Gen. Servs. Comm'n v. Little-Tex Insulation Co

In Gen. Servs. Comm'n v. Little-Tex Insulation Co., 39 S.W.3d 591, 599 (Tex. 2001), the State contracted with the plaintiff for asbestos abatement, and the State terminated the contract when it was unsatisfied with the plaintiff's performance. Little-Tex Insulation Co., 39 S.W.3d at 594. The plaintiff sued the State alleging various causes of action, including breach of contract and a takings claim. The supreme court concluded that the State had not waived its immunity from suit for the takings claim. The court stated: "Texas courts have long recognized that the State wears two hats: the State as a party to the contract and the State as sovereign. The State, in acting within a color of right to take or withhold property in a contractual situation, is acting akin to a private citizen and not under any sovereign powers. In this situation, the State does not have the intent to take under its eminent domain powers; the State only has an intent to act within the scope of the contract. Because the State was acting under colorable contractual rights, it did not have the requisite intent to take the plaintiff's labor and materials under any eminent domain powers. Accordingly, the plaintiff's constitutional-takings claim must fail." Id. at 599 .