Texas Disposal System, Inc. v. City of Round Rock, Texas and Laurie Hadley, in Her Official Capacity of City Manager of Round Rock, Texas

CourtCourt of Appeals of Texas
DecidedMay 31, 2023
Docket03-22-00450-CV
StatusPublished

This text of Texas Disposal System, Inc. v. City of Round Rock, Texas and Laurie Hadley, in Her Official Capacity of City Manager of Round Rock, Texas (Texas Disposal System, Inc. v. City of Round Rock, Texas and Laurie Hadley, in Her Official Capacity of City Manager of Round Rock, Texas) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Texas Disposal System, Inc. v. City of Round Rock, Texas and Laurie Hadley, in Her Official Capacity of City Manager of Round Rock, Texas, (Tex. Ct. App. 2023).

Opinion

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-22-00450-CV

Texas Disposal System, Inc., Appellant

v.

City of Round Rock, Texas and Laurie Hadley, in Her Official Capacity of City Manager of Round Rock, Texas, Appellees

FROM THE 395TH DISTRICT COURT OF WILLIAMSON COUNTY NO. 22-0482-C395, THE HONORABLE RYAN D. LARSON, JUDGE PRESIDING

MEMORANDUM OPINION

In two issues, Texas Disposal System, Inc. (Texas Disposal) contends that the

trial court abused its discretion by denying its application for a temporary injunction. For the

following reasons, we affirm.

BACKGROUND

Pursuant to non-exclusive franchise agreements with the City of Round Rock (the

City), Texas Disposal provided garbage and recycling collection for commercial businesses

(non-residential services) in the City. Other companies, including FF CTR Holdings, Inc. d/b/a

Central Texas Refuse (CTR), also had non-exclusive franchise agreements to provide

non-residential services. The most recent agreement between the City and Texas Disposal

expired on September 30, 2022, but among the agreement’s terms, the City was authorized at “its

sole discretion” to terminate the agreement “at any time beginning December 1, 2021, upon

thirty (30) days’ written notice” to Texas Disposal. The published agenda for the city council’s retreat that was held on July 22, 2021,

noticed under “Resolutions/Action Items” that the city council would be “consider[ing]

discussion and possible action regarding the collection and disposal of commercial refuse.”

During the retreat, the city council considered several alternatives before voting that the “City

Manager is authorized to negotiate a sole source contract with [CTR].” At that time, CTR was

the sole provider of residential garbage and recycling collection (residential services) and the

largest provider of non-residential services in the City.

The city council’s published agenda for its meeting on November 4, 2021,

provided notice that the city council would be considering resolutions (i) authorizing the mayor

to execute an “Amended and Restated Refuse Collection Contract with [CTR]” (Refuse

Collection Contract) that would “allow CTR to be the single vendor for all solid waste collection

services in the City” and (ii) authorizing the city manager to provide written notice to Texas

Disposal and other companies that their existing franchise agreements for non-residential

services would terminate on April 30, 2022. During a “packet briefing” 1 held before the

November meeting and again during the November meeting, representatives from Texas

Disposal and other companies spoke against the resolutions, but the city council ultimately voted

in favor of the resolutions.

Shortly after the November meeting, the City and CTR entered into the

Refuse Collection Contract, which covered residential and non-residential services, and on

March 23, 2022, the City provided written notice to Texas Disposal that the City had approved

the Refuse Collection Contract that authorized CTR to be the “single provider” of non-residential

1 According to the evidence, before regularly scheduled council meetings, the city council holds a “packet briefing,” which is an open public meeting where the city council discusses items on the upcoming agenda. 2 services in the City as of May 1 and that the City intended to terminate its franchise agreement

with Texas Disposal as of April 30. 2

On April 18, Texas Disposal filed suit against the City and its manager in her

official capacity 3 seeking declaratory relief under the Uniform Declaratory Judgments Act

(UDJA), see Tex. Civ. Prac. & Rem. Code §§ 37.001–.011, and mandamus or injunctive relief

under the Texas Open Meetings Act (TOMA), see Tex. Gov’t Code §§ 551.001–.146. Texas

Disposal alleged, among its claims, that the City’s “adoption of a sole-source exclusive

franchise” for non-residential services was void “because it conflicts irreconcilably with the City

Charter, which expressly provides that ‘[n]o exclusive franchise [of a public utility] shall ever be

granted,’” see City of Round Rock, Charter § 11.02, 4 and that the City violated the TOMA at its

July 2021 retreat. 5 CTR intervened in the suit, 6 and following a hearing, the trial court denied

Texas Disposal’s request for a temporary restraining order on April 29.

2 In the letter, the City also proposed a franchise agreement between the City and Texas Disposal for the collection and disposal of solid waste for temporary services, but the parties did not enter into that agreement. 3 We generally refer to the City and its manager collectively as the City. 4 Section 11.02 of the City Charter, titled “Franchise; power of City Council,” states:

The City Council shall have power to grant, amend, renew or extend by ordinance all franchises of all public utilities of every character including any person, business or corporation providing cable television or community antenna television service, operating within the City, and for such purposes is granted full power. No public utility franchise shall be transferable except to persons, firms or corporations taking all or substantially all of the holder’s business in the City and except with the approval of the City Council expressed by ordinance. No franchise shall be granted for an indeterminate term. No exclusive franchise shall ever be granted. 5 Texas Disposal’s other claims included that the city council’s adoption of a “sole-source exclusive franchise” was void because it violated the contract clauses of the United 3 On May 25, Texas Disposal filed an amended petition that included an ultra vires

claim against the city manager in her official capacity, alleging that she “acted without legal

authority” in carrying out “acts to effectuate an exclusive franchise for CTR.” Texas Disposal

sought a declaration that she cannot take future actions to enforce “the alleged exclusive

franchise or to enforce the wrongful cancellation of Texas Disposal’s non-exclusive franchise,”

and injunctive relief “barring any such future actions.” Texas Disposal sought a temporary

injunction “prohibiting” the City and the city manager “from taking any steps to enforce a sole-

source exclusive franchise and contract for the collection of commercial waste and recyclable

materials within the City”; from taking any steps to enforce the “sole-source contract’s

requirement for exclusive use” of a particular recycling facility; and “from enforcing any

revocation of the non-exclusive franchise to collect and haul non-residential waste within the

City held by Texas Disposal before the commencement of the present controversy.”

The day after Texas Disposal filed its amended petition, the trial court held a

hearing on Texas Disposal’s request for a temporary injunction. At the beginning of the hearing,

counsel for Texas Disposal represented to the trial court that its request for a temporary

injunction was limited to its claims that “the City has acted in violation of its own charter” and

that “the City has acted in violation of the [TOMA].” The witnesses at the hearing were Texas

Disposal’s director of sales, its principal owner, and its municipal sales manager; the City’s

director of utilities and environmental services and its assistant city manager; and CTR’s director

of public-sector services and community relations.

States and Texas constitutions, see U.S. Const. art. I §

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Texas Disposal System, Inc. v. City of Round Rock, Texas and Laurie Hadley, in Her Official Capacity of City Manager of Round Rock, Texas, Counsel Stack Legal Research, https://law.counselstack.com/opinion/texas-disposal-system-inc-v-city-of-round-rock-texas-and-laurie-hadley-texapp-2023.