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Suing the State? You'll Need State's Permission

The state is in a unique negotiating position when someone wants to file a lawsuit over a contract: You can't sue the state without the state's permission.

Former Texas Tech football coach, Mike Leach - September 15, 2011.

After December 2009, you have to assume that lawyers for every coach thinking about taking a job at a Texas college — or anyone looking at any contract with the state — have boned up on sovereign immunity law.

They would be stupid not to. With only a few exceptions, the law prevents anyone from collecting on a lawsuit against the state government, or even from successfully suing the state, without the state’s permission.

It is the shoelace that tripped Mike Leach, the former head football coach at Texas Tech University in Lubbock, when he claimed that the school violated his contract when it fired him and didn’t pay him what he believes he was owed. He was fired in late 2009 after being accused of mistreating Adam James, an injured player. (James is the son of former U.S. Senate candidate Craig James, a onetime ESPN analyst.)

Leach, who is now coaching at Washington State, can sue the state of Texas and Texas Tech only if he can get permission from the Legislature. He tried and failed to do that in 2011, but he could try again during next year’s legislative session. He challenged Tech’s immunity in the Texas Supreme Court, which denied his appeal, agreeing with a lower court that sided with the university. They didn’t rule on the facts of the case — whether the firing was righteous or the contract was breached — but on whether Leach can sue the state without its permission.

Here is how the appellate court in Amarillo described the state’s advantage in the decision the Supreme Court declined to reconsider: “So, while it must perform and, like any other party to a contract, is responsible for its failure to do so, it cannot be sued for damages without its permission if it opts to forego performance. In other situations, the converse is also true; the State may grant someone permission to sue it but retain its insulation from being forced to pay. The logic behind that circumstance is not ours to debate for that is the law as declared by our Supreme Court.”

Leach isn’t the most sympathetic poster child. He once appeared on the cover of Texas Monthly wearing a pirate’s eye patch. He is renowned for playing by his own rules. For those who didn’t go to school in Lubbock, Leach’s Red Raiders were the enemy.

But this raises a question for anyone who contracts with the state, whether they’re selling their skills as a coach, a doctor, a researcher or economist, or their products and services, from pencils and staplers for state workers to school buildings and roads for the rest of us.

Texas isn’t in the habit of stiffing its vendors, but it happens from time to time.

“The short answer is that people going into business with the state need to go in with their eyes open,” said Sean Jordan, an Austin lawyer. Now in private practice, he was the deputy solicitor general who defended the state in the Leach case.

Sovereign immunity has its benefits: The state is a fat target if you’re hungry for money — that’s why so many outfits hire so many lobbyists and consultants to work on procurements and privatization and all that. Just think what opportunities might occur to an entrepreneurial lawyer without that restraint.

But it sets up the state as a bully. Vendors can get some relief without going to court; there’s a stout section of state law that gives them administrative — nonjudicial — remedies when state agencies do them wrong. It’s sketchier when it comes to employment contracts, but the same law applies: you can’t sue the state unless the state says you can.

Lawyers say the people who regularly contract with the state know the risks, even if it’s news to the public — and, perhaps, to some contract employees.

The state doesn’t automatically turn down lawsuits, but it’s unusual for lawmakers to vote to allow people to haul the state into court. For one thing, they’re politicians: Who wants to vote to allow a football coach to grab $10 million in the same session in which they’re voting to cut back public education and other programs to save money?

They don’t have to, and so they usually don’t. From English monarchs, where modern sovereign immunity got its start, to now, the state is insulated, mostly, from these kinds of lawsuits and financial claims — and from the political fallout.

It’s good to be king.

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