Texas Appeals Court Partially Reverses, Remands Small-Cells Case
A Texas appeals court found "reversible error" in a lower court ruling in cities' challenge of the state's small-cells rules (see 2301270028). The trial court ruling siding with the state was reversed in part and the remainder of the ruling was remanded to the trial court. In Justice Edward Smith's opinion Friday in 03-22-00524-CV, he said the state "identifies no case" in which consideration of 10% of fair market value "was deemed adequate," and the cities "identify none in which that amount was held to result in a gratuity."
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Smith continued: "Because we conclude that the trial court erred in granting summary judgment in favor of the state on the grounds raised in its motion for traditional summary judgment, we reverse that portion of the trial court’s judgment and remand the cause for further proceedings on that issue." Smith added: "We affirm the remainder of the trial court’s judgment in favor of the cities." At issue were two Texas laws preempting local governments on ROW and capping fees, and the state's interpretation of the anti-gift provision of the Texas Constitution (see 2211230022)
The "adequacy of consideration constitutes an issue of material fact," the judge wrote. He noted that the state didn't provide evidence in support of its summary judgment motion before the trial court. The "real issue" is whether the legislature can "exempt a private entity accessing a public right-of-way (ROW) for private profit or commercial gain from an otherwise applicable fee for such access solely on the ground that the entity or its affiliate is subject to another fee provision," he wrote: "We hold that it may not." Texas Attorney General Ken Paxton's (R) office didn't comment.
It's likely that the case will be appealed to the state Supreme Court, said Don Knight, senior assistant city attorney for the city of Dallas and chair of the Texas Coalition of Cities for Utility Issues. "I think it'll be something other states look to" concerning their anti-gift rules, Knight said, noting the law in question is "very common throughout the states." In Texas, local governments can borrow money only in "very specific ways" under the anti-gift provisions of the Texas Constitution, he added.
The trial court didn't consider whether the $250 cap on ROW fees was "adequate compensation," Knight said. "They were told by the appeals court that that's not the law," he said, "so they'll have to hear testimony about market rates and those sorts of things."
Knight didn't anticipate the case influencing the state's BEAD program. "I don't see this as hindering the deployment in any way," he said: It's "not going to slow the state down" on project approvals and funding disbursements.