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Texas Supreme Court Rejects Waiver-by-Conduct Exception to Sovereign-Immunity Doctrine

Governmental entities, like the TNRCC, have sovereign immunity from suits for alleged breaches of contracts. Nevertheless, IT-Davy, a general contractor, sued the TNRCC for breach of contract, alleging an equitable, waiver-by-conduct exception to the sovereign-immunity doctrine. According to IT-Davy, the TNRCC waived its immunity from suit by accepting full performance of the contract without fully paying for the accepted services. The trial court and the court of appeals adopted this waiver-by-conduct exception. In the Texas Supreme Court, Rick Thompson argued that the TNRCC was protected by its sovereign immunity from suit and that any waiver-by-conduct exception to sovereign immunity should be adopted by the Texas Legislature, not Texas courts. The Texas Supreme Court agreed, reversed the court of appeals judgment, and dismissed IT-DAVY’s breach of contract claim because it was precluded by TNRCC’s immunity from suit. Tex. Natural Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849 (Tex. 2002).