The Texas Supreme Court overturned an earlier ruling by appeals court judges that clarified who is protected by the Texas Department of Transportation’s statutory immunity shield. It’s a state law that bars lawsuits against contractors for auto accidents as long as the contractors build according to design.
The case, which was closely followed in other states granting immunity, involved the interpretation of the word “for.”
In the ruling issued on December 12, the court ruled that a highway contractor and its traffic signal subcontractor actually worked for TxDOT and therefore can receive liability protection under Texas Code of Practice and Civil Remedies § 97.002.
The case, Third Coast Services and SpawGlass Civil Construction v. the family of Pedro Alfonso Castaneda, stemmed from a horrific accident in 2019. After leaving a plumbing supply store one afternoon, Castaneda stopped his Toyota Tacoma pickup truck at an intersection adjacent to a busy freeway overpass construction project in Pinehurst, Texas.
The traffic signals recently installed at the intersection were still covered by a black plastic sheet and were not yet operational. Castaneda stopped at the intersection and then, according to witnesses, rolled forward and began a left turn onto the frontage road. The shift never ended. Instead, one truck hit his pickup and flipped it while a second truck hit Castaneda’s pickup and rammed it into a utility pole, cutting power lines. Castaneda died at the scene.
The legal battle over Castaneda’s death began in 2019 with the family ultimately suing general contractor SpawGlass and traffic signal contractor Third Coast for negligence in causing the accident.
Third Coast and SpawGlass disputed the charges, saying they were not responsible for what happened on the roads or what could have caused Castaneda’s fatal driving error by failing to yield to the other vehicles. But their main legal defense, asserted in a motion filed before a trial began, has been that, as government contractors, they are immune and cannot be sued.
That lawsuit started a multi-year, multi-court battle to determine whether any contractor could be sued.
The state’s contractor and subcontractor companies and associations, in amicus briefs to both lower courts and the state supreme court, argued that under state law, any work done under TxDOT’s supervision was protected by an extension of immunity from lawsuits enjoyed by TxDOT itself. This defense has become a famous government procurement legal cause of the immunity issue.
The family argued that because Montgomery County, not the state directly, had contracted SpawGlass and the contract was performed in the county, the TxDOT shield was not in effect.
Two lower courts agreed with the family.
However, the December 12 ruling by a panel of Texas Supreme Court judges, written by Judge Rebeca Huddle, clarifies several points.
One such point concerns whether a direct contract between the state and the contractor is needed for the immunity to apply. Supreme Court justices ruled that the statute’s shield of immunity extends to a contractor who builds or repairs a road, highway or street for TxDOT.
Even though SpawGlass’ contract was with Montgomery County and not TxDOT, the contractor still has the same privileges as a direct privilege contract.
A dual employer
The court agreed with the contractors’ primary argument that they were, in fact, working for TxDOT because TxDOT would ultimately operate and maintain the frontage roads where the work and the accident occurred. The court wrote: “Because SpawGlass and Third Coast were contracted to perform work on the frontage roads, and TxDOT would assume responsibility for their operation and maintenance after the project was completed, the contractors’ work was both “for” the county and “for” TxDOT.
The Court also rejected the appeals court’s narrowing of the definition of “construct” to exclude general contractors. “A general contractor,” the judges wrote, “who has ultimate responsibility to the owner of a construction project ‘builds’ the project even if the general contractor does not actually perform the physical work.”
To provide relief to Texas highway contractors, the decision clarifies and codifies § 97.002 immunity to subcontractors and indirect contractors on projects where TxDOT retains ultimate responsibility or benefits from the work, even without a direct TxDOT contract.
The legal battle is not over.
The Court remanded to the lower court the question of whether the contractors conclusively demonstrated compliance with the material contract documents, an essential component of maintaining immunity. The outcome of this decision will determine whether the contractors are actually liable.
But the principle of double employment was established.
