CARL E. STEWART, Chief Judge:
This case involves a dispute between two waste disposal service entities, Plaintiff-Appellant Republic Waste Services of Texas, Ltd. ("Republic") and Defendant-Appellee Texas Disposal Systems, Inc. ("Texas Disposal"). At issue is a purported conflict between the Texas Health and Safety Code ("the Code") and an exclusive contract for solid waste disposal services entered into by Republic and the city of San Angelo, Texas ("the City"). After a hearing, the district court granted Texas Disposal's Rule 12(b)(6) motion to dismiss the suit and denied as moot Republic's motion for partial summary judgment. For the following reasons, we reverse the part of the district court's order granting Texas Disposal's motion to dismiss, vacate the part of the order denying as moot Republic's motion for partial summary judgment, and remand for further proceedings.
In July 2013, the City issued Texas Disposal a "Solid Waste Hauling Permit," allowing it to transport and dispose of garbage, trash, and debris within city limits, and to render "any service that is allowed by state law or city ordinance that does not conflict with the City's contract with Republic ... and the exclusive rights granted by that contract[.]"
At some point after the contract between the City and Republic went into effect, Texas Disposal began to contract for and provide solid waste disposal services to various construction projects in the City. Consequently, Republic sent Texas Disposal a cease-and-desist letter stating that its own contract with the City precluded Texas Disposal from entering into construction waste disposal contracts with the City's residents and businesses. In response, Texas Disposal acknowledged the contract between Republic and the City but contended that its terms concerning solid waste management services for construction projects were unenforceable
Republic disagreed and sued Texas Disposal in federal district court advancing a state law claim for tortious interference with an existing contract. Republic also sought: (1) a declaratory judgment as to the validity of its exclusive contract with the City, (2) an injunction against Texas Disposal's continued waste disposal servicing of construction projects, and (3) money damages. In lieu of an answer, Texas Disposal filed a Rule 12(b)(6) motion to dismiss, arguing that Section 364.034(h) of the Code precluded the City from entering into exclusive contracts for temporary construction solid waste disposal services. See Fed. R. Civ. P. 12(b)(6). Republic then filed a motion for partial summary judgment on its declaratory judgment claim and as to liability on its tortious interference claim.
The district court conducted a hearing on both motions and rendered an order granting Texas Disposal's motion to dismiss and denying as moot Republic's motion for partial summary judgment. In its order, the district court reasoned that the plain wording of Section 364.034(h) conveyed the legislature's "clear intent to take away the City's inherent authority to grant exclusive [contract rights] in the specific instance of `contracts to provide temporary solid waste disposal services to a construction project.'" Republic filed this appeal.
"This court reviews a district court's dismissal under Federal Rule of Civil Procedure 12(b)(6) de novo, accepting all well-pleaded facts as true and viewing those facts in the light most favorable to the plaintiff." Harris Cty. v. MERSCORP Inc., 791 F.3d 545, 551 (5th Cir. 2015) (internal quotation marks omitted) (citing Toy v. Holder, 714 F.3d 881, 883 (5th Cir. 2013)). A district court's Rule 12(b)(6) dismissal may be affirmed on any grounds raised below and supported by the record. Harris Cty., 791 F.3d at 551.
We also conduct a de novo review of a district court's denial of summary judgment, applying the same standard as the district court. Robinson v. Orient Marine Co., 505 F.3d 364, 365 (5th Cir. 2007). Summary judgment is appropriate if the record evidence shows that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Id. at 366; Fed. R. Civ. P. 56(a).
"Home-rule" cities in Texas, such as San Angelo, derive their authority from the Texas constitution. See Tex. Const. art. XI, § 5. As the Texas Supreme Court has consistently acknowledged, "[h]ome-rule cities have the full power of self-government and look to the Legislature, not for grants of power, but only for limitations on their powers." S. Crushed Concrete, LLC v. City of Hous., 398 S.W.3d 676, 678 (Tex. 2013) (citing Lower Colo. River Auth. v. City of San Marcos, 523 S.W.2d 641, 643 (Tex. 1975)). "An ordinance of a home-rule city that attempts to regulate a subject
In the recent case of Laredo Merchants Ass'n v. City of Laredo, a Texas appellate court addressed the unmistakable clarity rule in the context of a home-rule city ordinance that purportedly conflicted with part of the Solid Waste Disposal Act. No. 04-15-00610-CV, 2016 WL 4376627 (Tex. App. — San Antonio Aug. 17, 2016). There, the court was tasked with deciding whether Section 361.0961 of the Code preempted a checkout bag ordinance enacted by the home-rule city of Laredo that prohibited merchants in commercial establishments from providing paper or plastic "one-time-use" checkout bags to customers. Id. at *1. Section 361.0961 provides:
Tex. Health & Safety Code Ann. § 361.0961. In considering this statutory language to be unmistakably clear, the court explained:
Laredo Merchs., 2016 WL 4376627, at *5 (alterations, citations, and internal quotation marks omitted). The court concluded that the language in Section 361.0961 clearly preempted the checkout bag ordinance. Id. at *5, *7 ("[W]e hold the Ordinance is inconsistent with section 361.0961 of the Act and therefore unenforceable as a matter of law." (citation omitted)).
Here, Republic argues that the district court erred in similarly concluding that the language in Section 364.034(h) of the Code conveyed the legislature's clear intent to abrogate the City's home-rule authority to enter into an exclusive contract for solid waste disposal services to a construction project. We agree.
Neither party disputes that San Angelo is a home-rule city deriving its broad powers of self-government from the Texas constitution, and thus, any limitation by the legislature on those powers must be imposed with unmistakable clarity. Tex. Const. art. XI, § 5; S. Crushed Concrete, 398 S.W.3d at 678. It is true that Section 364.034(a) of the Code provides that a
Moreover, as Republic points out, subsection (f) — which employs very different language from subsection (h) — does indicate an unmistakably clear legislative intent to limit the City's home-rule authority. There, the statutory language clearly and unmistakably limits the City's home-rule authority to restrict the rights of other entities to contract for the removal of grease, grit, lint, and sand trap waste. Tex. Health & Safety Code Ann. § 364.034(f) ("Notwithstanding the other provisions of this section ... a county or a municipality [] may not restrict the right of an entity to contract with a licensed waste hauler for the collection and removal of domestic septage or of grease trap waste, grit trap waste, lint trap waste, or sand trap waste."). Unlike the language in subsection (h), the language in subsection (f) operates independently of any general grant of authority conferred by the Code and reads similarly to the language construed as unmistakably clear legislative intent in Laredo Merchants. See Laredo Merchs., 2016 WL 4376627, at *5 (citing Tex. Health & Safety Code Ann. § 361.0961) ("A local government ... may not adopt an ordinance... to ... prohibit or restrict, for solid waste management purposes, the sale or use of a container or package in a manner not authorized by state law[.]"); S. Crushed Concrete, 398 S.W.3d at 679 (holding that a statute stating that "a city ordinance `may not make unlawful a condition or act approved or authorized under [the Act] or the [C]ommission's rules or orders'" was unmistakably clear); cf. Quick v. City of Austin, 7 S.W.3d 109, 122-23 (Tex. 1998) (reasoning that silence will not be construed as unmistakably clear legislative intent to limit a home-rule city's authority on an issue). In contrast, the language in subsection (h) is not unmistakably
In light of these reasons, we hold that the language in Section 364.034(h) fails to indicate with unmistakable clarity that the legislature intended to restrict a home-rule city's authority to enter into an exclusive contract for solid waste disposal services to a construction project. See S. Crushed Concrete, 398 S.W.3d at 678. Accordingly, we hold that the district court erred in granting Texas Disposal's Rule 12(b)(6) motion to dismiss.
The part of the district court's order granting Defendant-Appellee's Rule 12(b)(6) motion to dismiss is reversed and the part of the order denying as moot Plaintiff-Appellant's motion for summary judgment is vacated. The case is remanded for further proceedings consistent with this opinion.