August 01, 2007
Hotze lawsuit against city over revenue caps tossed

Okay, so back in 2004 there were two competing revenue cap proposals for the city of Houston on the ballot. One only limited property and sales tax revenues plus water/sewer service fees, while the other affected those plus revenue generated by the airports and convention facilities. Both were passed, with the former getting a higher percentage and the city claiming that it therefore took precedence. Supporters of the more stringent cap filed a lawsuit, which ruled in their favor at first go-round; the city is currently appealing. In the meantime, City Proposition G from last November explicitly removed the airport and convention caps; it passed easily. Opponents of Prop G, who were among the initiators of the original strict caps from 2004, sued even before the vote, saying that Prop G was illegal.

That's the two-minute-drill outline, which will save me a boatload of copying and pasting from this article, which is about that lawsuit being dismissed. More background is here and here. On to today's piece:

In the latest court decision affecting the city's finances, a state district judge has dismissed a lawsuit challenging two ballot measures Houston voters approved last fall.

The suit, brought by local businessman and limited-government activist Bruce Hotze, sought to invalidate Propositions G and H. He claimed the measures, which loosened restrictions on how much revenue the city can raise from taxes and other sources, were not lawfully drafted or proposed.

But the city's outside counsel, Scott Atlas of Weil, Gotshal & Manges law firm, successfully argued that Hotze didn't have the right to sue.

"The city followed the letter in the law in every respect in putting Propositions G and H on the ballot," said Atlas, who also represents the city in another Hotze lawsuit in support of a city revenue cap, known as Proposition 2, that voters approved in 2004.


Hotze, who campaigned against Propositions G and H, said Tuesday that he might appeal State District Judge P.K. Reiter's decision in the most recent case.

"I'm disappointed that the court hasn't upheld in favor of the people," he said. "I filed this on behalf of the people."

Reiter's order doesn't explain the decision, which was handed down Friday. But the city's legal team asked for the dismissal, claiming that Hotze had filed the suit too late -- and that he didn't have "standing," a legal term referring to people who have the right to sue because they were somehow injured by another's party's actions. Atlas argued that Hotze wasn't affected by the ballot measures more than the average voter, and therefore couldn't sue.

I confess, I don't quite get the argument about standing. Much as I'm gratified by this ruling, it's not clear to this non-lawyer why exactly Bruce Hotze could not file that suit. It feels to me that if the city's logic is followed, no one could file suit, and that doesn't make sense to me. I'm also not sure what the deadline to have sued should have been - as noted, it was filed on November 3, 2006, which was the Friday before Election Day. I'm sure Hotze and friends will appeal the dismissal - it's what these guys do. In the meantime, if anyone who knows more about this stuff than I do wants to chime in about why the suit got tossed, I'd appreciate it.

Posted by Charles Kuffner on August 01, 2007 to Local politics

I haven't read the briefing, and it appears the judge's order dismissing the case does not go into any detail about the reasons for the dismissal (which is typical; most such orders don't). That said, I would guess that the taxpayer standing doctrine is a large part of the reason for the dismissal. In general, taxpayers do not have standing to sue in matters where their only damage is as a taxpayer just like all other taxpayers. Courts leave such matters to the legislative and electoral process.

Posted by: Kenneth Fair on August 1, 2007 11:41 AM

I'm sure Hotze and friends will appeal the dismissal - it's what these guys do.

Actually, Charles, it's what people who think they have a solid legal argument do, whether we're talking criminal, civil, or even political cases.

Another taxpayer group (CLOUT) recently won their appeal challenging a lower court dismissal, so it does happen. Appeals are an inherent part of the legal system, and even people with whom you disagree can avail themselves of the mechanism.

Posted by: Kevin Whited on August 1, 2007 1:27 PM

Charles, Kenneth has it right. In order to sue, plaintiffs must show they've been uniquely injured by a defendant's actions.

Take the recent case involving the terrorist (or warrantless wiretapping) surveillance program. An appeals court dismissed the case because the plaintiffs couldn't show they'd been affected by the program. This was complicated by the fact that it's a highly classified program, and no one in the public really knows who's been spied upon.

Here's an explanation from The New York Times' legal affairs reporter, Adam Liptak, who's also a skilled First Amendment lawyer.

Both you and Kevin are right on Hotze. He's perfectly within his rights to fight the city in court, and he's done so vigorously and successfully before.

Posted by: Matt Stiles on August 1, 2007 9:03 PM