A construction lawsuit about alleged cost overruns on a dam project led to a dispute about arbitrability, as to which the majority in San Antonio River Auth. v. Austin Bridge & Road held:
“Local Government Code Chapter 271 . . . authorizes local governments, like the River Authority, to agree to arbitrate claims brought under the chapter. Chapter 271 further provides that the final resolution of an arbitration proceeding is ‘enforceable’ insofar as immunity is waived. What is enforceable is authorized.”
“Immunity implicates subject-matter jurisdiction; it may be waived only by the legislature’s consent. And enforcement of a judgment against a local government requires the exercise of state judicial power. Courts are empowered to enforce such judgments only to the extent that immunity is waived. Accordingly, the judiciary retains the duty to decide whether a local government has waived its immunity, and the extent to which any arbitration award is recoverable against a local government—the parties’ agreement to arbitrate notwithstanding.” (emphasis added). Justice Bland wrote for the majority, joined by Justices Green, Lehrmann, Blacklock, and Busby.
A dissent saw the issue differently: “Austin Bridge and the River Authority indisputably “picked” binding arbitration as the method to resolve their contract dispute, but because the River Authority is a statutorily created local governmental entity, its “pick” does not ultimately matter. As a political subdivision of the State, the River Authority can only exercise powers that a statute expressly or impliedly confers. Ultimately, the State itself—acting through the legislature—must have authorized the River Authority to resolve this dispute through binding arbitration. If (as I conclude) it didn’t, the River Authority’s agreement to engage in binding arbitration is void and unenforceable.” (citations omitted) (emphasis added). Justice Boyd the dissent, joined by Chief Justice Hecht and Justices Guzman and Devine.
