In State of Texas v. City of McAllen, the Texas Supreme Court dismissed a lawsuit in which a group of cities challenged state statutes that reduced the fees cities can charge telecommunications companies for using public rights of way. The cities claimed that charging below-market rates amounted to an unconstitutional gift to the telecom companies under the Texas Constitution’s Gift Clauses. The Court vacated the lower courts’ judgments “without addressing the Gift Clauses at all” because the case “suffers from a basic defect that has deprived the courts of jurisdiction from the beginning: The cities sued the wrong defendant.”
The Court held that naming the “State of Texas” as defendant was insufficient. A plaintiff challenging a statute’s constitutionality must “identify and name the officer or agency with authority to enforce the challenged law” so a court can direct its judgment at the entity whose actions caused the injury. Naming the State is “not a cheat code for bypassing the requirement, incumbent on any plaintiff in any context, to seek a judgment against the party whose actions are the cause of the alleged injury.” The Court noted that no state officer or agency had taken or threatened any adverse action against the cities.
The Court further explained that the real dispute was between the cities and the telecom companies over how much the companies must pay to use public property. But because the cities did not sue the telecom companies, any judgment would not bind them. The companies “would be well within their rights to ignore a sweeping declaration against the ‘State of Texas’ in a lawsuit to which they were not parties and to insist on a judgment binding on them before they assent to the higher rates sought by the cities.” Therefore, because the judgment sought “would not redress the cities’ injury or resolve the real-world dispute animating this litigation,” the case was beyond the courts’ jurisdiction. No. 24-1060 (Tex. Jun. 5, 2026).
