MED CARE EMERGENCY MEDICAL SERVICES INC v. CITY OF PHARR TEXAS (2025)

ORDER AND OPINION

In 2021, the Board of Commissioners for the City of Pharr, Texas authorized the purchase of ambulance-service assets and passed an ordinance regulating the provision of ambulance services within the city limits. Plaintiff Med Care Emergency Medical Services, Inc. alleges that these actions, along with the City's efforts to hire away Med Care's employees and warn other hospitals from working with Med Care, have injured its business. The company brings suit against the City, Mayor Ambrosio Hernandez, and City Commissioners Itza Flores, Ricardo Medina, Daniel Chavez, Ramiro Caballero, and Robert Carrillo, alleging causes of action under 42 U.S.C. § 1983, the Sherman Antitrust Act, the Clayton Act, and the Texas Tort Claims Act.

Mayor Hernandez as well as Commissioners Flores, Medina, Chavez, Caballero, and Carrillo (“City Officials”) invoke absolute legislative immunity and move for dismissal of Med Care's causes of action against them. (Motion, Doc. 69) Based on the record and the applicable law, the Court concludes that the immunity doctrine protects each of the City Officials.

I. Factual Allegations and Procedural History 1

A Board of Commissioners governs the City of Pharr in Hidalgo County, Texas. The elected Mayor and six Commissioners constitute the Board of Commissioners, which possesses the authority “to enact local legislation, adopt budgets, determine policies, and appoint the City Manager.” (City Charter, Doc. 1–4, 78)

A. Purchase of HCEMS

In 2019, the Hidalgo County Emergency Services Company (“HCEMS”) operated as a privately owned ambulance company with “contracts with various cities and medical facilities in Hidalgo County, Texas.” (3d Am. Compl., Doc. 32, ¶ 16) That year, the company filed for bankruptcy, as it “was losing over $350,000 per month” and carried “millions of dollars in debt.” (Id. at ¶¶ 16, 17)

Within the bankruptcy proceedings, the Defendants “reached an agreement with the bankruptcy court to purchase HCEMS” for over $1,000,000 and an assumption of the company's debt. (Id. at ¶ 17) The Defendants entered into this arrangement “for the purpose of benefiting family members” of the Mayor and Commissioners. (Id.)

In March 2021, to implement the agreement, the Board of Commissioners passed Resolution 2021–19, authorizing the City to purchase the assets of HCEMS.²

On April 1, the Commissioners posted a Meeting Agenda for their upcoming April 5 meeting. One agenda item proposed authorizing the use of taxpayer money “to bid and over-pay for the purchase of [HCEMS].” (3d Am. Compl., Doc. 32, ¶ 15) At the meeting, the Commissioners approved the proposal.³ (Id.)

In late April, the Commissioners passed Resolution No. 2021–24, which recognized that the City had purchased HCEMS and exempted the City from “competitive procurement requirements” to purchase other assets necessary to begin providing emergency services.

A month later, the Board of Commissioners approved Ordinance 2021–27, which regulated emergency services within the City and designated the City of Pharr Emergency Medical Services Department (“Pharr EMS”) as “the sole provider of emergency ambulance services within the City of Pharr city limits.” (Doc. 1–4, 105) The Commissioners discussed Ordinance 2021–27 in a closed session, precluding “the citizens of the City an opportunity to voice their objection.” (Third Am. Compl., Doc. 32, ¶ 21) Upon the enactment of this ordinance, private ambulance services could receive emergency calls within the Pharr city limits only when Pharr EMS proved unavailable. In addition, before providing services, the private company had to obtain the City's approval by showing that it possessed the requisite licensing and a sufficient number of ambulances and insurance coverage.

At the time of these decisions, Mayor Hernandez was a “significant shareholder” of Doctors Hospital at Renaissance and stood to financially benefit by having Pharr EMS transport patients to this medical center. (Id. at ¶ 18) Also, Commissioner Caballero's wife was related to HCEMS's previous owner: “The purchase of the bankrupt HCEMS by the Defendants would aid the Caballero family both financially and otherwise.” (Id. at ¶ 19)

B. Med Care Emergency Medical Services

For over 25 years, Med Care has provided ambulance transportation to and from medical facilities in Hidalgo County, which includes the City.

After the Defendants orchestrated the purchase of HCEMS and enacted Ordinance 2021–27, unnamed city officials “engaged in an aggressive campaign to take [Med Care's] valued employees and managers in an effort to monopolize for the Defendants the business of Emergency Ambulance Services as well as to destroy [Med Care's] otherwise successful business.” (Id. at ¶ 22) The Defendants told Med Care's “client hospitals and clinics to cease working with [Med Care], and to cancel and not renew contracts” with it. (Id.) In addition, the Defendants “post[ed] and declar[ed] to [Med Care's] clients that [Pharr EMS] was their exclusive provider despite the lack of jurisdiction to do so outside the boundaries of the [ ] City.” (Id. at ¶ 24) Through this conduct, the Defendants intended “to deprive [Med Care] its existing successful business and to deprive it of its contracts with customers and employees in order to monopolize the EMS business to the new-found HCEMS.” (Id. at ¶ 22)

Med Care's resulting “loss of business, loss of opportunity and diminution in its core cadre of employees” exceeds $1,500,000. (Id. at ¶ 26)

C. Procedural History

In August 2021, Med Care filed this lawsuit in a Texas state court. In addition to seeking monetary damages, Med Care requested a temporary restraining order to enjoin enforcement of Ordinance 2021–27, along with a temporary and permanent injunction.⁴ Med Care also sought a declaratory judgment declaring Ordinance 2021-27 unconstitutional and ordering that the City “divest itself” of the purchased ambulance assets. (Orig. Pet., Doc. 1–4, 6) Med Care based its causes of action solely on Texas state law.

The City timely filed an Answer, and all of the Defendants asserted a Plea to the Jurisdiction. In the latter, they raised various defenses, including general immunity and absolute legislative immunity.

On November 15, 2021, Med Care filed its “Plaintiff's Amended Petition”, adding for the first time a claim under federal law, alleging that the Defendants violated the Fifth and Fourteenth Amendment by depriving Med Care of property “without due process and without compensation.” (Am. Pet., Doc. 1–1, 5)

Four days later, the Defendants removed the lawsuit based on federal question jurisdiction.

About eight months elapsed. Then, in July 2022, Med Care filed its Third Amended Complaint, which represents its live pleading and in which Med Care adds causes of action under Section 1983, the Sherman Antitrust Act, the Clayton Act, and the Texas Tort Claims Act. Med Care alleges damages of over $1,000,000, seeking them from the City Officials “individually and personally.” (Third Am. Compl., Doc. 32, 11)

In April 2023, the Defendants filed a motion to dismiss based on Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). As relevant here, the City Officials pled qualified immunity and sought to stay discovery pending resolution of the affirmative defense. A month later, the Court held a hearing and denied the motion without prejudice to refiling after discovery.

The City Officials appealed, but in June 2024, the Fifth Circuit affirmed the decision. See Med Care Emergency Med. Servs., Inc. v. Flores, No. 23-40340, 2024 WL 2271841 (5th Cir. May 20, 2024). The Fifth Circuit explained that qualified immunity “does not apply to the individual defendants’ legislative actions,” but noted that “the individual defendants are likely entitled” to absolute legislative immunity for their actions in approving expenditures and passing ordinances. Med Care, 2024 WL 2271841, at *3.⁵

In July 2024, the City Officials submitted the pending Motion to Dismiss, advancing the defense of absolute legislative immunity. They contend that their decisions authorizing the purchase of HCEMS and regulating ambulance services within the City are “inherently legislative because it reflects a discretionary, policymaking decision.” (MtD, Doc. 69, 5)

II. Standard of Review

A. Rule 12(b)(1)

When considering a Rule 12(b)(1) motion, a trial court must dismiss an action for lack of subject matter jurisdiction when the Court is without the statutory or constitutional power to adjudicate the case. Griener v. United States, 900 F.3d 700, 702 (5th Cir. 2018). In determining whether jurisdiction exists, the court may consider: “(1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts.” Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001). The party seeking the federal forum bears the burden of proving federal jurisdiction. Stockman v. Fed. Election Comm'n, 138 F.3d 144, 151 (5th Cir. 1998).

B. Rule 12(b)(6)

To survive a Rule 12(b)(6) motion to dismiss for failure to state a claim, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); Fed. R. Civ. P. 12(b)(6); see also Hutcheson v. Dallas Cnty., Texas, 994 F.3d 477, 482 (5th Cir. 2021). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). A plaintiff's complaint need not contain detailed factual allegations, but it must set forth “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. A court considers only the well-pleaded allegations in the complaint and must accept them as true, viewing them in the light most favorable to the plaintiff. Powers v. Northside Indep. Sch. Dist., 951 F.3d 298, 305 (5th Cir. 2020). “[W]hen a successful affirmative defense appears on the face of the pleadings, dismissal under Rule 12(b)(6) may be appropriate.” Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717, 726 (5th Cir. 2013) (quoting Kansa Reins. Co. v. Cong. Mortg. Corp. of Tex., 20 F.3d 1362, 1366 (5th Cir. 1994)).

III. Analysis

The City Officials argue that legislative immunity requires the dismissal of Med Care's claims under Rules 12(b)(1) and 12(b)(6). The Court will address the jurisdictional challenge first, as it must. See Burciaga v. Deutsche Bank Nat'l Tr. Co., 871 F.3d 380, 384 (5th Cir. 2017) (“The court must address challenges to subject-matter jurisdiction before reaching the merits of a case.”).

A. Jurisdictional Analysis under Rule 12(b)(1)

The City Officials contend that Med Care must “affirmatively demonstrate subject matter jurisdiction in a suit against a governmental unit by alleging a valid waiver of governmental immunity.”⁶ (Motion, Doc. 69, 2–3) (citing Tex. Dept. of Criminal Justice v. Miller, 51 S.W.3d 583 (Tex. 2001)) However, the Miller decision on which the City Officials rely for this proposition did not concern a federal court's analysis under Rule 12(b)(1), and its application to the present case is unclear. In any event, to the extent that a plaintiff must specifically allege waiver of governmental immunity, Med Care does so, alleging that the Defendants’ specific conduct waived any immunity typically provided to municipalities and their employees. (See Third Am. Compl., Doc. 32, ¶¶ 24, 27)

Moreover, the doctrine of legislative immunity represents an affirmative defense. See Andrews v. Adams, No. 23-50841, 2024 WL 4298150, at *2 (5th Cir. Sept. 26, 2024) (“We also agree that Andrews failed to overcome Appellees’ affirmative defenses of sovereign and legislative immunity.”). And the assertion of an affirmative defense typically does not concern subject matter jurisdiction, as the defendant's failure to plead an affirmative defense can lead to waiver, but subject matter jurisdiction is not waivable. See Matter of RE Palm Springs II, L.L.C., 106 F.4th 406, 416 (5th Cir. 2024); Smith v. Travelers Cas. Ins. Co. of Am., 932 F.3d 302, 308–09 (5th Cir. 2019). Although the Fifth Circuit has not established whether a federal district court can consider a legislative immunity defense as jurisdictional, the Second Circuit has, reasoning that “[i]t is well-settled that legislative immunity is not a jurisdictional bar, but is rather a personal defense that may be asserted to challenge the sufficiency of a complaint under Rule 12(b)(6).” State Emps. Bargaining Agent Coal. v. Rowland, 494 F.3d 71, 77 n.4 (2d Cir. 2007). The Court finds the reasoning of Rowland persuasive and concludes that it possesses subject matter jurisdiction over Med Care's lawsuit.

B. Viability of Causes of Action under Rule 12(b)(6)

The City Officials argue that as to their “actions in considering and voting on the ordinances” at issue in this lawsuit, absolute legislative immunity applies. (MtD, Doc. 69, 4)

Texas courts have established that individuals acting in a legislative capacity enjoy immunity from liability. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 157 (Tex. 2004); see also Bryan v. City of Madison, Miss., 213 F.3d 267, 272 (5th Cir. 2000). The doctrine encompasses legislators at all levels of government, including city commissioners. See Bogan v. Scott-Harris, 523 U.S. 44, 55, 118 S.Ct. 966, 140 L.Ed.2d 79 (1998) (recognizing that legislative immunity protected a mayor and city commissioner when they enacted an ordinance that eliminated the plaintiff's job); Weingarten Realty Invs. v. Silvia, 376 F. App'x 408, 410 (5th Cir. 2010) (“This immunity applies to city council members who are performing ‘legitimate legislative functions.’ ”) (quoting Joe, 145 S.W.3d at 157); see also Med Care, 2024 WL 2271841, at *2 (“[A]bsolute immunity attaches to legislative functions, including those carried out by city councils or commissions.” (emphasis in original)).

The immunity “applies to activities, not offices[,] ․ protect[ing] officials fulfilling legislative functions even if they are not ‘legislators.’ ” Bryan, 213 F.3d at 272. “A defendant's actions are legislative and protected by legislative immunity if they reflect ‘a discretionary, policymaking decision of general application, rather than an individualized decision based upon particular facts.” Weingarten, 376 F. App'x at 410 (quoting In re Perry, 60 S.W.3d 857, 860 (Tex. 2001)).

The Fifth Circuit has recognized two guidelines applicable to this analysis:

The first test focuses on the nature of the facts used to reach the given decision. If the underlying facts on which the decision is based are “legislative facts,” such as “generalizations concerning a policy or state of affairs,” then the decision is legislative. If the facts used in the decisionmaking are more specific, such as those that relate to particular individuals or situations, then the decision is administrative. The second test focuses on the “particularity of the impact of the state action.” If the action involves establishment of a general policy, it is legislative; if the action single[s] out specific individuals and affect[s] them differently from others, it is administrative.

Bryan, 213 F.3d at 273 (quoting Cutting v. Muzzey, 724 F.2d 259, 261 (1st Cir. 1984)).

Thus, the doctrine typically protects individuals when they enact legislation concerning municipal budgetary matters. See Bogan, 523 U.S. at 55–56, 118 S.Ct. 966 (applying the doctrine to individuals who approved a budget that eliminated an entire municipal department, reasoning that the act constituted “a discretionary, policymaking decision implicating the budgetary priorities of the city and the services the city provides to its constituents”); Craig v. Police Jury Par., 265 F. App'x 185, 191 (5th Cir. 2008) (concluding that legislative immunity protected individuals who enacted an ordinance abandoning specified road maintenance). Also, when city commissioners decided to rezone certain property as commercial, albeit with restrictions to accommodate traffic concerns, the Fifth Circuit concluded that the act was legislative in nature because it involved setting zoning policy for the city. See Weingarten, 376 F. App'x at 411; see also Calhoun v. St. Bernard Parish, 937 F.2d 172, 174 (5th Cir. 1991) (finding that local officials were entitled to legislative immunity for zoning decisions that impeded a developer's plans to build low-income housing, despite “allegations of discriminatory intent”). And when public officials enact ordinances that implicate the allocation of municipal resources, it “bears the hallmarks of traditional legislation.” Craig, 265 F. App'x at 191 (cleaned up).

The Bryan decision provides an illustrative example regarding the distinction between legislative and administrative conduct. In that case, a real estate developer sought approval to build an apartment complex, but found himself in a protracted battle with the mayor and two aldermen. The Fifth Circuit, relying in part on the guidance from Cutting, analyzed the various allegedly-wrongful acts. First, the mayor's vetoing of “a determination that Bryan's plan satisfied city zoning ordinances or building requirements” was non-legislative, as the act “entered the realm of ‘enforcement’ ” and “affected Bryan's development alone.” Bryan, 213 F.3d at 273. The same analysis applied to the Mayor's “delayed decisions on approval of Bryan's plans at various board meetings,” as the act “was also specific and particular.” Bryan, 213 F.3d at 274. The Fifth Circuit next found that the defendants’ “vote to apply for a rezoning” that would stymie the developer's plan resembled “ad hoc decisionmaking [rather] than the formulation of a policy.” Bryan, 213 F.3d at 274. As a result, legislative immunity did not apply to this conduct. Finally, the court found that the doctrine protected the mayor “plac[ing] the rezoning decision back on the agenda without notifying the parties” and the mayor and alderman “vot[ing] to rezone the property.” Bryan, 213 F.3d at 274. Although “irregular and inappropriate,” these final acts “were still legislative in nature because they involved a rezoning provision.” Bryan, 213 F.3d at 274.

Applying these principles to the present case, the Court concludes that the City Officials’ allegedly-wrongful acts represent legislative conduct and, as a result, receive the protections of absolute legislative immunity. Med Care's allegations focus on the City Officials enacting Ordinance 2021-27 and Resolutions 2021-19 and 2021-24. Through the two Resolutions, the Board of Commissioners authorized the City to use a portion of its budget to purchase the assets of HCEMS. These actions concerned the City's budget, a matter traditionally falling within legislative conduct. Although the act involved the purchase of specific property, it implicated the budgetary priorities of the City and the services it desired to provide to its constituents. In addition, the Resolutions did not target any individual or specific company in their impact. Under these circumstances, the approval of the Resolutions constituted legislative acts.

Through Ordinance 2021-27, the Board of Commissioners regulated the provision of ambulance services within the municipality, applying a city-wide policy that applied to all companies equally. While the Ordinance impacted Med Care's business, the Board of Commissioners through the enactment did not single out Med Care or treat it differently from other private ambulance services. Med Care identifies no unique impact arising from the Ordinance. As a result, the passage of Ordinance 2021–27 represents a legislative act, and the City Officials involved in that decision receive the protections of absolute legislative immunity for their role in that process.

Med Care principally responds that legislative immunity should not apply because some of the City Officials acted with the motive of “gaining complete control of the EMS service within Hidalgo County for their or their relatives’ financial gain.” (Response, Doc. 81, 4) This argument, however, proves unpersuasive. An allegation that defendants acted with improper motives or conflicts of interest do not affect the immunity analysis. The Supreme Court has clarified that courts do not “inquire into the motives of legislators” when analyzing whether legislative immunity applies. Bogan, 523 U.S. at 55, 118 S.Ct. 966; see also Calhoun v. St. Bernard Parish, 937 F.2d 172, 174 (5th Cir. 1991) (applying legislative immunity despite “allegations of discriminatory intent”). Med Care provides no authority indicating that a legislators’ motivation bears relevance upon, much less removes the protections that legislative immunity affords.

Finally, to the extent that Med Care bases its causes of action on “any individual defendant's non-legislative actions,” the Fifth Circuit has already concluded that such allegations “fail[ ] to state a claim.” Med Care, 2024 WL 2271841, at *2, n.2.

IV. Conclusion

For these reasons, it is:

ORDERED that the Defendants’ Rule 12(b)(6) and 12(b)(1) Motions to Dismiss Based on Absolute Immunity (Doc. 69) is GRANTED IN PART AND DENIED IN PART;

ORDERED that the Motion to Dismiss based on Federal Rule of Civil Procedure 12(b)(1) is DENIED;

ORDERED that the Motion to Dismiss based on Federal Rule of Civil Procedure 12(b)(6) is GRANTED on the grounds of absolute legislative immunity; and

ORDERED that all causes of action alleged by Med Care Emergency Medical Services, Inc. against Defendants Itza Flores, Ambrosio Hernandez, Ricardo Medina, Daniel Chavez, Ramiro Caballero, and Robert Carrillo are DISMISSED WITH PREJUDICE.

FOOTNOTES

2.   Although Med Care did not attach the relevant Resolutions and the Ordinance to its live pleading, these documents constitute matters of public record, of which a court can take judicial notice for purposes of a Rule 12 motion. See Norris v. Hearst Tr., 500 F.3d 454, 461 n.9 (5th Cir. 2007) (“[I]t is clearly proper in deciding a 12(b)(6) motion to take judicial notice of matters of public record.”); Vela v. City of Houston, 276 F.3d 659, 683 n.26 (5th Cir. 2001).

3.   The Commissioners also “conducted meetings to plan this takeover outside of posted Commission meetings.” (3d Am. Compl., Doc. 32, ¶ 15)

4.   The state court denied issuing a temporary restraining order. (See Order, Doc. 1–4, 14)

5.   The Fifth Circuit also commented that Med Care's allegation that City Officials had “blackballed” the company failed to state a claim upon which relief can be granted. Med Care, 2024 WL 2271841, at *2 n. 2.

6.   The Court recognizes that the City Officials include this argument in their Motion, but do so in a cursory manner and only when describing the applicable standard for a Rule 12(b)(1) analysis. They do not address jurisdictional concerns in the “Argument and Authorities” section of their Motion, focusing that section solely on their Rule 12(b)(6) argument.

Fernando Rodriguez, Jr., United States District Judge