The legal battle between the Tarrant Regional Water District and former employee Shanna Granger grew more complicated this week after a judge threw out two of Granger’s claims against the water district.
In a June lawsuit, Granger accused the water district of breaching contract and interfering with business relationships by terminating her permit to host an Oktoberfest event at Panther Island Pavilion, a water district-owned property.
Joel Geary, an attorney hired by the water district, argued that the district and its board members cannot be sued for breach of contract under a Texas law that provides immunity to government agencies, according to court filings obtained by the Fort Worth Report.
On July 18, Judge Chris Taylor ultimately agreed, dismissing those claims with prejudice and therefore banning Granger from pursuing the issue again in Tarrant County district court.
But Taylor is allowing more time for discovery and depositions on Granger’s claim accusing the water district of violating the Texas Open Meetings Act, keeping the case alive through next month, according to court filings.
“We have also filed an amended petition alleging additional claims for violation of the Texas Constitution – those claims are also still alive,” Greg Jackson, an attorney for Granger, said by email. “There will be a temporary injunction hearing in early August on the remaining claims.”
Granger, who previously organized Oktoberfest events for the district before leaving her role in November, and her company Prost Productions accuse the district and board members Leah King, James Hill and Mary Kelleher of improperly consulting with each other about the permit outside of a public board meeting.
In a sworn deposition, district general manager Dan Buhman said he spoke with all five board members about the permit, almost entirely during phone calls. The board never directed him to take a specific action on the matter, Buhman said. Stephen Tatum, who serves as general counsel for the water district, declined to comment on the record when reached Friday.
“As a general manager, my job was to be transparent with my board about what I’m doing, generally,” Buhman told the Report in a June interview. “So I make sure that the board is aware of my actions. But that’s very different from the board taking action on things.”
Buhman said last month that he made the decision to rescind the permit after learning that the water district could not grant a “thing of value,” such as the Oktoberfest branding or venue, to a corporation or individual without meeting several constitutional tests.
District leader and board members discussed Granger decision privately
Buhman’s June deposition offers a window into board members’ private concerns about how the public would perceive the water district granting a permit to Granger.
“There were concerns about the public perception of issuing that permit,” Buhman said, according to a deposition transcript. “I think that was the primary concern I heard. I don’t know specifically who I heard that from. I would say – I would say I certainly heard it from multiple board members.”
Before issuing the permit in March, Buhman said, he considered potential problems with giving Granger permission to host Oktoberfest at Panther Island Pavilion.
One was the perception of having a former employee run an event that the district previously organized. Another was her marriage to then-water district employee JD Granger, the former executive director of the district’s Panther Island project and the son of Congresswoman Kay Granger.
JD Granger, who was criticized for nepotism during his tenure at the district, left that role in April to create a consulting company, which signed a six-month contract with the water district shortly thereafter.
Buhman mentioned the possibility of granting the Oktoberfest permit to Shanna Granger to board members and did not hear pushback before March, he said.
That changed in late April or early May, when Buhman had a conversation with Hill, the board’s vice president. As Buhman explained the water district’s strategy to produce fewer recreational events, he told Hill that the district issued a permit to Granger and Prost Productions.
Hill expressed concern that the decision might not be legal, leading Buhman to consult with Tatum, the district’s general counsel. Tatum’s legal analysis found that the event’s association with the venue and water district branding was a “thing of value” that should have been transferred to another entity through a board vote. That analysis ultimately led Buhman to rescind the permit, he said.
Buhman said he spoke on the phone with every board member – including Hill, Kelleher, King, Marty Leonard and Jim Lane – about Granger’s permit, especially as the district explored options to transfer the permit to a nonprofit organization and avoid legal risk from transferring it to a corporation. Buhman recalled one conference call with King and Hill about the matter.
Jackson, Granger’s attorney, asked Buhman if any board members did not want the Oktoberfest permit to be on the agenda of a public board meeting.
“I would say I did hear a concern that this topic at a TRWD board meeting would have a negative impact on the water district’s public reputation and a concern that that would not be a good topic at this time,” Buhman said, according to the transcript.
The permit was never discussed at board meetings prior to the lawsuit, Buhman said. After the suit was filed, the issue was addressed during private executive sessions, he added.
Hill and other board members told Buhman they were concerned about negative public perceptions of the water district entering into contracts with the Grangers, Buhman said in the deposition. However, the board never directed him to take any specific actions on the permit, Buhman said.
“I would say my job is to weigh the pros and cons and risks and benefits of every decision,” Buhman told attorneys. “And I felt like those relationships we just described, those contract and permit relationships, were appropriate at the time (the permit was issued).”
Attorneys at odds over open meetings act, constitutional violations
In court filings, Granger’s attorneys argued that an unofficial quorum of board members – the minimum number of elected officials necessary to make a meeting’s proceedings valid – met outside of the public eye to discuss the Oktoberfest dilemma, violating the Texas Open Meetings Act. The only evidence the water district has given to prove that the board wasn’t involved is Buhman’s testimony, according to Granger’s legal team.
“The permit at issue is clearly a board-level decision,” Granger’s attorneys wrote. “Plaintiffs allege a walking quorum of the TRWD Board (King, Hill and Kelleher) engaged in discussions running afoul of TOMA, decided to terminate the permit, and instructed Buhman to carry out the action.”
Because granting the permit would have meant transferring a profitable Oktoberfest event to Prost Productions, the water district’s board of directors should have been involved in the decision to grant Granger’s permit in March, according to the district’s legal team. In turn, water district management decided to terminate the permit.
The board had no role and was not required to have a role in terminating the permit, according to arguments from water district attorneys. Because the board did not take official action to begin with, there is no decision for the court to invalidate even if Granger proves that an open meetings violation took place, the water district argues.
“The evidence conclusively establishes that General Manager Dan Buhman made the decision to terminate the permit and a quorum of the board took no action that could be voided by the Court,” the water district legal team wrote. “The (Texas Open Meetings Act) claim fails as a matter of law.”
What are the Taking Clause and the Due Course of Law Clause?
Violation of Takings Clause: “No person’s property shall be taken, damaged or destroyed for or applied to public use without adequate compensation being made, unless by the consent of such person.”
Violation of Due Course of Law Clause: “No citizen of this State shall be deprived of life, liberty, property, privileges or immunities, or in any manner disfranchised, except by the due course of the law of the land.”
While the court sided with the water district on its immunity from a contract lawsuit, attorneys will have an opportunity to collect more deposition and evidence regarding the open meetings allegations. Granger’s lawyers have also filed an amended petition adding two separate allegations of the district violating the Texas Constitution.
In the petition, Granger’s legal representation argues her property — in this case, the permit and the lease it conveyed — were taken for public use without adequate compensation, a violation of the constitution’s Takings Clause.
Additionally, they argue her permit was rescinded without due course of law. Another hearing on the case is expected in early August, though that meeting has not been officially scheduled yet, Jackson said.
Haley Samsel is the environmental reporter for the Fort Worth Report. Her position is supported by a grant from the Marilyn Brachman Hoffman Foundation. Contact her by email or via Twitter.
Emily Wolf is a government accountability reporter for the Fort Worth Report. Contact her at emily.wolf@fortworthreport.org or via Twitter.
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