City of Aledo, City of Angleton, City of Anna, City of Aubrey, City of Bonham, City of Brownsville, City of Bulverde, City of Cibolo, City of Clyde, City of College Station, City of Crandall, City of Denison, City of Denton, City of Edcouch, City of Elsa, City of Fate, City of Grand Prairie, City of Hutto, City of Kaufman, City of La Villa, City of Lockhart, City of McKinney, City of Navasota, City of Parker, City of Van Alstyne, and Aubrey Municipal Development District v. State of Texas, Attorney General Kenneth Paxton (In His Official Capacity), Acting Texas Comptroller of Public Accounts Kelly Hancock (In His Official Capacity), and the Office of the Texas Comptroller of Public Accounts

ACCEPTED
15-25-00086-Cv
FIFTEENTH COURT OF APPEALS
AUSTIN, TEXAS
1/8/2026 9:00 PM
No. 15-25-00086-CV CHRISTOPHER A. PRINE
CLERK
IN THE FIFTEENTH COURT OF APPEALSFILED IN
15th COURT OF APPEALS
AUSTIN, TEXAS AUSTIN, TEXAS
1/8/2026 9:00:05 PM
CHRISTOPHER A. PRINE
Clerk

City of Grand Prairie, City of Aledo, City of Angleton, City of Aubrey, City of
Bulverde, City of Clyde, City of College Station, City of Crandall, City of Denison,
City of Denton, City of Edcouch, City of Elsa, City of Fate, City of Hutto, City of
Kaufman, City of La Villa, City of Lockhart, City of McKinney, City of Navasota,
City of Parker, City of Van Alstyne, and Aubrey Municipal Development District
Appellants – Plaintiffs
City of Brownsvile, City of Cibolo, City of Anna, and City of Bonham
Appellants – Intervenor Plaintiffs
v.

The State of Texas, Attorney General Kenneth Paxton, In His Official Capacity,
Acting Texas Comptroller Of Public Accounts Kelly Hancock, In His Official
Capacity, and the Office of the Texas Comproller of Public Accounts
Appellees – Defendants

REPLY BRIEF OF CITY APPELLANTS

William Andrew Messer Bradford E. Bullock
State Bar No.13472230 State Bar No. 00793423
andy@txmunicipallaw.com brad@txmunicipallaw.com
Messer Fort, PLLC Messer Fort, PLLC
6371 Preston Road, Ste 200 4201 W. Parmer Ln., Ste C-150
Frisco, Texas 75034 Austin, Texas 78727
(972) 668-6400 (Phone) (512)930-1317 (Phone)

Attorneys for City Appellants

ORAL ARGUMENT REQUESTED
TABLE OF CONTENTS

TABLE OF CONTENTS ................................................................................................... ii
TABLE OF AUTHORITIES ........................................................................................... iv
I. State Appellees intentionally mis-frame the Cities’ pleaded
injuries as a policy dispute, ignoring the Cities allegations
demonstrating present legal and operational harm, loss of
pledged taxes, and loss of vested contractual rights ................................. 1
A. State Appellees waived their ability to challenge the
existence of the Cities’ pleaded jurisdictional facts because it
failed to meet its Miranda evidentiary burden ................................... 3
B. The Cities pleadings satisfy injury-in-fact — the pleaded
injuries are not “hypothetical” because (according to State
Appellees) SB 2038 operates “automatically” ..................................... 5
C. State Appellee’s “not particular because all cities are affected”
argument misunderstands standing and conflates breadth of
injury with “particularized” injury ....................................................... 9
D. State Appellees overstate “third-party causation” to avoid
acknowledging the Cities’ particularized injuries ........................... 10
E. The Cities satisfy injury-in-fact for multiple independent
reasons ...................................................................................................... 11
II. Traceability Exists Between The Cities’ Claims And State
Appellees........................................................................................................... 12
A. State Appellees Judicial Admission Regarding The
Attorney General Prosecutorial Indecision .................................... 13
B. State Appellees Enforcement Policy Through The Attorney
General ................................................................................................... 13
C. The Attorney General’s Prosecutorial Indecision Gives
Standing to the Cities .......................................................................... 15

APPELLANTS’ REPLY BRIEF PAGE ii
D. The Cities Face Threat Of Enforcement From Third
Parties ..................................................................................................... 21
E. The State Comptroller Has Mandated Statutory
Enforcement Powers............................................................................ 23
III. A declaration that 2038 is unconstitutional will redress the Cities’
injuries............................................................................................................... 26
IV. The State Appellees’Appellees’ facial plausibility and no
immunity waiver arguments lack merit ..................................................... 27
V. Elliott an HB 2512 do not moot the Cities’ claims ................................... 29
A. HB 2512 does not moot the Cities’ Nootsie-forced
implementation claims .......................................................................... 29
B. Elliott does not moot the Cities’ claims ............................................. 31
PRAYER .............................................................................................................................. 32
CERTIFICATE OF SERVICE ....................................................................................... 33
CERTIFICATE OF COMPLIANCE ............................................................................ 33
APPENDIX

APPELLANTS’ REPLY BRIEF PAGE iii
TABLE OF AUTHORITIES
Cases
303 Creative LLC v. Elenis,
600 U.S. 570, 143 S.Ct. 2298, 216 L.Ed.2d 1131 (2023)........................................... 21

Alamo Heights Indep. Sch. Dist. v. Clark,
544 S.W.3d 755 (Tex. 2018)......................................................................................... 3, 4

Arizona v. Yellen,
34 F.4th 841 (9th Cir. 2022).............................................................................................. 18

Babbitt V. United Foarm Workers Nat'l Union,
442 U.S. 289, 99 S. Ct. 2301, 60 L. Ed. 2d 895 (1979) .............................................. 18

Bland Indep. Sch. Dist. v. Blue,
34 S.W.3d 547 (Tex. 2000) ........................................................................................... 3, 4

Brown v. Kemp,
86 F.4th 745 (7th Cir. 2023).............................................................................................. 22

California v. Tex.,
593 U.S. 659, 141 S. Ct. 2104, 210 L. Ed. 2d 230 (2021)...................... 25, 26, 27, 28

California Trucking Ass'n v. Bonita,
996 F.3d 644 (9th Cir. 2021)............................................................................................ 19

City of Austin v. Paxton,
943 F.3d 993 (5th Cir. 2019)............................................................................... 19, 20, 21

City of El Paso v. Heinrich,
284 S.W.3d 366 (Tex. 2009).......................................................................................... 24

APPELLANTS’ REPLY BRIEF PAGE iv
City of McLendon-Chisholm v. City of Heath,
No. 05-23-00881-CV, 2024 WL 4824113, (Tex. App.—Dallas Nov. 19, 2024, no
pet.)............................................................................................................................. passim

Elliot v. City of Col. Station,
717 S.W.3d 888 (Tex. 2025)................................................................................... passim

FM Props. Operating Co. v. City of Austin,
22 S.W.3d 868 (Tex.2000) ................................................................................................ 5

Franciscan Alliance Inc. v. Becerra,
47 F.4th 368 (5th Cir. 2022)....................................................................12, 16, 17, 18, 20

General Servs. Com’n v. Little-Tex Insulation Co., Inc.,
39 S.W.3d 591 (Tex. 2001) ............................................................................................... 6

Gray v. City of Valley Park, Mo.,
567 F.3d 976 (8th Cir. 2009)............................................................................................ 19

Harrington v. Cobb,
185 S.W.2d 133 (Tex. Civ. App.─Dallas 1945), affirmed, 190 S.W.2d 709, 712
(1945) .......................................................................................................................... 24, 25

Italian Colors Rest. v. Becerra,
878 F.3d 1165 (9th Cir. 2018) ......................................................................................... 22

Janek v. Harlingen Family Dentistry, P.C.,
451 S.W.3d 97 (Tex. App.—Austin 2014, no pet.) .................................................... 24

KVUE, Inc. v. Moore,
709 F.2d 922 (5th Cir. 1983)............................................................................................ 17

Langever v. Miller,
124 Tex. 80, 76 S.W.2d 1025 (1934) ............................................................................ 26

APPELLANTS’ REPLY BRIEF PAGE v
Love v. City of Dallas,
40 S.W.2d 20 (Tex. 1931) ........................................................................................ 23, 25

McKinney v. Blankenship,
282 S.W.2d 691 (Tex. 1955).................................................................................... 24, 25

Mission Consol. Indep. Sch. Dist. v. Garcia,
372 S.W.3d 629 (Tex. 2012)............................................................................................. 4

Morath v. Kingsville ISD,
710 S.W.3d 918 (Tex.App. - 15 Dist. 2025, no pet) ........................................... 28, 29

National Ass’n for Gun Rights, Inc. v. Garland,
741 F.Supp.3d 568 (N.D. Tex. 2024) ........................................................ 16, 17, 20, 21

Nat'l Press Photographers Ass'n v. McCraw,
90 F.4th 770 (5th Cir. 2024).............................................................................................. 17

Nootsie, Ltd. v. Williamson Cty. Appraisal Dist.,
925 S.W.2d 659 (Tex.1996) .................................................................................... passim

Ostrewich v. Tatum,
72 F.4th 94 (5th Cir. 2023) ................................................................................................ 17

Pool v. City of Houston,
978 F.3d 307 (5th Cir. 2020)............................................................................... 16, 17, 20

Raj v. La. State Univ.,
714 F.3d 322 (5th Cir. 2013)............................................................................................ 20

Sandwell v. City of San Marco,
2025 WL 2108996 (S.D. Cal. 2025) .............................................................................. 19

Save Our Springs All., Inc. v. City of Dripping Springs,
304 S.W.3d 871 (Tex. App.—Austin 2010, pet. denied) ............................................ 5

APPELLANTS’ REPLY BRIEF PAGE vi
Speech First, Inc. v. Fenves,
979 F.3d 338 (5th Cir. 2020) .............................................................................. 16, 18, 20

Spirit Aerosystems, Inc. v. Paxton,
142 F.4th 278 (5th Cir. 2025) .......................................................................................... 18

State v. City of Double Horn,
2019 WL 5582237 (Tex. App.─Austin 2019) ............................................................ 15

State v. Epperson,
42 S.W.2d 228 (1931) ............................................................................................... 24, 25

Susan B. Anthony List v. Driehaus,
573 U.S. 149, 134 S. Ct. 2334, 189 L.Ed.2d 246 (2014) ............................... 17, 21, 22

Tex. Dep't of Parks & Wildlife v. Miranda,
133 S.W.3d 217 (Tex. 2004).................................................................................. 4, 6, 12

Texas v. KVUE-TV, Inc.
465 U.S. 1092 (1984) ................................................................................................. 17, 18

Toolpushers Supply Company v. IPR USA Corp.,
No. 3-10-CV-2195-B, 2012 WL 13028105 (N.D. Tex. Jan. 11, 2012) .................. 24

Vermont Right to Life Committee, Inc. v. Sorrell,
221 F.3d 376 (2nd Cir.2000)........................................................................................... 17

Warth v. Seldin,
422 U.S. 490, 95 S. Ct. 2197, 45 L. Ed. 2d 343 (1975) ................................................ 9

Whole Woman’s Health v. Jackson,
6642 S.W.3d 569 (Tex. 2022). ....................................................................................... 16

Wooley v. Schaffer,
447 S.W.3d 71 (Tex. App.—Houston [14th Dist.] 2014, pet. denied) ................... 4

APPELLANTS’ REPLY BRIEF PAGE vii
Zimmerman V. City of Austin,
881 F.3d 378 (5th Cir. 2018)............................................................................................ 21

Statutes
Tex. Civ. Prac. & Rem. Code § 66.001 ........................................................................... 15

Tex. Gov’t Code § 43.014 ................................................................................................. 12

Tex. Loc. Gov't Code § 41.001.....................................................................................8, 11

Tex. Loc. Gov't Code § 42.023......................................................................................... 30

Tex. Loc. Gov't Code § 42.101......................................................................................... 30

Tex. Loc. Gov't Code § 42.102......................................................................................... 29

Tex. Loc. Gov't Code § 42.105......................................................................................... 30

Tex. Loc. Gov't Code § 42.152......................................................................................... 30

Tex. Loc. Gov't Code § 42.157......................................................................................... 29

Tex. Loc. Gov't Code § 375.001 ...................................................................................... 23

Tex. Loc. Gov't Code § 377.101 ...................................................................................... 23

Tex. Tax Code § 321.101 .................................................................................................. 23

Tex. Tax Code § 323.501 .................................................................................................. 23

Tex. Tax Code § 322.201 .................................................................................................. 25

Tex. Tax Code § 323.301 ........................................................................................... 23, 24

Tex. Tax Code § 323.302 .................................................................................................. 23
APPELLANTS’ REPLY BRIEF PAGE viii
Tex. Tax Code § 323.502 .................................................................................................. 23

Texas Health and Safety Code § 171.001 ...................................................................... 16

Texas Heartbeat Act, SB 8................................................................................................ 16

Other Authorities
Tex. Att’y Gen. Op. GA-1015 (2013) ............................................................................. 24

Tex. Atty Gen. Op. MW-408 (1981) .............................................................................. 24

APPELLANTS’ REPLY BRIEF PAGE ix
REPLY BRIEF
I. State Appellees intentionally mis-frame the Cities’ pleaded injuries as
a policy dispute, ignoring the Cities allegations demonstrating present
legal and operational harm, loss of pledged taxes, and loss of vested
contractual rights

State Appellees’ arguments ignore the Cities’ legal authorities and pleaded

facts, rather than refute them.

The Cities do not assert that their injury is the reduction (or elimination) of

ETJ territory by a legislative act . By mis-framing the Cities’ challenge to SB 2038

as a mere policy disagreement, State Appellees create a strawman that it then easily

bats down.

After mischaracterizing the Cities’ alleged injury—mere loss of ETJ

jurisdiction and authority—State Appellees then dismiss it as “hypothetical,”

claiming that the alleged injuries have not yet occurred because the Cities denied

ETJ petitions. State Br. at 32–35. Even if that characterization of the Cities’ alleged

injuries were true (it is not), by later asserting that SB 2038 operates

“automatically,” State Appellees undermine the foundation upon which its

strawman is built. State Br. at 57.

If SB 2038 operates “automatically” as State Appellees argue, the Cities’

injuries are the actual or imminent consequence of an automatic petition process

that puts legislative decision-making power in the hands of financially interested

private landowners.

APPELLANTS’ REPLY BRIEF PAGE 1
State Appellees also misstate or mischaracterize the legal grounds upon

which the Cities’ injuries rest. For example, State Appellees argue that the Cities

assert their own due process rights to challenge SB 2038 under Article I of the

Texas Constitution and then refute that position by arguing cities do not possess

such Article I rights. State Br. at 35-36. But the Cities do not and never have

claimed that they possess Article I rights. Rather, the Cities’ claims are premised

on an unconstitutional delegation of legislative authority under Texas Article III,

from which the Cities’ various injuries flow. SB 2038 is unconstitutional because it

violates separation of powers, not because the Cities claim they have Article I

rights.

When State Appellees are not mis-framing the Cities’ injuries, they are

affirmatively misstating the Cities’ pleaded allegations. For example, they claim

that the Cities pleaded “no” economic injuries similar to those in McLendon-

Chisholm (State Br. at 34). City of McLendon-Chisholm v. City of Heath, No. 05-23-

00881-CV, 2024 WL 4824113, at *4 (Tex. App.—Dallas Nov. 19, 2024, no pet.).

But that is simply untrue. The Cities’ allegations plainly allege a loss of pledged

tax revenue and increased administrative costs, based not on speculative future

events, but based upon a specific ETJ petition that removed tax generating

property from AMMD’s EJT (24CR6128, 6136), and the receipt of every other

“automatic” ETJ petition, which occasions direct increased costs (injuries)

(24CR6146-51).

APPELLANTS’ REPLY BRIEF PAGE 2
State Appellees’ criticism of the quality of the Cities’ facts, which the trial

court was obligated to accept as true, rings hollow because it chose to forego the

opportunity to challenge the existence of the Cities’ pleaded jurisdictional facts and

the Cities’ jurisdictional evidence. (36CR8624-52).

State Appellees’ merits-based arguments should have been disregarded by

the trial court, and this Court should rectify that error by reversing and remanding.

When analyzed correctly, the Cities’ allegations meet the injury-in-fact standard,

as discussed more fully herein.

A. State Appellees waived their ability to challenge the existence of the
Cities’ pleaded jurisdictional facts because it failed to meet its Miranda
evidentiary burden.

Standing is a prerequisite to subject-matter jurisdiction, which may be

challenged by a jurisdictional plea. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547,

553-554 (Tex. 2000). State Appellees purport to challenge the quality and quantity

of the Cities’ factual allegations (State’s Br. at 39-40); therefore, State Appellees

were obligated to go beyond the pleadings and offer evidence conclusively

rebutting the Cities’ factual allegations, but they presented none (36CR8624-52).

See Alamo Heights Indep. Sch. Dist. v. Clark, 544 S.W.3d 755, 770-771 (Tex. 2018)

(jurisdictional plea challenging existence of jurisdictional facts should have

supporting evidence).

This “summary judgment” burden shifting analysis is mandatory, and State

Appellees’ argument that the Cities produced “insufficient” evidence (States Br. p.

APPELLANTS’ REPLY BRIEF PAGE 3
39-40) is nothing but an improper and premature attack on the merits of the Cities’

claim. Mission Consol. Indep. Sch. Dist. v. Garcia, 372 S.W.3d 629, 635 (Tex. 2012)

(describing burden shifting analysis). The State’s failure to present conclusively

rebutting evidence precludes it from challenging the Cities’ factual allegations

under the Miranda burden-shifting standard. Tex. Dep't of Parks & Wildlife v.

Miranda, 133 S.W.3d 217, 227 (Tex. 2004).

Because State Appellees presented no evidence in support of their

jurisdictional plea, they did not meet their burden as defendants to raise a successful

challenge to the existence of jurisdictional facts. Clark, 544 S.W. 3d at 771-72. Their

choice to forego introducing evidence while arguing that the Cities jurisdictional

evidence is insufficient must be regarded as nothing but an improper attempt to

require the Cities to “put on their case simply to establish jurisdiction.” Miranda,

133 S.W.3d at 228 (quoting Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex.

2000)).

Accordingly, State Appellees waived their ability to challenge the existence

of jurisdictional facts, and the Cities’ well-pleaded facts should be taken as true. See

Wooley v. Schaffer, 447 S.W.3d 71, 76 (Tex. App.—Houston [14th Dist.] 2014, pet.

denied) (comparing Texas Rule 91a with Federal Rule 12(b) motion to dismiss).

APPELLANTS’ REPLY BRIEF PAGE 4
B. The Cities pleadings satisfy injury-in-fact — the pleaded injuries are
not “hypothetical” because (according to State Appellees) SB 2038
operates “automatically.”

State Appellees’ “no injury-in-fact” argument rests almost entirely on a

mischaracterization the elements of injury-in-fact, the Cities’ factual allegations,

and on contradictory and inconsistent arguments about how SB 2038 operates. See

State Br. 32–39.

An injury is “hypothetical” when there is no actual or imminent invasion of

a concrete and particularized legally protected interest. Save Our Springs All., Inc.

v. City of Dripping Springs, 304 S.W.3d 871, 878 (Tex. App.—Austin 2010, pet.

denied).

The Cities pleaded multiple legally protected interests recognized by the

Texas Supreme Court and other courts for decades (24CR6123-86):

• The Cities may challenge SB 2038 because they have a legally

protected interest in avoiding compelled enforcement of

unconstitutional laws (private delegation of legislative authority); 1

• The Cities may challenge SB 2038 because they have a legally

protected interest in pledged tax revenue which has been lost by SB

2038’s private delegation framework; 2

1 Nootsie, Ltd. v. Williamson Cty. Appraisal Dist., 925 S.W.2d 659 (Tex.1996); FM Props.
Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex.2000).
2 City of McLendon-Chisholm v. City of Heath (“McLendon-Chisholm”), No. 05-23-00881-CV, 2024

WL 4824113 (Tex.App.—Dallas Nov. 19, 2024, no pet.).
APPELLANTS’ REPLY BRIEF PAGE 5
• The Cities may challenge SB 2038 because they have a legally

protected interest in development agreement contracts that are no

longer performable because of SB 2038’s impairment of vested

contractual rights (annexation by agreement); 3

• The Cities may challenge SB 2038 because administrative and other

costs associated with the implementation and enforcement of its

mandate (revise ETJ boundaries, update official maps, adjust

development administration, process petitions) are recognized

“injuries”. 4

By contrast, State Appellees produced no evidence as part of their plea, and,

therefore, could not have conclusively rebutted any of the Cities factual allegations.

Miranda, 133 S.W. 3d at 227.

State Appellees also argue the Cities have suffered no injury because “the

Cities have denied the petitions, [therefore] none of those alleged injuries have

occurred.” State Br. at 32–33. They argue that because the Cities denied the ETJ

removal petitions, any loss of ETJ authority or related regulatory impacts are

merely “hypothetical.” Id. at 32–34.

But that assertion cannot be reconciled with the Cities’ pleaded facts and

State Appellees’ interpretation of SB 2038 elsewhere in their brief.

3 See General Servs. Com’n v. Little-Tex Insulation Co., Inc., 39 S.W.3d 591, 599 (Tex. 2001).
4 McLendon-Chisholm, No. 05-23-00881-CV, 2024 WL 4824113.
APPELLANTS’ REPLY BRIEF PAGE 6
When addressing mootness 5 and the effect of Elliott, State Appellees insist

that a city has no discretion to deny a statutorily compliant ETJ removal petition

and that, if the city fails to release the area within the statutory timeframe, “release

is effectuated as a matter of law.” State Br. at 61–62. State Appellees emphasize that

under Elliott, release is “automatic” when statutory conditions are met, regardless

of a city’s purported denial. See Elliot v. City of Col. Station, 717 S.W. 3d 888, 901,

(Tex. 2025) (“Release is a matter of paperwork, not permission.”).

These irreconcilable arguments disprove State Appellees’ contention that

the Cities’ pleaded injuries are merely “hypothetical” because:

• State Appellees cannot convincingly argue “no injury” because

petitions were denied, while simultaneously arguing that denials do

not matter and that release occurs automatically. If a city’s attempted

petition denial is a legal nullity and release occurs by operation of law,

then the governmental and contractual injuries alleged by the Cities

cannot be hypothetical—they occur by operation of SB 2038’s

delegatory framework.

• Taking State Appellees’ “operation of law” argument at face value,

Elliott acknowledges that Cities must perform the “paperwork” related

to administering SB 2038. See Elliott at S.W. 3d at 901. The Cities

5 The Cities will separately address why Elliott and HB 2512 do not moot their claims.

APPELLANTS’ REPLY BRIEF PAGE 7
allege this mandatory “paperwork” forces them to administer an

unconstitutional ETJ release regime, lose pledged tax revenue, and

contractual rights, and incur direct costs each time a private party

submits a statutorily compliant petition. The Cities injuries cannot be

a remote, speculative future possibility. Such injuries (e.g., require

revisions to official maps under Local Government Code § 41.001(c)

(Appx A), along with associated GIS, cartographic, and staff work—

each of which entails real financial cost) are a legal certainty if SB 2038

is an unconstitutional delegation of legislative authority as the Cities

claim.

• Because of SB 2038’s mandatory operation, the Cities’ injuries are the

predictable consequence of acts expressly authorized by SB 2038,

which necessarily cause present, ongoing governmental and

contractual injuries to the Cities each time a statutorily compliant

removal petition is received.

State Appellees’ claim that the Cities pleaded “no economic injuries” depends

on ignoring the Cities’ compliance-cost allegations entirely. If SB 2038 operates

automatically, State Appellees’ “hypothetical injury” argument fails, and the Cities

respectfully ask this Court to reject it.

APPELLANTS’ REPLY BRIEF PAGE 8
C. State Appellees’ “not particular because all cities are affected”
argument misunderstands standing and conflates breadth of injury with
“particularized” injury.

Implicitly acknowledging that the Cities suffer economic injuries, State

Appellees argue that even if the Cities do face mandatory “paperwork” and financial

impacts, those harms are not “particular” because “[e]very municipality in Texas

that has an ETJ will have those same mandatory compliance duties and financial

impacts.” State Br. at 35–36.

That argument confuses breadth with lack of particularization, an argument

the Supreme Court expressly rejects. Warth v. Seldin, 422 U.S. 490, 501, 95 S. Ct.

2197, 2206, 45 L. Ed. 2d 343 (1975) (plaintiff must allege a distinct/palpable injury

to himself, even if injury shared by larger class of possible litigants). The Cities

meet this standard—though there are a large number of cities in Texas, they are

particularly affected each time one receives a removal petition. They all must bear

the “paperwork” costs described infra, and some suffer additional particularized

injuries (e.g., removal petitions related to land that was subject to a statutorily-

backed development agreement, and in the case of AMDD, land subject to pledged

taxes the AMDD would receive). Id.; Elliott, S.W. 3d at 901.

These injuries are particular to each city that receives an ETJ petition

initiated by a private landowner, even if numerous cities suffer similar injuries

under the same statute.

APPELLANTS’ REPLY BRIEF PAGE 9
State Appellees cite no authority holding that an injury ceases to be

“particular” simply because it is widespread. Accordingly, their “no particularity”

argument fails and the Cities respectfully ask this Court to reject it.

D. State Appellees overstate “third-party causation” to avoid
acknowledging the Cities’ particularized injuries.

State Appellees repeatedly assert that any alleged injury depends on “the acts

of independent third-party landowners” and is therefore speculative. State Br. at

33–34, 38–39. And insofar as it relates to ETJ removals subject to existing

development agreements, they also assert that, “The parties who chose to file

petitions to release their property from the ETJ are the ones who breached their

contracts with the Contract Cities.” State Br. at 38.

That contradicts State Appellees’ argument that once SB 2038’s statutory

predicates are met, release is mandatory and automatic, and denial is legally

ineffective. State Br. at 61–62. SB 2038’s automatic operation means the Cities’

injuries flow from the statute’s design, not from discretionary choices by

landowners. The fact that these injuries are triggered by private landowners is not

a bug—it is the predominant feature of SB 2038.

For injury-in-fact purposes, the relevant point is that SB 2038 mandates a

release regime, and forces cities to administer that regime. Passing the buck to

private parties does not change the triggering mechanism of the injury—SB 2038’s

delegation mechanism. That is sufficient to establish concrete and imminent injury

APPELLANTS’ REPLY BRIEF PAGE 10
even if third-party landowners are the triggering mechanism because without SB

2038’s delegation of authority, private landowners could no more “abolish” ETJs

than cities can mandate their existence. See Nootsie, 925 S.W.2d at 661-62.

E. The Cities satisfy injury-in-fact for multiple independent reasons.

Texas courts recognize injury where political subdivisions are charged with

implementing allegedly unconstitutional statutes. The Cities grounded this

principle in Texas Supreme Court precedent in Nootsie, Proctor, and Neeley. Cities’

Br. at 21–23, 25–26.

SB 2038 forces ongoing costly municipal action—map revisions, GIS

updates, staff time, city engineer time, administrative processing, website design—

each time the ETJ changes by submittal of a single 2038 petition. Cities’ Br. at 10–

18. Those are concrete municipal expenditures. These expenditures are mandated

by statute, Local Government Code § 41.001. See Appx A. And these expenditures

are sufficient to establish injury in fact.

The Cities specifically pleaded that AMDD will lose local sales and tax

revenue by virtue of an ETJ release petition affecting a specific parcel that would

otherwise be subject to such taxes (24CR6128, 6136). See McLendon-Chisholm at *4.

State Appellees raised a merits-based argument, complaining that the Cities did not

include expert reports as part of its pleading. State Br. at 39-40.6 That ipse dixit is

6 The improper merits-based nature of State Appellees’ argument is apparent—“AMDD has
not suffered an injury in fact.” State Br. at 40. The proper analysis at this jurisdictional stage is
APPELLANTS’ REPLY BRIEF PAGE 11
insufficient—State Appellees did not meet their Miranda summary judgment

burden and disprove the existence of pleaded jurisdictional facts and evidence.

State Appellees argue that since cities have no “vested rights” against the

state to retain ETJ (State Br. at 37), the Cities have no legally protected interest

that supports their impairment of contract claims. This argument is another

strawman. SB 2038 provides a legislatively created mechanism for parties to

development agreements to remove their property from a city’s ETJ—a legal

prerequisite for a city to enter a development agreement and ultimately annex the

property in question. Tex. Gov’t Code § 43.014. Once a property is out of a city’s

ETJ, the legal basis for a Chapter 212 development agreement expires. Thus, SB

2038 constitutes an unconstitutional impairment on existing contracts.

These allegations and the Cities’ jurisdictional evidence in support of these

pleadings plainly meet the injury-in-fact threshold (24CR6123-86; 21CR4761-

5446; 22CR5449-5895; 23CR5897-6120).

II. Traceability Exists Between The Cities’ Claims And the State
Appellees.

The Fifth Circuit has recently and repeatedly held that plaintiffs have Article

III standing when faced with prosecutorial indecision. E.g., Franciscan Alliance

Inc. v. Becerra, 47 F.4th 368, 376-377 (5th Cir. 2022) (prosecutorial indecision, and

whether the Cities adequately pleaded facts that constitute an injury-in-fact. They did. See
McLendon-Chisholm at *4.
APPELLANTS’ REPLY BRIEF PAGE 12
thus standing, found when government had not determined its position on

enforceability and when the government vaguely promised not to enforce policies).

A. State Appellees Judicial Admission Regarding The Attorney General
Prosecutorial Indecision.

State Appellees’ amended plea to the jurisdiction admits that the Attorney

General “has not disavowed ever enforcing SB 2038”, and this failure to disavow

“shows nothing about whether the State or Attorney General will imminently do

so against the Cities.” CR 8634 (emphasis added). The State’s argument attempts

to show a lack of imminence but misses the point of prosecutorial indecision.

24CR6149-51). State Appellees’ admission in its live pleading that is has not

disavowed ever enforcing SB 2038 against the Cities easily meets the “prosecutorial

indecision” standard necessary for the Cities to establish Article III standing.

B. State Appellees Enforcement Policy Through The Attorney General

There is no question that the Attorney General’s office has a clear

enforcement policy targeting cities that it believes do not follow state law. The

Attorney General has issued press releases that establish a credible threat of

prosecution against cities that challenge laws they find unconstitutional. Says the

Attorney General:

APPELLANTS’ REPLY BRIEF PAGE 13
It’s quite simple: the legislature passes every law after a full debate on
the issue, and we don’t allow cities the ability to create anarchy by
picking and choosing the laws they enforce. 7

My office will take all necessary legal actions to ensure compliance
with state law and hold accountable any local entity that defies its legal
obligations. 8

Local governments must abide by the law, and I will take every step
to defend the people of Texas[.] 9

–and–

I’m launching this review to ensure that the law is universally
followed, taxpayers are respected, and local government is
accountable to all Texans. 10

The Texas Attorney General has demonstrated a willingness to enforce, and

has actually enforced, such claims against Texas municipalities. See State of Texas

v. City of Dallas, et al (all city councilmembers), No. DC-24-20503, 134th Dist. Court,

Dallas County, Texas (ultra vires claim against councilmembers for violating the

7 See press release on January 31, 2024, which may be found on the Attorney General’s
website. https://www.texasattorneygeneral.gov/news/releases/attorney-general-ken-paxton-
sues-five-cities-over-marijuana-policies-preventing-enforcement-texas.
8
See press release on March 13, 2025, which may be found on the Attorney General’s website
https://www.texasattorneygeneral.gov/news/releases/attorney-general-ken-paxton-
announces-investigation-dallas-open-borders-sanctuary-city-policies
9 Seepress release on December 9, 2025, which may be found on the Attorney General’s
website. https://www.texasattorneygeneral.gov/ news/releases/attorney-general-ken-paxton-
orders-texas-cities-halt-potentially-illegal-property-tax-increases

10 See https://www.texasattorneygeneral.gov/news/releases/attorney-general-ken-paxton-
launches-statewide-investigation-nearly-1000-texas-cities-ensure
APPELLANTS’ REPLY BRIEF PAGE 14
law). He publicly proclaims that one of his priorities is to enforce the law against

cities, even where the law is constitutionally infirm.

State Appellees acknowledges in their pleadings that the Attorney General

has the authority to file ultra vires suits against city officials, and that ultra vires

suits are “a way to reassert the State’s control over its municipalities… .” CR 8634.

The State can also file quo warranto suits against municipalities and their officials.

Tex. Civ. Prac. & Rem. Code § 66.001–.003. For example, the State sued the town

of Double Horn and its city councilmembers asserting a quo warranto claim. See

State v. City of Double Horn, 2019 WL 5582237 (Tex. App.─Austin 2019, pet.

denied). In its appellate briefing in that case, the Attorney General stated its policy

against municipalities: “For centuries, quo warranto has protected the people from

municipal overreach.”; “In Texas, the State has long used quo warranto to challenge

…usurpations of power by city officials.”; and “The State commonly uses quo

warranto against municipalities.” See No. 03-19-00304-CV, State brief at 3.

C. The Attorney General’s Prosecutorial Indecision Gives Standing to the
Cities.

Throughout this lawsuit, the Attorney General has repeatedly refused to

disavow prosecuting the Cities for violating SB 2038, and instead, attempted to

APPELLANTS’ REPLY BRIEF PAGE 15
assuage concerns by basically stating there are no current plans to prosecute.11

That is precisely the type of position that provides standing to the Cities.

In Franciscan Alliance, the U.S. Department of Health and Human Services in

its appellate brief said it “has not to date evaluated” whether it will seek an

enforcement lawsuit. 47 F.4th at 376 (emphasis added). The Fifth Circuit found that

statement dispositive of standing, equating it to “conceding that it may” file an

enforcement action. Id. 12 In Pool v. City of Houston, when the “City … indicated

that it had not yet determined its position on the Charter requirements’

enforceability,” the Fifth Circuit held that the plaintiffs had standing to bring an

“immediate [] challenge.” 978 F.3d 307, 310 (5th Cir. 2020) (emphasis added). In

Speech, when the defendant “vaguely promised to not enforce the challenged

policies, the Fifth Circuit held that the plaintiffs had standing because the

defendant’s position was “so vague… .” 979 F.3d at 338 & n.40 (emphasis added).

In National Ass’n of Gun Rights, Inc. v. Garland, 741 F.Supp.3d 568 (N.D. Tex. 2024),

the U. S. Attorney and other federal government defendants challenged the

standing of the plaintiffs, arguing there was no credible threat of prosecution. Id.

11 Nothing in SB 2038 prevents the Attorney General from bringing suit against the Cities to
enforce its terms. Compare SB 2038 with the Texas Heartbeat Act, SB 8, Texas Health and Safety
Code § 171.001 et seq., which forbids the State and its officers from enforcing the Texas abortion
ban through civil enforcement action. Whole Woman’s Health v. Jackson, 642 S.W.3d 569, 575
(Tex. 2022).
12 The State acknowledges, as it must, that Texas uses the federal law of Article III standing as

precedent. State Br. at 30.
APPELLANTS’ REPLY BRIEF PAGE 16
at 586 (emphasis added). In that case, the government defendants “repeatedly

refused to disavow prosecuting the [plaintiffs].” Id. at 586. The court found the

plaintiffs had standing because the plaintiffs faced an implicit threat, the

government defendants stood with “lingering silence” and “could change their

current plans at any time by deciding to prosecute .” Id. at 586 (emphasis added).

The court found the plaintiffs had standing because a “credible specter of

enforcement hangs in the balance.” Id. at 588;13 see also KVUE, Inc. v. Moore, 709

F.2d 922, 930 (5th Cir. 1983) (plaintiffs had standing in part because “the state has

not disavowed enforcement.”), aff’d sub nom. Texas v. KVUE-TV, Inc. 465 U.S. 1092

(1984); Vermont Right to Life Committee, Inc. v. Sorrell, 221 F.3d 376, 383 (2nd

Cir.2000) (noting state retained option to sue and not bound by estoppel from

pursuing enforcement in future).

State Appellees cite just two cases, Ostrewich v. Tatum, 72 F.4th 94, 101 (5th

Cir. 2023) and Nat’l Press Photographers Ass’n v. McCraw, 90 F.4th 770, 786 (5th Cir.

2024), to argue against the established prosecutorial indecision precedent. State

13 If there is any doubt that the Attorney General in this case has not fully disavowed
enforcement, this Court can request supplemental briefing on this very issue. See National Ass’n
for Gun Rights, 741 F.Supp.3d at 587 & n.46.
And in Franciscan Alliance, during oral argument the State pointedly refused to disavow
enforcement. See Oral Arg. At 15:46-19:27, https://perma.cc/Z82R-F7AY ([Q.] Are you able to
tell us that … you’re not going to enforce? [A.]: “No, your honor.”). The Court found standing
for prosecutorial indecision in that case. 47 F.4th at 376. The same refusal of disavowment
occurred in oral argument in Susan B. Anthony List v. Driehaus, 573 U.S. at 165 (Court found
standing in part because the government did not disavow future enforcement, citing Tr. Of Oral
Arg. 29-30).
APPELLANTS’ REPLY BRIEF PAGE 17
Appellees’ argument is flawed. Those two cases are not standing cases addressing

Article III standing at all. Rather, they address Ex parte Young waivers of Eleventh

Amendment immunity. The cases are easily distinguishable.

Earlier this year, the Texas Attorney General argued lack of standing when

a plaintiff challenged the constitutionality of a statute. In Spirit Aerosystems Inc., the

Fifth Circuit again addressed the doctrine of standing when there was prosecutorial

indecision by the Texas Attorney General. Said the Fifth Circuit:

Our court has recognized that where a governmental authority
‘concedes that it may’ enforce a particular provision, ‘plaintiffs have
standing in the face of … prosecutorial indecision.’ This is the classic
case of prosecutorial indecision.

Spirit Aerosystems, 142 F.4th 278, 285 (5th Cir. 2025) (emphasis added) (internal

citation omitted).

In the face of prosecutorial indecision by the State Appellees, and particularly

the Attorney General, the Court should apply straightforward precedent and find

the Cities have standing, just as standing was found in KVUE-TV (1984), Pool

(2020), Speech First (2020), Franciscan Alliance (2022), and Spirit Aerosystems (2025).

Though State Appellees do not seem to acknowledge this legal principle, the Fifth

Circuit has “repeatedly held that plaintiffs have standing in the face of similar

prosecutorial indecision.” Franciscan Alliance, 47 F.4th at 376 & n.40; see also Babbitt

v. United Farm Workers Nat’l Union, 442 U.S. 289, 302, 99 S. Ct. 2301, 2311, 60 L.

Ed. 2d 895 (1979) (refusal to disavow prosecution constitutes indecision); Arizona

APPELLANTS’ REPLY BRIEF PAGE 18
v. Yellen, 34 F.4th 841, 850 (9th Cir. 2022) (same); Sandwell v. Cit of San Marco, 2025

WL 2108996, *5 (S.D. Cal. 2025) citing California Trucking Ass’n v. Bonita, 996 F.3d

644, 653 (9th Cir. 2021) (same); Gray v. City of Valley Park, Mo., 567 F.3d 976, 985-

86 (8th Cir. 2009) (same).

State Appellees should not be able to use prosecutorial indecision as a shield

to gain a litigation advantage against the Cities to obtain dismissal of suit, and then

the next day, still be able to file suit against the Cities and their officials for claims

of ultra vires or quo warranto. On a policy level, it would be fundamentally unfair to

allow the Attorney General to use his office as both a shield and a sword.

State Appellees rely on City of Austin v. Paxton, 943 F.3d 993 (5th Cir. 2019),

to address the Attorney General enforcement policy against cities in other cases to

deny Article III standing. See State Br. at 47-48. Austin is distinguishable in many

respects.

First, that was a case where the city of Austin sued the Attorney General and

Texas Workforce Commission alleging federal preemption of a state statute that

affected an Austin ordinance. The case dealt extensively with whether the Attorney

General and Workforce Commission have 11th Amendment immunity or are

subject to the Ex parte Young exception to immunity. The present case has nothing

to do with 11th Amendment immunity or Ex parte Young standing. State Appellees

have neither specifically pled nor argued for 11th Amendment immunity.

APPELLANTS’ REPLY BRIEF PAGE 19
Austin is distinguishable for a second reason. The Young exception to

immunity is considered a legal fiction that allows private parties to bring suits

against state officials for violating federal law. City of Austin, 943 F.3d at 997, citing

Raj v. La. State Univ., 714 F.3d 322, 328 (5th Cir. 2013). In this case, there is no

claim that State Appellees have violated federal law.

The Austin opinion did analyze whether the Young 11th Amendment

immunity exception applied to the Attorney General because there was some

connection with the enforcement of the challenged law. 943 F.3d at 999-1003. At

that time, in 2019, the Fifth Circuit panel recognized that “[w]hat constitutes a

sufficient ‘connection to [] enforcement’ is not clear from our jurisprudence.” at

999. Since then, the Fifth Circuit has repeatedly held that plaintiffs have standing

when faced with prosecutorial indecision as is occurring in this case. See, e.g.,

Franciscan Alliance, 47 F.4th at 376 & n.40, Pool v. City of Houston, 978 F.3d at 310

(5th Cir. 2020), Speech First, 979 F.3d at 338 & n. 40; National Association of Gun

Rights, 741 F.Supp.3d 568. Austin is legally inapposite to this case.

Additionally, the Austin court found that the city of Austin faced no legal

consequences if it attempted to enforce its own ordinance, id. at 1002, and that the

city did not show a significant possibility of future harm. Id. at 1003. But in this

case, the Cities have demonstrated that they have and will certainly suffer harm.

APPELLANTS’ REPLY BRIEF PAGE 20
Further, Austin is factually distinguishable. Id. Unlike Austin, this case does

not involve whether a city may enact and enforce its own ordinances, which may

be preempted by state law. Rather, this case involves a state-created ETJ release

scheme instituted by private individuals. State Br. at 33. These facts are more

similar to “pre-enforcement challenges, which require a showing of “an intent to

engage in a course of conduct arguably affected with a constitutional interest, but

proscribed by statute, … as well as a credible threat of prosecution.” Nat'l Ass'n for

Gun Rights, Inc. v. Garland, No. 4:23-CV-00830-O, 2023 WL 5610293, at *4 (N.D.

Tex. Aug. 30, 2023) (citing Zimmerman v. City of Austin, 881 F.3d 378, 391 (5th Cir.

2018)).

D. The Cities Face Threat Of Enforcement From Third Parties.

The U.S. Supreme Court in Susan B. Anthony List found Article III standing

in part because the threat of a lawsuit is not limited to the government or

prosecutor. Susan B. Anthony List v. Driehaus, 573 U.S. 149, 164 (2014). “Because

the universe of potential complainants is not restricted to state officials who are

constrained by explicit guidelines of ethical obligation, there is a real risk of

complaints from [third parties].” Id.; see also 303 Creative LLC v. Elenis, 600 U.S.

570, 583, (2023) (credible threat of enforcement existed where “anyone in the State

[could] file a complaint against [plaintiff] and initiate ‘a potentially burdensome

administrative hearing’ process.”).

APPELLANTS’ REPLY BRIEF PAGE 21
Here, the Cities’ standing is bolstered by the undeniable fact that any

property owner in the Cities’ ETJ has the right to enforce SB 2038 against the

Cities. This is evidenced in this very case. The City of Denton was sued by

developer Long Tale for denying Long Tale’s 2038 petition. Denton was sued in

district court in Denton County, styled: 2020 Long Tail Trail Investments, LLC v.

City of Denton et al, No. 24-0075-431 (431st District), which was abated so that Long

Tale could intervene to assert its declaratory judgment claims against Denton in

this case. That occurred. 14 These facts demonstrate the Cities possess standing. See

Susan B. Anthony List, 573 U.S. at 164; Brown v. Kemp, 86 F.4th 745, 768 (7th Cir.

2023) (party had standing because government authorities were not the only ones

who could seek to enforce a law); Italian Colors Rest. v. Becerra, 878 F.3d 1165, 1173

(9th Cir. 2018) (party had standing because “even if the Attorney General would not

enforce the law,” private citizens had a right of action).

14 As of September 13, 2023, Denton had five 2038 petitions submitted. 24CR6067. As of today,

Denton has 24 removal petitions. Cities ask the Court to take judicial notice that as of December
15, 2023, the City of Austin (not a party) had 191 petitions for release, with 74 released by
operation of SB 2038. https://services.austintexas.gov/edims/document.cfm?id=420864 The
Cities also ask the Court to take judicial notice that in 2024, upon the request of various owners,
various parcels were added back to the ETJ, with one resident quoted as follows:

“Susan Harris told Council her 7-acre property was included in a request for
disannexation “without notice to us, without our consent, and entirely against
our wishes. And after a steep learning curve and much strategizing, we decided that
under Senate Bill 2038, which is the bill that’s harming us in this case, we would use
that to protect ourselves. And we petitioned the city to release our property
voluntarily from the ETJ,” so they could come back and ask to rejoin the ETJ.”
https://austinmonitor.com/stories/2025/01/at-citizens-request-city-council-
reannexes-land/
APPELLANTS’ REPLY BRIEF PAGE 22
Given that State Appellees have steadfastly refused to promise, in any way,

they will not seek enforcement against the Cities, the Cities have standing to

challenge the constitutionality of SB 2038 under firmly established precedent.

Credible threats of enforcement continue to loom over the Cities.

E. The State Comptroller Has Mandated Statutory Enforcement Powers

The AMDD is a Texas municipal management district with undisputed

authority by statute to impose and receive local sales and use taxes approved at an

election. Tex. Tax Code § 321.101 (municipalities); Tex. Loc. Gov’t Code § 377.101,

375.001 et seq. (municipal management districts). Although such local jurisdictions

impose local sales and use taxes, the Comptroller is responsible for administering,

collecting, and enforcing the taxes imposed by the ADD. Tex. Tax Code §§

323.301, 323.502. Retailers report and remit sales tax collected to the Comptroller,

see, e.g., id. §§ 323.201, 323.502, 323.302, and then, it is the Comptroller’s statutory

duty to disburse the sales tax to the local taxing authority, AMDD. See id., §§

323.502, 323.302. The State does not own the sales taxes; rather, the Comptroller

holds them in trust for the benefit and use of the local taxing authority. See Love v.

City of Dallas, 40 S.W.2d 20, 29 (Tex. 1931). AMDD has a vested right to the tax

revenues collected by the Comptroller. Id.; see Tex. Tax Code § 323.501 et seq.

(Comptroller required to maintain sales tax revenue in trust in a separate suspense

account of the municipality and is required to disburse the revenue at least twice

annually).
APPELLANTS’ REPLY BRIEF PAGE 23
The Texas Tax Code states, “The comptroller shall administer, collect , and

enforce the sales and use tax of a taxing entity.” Tex. Tax Code § 322.301

(emphasis added). See also Tex. Att’y Gen. Op. GA-1015 (2013) (recognizing the

Comptroller’s role in overseeing the administration of municipal and county sales

tax); Toolpushers Supply Company v. IPR USA Corp., 2012 WL 13028105, at *3 (N.D.

Texas Sept. 11, 2012) (same). Under the plain language of § 323.301, the

Comptroller is the sole enforcement authority and has no discretion regarding

the tax payments he must collect and remit to the AMDD (or any taxing entity).

Tex. Atty Gen. Op. MW-408 (1981) (comptroller is the sole administrator and

collector of local sales tax).

The Comptroller, like every state official, is not permitted to disregard a

ministerial duty imposed on him by law. City of El Paso v. Heinrich, 284 S.W.3d 366,

372 (Tex. 2009) (no immunity for ultra vires acts); Harrington v. Cobb, 185 S.W.2d

133, 139 (Tex. Civ. App.─Dallas 1945), affirmed, 190 S.W.2d 709, 712 (1945)

(addressing ministerial duties); McKinney v. Blankenship, 282 S.W.2d 691, 694 (Tex.

1955) (same). If the Comptroller fails in that ministerial duty, he is subject to an

ultra vires action. Heinrich, 284 S.W.3d at 374. Payment of monies owed is “purely

ministerial” under certain circumstances. State v. Epperson, 42 S.W.2d 228, 231

(1931) (holding duty to make payments owed to persons who are entitled to receive

money under valid contracts is purely ministerial); see also

APPELLANTS’ REPLY BRIEF PAGE 24
Dentistry, P.C., 451 S.W.3d 97, 104 (Tex. App.—Austin 2014, no pet.) (addressing

ministerial duty to remit tax (Medicaid) payments). 15

AMDD plainly faces a credible threat that the Comptroller will enforce the

unconstitutional SB 2038 because that is the Comptroller’s undisputed ministerial

duty pursuant to and withhold AMDD’s pledged tax revenue the Comptroller

would have otherwise had an undisputed ministerial duty pursuant to § 322.201(a)

to disburse. The Comptroller is in the cross-hairs of this statutory, constitutional

dilemma. The standing elements regarding the Comptroller have been established

by the AMDD: (1) it has or will imminently suffer an injury-in-fact from perpetual

lost sales tax revenues and (2) this loss is fairly traceable to the Comptroller, who

is the state official solely responsible for sales tax administration, collection and

enforcement, and (3) AMDD’s injury would be redressed by invalidating SB 2038.

Harrington v. Cobb, 185 S.W.2d 133,139 (Tex. Civ. App.─Dallas 1945), affirmed,

190 S.W.2d 709, 712 (1945) (State Comptroller properly sued for declaratory

judgment involving payment of occupation taxes)

15 State Appellees assert that the Cities claim that “the Comptroller is somehow enforcing SB
2038 by not remitting sales and use taxes … related to a property that has been removed from
the municipality’s ETJ” is a “leap too far.” See State Brief at 51. State Appellees fail to recognize
the Comptroller’s statutory legal duty. Their view of the Comptroller’s enforcement authority is
severely myopic, focusing only on the terms of SB 2038 while ignoring the statutes in the Tax
Code that proscribe the Comptroller’s mandatory legal duties. Notably too, their brief does not
mention, much less distinguish, the Supreme Court cases of Love v. City of Dallas, Harrington v.
Cobb, McKinney v. Blankenship, and State v. Epperson, which all involve the Comptroller and/ or
tax collection. State Appellees’ silence is telling.

APPELLANTS’ REPLY BRIEF PAGE 25
III. A declaration that 2038 is unconstitutional will redress the Cities’
injuries.

The Cities have alleged that SB 2038 causes them to suffer various well-

recognized injuries (i.e., implementation of unconstitutional law 16;

unconstitutionally impaired contract rights17; loss of pledged tax revenue18; costs

associated with implementation 19) that are fairly traceable to the implementation

of SB 2038 20. Indeed, State Appellees essentially concede that the Cities suffer

injuries traceable to SB 2038 by admitting that parties to development agreements

breach when they remove their property from ETJs 21—they just argue that the

injuries are caused by the private third parties, not by operation of SB 2038. But

that is wrong.

Having conveniently pointed the finger of blame at private third parties who

can only “breach” development agreements by virtue of SB 2038, State Appellees

sidestep redressability, arguing that because the named defendants do not “enforce”

SB 2038, the Cities injuries cannot be redressed. 22 But that misses the redressability

16 See Nootsie 925 S.W.2d at 662.
17 Langever v. Miller, 124 Tex. 80, 76 S.W.2d 1025, 1032 (1934) (“Any impairment” of contract

obligation is within constitutional prohibition; degree of impairment is immaterial).
18 See McLendon-Chisholm at *4.
19 California v. Tex., 593 U.S. 659, 692, 141 S. Ct. 2104, 2127, 210 L. Ed. 2d 230 (2021)
(“pocketbook” injuries, even nominal ones, constitutes injury in fact).
20 See Elliott S.W.3d at 895-96 (ETJ release is the only action a city is authorized to take upon

receipt of a valid petition).
21 See State Br. at 38.
22 See State Br. at 38.

APPELLANTS’ REPLY BRIEF PAGE 26
mark when the harm complained of is implementation of an unconstitutional

statute.

Like the states in California v. Texas, the Cities here have alleged financial

injuries caused by implementing an unconstitutional statute. 593 U.S. at 692. The

question is whether these injuries would be redressed by a favorable judgment

declaring SB 2038 unconstitutional, thereby rendering the third-party actions

taken pursuant to it legal nullities. The Supreme Court tells us the answer is

unquestionably yes. Id. (declaration of unenforceability of a law redresses the injury

of implementation).

As the Supreme Court observed, “when a party is ‘an object of the action ...

at issue,’ ‘there is ordinarily little question that the action ... has caused [that party]

injury’—i.e., that the injury is traceable to that action—'and that a judgment

preventing ... the action will redress it .’” Id. at 694 (emphasis added). The Cities

are the object of SB 2038 and declaring it an unconstitutional delegation of

legislative authority will redress the continued injuries Cities sustain by

implementing it. Id. at 695 (finding it “obvious” that ending ongoing expenses

associated with implementation of an unconstitutional law will redress the injury).

IV. The State Appellees’ facial plausibility and no immunity waiver
arguments lack merit.

Only by creating a weak strawman argument that the Cities are asserting

equal protection and due course claims on their own behalf are State Appellees able

APPELLANTS’ REPLY BRIEF PAGE 27
to argue that the Cities’ claims lack facial plausibility. As the Cities have repeatedly

shown, Nootsie and its progeny stand for the proposition that local governments

have standing to challenge and are injured by forced implementation of allegedly

unconstitutional laws passed by the Legislature. The State’s State Appellees’ shell-

game of passing laws purposely designed to avoid “enforcement connection” do not

divest cities of the ability to challenge them when they allege, as the Cities did here,

forced implementation and financial injuries. 23 See California, 593 U.S. at 692.

State Appellees’ no immunity waiver argument (State Br. at 62) is barely

worth addressing because it is built on an imaginary foundation. There is simply

no question that the UDJA waives immunity for claims challenging the validity of

a statute. Whether a particular plaintiff has standing and asserts a viable claim (the

Cities contend they have demonstrated many times over), does not change the fact

that the UDJA is the exact mechanism a party uses to challenge constitutionally

infirm statutes. See Morath v. Kingsville ISD, 710 S.W.3d 918, 929 (Tex. App.─15

Dist. 2025, no pet.) (immunity is waived for declaratory judgment challenging

validity of a statute).

23 It is noteworthy remembering that the trial court compelled State Appellees to answer
disclosures after the State refused to do so, and even after being compelled to answer, it refused
to disclose potential parties (20CR4742-43). State Appellees play a shell game, hiding behind
prosecutorial indecision and refusal to answer court-mandated discovery.

APPELLANTS’ REPLY BRIEF PAGE 28
V. Elliott and HB 2512 do not moot the Cities’ claims.

In enacting HB 2512, the Legislature implicitly acknowledged SB 2038 was

constitutionally infirm in significant ways and validated that the Cities were right

to assert claims that they were forced to implement a law that violated

constitutional equal protection and due course of law. But State Appellees

drastically oversell the legislative changes made by HB 2512 and in the process

exposes the weakness of their mootness arguments.

A. HB 2512 does not moot the Cities’ Nootsie -forced implementation
claims.

HB 2512 does not sweep nearly so far as the State Appellees contend and

fails to “fix” SB 2038’s fundamental delegation and contract impairment flaws. For

example, the “opt out” provision that allows affected landowners to remain in a

city’s ETJ only applies to ETJ releases by election, not petition. See Tex. Loc. Gov't

Code Ann. § 42.157 (opt out only applies “under this subchapter”—Subchapter E –

Release by Election). Subchapter D, which governs petitions filed by individual

landowners, still permits “majority in value” owners to sweep up unwilling

minority in value landowners in an ETJ removal and that Subchapter contains no

“opt out” provision for minority value owners. See Tex. Loc. Gov’t Code Ann. §

42.102(b).

Moreover, HB 2512’s mandatory notice provision, which State Appellees

claim moots the Cities’ due course forced-implementation claims (State Br. at 59)

APPELLANTS’ REPLY BRIEF PAGE 29
likewise only applies to Subchapter E (removal by election), not Subchapter D

(removal by petition). See Tex. Loc. Gov’t Code Ann. 42.152(d) (“If a municipality

receives a petition under this section …”).

The notice provision applicable to Subchapter D remains unchanged. See Tex. Loc.

Gov’t Code Ann. § 42.105(b). Affected property owners may or may not receive

notice that their property is a minority value property, but even if they are provided

such notice by a city, there is still no mechanism for them to “opt out,” meaning

there is no meaningful opportunity to be heard prior to ETJ removal.

Accordingly, the changes HB 2512 makes to Local Gov’t Code Chapter 42

ETJ removal do not moot the Cities equal protection and due course Nootsie-forced

implementation claims because Subchapter D, the common method of ETJ

removal, remains unchanged in those respects. Accordingly, the Cities Nootsie-

“forced implementation” claims premised on equal protection and due course

protections belonging to affected landowners are not mooted. The only claim

mooted by HB 2512 concerns the now-resolved conflict between the former Local

Government Code § 42.023, which required municipal consent to reduce ETJ. As

of September 1, 2025, that has been legislatively mooted by HB 2512.

But what HB 2512 does not do is fundamentally alter the ETJ removal

authority delegated to private individuals. SB 2038 (more specifically Tex. Loc.

Gov’t Code, Ch. 42, Subchapter D, §§ 42.101-105) still suffer the same

constitutional infirmities they always have since adoption.

APPELLANTS’ REPLY BRIEF PAGE 30
B. Elliott does not moot the Cities’ claims.

Contrary to the State Appellees’ argument, the Texas Supreme Court did

not rule on the constitutionality of SB 2038 in Elliott. Instead, it expressly

declines to do so under the doctrine of constitutional avoidance. Elliott, 717 S.W.3d

at 900. The Court directly states that the City’s challenge to SB 2038 does not

justify a constitutional ruling in that case:

Nor does the City’s resistance to SB 2038 authorize this Court to pass
judgment on the constitutionality of an ETJ regime that lacks a
unilateral opt-out option … .

Id. at 896-97. The Court explicitly grounds its refusal to decide the constitutional

issues in this case based on the doctrine of constitutional avoidance. Id. at 895.

imprudent. Id.

Finally, the Court acknowledges that SB 2038’s constitutionality is being

litigated elsewhere—and is not decided in this case. Id. Rather than passing on the

merits of SB 2038’s constitutionality, the Court is simply restating the legal truism

that all legislative enactments enjoy a presumption of constitutionality. Id.

Additionally, an order of vacatur and abatement is incompatible with a ruling on

constitutionality because it removes the lower court opinion’s precedential value.

Id. Elliott did not rule on SB 2038’s constitutionality and does not moot the Cities’

claims.

APPELLANTS’ REPLY BRIEF PAGE 31
PRAYER

The Court should reverse the district court’s order and remand the case for

consideration of the Cities claims that SB 2038 is constitutionally infirm.

Respectfully submitted,

/s/ Wm. Andrew Messer
Wm. Andrew Messer
State Bar No. 13472230
andy@txmunicipallaw.com
Messer Fort, PLLC
6371 Preston Road, Suite 200
Frisco, Texas 75034
972.668.6400 – Telephone

Bradford E. Bullock
State Bar No. 00793423
brad@txmunicipallaw.com
Messer Fort, PLLC
4201 Parmer Lane, Suite C150
Austin, Texas 78727-4168
512.930.1317 – Telephone

ATTORNEYS FOR
CITY APPELLANTS

APPELLANTS’ REPLY BRIEF PAGE 32
CERTIFICATE OF SERVICE

This is to certify that a true and correct copy of the foregoing instrument
has been sent via electronic service to all attorneys of record, in compliance with
Rule 6.3 of the Texas Rules of Appellate Procedure, on January 8, 2026.

/s/Wm. Andrew Messer
Wm. Andrew Messer

CERTIFICATE OF COMPLIANCE

This is to certify that, according to the Microsoft Word computer program
used to prepare this document, the document contains 7389 words, which is in
compliance with Texas Rule of Appellate Procedure 9.4(i)(3), excluding those items
that are not to be included in the word count pursuant to Texas Rule of Appellate
Procedure 9.4(i)(1).

/s/Wm. Andrew Messer
Wm. Andrew Messer

APPELLANTS’ REPLY BRIEF PAGE 33
APPENDIX A

APPELLANTS’ REPLY BRIEF PAGE 34
§ 41.001. Map of Municipal Boundaries and Extraterritorial..., TX LOCAL GOVT §...
APPENDIX A

Vernon's Texas Statutes and Codes Annotated
Local Government Code (Refs & Annos)
Title 2. Organization of Municipal Government (Refs & Annos)
Subtitle C. Municipal Boundaries and Annexation
Chapter 41. Municipal Boundaries

V.T.C.A., Local Government Code § 41.001

§ 41.001. Map of Municipal Boundaries and Extraterritorial Jurisdiction

Effective: September 1, 2019
Currentness

(a) Each municipality shall prepare a map that shows the boundaries of the municipality and of its extraterritorial jurisdiction.
The municipality shall maintain a copy of the map in a location that is easily accessible to the public, including:

(1) in the office of the secretary or clerk of the municipality;

(2) if the municipality has a municipal engineer, in the office of the engineer; and

(3) if the municipality maintains an Internet website, on the municipality's website.

(a-1) A municipality shall make a copy of a map required under Subsection (a) available without charge.

(b) If the municipality annexes territory, the map shall be immediately corrected to include the annexed territory. The map shall
be annotated to indicate:

(1) the date of annexation;

(2) the number of the annexation ordinance, if any; and

(3) a reference to the minutes or municipal ordinance records in which the ordinance is recorded in full.

(c) If the municipality's extraterritorial jurisdiction is expanded or reduced, the map shall be immediately corrected to indicate
the change in the municipality's extraterritorial jurisdiction. The map shall be annotated to indicate:

(1) the date the municipality's extraterritorial jurisdiction was changed;

(2) the number of the ordinance or resolution, if any, by which the change was made; and

© 2026 Thomson Reuters. No claim to original U.S. Government Works. 1
§ 41.001. Map of Municipal Boundaries and Extraterritorial..., TX LOCAL GOVT §...

(3) a reference to the minutes or municipal ordinance or resolution records in which the ordinance or resolution is recorded
in full.

(d) In addition to the requirements of this section, a home-rule municipality shall create, or contract for the creation of, and
make publicly available a digital map that complies with this section. A digital map required under this subsection must be made
available without charge and in a format widely used by common geographic information system software. If the municipality
maintains an Internet website, the municipality shall make the digital map available on the municipality's website.

(e) A home-rule municipality that does not have common geographic information system software shall make the digital map
available in any other widely used electronic format in accordance with Subsection (d).

Credits
Acts 1987, 70th Leg., ch. 149, § 1, eff. Sept. 1, 1987. Amended by Acts 1997, 75th Leg., ch. 970, § 1, eff. Sept. 1, 1997; Acts
2019, 86th Leg., ch. 1217 (S.B. 1303), § 1, eff. Sept. 1, 2019.

V. T. C. A., Local Government Code § 41.001, TX LOCAL GOVT § 41.001
Current through the end of the 2025 Regular and Second Called Sessions of the 89th Legislature.

End of Document © 2026 Thomson Reuters. No claim to original U.S. Government Works.

© 2026 Thomson Reuters. No claim to original U.S. Government Works. 2
APPENDIX B

APPELLANTS’ REPLY BRIEF PAGE 35
APPENDIX B

Page 6067
Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.

Sherry Brown on behalf of Wm. Andrew Messer
Bar No. 13472230
sherry@txmunicipallaw.com
Envelope ID: 109844903
Filing Code Description: Brief Requesting Oral Argument
Filing Description: Reply Brief of City Appellants
Status as of 1/9/2026 7:14 AM CST

Associated Case Party: Attorney General Kenneth Paxton (in his Official Capacity

Name BarNumber Email TimestampSubmitted Status

Jennifer Holt jennifer.holt@oag.texas.gov 1/8/2026 9:00:05 PM SENT

Cole Wilson Cole.Wilson@oag.texas.gov 1/8/2026 9:00:05 PM SENT

Tristan AGarza tristan.garza@oag.texas.gov 1/8/2026 9:00:05 PM SENT

Lynn Saarinen lynn.saarinen@oag.texas.gov 1/8/2026 9:00:05 PM SENT

Case Contacts

Name BarNumber Email TimestampSubmitted Status

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Sherry Brown sherry@txmunicipallaw.com 1/8/2026 9:00:05 PM SENT

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George Hyde ghyde@txlocalgovlaw.com 1/8/2026 9:00:05 PM SENT

Matthew Weston mweston@txlocalgovlaw.com 1/8/2026 9:00:05 PM SENT

David Overcash david.overcash@wtmlaw.net 1/8/2026 9:00:05 PM SENT

Clark McCoy cmccoy@wtmlaw.net 1/8/2026 9:00:05 PM SENT

Associated Case Party: City of Brownsville, Texas
Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
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Sherry Brown on behalf of Wm. Andrew Messer
Bar No. 13472230
sherry@txmunicipallaw.com
Envelope ID: 109844903
Filing Code Description: Brief Requesting Oral Argument
Filing Description: Reply Brief of City Appellants
Status as of 1/9/2026 7:14 AM CST

Associated Case Party: City of Brownsville, Texas

Name BarNumber Email TimestampSubmitted Status

Lena Chaisson-Munoz lena.munoz@brownsvilletx.gov 1/8/2026 9:00:05 PM SENT

Will S.Trevino will.trevino@brownsvilletx.gov 1/8/2026 9:00:05 PM SENT