Third Court of Appeals Dismisses Cities’ Challenge to Texas Regulatory Consistency Act for Lack of Standing

The decision

On July 18, 2025, the Third Court of Appeals reversed a Travis County judgment that had declared House Bill 2127, the Texas Regulatory Consistency Act, unconstitutional in its entirety, and rendered judgment dismissing the suit brought by the Cities of Houston, San Antonio and El Paso without prejudice for lack of subject-matter jurisdiction. The court held that the Cities’ live pleadings affirmatively negated their standing to sue the State of Texas: the Cities did not allege an injury-in-fact, and their alleged injuries were not fairly traceable to the State.

The opinion does not address whether the Act is constitutional. The court resolved the appeal on standing alone, declined to reach the third standing element of redressability, and did not analyze the ripeness and immunity grounds the State had also raised.

Background

According to the opinion, Governor Greg Abbott signed House Bill 2127 into law on June 14, 2023. The court described the Act’s stated purpose as replacing a perceived “patchwork” of local regulations with “statewide consistency by returning sovereign regulatory powers to the state.” The Act amends various statutes to preempt certain local regulations and creates a cause of action for any person injured by a preempted regulation.

The court identified two provisions as particularly relevant. The first, which it called the Preemption Clause, provides: “Unless expressly authorized by another statute, a municipality or county may not adopt, enforce, or maintain an ordinance, order, or rule regulating conduct in a field of regulation that is occupied by a provision of this code.” The opinion states that this clause was added to eight subject-matter codes and lists the Agriculture, Business and Commerce, Finance, Labor, Natural Resources, Occupations, and Property Codes. The second, the Enforcement Clause, creates a private cause of action for any person injured by a preempted local law, defines “person” broadly, allows recovery of declaratory and injunctive relief, costs and fees, and requires at least three months’ notice to the municipality or county before suit.

Before the Act took effect, Houston sued the State under the Uniform Declaratory Judgments Act, asserting that the Act is unconstitutional both facially and as applied to Houston and its local laws. Houston alleged, among other things, that the Act violates the Home Rule Amendment, article XI, section 5 of the Texas Constitution, by imposing “field preemption” rather than conflict preemption; that it amounts to an improper constitutional amendment; that it is unconstitutionally vague; that it improperly delegates power to the courts; and that it exceeds the Legislature’s authority. San Antonio intervened with its own claim, and El Paso later joined San Antonio’s petition. Those two cities sought only a declaration that the Act facially violates the Home Rule Amendment and due-process guarantees by failing to preempt local law with “unmistakable clarity.”

The State filed an instrument raising standing, ripeness and immunity; although styled as a motion to dismiss, the court construed it as a plea to the jurisdiction. Houston moved for traditional summary judgment on every ground it had pleaded. The trial court denied the State’s plea, granted Houston’s motion, and declared that the Act “in its entirety is unconstitutional—facially, and as applied to Houston as a constitutional home rule city and to local laws that are not already preempted under article XI, section 5 of the Texas Constitution.” The judgment stated that this declaration also resolved San Antonio’s and El Paso’s claims. The State appealed.

The court’s reasoning

The opinion, by Justice Maggie Ellis, framed the appeal as presenting a single question: whether the Cities’ live pleading affirmatively negated their standing. Standing, the court explained, is a component of subject-matter jurisdiction requiring an injury-in-fact, a causal connection between the injury and the defendant’s conduct, and a likelihood that a favorable decision will redress the injury. Because the State’s plea challenged the pleadings, the court reviewed the live pleadings de novo, construing them liberally and taking the factual assertions as true. The State argued that the judgment must be reversed and the suit dismissed. The court wrote: “We agree for two reasons.”

Injury-in-fact

The Cities contended they had alleged pre-enforcement injuries: that they would have to review their ordinances to determine which are preempted, refrain from enforcing or maintaining ordinances that are or might be preempted, replace services provided under preempted laws, endure uncertainty about which ordinances are preempted, and defend litigation in which parties challenge local laws as preempted. The State argued these allegations showed no actual injury from the Act’s application.

The court agreed with the State. Because the Cities brought both facial and as-applied challenges, the court held that a plaintiff “must first show that the statute’s application in the particular context in which it has acted, or in which it proposes to act, would be unconstitutional,” citing Village of Hoffman Estates v. Flipside, Texas Department of Insurance v. Stonewater Roofing and Roark & Hardee LP v. City of Austin. In a footnote, the court stated that the only exception is a facial challenge based on First Amendment free-speech grounds.

The court gave two reasons for the rule. Legally, it ensures a concrete and particularized injury so that a court resolves an actual controversy rather than issuing an advisory opinion. Prudentially, concrete facts anchor statutory interpretation, which the court said is “especially true when, as here, the meaning of a statute can only be discerned by applying it to another statute.”

Sorting the Cities’ claims into challenges based on a right to adopt, enforce and maintain local laws and challenges based on a right to fair notice of which laws are preempted, the court concluded that under either theory the Cities had to show that the Act’s application to a specific local law would be unconstitutional. It found that “San Antonio and El Paso fail to identify a single local law to which the Act’s application would be unconstitutional.” Houston came closest by alleging that the Act might preempt its pay-or-play insurance program, described in a footnote as requiring City contractors to insure their workers or pay into a fund for care of the uninsured. But the court found it unclear from Houston’s pleadings which theory that allegation invoked. None of the alleged injuries, the court concluded, arose from a specific application of the Act to a specific local law, and the trial court’s declaration therefore addressed a hypothetical future application. Quoting State v. Zurawski, the court stated that “[a] court does not strike down a law as unconstitutional based on a hypothetical situation.”

Traceability

The Cities offered two reasons their injuries were traceable to the State: the Legislature enacted the Act, and the State qualifies as a “person” who may sue under the Enforcement Clause.

On the first, the court relied on the Supreme Court of Texas’s decision in Abbott v. Mexican American Legislative Caucus (MALC): “the State is not automatically a proper defendant in a suit challenging the constitutionality of a statute merely because the Legislature enacted it.” The State is a proper defendant only where an “enforcement connection” exists between the challenged provisions and the State. The court rejected the Cities’ reading of Texas Board of Chiropractic Examiners v. Texas Medical Association, explaining that the case held only that an examining board is the proper defendant in a challenge to a rule it adopted to enforce state law, and that MALC had since expressly rejected the broader proposition.

On the second, the court assumed without deciding that the State qualifies as a “person” under the Act, but held that this status alone does not create an enforcement connection; otherwise, the court reasoned, an enforcement connection would exist with every individual and entity meeting the definition. The court observed that the Act “is enforced through a private right of action,” distinguishing it from statutes enforced exclusively by an agency or other arm of the State. Where a governmental entity merely shares a private right of action, the court held, no enforcement connection exists absent a showing that the entity has exercised or likely will exercise that right. The court found: “They do not allege that the State has threatened to sue. Nor have they made any allegation otherwise indicating that the State likely will sue. And the State, for its part, has disavowed any right to bring an action under the Act.” To the extent the Cities relied on exposure to litigation by any injured person, the court, quoting Okpalobi v. Foster, stated that they confused the statute’s own coercive effect with coercion applied by the defendant.

Remand

The Cities asked that, if their pleadings were found defective, the case be remanded to allow amendment. The court acknowledged that the injury-in-fact defect “may be curable,” but held that the traceability defect was not: “No amount of repleading will make the State of Texas a proper defendant.” It therefore held that the live pleadings affirmatively negated standing and that remand was not warranted.

Separate opinions

None.

Status

The court reversed the trial court’s final judgment and rendered judgment dismissing the suit without prejudice for lack of subject-matter jurisdiction. The court’s judgment orders that the Cities “shall pay all costs relating to this appeal, both in this Court and in the court below.” The opinion does not decide any of the Cities’ constitutional challenges to the Act.

The decision was widely reported, with several public-radio stations carrying The Texas Tribune’s account. The Tribune reported on July 18 that the San Antonio city attorney’s office said it was reviewing its legal options and coordinating with Houston and El Paso on next steps.