The Texas Court of Appeals has upheld a lower court's decision to dismiss a case involving the San Antonio Water System (SAWS) and the Bexar Medina Atascosa Counties Water Control and Improvement District Number 1 (BMA). The court ruled that SAWS could not pursue its claims due to governmental immunity, which protects public entities from certain lawsuits.

This ruling affects both SAWS and BMA, as well as residents who rely on water services provided by these entities. The case centers on a contract dispute regarding water supply and the quality of water provided under that contract.

Background

SAWS is an agency of the City of San Antonio responsible for providing water services to residents. BMA, on the other hand, is a political subdivision of the state that manages water resources, including the supply of untreated water from Medina Lake to SAWS under a take-or-pay agreement.

The dispute arose when SAWS decided to stop accepting water from BMA due to poor water quality resulting from low lake levels. SAWS claimed that the contract required them to pay for water they were not receiving, which they argued violated the Texas Constitution's Gift Clause. They also alleged that BMA's board members acted outside their authority by accepting these payments.

SAWS filed a suit against BMA, claiming that the payments constituted a violation of public funds. BMA responded by filing a plea to the jurisdiction, arguing that they had governmental immunity, which protects them from such lawsuits. The trial court agreed and dismissed the case, prompting SAWS to appeal the decision.

The Ruling

The Texas Court of Appeals, in a memorandum opinion delivered on July 8, 2026, affirmed the trial court's decision to dismiss SAWS's claims. The court ruled that SAWS failed to demonstrate a waiver of BMA's governmental immunity, which is essential for the court to have jurisdiction over the case.

The court stated, "Because SAWS has failed to demonstrate a waiver of governmental immunity, the trial court lacked subject matter jurisdiction over SAWS’ claims."

The judges on the panel included Justice H. Todd McCray, Justice Irene Rios, and Justice Lori Massey Brissette. The court emphasized that SAWS did not provide sufficient evidence to challenge the immunity claim made by BMA.

Impact

This ruling has significant implications for governmental entities in Texas. It reinforces the principle of governmental immunity, which limits the ability of citizens to sue public entities for claims related to contracts and other governmental functions. As a result, SAWS and other entities may have limited recourse in similar disputes regarding water supply agreements.

The decision also highlights the challenges faced by public agencies when dealing with contract disputes, especially when the quality of service provided is in question. Residents who depend on these services may find it difficult to seek legal remedies if issues arise in the future.

What's Next

While SAWS has the option to appeal this ruling to a higher court, details regarding any potential appeal were not available in the court filing. The outcome of this case may set a precedent for how similar disputes are handled in Texas.