Texas Cities Strike Out: Court of Appeals Dismisses Constitutional Challenge to State Preemption Law on Standing Grounds
Introduction
On July 18, 2025, the Texas Court of Appeals for the Third District delivered a significant blow to municipal authority advocates, reversing a trial court's sweeping invalidation of the Texas Regulatory Consistency Act (“TRCA”). But in a twist that leaves constitutional questions hanging, the appellate court didn't rule on the merits—instead dismissing the case entirely for lack of standing. State v. City of Houston, No. 03-23-00531-CV (Tex. App.—Austin July 18, 2025).
The decision represents a masterclass in jurisdictional analysis and offers crucial insights into the evolving landscape of Texas municipal law. More importantly, it leaves the TRCA's controversial preemption scheme intact while providing a roadmap for future challenges.
The TRCA: A Preemption Power Play
The Texas Regulatory Consistency Act, signed into law by Governor Greg Abbott in June 2023, represents one of the most aggressive state preemption efforts in recent Texas history. The Act's stated purpose is ambitious: to replace what lawmakers characterized as a "patchwork" of local regulations with "statewide consistency by returning sovereign regulatory powers to the state."
The Preemption Clause: Field Preemption on Steroids
The Act's preemption mechanism is both broad and novel. Rather than traditional conflict preemption—where state law only trumps local law when they directly conflict—the TRCA establishes field preemption across eight subject-matter codes: Agriculture, Business and Commerce, Finance, Labor, Natural Resources, Occupations, and Property.
The preemption language is sweeping, as shown in Chapter 1 of the Texas Occupations Code:
"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." Tex. Occ. Code Ann. § 1.004 (Westlaw 2024).
This means that, absent an express delegation of regulatory authority, if any provision in these eight codes touches on a regulatory field, municipalities are completely barred from regulating in that area—even if their local law doesn't conflict with state law.
The Private Enforcement Gambit
Perhaps more concerning to municipal officials is the Act's private enforcement mechanism. The TRCA creates a private cause of action allowing "any person" injured by a preempted local law to sue the municipality directly. The definition of "person" is intentionally broad, encompassing everything from individuals to corporations to "any legal or commercial entity."
Successful plaintiffs can recover declaratory and injunctive relief, costs, and attorney fees—creating a powerful financial incentive for challenges to local regulations. The only procedural hurdle is a three-month notice requirement before filing suit.
The Cities Fight Back
Before the Act took effect, Houston filed a preemptive strike under the Uniform Declaratory Judgments Act, later joined by San Antonio and El Paso. The cities' constitutional challenges were both sweeping and sophisticated:
Core Constitutional Claims
1. Home Rule Amendment Violations: Houston argued that the TRCA violated Article XI, Section 5 of the Texas Constitution by imposing field preemption rather than conflict preemption, effectively neutering home rule authority.
2. Improper Constitutional Amendment: The cities claimed the Act constituted an improper amendment to the Home Rule Amendment in violation of Article XVII, Section 1's constitutional amendment procedures.
3. Vagueness and Delegation: Houston challenged the Act as unconstitutionally vague under Article I, Section 19 (due course of law) and Article II, Section 1 (separation of powers), arguing it improperly delegated legislative power to courts to determine what laws are preempted.
4. Legislative Overreach: The cities argued the Legislature exceeded its constitutional authority by attempting to limit home rule cities' power to adopt local laws that don't conflict with existing state law.
San Antonio and El Paso focused more narrowly on claims that the Act violated due process by failing to preempt local laws with "unmistakable clarity."
Trial Court Victory
The trial court sided decisively with the cities, rendering a final judgment declaring 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."
It was a complete victory for municipal authority—until the Court of Appeals stepped in.
The Appellate Court's Standing Analysis: A Jurisdictional Roadblock
The Third Court of Appeals never reached the constitutional merits, instead dismissing the case entirely for lack of standing. The court's analysis provides a sophisticated examination of standing doctrine in constitutional challenges.
The Three-Part Standing Test
Under Texas law, standing requires three elements:
Injury-in-fact: A concrete and particularized invasion of a legally protected interest that is actual or imminent
Traceability: A causal connection between the injury and the defendant's conduct
Redressability: A likelihood that the injury will be redressed by a favorable decision
In re Abbott, 601 S.W.3d 802, 808 (Tex. 2020).
Injury-in-Fact: The Fatal Flaw
The court's injury-in-fact analysis reveals a fundamental problem with pre-enforcement constitutional challenges. The cities alleged various pre-enforcement injuries:
Having to review ordinances to determine which are preempted
Refraining from enforcing potentially preempted ordinances
Finding ways to replace services under preempted laws
Enduring uncertainty about preemption scope
Defending potential litigation over preempted laws
The court found these injuries insufficiently concrete. In a crucial holding, the court explained that when challenging a statute's constitutionality, plaintiffs must show the statute's application in a particular context would be unconstitutional—not just that the statute is generally problematic.
"To establish an injury-in-fact, then, the Cities must show an injury arising from the Act's unconstitutional application to them—that the Act's application to them violates their rights in some specific way and thereby causes them some specific injury."
The As-Applied Prerequisite
The court's analysis reveals an important procedural hurdle: facial challenges must be built on as-applied challenges. Drawing from federal precedent, the court explained that even facial challenges require showing the statute's unconstitutional application in the particular context of the plaintiff's conduct.
This creates a Catch-22 for municipalities: they must identify a specific local law that would be unconstitutionally preempted, but doing so might expose them to private enforcement actions under the very Act they're challenging.
Houston came closest to meeting this standard by mentioning its "pay-or-play" insurance program for city contractors, but the court found this reference too vague to establish concrete injury.
Traceability: Why the State Isn't a Proper Defendant
The court's traceability analysis delivers another blow to the cities' case. Drawing from the Texas Supreme Court's decision in Abbott v. Mexican American Legislative Caucus, 647 S.W.3d 681, 697 (Tex. 2022), the court held that "the State is not automatically a proper defendant in a suit challenging the constitutionality of a statute merely because the Legislature enacted it."
Instead, there must be an "enforcement connection" between the challenged statute and the State itself. The cities argued two theories for such a connection:
Theory 1: Legislative Enactment The court quickly rejected the argument that legislative enactment alone creates an enforcement connection, citing recent Texas Supreme Court precedent.
Theory 2: State as "Person" Under the Act The cities argued that because the State qualifies as a "person" under the Act's broad definition, it could theoretically sue municipalities for violations, creating an enforcement connection.
The court found this theory insufficient, noting that if this logic held, then "an enforcement connection exists between the Act and every individual, business, and entity that qualifies as a 'person,' regardless of whether that party has any intention of bringing an action under the Act."
The Private Enforcement Distinction
The court's analysis highlights a crucial feature of the TRCA: it is enforced through private rights of action, not state enforcement. This distinguishes it from statutes enforced by administrative agencies or through criminal prosecutions.
The court explained that when a governmental entity merely has the right to bring a private cause of action—a right shared with other parties—no enforcement connection exists absent evidence the government will likely exercise that right.
Since the cities didn't allege the State had threatened to sue them, and the State actually disavowed any right to bring enforcement actions, the traceability element failed.
The Procedural Implications
The court's ruling creates several important procedural implications for future constitutional challenges:
No Opportunity to Amend
The cities requested an opportunity to amend their pleadings if found jurisdictionally defective. The court denied this request, explaining that "at least one of the defects cannot be cured: No amount of repleading will make the State of Texas a proper defendant."
This creates a significant hurdle for municipalities seeking to challenge similar preemption statutes.
The Dismissal Without Prejudice
The court dismissed the claims "without prejudice," meaning the cities could theoretically refile against proper defendants. But identifying proper defendants under the court's analysis presents substantial challenges.
What This Means Going Forward
The TRCA Remains in Effect
Most immediately, the TRCA remains fully in effect. The constitutional questions that dominated the trial court proceedings remain unresolved. Municipalities must continue to grapple with the Act's preemption requirements and exposure to private enforcement actions.
Future Challenge Strategies
The decision provides a roadmap for future constitutional challenges, but it's a difficult path:
1. Identify Specific Applications: Challengers must identify specific local laws that would be unconstitutionally preempted, creating concrete injury-in-fact.
2. Sue Proper Defendants: Rather than suing the State, challengers might need to wait for private enforcement actions and raise constitutional defenses, or potentially sue enforcement agencies if they become involved.
3. Consider Ripeness: The court's analysis suggests that pre-enforcement challenges to statutes with private enforcement mechanisms face significant standing hurdles.
Implications for Municipal Authority
The ruling represents a significant procedural victory for proponents of state preemption. By creating standing hurdles for constitutional challenges, the decision effectively insulates preemption statutes from early judicial review.
This could embolden other states to adopt similar private enforcement mechanisms for preemption statutes, knowing that constitutional challenges will face significant procedural barriers.
The Broader Context: A New Era of Preemption
The TRCA represents part of a broader trend toward aggressive state preemption of local authority. From minimum wage laws to environmental regulations, states across the country are increasingly using preemption to limit municipal regulatory authority.
The private enforcement mechanism pioneered by the TRCA offers a new model for preemption advocates: rather than relying on state agencies to enforce preemption, states can deputize private parties to police local regulations through civil litigation.
This creates a chilling effect on local regulatory activity, as municipalities face potential liability for any regulation that might be deemed preempted—even if the preemption question is legally unclear.
Constitutional Questions Remain
While the procedural ruling means the constitutional merits remain unresolved, the cities' challenges raise important questions about the balance between state and local authority in Texas:
Field vs. Conflict Preemption
The distinction between field preemption (which the TRCA employs) and conflict preemption (which cities argue is required by the Texas Constitution) remains a live constitutional issue. The Texas Supreme Court has not definitively resolved whether the Home Rule Amendment permits field preemption in all contexts.
Due Process and Vagueness
The cities' vagueness challenges also remain unresolved. The argument that the TRCA fails to provide fair notice of which local laws are preempted could still succeed in a properly structured challenge.
Legislative Authority
The fundamental question of whether the Legislature has constitutional authority to limit home rule cities' power to adopt non-conflicting local laws remains open.
Conclusion: A Pyrrhic Victory?
The State's victory in State v. City of Houston may prove pyrrhic. While the TRCA survives this challenge, the constitutional questions remain unresolved and will likely surface in future litigation.
The decision also highlights the growing sophistication of standing doctrine in Texas constitutional law. By requiring concrete application-specific injuries for constitutional challenges, the court creates a more rigorous but potentially more fair framework for constitutional adjudication.
For municipalities, the decision serves as a cautionary tale about the importance of careful pleading in constitutional challenges. It also underscores the need for strategic thinking about proper defendants and concrete injuries when challenging preemption statutes.
Most importantly, the decision leaves the fundamental tension between state preemption and local authority unresolved. As Texas continues to grapple with questions of municipal autonomy in an era of increasing state centralization, these constitutional questions will inevitably return to the courts.
The battle over the TRCA may be over, but the war over municipal authority in Texas has only just begun.