Cities Disagree They Must Show Texas Small-Cells Cap Is Like Fraud

Texas inappropriately cited a contract case standard to justify the state's $250 cap on right-of-way rental fees for 5G wireless equipment, McAllen and other cities said in a reply brief posted Friday at the Texas 3rd Court of Appeals (case 03-22-00524-CV). Texas told the court last month that cities challenging a 2017 small-cells law made no showing or allegation the $250 cap was unconscionably low or tantamount to fraud (see 2301270028). “The flaw in the State’s analysis is that the standard it espouses relates specifically and exclusively to contract law,” said the cities. “There is nothing to suggest it would apply to a legislatively directed transfer of public property as is at issue here.” If the contract law rule can be applied, the court can’t jump to summary judgment, the cities said. “Assuming that the court is not prepared to establish a rule that consideration of as little as ten percent of an item’s value will always be sufficient to avoid the constitutional gift or grant prohibitions, then it will be necessary to determine what the value of transferred asset is. And that is a genuine issue of a material fact that precludes issuance of a summary judgment.”