In Engelman Irrigation District v. Shields Brothers, 2017 Tex. App. LEXIS 294 (Tex. March 17, 2007), the Texas Supreme Court affirmed the court of appeals’ ruling that a final judgment could not be declared void on the ground that a ruling by the Texas Supreme Court on governmental immunity should be given retroactive effect.  In so holding, the Court found that sovereign immunity does not equate to a lack of subject-matter jurisdiction, despite prior cases that seemed to so hold.

The irrigation district was sued in 1992 for breaching a contract to supply water.  The trial court and court of appeals found that statutory “sue and be sued” language in the irrigation district’s enabling statute waived sovereign immunity.  A judgment against the irrigation district for $271,000 was entered and affirmed on appeal, but never paid.  Twenty-four years later the Texas Supreme Court held that a governmental entity has sovereign immunity despite the presence of “sue and be sued” language in its enabling statute.  Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006).

Even though a judicial decision generally applies retroactively, it will not operate to reopen a final judgment when all direct appeals have been exhausted.  That the judgment may have been wrong or premised on a legal principle subsequently overruled does not affect application of res judicata.  Such a collateral attack on a final judgment runs squarely against principles of res judicata that are essential to a rational and functioning judicial system.