The Texas Supreme Court recently issued an important decision for contractors, subcontractors, and infrastructure companies involved in public roadway projects. In Third Coast Services, LLC v. Castaneda, the Court held that statutory protection under Section 97.002 of the Texas Civil Practice and Remedies Code does not depend on a direct contractual relationship with the Texas Department of Transportation (“TxDOT”).

The opinion provides guidance on three recurring issues in roadway-construction litigation: whether Section 97.002 requires contractual privity with TxDOT, what it means to perform work “for” TxDOT, and whether traffic-signal work can qualify as construction or repair of a “highway, road, or street” under the statute.

The case arose from a fatal collision at an intersection under construction along State Highway 249. Traffic signals had been installed, but they were not yet operational at the time of the accident. The decedent’s family sued SpawGlass Civil Construction, Inc., the general contractor, and Third Coast Services, LLC, an electrical subcontractor, alleging negligence in traffic control and signal-related work. Neither contractor had contracted directly with TxDOT. Instead, TxDOT and Montgomery County entered into an agreement governing the toll-road project; Montgomery County retained SpawGlass as the general contractor, and SpawGlass subcontracted with Third Coast to furnish and install electrical components, including traffic signals.

The contractors moved for summary judgment under Section 97.002. That statute provides that a contractor who constructs or repairs a highway, road, or street for TxDOT is not liable for personal injury, property damage, or death arising from that work if, at the time of the injury, the contractor was in compliance with contract documents material to the condition or defect that was the proximate cause. The trial court denied summary judgment, and the court of appeals affirmed, holding that Section 97.002 applied only to contractors hired by TxDOT. The Supreme Court of Texas reversed that ruling.

The Court’s first and most consequential holding is that Section 97.002 does not require direct contractual privity with TxDOT. The statute contains no language imposing such a limitation, and the Court emphasized that when the Legislature intends to require privity, it does so expressly. Its absence here was dispositive. The Court’s analysis turned on the meaning of the phrase “for” TxDOT. Looking to ordinary meaning, the Court explained that the term encompasses work whose result is to be received, owned, or used by TxDOT, consistent with its ordinary meaning.

The Court rejected both extremes. It declined to limit the statute to contractors directly hired by TxDOT. But it also rejected the contractors’ broader argument that any work subject to TxDOT review, approval, or standards is necessarily performed “for” TxDOT. The Court explained that coordination and oversight, standing alone, are insufficient. Instead, the Court focused on the structure of the project and the ultimate allocation of responsibility. Although Montgomery County was responsible for designing, constructing, maintaining, and operating the County Project during development, the governing agreement provided that TxDOT would ultimately operate and maintain the frontage roads. The record also included evidence that TxDOT would control the traffic signals upon completion. Under those circumstances, the Court held that the contractors’ work was performed both “for” the County and “for” TxDOT.  The Court further made clear that the statute does not require exclusivity; work may be performed “for” more than one entity.

The Court also rejected the argument that traffic-signal work falls outside Section 97.002 because signals are not themselves a “highway, road, or street.” Relying on the Transportation Code’s definition of “highway,” which includes “other necessary structure related to a public road,” the Court held that traffic signals qualify because they relate to the physical function and safety of the roadway. Accordingly, the Court concluded that the contractors’ work on traffic signals for what would become the frontage roads constituted construction or repair of a highway for purposes of Section 97.002.

Although the Court resolved these statutory-interpretation issues in the contractors’ favor, it did not render judgment granting immunity. Section 97.002 is an affirmative defense, and the contractors must still conclusively establish the statute’s remaining elements, including compliance with contract documents material to the alleged defect. The plaintiffs alleged multiple potential deviations from project requirements, including issues relating to signal covering, temporary traffic control, and work sequencing. The Supreme Court remanded the case to consider whether the contractors satisfied the remaining elements of the defense.

The decision is important for contractors and subcontractors operating within multi-layered public infrastructure projects. It confirms that Section 97.002 is not limited to direct contracts with TxDOT and that qualifying work may be performed “for” TxDOT when TxDOT will ultimately receive, operate, or control the relevant roadway infrastructure. At the same time, the opinion preserves meaningful limits. TxDOT’s regulatory involvement or approval authority does not, by itself, trigger immunity, and contractors must still prove compliance with contract documents tied to the alleged defect.

The attorneys in our Austin and Dallas offices are available to answer any questions you may have regarding the opinion or whether immunity may apply to your project. You may contact us at info@gstexlaw.com.

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