Fifth Circuit Rejects Cat’s Paw Liability for Municipalities Under Monell: Headcount Rule Governs §1981/§1983 Claims Against Multi‑Member Bodies

Introduction

In Jones v. City of Hutto, the United States Court of Appeals for the Fifth Circuit (opinion by Chief Judge Priscilla Richman, joined by Judges Graves and Ramirez) resolved a high‑stakes municipal liability and contract dispute arising from the City of Hutto’s rescission of a separation agreement with its former City Manager, Odis Jones. The case sits at the intersection of federal civil rights and Texas local government law, and it addresses three principal issues:

Whether a §1981 claim against a municipality must proceed through §1983 and, if so, whether a plaintiff can use cat’s paw theory to impute the discriminatory animus of two councilmembers to the City Council as a whole;
Whether the City’s agenda notice under the Texas Open Meetings Act (TOMA) was adequate, and whether the City’s overspending/appropriations argument was preserved;
Whether the City breached the separation agreement by rescinding it and demanding repayment, and what remedies are available under Texas’s limited waiver of immunity for local government contract claims.

The court reverses the jury’s §1981 verdict because the plaintiff’s proof of discriminatory intent did not meet Monell’s requirements for municipal liability: cat’s paw does not apply, and the “headcount” of discriminatory votes was insufficient. At the same time, the court affirms as a matter of law that the separation agreement was valid and that the City breached it by attempting to rescind and demanding repayment, though Texas law bars consequential damages and limits recovery primarily to attorney’s fees. The matter is remanded solely for the district court to address attorney’s fees.

Summary of the Opinion

The court holds:

Section 1981 claims against a municipality must be brought through §1983. To impose municipal liability, a plaintiff must satisfy Monell: identify an official policy by a final policymaker that was the moving force behind a constitutional (or federal rights) violation.
The City Council’s resolution rescinding the separation agreement is an official policy by the City’s final policymaker (the Council under the City Charter), and it directly impaired Jones’s contract rights. Thus, the §1983 framework is met as to policy, policymaker, and causation.
However, Jones’s §1981 claim fails on intent: to prove that race was a but‑for cause (Comcast) of the policy decision by a multi‑member body, a plaintiff must show that a majority of the voting body acted with discriminatory animus (the “headcount” approach from Griggs). Here, even assuming two councilmembers (Snyder and Rose) harbored animus, the evidence did not establish discriminatory intent as to the remaining voting majority.
Cat’s paw theory is incompatible with Monell’s bar on respondeat superior. Because cat’s paw is grounded in agency and vicarious liability principles, it cannot be used to impute the bias of non‑policymakers (or minority members) to the municipal policymaker in §1983 cases.
On the state law contract claim, the separation agreement was valid; TOMA notice was sufficient as a matter of law; the City’s City‑Charter overspending argument was forfeited; and the City breached the agreement by rescinding and demanding repayment. Consequential damages are barred by Tex. Loc. Gov’t Code §271.153(b), but Jones may seek attorney’s fees because he “gained something” by vindicating his right to retain the $412,000 payment. The disparagement claim fails because alleged statements by two councilmembers, made individually, were not City action.

Disposition: Affirmed in part (contract validity and breach, with damages limits), reversed in part (civil rights verdict under §1981/§1983), and remanded for the limited purpose of determining attorney’s fees.

Analysis

Precedents Cited and Their Influence

Monell v. Department of Social Services, 436 U.S. 658 (1978), and progeny (e.g., Jett v. Dallas ISD, 491 U.S. 701; Oden v. Oktibbeha County, 246 F.3d 458): These cases require §1981 claims against municipalities to be prosecuted via §1983 and prohibit respondeat superior. The Fifth Circuit applied Monell’s tripartite test—official policy, final policymaker, moving force—and found those elements satisfied based on the Council’s rescission resolution.
Pembaur v. City of Cincinnati, 475 U.S. 469; Owen v. City of Independence, 445 U.S. 622: A single decision by a final policymaker can be official municipal policy. The Council’s rescission resolution qualifies as such a policy.
Piotrowski v. City of Houston, 237 F.3d 567: “Moving force” requires a direct causal link. The link was straightforward because the resolution itself purported to void Jones’s contract rights.
Comcast Corp. v. National Association of African American‑Owned Media, 589 U.S. 327 (2020): §1981 demands but‑for causation. The court framed the intent analysis accordingly.
Griggs v. Chickasaw County, 930 F.3d 696 (5th Cir. 2019): For multi‑member policymaking bodies, a plaintiff must prove that a majority’s votes were tainted by discriminatory animus. The court used Griggs to anchor the “headcount” requirement.
Cat’s paw lineage: Shager v. Upjohn Co., 913 F.2d 398 (7th Cir. 1990) (Posner); Staub v. Proctor Hospital, 562 U.S. 411 (2011). The Fifth Circuit canvassed these authorities to explain that cat’s paw rests on agency principles and imputes an agent’s action to the employer under vicarious liability—rendering it incompatible with Monell.
Fifth Circuit guidance cautioning against cat’s paw in §1983/Monell settings: Howell v. Town of Ball, 827 F.3d 515; Edelstein v. City of Brownsville (unpublished). These cases point plaintiffs toward either (1) proving the board itself harbored animus (headcount) or (2) ratification—rather than cat’s paw—when suing municipalities.
TOMA notice cases: Cox Enterprises, Inc. v. Austin ISD, 706 S.W.2d 956; City of San Antonio v. Fourth Court of Appeals, 820 S.W.2d 762; Rettberg v. Texas Department of Health, 873 S.W.2d 408; Stockdale v. Meno, 867 S.W.2d 123. The court used these to hold that “Consideration and possible action(s) on personnel matters regarding city manager” adequately notified the public.
Dupree v. Younger, 598 U.S. 729 (2023): A party need not re‑urge a purely legal issue post‑trial to preserve it for appeal. This allowed the City to challenge contract validity issues resolved at summary judgment without a Rule 50 renewal.
Texas Local Government Code §§271.152, 271.153(b): The former provides a limited waiver of immunity for certain contract claims; the latter limits recoverable damages and bars consequential damages against municipalities.
MBM Financial Corp. v. Woodlands Operating Co., 292 S.W.3d 660 (Tex. 2009): Attorney’s fees cannot be awarded in Texas unless the plaintiff “gains something.” The court found Jones did—he preserved his right to keep the $412,000 payment—so fees remain potentially available on remand.

Legal Reasoning

The court’s legal analysis proceeds in three layers: (1) the §1981/§1983 pathway and Monell; (2) the proof of discriminatory intent by a multi‑member body; and (3) the contract law and remedies issues under Texas law.

1) §1981 claims against municipalities proceed through §1983 and must satisfy Monell

Section 1981 protects the right to make and enforce contracts free from racial discrimination, broadly encompassing performance, modification, termination, and enjoyment of contractual benefits. But municipalities cannot be sued directly under §1981; plaintiffs must proceed via §1983, which—under Monell—prohibits respondeat superior and requires:

An official policy;
Promulgated by a final policymaker;
That is the moving force behind the violation.

The Council’s rescission resolution is an official policy. The Hutto City Charter vests policymaking authority in the Council. And the resolution itself directly purported to void Jones’s bargained‑for rights, easily satisfying “moving force.”

2) Proving discriminatory intent: headcount required; cat’s paw rejected

The heart of the decision lies in how a plaintiff proves discriminatory intent when the adverse action is taken by a multi‑member governing body. Because §1981 requires but‑for causation (Comcast) and Monell forbids vicarious liability, a plaintiff must connect the discriminatory motive to the policymaker itself.

Headcount: Following Griggs, the plaintiff must show that a majority of the voting body acted with discriminatory intent—that but for race, the policy (here, rescinding the agreement) would not have been adopted. The court assumed that two members (Snyder and Rose) harbored animus, but found no evidence that the other members (Sutton, Martinez, Gordon, Thornton) voted because of race. Agreement with or support from the allegedly biased members, standing alone, did not bridge the gap to discriminatory intent for those other votes.
Cat’s paw: The court undertook an extensive examination of the doctrine’s origins and emphasized that it rests on agency and respondeat superior principles—using causation to connect a biased subordinate to the adverse action and then imputation to hold the employer liable. That logic cannot be used to hold municipalities liable under §1983, because Monell expressly prohibits respondeat superior. The court thus squarely foreclosed cat’s paw as a route to §1983 municipal liability, aligning with skepticism from the Seventh and Tenth Circuits and numerous district courts. Plaintiffs must instead prove board‑level intent (headcount) or pursue established Monell routes such as ratification (which was not developed here).

Because Jones did not establish majority animus and could not rely on cat’s paw, his §1981 claim fails as a matter of law notwithstanding the existence of a municipal policy and policymaker.

3) Contract validity, TOMA notice, and Texas remedies

The City advanced three legal challenges to contract validity: TOMA, a City‑Charter appropriations provision, and immunity arguments focused on the non‑disparagement clause.

TOMA notice: The agenda read “Consideration and possible action(s) on personnel matters regarding city manager.” Given Texas law requiring adequate notice to a generalized reader and calibrated specificity when public interest is high, the court held this was sufficient. Unlike Cox Enterprises, which faulted an agenda that referenced only “personnel” while the board planned to select a new superintendent, Hutto’s notice specified the subject of the personnel action—the city manager. The court declined to address whether a municipality can void its own action by asserting its own TOMA violation.
City Charter §8.10 (appropriation/certification) argument: Forfeited because it was not raised in the City’s summary judgment papers or in its Rule 50 motion.
Non‑disparagement/immunity: The court did not reach the validity of the non‑disparagement clause on immunity grounds because it had no bearing on the issues decided on appeal.

On breach, the court agreed with the district court that the separation agreement was valid as to the severance payment and that the City breached by adopting a resolution rescinding the agreement and sending a demand letter seeking repayment of the $412,000. The City’s assertion that no breach occurred because Jones kept the money and the City filed no counterclaim “rang hollow”; the contract rights were impaired by the rescission policy and the demand to repay.

Remedies are strictly limited by Texas’s Local Government Contract Claims Act:

Section 271.152 provides a limited waiver of immunity for certain written contracts with local governments.
Section 271.153(b) bars consequential damages and limits recoverable damages (e.g., to amounts due and owing under the contract, interest). As a result, the jury’s consequential damages award could not stand, and the district court’s remittitur was appropriate.
Attorney’s fees remain potentially recoverable because under MBM Financial a plaintiff may recover fees if he “gains something” beyond fees themselves. Vindicating the right to retain the $412,000 satisfies that test, even without a net monetary judgment beyond what he already possessed.
Disparagement: Even if not barred by §271.153(b) (which the court did not decide), the record lacked evidence that the City as a body, or the Council acting officially, disparaged Jones. Statements by two members in their individual capacities were not municipal action.

Impact

The decision is consequential in at least four ways.

Cat’s paw is off the table for municipal defendants in the Fifth Circuit. The court’s clear statement that cat’s paw is incompatible with Monell closes a contested path that plaintiffs occasionally attempted in §1983 cases. Going forward, plaintiffs must prove discriminatory intent by the municipal policymaker itself—typically via:
- A headcount showing a majority acted with animus; or
- Other recognized Monell theories like ratification, delegation, or a pattern of similar violations coupled with deliberate indifference (depending on the claim context).
This tightening will likely reduce the success of §1981/§1983 claims against municipalities predicated on the bias of a few influential members or staff unless majority intent or true ratification can be shown.
The headcount framework is reinforced and operationalized. Plaintiffs targeting decisions of councils, boards, or commissions must develop evidence as to each vote needed for a majority—showing that but for race, those votes would not have been cast. Mere alignment with a biased member’s policy preferences, post‑hoc investigations, or political coalitions are insufficient absent evidence tying those votes to racial bias.
TOMA pleading/notice: Municipalities in Texas can take guidance that specifying the subject person or office in a personnel‑related agenda item (“regarding city manager”) may satisfy TOMA’s notice requirement, even on matters of high public interest. Cox Enterprises still requires enhanced specificity where the agenda is truly generic (“personnel”), but Hutto shows that modest specificity can suffice. The court left unresolved whether a city may invalidate its own acts for its own TOMA violation—an issue likely to recur.
Texas contract remedies against municipalities remain narrow. Even when a plaintiff proves breach, consequential damages are barred under §271.153(b). However, prevailing to preserve payments already received can support an award of attorney’s fees because the plaintiff “gained something” by confirming the right to retain those funds. Municipal counsel should be cautious in adopting rescission resolutions coupled with repayment demands; such steps can constitute breach and expose the city to fee awards even if the monetary exposure on damages is otherwise limited.

Complex Concepts Simplified

Section 1981 vs. Section 1983: Section 1981 creates federal rights against race discrimination in contracting; Section 1983 provides the vehicle to sue state actors for violations of federal rights. Municipalities can be sued under §1983, but only if the injury was caused by an official policy or custom—not just employee misconduct.
Monell liability: To hold a municipality liable, a plaintiff must prove (1) an official policy, (2) made by a final policymaker, (3) that caused the injury. A city council’s formal resolution typically qualifies as official policy if the council is the charter‑designated policymaker.
Headcount for multi‑member bodies: When an official policy is adopted by vote, plaintiffs must show that a majority’s votes were cast with the requisite discriminatory intent. One or two biased members will not suffice if there are not enough biased votes to pass the measure.
Cat’s paw (and why it does not apply here): In employment cases against private employers, a biased supervisor’s action can be attributed to the employer if it influenced a neutral decisionmaker. That attribution relies on agency and vicarious liability principles. Monell forbids that mode of attribution for municipalities under §1983, so cat’s paw cannot be used to impute bias to a city council.
TOMA notice: Texas’s Open Meetings Act requires agendas to fairly apprise the public of the subject of governmental action. Greater public interest may call for greater specificity, but identifying the position (e.g., “regarding city manager”) can meet the standard.
Texas local government contract claims: Texas has partially waived local governmental immunity for certain written contracts. Even so, damages are strictly limited: no consequential damages, exemplary damages, or similar categories. Attorney’s fees may be available if the plaintiff “gains something,” such as vindicating the contractual right to keep funds already paid.
Remittitur: A court’s reduction of a jury award, with the plaintiff’s consent, when some categories of damages are legally unavailable (here, consequential damages barred by §271.153(b)).

Conclusion

Jones v. City of Hutto clarifies, in a precedential way for the Fifth Circuit, that cat’s paw liability is incompatible with Monell’s prohibition on respondeat superior. Plaintiffs suing municipalities for race‑based impairment of contract rights under §1981 (via §1983) must carry the heavy burden of proving that a majority of the governing body acted with discriminatory intent or pursue other recognized Monell routes such as ratification. The decision thus strengthens the doctrinal guardrails around municipal liability in civil rights suits.

On the state‑law side, the court reaffirms that Texas’s TOMA requires agenda specificity tied to the subject but does not demand exhaustive detail, and it enforces the Legislature’s tight limits on damages in local government contract suits. Even so, where a city adopts a policy rescinding a valid agreement and demands repayment, it breaches the contract and may owe attorney’s fees when the contractor vindicates the right to keep the bargained‑for payment.

Key takeaways:

Cat’s paw cannot establish municipal liability under §1983 in the Fifth Circuit; headcount or recognized Monell theories must be used.
To prove discriminatory intent by a council or board, target the majority’s votes, not just a vocal minority’s bias.
TOMA notice identifying the specific office (“city manager”) can be sufficient for significant personnel actions.
Municipal contract liability is largely fee‑exposed rather than damages‑exposed; consequential damages are barred, but fee exposure can follow a wrongful rescission.

The court affirms in part, reverses in part, and remands for the narrow issue of attorney’s fees, leaving behind a clear and influential rule for §1981/§1983 claims against municipalities and a practical roadmap for Texas local government contract litigation.