The long-running fight over who feeds travelers at Hobby Airport is back in play, after the Texas Supreme Court gave Pappas Restaurants new life in its legal battle with the City of Houston.
In an order issued Friday, the high court revived Pappas Restaurants' challenge to the city over the Hobby Airport concessions contract and sent the case back to the trial court. The move lets Pappas dig for evidence on a key technical question that could determine whether the lucrative deal is valid at all. It also reopens a dispute that pushed the Pappas family out of Hobby in 2023 and reshaped the dining lineup in the terminal.
High court clears limited discovery
The Supreme Court "reversed the court of appeals' judgment in part and remanded the case to the trial court," authorizing what the justices called jurisdictional discovery into whether the agreement with Areas "requires an expenditure of more than $50,000," a central threshold in Pappas' claim. The order was handed down on Jan. 9, 2026; according to the Texas Supreme Court, remanding the matter means the trial court will be able to consider evidence the appeals court did not.
What Pappas is alleging
Pappas argues the city skipped Chapter 252's competitive-bidding procedures before awarding Hobby's food-and-beverage agreement to Areas and that the Areas contract is therefore voidable if it in fact requires qualifying city expenditures. Court filings show the city executed a Food and Beverage Concession Agreement with Areas on March 9, 2023, after a multi-year solicitation. Reporting at the time, including coverage from Eater Houston, described the deal as a 10-year, roughly $470 million award to Areas. A legal summary of the case is posted on Justia.
Why the statutory threshold matters
Chapter 252 of the Texas Local Government Code requires cities to follow competitive procedures when entering contracts that "require an expenditure" above a statutory cutoff. If the statute is violated, the contract can be declared void and blocked by a court. The Supreme Court framed the jurisdictional question around whether the Areas agreement "requires an expenditure of more than $50,000" under the version of the statute it reviewed, even though the Legislature later raised that threshold to $100,000 in a 2025 amendment. The statute text is available in the Texas Local Government Code.
What comes next
Because the Supreme Court remanded the case for jurisdictional discovery, Pappas will now be able to seek documents and evidence, from city maintenance records to contract implementation plans, that could show whether the agreement obliges the city to make qualifying expenditures. The trial court will decide how broad that discovery can be and how fast it moves. If Pappas uncovers proof that the contract triggers Chapter 252, it can again press for injunctive relief or a declaration that the contract is void. The court's order is posted on the Texas Supreme Court.
Local stakes
For now, the shift is procedural instead of dramatic. Pappas' restaurants remain out of Hobby, and other vendors have been serving travelers since the 2023 transition. The Houston Chronicle reported the ruling and said it had contacted Pappas for comment. City officials did not immediately respond to requests for comment on the Supreme Court's decision.
