State Bar of Texas Administrative and Public Law Section
Featured Article - June 1998
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State Bar of Texas Administrative and Public Law SectionFeatured Article - June 1998 |
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CASE LAW UPDATESeptember 1, 1996--August 31, 1997JESSIE A. AMOS
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CASE LAW UPDATE:September 1, 1996--August 31, 1997
I. INTRODUCTIONThis paper surveys recent state-court appellate decisions addressing issues of Texas administrative law. I have attempted to follow the format previous authors used in presenting Case Law Updates, and have attempted to cover most, if not all, published opinions issued between September 1, 1996, and August 31, 1997. The most recent opinions are included in an appendix distributed at the seminar. Since neither counsel nor the courts are to cite unpublished opinions as authority, they are not included in the update. See Tex. R. App. P. 47.7 (formerly Tex. R. App. P. 90(i)). As with past case law updates, this paper attempts to provide a catalogue of decisions without respect to their contribution to the development of administrative law. Each case is presented in two parts. First, the "Nature and Disposition of the Case" is stated in short form. If the information were readily available, the presiding trial court judge and the appellate panel that issued the opinion is named. The name of the appellate judge who authored the opinion is underlined. If the opinion were issued "per curiam," the panel is underlined. After the "Nature and Disposition of the Case" is a list of "Key Points." The Key Point is a paraphrase or quote from the opinion on a point of administrative law. Since many of the reported decisions involve non-administrative law issues, the listed Key Points may be secondary to other issues the appellate court addressed. The intent is to provide a quick and reasonably accurate indication of whether an issue is germane to an area of administrative law. To avoid repetition, I use the short form "APA" for the Administrative Procedure Act, Tex. Gov't Code Ann. §§ 2001.001-.902 (Vernon 1997). The cases are grouped roughly by administrative law subject. These groupings are: (1) Jurisdictional and Other Prerequisites to Judicial Review; (2) Standard of Review; (3) Agency's Express and Implied Powers; (4) Due Process Considerations; (5) Open Meetings and Open Records; and (6) Other Recent Decisions. Any Supreme Court of Texas decisions within a group are listed first. Decisions are listed only once even though many could be placed in more than one category. Accordingly, it often will be necessary to review all listed cases and not assume that any one section of this paper is exhaustive on a subject. Remember that slip opinions are subject to being withdrawn and reissued on rehearing, applications for writ of error may have been filed and may be granted, and petitions for review may be filed. Finally, a few statistics. Of the 65 decisions covered here, the Supreme Court issued nine. Of the remaining 56, the Austin Court of Appeals issued the majority - 30. The Fort Worth and San Antonio Courts of Appeals issued four decisions each; the Houston-First and Corpus Christi Courts of Appeals issued three opinions each; the Dallas, Amarillo, Waco, Eastland and Houston-Fourteenth Courts of Appeals issued two decisions each; and the El Paso and Beaumont Courts of Appeals issued one each. While the Austin Court of Appeals still handles the greatest number of administrative law cases, statistics demonstrate that administrative law issues arise in a variety of proceedings and are considered by trial and appellate courts throughout the state. II. JURISDICTIONAL AND OTHER PREREQUISITES TO JUDICIAL REVIEWA. Central Power & Light Co. v. Sharp, 40 Tex. Sup. Ct. J. 443 (Mar. 21, 1997) NATURE AND DISPOSITION OF CASE: Suit for refund of franchise taxes paid. Travis County district court (Dellana, J.) rendered judgment for Comptroller. Austin Court of Appeals (Carroll, C.J., and Jones and Smith, J.J.) affirmed, 919 S.W.2d 485. Supreme Court (per curiam) denies the application for writ of error. KEY POINT: Motion for Rehearing in Agency: The court of appeals held that the district court erred in denying the Comptroller's plea to the jurisdiction as to a complaint the taxpayer did not raise in its motion for rehearing in the agency. The supreme court disapproves of the court of appeals' analysis of this issue. Implicit in the general rule that a complaint must first be raised in a motion for rehearing in the agency is the assumption that the agency has authority to correct the error complained of. An agency lacks authority to decide unconstitutionality of a statute. Thus, the district court had jurisdiction over the challenge to the Comptroller's order on the basis that the underlying statute is unconstitutional even through the taxpayer did not raise the complaint in the motion for rehearing in the agency. B. City of Arlington v. Nadig, 40 Tex. Sup. Ct. J. 737 (June 20, 1997) NATURE AND DISPOSITION OF CASE: Mandamus proceeding. Supreme Court (per curiam) overrules motion for leave to file petition for writ of mandamus. KEY POINT: Mandamus-State Board Members: City sought review of Texas Worker's Compensation Commission decision in district court. The court reversed the decision and held that the city was entitled to reimbursement from the Subsequent Injury Fund. When the Commission refused to reimburse the city, it sought mandamus in the supreme court against the executive director of the Commission and the administrator of the Subsequent Injury Fund, asserting that the supreme court had exclusive jurisdiction over them as officers of state government executive departments. See Tex. Gov't Code Ann. § 22.002(c) (Vernon 1988). But, members of state boards are not state officers for purposes of the supreme court's exclusive mandamus jurisdiction. Those officials are subject to mandamus in the district court and relief should be sought there. C. Texas Health Enters., Inc. v. Texas Dep't of Human Servs., 40 Tex. Sup. Ct. J. 909 (July 9, 1997) NATURE AND DISPOSITION OF CASE: Suit for judicial review. Travis County district court (Dietz, J.) affirmed agency order. Austin Court of Appeals (Carroll, C.J. and Aboussie and Kidd, J.J.) affirmed district court judgment, 925 S.W.2d 750. Supreme Court (per curiam) reverses court of appeals judgment and remands with instructions to file agency record. KEY POINT: Suit for Judicial Review-Agency Record-Appeal: Facility sought judicial review of agency decision. Although the agency filed the agency record with the district clerk, neither party offered the record in evidence under APA § 2001.175(d). But, both parties relied on the record in their district court arguments and that court based its decision on the agency record. The court of appeals held that it could not file the agency record because it had not been admitted in evidence, citing Nueces Canyon Consolidated Independent School District v. Central Education Agency, 917 S.W.2d 773 (Tex. 1996). The supreme court states that Nueces Canyon does not address the issue here, that is, whether the trial court admitted the agency record in evidence. The court holds that evidence that is not objected to, and that the district court and parties treat as admitted, is for all practical purposes admitted. D. Caspary v. Corpus Christi Downtown Management Dist., 942 S.W.2d 223 (Tex. App.-Corpus Christi 1997, writ requested) NATURE AND DISPOSITION OF CASE: Suit challenging ad valorem taxation. Nueces County district court granted district's plea to the jurisdiction. Corpus Christi Court of Appeals (Dorsey, Chavez, and Rodriguez, J.J.) affirms order of dismissal. KEY POINT: Exhaustion of Administrative Remedies- Management District Hearing-Notice: Property owners appeared at hearing on municipal management district's proposed taxation scheme and presented their objections but received no notice that the district overruled their objections. After receiving their tax bill, property owners filed suit in district court to challenge the taxation scheme. The district court dismissed the suit because property owners had not exhausted their administrative remedies. Property owners argue that Tex. Loc. Gov't Code Ann. § 375.097(b) (Vernon Supp. 1997) required notice to them that the district had adopted the proposed taxation scheme. That section requires the district to conduct hearings in accordance with the APA. Thus, appellants base their argument on APA § 2001.142(a), which requires notice to a party in a contested-case proceeding. The court of appeals holds that the term "contested-case" and "hearing" are not equivalent; thus, § 2001.142(a) does not apply to the district proceeding. Appellants did not exhaust their administrative remedies, do not allege compliance with administrative procedures, or provide a tenable excuse for noncompliance. E. City of Houston Fire Fighters & Police Officers Civil Serv. Comm'n v. Morris, No. 14-95-00093-CV (Tex. App.-Houston [14th Dist.] July 10, 1997) NATURE AND DISPOSITION OF CASE: Suit for judicial review of Commission order and declaratory judgment. Harris County district court granted summary judgment for police officer. Houston -Fourteenth Court of Appeals (Lee, Amidei, and Edelman, J.J.) reverses and remands case with instructions to dismiss for want of jurisdiction. KEY POINT: Suit for Judicial Review-Deadline to File Petition: Police officer filed a petition in district court for review of a Commission order and for declaratory judgment. The court of appeals concludes that the officer did not timely file his petition under Tex. Loc. Gov't Code Ann. § 143.015(a) (Vernon 1988). That section requires that the petition be filed within ten days after the date a final decision is either (1) sent to the officer by certified mail or (2) personally received by the officer or the officer's designee. Here, the decision was sent on September 2 but not received by the officer until September 10. The officer filed his petition on September 20. The court of appeals holds that "the phrase 'personally received' does not apply to decisions sent by certified mail pursuant to subsection (a)(1)." Although filed within ten days of the day the officer actually received the decision, the petition was untimely. In an Appendix, the court lists provisions of other statutes addressing notice of a decision. F. City of Lancaster, Tex. v. Texas Natural Resources Conservation Comm'n, 935 S.W.2d 226 (Tex. App.-Austin 1996, writ requested) NATURE AND DISPOSITION OF CASE: Suit for judicial review. Travis County district court (Davis, J.) affirmed Commission order. Austin Court of Appeals (Powers, Aboussie, and Smith, J.J.) dismisses appeal for want of jurisdiction. KEY POINT: Suit for Judicial Review-Appellate Jurisdiction-Time to Perfect Appeal: After district court rendered judgment affirming Commission order, city timely filed a request for findings of fact and conclusions of law under Tex. R. Civ. P. 296. The city filed its notice of appeal 92 days after the judgment was signed and, believing that the request for findings of fact and conclusions of law extended the time to perfect appeal, filed a motion to extend the time to perfect appeal. A timely-filed request for findings of fact and conclusions of law, however, does not extend the appellate timetable in a substantial-evidence suit for judicial review of an agency order. When it is clear from the record that the trial court judgment is not based upon evidence heard by the court, a request for findings of fact does not extend the appellate timetable. In this substantial-evidence review under the APA, "the court's review of the agency record did not entail receiving evidence, [and] the request for findings of fact did not extend the appellate timetable." The city argued that the request for findings of fact was appropriate based on their claim of procedural irregularities at the Commission. But the city failed to tender a statement of facts and, thus, was prevented from showing that the city presented evidence of procedural irregularities to the district court. G. Corbitt v. City of Temple, 941 S.W.2d 354 (Tex. App.-Austin 1997, writ requested) NATURE AND DISPOSITION OF CASE: Suit for judicial review of Civil Service Commission decision not to provide hearing. Bell County district court (Morris, J.) held Commission did not have jurisdiction. Austin Court of Appeals (Powers, Aboussie, and Jones, J.J.) affirms district court judgment. KEY POINT: Jurisdiction-Appeal to Civil Service Commission: The issue is whether the city's civil service commission had jurisdiction over an appeal of chief of police's decision withdrawing permission for officers to engage in off-duty employment. After the Internal Affairs Division found officers committed infractions, police chief notified them that they were prohibited from engaging in off-duty employment for a period of 68 days. Officers attempted to appeal this decision to the Commission, which declined to hear the claim. Officers brought suit alleging that the failure to provide them a hearing violated the Civil Service Act. See Tex. Loc. Gov't Code Ann. §§ 143.001-.313 (Vernon 1988 & Supp. 1997). Under the Act, the Commission has jurisdiction over appeals from promotional passovers, disciplinary suspensions, and demotions. Disciplinary actions are defined in terms of departmental employment; the Act applies strictly to departmental issues. This decision involved a suspension from nondepartmental employment; therefore, no appeal was available. H. Escajeda v. CIGNA Ins. Co., 934 S.W.2d 402 (Tex. App.-Amarillo 1996, no writ) NATURE AND DISPOSITION OF CASE: Suit against workers' compensation insurer for failure to pay for treatment. Potter County county court at law (Roberts, J.) granted summary judgment for insurer. Amarillo Court of Appeals (Boyd, Quinn, and Reynolds, J.J.) reverses the portion of the judgment dismissing the claims for statutory violations and affirms the remainder. KEY POINT: Exhaustion of Administrative Remedies- Workers' Compensation: After workers' compensation insurer refused to pay for treatment that injured employee believed was covered under settlement agreement, employee filed suit. Insurer moved for summary judgment on grounds that: (1) employee did not exhaust her administrative remedies; (2) employee's doctor did not exhaust administrative remedies; (3) exhaustion was a prerequisite to recovery of damages under any theory alleged; and (4) insurer had reasonable basis to delay payment. The trial court granted summary judgment. The court of appeals concludes that, to the extent employee attempts to recover damages related to lost compensation benefits caused by the misrepresentations or deceptive trade practices, the Texas Workers' Compensation Act applies and the trial court lacked original jurisdiction. But, the Act is inapplicable to the extent she seeks to recover damages arising from the misrepresentations or deceptive trade practices. I. Firemen's Pension Comm'n v. Jones, 939 S.W.2d 730 (Tex. App.-Austin, no writ) NATURE AND DISPOSITION OF CASE: Suit for judicial review of Firemen's Pension Commissioner's decision. Travis County district court (McCown, J.) reversed decision and remanded proceeding. Austin Court of Appeals (Carroll, C.J. and Powers and Jones, J.J. affirms district court judgment, KEY POINT: Jurisdiction-Right of Review-Statutory Interpretation: The fact that a fireman's appeal from a decision of the local board to the Firemen's Pension Commission was a "contested case" under the APA did not confer subject-matter jurisdiction on the district court. The APA does not create a right of judicial review of an agency order. The district court here, however, had jurisdiction under former Tex. Rev. Civ. Stat. art. 6243e, § 18, which was continued in effect by a "savings clause." The district court's interpretation of the agency's governing statute did not violate the separation of powers doctrine. Statutory interpretation is a judicial, not a legislative function. Although an agency's interpretation is entitled to "serious consideration," the interpretation is a legal determination that does not bind the courts. J. Ford Motor Co. v. Texas Dep't of Transp., 936 S.W.2d 427 (Tex. App.-Austin 1996, no writ) NATURE AND DISPOSITION OF CASE: Suit for judicial review of Motor Vehicle Division order; counterclaim for DTPA violations and breach of contract and warranty. Travis County district court (Meurer, J.) affirmed agency order and dismissed counterclaims. Austin Court of Appeals (Jones, Kidd, and Smith, J.J.) affirms district court judgment as to the agency order and reverses as to dismissal of counterclaims. KEY POINT: Jurisdiction-Suit for Judicial Review-Counterclaim: Vehicle owners filed counterclaim in manufacturer's suit for judicial review. Manufacturer contends that the district court was permitted to exercise only its statutory jurisdiction under the Texas Motor Vehicle Commission Code, Tex. Rev. Civ. Stat. Ann. art. 4413(36), § 7.01 (Vernon Supp. 1997), which provides for judicial review of an agency order. The court of appeals holds that, although there may be impediments to a combined hearing of an administrative appeal and a counterclaim, the district court erred in dismissing the counterclaims. Any impediments are not jurisdictional; the different issues and different standards of review suggest that severance would be proper. Although the trial court may not apply the substantial evidence standard of review and the preponderance of the evidence standard in a hybrid proceeding, the district court here ended the substantial evidence review of the agency order before addressing the counterclaims. "Because nothing deprived the trial court of jurisdiction over the counterclaims, it erred in granting the motion to strike." Substantial Evidence Review-Lemon Law: Vehicle owners filed a complaint with TxDOT Motor Vehicle Division. After a hearing, the agency found that the prerequisites for manufacturer's repurchase of vehicle had been met. Manufacturer sought judicial review of the agency order requiring repurchase. The court of appeals reviews the agency order under the substantial evidence rule and holds that substantial evidence supports the hearing examiner's findings as to the existence of a continuing defect, a reasonable number of repair attempts, and the repurchase price. K. Hernandez v. Texas Workers' Compensation Ins. Fund, 946 S.W.2d 904 (Tex. App.-Eastland 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for judicial review of Workers' Compensation Appeals Panel decision. Taylor County district court (Anderson, J.) granted plea to jurisdiction. Eastland Court of Appeals (Arnot, C.J. and Dickenson and Wright, J.J.) reverses the dismissal and remands the case to the district court. KEY POINT: Suit for Judicial Review-Workers' Compensation Act-County of Suit: The Texas Workers' Compensation Act, Tex. Labor Code Ann. § 410.255(a) (Vernon 1996), provides that a suit for judicial review of a decision is to be brought under the APA, unless Tex. Lab. Code Ann. § 410.031 (Vernon 1996) governs the dispute. That section provides for "judicial review of administrative decisions in . . . cases where the issues involve compensability, eligibility, or the amount of income or death benefits." These suits may be brought in the county where the employee resided at the time of injury, rather than in Travis County. The injured worker brought suit in Taylor County. The court determines the plea to the jurisdiction from a review of the plaintiff's pleading, construing the allegations in plaintiffs' favor. Although he may have pleaded the claims with more particularity, the petition shows that he seeks review "touching upon" the incapacity rating and maximum medical improvement rating, matters dealing with the amount of benefits. The allegations were sufficient to invoke the district court's jurisdiction. L. Hicks v. Lamar Consol. Indep. Sch. Dist., 943 S.W.2d 540 (Tex. App.-Eastland 1997, no writ) NATURE AND DISPOSITION OF CASE: Declaratory judgment for violation of constitutional and contractual rights. Fort Bend County district court (Elliott, J.) granted plea to jurisdiction. Eastland Court of Appeals (Arnot, C.J. and Dickenson and Wright, J.J.) affirms the order of dismissal. KEY POINT: Exhaustion of Administrative Remedies-Constitutional Claims-Questions of Law and Fact: Former school administrator sued for declaration that the district's actions violated his "Article I, § 19 Property interest" and "contractual relief." Administrator contended that he was not required to exhaust administrative remedies before bringing his constitutional law claims. The court of appeals holds: "Although some Texas courts have referred to 'constitutional' claims as creating an exception to the exhaustion of remedies doctrine . . . the facts of those cases involve federal claims and federal constitutional questions only, and then only when filed in the federal court system . . . . The appropriate distinction is not that a particular claim is a 'constitutional' one but, rather, that it is a 'federal constitutional claim, or other federal claim, presented in a state court' . . . ." Otherwise, "resort must first be had to administrative remedies unless questions of law only are presented." The court agrees with the general proposition that when a pure question of law, constitutional or otherwise, is presented, a claimant is not required to exhaust administrative remedies. Here, taking all allegations of administrator's pleadings as true, the issue is a question of fact-why did the district act as it did? Calling the claim a constitutional question does not changes its nature as fact question. Administrator was required to exhaust his administrative remedies. Exhaustion of Administrative Remedies-Waiver of Complaint on Appeal: Administrator argued that other exceptions to the doctrine of exhaustion of administrative remedies, such as inadequacy of remedies, applied. The court of appeals holds that administrator waived these arguments. Although briefing the argument, he did not raise these matters in this petition in district court. M. Janik v. Lamar Consol. Indep. Sch. Dist., No. 01-96-00703-CV (Tex. App.-Houston [1st Dist.] July 17, 1997. n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for wrongful discharge. Fort Bend County district court granted plea to the jurisdiction. Houston-First Court of Appeals (Cohen, Hedges, and Wilson, J.J.) affirms district court judgment. KEY POINT: Exhaustion of Administrative Remedies-Constitutional Claims: District discharged employee from her position as school district clerk. Employee did not pursue any administrative remedies before filing suit in district court. Employee contends that she was not required to exhaust administrative remedies because she raises state constitutional claims. The court of appeals follows Hicks v. Lamar Consolidated Independent School District, 943 S.W.2d 540, 543 (Tex. App.-Eastland 1997, n.w.h.), in concluding "that federal constitutional claims involving only questions of law, not questions of fact, bypass the requirement of exhaustion of administrative remedies not because the claims are constitutional, but because they are federal." Employee also argues that district was estopped because it never told her of the required administrative procedure. Although such allegations may create a fact issue regarding estoppel, the allegations cannot confer jurisdiction on a district court. Even construing the pleadings in her favor, employee alleged neither exhaustion of administrative remedies nor an exception to the requirement. N. Limon v. State, 947 S.W.2d 620 (Tex. App.-Austin 1997, no writ) NATURE AND DISPOSITION OF CASE: Declaratory judgment challenging constitutionality of Alcoholic Beverage Code provisions. Travis County district court (Hart, J.) denied relief requested. Austin Court of Appeals (Carroll, C.J. and Aboussie and Smith, J.J.) modifies judgment and affirms, as modified. KEY POINT: Jurisdiction-Standing to Challenge Statute: The Alcoholic Beverage Code requires certain businesses to post surety bonds before issuing a license or permit. Applicants filed suit in district court seeking a declaration that the bond provision was unconstitutional. Although all are subject to the provision and three had posted bonds, the Alcoholic Beverage Commission had not attempted to forfeit any of the bonds. Applicants have no standing to challenge the forfeiture provisions. To challenge a statute, a plaintiff must suffer some actual or threatened injury under the statute. Further, a trial court has no jurisdiction to enjoin conjectural or speculative events under the injunction statute. Here, there is no threatened or actual controversy that enables the court to determine whether forfeiture of the bond would be constitutional. O. Mednick v. Texas State Bd. of Pub. Accountancy, 933 S.W.2d 336 (Tex. App.-Austin 1996, writ denied) NATURE AND DISPOSITION OF CASE: Suit for judicial review. Travis County district court (Williams, J.) dismissed for lack of subject- matter jurisdiction. Austin Court of Appeals (Carroll, C.J. and Kidd and Smith, J.J.) reverses the district court judgment and remands the proceeding to that court. KEY POINT: Jurisdiction-Motion for Rehearing-Deadline to File: The district court dismissed appellant's suit for judicial review of a Board order because he did not timely file his motion for rehearing in the agency. The motion was timely filed under the 20-day deadline of APA § 2001.146(a) but not under the 15-day deadline of the Texas Public Accountancy Act, Tex. Rev. Civ. Stat. Ann. art. 41a-1, § 22(f)(1) (Vernon Supp. 1997). The APA provides the minimum standards for practice and procedure for state agencies. "Because the APA provides the minimum standards for procedural matters, an agency's organic statute cannot restrict the procedural time requirements established by the APA." The 20-day deadline of the APA controls over the 15-day deadline of the Accountancy Act. P. Mercedes Indep. Sch. Dist. v. Munoz, 941 S.W.2d 215 (Tex. App.-Corpus Christi 1996, writ denied) NATURE AND DISPOSITION OF CASE: Probationary teacher's suit for breach of contract. Hidalgo County district court awarded teacher damages for lost salary. Corpus Christi Court of Appeals (Seerden, C.J. and Yañez and Chavez, J.J.) reverses district court judgment and remands the cause for further action consistent with the opinion. KEY POINT: Exhaustion of Administrative Remedies-Question of Law: Probationary teacher requested, and was granted, leave of absence from her position. The district did not notify the teacher that it did not intend to renew her contract by the deadline but told her, when she asked about her assignment for the year, that none was available. Teacher sued district for breach of contract. District contended that teacher was required to exhaust administrative remedies; she contended that no issues of fact were involved and that the exception for questions of law applied. Teacher specifically asserted that district's failure to give timely notice of the nonrenewal of her contract was a breach of the contract as a matter of law. The court of appeals reviews the evidence, concludes that a fact issue exists as to whether the teacher terminated her contract, and holds that the exception to the exhaustion requirement does not apply. Q. Metro Temps, Inc. v. Texas Workers' Compensation Ins. Facility, No. 03-96-00265-CV (Tex. App.-Austin July 24, 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Declaratory judgment action regarding responsibility for payment of premiums. Travis County district court (McCown, J.) dismissed claims for failure to exhaust administrative remedies. Austin Court of Appeals (Powers, Jones, and Hill, J.J.) affirms the order of dismissal. KEY POINT: Exhaustion of Administrative Remedies-Multiple Claims: The trial court dismissed appellants' claims for failure to exhaust administrative remedies. Appellants contended that their claims are beyond the authority of the agency to adjudicate and, therefore, they were not required to exhaust their administrative remedies. Dismissal was appropriate because appellants did not pursue their administrative remedies as to the claims the Board could have adjudicated. "Where . . . administrative remedies are available for a portion of the plaintiff's claims and the resolution of that portion of the claims may be determinative of the claims over which the administrative body has no jurisdiction, the trial court does not have jurisdiction over the claims outside the jurisdiction of the administrative body until the plaintiff has exhausted its administrative remedies with respect to the claims over which the administrative body does have jurisdiction." The holding here is not inconsistent with that of Montgomery v. Blue Cross & Blue Shield of Texas, Inc., 923 S.W.2d 147 (Tex. App.-Austin 1996, writ denied). There, plaintiffs pursued their administrative remedies with respect to the portions of their claims that the agency had the authority to adjudicate. R. P.R.I.D.E. v. Texas Workers Compensation Comm'n, No. 03-96-00520-CV (Tex. App.-Austin July 24, 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for judicial review. Travis County district court (Morgan, J,) dismissed the suit for want of jurisdiction. Austin Court of Appeals (Powers, Jones, and Kidd, J.J.) affirms order of dismissal. KEY POINT: Suit for Judicial Review-Time to File Petition-"Mailbox Rule": Administrative Law Judge's order in medical-reimbursement dispute was final on March 5, the day medical provider received it. A petition for judicial review was due to be filed in Travis County district court within thirty days under APA § 2001.171. Medical provider mailed its petition to the district clerk on March 26. The package, however, was not delivered and was returned. On May 30, more than a week after the package was returned, medical provider filed the petition and a motion to extend time with the district clerk. The district court dismissed the case, with prejudice, on plea to the jurisdiction. The court of appeals holds that the petition was untimely: the district clerk did not receive the petition within ten days of its due date as the mailbox rule, Tex. R. Civ. P. 5, requires. The court of appeals modifies the district-court judgment to delete "with prejudice." Because the court could not reach the merits of the case, the district court could not dismiss the cause with prejudice. Suit for Judicial Review-APA § 2001.171: Justice Powers concurs in the judgment on the basis that the district court did not have subject-matter jurisdiction over the proceeding because "section 2001.171 of the APA cannot reasonably be construed as creating the right to sue for judicial review-and subject-matter jurisdiction in the district court-whenever an administrative agency chooses to decide a controversy through contested-case procedure." S. Planet Ins. Co. v. Serrano, No. 04-95-00758-CV (Tex. App.-San Antonio Nov. 13, 1996, n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for judicial review of Texas Workers' Compensation Commission appeals panel decision. Bexar County district court (Tanner, J.) granted motion to dismiss for want of jurisdiction. San Antonio Court of Appeals (Rickhoff, Hardberger, and Hill, J.J.) reverses district court judgment and remands for trial. KEY POINT: Suit for Judicial Review-Filing Petition with Agency: Appeals panel made challenged decision on March 13. Insurer filed its petition in district court on April 5, within the forty-day period set out in Tex. Lab. Code Ann. § 410.252 (Vernon 1996). But, insurer did not file a copy of the petition with the Commission until April 12, still within the § 410.252 period. The district court concluded that it did not have jurisdiction because the filings were not simultaneous, as Tex. Lab. Code Ann. § 410.253 (Vernon 1996) requires. The court of appeals holds that the provision of § 410.253 requiring simultaneous filing with the Commission and district court, while mandatory as to the filing with the Commission, is directory as to the requirement that the filing be simultaneous. T. Producers Assistance Corp. v. Employers Ins., 934 S.W.2d 796 (Tex. App.-Houston [1st Dist.] 1996, no writ) NATURE AND DISPOSITION OF CASE: Suit against workers' compensation insurance carrier for numerous claims, including breach of duty of good faith and fair dealing and statutory violations. Harris County district court (Hall, J.) dismissed suit for lack of subject matter jurisdiction. Houston- First Court of Appeals (Taft, Huston-Dunn, and O'Connor, J.J.) affirms district court judgment. KEY POINT: Exhaustion of Administrative Remedies: Servicing agent denied a claim asserted against employer because the employee's injury occurred approximately 500 miles outside the policy territory. Employer did not seek an administrative appeal of the denial of coverage but did file suit against the servicing agent for breach of the duty of good faith and fair dealing, negligence, gross negligence, intentional infliction of emotional distress, breach of contract, fraud and statutory violations. The district court dismissed the claims, except that for the breach of the duty of good faith and fair dealing, for failure to exhaust administrative remedies. The court of appeals holds "that enforcing exhaustion of all claims arising from a grievance under the administrative system is the best way to uphold the legislative purposes in establishing such a system without denying access to the judicial system. Access to the judicial system is not denied; it is only delayed until all aspects of the grievance that can be resolved in the administrative system are so resolved." The dismissal was proper. U. St. Paul Fire & Marine Ins. Co. v. Texas Workers' Compensation Comm'n, 945 S.W.2d 886 (Tex. App.-Austin 1997, no writ) NATURE & DISPOSITION OF THE CASE: Declaratory judgment action for declaration that reimbursement scheme was unconstitutional. Travis County district court (Cooper, J.) denied the relief. Austin Court of Appeals (Carroll, C.J. and Aboussie and Smith, J.J.) vacates the district court judgment and dismisses the cause. KEY POINT: Declaratory Judgments Act-Justiciable Controversy-Challenge to Statute: The Texas Workers' Compensation Act allows a party wrongfully ordered to pay benefits to seek reimbursement for benefits paid under a decision of a benefit review officer or the appeals panel but does not provide for reimbursement for benefits paid under a hearing officer's contested case decision that is reversed or modified. Insurer was ordered to pay benefits under a hearing officer's contested-case decision. Insurer, however, filed this action before either paying any benefits or proceeding to an appeals panel hearing. The court of appeals holds that the district court did not have subject-matter jurisdiction because insurer did not present a justiciable controversy; insurer did not show that it would suffer imminent harm upon application of the challenged statute. The fact that insurer sought a declaratory judgment does not require a different result. A party seeking a declaration as to the validity of a statute must at least establish that the statute has been used or violated by one of the parties. Insurer did "not establish TWCC is wrongfully depriving it of anything or that [insurer] will be entitled to reimbursement at all. [Insurer's] intimation that the contested-case decisions might be reversed or modified . . . is not enough . . . ." Insurer asks the court to declare the law as applied to a hypothetical situation and, effectively, seeks an advisory opinion. V. Texas Comm'n of Licensing & Regulation v. Model Search Am., Inc., No. 03-96-00349-CV (Tex. App.-Austin June 12, 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Declaratory judgment action. Travis County district court (Davis, J.) awarded declaratory relief. Austin Court of Appeals (Powers, Aboussie, and Jones, J.J.) reverses district-court judgment and orders cause dismissed for want of subject-matter jurisdiction. KEY POINT: Declaratory Judgments Act-Justicable Controversy-Review of Agency Action: Model Search America sued for a declaratory judgment that the Texas Talent Agency Act, Tex. Rev. Civ. Stat. Ann. arts. 5221a-9, 9100 (Vernon Supp. 1997) ("TTA"), did not apply to MSA. The district court declared that the TTA did not apply. The court of appeals disagrees with MSA's contention that the Declaratory Judgments Act, Tex. Civ. Prac. & Rem. Code Ann. §§ 37.001-.011 (Vernon 1986 & Supp. 1997) ("DJA") provides for statutory review of the agency action in this instance. Although authorizing a district court to award a remedy not otherwise available, the DJA "does not itself create jurisdiction in the district court to review an agency action not otherwise reviewable." An agency action is reviewable only if the legislature provides for review or the plaintiff complains the action is ultra vires or violates a constitutional right. MSA's disagreement with the agency interpretation of the TTA did not "affect" MSA's status, rights, or other legal relations with the immediacy and concreteness contemplated by the DJA. There was no final agency order and the Commission had not attempted to enforce the TTA. MSA and the Commission's general counsel had simply discussed application of the requirements and disagreed on their applicability. The district court lacked jurisdiction under the DJA. W. Texas Dep't of Pub. Safety v. Jones, 938 S.W.2d 785 (Tex. App.-Beaumont 1997, no writ) NATURE AND DISPOSITION OF CASE: Suit for judicial review of driver's license suspension . Montgomery County county court at law reversed. Beaumont Court of Appeals (Walker, C. J. and Burgess and Stover, J.J.) reverses trial court judgment and renders judgment affirming suspension. KEY POINT: Suit for Judicial Review-Driver's License Suspension-Appellate Jurisdiction: Driver challenged court of appeals jurisdiction to review county court at law decision in a license suspension proceeding because Tex. Transp. Code Ann. § 524.041 (Vernon 1997) does not provide for an appeal to the court of appeals. The court of appeals has jurisdiction under Tex. Const. art. V, subject to the limitation of § 524.041(d). That section limits the department's right of appeal to issues of law. X. Texas Dep't of Pub. Safety v. Lavender, 935 S.W.2d 925 (Tex. App.-Waco 1996, writ requested) NATURE AND DISPOSITION OF CASE: Suit for judicial review of driver's license suspension. Johnson County county court at law (Altaras, J.) reversed. Waco Court of Appeals (Davis, C. J. and Cummings and Vance, J.J.) reverses trial court judgment and renders judgment upholding suspension. KEY POINT: Appellate Jurisdiction-Application of APA-Driver's License Suspension: Driver asserts that court of appeals is without jurisdiction because former art. 6687b-1, codified at Tex. Transp. Code Ann. § 524.041 (Vernon 1997), does not provide for appeal from the county court at law to the court of appeals and the DPS is allowed to appeal only issues of law. Article 6687b-1 expressly referred to APTRA as applying to proceedings under that article. The DPS, as a party in the trial court, has a right to appeal an adverse judgment to the court of appeals under APA § 2001.901. As of January 1, 1995, APA § 2001.221 was amended to delete reference to former art. 6501l-5, relating to driver's license suspension; therefore, the APA applies. The provision of the art. 6687b-1 limiting the DPS appeal to issues of law applies to the appeal to the county court at law and not to the appeal to the court of appeals. Substantial Evidence Review-Necessity of Agency Record: DPS contends that the trial court erred in reversing the suspension without the record from the ALJ hearing. Because the APA applies, driver was required to admit the agency record into evidence. The court of appeals holds that, without the record, the court is unable to find that the order is not supported by substantial evidence or that it is infected with some other error of law. The State Office of Administrative Hearings rule relating to the agency record, 1 Tex. Admin. Code § 159.37 (West 1997), relates to the taking of an appeal to the county court at law and does not control the procedures in that court. Y. Texas Dep't of Pub. Safety v. Stacy, 933 S.W.2d 746 (Tex. App.-San Antonio 1997, no writ) NATURE AND DISPOSITION OF CASE: Suit for judicial review of driver's license suspension. Frio County county court at law (Garcia, J.) reversed ALJ decision. San Antonio Court of Appeals (Lopez, Stone and Hardberger, J.J.) overrules appellee's motion to dismiss. KEY POINT: Appellate Jurisdiction-Mootness-Driver License Suspension: Driver sought dismissal of the appeal as moot because his license had been suspended for sixty days under two department orders, despite the trial court ruling reversing the ALJ's suspension decision. The ALJ's suspension order was stayed when driver filed his suit for judicial review. Any department order issued thereafter was void as was any order issued after the county court at law reversed the suspension. Because the two department orders were void, driver had not served his entire suspension. The appeal is not moot. Even if he had served the suspension, the appeal would not be moot because the Department has an interest in the actual suspension and its future enhancement. Z. Texas Dep't of Transp. v. T. Brown Constructors, Inc., 947 S.W.2d 655 (Tex. App.-Austin 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Bill of review to set aside decision in suit for judicial review. Travis County district court (Cooper, J.) granted motion for summary judgment denying bill of review. Austin Court of Appeals (Powers, Jones and Aboussie, J.J.) reverses district court judgment and remands proceeding to that court. KEY POINT: Suit of Judicial Review-Separation of Powers-Jurisdiction to Render Judgment: In a suit for judicial review, the district court awarded appellee judgment for $3 million, much more than appellee was awarded in the agency. After failing to appeal timely, TxDOT sought to set aside the judgment by bill of review, which the trial court denied. TxDOT's challenge is a collateral attack on the prior judgment on the basis that the judgment is void for awarding appellee an amount different from that which the agency awarded. Because the challenge is a collateral attack on a prior judgment, TxDOT did not have to meet the requirements for a bill of review to set the judgment aside. The court holds that the prior judgment is void and fundamentally erroneous because by awarding an amount different from the agency, the district court violated the separation-of-powers doctrine. "Although courts have authority to hold that an agency erred and must correct its error, courts cannot dictate how to correct the error if, by doing so, the court effectively usurps the authority and discretion delegated to the agency by the legislature." A. Gonzalez v. United Indep. Sch. Dist., 940 S.W.2d 593 (Tex. 1996) NATURE AND DISPOSITION OF CASE: Suit for review of school board decision expelling student. Webb County district court (Flores, J.) declared expulsion void. San Antonio Court of Appeals (Rickhoff, Lopez, and Green, J.J.) reversed district court judgment and rendered judgment that student take-nothing, 911 S.W.2d 118. Supreme Court (per curiam) denies the application for writ of error. KEY POINT: Standard of Review-Substantial Evidence De Novo: The school district contended that review of its decision to expel the student was under a substantial evidence standard of review; the student contended that review was by trial de novo. The court of appeals concluded that the proper standard of review for school board actions regarding student expulsions is substantial evidence de novo, citing Sanchez v. Huntsville Independent School District, 844 S.W.2d 286, 290 (Tex. App.-Houston [1st Dist.] 1992, no writ). In denying the application for writ of error, the supreme court "neither approves nor disapproves of the court of appeals' discussion of the standard of review. See 911 S.W.2d 118, 123." B. All Star Sheet Metal & Roofing, Inc. v. Texas Dep't of Ins., 935 S.W.2d 186 (Tex. App.-Austin 1996, no writ) NATURE AND DISPOSITION OF CASE: Suit for judicial review of Commissioner's order. Travis County district court (Dietz, J.) affirmed. Austin Court of Appeals (Powers, Aboussie, and Jones, J.J.) affirms district court judgment. KEY POINT: Substantial Evidence Review-Meaning, Weight, and Credibility of Evidence: In January 1991, workers' compensation carrier predicted a large increase in premiums. To give its employees an opportunity to waive coverage, employer discharged them and rehired them the following Monday. All but one waived worker's compensation coverage within the statutory period. Carrier told employer that the premium calculation for the upcoming year would not give effect to the purported discharges and waivers and that coverage would be canceled if employer did not pay the increased premiums. After a contested-case hearing, the Commissioner issued his order that the waivers were not genuine and that the premiums should be calculated accordingly. The evidence reasonably supports the Commissioner's findings. "The meaning, weight, and credibility assigned various parts of the evidence and their orchestration in light of all the evidence were matters for the Commissioner to determine; we are forbidden to make those assessments and are limited to the issue of whether the agency record as a whole demonstrates that the Commissioner's assessments were unreasonable." C. Board of Trustees v. Benge, 942 S.W.2d 742 (Tex. App.-Austin 1997, writ requested) NATURE & DISPOSITION OF CASE: Suit for judicial review of Employees Retirement System decision denying accidental death benefits. Travis County district court (Dietz, J.) remanded proceeding to Board. Court of Appeals (Carroll, C.J. (not participating) and Kidd and Smith, J.J.) reverses district court judgment and affirms agency order. KEY POINT: Substantial Evidence Review-Employees Retirement System: Insured died when his plane collided with another plane immediately after landing. Insured's wife sought accidental death benefits under the policy, which Board denied under the policy's aviation exclusion. The district court concluded that the Board improperly applied the exclusion without first determining that the excluded activity-air travel or flight-caused insured's death. The proper standard of review is substantial evidence review-that is, the Board order may not be reversed unless the agency record show's that claimant's substantial rights were prejudiced by the Board committing one of the errors listed in the APA. The Board, however, was not required to find that flying the plane was the sole proximate cause of insured's death. "[T]he accident occurred only moments after [insured] landed and his plane veered into the path of the next landing craft. Under these circumstances, the Board could reasonably have found that [insured's] flying activity was a direct . . . cause of his accident." D. City of Odessa v. Barton, 939 S.W.2d 707 (Tex. App.-El Paso 1997, writ requested) NATURE AND DISPOSITION OF CASE: Suit for breach of contract. Ector County district court (Milburn, J.) rendered judgment against city. El Paso Court of Appeals (Larsen, J.) affirms district court judgment. KEY POINT: Substantial Evidence Review-No Agency Order: Former employee sued city for breach of contract. The city discharged employee after a predetermination hearing. He timely requested a post-termination hearing, appeared at that hearing, and walked out. The hearings panel did not make findings or issue an order as contemplated by the city's personnel manual. The city argued that the appropriate standard of review was substantial evidence because the district court was reviewing a decision of an administrative body. The city, however, presented the court nothing to review. The city did not finish its presentation of evidence before the panel or obtain findings after the employee walked out. The breach of contract claim exists independently of any administrative review here. E. City of Plano, Tex. v. Public Util. Comm'n, No. 03-96-00691-CV (Tex. App.-Austin Aug. 14, 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for judicial review of Commission order granting service provider certificate of operating authority to resell local exchange service. Travis County district court (Dietz, J.) affirmed Commission order. Austin Court of Appeals (Carroll, C.J. and Aboussie and Smith, J.J.) affirms district court judgment. KEY POINT: Agency Interpretation of Statute-Reviewing Court "Bound to Accept": The issue is the meaning of Public Utility and Regulatory Act of 1995, Tex. Rev. Civ. Stat. Ann. § 3.2555(a) (Vernon Supp. 1997) (repealed and codified at Tex. Util. Code Ann. §§11.01-63.042, effective Sept. 1, 1997), which requires an applicant for a service provider certificate of operating authority ("SPCOA") to provide a sworn statement that it has applied for any necessary municipal franchise for the services to be provided. The city contended that the Commission's interpretation impermissibly allows it-and not the city-to decide when municipal consent is necessary. In construing § 3.2555(a), the court gives "serious consideration" to the agency's construction, so long as the interpretation is reasonable and does not contradict the statute's plain meaning. "This is particularly true where the statute is ambiguous due to the complexity of the subject matter. . . . Indeed, if the statute can reasonably be read as the agency has ruled, and that reading is in harmony with the rest of the statute, then the court is bound to accept that interpretation even if other reasonable interpretations exist." (Citations omitted). Here, the Commission's interpretation of § 3.2555(a) as requiring a sworn statement from the applicant is reasonable and consistent with PURA 95's purpose. Substantial Evidence Review-PURA 95 In conducting a substantial evidence review, the court determines whether the evidence as a whole is such that reasonable minds could have reached the conclusion the agency reached. The city contends that the applicant's statement that it had applied for all necessary franchises was not sufficient evidence to support the finding that applicant had applied for all necessary permits. In light of the court's holding that the Commission cannot determine the necessity of a municipal franchise and is not required to determine whether the applicant actually applied, the applicant's statement provides a reasonable basis to support the finding. F. Duenas v. Garland Indep. Sch. Dist., No. 05-95-01578-CV (Tex. App.-Dallas Nov. 27, 1996, writ requested) NATURE AND DISPOSITION OF CASE: Declaratory judgment action for declaration that compromise settlement agreement is void. Dallas County county court at law granted summary judgment for district. Dallas Court of Appeals (Morris, James, and Wolfe, J.J.) reverses the trial court judgment. KEY POINT: Agency Interpretation-Intent of Rule or Regulation: Injured worker sought declaration that her compromise settlement agreement with the school district was void because submitted and approved in violation of 28 Tex. Admin. Code § 55.20 (West 1997). The court of appeals holds that compliance with § 55.20 is mandatory. In interpreting the rule, the prime object is to ascertain and to give effect to the intent of the rule or regulation. The TWCC has expressed its intent that compliance with its rules is mandatory, 28 Tex. Admin. Code § 41.5 (West 1997). The agreement is void for noncompliance with § 55.20. G. Edwards v. Texas Employment Comm'n, 936 S.W.2d 462 (Tex. App.-Fort Worth 1996, no writ) NATURE AND DISPOSITION OF CASE: Suit for review of TEC decision denying benefits. Wichita County district court (Nelson, J.) rendered judgment for employee. Fort Worth Court of Appeals (Day, Dauphinot & Bugham, J.J.) affirms. KEY POINT: Substantial Evidence De Novo Review: The TEC initially determined appellant was eligible for benefits; however, the appeals tribunal reversed. Appellant requested that the TEC review the tribunal decision. The two TEC commissioners could not agree and the tribunal decision remained in effect. The trial court concluded that substantial evidence supported the TEC ruling. "Judicial review of an administrative decision regarding a former employee's right to unemployment benefits requires a trial de novo with substantial evidence review and, thus, is presumably valid." The court of appeals holds that there was substantial evidence-testimony of a TEC attorney and employee's handwritten statement-to establish the existence and content of the employer's policy. Further there was substantial evidence that the employee violated this policy. H. Hunnicutt v. Texas Employment Comm'n, No. 07-95-0826-CV (Tex. App.-Amarillo June 30, 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for review of TEC order denying benefits. Collingsworth County district court (McCoy, J.) affirmed. Amarillo Court of Appeals (Boyd, C.J. and Dodson and Reynolds, J.J.) reverses district court judgment and renders judgment for claimant. KEY POINT: Substantial Evidence Review-Texas Employment Commission Order: The court of appeals holds that, to establish that an individual's misconduct is "connected with the individual's last work" under Tex. Lab. Code Ann. § 207.044(a) (Vernon 1996), substantial evidence must show that the employee's misconduct: (1) had some nexus with the employee's work; (2) resulted in some harm to the employer's interest; and (3) was, in fact, conduct that was violative of some code of behavior contracted for between employer and employee, and done with intent or knowledge that the employer's interest would suffer. Here, the claimant was discharged after pleading guilty to assaulting her husband's mistress. The substantial evidence fails to show a factual link or nexus between her misconduct and her work as a housekeeping supervisor at a hospital. I. McMullen v. Employees Retirement Sys., 935 S.W.2d 189 (Tex. App.-Austin 1996, writ denied) NATURE AND DISPOSITION OF CASE: Suit for judicial review of Employees Retirement System denial of claim for payment of benefits. Travis County district court (Lowry, J.) affirmed. Austin Court of Appeals (Powers, Aboussie, and Jones, J.J.) affirms district court judgment. KEY POINT: Substantial Evidence Review-Agency Interpretation of Policy Language: After a contested-case hearing, the System's Board of Trustees denied state employee's claim for coverage of sums paid for eyeglasses and vision therapy. The court of appeals holds that the Board's conclusion that the optometrist's services-prescription of eyeglasses and "vision therapy"-fell within policy exclusions is supported by substantial evidence. The Board had "undoubted power" to determine the meaning of "orthoptics or visual training," the language used in the policy exclusion. That interpretation, in accord with ordinary usage, was not unreasonable. Substantial Evidence Review-Findings of Fact: The district court did not err in not filing findings of fact and conclusions of law as requested. In a substantial-evidence hearing there is no evidence from which the court "could infer facts and no occasion to give any fact findings legal effect through conclusions of law." J. Rodriguez v. Texas Employment Comm'n, 936 S.W.2d 67 (Tex. App.-San Antonio 1997, no writ) NATURE AND DISPOSITION OF CASE: Suit for judicial review of agency decision denying benefits. Maverick County district court (Abascal, J.) rendered judgment for employer. San Antonio Court of Appeals (Rickhoff, Green and Duncan, J.J.) affirms the district court judgment. Substantial Evidence De Novo Review-Conflicting Testimony: The TEC denied benefits on a finding that the employee was terminated for misconduct. The district court granted the agency's motion for summary judgment. The TEC decision is subject to a de novo standard of review, which includes a substantial-evidence component. Employee's argument centered on a contention that the TEC panel did not give sufficient weight to his testimony. The testimony at the hearing conflicted; the TEC resolved the conflict in the employer's favor. The standard of review requires the court to defer to the TEC's resolution of such factual-based conflicts. K. State Bd. of Medical Examiners v. Scheffey, No. 03-96-00216-CV (Tex. App.-Austin July 3, 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for judicial review of Board order. Travis County district court (Meurer, J.) reversed Board order. Austin Court of Appeals (Powers, Aboussie, and Jones, J.J.) reverses district court judgment and renders judgment reinstating Board decision. KEY POINT: Substantial Evidence Review-Upholding Agency Order: The Board suspended physician's license based on three violations of the Medical Practice Act, Tex. Rev. Civ. Stat. Ann. art. 4495b (Vernon Supp. 1997). The district court reversed the Board decision concluding that substantial evidence did not support the Board's action. The court of appeals agrees with the trial court as to two of the violations-those relating to the physician's charging practices-on which the Board based its order. Unlike the district court, the court of appeals concludes that the record contained substantial evidence to support the Board's conclusion that physician failed to practice medicine in an acceptable manner consistent with the public health and welfare. Because the court found substantial evidence to support one of the three grounds for the Board's suspension of the license, the court upheld the Board order. "Because we need only find substantial evidence supporting one ground for suspension in order to uphold the Board's order, we hold the record contains substantial evidence to support the Board's conclusion Based upon this violation, the Board could suspend [the physician's] license." L. Sharp v. Cox Tex. Publications, Inc., 943 S.W.2d 206 (Tex. App.-Austin 1997, no writ) NATURE AND DISPOSITION OF CASE: Suit for refund of sales tax paid. Travis County district court (Hart, J.) rendered judgment for publisher. Austin Court of Appeals (Carroll, C.J. and Kidd and Smith, J.J.) affirms in part and reverses in part. KEY POINT: Legislative Rule-Agency Interpretation: Texas Tax Code Ann. § 151.005 (Vernon 1992) defines "sale" as a "transfer of title or possession of tangible personal property for consideration." In Bullock v. Cordovan Corp., 697 S.W.2d 432 (Tex. App.-Austin 1985, writ ref'd n.r.e.), the court expanded the meaning of "sale" to include transfer of a free magazine under limited circumstances. Afterward, the Comptroller adopted 34 Tex. Admin. Code § 3.299(b)(3) (West 1997), requiring a publisher of a free magazine to collect sales tax from the advertisers based on a fictitious sales price. Relying on Cordovan and Rule 3.299, the Comptroller found that the advertisers furnished sufficient consideration to make publisher's distribution of the magazine subject to sales tax. The court of appeals determines whether the Comptroller's "formulation" of its rule was reasonable. "A rule that 'clearly affects individual rights or obligations to the extent it applies is a "legislative" as opposed to an "interpretative" rule.'" A legislative rule is binding, like a statute, to the extent the rule is within the power delegated to the agency, is the product of proper procedure, and is reasonable. The Comptroller had authority to adopt rules consistent with common law; therefore, Rule 3.299 is reasonable only to the extent it correctly interprets Cordovan. The court of appeals holds that the formulation of Rule 3.299 was unreasonable and, therefore, the Comptroller erroneously assessed a sales tax against the publisher. M. Southwest-Tex Leasing Co. v. Bomer, 943 S.W.2d 954 (Tex. App.-Austin 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for judicial review. Travis County district court (Dietz, J.) affirmed agency order. Austin Court of Appeals (Carroll, C.J., and Kidd and Smith, J.J.) affirms district court judgment. KEY POINT: Substantial Evidence Review-Reasonableness of Findings: Servicing company for Texas Workers' Compensation Insurance Facility issued policy to employer. Because employer did not have an "experience rating," servicing company based the premium on the Texas Assigned Risk Rating Factor. The Facility then calculated employer's rating and instructed serving company to apply the Facility-calculated rating, resulting in increased premiums. Employer sought review of the action in the Facility which concluded that servicing company had handled the policy properly. The court of appeals holds that substantial evidence supports the agency order. "Substantial evidence is that which reasonable minds could have viewed as supporting the finding." The reviewing court is "concerned only with the reasonableness of findings, not their correctness." N. Texas Dep't of Pub. Safety v. Cantu, 944 S.W.2d 493 (Tex. App.-Houston [14th Dist.] 1997, no writ) NATURE AND DISPOSITION OF CASE: Suit for review of driver's license suspension. Harris County county court at law (Bradshaw-Hull, J.) reversed ALJ decision. Houston-Fourteenth Court of Appeals (O'Neill, J.) reverses the trial court and reinstates suspension. KEY POINT: License Suspension Hearing-Admission of Evidence: Driver argued that his substantial rights were prejudiced because the DPS did not respond to his request for production of documents timely. Although 37 Tex. Admin. Code § 17.17 (West 1997) provides the specific address to which a document request is to be sent, appellee sent his request to the general address on his notice of hearing letter. DPS provided the documents two days before the hearing rather than within the statutory time limit. The ALJ's decision to admit the documents into evidence was not erroneous for any of the reasons listed in APA § 2001.174. The court of appeals notes that appellee may have avoided any alleged surprise or "trial by ambush" by requesting a continuance of his hearing. O. Texas Dep't of Pub. Safety v. Latimer, 939 S.W.2d 240 (Tex. App.-Austin 1997, no writ) NATURE AND DISPOSITION OF CASE: Suit for judicial review of license suspension. Travis County county court at law (Naranjo, J.) reversed ALJ's decision. Austin Court of Appeals (Powers, Aboussie, and Jones, J.J.) reverses trial court judgment and affirms ALJ decision. KEY POINT: Suit for Judicial Review-Admission of Agency Record in Evidence: DPS complains that the trial county erred in reversing an order sustaining the suspension of appellee's license on the basis that the court did not admit the agency record into evidence. The statement of facts, however, shows that the trial court "effectively" admitted the record into evidence. The statement of facts shows that the trial court considered the agency record in arriving at its decision; both parties treated the record as if admitted into evidence. Additionally, DPS did not raise any complaint about admission of the record in the trial court. The court notes that the bases for considering whether documents have been effectively admitted is even more compelling in a suit for judicial review: (1) APA § 2001.175(b) requires the agency to file the record with the district clerk and (2) the reviewing court can consider only the agency record. P. Texas Dep't of Pub. Safety v. Ray, 943 S.W.2d 87 (Tex. App.-Fort Worth 1997, no writ) NATURE AND DISPOSITION OF CASE: Suit for judicial review of order suspending driver's license. Tarrant County county court at law (Sprinkle, J.) reversed the order. Fort Worth Court of Appeals (Cayce, C.J. and Day and Brigham, J.J.) reverses trial court judgment and renders judgment affirming suspension. KEY POINT: Substantial Evidence Review-Driver's License Suspension: In accord with Tex. Transp. Code Ann. § 724.042 and § 742.043 (Vernon 1997), the ALJ sustained the suspension of driver's license for failure to take a breath test. Review of the ALJ decision is under substantial evidence standard of review. In conducting the review, the court must determine whether the evidence as a whole is such that reasonable minds could have reached the conclusion the agency must have reached to take the disputed action. The arresting officer testified at the ALJ hearing as to appellee's condition and that he failed each of the field sobriety tests and gave him the required statutory warning. The court holds that the officer's testimony proved "by a preponderance of the evidence" the four elements necessary for an ALJ to sustain the suspension and that the ALJ's decision was reasonable and supported by substantial evidence "in light of the probative and reliable evidence in the record as a whole." Q. Texas Dep't of Pub. Safety v. Rodriguez, No. 03-96-00533-CV (Tex. App.-Austin July 3, 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for judicial review of driver's license suspension. Travis County county court at law (Phillips, J.) overturned ALJ decision. Austin Court of Appeals (Powers, Jones, and Kidd, J.J.) affirms trial court order. KEY POINT: Substantial Evidence Review-Driver's License Suspension: At the hearing on driver's license suspension, DPS decided to meet its burden of proof with the affidavit of the arresting officer. The affidavit provided sufficient evidence of probable cause to stop the vehicle. But, there was "a fatal gap" concerning the probable cause necessary to detain driver to investigate whether she was intoxicated; the affidavit provides no causal nexus between the initial stop and the field sobriety tests. The court of appeals affirms the trial court decision because the court finds "a significant substantive defect in the affidavit that represents all of the evidence in [the] proceeding . . . ." R. Texas Dep't of Pub. Safety v. Watson, 945 S.W.2d 262 (Tex. App.-Houston [1st Dist.] 1997, no writ) NATURE AND DISPOSITION OF CASE: Suit for judicial review of order suspending driver's license. Brazoria County county court at law (Germany, J.) reversed order. Houston-First Court of Appeals (Hedges, O'Connor, and Hutson-Dunn, J.J.) reverses trial court judgment and renders judgment affirming suspension. KEY POINT: Standard of Review-Driver's License Suspension: County court at law may not substitute its judgment for that of ALJ on weight of the evidence but may reverse the case if appellant's substantive rights have been prejudiced because the administrative findings are: (1) in violation of a constitutional or statutory provision; (2) in excess of the agency's statutory authority; (3) made through unlawful procedure; (4) affected by other error of law; (5) not reasonably supported by substantial evidence; or (6) arbitrary or capricious. APA § 2001.174(2). The court of appeals holds that the ALJ's decision is supported by substantial evidence in the record as a whole. S. Texas Workers' Compensation Ins. Fund v. Texas Employment Comm'n, 941 S.W.2d 331 (Tex. App.-Corpus Christi 1997, no writ) NATURE AND DISPOSITION OF CASE: Suit for review of TEC award of severance pay. Kleberg County district court (Banales, J.) granted judgment for TEC. Corpus Christi Court of Appeals (Dorsey, Chavez, and Rodriguez, J.J.) affirms. KEY POINT: Substantial Evidence De Novo Review-Texas Employment Commission: After the Fund did not honor her severance agreement, former employee filed a wage claim for unpaid severance, under Tex. Lab. Code Ann. § 61.001 (Vernon 1996). TEC found that employee was entitled to severance pay under the agreement because there was no written contingency and, therefore, the oral condition that she sign and return a release was legally irrelevant and unenforceable. The Fund argued that signing and return of the release was a condition precedent. Because the employee did not return the release, there was never any agreement to bind the parties. On summary judgment, the court of appeals reviews the TEC decision against the summary judgment proof to determine whether that proof established as a matter of law that substantial evidence existed to support the TEC decision. Although an oral condition precedent is generally enforceable, this general rule does not apply if the condition precedent is inconsistent with the written instrument. The only contingency provided for in the written agreement was return of all Fund documents and equipment. T. Yselta Indep. Sch. Dist. v. Meno, 933 S.W.2d 748 (Tex. App.-Austin 1996, writ denied) NATURE AND DISPOSITION OF CASE: Suit for judicial review of order of reinstatement. Travis County district court (Dellana, J.) affirmed. Austin Court of Appeals (Powers, Kidd, and Smith, J.J.) reverses district court judgment and remands proceeding to Commissioner. KEY POINT: Standard of Review-Substantial Evidence-Appeal to Commissioner of Education: The issue presented is the scope of review permitted the Commissioner on appeal of a board decision. After an evidentiary hearing, district's board of trustees discharged middle-school teacher employed under a continuing contract. Teacher appealed this decision to the commissioner. Based on his assessment of the evidence and credibility of students who testified before the board, commissioner determined that the evidence did not support the board finding of immoral conduct. Finding sua sponte that the board did not timely grant the teacher's request for a hearing, the commissioner ordered reinstatement. The standard of review for appeals under former Tex. Educ. Code § 13.115(a), commissioner's review of local school board decision to discharge a continuing-contract teacher during the school year, is substantial evidence. The commissioner may not review such decisions de novo. In this instance, the Commissioner, by re-determining the credibility of the witnesses and the weight to be given their testimony, exceeded his statutory authority.
A. Gulf States Utils. v. Public Util. Comm'n, 40 Tex. Sup. Ct. J. 269 (Jan. 31, 1997) NATURE AND DISPOSITION OF CASE: Suit for judicial review of rate order. Travis County district court (Davis, J.) reversed Commission order. Austin Court of Appeals (Powers, Aboussie, and Smith, J.J.) affirmed in part and reversed in part, 883 S.W.2d 739. Supreme Court (Hecht, J.) reverses court of appeals judgment and remands proceeding to Commission. KEY POINT: Agency Deferral of Ruling: In Docket 7195, the Commission considered utility's request to include in rate base some $3 billion representing utility's share of the costs to construct nuclear generating plant. The Commission agreed that $1.591 billion of the construction costs were reasonably and prudently incurred and should be included in rate base. As to the balance of $1.453 billion, the evidence was inadequate to support a finding of either prudence or imprudence. Despite the failure of proof, the Commission expressly refused to exclude the amount from rate base and deferred ruling on the question until a later proceeding. After utility initiated a new proceeding to include in rate base the $1.453 billion in costs on which ruling was deferred in Docket 7195, the supreme court held that the doctrines of res judicata and collateral estoppel precluded the utility from relitigating the issue in the new proceeding. See Coalition of Cities for Affordable Util. Rates v. Public Util. Comm'n, 798 S.W.2d 560, 565 (Tex. 1990). In this final stage of judicial review of Docket 7195, the supreme court holds that the Commission erred in deferring a ruling on the request to include the $1.453 billion in costs in rate base. The court's holding in Coalition of Cities was solely that the legal effect of the Commission's final order in Docket 7195 barred relitigation of issues squarely presented in that proceeding, regardless whether the Commission refused to decide them. Without severing the issue of the $1.453 billion from Docket 7195, the Commission could not render a final order that did adjudicate the issue. The court leaves to the Commission to determine whether further evidence is necessary or whether the remaining issues can be decided on evidence previously received in Docket 7195. B. Industrial Utils. Serv., Inc. v. Texas Natural Resource Conservation Comm'n, 947 S.W.2d 712 (Tex. App.-Austin 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for judicial review of Commission order. Travis County district court (Cooper, J.) affirmed agency order. Austin Court of Appeals (Carroll, C.J. and Kidd and Smith, J.J.) affirms district court judgment. KEY POINT: Ratemaking-Agency Authority to Disallow Expense: The issue is whether the Commission had authority to determine that certain rate-case expenses could not be included in cost of service to utility's customers. Utility proposed to finance one-half the cost of surface-water treatment plant through a surcharge on customers and filed a surcharge application with the Commission. But utility then asked the Commission to deny the surcharge request. After hearing evidence, the Commission denied the requested surcharge and the recovery of expenses incurred in seeking the surcharge. The utility argued that the Commission could not disallow the expenses because the utility did not request expenses in its surcharge application and the Commission has no authority to decide an issue not presented to it. The Commission's ratemaking power includes the discretion to disallow improper legal expenses; therefore, the Commission had authority to determine the reasonableness, necessity, and recoverability of the utility's expenses incurred in seeking the surcharge when considering the propriety of the surcharge. C. State v. Foley, No. 03-96-00673-CV (Tex. App.-Austin Aug. 14, 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for enforcement of Railroad Commission order. Travis County district court (Cooper, J.) granted summary judgment that state take-nothing. Austin Court of Appeals (Carroll, C.J. and Aboussie and Smith, J.J.) affirms. KEY POINT: Federal Preemption-Deregulation Statute: The Attorney General brought enforcement proceeding based on failure to comply with a Commission final order assessing penalties for operating without a certificate of convenience and necessity. Appellee sought summary judgment on the basis that 49 U.S.C.A § 14501 (West 1997) preempted the Commission from issuing, and the state from enforcing, the order. Section 14501 generally prohibits states from regulating the price, route, or service of any motor carrier. The provision was enacted after an Interim Order, but before a final order, was issued in the agency proceeding. The court of appeals holds that § 14501 applies to cases pending before a state regulatory agency on January 1, 1995, the section's effective date. The Commission was preempted from issuing its final order and, therefore, is now preempted from seeking to enforce the order. In interpreting a deregulation statute, a court is to determine whether Congress intended to preempt the state action offensive to plaintiff in a given case. Section 14501's language is broad and encompasses state action "related to"-that is, connected with or referencing-the prices, routes, or services of any motor carrier. D. Tarrant Appraisal Review Bd. v. Martinez Bros. Inv., Inc., 946 S.W.2d 914 (Tex. App.-Fort Worth 1997, no writ) NATURE AND DISPOSITION OF CASE: Suit against appraisal review board. Tarrant County district court (Curry, J.) granted judgment for appellees, requiring the Board to schedule and conduct hearings. Fort Worth Court of Appeals (Cayce, C.J. and Day and Brigham, J.J.) affirms the district court judgment. KEY POINT: Authority to Impose Burden or Restriction: In 1992, the Board adopted operating procedures requiring a property owner's representative to file a fiduciary form before filing a notice of protest. Here, tax consultants filed the necessary form after timely filing notices of protest and the Board refused to file the notices or schedule hearings. Neither Tex. Tax Code Ann. § 1.111 (Vernon 1992) nor 34 Tex. Admin. Code §9.3044(e) (West 1997), relating to designation of an agent or representative, preclude property owners from protesting their appraisals because the designation forms were received after the June 1 deadline. The Board cannot impose an additional burden or restriction on a taxpayer in excess of statutory authority. E. Texas Health Care Ass'n v. Health & Human Servs. Comm'n, No. 03-96-00493-CV (Tex. App.-Austin July 24, 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for declaratory judgment contesting validity of rule. Travis County district court (Meurer, J.) denied requested relief. Austin Court of Appeals (Powers, Jones, and Kidd, J.J.) affirms district court judgment. KEY POINT: Authority to Adopt Rule: The Department regulates facilities that provide Medicaid patients long-term nursing care under provider agreements that require the facilities to comply with federal regulations. These regulations set out remedies if the Department finds a facility deficient under the regulatory standards. The Department promulgated the "Three-Strike Rule," allowing the Department to terminate a provider agreement after the Department imposes remedies on a facility three times within a 24-month period. This rule has no counterpart in the federal regulations. Facilities sought a declaration that the rule is ultra vires, contending that a legislative directive that the Department cooperate with federal agencies limits the Department's broad rulemaking power. See Tex. Hum. Res. Code Ann. § 32.021(b), (c) (Vernon 1990). The court of appeals concludes that the legislature did not intend "such a crabbed meaning"--as appellants argue--when the legislature "authorized the Department 'to adopt necessary rules for the proper and efficient operation of the program.'" Declaratory Judgment Act-Award of Attorney's Fees: The facilities also contend that the district court erred in not awarding attorney's fees because the suit was brought under the Declaratory Judgments Act, Tex. Civ. Prac. & Rem. Code Ann §§ 37.001-.011 (Vernon 1986 & Supp. 1997), which authorizes recovery of attorney's fees. The court of appeals finds nothing unreasonable or unjust in the district court's decision not to award either party attorney's fees. "The decision instead appears reasonable in light of the record, which shows only that the parties had a good-faith dispute about questions of law, determinable from undisputed facts, which was resolved on motions for summary judgment." F. Texas Home Management, Inc. v. Texas Dep't of Mental Health & Mental Retardation, No. 03-96-00705-CV (Tex. App-Austin July 24, 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for judicial review. Travis County district court (Hart, J.) affirmed Department order. Austin Court of Appeals (Carroll, C.J. and Aboussie and Smith, J.J.) affirms district court judgment. KEY POINT: Authority to Adopt Rules-Harmony with Governing Statute: The Department terminated Medicaid contract after imposing three vendor holds within an 18-month period. The facility contends that the Department lacks statutory authority to impose vendor holds on facilities and terminate contracts under the "Three Strike Rule." In deciding validity of agency rule, the court of appeals decides whether the rule is in harmony with the general objectives of the statute involved, considering all applicable provisions not only the provision in question. The court joins in the holding of Texas Health Care Ass'n v. Texas Department of Human Services, No. 03-95-00493-CV (Tex. App.-Austin July 24, 1997, n.w.h.), that Tex. Hum. Res. Code Ann. § 32.021(c) (Vernon 1990), constitutes a broad grant of rulemaking authority and that no other provision restricts the Department's broad grant of rulemaking authority or the scope of agency rules that might be necessary to the administration of the program. Substantial Evidence Review-Agency Interpretation of Rule-Agency Construction of Statute: The facility also contends that two of the vendor holds are unsupported by substantial evidence. As to the first, the facility essentially argues that the conduct found does not rise to the level necessary to support a violation. An agency's interpretation of its own regulation is entitled to deference by the courts so long as it is reasonable. Further, an agency's construction of a statute is entitled to consideration so long as the construction is reasonable and does not contradict the statute's plain language. In conducting a substantial evidence review, the reviewing court determines whether the evidence as a whole is such that reasonable minds could have reached the conclusion the agency reached. "The agency is the final arbiter of the meaning, weight, and credibility assigned to various parts of the evidence; [the court] is limited to the issue of whether the agency record as a whole demonstrates theat the agency's actions were unreasonable." The court of appeals holds that the substantial evidence supports the finding. A. Texas Employment Comm'n v. Remington York, Inc., No. 05-96-00021-CV (Tex. App.-Dallas June 18, 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for judicial review of benefits award. Dallas County district court granted summary judgment for employer. Dallas Court of Appeals (Ovard, Morris, and James, J.J.) reverses the district court judgment and remands the proceeding to district court. KEY POINT: Authority to Act-Quorum-Texas Employment Commission: Commission appeal tribunal determined that former employee was entitled to benefits. Employer appealed that decision to the three-member Commission. The Commission upheld the decision by a majority vote, the two commissioners representing labor and the public voting to affirm. Before the Commission considered the motion for rehearing, the commissioner representing the public resigned. The two remaining commissioners considered the motion, one favoring the employee and the other favoring the employer. Because two commissioners did not vote to overturn the Commission's decision, it remained in force. Employer first contended that Commission is statutorily enjoined from acting with only two commissioners because former art. 5221b-8(g), authorizing actions taken by a quorum, was omitted when the Texas Unemployment Act was placed in the Labor Code. Omission of the provision was not a substantive change in the law permitting a quorum of commissioners to act. Article 5221b-8(g) was substantively identical to the quorum provision of the Code Construction Act, Tex. Gov't Code Ann. 311.013 (Vernon 1988). The court of appeal holds that two members of the Commission can validly act and exercise the Commission's full authority. Further, Tex. Lab. Code Ann. § 301.006(b)(1) (Vernon 1996) designates the commissioner representing the public as chair when he or she is present; however, if that commissioner is not present, the Commission retains authority to act. Due Process and Equal Protection: Employer also contends that the Commission deprived it of due process and equal protection by deciding the motion for rehearing during a vacancy of the commissioner representing the public. Employer argues that Commission review cannot be meaningful if one commissioner is "biased" in favor of management and the other in favor of labor because there is an inherent one-to-one split and an automatic affirmance of the appeal tribunal decision. The proper question is whether employer received due process in light of all the circumstances. Employer did not present any summary judgment proof that the motion for rehearing met the requirements for reversal of a decision set out in 40 Tex. Admin. Code § 815.17(g)(2) (West 1997). Other businesses appearing before the Commission did not receive benefits not conferred upon employer, therefore, depriving it of equal protection.
A. Conely v. Peck, 929 S.W.2d 630 (Tex. App.-Austin Sept. 11, 1996, no writ) NATURE AND DISPOSITION OF CASE: Mandamus proceeding under Open Records Act. Travis County district court (Williams, J.) rendered judgment for Board employees. Austin Court of Appeals (Powers, Jones, and Smith, J.J.) affirm. KEY POINT: Open Records-Availability for Review- "Comfort and Facility": Inmate asked in writing to see his central file, which is kept in Huntsville. The records department responded that it could copy file, at his expense, and send copies. Inmate brought suit alleging that he had a right to review the file in person when it was brought to his unit from Huntsville. The Open Records Act, Tex. Gov't Code § 552.221(since amended), requires only that the officer in charge of records make them available for review within the offices of the governmental body. Temporarily transporting the records from the office for official use does not trigger a duty to make the records available to the public wherever they may be. The requirement that officer give "all comfort and facility" does not require the officer to transport records to the requestor or make them available outside the offices of the governmental body. Open Records-Request for Attorney General Decision: The need to request an attorney general's decision under Tex. Gov't Code Ann. § 552.301(a) (Vernon 1994) comes into play only if the governmental body receives a request for information that the governmental body considers to be subject to an exception under the Open Records Act. B. Spiller v. Texas Dep't of Ins., No. 03-96-00393-CV (Tex. App.-Austin July 24, 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for Open Meetings Act violations. Travis County district court (Dietz, J.) found that the reduction in force was valid regardless of the validity of the Board actions. Austin Court of Appeals (Aboussie, Kidd, and Smith, J.J.) affirms. KEY POINT: Open Meetings-Void Action: Former employees challenged a reduction in force as void because the State Board of Insurance approved the reduction at an illegally closed meeting. The trial court agreed that the Board violated the Open Meetings Act but did not void the reduction in force. The issue presented on appeal is whether voidable actions of the Board rendered an otherwise valid action of the commissioner, who had authority over the reduction in force, void. The court holds that the commissioner had the independent power to fire the employees. This independent power to fire employees "makes the validity of the Board's approval irrelevant to the validity of the reduction. C. Markowski v. City of Marlin, 940 S.W.2d 720 (Tex. App.-Waco 1997, writ requested) NATURE AND DISPOSITION OF CASE: Suit for violations of Open Meetings Act. Falls County district court (Stem, J.) rendered judgment for city. Waco Court of Appeals (Davis, C.J. and Cummings and Vance, J.J.) affirms. KEY POINT: Open Meetings-Notice of Emergency Meeting: On April 16, 1993, the Marlin City Council met in executive session to consider firefighter's complaints of racial discrimination and, as a result, suspended appellants without pay. On April 19, the city posted notice that it would meet in executive session on April 22 to consider further action. Appellants then filed suit asking that any action taken on April 22 be taken in an open session. The city posted notice of an emergency meeting on April 22 to discuss the lawsuit. During the open session, the council modified the suspensions to suspension with pay, and allowed appellants to make a statement and to present witnesses. The council then voted to terminate appellants. They contend that the second notice for the April 22 meeting did not describe an emergency or matter of public necessity, see Tex. Gov't Code Ann. § 551.045 (Vernon 1994). The court of appeals distinguishes this case from Piazza v. City of Granger, 909 S.W.2d 529 (Tex. App.-Austin 1995, no writ), because the notice here identified an emergency. The notice specifically stated that a closed meeting was to be held so council could obtain legal advice as to what action should be taken regarding the lawsuit. The need for information as to how to deal with the lawsuit was the emergency. To require more explanation than provided would interfere with the confidentiality of private legal consultations. The court of appeals also holds that the attorney-client privilege applies to the council's discussion of the charges and complaints against appellants. Open Meetings-Closed Session: Appellants contend that the council improperly heard charges against them in closed session with council's attorney, in violation of Tex. Gov't Code Ann. § 551.074 (Vernon 1994). The court of appeals holds "that when a pending lawsuit involves unresolved charges or complaints about an officer or employee, it is permissible for the council to discuss those charges with its attorney as long as the discussion relates to the lawsuit." Further, the council voted to terminate appellants at an open meeting at which they were given an opportunity to speak. The district court, therefore, properly found no violation of the Act. Open Meetings-Inadequate Notice: Appellants also contend that the notice for the April 16 meeting was insufficient. The question is whether the notice sufficiently informed the public that some action was to be taken regarding appellants. The notice stated: "Action if any to be taken on grievance of firefighter Keggins." The court of appeals holds that the notice was inadequate. The "interested public" not only had a special interest in the jobs of fire chief and captain-requiring the notice to be more specific-but also were not informed that charges were being made against appellants. But, the council corrected its invalid act on April 22. D. Rivera v. City of Laredo, No. 04-96-00058-CV (Tex. App.-San Antonio Apr. 16, 1997, writ requested) NATURE AND DISPOSITION OF CASE: Suit for Open Meetings Act violations. Webb County district court (Petersen, J.) granted summary judgment for city. San Antonio Court of Appeals (Stone, Green, and Angelini, J.J.) reverses district court judgment and renders judgment declaring the city's action void. KEY POINT: Open Meetings-Standing-Interested Person: Suspended police officer, former police chief, and police officers association brought suit contending that the city had selected a new police chief in violation of the Open Meetings Act. The city contested plaintiffs' standing to bring suit, arguing that a suit to remove a public officer is in the nature of quo warranto, an action that only the attorney general or county or district attorney can bring. See Tex. Civ. Prac. & Rem. Code Ann. § 66.001 (Vernon 1986). The court of appeals concludes, following City of Fort Worth v. Groves, 746 S.W.2d 907, 913 (Tex. App.-Fort Worth 1988, no writ), and Cameron County Good Government League v. Ramon, 619 S.W.2d 224, 230-31 (Tex. App.-Beaumont 1981, writ ref'd n.r.e.), that plaintiffs are "interested persons" under the Act. The court of appeals holds that an "interested person" can challenge a public official's right to hold office other than in a quo warranto proceeding when there is an alleged violation under the Open Meetings Act. Open Meetings-Notice of Recessed Meeting: The city council met on May 4, after posting notice, and recessed the meeting until May 6. On May 6, the council approved the city manager's nomination for police chief. Under Tex. Gov't Code Ann. § 551.041 (Vernon 1994), a governmental body must give written notice of the date, hour, place, and subject of each meeting held. No provision, however, addresses a recess. The court of appeals holds that the city was required to post notice of the May 6 meeting before convening, regardless of whether it considered the meeting a continuation from a recessed meeting held two days earlier. The court regards Tex. Att'y Gen. Op. No. H-1000 (1977) as implying that a governmental body can recess only to the next day without evading the Act. Although the appointment is void, actions taken by the police chief are valid. A. Federal Sign v. Texas So. Univ., 40 Tex. Sup. Ct. J. 676 (June 20, 1997) NATURE AND DISPOSITION OF CASE: Suit for breach of contract and violation of competitive bidding and open meeting laws. Harris County district court (Chambers, J.) rendered judgment against University. Houston-Fourteenth Court of Appeals (Sears, Lee, and Barron, J.J.) reversed judgment and remanded case with instructions to dismiss, 889 S.W.2d 509. Supreme Court affirms court of appeals judgment. KEY POINT: Sovereign Immunity-Contract with State: Company filed suit against University for breach of contract and violations of competitive bidding and open meeting laws. The trial court denied University's plea to the jurisdiction and, after a jury trial, rendered judgment against the University. The court of appeals reversed holding that sovereign immunity barred the claims. The supreme court agrees. The legislature had not given consent for the suit. A litigant who alleges that a state official has violated the law and sues for a determination of rights by injunction, declaratory judgment or otherwise, can bring suit without legislative permission. But, a suit seeking damages is different and requires permission. Additionally, immunity from suit differs from immunity from liability. When the state contracts with a private person, the state is liable on the contract, as if it were a private person, and, therefore, waives immunity from liability. The state, however, does not waive immunity from suit unless a statute or the legislature so provides. The requirement that a citizen must get legislative permission to sue the state for breach of contract does not render the contract illusory. It is entirely up to the legislature to waive or abrogate sovereign immunity; the courts cannot do so. The application of sovereign immunity does not violate the Texas constitution's due course of law or open courts provisions. B. San Antonio Indep. Sch. Dist. v. McKinney, 936 S.W.2d 279 (Tex. 1996) NATURE AND DISPOSITION OF CASE: Suit for breach of contract and to enforce commissioner's order of reinstatement. Bexar County district court (Gallardo, J.) granted district's motion for summary judgment. San Antonio Court of Appeals reversed, 897 S.W.2d 879. Supreme Court (Enoch, J.) reverses court of appeals judgment and renders judgment that district take-nothing. KEY POINT: Federal Court Suit-Independent School District-Res Judicata: Teacher brought race discrimination suit in federal court against school district. While this lawsuit was pending, teacher appealed his termination to the Commissioner of Education, arguing that the district did not follow proper procedure in firing him. Although the Commissioner ruled for the teacher, the district did not reinstate him. The teacher did not amend his federal-court complaint to assert breach of contract or failure to reinstate. The federal court rendered summary judgment against the teacher. When he filed suit in state court for breach of contract and to enforce the Commissioner's decision, the trial court granted the district's motion for summary judgment on the basis of res judicata. The court of appeals held that, because a school district is an arm of the state and U.S. Const. Amend. XI prevented the teacher from raising these claims in federal court, res judicata did not bar the state suit. The supreme court holds that an independent school district is more like a city or county than an arm of the state and is amenable to suit in federal court. Because the federal court had jurisdiction to consider the teacher's omitted state law claims against the district, res judicata precludes litigation of the claims in state court. C. Texas Boll Weevil Eradication Found., Inc. v. Lewellen, 40 Tex. Sup. Ct. J. 523 (Apr. 30, 1997) NATURE AND DISPOSITION OF CASE: Consolidated declaratory judgment actions challenging constitutionality of Federation referenda or assessments, including claim that these violated separation of powers doctrine. Hale County district court granted summary judgment for plaintiff cotton growers; Cameron County district court enjoined collection of assessments. On direct appeal, the supreme court (Phillips, C.J.-opinion of the court as to Parts I, II, IV, and V) affirms district courts' judgments. KEY POINT: Legislative Delegation of Authority: Texas Agric. Code Ann. §§ 74.001-.127 (Vernon Supp. 1997) provides for the creation and operation of a private boll weevil eradication foundation. The foundation is authorized to operate eradication programs and asses cotton growers for their cost. Cotton growers brought suit challenging the assessments. In each case, the district court invalidated the assessments and enjoined their collection. The supreme court concludes that the legislature made an unconstitutionally broad delegation of authority to the Foundation, in violation of Tex. Const. art. II, § 1. Article II, § 1 requires the separation of powers between the legislative, executive, and judicial branches. The court recognizes that some authority must be delegated. "Even in a simple society, a legislative body would be hard put to contend with every detail involved in carrying out its laws; in a complex society, it is absolutely necessary to do so. Hence, legislative delegation of power to enforce and apply law is both necessary and proper." "'[T]he kind of government we have developed could not operate without' allowing legislatures to delegate rulemaking authority to administrative bodies." (Citation omitted). Standard of Review-Delegation of Authority: The supreme court sets out standards to review a private delegation of authority. The court states: "[T]hese standards apply only to private delegations, not to the usual delegation by the Legislature to an agency or another department of government. In reviewing a public delegation, we adhere to those factors set forth by this Court in Housing Authority of the City of Dallas v. Higginbotham, 143 S.W.2d 79, 87 (Tex. 1940), and its progeny." Rulemaking Authority: The Legislature did direct the Commissioner of Agriculture to promulgate rules regarding certain areas of the Foundation's operations and allows the Commissioner to adopt rules regulating cotton planting in eradication zones and to adopt a schedule of penalty fees. "The Commissioner could not, however, adopt any procedure for reviewing such critical decisions as the amount of assessments adopted by the growers, the total amount of funds expended on eradication, the amount of debt incurred by the Foundation, or the repayment terms for such debts." D. Order and Opinion Denying Request under Open Records Act, Misc. Docket 97-9141 (Aug. 21, 1997) NATURE AND DISPOSITION OF CASE: Request for records. Attorney General concluded that court telephone billing records are not records of the judiciary. Supreme Court (per curiam) issues order "to explain why ORD-657 is incorrect" and denies request. KEY POINT: Open Records-"Governmental Body"- Application to Judiciary: Texas Att'y Gen. ORD-67 (July 24, 1997) was issued in response to an inquiry whether supreme court telephone billing records are subject to disclosure under the Open Records Act. The Attorney General concluded that, although the records belong to the court and the General Services Commission only collects and maintains them, the records "'are not records of the judiciary for purposes of the Act'." The supreme court states: "ORD-657 flatly contradicts the plain language of the Act. . . . [T]he Act applies only to governmental bodies, which are defined as not including the judiciary. . . . [T]he Act simply does not apply to the judiciary." The supreme court denies the request for telecommunications records because it calls for documents of the judiciary not subject to the Open Records Act. Open Records-Challenge to Attorney General Decision: ORD-657's construction of the judiciary exclusion makes the Act unworkable. A court would be required to seek a opinion from the Attorney General as to whether records are protected from disclosure. But, Attorney General opinions are not binding on the courts and a court is not a governmental body that the Act authorizes to request an Attorney General opinion. Any appeal of a court ruling would ultimately lie to the supreme court, the court whose records are at issue. "'Statutory provisions will not be so construed or interpreted as to lead to absurd conclusions . . . if the provision is subject to another, more reasonable construction or interpretation.'" (Citation omitted). The supreme court directs its Chief Justice and Clerk not to comply with the provisions for challenging Attorney General decisions under the Act. E. Armbrister v. Morales, No. 03-97-00011-CV (Tex. App.-Austin Apr. 10, 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for declaratory judgment. Travis County district court (Dietz, J.) declared that settlement triggered need for election. Austin Court of Appeals (Carroll, C.J. and Aboussie and Smith, J.J.) reverse and render judgment for state senators. KEY POINT: Statutory Interpretation-Election: This case arises from a dispute over the effect of a settlement in a federal lawsuit concerning reapportionment of state senatorial districts. The issue is whether the settlement constitutes an "apportionment" under Tex. Const. art. III. § 3, which requires a new Senate to be chosen after each apportionment. If the settlement is an "apportionment," all state senate seats must be on the ballot in 1998 and the senators must draw lots to determine whether each serves a two or four year term. The court of appeals holds that the settlement is not an "apportionment"-it does not divide senatorial seats among new districts. The settlement memorializes an apportionment applied in the previous election. This result also maintains the staggered system for election of senators that art. III, § 3 requires. F. Branham v. Texas Dep't of Pub. Safety, No. 2-96-225-CV (Tex. App.-Fort Worth June 19, 1997, n.w.h.) NATURE AND DISPOSITION OF CASE: Suit for judicial review of driver's license suspension. Tarrant County county court at law affirmed decision. Fort Worth Court of Appeals (Day, Brigham, and Holman, J.J.) affirm the trial court judgment. KEY POINT: Stay of Agency Order-Tex. R. App. P. 47: County court at law set aside an order staying the suspension of his driver's license pending appeal. Driver asserts this action was in violation of Tex. R. App. P. 47 (now Tex. R. App. P. 24), which provided for suspension of a judgment pending appeal. Texas Transp. Code Ann. § 524.042(b) (Vernon 1997) limits a stay of the suspension to 90 days after the "appeal petition is filed." The court of appeals holds that any statute "apparently conflicting" with Rule 47 controls under the plain language of the rule. Section 524.042 is such a statute because it expressly limits a stay to 90 days. G. Bohannan v. Texas Bd. of Criminal Justice, 942 S.W.2d 113 (Tex. App.-Austin 1997, writ denied) NATURE AND DISPOSITION OF CASE: Suit challenging Board policy on good conduct time. Travis County district court (Williams, J.) dismissed claims. Austin Court of Appeals (Powers, Jones, and Smith, J.J.) reverses in part and affirms in part. KEY POINT: Tex. Civ. Prac. & Rem. Code § 13.001 Dismissal: Inmate who had accrued good time conduct sued Board alleging that he was adversely affected by a policy ceasing the restoration of good time conduct after revocation of mandatory supervision. He asserted that the Board exceeded its statutory authority, its action was procedurally defective, he had a vested property right in the restoration of good conduct time, and the policy was retroactively applied. The district court dismissed the suit under Tex. Civ. Prac. & Rem. Code Ann. § 13.001 (Vernon Supp. 1997), which allows a court to dismiss a cause in which an affidavit of inability to pay costs has been filed if the suit is frivolous or malicious. The court of appeals considers whether the suit had an arguable basis in law under § 13.001(b)(2). The court adopts the holding of Nietzke v. Williams, 490 U.S. 319, 109 S.Ct. 1827, 104 L.Ed.2d 38 (1989): a cause is not necessarily frivolous simply because it is resolved against the plaintiff. The court of appeals holds that "section 13.001 dismissals are limited to causes that are indisputably meritless . . . ." Challenge to Agency Rule-Declaratory Judgment Action: Inmate asserted a declaratory judgment action under APA § 2001.038 challenging the good conduct time policy. APA § 2001.226 provides that § 2001.038 does not apply to a Board rule or internal procedure that applies to an inmate or to an action taken under such a rule or internal procedure. A claim under § 2001.038 is precluded. Inmate also relied on the Declaratory Judgments Act, Tex. Civ. Prac. & Rem. Code Ann. §§ 30.001-.011 (Vernon 1986 & Supp. 1997). But, he "may not seek to do indirectly what he cannot do directly." The intent of APA § 2001.226 is to preclude challenges to Board rules; he may not sidestep this prohibition by casting his complaint as a request for a declaration of rights. Open Meetings-Application to Agency Rule: In his petition, inmate asserted that the board did not give adequate notice of its intent to promulgate rules regarding restoration of good conduct time. On appeal, he complains that the Board did not comply with Open Meetings Act notice provisions. His allegation of "improper procedures" was insufficient to put the trial court on notice that he raised a complaint under the Open Meetings Act. Further, "the Open Meetings Act is not a part of the procedure by which an agency must generally promulgate its rules." H. Eckmann v. Des Rosiers, No. 03-96-00337-CV (Tex. App.-Austin Feb. 27, 1997, no writ) NATURE AND DISPOSITION OF CASE: Medical malpractice suit. Travis County district court (Cooper, J.) granted summary judgment for defendants. Austin Court of Appeals (Powers, Jones, and Kidd, J.J.) affirms trial court judgment. KEY POINT: Judicial Notice-Agency Regulations: Patient sued doctor for malpractice, alleging that doctor negligently failed to obtain her informed consent before surgery. The Medical Liability and Insurance Improvement Act, Tex. Rev. Civ. Stat. Ann. art. 4590i, § 6.02 (Vernon Supp. 1997), establishes the Medical Disclosure Panel, attached to the Department of Health, which determines what treatments or procedures do or do not require disclose of risks or hazards. On appeal, plaintiffs contended that, although the consent form was included in defendants' summary judgment proof, the form's sufficiency could not be determined because the Texas Register was not part of the summary judgment proof and nothing indicted that the trial court had taken judicial notice of its contents. The court of appeals concludes the duty to take judicial notice is "mandatory, even in the absence of a request under [Tex. R. Civ. Evid.] 204, respecting administrative agency regulations published in the Texas Register and Texas Administrative Code. . . . Sections 2002.022(a) and 2002.054(1) of the Government Code . . . 'require that the contents of the Texas Register and Texas Administrative Code be judicially noticed'" (Citation omitted). The court of appeals has the power to take judicial notice of the regulations for the first time on appeal. |
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