Opinion
NO. 03-16-00631-CV
04-19-2017
Texas Department of Family and Protective Services, Appellant v. Cheryl Wallace, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 126TH JUDICIAL DISTRICT
NO. D-1-GN-14-003182 , HONORABLE ORLINDA NARANJO, JUDGE PRESIDING MEMORANDUM OPINION
In this interlocutory appeal, we are asked to determine whether the trial court had subject-matter jurisdiction over appellee Cheryl Wallace's suit for judicial review of an order of the Texas Health and Human Services Commission (HHSC) when Wallace did not file a motion for rehearing with the agency. The HHSC order upheld the determination made by the Texas Department of Family and Protective Services (DFPS) that Wallace engaged in "reportable conduct" and that her name, therefore, would be placed on the publicly available Employee Misconduct Registry (EMR) maintained by the Texas Department of Aging and Disability Services (DADS). For the reasons explained below, we will reverse the trial court's denial of DFPS's plea to the jurisdiction and render judgment granting the plea and dismissing Wallace's suit for lack of subject-matter jurisdiction.
BACKGROUND
DADS maintains a central registry of employees of facilities licensed by DADS who have been found to have committed acts constituting "reportable conduct." See Tex. Health & Safety Code § 253.007. This registry is called the EMR and contains information such as the employee's name, address, social security number, and the date and description of the reportable conduct. Id. The EMR is available to the public. See id. Before a "facility" (as defined in the Health and Safety Code, see id. § 253.001(4)) may hire an employee, it must search the EMR to determine whether the applicant is listed for abuse, neglect, or exploitation of a resident, consumer, or individual receiving services from a facility and may not hire a person who is so listed. Id. § 253.008.
DFPS has the statutory authority to investigate the abuse, neglect, or exploitation of an elderly person or person with a disability, Tex. Hum. Res. Code §§ 48.001, .152, and must forward a confirmed finding of a regulated employee's "reportable conduct" to DADS for inclusion in the EMR, id. § 48.403. If, after conducting an investigation, DFPS concludes that an employee committed "reportable conduct," it must provide written notice to the employee to include: a summary of its findings; a statement of the employee's right to a hearing on the findings; and a statement that if the employee fails to timely respond to the notice, the reportable-conduct finding will be recorded in the EMR. Id. § 48.404. The employee may then make a written request for a hearing on the reportable-conduct finding within 30 days of receiving the notice, and if the employee fails to timely request the hearing, DFPS "shall" issue an order approving the finding and forwarding it to DADS for inclusion in the EMR. Id. (b), (c). After an EMR hearing, which is to be conducted by an administrative law judge (ALJ) designated by DFPS, the ALJ "shall promptly issue an order regarding the occurrence of the reportable conduct." Id. § 48.405. The employee may request judicial review of an EMR finding. See id. § 48.406.
There is no dispute that Wallace is an "employee" as defined in the applicable statute. See Tex. Hum. Res. Code § 48.401(3) (defining employee).
DFPS investigated an incident involving Wallace's care of a resident of the group home that Wallace managed. DFPS found that Wallace had committed "reportable conduct" and recommended that she be placed on the EMR. See id. § 48.403 ("[DFPS] shall immediately forward [a] finding [confirming the occurrence of reportable conduct] to [DADS] to record the reportable conduct in the [EMR]."). Wallace timely requested an administrative appeal hearing, which DFPS delegated to HHSC. See id. § 48.405 (noting that DFPS or its designee shall set hearing and designate ALJ to conduct hearing); 40 Tex. Admin. Code § 711.1421(a) (2017) (Dep't of Family & Protective Servs., When and where will the EMR hearing take place and who conducts the hearing?) ("An EMR hearing will be conducted by an administrative law judge with [HHSC]"); see also Tex. Health & Safety Code §§ 253.003-.004 (outlining procedures for EMR hearings). HHSC sustained DFPS's determination, and Wallace then filed a suit for judicial review with the district court, see Tex. Hum. Res. Code § 48.406, which denied DFPS's plea to the jurisdiction. DFPS appeals the denial of its plea to the jurisdiction.
DISCUSSION
DFPS contends that the trial court erred in denying its plea to the jurisdiction because, in failing to file a motion for rehearing, Wallace did not exhaust her administrative remedies, and the EMR order, therefore, did not become "appealable" under the Administrative Procedure Act (APA). See Tex. Gov't Code § 2001.145(a) ("A timely motion for rehearing is a prerequisite to an appeal in a contested case except that a motion for rehearing of a decision or order that is final under Section 2001.144(a)(3) or (4) is not a prerequisite for appeal."), (b) ("A decision or order that is final under Section 2001.144(a)(2), (3), or (4) is appealable."); Lindsay v. Sterling, 690 S.W.2d 560, 564 (Tex. 1985) (holding that requirement of having motion for rehearing overruled, thus exhausting administrative remedies, is jurisdictional prerequisite to suit and cannot be waived by action of parties); see also Tex. Gov't Code § 311.034 (noting that statutory prerequisites to suit are jurisdictional requirements in all suits against governmental entity). We review the denial of a plea to the jurisdiction de novo. Presidio Indep. Sch. Dist. v. Scott, 309 S.W.3d 927, 929 (Tex. 2010).
As the supreme court and this Court have repeatedly held, the APA's motion-for-rehearing requirement is jurisdictional and applies generally to all judicial appeals from agency orders issued in contested cases. See Railroad Comm'n v. WBD Oil & Gas Co., 104 S.W.3d 69, 74 (Tex. 2003) ("Judicial review of contested case decisions is . . . limited. To obtain such review, an aggrieved person must move for rehearing (except in certain cases), must have exhausted all other administrative remedies available, and must file a petition with the court within thirty days of the decision." (footnote omitted)); Temple Indep. Sch. Dist. v. English, 896 S.W.2d 167, 169 (Tex. 1995) ("The failure to file a timely motion for rehearing deprives the district court of jurisdiction to review the agency's decision on appeal."); Texas Water Comm'n v. Dellana, 849 S.W.2d 808, 810 (Tex. 1993) ("The exhaustion doctrine, codified in the [APA], requires the filing of a motion for rehearing before the agency as a prerequisite to judicial review."); see also Natter v. Texas Dep't of State Health Servs., No. 03-16-00317-CV, 2016 WL 4980215, at *2 (Tex. App.—Austin Sept. 13, 2016, no pet.) (mem. op.) ("Under the APA, a timely filed motion for rehearing is a prerequisite to an appeal," and "timely filing the motion for rehearing with the agency is part of the exhaustion requirement and is a prerequisite to invoking the district court's jurisdiction."); Marble Falls Indep. Sch. Dist. v. Scott, 275 S.W.3d 558, 565 (Tex. App.—Austin 2008, pet. denied) ("Under the APA, a timely motion for rehearing generally is a jurisdictional prerequisite to an appeal in a contested case.").
This jurisdictional prerequisite applies even when agency-specific legislation authorizes judicial review of agency orders but does not explicitly make reference to motions for rehearing or expressly incorporate the APA. See Dellana, 849 S.W.2d at 809-10 (where Water Code authorized judicial review of Water Commission decisions but was silent about motions for rehearing, APA applied and required motion for rehearing); Reed v. Department of Licensing & Regulation, 820 S.W.2d 1, 2-4 (Tex. App.—Austin 1991, no writ) (per curiam) (where specific licensing statute did not require motion for rehearing but did not conflict with APA, APA applied, including its jurisdictional requirement of motion for rehearing); see also Mednick v. Texas State Bd. of Pub. Accountancy, 933 S.W.2d 336, 338 (Tex. App.—Austin 1996, writ denied) (concluding that even though enabling statute did not require motion for rehearing, its incorporation of APA included APA's requirement of motion for rehearing). In sum, "[u]nless otherwise provided, the APA's contested-case and judicial-review procedures apply to agency-governed proceedings." Scott, 275 S.W.3d at 563.
The specific enabling legislation at issue—section 48.406 of the Human Resources Code—does not expressly require a motion for rehearing, but neither does it expressly dispense with such requirement: "Not later than the 30th day after the date the decision becomes final as provided by Chapter 2001, Government Code, the employee may file a petition for judicial review contesting the finding of the reportable conduct." Tex. Hum. Res. Code § 48.406(b); cf. Tex. Educ. Code § 21.034(b) "(A request for rehearing is not required for a party to appeal the commissioner's decision."). The supreme court has held that similarly worded enabling statutes are subject to the APA's motion-for-rehearing requirement. See Dellana, 849 S.W.2d at 809-10 (holding that, where Water Code authorized judicial review when affected persons "file[d] petition within 30 days after the effective date of the ruling, order, or decision" but was silent as to motions for rehearing, "[t]he exhaustion doctrine, codified in the [APA], requires the filing of a motion for rehearing before the agency as a prerequisite to judicial review").
Section 48.406 further provides that "[j]udicial review of [an EMR] order . . . is instituted by filing a petition as provided by Subchapter G, 2001, Government Code." Tex. Hum. Res. Code § 48.406(c). Subchapter G, in turn, provides that "[a] person initiates judicial review in a contested case by filing a petition not later than the 30th day after the date the decision or order that is the subject of complaint is final and appealable," Tex. Gov't Code § 2001.176(a) (emphasis added), and "appealable" orders are those for which a motion for rehearing has been filed and overruled, see id. § 2001.145(a), (b). In other words, the APA explicitly requires a motion for rehearing as a prerequisite to judicial review, except in particular circumstances not applicable here. See id. It matters not that section 48.406 does not expressly incorporate the motion-for-rehearing or "appealability" requirement because, unless otherwise provided, the APA applies to all agency-governed proceedings. See Scott, 275 S.W.3d at 563. We will not read the legislature's failure to expressly incorporate the motion-for-rehearing requirement into the enabling statute as creating a conflict with the APA's express requirement for such a motion but will, rather, read the statutes in conjunction and give effect to both. See Texas Nat. Res. Conservation Comm'n v. Sierra Club, 70 S.W.3d 809, 811-12 (Tex. 2002). Indeed, even when an agency's enabling statute authorizes judicial review of an agency action, "[t]he APA imposes additional requirements on those affected by agency decisions." Id. (emphasis added) ("Thus any Solid Waste Disposal Act requirements must be read in conjunction with the APA provisions governing judicial review of contested cases.") (citing Grounds v. Tolar Indep. Sch. Dist., 707 S.W.2d 889, 891-92 (Tex. 1986), overruled in part on other grounds, Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71, 76 (Tex. 2000)).
There are two exceptions to the motion-for-rehearing requirement, neither of which Wallace contends apply here. See Tex. Gov't Code §§ 2001.144(a)(3), (4), .145(a).
The APA applies to review of agency orders, and the plain language of section 48.406 does not "provide otherwise." Cf. AGAP Life Offerings, LLC v. Texas State Secs. Bd., No. 03-11-00535-CV, 2013 WL 6464537, at *4 (Tex. App.—Austin Nov. 26, 2013, no pet.) (mem. op.) (construing Securities Act provision mandating that "order affirming or modifying the emergency order is immediately final for purposes of enforcement or appeal" as statute that "provides otherwise" and does not require motion for rehearing). We hold, therefore, that in the absence of an express legislative exemption of EMR cases from the APA's motion-for-rehearing requirement, an employee is required to timely file a motion for rehearing as a jurisdictional prerequisite to judicial review of an EMR order. See Dellana, 849 S.W.2d 809-10.
It is undisputed that Wallace did not file a motion for rehearing with DFPS. Nonetheless, she contends that the trial court had jurisdiction over her suit, based on the following theories: (1) promissory estoppel; (2) equitable estoppel; and (3) her constitutional right to due process. The essence of Wallace's arguments under each of the theories is that DFPS misrepresented to her, through the ALJ's letter enclosed with the order, that her "only recourse" after receiving the order was to "file a petition for judicial review" in district court, referencing DFPS's Former Rule 711.1431. See 40 Tex. Admin. Code § 711.1431 (2015) (Dep't of Family & Protective Servs., How is judicial review requested and what is the deadline?) (Former Rule 711.1431). While it is true that Former Rule 711.1431 did not explicitly require a motion for rehearing, and the agency did not direct her to file one in its "misleading" letter about her "only recourse," it is settled law that an agency may not waive a jurisdictional prerequisite such as the APA's motion-for-rehearing requirement by estoppel, waiver, rule, or other action, even if the agency improperly communicates to a party that there are no further administrative remedies available to pursue. See Wilmer-Hutchins Indep. Sch. Dist. v. Sullivan, 51 S.W.3d 293, 294 (Tex. 2001) (noting that jurisdiction cannot be conferred by estoppel or action of party or agency and that school district's failure to inform employee about administrative remedies did not absolve employee of exhaustion-of-remedies requirement); see also Texas Nat. Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 858 (Tex. 2002) ("[A]dministrative agencies cannot waive immunity from suit."); Lindsay, 690 S.W.2d at 563-64 ("The requirement of having a motion for rehearing overruled, thus exhausting administrative remedies, is a jurisdictional prerequisite to judicial review by the district court and cannot be waived by action of the parties."); Bacon v. Texas Historical Comm'n, 411 S.W.3d 161, 173-74 (Tex. App.—Austin 2013, no pet.) (noting that only legislature may waive sovereign immunity); Texas Alcoholic Beverage Comm'n v. Sfair, 786 S.W.2d 26, 27 (Tex. App.—San Antonio 1990, writ denied) ("An appeal from an administrative agency is not a matter of right, it is set out by statute and must be strictly complied with in order to vest the district court with jurisdiction."). The cases that Wallace cites in support of her estoppel arguments are not applicable to the circumstances here. Moreover, even if Former Rule 711.1431 conflicted with the APA and section 48.406 as to whether a motion for rehearing were a prerequisite to judicial review, the rule must yield to the statutes. See State Office of Pub. Util. Counsel v. Public Util. Comm'n, 131 S.W.3d 314, 321 (Tex. App.—Austin 2004, pet. denied) (noting that agency rule is facially invalid if it contravenes specific statutory language or runs counter to general objectives of statute).
As Wallace correctly notes in her brief, after her contested-case proceedings had concluded, DFPS amended Rule 711.1431, which now states: "A timely motion for rehearing is a prerequisite to judicial review and must be filed in accordance with Subchapters F and G, Chapter 2001, Government Code." 40 Tex. Admin. Code § 711.1431(a) (Dep't of Family & Protective Servs., How is judicial review requested and what is the deadline?). The prior rule read, in relevant part: "To request judicial review of a Hearing Order, the employee must file a petition for judicial review in a Travis County district court, as provided by Government Code, Chapter 2001, Subchapter G" and "The petition must be filed with the court no later than the 30th day after the date the Hearing Order becomes final, which is the date that the Hearing Order is received by the employee." 40 Tex. Admin. Code § 711.1431(a) (2015) (Dep't of Family & Protective Servs., How is judicial review requested and what is the deadline?).
For instance, Wallace cites cases indicating that a city, by its conduct, could possibly be estopped from asserting the defense of a plaintiff's failure to comply with a city ordinance's notice-of-claim provision before filing suit. See City of San Antonio v. Schautteet, 706 S.W.2d 103, 105 (Tex. 1986) (holding that summary judgment is improper where there are genuine issues of material fact whether city, through its officials, misled claimant to believe no further steps needed to be taken until city completed its investigation); Roberts v. Haltom City, 543 S.W.2d 75, 80 (Tex. 1976) (same). However, the supreme court has noted that Schautteet and Roberts are "the only two cases where we have applied estoppel against the government," Texas Dep't of Transp. v. A.P.I. Pipe & Supply, LLC, 397 S.W.3d 162, 170 n.36 (Tex. 2013), and limited the holdings in both Schautteet and Roberts, emphasizing that they "illustrate the types of cases that may . . . [be deemed] exceptional case[s] in which justice requires estoppel," in light of evidence that city officials "acted deliberately to induce a party to act in a way that benefitted the city but prejudiced the party," City of White Settlement v. Super Wash, Inc., 198 S.W.3d 770, 775 (Tex. 2006). These more recent opinions, along with the supreme court's explicit rejection of the estoppel theory in the context of exhaustion of administrative remedies, Wilmer-Hutchins Indep. Sch. Dist. v. Sullivan, 51 S.W.3d 293, 294 (Tex. 2001), lead us to conclude that the cases Wallace cites are inapposite.
As to Wallace's constitutional due-process argument, Texas law does not allow a party to avoid statutory jurisdictional prerequisites simply by including a constitutional claim. See Texas Comm'n on Envtl. Quality v. Kelso, 286 S.W.3d 91, 97 (Tex. App.—Austin 2009, pet. denied) (holding that when statute provides right of judicial review, person raising constitutional claim must comply with statute's jurisdictional requirements even if making constitutional claims about agency order's affecting vested property rights); HCA Healthcare Corp. v. Texas Dep't of Ins., 303 S.W.3d 345, 352 (Tex. App.—Austin 2009, no pet.) (same); see also City of Dallas v. Stewart, 361 S.W.3d 562, 579-80 (Tex. 2012) (citing Kelso for proposition that "a party making a constitutional claim must nonetheless comply with statutory prerequisites for judicial review"); Otieno v. Texas Bd. of Nursing, No. 03-14-00251-CV, 2015 WL 4909766, at *2 (Tex. App.—Austin Aug. 11, 2015, no pet.) (mem. op.) (same). Furthermore, Wallace is charged with notice of the APA and its requirements. See Hernandez v. Texas Dep't of Ins., 923 S.W.2d 192, 195 (Tex. App.—Austin 1996, no writ) (holding that party was charged with knowledge of APA provisions related to exhaustion of administrative remedies). Accordingly, Wallace's "due process" contentions do not absolve her of the requirement to exhaust administrative remedies.
We, therefore, sustain DFPS's issue on appeal and hold that the trial court did not have jurisdiction over Wallace's suit for judicial review because she failed to file a motion for rehearing.
CONCLUSION
We hold that the trial court did not have subject-matter jurisdiction over this case and erred in denying DFPS's plea to the jurisdiction. Accordingly, we reverse the trial court's order denying the plea and render judgment granting the plea and dismissing Wallace's suit.
/s/_________
David Puryear, Justice Before Justices Puryear, Pemberton, and Goodwin Reversed and Rendered Filed: April 19, 2017