Texas Court Reporters v. Esquire Deposition

• Decision Date: 20 July 2007
• Docket Number: No. 03-06-00002-CV.,03-06-00002-CV.
• Citation: 240 S.W.3d 79
• Parties: TEXAS COURT REPORTERS CERTIFICATION BOARD and Michele Henricks, as Director of the Court Reporters Certification Board, Appellants, v. ESQUIRE DEPOSITION SERVICES, L.L.C., Appellee.
• Court: Texas Court of Appeals

240 S.W.3d 79

TEXAS COURT REPORTERS CERTIFICATION BOARD and Michele Henricks, as Director of the Court Reporters Certification Board, Appellants, v. ESQUIRE DEPOSITION SERVICES, L.L.C., Appellee.

No. 03-06-00002-CV.

Court of Appeals of Texas, Austin.

July 20, 2007.

Frank J. Knapp, Jr., Asst. Atty. Gen., Administrative Law Division, Kristofer S.

Monson, Asst. Solicitor Gen., Austin, for appellants.

James R. Bailey, Fulbright & Jaworski L.L.P., Austin, for appellee.

Before Justices PATTERSON, PEMBERTON and WALDROP.

OPINION

BOB PEMBERTON, Justice.

The Texas Court Reporters Certification Board (the "Board") set a hearing on a disciplinary complaint against Esquire Deposition Services, L.L.C. ("Esquire") alleging that Esquire provided court reporting services during a December 2003 deposition pursuant to a long-term volume discount arrangement that violated statutes and rules governing Texas court reporting firms. Esquire sued the Board and its director, Michele Henricks, alleging that the Board lacked statutory authority to regulate or prohibit "long term discounts in contracts by court reporters and court reporting firms" and seeking declaratory and injunctive relief. The Board and Henricks filed a plea to the jurisdiction, which the district court denied. The Board appeals the district court's order denying its plea to the jurisdiction. See Tex. Civ. Prac. & Rem.Code Ann. § 51.014(8) (West Supp. 2006).¹ We reverse the district court's order and dismiss Esquire's suit for want of jurisdiction.

STANDARD OF REVIEW

The subject matter jurisdiction of a trial court may be challenged through a plea to the jurisdiction. See Texas Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225-26 (Tex. 2004); Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). The determination of whether a trial court has subject matter jurisdiction begins with the pleadings. See Miranda, 133 S.W.3d at 226. The pleader has the initial burden of alleging facts that affirmatively demonstrate the trial court's jurisdiction to hear the cause. Id. (citing Texas Ass'n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993)). Whether the pleader has met this burden is a question of law that we review de novo. Id. We construe the pleadings liberally and look to the pleader's intent. Id.

If the pleadings do not contain sufficient facts to affirmatively demonstrate the trial court's jurisdiction but do not affirmatively demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency and the plaintiffs should be afforded the opportunity to amend. Id. at 226-27; Elgin Indep. Sch. Dist. v. R.N., 191 S.W.3d 263, 272 (Tex. App.-Austin 2006, no pet.). If the pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be granted without allowing the plaintiffs an opportunity to amend. Miranda, 133 S.W.3d at 227.

A defendant may also challenge the jurisdictional facts alleged by the plaintiff through the process described in Miranda. See Miranda, 133 S.W.3d at 227 (citing Bland, 34 S.W.3d at 555). When a plea to the jurisdiction challenges the existence of facts alleged by the pleader to establish the trial court's subject matter jurisdiction, the trial court must consider relevant evidence submitted by the parties. Bland, 34 S.W.3d at 555. Here, the Board and Henricks did not challenge the jurisdictional facts alleged by Esquire, nor did they introduce jurisdictional evidence. Instead, they challenged only the sufficiency of Esquire's pleadings. Thus, we take as true the facts alleged in Esquire's pleadings and construe them liberally in favor of jurisdiction. Id. at 226.

Additionally, although the Board did not present jurisdictional evidence, Esquire did attach evidence to its pleadings, and we may consider it in resolving the jurisdictional challenges the Board has raised. Bland, 34 S.W.3d at 555 ("[A] court deciding a plea to the jurisdiction is not required to look solely to the pleadings but may consider evidence and must do so when necessary to resolve the jurisdictional issues raised.").

PLEADINGS AND JURISDICTIONAL EVIDENCE

Esquire is a national court reporting firm. It is registered in Texas and has eight offices statewide. Esquire's factual allegations center on a disciplinary complaint filed against it by Henricks, in her capacity as director of the Board. To place these allegations in context, it is helpful first to briefly review the statutes governing the Board's regulatory and disciplinary powers over court reporting firms.

Regulatory framework

Chapter 52 of the government code regulates the business and practice of court reporting in the State of Texas, including establishing certification, education, and conduct requirements for court reporters and court reporting firms. Tex. Gov't Code Ann. §§ 52.001-.059 (West 2005). The Board is a state agency, administratively attached to the Office of Court Administration of the Texas Judicial System, whose statutory charges include administering and enforcing chapter 52, administering examinations and other requirements related to reporter certification, prescribing educational programs, and "the executive functions necessary to carry out the purposes of this chapter under rules adopted by the supreme court." Id. §§ 52.013-.0131 (West 2005). The supreme court appoints the Board, and "may adopt rules consistent with this chapter," including rules governing the certification and conduct of court reporters and the registration and conduct of court reporting firms. Id. §§ 52.002, .011. The Board does not have its own rule-making authority.

To practice court reporting, a person must be certified by the supreme court. Id. § 52.021(a)-(b). To obtain court-reporter certification, a person must file an application with the Board, pass an examination, and comply with other requirements of the statute and rules. Id. §§ 52.0211-.026. The Board certifies each qualified applicant's name to the supreme court, which issues the formal certification. Id. § 52.024. Court reporting firms must also register with the Board, and "[r]ules applicable to a court reporter are also applicable to a court reporting firm." Id. §§ 52.021(h)-(i), 52.0255.

The Board is also authorized—and required— to take disciplinary action against court reporters and court reporting firms. Id. §§ 52.029, 52.0295. Section 52.0295(a) is addressed to court reporting firms, and provides that the Board "shall reprimand, assess a reasonable fine against, or suspend, revoke, or refuse to renew the registration of a shorthand reporting firm or affiliate office for" any of twelve enumerated grounds that conclude with "other sufficient cause." Id. § 52.0295(a). Among these disciplinary grounds is:

unprofessional conduct, including a pattern of giving directly or indirectly or benefitting from being employed as a result of giving any gift, incentive, reward, or anything of value to attorneys, clients, or their representatives or agents, except for nominal items that do not exceed $100 in the aggregate for each recipient each year.

Id. § 52.0295(a)(9). However, the legislature has provided that "nothing in Subsection (a)(9) [the "unprofessional conduct" prohibition] shall be construed to define providing value-added business services, including long-term volume discounts, such as the pricing of products and services, as prohibited gifts, incentives, or rewards." Id. § 52.0295(b).

On the other hand, the legislature has prohibited, as a separate disciplinary ground, "entering into or providing services under a prohibited contract described by Section 52.034." Id. § 52.0295(a)(10). Section 52.034 defines "prohibited contracts" in relevant part as "any contractual agreement, written or oral, exclusive or nonexclusive," that "undermines the impartiality of the court reporter," "requires a court reporter to provide any service not made available to all parties to an action," or "gives or appears to give an exclusive advantage to any party." Id. § 52.034(a)(1), (3)-(4).

Procedurally, the Board's disciplinary process is triggered by the filing of a complaint against a court reporter or court reporting firm by a person with personal knowledge of the alleged violation, which may include the Board or a court of this state. Id. § 52.027(a), (c).² If, after receiving a complaint, the Board "believes that a hearing on the complaint is advisable," it is required to set a hearing not later than the 30th day after the date the Board received the complaint. Id. § 52.028(a). Immediately after setting the hearing date, the Board must give notice to the subject reporter or firm, stating "the cause of any contemplated disciplinary action" and the hearing time and place. Id. § 52.028(b).

At the hearing, the Board shall apply "the general rules of evidence applicable in a district court" in determining whether a violation occurred, and "shall produce a written summary of the evidence before it and a written finding of facts." Id. §§ 52.028(d), .028(g), .029(a), .0295(a). If it finds a ground for discipline against a court reporting firm, the Board is authorized to "reprimand, assess a reasonable fine against, or suspend, revoke, or refuse to renew the registration of" the firm. Id. § 52.0295; see also id. § 52.0321 (authorizing administrative penalties). An aggrieved court reporter or court reporting firm may appeal a disciplinary action of the Board to district court. Id. § 52.030. This appeal shall be by trial de novo. Id.

The complaint against Esquire

The Board's present actions against Esquire stem from an earlier complaint that a certified court reporter, Donna Collins, filed against Esquire and one of its reporters alleging that Esquire had committed "unprofessional conduct" by failing to timely disclose, prior to a December 2003 deposition, the existence of a contract under which Esquire had agreed to provide services to one of the parties to a lawsuit. See ...