Texas Prot. & Reg. Serv. V. Mega Child Care

• Decision Date: 03 September 2004
• Docket Number: No. 02-0728.,02-0728.
• Citation: 145 S.W.3d 170
• Parties: TEXAS DEPARTMENT OF PROTECTIVE AND REGULATORY SERVICES, Petitioner, v. MEGA CHILD CARE, INC., Respondent.
• Court: Texas Supreme Court

145 S.W.3d 170

TEXAS DEPARTMENT OF PROTECTIVE AND REGULATORY SERVICES, Petitioner, v. MEGA CHILD CARE, INC., Respondent.

No. 02-0728.

Supreme Court of Texas.

Argued on September 11, 2003.

Decided September 3, 2004.

Appeal from the 190th District Court, Harris County, John P. Devine, J Ron Beal, Waco, TX, pro se.

Bill Aleshire, Riggs and Aleshire, P.C., Austin, TX, for Amicus Curiae Texas Licensed Child Care.

Greg Abbott, Attorney Gen. of TX, Austin, Idolina Garcia, Hermes Sargent Bates, LLP, Dallas, Howard G. Baldwin, First Asst. Atty. Gen., Jeffrey S. Boyd, Thompson & Knight, Philip A. Lionberger, Brown McCarroll, L.L.P., Barry Ross McBee, Don Walker, Raymond C. Winter, Rafael Edward Cruz, Edward D. Burbach, Joseph Hughes, Office of Attorney Gen., and Kristofer S. Monson, Asst. Solicitor Gen., Austin, for Petitioner.

Booker T. Morris III, Nasiche B. Biscette, Booker T. Morris, III & Associates, Houston, TX, for Respondent.

Justice SMITH delivered the opinion of the Court, in which Chief Justice PHILLIPS, Justice HECHT, Justice O'NEILL, Justice JEFFERSON, Justice WAINWRIGHT and Justice BRISTER joined.

In Texas, a person may obtain judicial review of an administrative action only if a statute provides a right to judicial review, or the action adversely affects a vested property right or otherwise violates a constitutional right. See Cont'l Cas. Ins. Co. v. Functional Restoration Assocs., 19 S.W.3d 393, 397 (Tex.2000); Firemen's & Policemen's Civil Serv. Comm'n v. Kennedy, 514 S.W.2d 237, 239 (Tex.1974); City of Amarillo v. Hancock, 150 Tex. 231, 239 S.W.2d 788, 790 (1951).

The question in this case is whether a person who holds a child-care facility license may obtain judicial review of an administrative decision to revoke the license. The court of appeals held that the holder of a child-care facility license has a statutory right to judicial review. We will affirm.

I

In 1975, the 64th Legislature enacted the Administrative Procedure and Texas Register Act (APTRA), the first comprehensive statute governing the practices and procedures of Texas administrative agencies. See APTRA, 64th Leg., R.S., ch. 61, 1975 Tex. Gen. Laws 136 (compiled as Tex.Rev.Civ. Stat. art. 6252-13a). Section 19 of the APTRA was titled "Judicial Review of Contested Cases," and subsection (a) thereof provided: "A person who has exhausted all administrative remedies available within the agency and who is aggrieved by a final decision in a contested case is entitled to judicial review under this Act. This section is cumulative of other means of redress provided by statute." Id. § 19(a), at 146 (emphasis added).

In 1993, the APTRA was codified in the Government Code. The part of the APTRA concerning the Texas Register was transferred to Chapter 2002. The remainder of the APTRA was transferred to Chapter 2001 and designated the Administrative Procedure Act (APA). Section 19(a) of the APTRA was divided and placed in two different sections of the APA. Subchapter G of the APA, titled "Contested Cases: Judicial Review," contains sections 2001.171 through 2001.178. Section 2001.171 provides: "A person who has exhausted all administrative remedies available within a state agency and who is aggrieved by a final decision in a contested case is entitled to judicial review under this chapter." TEX. GOV'T CODE § 2001.171 (emphasis added). And section 2001.178 provides: "This subchapter is cumulative of other means of redress provided by statute." Id. § 2001.178.

The Third Court of Appeals has "repeatedly held that [section 2001.171 of the APA] is a procedural provision that does not confer independent subject matter jurisdiction on the district court." Eldercare Props., Inc. v. Tex. Dep't of Human Servs., 63 S.W.3d 551, 557 (Tex.App.-Austin 2001, pet. denied). For example, in Employees Retirement System v. Foy, 896 S.W.2d 314, 316 (Tex.App.-Austin 1995, writ denied), the court stated: "Notwithstanding the generality of section 2001.171, the legislature intended the judicial-review provisions of the APA to be procedural only; they do not create a right to judicial review where the right does not exist by reason of another statute specifically granting the right." In contrast, before the provision was codified, the Tenth and Fourteenth Courts of Appeals concluded that section 19(a) of the APTRA provided a right to judicial review. See Tex. Health Facilities Comm'n v. W. Tex. Home Health Agency, 588 S.W.2d 655, 657 (Tex.Civ.App.-Waco 1979, no writ); Moore v. Tex. Employment Comm'n, 565 S.W.2d 246, 247 (Tex.Civ.App.-Houston [14th Dist.] 1977, no writ).

In this case, a divided panel of the First Court of Appeals held that section 2001.171 of the APA provides a right to judicial review. 81 S.W.3d 470. We granted review to resolve the conflict among the courts of appeals regarding the proper interpretation of section 2001.171. Based on its plain language, we conclude that section 2001.171 provides an independent right to judicial review of a contested-case decision when the agency's enabling statute neither specifically authorizes nor prohibits judicial review of the decision.

II

On April 28, 1999, Mega Child Care, Inc. filed suit against the Texas Department of Protective and Regulatory Services (TDPRS), a state agency subject to the APA. The petition for judicial review, which was filed in a Harris County district court, stated:

On or about July 22, 1997, the agency notified Plaintiff to appear before it and show cause why Plaintiff's license to operate a Day Care Facility should not be revoked as a result of alleged failure to comply with minimum standards.

After a hearing on November 19, 1998, the agency made its decision adverse to Plaintiff and refused to grant a timely motion for rehearing. All conditions precedent to Plaintiff's right of judicial review of agency's decision having been performed or occurred, Plaintiff is entitled to trial de novo under the authority of Section 19(c) of Article 6252-13a, Revised Civil Statutes of Texas.

On May 24, 1999, the TDPRS filed Defendant's Plea to the Jurisdiction, Special Exceptions, and Original Answer. Part I of the pleading, titled "Plea to the Jurisdiction," stated:

Defendant asserts that this court should dismiss this suit because it lacks subject matter jurisdiction to review the final decision of Defendant which revoked Plaintiff's license to operate a day care due to numerous noncompliances with the Minimum Standards for Day Care Facilities. A review of the regulations and the statutes that govern this cause reveals that there has been no provision made by the legislature for judicial review of the decision of the Department after a full evidentiary hearing has been held before an administrative law judge, who sits as the sole fact-finder.

Notwithstanding the generality of section 2001.171 of the Administrative Procedure Act (APA), formerly Article 6252-13a, § 19(a) of the Texas Revised Civil Statutes, the legislature intended the judicial review provisions of the APA to be procedural only. They did not create a right to review where the right does not exist by another statute that specifically grants that right. [citation to Third Court of Appeals's precedent].

For the foregoing reasons, this court has no subject matter jurisdiction over Plaintiff's Original Petition which seeks judicial review of the Department's decision dated July 23, 1998. Accordingly, Plaintiff's petition must be dismissed for want of jurisdiction.

Part II of the pleading contained a general denial. In part III, the TDPRS asserted "its affirmative defense of sovereign immunity." Part IV set forth special exceptions.¹

On August 30, 1999, the trial court granted the TDPRS's plea to the jurisdiction and dismissed the suit. On October 6, 1999, the trial court denied Mega Child Care's motion for new trial. No hearing was held on either the plea or the motion. On November 3, 1999, Mega Child Care filed a notice of appeal.

In the court of appeals, Mega Child Care asserted for the first time the additional argument that the administrative decision adversely affected a vested property right and, therefore, it had an inherent right to judicial review. The TDPRS, in its court of appeals brief, asserted that "no statute authorizes judicial review of the Department's decision or SOAH's order" and that Mega Child Care "failed to raise its constitutional argument in the court below, therefore it has waived its claim that the Department's decision violated its due process rights." The TDPRS did not raise or otherwise discuss sovereign immunity in its court of appeals brief.

On June 28, 2002, the court of appeals reversed and remanded, holding that Mega Child Care had "exhausted all available administrative remedies and was entitled to judicial review" under section 2001.171 of the APA. 81 S.W.3d at 473. The majority did not discuss the Third Court of Appeals's precedent construing section 2001.171. The dissent asserted that the court should follow the Third Court of Appeals's precedent and hold that Mega Child Care had no statutory right to judicial review. Id. at 477. In addition, the dissent agreed with the TDPRS that Mega Child Care had waived its constitutional claim. Id. at 477-78. Accordingly, the dissent would have affirmed the trial court's judgment. Neither the majority nor the dissent discussed the doctrine of sovereign immunity.

In its petition for review, the TDPRS asserted that section 2001.171 of the APA neither grants "an aggrieved party a substantive right to judicial review of an agency contested case order" nor waives sovereign immunity. In addition, the TDPRS argued that because section 19(a) of the APTRA was not substantively amended in 1993 when it was codified, "the Legislature has accepted the Third Court of Appeals' construction."² Finally, the TDPRS contended that Mega Child Care had "waived any claim of an inherent right to judicial review by not raising the issue in the trial court." In...