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Texas Department of Family and Protective Services v. Wallace

Court of Appeals of Texas, Third District, Austin

April 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

          Before Justices Puryear, Pemberton, and Goodwin

          MEMORANDUM OPINION

          David Puryear, Justice

         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[1] "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.

         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, [2]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 ...


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