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Sullivan v. Texas Ethics Commission

Court of Appeals of Texas, Third District, Austin

May 17, 2018

Michael Quinn Sullivan, Appellant
Texas Ethics Commission, Appellee


          Before Justices Puryear, Field, and Bourland


          David Puryear, Justice

         In this interlocutory appeal, we are faced with a legal question of first impression: can a motion to dismiss authorized by the Texas Citizens Participation Act (TCPA) be used to dismiss one's own administrative appeal? See Tex. Civ. Prac. & Rem. Code § 27.003. In the proceedings below, Michael Quinn Sullivan appealed to the district court a final order of the Texas Ethics Commission determining that he failed to register as a lobbyist and assessing a civil penalty against him. See Tex. Gov't Code §§ 305.003, .032. Pursuant to Sullivan's own motion, the trial court realigned the parties, naming the Commission as plaintiff and Sullivan as defendant, due to the Commission carrying the burden of proof in the "trial de novo" of the Commission order. See id. § 571.133(d). The Commission amended its pleadings accordingly, and Sullivan responded by filing a TCPA motion to dismiss the Commission's amended pleading, which the trial court denied. Because application of the TCPA under these circumstances cannot be harmonized with the more specific statutory procedures for judicial review of Commission orders, we hold that the TCPA does not apply and affirm the trial court's denial of Sullivan's TCPA motion. We reverse, however, the trial court's award of attorney's fees and costs to the Commission because the record does not support the trial court's findings that Sullivan's motion was frivolous or solely intended to delay the proceedings.


         The Commission is a state agency established to "provide guidance on various public ethics laws." See Tex. Const. art. III, § 24a. It is charged with administering and enforcing chapter 305 of the government code, which governs lobbyist registration, reports, and activities. See Tex. Gov't Code §§ 305.001-.036, 571.061(a)(1).

         The events relevant to this dispute concern Sullivan's conduct in 2010 and 2011, when he was (and remains) the President of Empower Texans, [1] a non-profit corporation that "educate[s] and inspire[s] Texans to exercise effective citizenship" and "empower[s] taxpayers to advocate for good governance and hold their elected officials accountable" through its use of "research, reporting, and advocacy."[2] Government code section 305.003 requires a person to register with the Commission as a lobbyist if certain enumerated conditions are met. See id. § 305.003(b) (requiring registration if person (1) received compensation in excess of $1, 000 in calendar quarter (2) from another person (3) as part of regular employment and (4) communicated directly with member of legislative or executive branch (5) to influence legislation). The Commission, as well as the attorney general and any county or district attorney, may enforce chapter 305, including the lobbyist-registration statute. See id. § 305.035(a).

         In April 2012, the Commission received two sworn complaints filed by Texas legislators alleging Sullivan's failure to register in 2010 and 2011. See id. §§ 305.035(c) ("A person may file with the appropriate prosecuting attorney or with the commission a written, sworn statement alleging a violation of this chapter."), 571.122 (providing procedures and requirements for sworn complaints). The Commission conducted a formal evidentiary hearing on the matter, see id. § 571.121 (authorizing Commission to hold hearings on sworn complaints and render decisions thereon), after which it concluded that Sullivan-a "professional lobbyist compensated by Empower Texans and its related entities for employment activities that include direct advocacy"-was required to register but failed to do so, see id. § 305.003. The Commission's final order assessed a $10, 000 civil penalty against Sullivan. See id. § 305.032 (stating that person who fails to register as lobbyist shall pay civil penalty in amount determined by Commission rule).

         Sullivan timely filed an appeal of the Commission's final order by filing a petition in Denton County district court. See id.§ 571.133 (authorizing appeal). His petition alleged that his "cause of action" was a "de novo appeal of the Commission's July 21, 2014 Final Order pursuant to Tex. Gov't Code § 571.133." See id. (providing for de novo trial); see also id. § 2001.173 (in trial de novo, "the reviewing court shall try each issue of fact and law in the manner that applies to other civil suits in this state as though there had not been an intervening agency action or decision but may not admit in evidence the fact of prior state agency action or the nature of that action except to the limited extent necessary to show compliance with statutory provisions that vest jurisdiction in the court"). As a result of Sullivan's petition, the Commission's final decision was automatically vacated. See id. § 2001.176(b)(3) ("[T]he filing of the petition vacates a state agency decision for which trial de novo is the manner of review authorized by law but does not affect the enforcement of an agency decision for which another manner of review is authorized.").

         The Commission answered the lawsuit and moved to transfer venue to Travis County, alleging that Sullivan resided in Travis County and that mandatory venue, therefore, lay in Travis County.[3] See id. § 571.133(a). Later that same day, Sullivan filed a motion to realign the parties, seeking to name the Commission as plaintiff and himself as defendant, as the Commission bears the burden of proof in a trial de novo. See id. § 571.133(d) ("The reviewing court shall try all issues of fact and law in the same manner as applicable to other civil suits in this state."); Texas Ethics Comm'n v. Goodman, No. 02-09-094-CV, 2010 WL 323544, at *3 (Tex. App.-Fort Worth Jan. 28, 2010, no pet.) (mem. op.) (noting that respondent to Commission final order who perfected appeal in district court for trial de novo was "defendant" below and had filed summary-judgment motion on his affirmative defense to Commission's allegations). The trial court granted the agreed motion to realign, and the Commission then filed an amended pleading as plaintiff, alleging two "counts" against Sullivan for violating the lobbyist-registration statute and seeking the maximum allowable civil penalty.

         Within two weeks of the Commission filing its amended pleading, Sullivan moved to dismiss the pleading under the TCPA. After two hearings before two Denton County district judges, the trial court granted the motion and denied the Commission's motion to transfer venue.[4]The Commission appealed the venue determination and dismissal to the Fort Worth Court of Appeals, which reversed and remanded for a trial de novo in Travis County. Texas Ethics Comm'n v. Sullivan, No. 02-15-00103-CV, 2015 WL 6759306, at *9 (Tex. App.-Fort Worth Nov. 5, 2015, pet. denied) (mem. op.). The Fort Worth Court of Appeals did not express any opinion about Sullivan's motion to dismiss under the TCPA, although the reversal of the venue determination-as a "threshold determination"-resulted in the vacating of the Denton County district court's grant of Sullivan's motion to dismiss. See id.

         The Travis County district court conducted yet another hearing on Sullivan's motion to dismiss and denied it. The trial court also made a finding that his motion was frivolous and intended solely to delay and granted the Commission's request for attorney's fees and costs. See Tex. Civ. Prac. & Rem. Code § 27.009(b). Sullivan appeals both rulings.


         Can the TCPA be used to dismiss one's own ...

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