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Mosley v. Texas Health and Human Services Commission

Supreme Court of Texas

May 3, 2019

Patricia Mosley, Petitioner
v.
Texas Health and Human Services Commission and Texas Department of Family and Protective Services, Respondents

          Argued January 9, 2019

          On Petition for Review from the Court of Appeals for the Third District of Texas

          OPINION

          Jeffrey V. Brown Justice.

         In this case we hold that under the Administrative Procedures Act, an appellant seeking judicial review of an administrative order must first file a motion for rehearing with the administrative-law judge unless another statute plainly provides otherwise. We further hold that an agency's misrepresentation of the proper procedures to seek judicial review of an adverse order can-at least under some circumstances-violate the appellant's right to due process.

         Accordingly, we agree with the court of appeals that the trial court below lacked jurisdiction over the petitioner's appeal because she did not seek rehearing of the administrative-law judge's ruling. But, unlike the court of appeals, we further hold that the agency's misleading letter to the petitioner, and the admittedly incorrect regulation on which it relied, effectively deprived her of her right to judicial review. Although the agency now insists a motion for rehearing was required, a letter the agency sent the petitioner quoted a regulation stating she had thirty days to seek judicial review from a district court without mentioning a motion-for-rehearing requirement. The petitioner acted accordingly. The agency concedes the now-repealed regulation misstated the law, but argues the petitioner should have known better. We disagree and hold that the letter's misrepresentations amounted to a denial of due process.

         We therefore affirm the court of appeals' judgment in part and reverse in part. Because the remedy for a deprivation of due process is due process, we direct the Health and Human Services Commission to reinstate Mosley's administrative case to afford her an opportunity to seek rehearing of the order entered against her.

         I

         One of the duties of the Texas Department of Family and Protective Services (the Department) is to investigate reports of "abuse, neglect, or exploitation of an elderly person or person with a disability." Tex. Hum. Res. Code § 48.001. When it discovers any "reportable conduct," it notifies the Department of Aging and Disability Services (DADS). Id. § 48.403. DADS then adds the information to its Employee Misconduct Registry. Id. The Registry lists employees of DADS-licensed facilities who have been found to have committed "reportable conduct." Tex. Health & Safety Code § 253.007(a). The Registry contains the employee's name, address, social-security number, and a description of the reportable conduct. Id. Before any facility can hire an employee, it must search the Registry "to determine whether the applicant for employment is designated . . . as having abused, neglected, or exploited an individual," and cannot hire the employee if he or she appears in the Registry. Id. § 253.008(a)-(b). Placement in the Registry is effectively career-ending. See id.

         Upon a finding of "reportable conduct," the Department must provide written notice to the employee that includes: a summary of its findings; a statement of the employee's right to a hearing on the findings; and a statement notifying the employee that if the employee fails to timely respond to the notice, the reportable-conduct finding will be recorded in the Registry. Tex. Hum. Res. Code § 48.404(a). The employee may request a hearing on the reportable-conduct finding within thirty days of receiving the notice. Id. § 48.404(b). If the employee fails to timely request the hearing, the Department "shall" issue an order approving the finding and forward it to DADS for inclusion in the Registry. Id. § 48.404(c). After a Registry hearing, the administrative-law judge (ALJ) "shall promptly issue an order regarding the occurrence of the reportable conduct." Id. § 48.405(b). The employee may request judicial review of a Registry finding. Id. § 48.406.

         The Department investigated an incident involving Patricia Mosley's care of a group-home resident, confirmed a finding of "reportable conduct," and recommended Mosley's name be added to the Registry. Mosley requested a hearing, which the Department delegated to the Health and Human Services Commission (the Commission). The ALJ sustained the determination and sent Mosley a "Final Decision and Order." The accompanying letter stated:

Enclosed is the Final Decision and Order (Hearing Order) in the hearing you requested in the-above referenced matter. This Hearing Order will become final and your name will be submitted to the Employee Misconduct Registry unless you timely petition for judicial review.
Should you wish to appeal the Hearing Order, section 711.[1]431[1] of the Texas Administrative Code provides, in pertinent part, as follows:
(a) To request judicial review of a Hearing Order, the employee [you] must file a petition for judicial review in a Travis County district court, as provided by Government Code, Chapter 2001, Subchapter G.
(b) 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.
(c) Judicial review by the court is under the substantial evidence rule, as provided by § 48.406, Human Resources Code.
(d) Unless citation for a petition for judicial review is served on DFPS within 45 days after the date on which the Hearing Order is mailed to the employee, DFPS will submit the employee's name for inclusion in the Employee Misconduct Registry. If valid service of citation is received after the employee's name has been recorded in the registry, DFPS will determine whether the lawsuit was timely filed and, if so, immediately request that the employee's name be removed from the registry pending the outcome of the judicial review. . . .

         At issue in this appeal are the representations contained in the letter and the quoted provisions of a now-repealed Department rule addressing finality of the ALJ's order and the process by which Mosley may seek judicial review. Specifically, the letter indicates that the "Order will become final . . . unless you timely petition for judicial review" within thirty days of receiving the order. The letter fails to explain that Mosley may file a motion for rehearing or indicate that doing so is a prerequisite for judicial review. The Department and the Commission (the Agencies) concede the letter and the regulation therein contained bad information. The Agencies now argue that the Administrative Procedures Act (the APA), see Tex. Gov't Code §§ 2001.001-902, required Mosley to file a motion for rehearing with the ALJ before seeking judicial review, and that the order was not final for purposes of appeal because she failed to do so.

         Claiming she relied on the letter and quoted regulation, Mosley sought judicial review without filing a motion for rehearing. The Agencies filed a plea to the jurisdiction, arguing the trial court lacked subject-matter jurisdiction because Mosley failed to seek rehearing. Although the Agencies concede the Department rule in place at the time incorrectly stated the law, they argued an incorrect agency rule cannot confer subject-matter jurisdiction on the trial court and that Mosley was charged with knowledge of the APA's requirements.

         While Mosley litigated her case at the trial court, the Department amended its rule to expressly require a motion for rehearing: "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). Importantly, a Department memo circulated just two months after the agencies filed their pleas to the jurisdiction stated that the "primary purpose" of the rule amendment was "to update the terminology and process requirements regarding the due process rights of an employee prior to placement on the [Registry]." According to the memo, the amendment "[m]akes the filing of a timely motion for rehearing in accordance with Subchapters F and G of Government Code Chapter 2001 a prerequisite to judicial review" and "[u]pdates the guidance regarding seeking judicial review by referring to the operative law on point, Subchapters F and G of Government Code Chapter 2001."

         The trial court overruled the Agencies' jurisdictional plea but ruled for them on the merits of Mosley's appeal, finding that substantial evidence supported the ALJ's order. See Tex. Hum. Res. Code § 48.406(c)(2) (providing that judicial review will be conducted under the substantial-evidence rule); Mercer v. Ross, 701 S.W.2d 830, 831 (Tex. 1986) (recognizing that under the substantial-evidence rule, a reviewing court may set aside an ALJ's decision only if it was "made without regard to the law or the facts and therefore was unreasonable, arbitrary, or capricious," and not simply because the trial court "would have reached a different conclusion"). Accordingly, Mosley appealed the trial court's decision on the merits, and the Agencies-though winning on the merits at the trial court-cross-appealed the trial court's denial of their jurisdictional plea.

         The court of appeals reversed the trial court's judgment on the Agencies' jurisdictional plea and rendered judgment that Mosley's failure to seek rehearing deprived the trial court of subject-matter jurisdiction. 517 S.W.3d 346, 354 (Tex. App.-Austin 2017). The court of appeals therefore did not consider the merits of Mosley's appeal. The court reasoned that while the statutory provisions providing for judicial review of a Registry finding are silent as to a motion for rehearing, the motion-for-rehearing requirement in the APA "is jurisdictional and applies generally to all suits for judicial review to challenge agency orders issued in contested cases." Id. at 350. This "jurisdictional prerequisite," the court continued, "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." Id. at 350-51.

         That standard notwithstanding, the court of appeals noted that chapter 48 of the Human Resources Code-which governs judicial review of a Registry finding-does expressly invoke the APA. Although it does not "expressly require a motion for rehearing," the court observed that it nonetheless provides that "'[j]udicial review of [a Registry finding] is instituted by filing a petition as provided by Subchapter G [of the APA].'" Id. at 351 (quoting Tex. Hum. Res. Code § 48.406(c)) (internal punctuation omitted). Subchapter G of the APA, 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.'" Id. at 351-52 (quoting Tex. Gov't Code § 2001.176(a)) (emphasis added). And because the APA further states that "[a] timely motion for rehearing is a prerequisite to an appeal in a contested case," Tex. Gov't Code § 2001.145(a), the court held that an "appealable" order under the APA is one in which "a motion for rehearing has been filed and overruled." Id. at 352 (citing Tex. Gov't Code § 2001.145(a), (b)).

         The court of appeals further rejected Mosley's argument that "[the Department's] rules effective at the time of the proceedings below reflect the agency's 'interpretation' that no motion for rehearing was required," reasoning that "an agency may not waive a jurisdictional prerequisite such as the APA's motion-for-rehearing requirement, even if the agency improperly communicates to a party that there are no further administrative remedies available to pursue." Id. at 353. The court also disagreed with Mosley that the legislature had impliedly adopted the Department's interpretation. Id. Finally, the court rejected Mosley's argument that "her constitutional rights to due process were violated by [the Department's] promulgating an 'invalid' rule, directing that she follow the rule and thereby 'preventing' her from seeking rehearing, and ultimately adversely affecting her vested property and liberty interests as a state-registered nurse aid." Id. at 354. ...


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