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Davis v. Morath

Court of Appeals of Texas, Third District, Austin

October 17, 2019

Angela Davis, as President of NEA-Dallas (a Local Affiliate of Texas State Teachers Association), on behalf of All Affected Members and Named Individuals, Appellant
Mike Morath, Commissioner of Education of The State of Texas, and Dallas Independent School District, A Public Body Corporate, Appellees


          Before Justices Goodwin, Baker, and Triana



         This is an appeal from a judgment in a suit for judicial review of an administrative decision by the Texas Commissioner of Education. Appellants are teachers employed with the Dallas Independent School District (DISD) during the 2014-15 and 2015-16 school years. They filed a collective grievance challenging their appraisals under DISD's newly adopted teacher-appraisal system, and the Commissioner dismissed the Teachers' grievance for lack of jurisdiction. Angela Davis, the President of NEA-Dallas (a local affiliate of the Texas State Teachers Association), then filed suit for all affected members and named individuals (Teachers) against the Texas Commissioner of Education Mike Morath (Commissioner) and DISD. The district court affirmed the Commissioner's dismissal, and the Teachers appealed.

         In three issues, the Teachers contend that the district court erred in affirming the Commissioner's decision because: (1) the Commissioner incorrectly determined that the Teachers' grievance was untimely; (2) the Commissioner incorrectly refused to consider and rule on the Teachers' allegations that DISD violated Texas teacher-appraisal laws when he dismissed the Teachers' appraisal grievance as untimely; and (3) the Commissioner incorrectly determined that decreasing the Teachers' salary after the start of the school year did not violate Texas law. For the reasons that follow, we conclude that the district court's judgment should be affirmed in part and reversed and remanded in part.


         The Texas Education Code requires all teachers to be appraised. Tex. Educ. Code § 21.352(c). While most Texas school districts use the teacher-appraisal process and criteria developed by the Commissioner, school districts may develop and use their own. Id. § 21.352(a)(2). Any district-developed appraisal process and criteria "must be based on observable, job-related behavior," including two components: "(1) teachers' implementation of discipline management procedures; and (2) the performance of teachers' students." Id. § 21.351.

         Here, DISD adopted its own teacher-appraisal system in 2014 called the Teacher Excellence Initiative (TEI). On September 18, 2015, under its new TEI appraisal process, DISD issued a "Teacher Evaluation Scorecard" to teachers. The Scorecards issued weighted points to three evaluation components: (1) Teacher Performance; (2) Student Experience, and (3) Student Achievement. The Student Achievement component included students' performance on standardized tests, such as the State of Texas Assessment of Academic Readiness (STAAR), which was not available until after the 2014-15 school year ended. The record contains a sample Scorecard:

         (Image Omitted)

         Davis, et al v. Dallas ISD TEA bates* 001412

         After the students' standardized test scores were disclosed in the summer, DISD weighted the scores for each of the three teacher-evaluation components and translated those weighted scores into a range of points within seven categories of Evaluation Ratings: Unsatisfactory, Progressing I, Progressing II, Proficient, Proficient II, Proficient III, and Exemplary. Using a predetermined set of percentages called a "target distribution," DISD defines what proportion of scores will be assigned to each category. The target distribution for Evaluation Ratings is set to designate 3% of teachers as Unsatisfactory, 12% of teachers as Progressing I, 25% of teachers as Progressing II, 40% of teachers as Proficient I, 12% of teachers as Proficient II, 6% of teachers as Proficient III, and 2% of teachers as Exemplary. The sum of points from all three evaluation components is listed on a Scorecard for the first time as a teacher's numerical Evaluation Score.

         The Scorecards, also for the first time, notified teachers of their designated Effectiveness Level, which correlated with compensation increases under TEI's pay-for-performance model and determined the salary that the teacher would receive for the 2015-16 school year. Effectiveness Levels are designed to provide context for a teacher's evaluation scores over a two-year period, but because TEI was newly implemented in 2015, only one year of information was to be considered for a teacher's Effectiveness Level in the first Scorecard. Also during the first year of implementation, certain TEI rules limited the highest Effectiveness Level category that some teachers could attain.[1]

         On October 2, 2015, within ten district-business days of receiving their Scorecards, the Teachers filed a grievance with DISD alleging that "each of the Scorecards [was]": unwarranted and unjustified, without factual basis or merit, based upon improper criteria including unreliable District-promulgated standardized test scores, based on other unreliable data, violative of each teacher's right to due process, violative of Texas school laws, detrimental to the teachers by undermining and impairing their effectiveness, conducted in an improper and unlawful manner, and arbitrary, capricious, demeaning, and unprofessional. Based on those stated complaints about the Scorecards, the Teachers further alleged that "the entire TEI instrument and process as a whole is inequitable, arbitrary, capricious, subjective, and unlawful" and that the TEI instrument and process have a disparate negative impact on more experienced teachers and new teachers.

         The Teachers also contended specifically that

• under the TEI system, teachers are not given a final evaluation during the appraisal school year; rather, teachers receive this information only after the school year ends;
• calculation of the Student Achievement section of the Scorecard, which is based on a three-matrix formula, is not provided to teachers, thus, they were evaluated on information not provided to them in a timely manner or at all;
• calculation of the Scorecard was influenced by other unknown factors, including formulae that are arbitrary and capricious; and
• the resulting effect on each Grievant's compensation constitutes a breach of the Grievant's contract of employment and/or an unlawful demotion without due process of law which has caused and will continue to cause the Grievant monetary harm.

         The Teachers filed an amended grievance on October 14, 2015, contending additionally that "TEI wrongfully attempts to circumvent the teacher's right to rebut documentation and the right to file a grievance"; that "DISD has created a moving target, changing the metrics for bonus to stay within a defined budget which wrongfully deprives qualified teachers of increases in pay"; and that "no teachers received cost-of-living increases."

         The Teachers had two administrative grievance hearings. During the initial hearing before DISD's hearing officer, DISD's counsel admitted, "Their grievance is timely as to their overall effectiveness level. The District concedes that." However, the hearing officer's decision letter made no reference to DISD's concession about the timeliness of such grievance, and appellees fail to discuss the concession.

         The hearing officer found that two individuals were not proper parties to the Teachers' grievance and that the Teachers' requested relief should be denied in part and granted in part. The hearing officer granted the Teachers' request that they would not suffer any retaliation for filing the grievance but denied all their remaining substantive requests: (1) to have the Scorecards rescinded, removed, or revised; (2) to make the documents, information, and formula calculation used in the final evaluation "fair and equitable" to all teachers; (3) for an investigation into the efficacy and fairness of the TEI system; and (4) for DISD to return to the prior teacher-appraisal system known as Professional Development and Appraisal System (PDAS) during that investigation. The hearing officer concluded that "[t]he student achievement metrics and target distribution are not arbitrary, capricious, in bad faith, or in violation of District policy, state or federal law" and stated, "To the extent that the Grievants complain of decisions or actions of Dallas ISD that were known, or should have been known, to them prior to September 18, 2015 [the date they received their Scorecards]," their "grievance is denied and dismissed as untimely."

         The Teachers then appealed to a three-member subcommittee of the DISD Board of Trustees. At this hearing, one school-board member sought confirmation from Betsy Cook, the TEI Operations Manager, about whether the Teachers had received "the other part of their appraisal" on September 18 in their Scorecards, which Cook confirmed was "correct." At the conclusion of the hearing, the other two members of the school-board subcommittee decided that the Teachers' grievance was untimely filed. But the subcommittee's decision made no reference to the Teachers' grievance being dismissed. Rather, the two-member majority of the subcommittee determined that the hearing officer's fact findings and decision "should be affirmed" and that the Teachers' appeal of their grievance was denied.

         The Teachers next filed a petition for review with the Commissioner, who appointed an administrative law judge (ALJ) to hear the appeal of the Teachers' grievance. For the first time, DISD filed a plea to the jurisdiction and motion to dismiss. The ALJ issued a proposal for decision with findings of fact and conclusions of law and determined that the Teachers' "cause should be dismissed for a lack of jurisdiction." The Teachers filed timely exceptions to the ALJ's proposal for decision.

         The Commissioner adopted the ALJ's findings and conclusions, determined that he lacked jurisdiction to hear the administrative appeal, and issued a decision dismissing it.[2] The Teachers filed a motion for rehearing that was overruled by operation of law. The Teachers then sought judicial review in a Travis County district court, which ultimately affirmed the Commissioner's decision dismissing the appeal for want of jurisdiction. The Teachers filed a motion for new trial that was denied by operation of law. This appeal followed.


         The Teachers contend that the Scorecards they received in September of 2015 were their complete and final appraisals for the preceding school year and thus, violated section 21.352(c) of the Education Code, which requires school districts to appraise teachers at least once during the school year. See Tex. Educ. Code § 21.352(c). Further, the Teachers state that they were harmed by the issuance of the Scorecards in the fall of 2015, purporting to inform them of their performance for the prior school year, when the Teachers were contractually bound to remain employed with DISD. Specifically, Angela Davis testified that teachers were deprived of the opportunity to resign because they did not receive their final evaluation Scorecards until the middle of September, and teacher resignations must be submitted 45 days before the first day of instruction with the school district. See id. §§ 21.105, 21.160, 21.210 (addressing resignations for teachers under probationary, continuing, or term contracts).

         DISD responds that a Scorecard is not the teacher's "appraisal" for the 2014-15 school year under section 21.352(c); rather the Scorecard is the teacher's "overall effectiveness level." According to DISD, the appraisal contemplated by section 21.352(c) refers only to the teacher's "summative annual appraisal" conducted during the school year. The Commissioner contends that compliance with section 21.352(c) is not required-i.e., DISD need not appraise teachers at least once during the school year-because the statute is merely directory.

         As a preliminary matter, we address DISD's and the Commissioner's contentions that the Teachers' exceptions to the proposal for decision and the Teachers' motion for rehearing failed to preserve any error for appeal.

         Exceptions to PFD preserved most error, however continuing-violation complaint is waived

         DISD complains that the Teachers failed to preserve their complaints for judicial review by filing inadequate exceptions to the ALJ's proposal for decision (PFD). Relying on Rule 157.1059(d)-(e) of the Texas Administrative Code, DISD contends that the Teachers' disagreements with the PFD were not specifically and concisely stated, resulting in waiver of those disagreements. Rule 157.1059(d)-(e) provides that:

(d) All disagreements with the factual findings and legal conclusions of the proposal for decision must be made in the parties' exceptions to the proposal for decision or be waived.
(e) The exceptions shall be specifically and concisely stated. The evidence relied upon shall be stated with particularity, and any evidence or arguments relied upon shall be grouped under the exceptions to which they relate.

19 Tex. Admin. Code § 157.1059(d)-(e) (2015) (Tex. Educ. Agency, Filing of Exceptions and Replies to Proposal for Decision). This Rule was promulgated "to ensure full presentation of all disagreements with the proposal for decision." Tex. Educ. Agency, Adopted Rules, 29 Tex. Reg. 6887, 6892 (2004) (notes on former section 157.1058, "Filing of Exceptions and Replies to Proposal for Decision," repealed, updated, and adopted new as section 157.1059).

         Rule 157.1059(e) requires a party's exceptions to be specific, and if the exceptions rely on evidence, that evidence also must be stated with particularity. 19 Tex. Admin. Code § 157.1059(e). Unlike the rule for exceptions to a PFD in proceedings before the State Office of Administrative Hearings-which provides that such exceptions are permissive- Rule 157.1059(d)-(e) requires disagreements with the PFD to be made or such disagreements are waived. Compare 1 Tex. Admin. Code § 155.507(b) (2015) (State Office of Admin. Hearings, Proposals for Decision; Exceptions and Replies) (providing that parties "may" submit exceptions to proposal for decision), with 19 Tex. Admin. Code § 157.1059(d); see Alphonso Crutch Life Support Ctr. v. Williams, No. 03-13-00789-CV, 2015 Tex.App. LEXIS 12151, at *17-18 n.7 (Tex. App.-Austin Nov. 30, 2015, no pet.) (mem. op.) (noting party's concession that it "missed its deadline for objections" to PFD).

         Here, it is undisputed that the Teachers' exceptions to the PFD were timely, but the Commissioner determined that some of the Teachers' exceptions to the PFD were deficient.[3]On appeal, DISD complains that the Teachers made deficient exceptions disagreeing with the PFD's statements that: their grievance was untimely (exceptions nos. 1, 4, 6, 7, 15, and 19); there was no complaint about improperly calculated Scorecards (exception no. 8); they failed to exhaust administrative remedies about DISD's policy (exception no. 18); their grievance was dismissed (exception no. 2); there was no complaint about DISD reducing any payment for teacher insurance (exception no. 21); and there was no basis for the cost-of-living claims (exceptions nos. 20, 22). DISD points to a sentence included in several of the Teachers' exceptions, claiming that certain statements in the PFD were "in direct contradiction to the evidence in the record" but not identifying any evidence showing the alleged contradiction. However, there was more to each of the Teachers' exceptions than that single quoted sentence.

         For each of these exceptions, the Teachers explained why they contended that particular statements in the PFD were inaccurate and contrary to the record:

• In response to the PFD's statements that the Teachers' claims were untimely, that they did not complain about Scorecard calculation, and that they did not exhaust administrative remedies about DISD's policy, the Teachers' exceptions noted that: (1) their claims were timely filed within ten days of receiving their Scorecards in the fall of 2015; (2) their grievance arose from the Scorecards and the manner in which the Teachers were appraised but not from school board policy; (3) their claims were not ripe before receipt of the Scorecards; and (4) the district waived its right to claim untimeliness.
• In response to the PFD's statement that the Teachers' claims were dismissed "at all levels of the grievance policy," the Teachers' exceptions noted that the school district's board of trustees did not dismiss their grievance.[4]
• In response to the PFD's statement that the Teachers did not complain about any reduction in DISD's insurance payment, the Teachers noted that: (1) DISD offered no evidence of the amount it paid for the Teachers' insurance; (2) the increased cost of pretax deductions was taken from their salaries; (3) the result was a reduction in their overall compensation; and (4) they provided pay stub information reflecting the reduction in compensation.

         As to the Teachers' exception to PFD's statement that there was no basis for their cost-of-living claims, we note that the Commissioner specifically found similar exceptions (nos. 10 and 23) as to the Teachers' cost-of-living claims did include proper identification of the evidence that the Teachers relied upon.

         DISD further complains that the Teachers made deficient exceptions alleging that their claims were not ripe until the Scorecards issued in the fall of 2015. Specifically, DISD states that the Teachers' exceptions numbered 1, 6, 7, 11, 15, 18, and 19 fail to identify a factual or legal basis for the Teachers' assertion of unripeness. However, the Teachers' exception number 4 to the PFD explains that the claims in their grievance were not ripe until the Scorecards were issued in the fall of 2015 because the violations of law alleged in the grievance arose "from the TEI system as implemented in the Scorecards" and that "any dispute regarding the manner in which the appraisal occurred would have been premature" until then.

         Additionally, DISD complains that none of the Teachers' exceptions "stated with particularity" any legal deficiency in the PFD, and that certain exceptions vaguely allege that statements in the PFD are "in direct contradiction to the school laws of this state, other laws of this state, past case law and commissioner's decision" (exceptions nos. 17 and 24-32) without alerting the Commissioner to the Teachers' complained-of error.

         In exceptions numbered 24 through 32, the Teachers claimed that the Commissioner's stated propositions lacked legal support. To address these exceptions, the Teachers incorporated arguments and authorities previously cited in their briefing. The Teachers' reference to their briefing is general, but it is not, as DISD suggests, the equivalent of a request to incorporate the entire administrative record. Cf. Burke v. Central Educ. Agency, 725 S.W.2d 393, 399 (Tex. App.-1987, writ ref'd n.r.e.) (concluding that motion for rehearing incorporating by reference "the papers and records on file in this cause" was insufficient to obtain judicial review because motion "argue[d] for an adoption of the entire administrative record").

         By contrast, the Teachers' exception number 17-concerning the PFD's rejection of the continuing-violation doctrine as a justification for a late-filed grievance-complains only that, "This statement is in direct contradiction to the school laws of this state, other laws of this state, past case law, and commissioner's decisions." The rest of this exception states only that the "ALJ has erred and the finding should be removed from the decision." Thus, we agree with DISD that this exception fails to state "with particularity" any legal deficiency in the PFD. Because of this deficient exception, the Teachers waived their complaint as to the applicability of the continuing-violation doctrine. See 19 Tex. Admin. Code § 157.1059(d)-(e).

         As to the remainder of the Teachers' exceptions identified here, we disagree with DISD's contentions that the exceptions were conclusory, failed to alert the Commissioner to any factual error in the PFD, and failed to explain adequately any legal deficiency in the PFD to allow for correction by the Commissioner. See id.; see also Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 481 (Tex. 2019) (rejecting form-over-substance approach to application of preservation rules); Thota v. Young, 366 S.W.3d 678, 690 (Tex. 2012) (favoring common-sense application of procedural rules rather than technical application).

         Motion for rehearing of Commissioner's decision preserved error

         The Commissioner contends that the Teachers failed to preserve their complaints for judicial review by filing an inadequate motion for rehearing challenging the Commissioner's decision. Specifically, the Commissioner contends that the Teachers' motion failed to state with particularity the legal basis for their claimed error.

         A motion for rehearing is a statutory prerequisite for appeals from a Commissioner's decision. Tex. Gov't Code § 2001.145(a); 19 Tex. Admin. Code § 157.1061(a) (2016) (Tex. Educ. Agency, Motions for Rehearing); see BFI Waste Systems of North America, Inc. v. Martinez Envtl. Grp., 93 S.W.3d 570, 578 (Tex. App.-Austin 2002, no pet.) (addressing necessity of motions for rehearing in contested cases generally). The purpose of a motion for rehearing is to apprise the agency of the claimed error and provide the agency with an opportunity to correct the error or prepare to defend against it. Suburban Util. Corp. v. Public Util. Comm'n, 652 S.W.2d 358, 365 (Tex. 1983); BFI, 93 S.W.3d at 578. A timely filed motion for rehearing is jurisdictional, but the sufficiency of the motion's content pertains only to preservation of error. BFI, 93 S.W.3d at 578.

         Motions for rehearing must set forth: (1) the particular finding of fact, conclusion of law, ruling, or other agency action that is the basis of the party's complaint; and (2) the legal and factual bases for the complained-of error. Tex. Gov't Code § 2001.146(g); BFI, 93 S.W.3d at 578 (citing Burke, 725 S.W.2d at 397). It is insufficient to set forth these two elements in generalities, for example, by complaining that the findings as a body, or the conclusions as a whole, are not supported by substantial evidence. Scally v. Texas State Bd. of Med. Exam'rs, 351 S.W.3d 434, 445 (Tex. App.-Austin 2011, pet. denied); Burke, 725 S.W.2d at 397. Preservation of error requires both elements to be present in the motion, but neither element requires briefing of the law and the facts. BFI, 93 S.W.3d at 578; Burke, 725 S.W.2d at 397. The standard is one of fair notice. Scally, 351 S.W.3d at 445; BFI, 93 S.W.3d at 578.

         Here, the Commissioner states that he made three "key" conclusions of law, namely that: (1) he lacks jurisdiction over this case under Texas Education Code section 7.057; (2) the Teachers' grievance claims are untimely; and (3) ultimately, the cause should be dismissed for lack of jurisdiction. The Commissioner contends that the Teachers' motion for rehearing provided an inadequate response to these three conclusions by raising only general complaints that those conclusions were "in direct contradiction to the school laws of this state, other laws of this state, past case law, and commissioner's decision in the record" and "contrary to the arguments and authorities cited in Petitioners' briefing."

         However, the Teachers' motion for rehearing provided fair notice of complaints concerning the Commissioner's decision. The Teachers directed their complaints in the motion to the preamble, discussion, and specifically numbered findings and conclusions in the Commissioner's decision. The Teachers responded to the Commissioner's conclusions that he lacked jurisdiction under section 7.057 of the Education Code, that the Teachers' grievance was untimely, and that dismissal was proper, including four pages detailing complaints that:

(1) the Scorecards resulted from a local teacher-appraisal system that violated Texas school laws requiring teacher appraisals to be conducted annually and in accordance with sections 21.351-21.352 of the Education Code;
(2) the grievance was erroneously dismissed as untimely because the Teachers filed it on October 2, 2015, within ten days of receiving their Scorecards; and
(3) dismissal for lack of jurisdiction was not warranted as argued on pages 21-23 of the Teachers' response to DISD's plea to the jurisdiction and motion to dismiss.

         Thus, the Teachers' motion provided the Commissioner with far more specific information than that set forth in the three particular responses that the Commissioner identified. See Scally, 351 S.W.3d at 445. Further, the substance of the Teachers' motion for rehearing is unlike those found inadequate by Texas courts and resulting in waiver. See, e.g., Texas Alcoholic Bev. Comm'n v. Quintana, 225 S.W.3d 200, 204 (Tex. App.-El Paso 2005, pet. denied) (concluding that permit holder who "did not challenge any of the specific factual findings forming the basis of the Commission's decision to cancel her permit and license" waived her complaint); Hamamcy v. Texas State Bd. of Med. Exam'rs, 900 S.W.2d 423, 425 (Tex. App.-Austin 1995, writ denied) (concluding that doctor's motion for rehearing consisting entirely of statement that "the presentation of the discussion at the hearing will be done from the charts of the patients and from the records on file with the Board" constituted no motion for rehearing at all); Burke, 725 S.W.2d at 398-99 (concluding that teacher's motion for rehearing failed to preserve error because it did not point to any particular finding of fact or conclusion of law, did not identify legal principles referred to, and complained of Board's action that was unsupported by record); see also Morgan v. Employees' Ret. Sys. of Tex., 872 S.W.2d 819, 822 (Tex. App.-Austin 1994, no writ) (concluding that party's motion for rehearing "achieve[d] its purpose" of sufficiently informing agency of alleged errors); cf. Scally, 351 S.W.3d at 435 (rejecting agency's complaint as to inadequacy of motion for rehearing).

         Because this motion for rehearing provided the Commissioner with fair notice of the Teachers' complaints, we conclude that the Teachers' motion sufficiently preserved error. See Scally, 351 S.W.3d at 445; BFI, 93 S.W.3d at 578. Having concluded that the Teachers did not waive their complaints-except as to the applicability of the continuing-violation doctrine- we consider the Teachers' appellate issues.

         First issue: Commissioner's determination that he ...

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