### T E X A S C O U R T O F A P P E A L S , T H I R D D I S T R I C T , A T A U S T I N

NO. 03-13-00211- CV

Teladoc, Inc., Appellan t

v.
Texas Medical Board and Nan cy Leshikar, in h er Offi cial Capacity as G eneral Counsel of the Texas Medical Board, Appellees

F ROM TH E DISTRI CT COURT O F TRAVIS CO UNTY, 353 RD JUDICI AL DISTRICT NO. D-1 -GN-1 1-0 0211 5, H ONO RAB LE AMY CLARK MEACH UM, J UDGE P RESIDING

O P I N I O N

We ag ain confr ont the rec urre nt question of whether an “informa l” written ag ency
pronounce ment reg arding law or policy constitutes a “rule” as t h e Administrative Procedur e Act (APA) define s that term. I n this case , a profe ssional reg ulatory ag ency sent a letter to the primary

1 2
statewide a ssociation repr esenting the reg ulated population w arning that cer tain prac tices violated

ag ency rules and would lead to disciplinary action. The ag ency ’s p ro n o unceme nt went bey ond a

mere restate ment of its exi sting formally promulg ated rules or underly ing statutes. We have little difficulty concluding that the substance and nature of this pronounce ment distinguishes it as a “rule ”
under the APA.

The APA is codified in chapte r 2001 of the Texas Gover nment Code. See Tex. Gov’t Code 1 §§ 2001.001–.902.
See id . § 2001.003(6). 2BACK GR OUND
As its name sug g ests, Teladoc , I nc., the appellant, is in the business of providing
health-c are consumers acc ess to a network of phy sicians who dispense medical service s by telephone. The basic fea tures of Teladoc ’s business model are undisputed. Throug h a website, an
individual consumer creat es a p ersonal acc ount, provides acc ess to persona l information and
medical rec ords, and can reque st consultation with a phy sician when the need arises. I n that event,

a responding phy sician will acc ess and revie w the patient’s information and medical rec ords throug h the website, then call the patient by telephone and consult with him or her. Ba sed on the m edica l

rec ords and history , the patient’s re p o rt ed sy mptoms, and other information the phy sician elicits during the consultation, the phy sician dispenses medical advice and, when deeme d appropr iate, can
presc ribe cer

tain medications. A nurse revie ws any resulting presc riptions for allerg ies or potential 3
d r u g in te rac tions befor e submissi on to the patient’s pharma cy
. The consulting phy sician enter s notes
and finding s into the patient’s elec tronic health rec ord, which is immediately made available to the patient and the patient’s primary -ca re phy sician.
Teladoc has opera ted in Texas since 2005, and its clientele curr ently i n cludes

sever al l arg e publi c and private he al t h plans and manag ed-c are org anizations. But in J une 2011, 4

Teladoc has emphasized that its phy sicians do not presc ribe drug s that have a demonstrated 3 risk of abuse , such as na

rcotics, or non-thera

peutic drug s like Viag ra. Teladoc indicates, and the Texas Medica l Board does not dispute, that its customers 4
curr ently include “the entire commerc ially -insured population of Aetna in the State of Texas, as well
as sever al larg e g roup employ ers
. . . and over three hundred smaller employ ers throug h non-Ae tna plans[,]

. . . 800,000 members of the Texas State Medica id manag ed car e p o p ulation,

. . . approximately 25,000 individuals within the Medica re population,

. . . and a number of children in foster c are for the T exas Health and H uman Service s Commi ssion.”
2the Texas Medica l Boa rd (TMB or the Boa

rd)—the administrative ag ency that licenses and reg ulates phy sicians in this state, including those participa ting in Teladoc ’s network —wrote Teladoc a letter 5 taking issue with “seve ral rec ent repr esenta tions by Teladoc reg arding its internet prog ram” that, in
TMB’ s view, indicated that phy sicians would be “jeopa rdizing their respe ctive licenses should they choose to pa

rticipate” in Teladoc ’s networ k.

T h e le tt e r a

tt a c k e d “ T e la doc[] adver

tising materia ls” for indicating that th e p h y s ic ia n s
in its netwo rk ca n provide medical service s “over the telephone without any prior establishment
of a phy sician/patient rela t i onship via a ‘fa ce- to-fac e’ examination,” asser ting that this prac tice
violated “B oard Rule 190.8(1)( L ).” That rule, codified in Title 28 of the Texas Administrative Code

at section 190.8(1)( L ), is inc luded among a non-exclusive list of phy sician acts and omissions that

TMB has deeme d to constitute the “fa il[ ure] t o p ra ct i ce medicine in an acc eptable profe ssional

manner consistent with public health and welfa re” under the Medica l Practice Act. The ref ere nced 6

para g raph (L ) specific ally prohibits phy sicians from presc ribing “any dang erous drug or controlled
substance wit h o ut first establishing a proper profe ssional rela tionship with the patient.” Since 7

See Tex. Occ

. Code § 152.001 (cr eating TMB) ; see g en er a l l y id. §§ 151.001–168.202 5 (Medica l Practice Act). There is no contention that T el adoc itself is prac ticing medicine or is otherwise dir ectly

subject to TMB’ s reg ulatory authority

. 22 Tex. Admin. Code § 190.8(1) (TMB , Violation Guidelines); see Tex. Occ

. Code 6 §§ 153.001 (TMB ’s rulemaking authority ), 164.051(a) (6) (“The board may ref use to admit a person to its examination or ref

use to issue a license to prac tice medicine and may take disciplinary action ag ainst a person if the p er s o n
. . . fails to prac tice medicine in an acc eptable profe ssional manner consistent with public health and we lfare .”).
22 Tex. Admin. C ode § 190.8(1) (L ). 7
3November 2003, and at all times rele vant to this case , subpara g rap h (i ) o f p arag raph (L ) has

presc ribed the r equire ments for c rea ting a “prope r prof

essional re lationship” as follows:

(i) A prope r re lationship, at a minimum require s: (I ) establishing that the person reque sting the medication is in fac t w ho the per son claims to be; (I I ) establishin g a diag nosis throug h the use of acc eptable medical prac tices such as patient history , mental status examination, phy sical examination, and appropriate diag nostic and laboratory testing. An online or telephonic evalua tion by questionnaire is inade quate; (I I I ) discussing w ith the patient the diag nosis a nd the evidenc e for

it, the risks and bene fits of various tre atment options; and (I V) ensuring the availability of the licensee or cover ag e of the patient for appropr iate follow-up c are
. 8

Acc ording to TMB, the require ments set fort h i n (I I )—“Rule 190.8(1)( L )(i)( I I )”—me ant that the
“ac cepta b l e medical prac tices” entailed in “esta blishing a diag nosis” (and, in turn, initiating a

“ p r o p e r ” p h y s ic ia

n - p a ti e n t r e lationship) must alway s include a “‘f ace - to

- f a c e ’ p h y s ic a l e xa

mi n a ti o n
. ”
As TMB would later elabor ate, this construction rested upon two rela ted premises: (1) the “phy sical

e xa mi n a ti o n ” c o n te mp la

te d in Ru le 1 9 0 .8(1)( L )(i)( I I ) entails a “fa ce- to-fac e” examinat io n ; a n d , mo r e
critica lly , (2) the rule’s ref ere nce to “ac cepta

ble medical prac tices s u ch a s p atient history , mental

status examination, phy sical examination, and appropr iate diag nostic and labora tory testing” means that phy sicians must perfor m all four enumer ated pr ocedur es or their equivalent. I n TMB’ s view,

28 Tex. Reg. 10496, 10497 ( 2003) (c odified at 22 Te x . Admin. Code § 190.8(1)(L )(i))

. 8
4th e “ f

a c e - to

- f a c e ” phy sical examination component of these require ments p r e c lu d e d a p h y s ic ia n f r o m making an initial diag nosis by telephone.
TMB’ s letter simil arly criticized Teladoc for p u rp o rt edly adver tising that the telephone consultations it provides are not within the scope of re v i s ed rules g overning
“teleme dicine” that the ag ency promulg ated in 2010. Teleme dicine, simply descr ibed, ref ers to
medica l s e r

v ic e s p r o v id e d o v e r the I nterne t or other “adva nced communication technolog y ” enabling

an off- site phy sici an to see and hear the patient in rea l time. TMB’ s 2010 telemedicine rules, 9
codified in chapte r 174 of title 22 of the Texas Administrative Code, incorporate an ex p l i cit 1 0

conce pt of “fa ce- to-fac e visit,” define d as “[a]n evalua tion perf orme d on a patient wher e the provider
and patient are both at the same phy sical location” unless the patient is located at a medical fac ility qualify ing as an “esta

blished medical site.” When a patient is loc ated at an “esta blished medical 1 1

s i te,” the rules permit a “distant site provider” to use “teleme dicine medical service s
. . . for all patient visits, including initial evalua tions to establish a pro p er phy sician-pa tient rela tionship

See 22 Tex. Admin. Code § 174.2(10) (TMB , De fi n i tions) (def ining “Te lemedicine 9 Medica l Service s” as “[t] he prac tice of medical car e delivery , initiated by a d i stant site provider, who is phy sically located at a si te ot her than the s ite wher e the patient i s located, for the purposes
o f evalua tion, diag nosis, consultation, or trea tment which require s the use of adva n ce d telecommunica tions technolog y that allows t h e d i stant site provider to see and hear the patient in
rea l time”); see also Tex. Gov’t Code § 531.001(8) (def ining same phrase as “a health car e service initiated by a phy sician or provided by a health profe ssional, diag nosis or consul t at i o n b y a phy sician, trea tment, or the tran sfer of medical data that require s the use of advanc ed telecommunica tions technolog y ”).

See 22 Tex. Admin. C ode §§ 174.1–.12 (TMB Teleme dicine rule s). 1 0
See id

. § 174.2(3) (def ining “fa ce- to-fac e visi t ”) ; see also id

. § 174.2(2) (def ining 1 1 “esta blished medical site”)

. 5betwee n a distant site provider and a patient.” Howeve r, when a patient is located s o m ew h er e 1 2
other than an “esta

blished medical site,” a distant site provider may not provide t el em ed i ci ne

m ed i ca l s er v ices without first “see [i ng ] the patient one ti me i n a face -to-fa ce visit ” or rec eiving a

re fer ral from another phy sician who has perf ormed an in-person evalua tion of the patient. T h e 1 3
telemedicine rules additionally include a provision, Rule 174.8, that addre sses the initial cre ation of the phy sician-pa tient relationship in a manner simil ar to Rule 190.8(1) (L )(i):

(a) Evaluation of the Patient. Distant site providers who utiliz e telemedicine medical services must ensure that a pr oper phy sician-pa tient rela tionship is established which at a minimum i ncludes: (1) establishing that the person reque sting the trea tment is in fac t whom he/she c laims to be; (2) establishing a d i agn o s i s t h ro u gh t h e u s e of acc eptable me dical prac tices, including pat i ent history , mental status examination, phy sical examination (unless not war rante d by the patient's m en tal cond i t ion), and appropr iate diag nostic and labora tory testing to establish diag noses, as well as identify u n d er ly ing conditions or contra -indications, or both, to trea tment rec ommended or provided; (3) discussing w ith the pa tient the diag nosis and the evidenc e for it, the risks and bene fits of various tre atment options; and

Id

. § 174.6 (TMB , Teleme d i cine Medica l Service s Provided at an Established 1 2 Medica l Sit e).

See id. § 1 7 4 .7(a) (TMB , Teleme dicine Medica l Service s Provided at Sites other than 1 3 an Established Medic al Site). The same rule additionally require s that any such patients obtain an annual “in-pe rson” evalua tion by a phy sician and that exis ting patients rec eive fac e-to-fac e visits within 72 hours afte r rec eiving telemedicine medical service s relat ed t o n ew s y mptoms. See id

. § 174.7(c) , (e)

. 6(4) ensuring the availability of the distant site provider or cover ag e of the patient for a

ppropriate follow-up ca

re. 1 4

Subparag raph (2) g ener ally corr esponds t o Rule 190.8(1)( L )(i)( I I ), but with an obvious text ual
differ ence —wher eas Rule 190.8(1)( L )(i)( I I ) require s “esta blishing a diag nosis throug h the use of

acc eptable medical prac tices such as patient history , mental status examina t i o n , phy sical examination, and appropr iate diag nostic and labora tory testing,” Rule 174.8(a) (2) re q u i res 1 5

“esta blis h i n g a diag nosis throug h the use of acc eptable medical prac tices, including patient history , mental status examination, phy sical examination

. . . and appropr iate diag nostic and
labora tory

testing.” 1 6
Wh il e a c k n o wledg ing that “phone consults we r e d e le te d f r o m th e [2 0 1 0 te le me d ic in e ]
rule as adopted,” TMB in its lett er insisted—notwiths tanding the text ual differ ence s betwee n

t h e enac tments—that this exclusion had ref lected its position “both initially and thr o u gh o u t
the [rulemaking] proce ss” that the more g ener al Rule 190.8(1)( L )(i)( I I ) had alre ady require d “‘f ace to-fac e’ consults [as] the only appropr iate manner in which to establish a phy sician/patient
rela tionship.” The telemedicine rules had depar t ed fr o m this policy , TMB claimed, only to the

ex tent of “allow[ing] for situations in which th[ e] require d ‘fa ce- to-fac e’ examination co u l d b e

acc omplished throug h the use of the [I ]n terne t.” TMB also emphasized that Teladoc had commented

Id . § 174.8(a) (TMB , Evaluation and Tr eatment of the Patient). 1 4
Id. § 190.8(1)( L )(i)( I I ) (e mphasis added)

. 1 5
Id. § 174.8(a) (2) ( emphasis adde d). 1 6
7in opposition to the t el emedicine rules when proposed, char acte rizing the company as having 1 7

“ ma in ta in [e d ] th r o u g h o u t th e r

u le ma k in g p r o c e s s th a

t ‘fa ce- to-fac e’ examinations wer e not nece ssa r y

to establish a phy sician/patient rela tionship,” and portray ing the ag ency ’s response as a repudia tion of that position not only

with respec t to the telemedicine r ules, but also Rule 190.8(1)(L )(i)( I I ). 1 8

Ba sed on TMB’ s view o f R u l e 190.8(1)( L )(i)( I I ) and the rule’s rela tionship with
the 2010 telemedicine rules, TMB acc used Teladoc of “unconsc ionable” “misrepres en t at i on” in
adver tising or repr esenting that “its proce ss can be conducte d over the telephone without any prior
establishment of a phy sician/patient rela tionship via a ‘fa ce- to-fac e’ examination.” TMB added that “[t] hese statements

. . . if followed by licence d Texas phy sicians, will lead t o disciplinary
action ag ainst the participa ting doctors in the prog ram.” The ag ency also threa tened that “any

repr esenta tion that y ou [Teladoc] make reg arding Teladoc ’s prog ram being i n compliance with

Boa rd rules will be direc tly and firmly ref uted by the Boa

rd” and that “[t] he Boa

rd will take all leg al
steps as are nece ssary should it see continued adver t i s em en t s containing the materia l ref ere nced
above.”
Of final note, the l et ter advised that “[b] y copy here of, the Boa rd is sending this

corr espondenc e to the Texas Medica l Association,” and a copy was indeed transmitted by overnig ht delivery to TMA’s Vice President and Gene ral Counsel. TMA, as TMB acknow ledg es, is the chief

Teladoc or af

filiates evidently

offe r medica l service s over the I nterne t in other states. 1 7
The letter repr esents, for example, that “as Teladoc descr ibed its prac t i ce s befor e the 1 8 Boa rd members sitti ng on the rulemakin g co mmitt ee, Teladoc was told that it was then violating Boa rd rules a nd if it continued in that vein it would continue to be in violation of Boa rd rules.”
8statewide association re p resenting the Texas medical profe ssion, with over 48,000 phy sician and

medical student membe rs. 1 9

I n response to this l etter a nd its im plications for Te ladoc’ s ability to do business in
Texas, the company sued TMB under section 2001.038 of the APA, which authorizes decla ratory

judgme nt claims ag ainst a state ag ency to ch alleng e the “validity ” or “applica bility ” of a “rule .” 2 0
Teladoc contende d that TMB’ s letter—or, more prec isely , the ag ency ’s pronounce ments there in

conce rning the construction and eff ect of R u l e 1 9 0.8(1)( L )(i)( I I )—wa s in itself a “rule ” under
the APA. Be cause TMB unquestionably did not comply with the APA’s n o tice-a nd-comment 2 1 rulemaking require ments befor e promulg ating this new “rule , ” Teladoc pray ed that the
“rule ” be decla

red void unde r APA section 2001.035. I n the alter native, Te ladoc pr ay ed that the 2 2

As if to emphasize t h i s fa ct , o ur oral-a rg ument docket on the day we hear d Teladoc ’s 1 9
a p p e a l also included, by happensta nce, one of the many scope- of-pr actice lawsuits TMA has in it ia te d over the y ear s on behalf of the Texas medical pr ofession.
S ee Tex. Gov’t C ode § 2001.038(a) (“The validity or applicability of a rule .

. . may b e 2 0 deter mined in an action for decla ratory judgme nt if i t i s al l ege d that the rule or its threa tened application interfe res with or impairs, or threa tens to interfe re with or impair a leg al rig ht or privileg e of the plaintiff.”) , (c) (“The state ag ency must be a party to the action.”) ; see a l s o T ex a s De p ’t of Transp. v. Sunset Transp., Inc ., 357 S.W .3d 691, 700 (Tex. App.—Austin 2011, no pet.) (explaining that section 2001.038 waives sovere ign immunit y to the extent of the relief it authoriz es) (citing Texas Logos, L.P. v. Texas Dep’ t of Transp. , 241 S.W .3d 1 0 5 , 123 (Tex. App.—Austin 2007, no pet.)).
See Tex. Gov’t Code § 2001.003(6) (de fining “rule ”).

2 1
See id

. §§ 2001.0225–.034 (rulema king proce dures ), .035 (“A rule is voidable unless a 2 2 state ag ency

adopts it in subst antial compliance with Sections 2001.0225 through 2001.034.” ).
9district court rema nd the “rule ” to TMB, pursuant to APA section 2001.040, to aff ord the ag ency the opportunity

to rea dopt or revise throug h proper APA proce dures. 2 3

T eladoc subsequently soug ht summary judgme nt on its claims. TMB cou n t er ed
with a cross-motion for summary judgme nt challeng ing whether its J une 2011 letter had constituted

a “rule ” under the APA and, in turn, whe t her Teladoc ’s claims had invoked the district court’s jurisd i ct i on via section 2001.038. Concluding that “the J une 16, 2011 letter

. . . is not an 2 4

See id

. § 2001.040 (“I f a court fin d s t h at an ag ency has not substantially complied wit h 2 3
one or more of the proce dural require ments of Sections 2001.0225 throug h 2001.034, the court may rema nd the rule, or a portion of the rule, to the ag ency and, if it does so rema nd, shall provide a rea sonable time for

the ag ency

to either re vise or re adopt throug h established proc edure .”).

I n addition to the decla

ratory relief it soug ht, Teladoc also asser ted claims for temporar

y and perma

nent injunctive relief to restra in the “rule ’s” enfor ceme nt. The district court g rante d a temporar y restra ining order , which was ultimately extended throug h judgme nt by ag ree ment. On appea l, howeve r, Teladoc does not appea r to complain of the district court’s dismiss al of its claims for injunctive r elief.

Teladoc also named as a defe ndant the TMB office r who had written the J une 2011 letter
o n t h e age n cy ’s behalf

—g ener al counsel Nanc y L eshikar, in her officia l capa city

. At least with respe ct to Teladoc ’s clai m for decla ratory relief under APA section 2001.038, this amounts to a duplicative but harmless pleading of the same claim for relief ag ainst the same defe ndant, TMB. See Texas Dep’ t of State Health Servs. v. Balquinta , 429 S.W .3d 726, 750 (Tex. App.—Austin 2014, pet. fi l ed ) (s u gg esting that wher e sovereig n immunit y has been waived by APA section 2001.038
so as to permit suit ag ainst an ag ency , it is of no substantive conseque nce that claimant also named ag ency officia l as a defe ndant to that claim) (citing Texas A & M Univ. Sys. v. Koseoglu , 233 S.W .3d 835, 844 (Tex. 2007); cf. Texas State Bd. of Pharmacy v. W itcher , __S.W .3d__, No. 03-12-00560- CV, 2014 WL 5654255, at *20 (Tex. App.—Austin Oct. 31, 2014, pet. filed) (re asoning that wher e ag ency ’s immunit y from suit was waived by section 2001.171 of the APA, immunit y was likewise waived as to ag ency office rs sued in their officia l capa cities) (citing Koseoglu , 233 S.W .3d at 844). For convenie nce, how ever , we r efe r to the re levant def endant solely

as TMB

. See Slay v. Texas Comm’n on Envtl. Quality , 351 S

. W

. 3 d 5 3 2, 544–45 2 4 (Tex. App.—Austin 2011, pet. denied) (“F rom the fac e of the statute, a challeng ed ag ency action that constitutes a ‘rule’ is a

mong the fac ts ( more prec isely , a mix ed question of law and fac t) that must exis t in order for a claimant to succe ssf u l l y invoke, via section 2001.038, a trial court’s subjectmatter jurisdiction over the claim for relief authorized by the statute. I f there is no ‘rule’ as define d
10unpublished ‘rule’ within the meaning of the [AP A],” the district court rende red judgme nt deny ing

Teladoc ’s motion and g ranting TMB’ s cross-motion, in eff ect sustaining the ag ency ’s jurisdictional challeng e. This appe al ensue d.

ANALYSIS

Teladoc bring s two issues on appea l. I n th e first, Teladoc arg ues that TMB’ s
J une 2011 letter constitut es a “rule ” under t h e AP A as a matter of l aw, such that the di strict court

err ed in deny ing Teladoc ’s summary -judg ment motion and g ranting TMB’ s. Teladoc further pray s
that we rende r judgme nt ag ainst TMB decla ring the “rule ” invalid or, alterna tively , rema nding it to
TMB under APA section 2001.040. I n its second issue, urg ed in the alterna tive, Teladoc contends
that even if

it is not entitled to summary judgme nt, TMB ha s likewise fa iled to me et its summ ary judgme n t b u rd en, such that we should reve rse the district court’s judgme nt and rema nd for
further proce eding s.

Stand ard of review

We revie w the district court’s summary -judg ment ruli n g s de novo. Summary 2 5 judgme nt is proper whe n there are no disputed issues of materia l f act and the movant is e ntitled to judgme nt as a matter of law. Where, as here , b o t h sides move for summary judgme nt and the 2 6

by the APA being challen ged, in other words, the claimant cannot obtain the decla ratory relief the statute authorizes ag ainst the State, its ag encie s, or it s ag ents, beca use sovere ign immunit y wo u l d b ar the cause of action.”) (citing Combs v. City of W ebster , 311 S.W .3d 85, 100

– 0 1 (Tex. App.—Austin 2009, pet. denied))

.

Valence Operating Co. v. Dorsett , 164 S.W .3d 656, 661 (Tex. 2005). 2 5
Tex. R. C iv. P. 166a(c); Shell Oil Co. v. Khan , 138 S.W .3d 288, 291 (Tex. 2004). 2 6
11trial court g rants one motion and denies the other, we revie w the summary -judg men t evidenc e

prese nted by both sides, d et er mine all questions prese nted, and rende r the judgme nt that the
district court should have r ender ed. 2 7

I n this case , the pivotal summary -judg ment issue turns on application of statutes and
rules to undisputed fac ts—whether TMB’s J u n e 2011 letter, whose contents are in the record and undisputed, qualifies as a “rule ” as the APA has d ef i n ed t h at t er m
. I f the letter is not a “rule ,” 2 8
Teladoc failed to invoke the district court’s jurisdiction th ro u gh APA section 2001.038. I f, on 2 9
the other hand, the letter is a “rule ,” Teladoc both pr operly invoked the district c ourt’s jurisdiction throug h s ec t i o n 2 0 01.038 and established its entitlement to summary judgme nt on its decla ratory
claim under that statute, as it is undisp u t ed t h at TMB did not promulg ate the letter in acc ordanc e
with the APA’s notice- and-c omment rulemaking require ments. 3 0

Construction of both statutes and administrative rules prese nts questions of law that
we review de novo under traditional principles of statutory construction. Ou r primary objective 3 1

Texas W o r ke r s ’ C omp. Comm’n v. Patient Advoc ates of Tex ., 136 S.W .3d 643, 648 2 7 (Tex. 2004); FM Props. Ope rating Co. v. Ci ty of Austin , 22 S.W .3d 868, 872 (Tex. 2000).
Teladoc also emphasizes summary -judg ment evidenc e of what it char acte rizes as TMB’ s 2 8 prior expli cit or tacit ag ree ment that initial phy sician-pa tient consultations by telephone satisfy Rule 190.8(1)( L )(i)( I I ). Be cause we conclude the contents of the letter itself conclusively establish that it is a “rule,” we ne ed not addr ess this additional evidence or its possible impl ications. See, e .g. , Slay , 351 S.W .3d at 544–45, 548. 2 9 See, e.g. , El Paso Ho s p

. Di st. v. Texas Health & Human Servs. Comm’n , 247 S.W .3d 3 0 7 0 9 , 7 1 5 (Tex

. 2008); Combs v. Entertainment Publ’ns, Inc ., 292 S.W .3d 712, 723–24 (Tex. App.—Austin 2009, no pet.).
See TGS-NOPEC Geophy sical Co. v. Combs , 340 S.W .3d 432, 438 (Tex. 2011) (holding 3 1 that administrative rules are interpre ted under principles of statutory construction); City of Rock wall
12is to asce rtain and g ive eff ect to the draf

ters’ intent. We deter

mine that intent from the plain 3 2 meaning of the words chosen when i t i s p o s s i b l e to do so, using any definitions provided. We 3 3
consider the statutes or rules as a whole rathe r than their isolated provisions. We presume that the 3 4

enac tment’s lang uag e wa s chosen with ca re, w ith each w ord included ( or omitted) purposef ully

. 3 5

A rule?
The APA de fines a “ rule” as follows:

“Rule”: (A) means a

state ag ency

statement of g ener al applica bility that: (i) implements, interprets, or presc ribes law or policy ; or (ii) descr ibes the proce dure or prac tice requ i re ments of a state ag ency ; (B ) includes the a mendment or re peal of a prior r ule; and

v. Hu g h es , 2 46 S.W .3d 621, 625 (Tex. 2008) (“Statutory construction is a leg al question we revie w de novo.” ).

See TGS-NOPEC , 340 S.W .3d at 439 (citing Tex. Gov’t Code § 312.005; Texas Dep’ t of 3 2 Protective & Regulatory Serv s. v. Me ga Child C

are, Inc

. , 145 S.W .3d 170, 176 (Tex. 2004)).
See id. (citing Tex. Gov’t Code § 311.011(b)). 3 3
See id. (citing Texas Dep’ t of Transp. v. City of Sunset Valley , 146 S.W .3d 637, 642 3 4 (Tex. 2004)).

See id. (citing In re M

.N. , 262 S.W .3d 799, 802 (Tex. 2008)). 3 5
13(C) does not include a statement reg arding only the internal manag em ent or org anization of a state ag ency and not aff ecting private r ights or pr ocedur es. 3 6

Teladoc asser

ts that TMB’ s letter satisfies eac h element of this definition

. TMB does not dispute
that its letter is a “state ag ency statement,” as require d by (A), and it plainly is—it purports to speak
for the Boa

rd, convey

ing its officia l position, and there is no contention that the writer, the ag ency ’s

g ener al counsel, was acting with any thing less than the Boa

rd’s full au t h o ri t y
. Simi larly , the 3 7

statement obviously “implements, interpre ts, or presc ribes law or pol i cy , ” re flec ting the Boa rd’s
construction and application of Rule 190.8(1)( L )(i)( I I ) and the underly ing statu t o ry conce pt of

prac ticing medicine “in an acc eptable profe ssional manner consistent with public heal th and
welfa re.” The stateme nt likewise implements a broa der policy judgme nt by the B oard, r efle cted 3 8 expli citly in the 2010 telemedicine rules, that the cre ation of a new phy sician-pa tient rela tionship
should g ener ally entail an in-person phy sical examination. The statem en t wo u l d also impact 3 9

Tex. Gov’t Code § 2001.003(6). 3 6
See E n t ert ainment Publ ’ns , 292 S.W .3d at 718, 721–22 (letter signe d by the “Assist ant 3 7 Direc tor of Tax Administration” of the Comptroller’s office convey ing Comptroller’s construction
o f tax laws was a “rule ” under the APA; noting that “the Comptroller does not contend that t h e signe r of the le tter wa s acting with any thing less than he r full authority ”).
See id . at 721 (“ There is no question” t hat l etters convey ing Compt roller’ s construction 3 8 of tax laws are “stateme nts implementing, interpre t[ ing], o r presc ribing law or policy ,” as they “interpr et[ed] the tax code to mean that [brochure- fundra ising] firms are , for purposes of collecting and re mitti ng sales tax, alway s the ‘seller s’ of the ta x able items.”)

.

See El Paso Hosp

. Di s t

. , 2 4 7 S.W .3d at 714 (HHSC’s “F ebrua ry 28 cutoff” used in 3 9 calc ulating Medica id reimb ursement rate s “implements law” and “implements policy ”); W itcher , 2014 WL 5654255, at *7 (“The Boa rd’s disciplinary order

. . . leave [] s l i t t l e d o ubt” that Boa rd’s de fac to “re ciproc al-sanc tions” require ment “is a statement implementing, interpre ting, or presc ribing the ag ency ’s policy . . . .”).
14private rig hts and not mere ly intern al agency manag ement or org anization, there by neg ating the

exception in (C)—TMB unambig uously and definitively asser ts that a phy sician’s provision of

p re s criptions or other medical service s “over the telephone without any prior establishment o f a phy sician/patient rela tionship via a ‘fa ce- to-fac e’ examination” violates Rule 190.8(1)( L )(i)( I I ) and will prompt lega l action that includes “ disciplinary action ag ainst the participa ting doc tors.” 4 0

TMB joins issue, howeve r, as to whether the letter repr esents an ag ency statement of “g ener al applicabili t y
. ” Ag ency statements of “g ener al applicability ” ref er to those “that aff

ect
the interest of the public at l arge such that they cannot be g iven the eff ect of law without public comment,” as contra sted with statements “made in deter mining individu al rig hts.” I ts letter 4 1
does not meet this require ment, TMB insists , beca use it was “dire cted only at Teladoc .” That

narr ow cha

rac terization is conclusively ref uted by the contents of the letter itself. Whil e the letter

cer tainly seeks in part to influence or impede Telad o c’ s T ex as opera tions, it also pronounce s a
rule construction that impacts all phy sicians prac ticing in this state—ac companied by a threa t of “disciplinary action” ag ainst any phy sicians who would dare to deviate from the Boa rd’s view. The

4 2

See W itcher , 2014 WL 5654255, at *7 (noting that Boa rd’s order was essentially statement 4 0 t hat it was “duty bound” to impose disciplinary action based on interpre tation); Entertainm en t Publ’ns, In c ., 292 S.W .3d at 722 (empha siz ing that leg al interpre tation in Comptroller’s letters would bind ag ency employ ees and “unambig uously express[ed] an intent to apply this interpre tation

. . . in all future case s” involving simil ar fac ts); see also W itcher , 2 0 1 4 W L 5 6 5 4 255, at *10 (distinguishing Boa

rd of Pharmac y ’s re ciprocal-sanc tions “rule ” from the non-binding evalua tive sanctions g uidelines addre ssed in Slay , 351 S.W .3d at 537–42, 546–48).

See Entertainment P u b l ’ns, Inc ., 292 S.W .3d at 721 (quoting El Paso Hosp. Dist ., 4 1 247 S.W .3d at 714; Railroad Comm’n v. W BD Oil & Gas Co. , 104 S.W .3d 69, 79 (Tex. 2003)).
See id

. at 721–22 (Comptroller’s letters reg arding tax trea tment of brochur e-f undraising 4 2 firms “apply not only to Entertainment and the tax-ex empt g roups with which it conducts business, but to all brochure -fundr aising firms eng ag ing in business a cross the state .”).
15letter is also pointedly copied to TMA, the chief statewide profe ssional org anization repr esenting

Texas phy sicians and medical students. I n short, the letter and the manner of its dissemination are plainly calc ulated to place the reg ulated public—Texas phy sicians—on notice of the ag ency ’s leg al

pronounce ment and the a ccompa ny ing thr eat of

adver se conse quence s if they fail to comply

. 4 3

A potentially more complicated question on which the parties diverg e is whether

t h e p ronounce ments in the letter should be considere d to have any leg al eff ect or signif

i ca n ce independe nt of what is alre ady contained in Rule 190.8(1)( L )(i)( I I ). Subpart (B ) of the APA’s
definition states that a “rule ” “includes the amendment or repe al of a prior rule.” Whil e “includes” 4 4
denotes that a “rule ” may include ag ency statements bey ond those that amend or repe al an exis ting rule, “this indicia of a ‘rule,’ ” as we have previously observe d, “is nonetheless illust rative of the
ty pes of ag ency actions that would [be consid er ed t o ] have leg al eff ect on private persons, as

See id. at 722 (“[W] hile the interpre tati on [of Tax Code in letters] would bind ag ency 4 3
em p l o y ee s t o ap ply the rule in analy zing the tax responsibilities to parties to these sales, it is not direc ted ‘only ’ t o the ‘interna l manag ement or or g anization of a state a g ency .’ Rather , it is aimed at placing the reg ulated public on notice of the Comptroller’s prospec tive, blanket application of [t he] tax code.” ) (inter

nal citation omitted); see also id . (conc luding that the ma nifested “intent of the ag ency , the presc riptive nature of the [l etters], and the context in which the ag ency statement was made” distinguished them as a “rule ”) (quoting Texas Educ. Agenc y v. Leeper , 893 S.W .2d 432, 443 (Tex. 1994)).
Simi larly misplaced is TMB’ s relianc e on Beac on National Insurance Co. v. Montemay or , wh i ch reje cted an attempted APA section 2001.038 challeng e to an asser ted “rule ” consisting “only [of] a series of letters betwee n Be acon and TDI and a proposed consent decr ee submi tted to Be acon by TDI .” 86 S.W .3d 260, 268–69 (Tex. App.—Austin 2002, no pet.). The Beac on Court emphasize d that “the corr espondenc e from TDI about which Be acon complains is direc ted at Be acon only ” and did not “equate to a specific ag ency rule, set of require ments, or specific policy .” Id . 268–69. None of

that is true of TMB ’s letter he re. Tex. Gov’t Code § 2001.003(6)(B ). 4 4
16contemplated by [(C)] .” Consequently , as we explained in Sunset Transport ation , “an i n fo rm al 4 5

ag ency statement that does no more than mere ly restate its own formally promulgat ed rules
would not in itself be a ‘rule,’ ”addi n g t h at t h i s proposition is perha ps one of the few that can be
d i s ce rned with “re lative cer tainty ” in this notoriously muddled corne r of the law. But in t h e 4 6
afte rmath of the Texas Supreme Court’s El Paso Hospital decision, i t is equally clea r that an
ag ency ’s “interpr etations” or “applica tions” of exis ting formally promulg ated rules will themselves
be held to be “r

ules” whe re the y

have the eff

ect of amending the exist ing r

ules, or of cre ating new rules, and the other require ments of the APA’s “ rule” definition are met. Simi larly , the bare fac t 4 7
that an ag ency statement might be said to “interpr et” or eff ectua te only standards alre ady presc ribed
in exis ting statutes or rules, as opposed to cre ating new standards, cannot cate g orica lly mean that the

statem en t l ac k s t h e sort of leg al eff ect on private persons that distinguishes a “rule ,” as the same
would be true of any “ag ency statement of g ener al applicability that

. . . interpre ts

. . . law,” and the

L eg islature has e x plicitly included such statements within the Tex as AP A’s definition of “r ule.” 4 8

Sunset Transp. , 357 S.W .3d at 704. 4 5
Id

. at 703; accord Texas Dep’ t of Pub. Sa f et y v. Salazar , 304 S.W .3d 896, 904 4 6 (Tex. App.—Austin 2009, no pet.) ( D PS in te r n a l me mo r a

n dum presc ribing that drivers’ licenses will include statement of bear er’ s immigra tion status “mer ely reiter at es ” rule alre ady imposing that require ment).

See El Paso Hosp. Dist ., 247 S.W .3d at 714–15 (holding ag ency statement to be a “rule ” 4 7 despite age ncy ’s i nsistence that it “is n o t a rule itself, but rathe r i ts interpre tation of t he [ exis ting] rule” ). Acc ord W

itcher , 2014 WL 5654255, at *9–10.
See Tex. Gov’t Code § 2001.003(6)(A); see also Entertainment Publ’ns , 292 S.W .3d 4 8 at 723 n.6 (ac knowledgi n g t h at the Court’s analy sis rea ched the same conclusion as would apply ing Professor Ron Be al’s analy sis to identify an “i n t er p retive rule” ) (citing Ron Be al, A Miry Bog Part II: UDJA and APA Dec laratory Judgme nt Actions and Agenc y Statements Made Outside a Contested Case Hearing Regarding the Meaning of the Law , 59 Ba y lor L

. Rev. 267,
17The “ag ency statement” held to be a “rule ” in El Paso Hospital was HHSC’s

“interpr etation” of its formally promulg ated rules g overning calc ulation of Medica id reimburse ment

rate s to divine a temporal cut-off for the data set that was not found in the text of the exis ting rules. 4 9

A m ore rec ent example of an ag ency rule “interpr etation” held to itself constitute a “r u l e” i s
found in this Court’s W

itcher decision, in which the Boa rd of Pharmac y had applied a multi-factor
sanctions rule in a manner that eff ectively made only one of the fac tors singula rly dispositi ve. At 5 0
the opposite end of the spectrum is the situation we addre ssed in Sunset Transport ation , wher e the

asser ted “rule ”—an informational “noti ce ” issued by the Texas Depa rtment of Transpor

tation

conce rni n g re gulatory chang es impacting cer tain interstate motor car

riers —was substantively 5 1
identical to the ag ency ’s formally promulg ated rules. We further observe d that “distinguishing a 5 2

270 (20 07); Ron Be al, The APA and Rulemak ing: Lack of Uniformity W ithin a Uniform System , 56 Ba y lor L . Rev. 1, 29–46 (2004))

. As Professor B eal f urther note s, the Texas APA differ s from its fede ral counter

part in making “rule s” that “interpr et” law or policy —the so-ca lled “interpr etive rules”—s u b

ject to notice-a

nd-comment rulemaking require ments. Ronald L

. Be al, Texas Administrati ve P ractice &Procedure , § 2.3.4 (2014) ( citing 5 U .S.C. § 553(b)(3)(a )).
See E l Paso Hosp. Dist. , 247 S.W .3d at 714–15. 4 9
See W itcher , 2014 WL 5654255, at *10. 5 0
See Sunse t Transp ., 357 S.W .3d at 700–01. 5 1
See id

. at 704. The por tions of the notice at issue consisted of (1) a statement that “[a]ll 5 2 motor car riers must maintain active insurance filing with Tx DOT at all times;” and (2) a statement that motor car

riers whose state reg istrations have been revoke d “a re require d to re- reg ister and submit applicable fee s.” The first challeng ed statement, we observe d, “tra cks Tx DOT’s rules” requiring motor car

riers to “file and maintain proof of automobile liability insurance for all vehicles require d to be reg istered.” Id

. (quoting 43 Tex. Admin. Code § 218.16(e) (1)( A) ). The second challeng ed statement, we conclude d, “tra cks Tx DOT’s rules providing that ‘[i] f a motor car rier that has reg istered [under the statute requiring it] does not maintain continuous motor car rier reg istration
18mere restate ment of a formally promulg ated rule fro m a statement that is itself a ‘rule,” was

“straig htforwa

rd” on the reco rd prese nted there , but “mig ht prove more elusive in other
circ umstances.” 5 3

The parties urg e diametrically opposing views as t o wh er e TMB’ s letter li es along
this continuum. Teladoc arg ues that the “construc tion” of Rule 190.8(1)( L )(i)( I I ) pro n o u n ce d i n
TMB’ s letter amounts to an amendme nt of that formally promulg ated rule, simil ar to the temporal
cut-off in El Paso Hospital

. I t rea sons that Rule 190.8(1)( L )(i)( I I )’s require ment of “.

. . acc eptable
medical prac tices such as patient history , mental status ex am i n at ion, phy sical examination, and

appropr iate diag nostic and labora tory testing” denotes a non-exclusive list of illust rative examples
of “ac cepta

ble medical prac tices,” emphasizing dictionary definitions to that eff ect. Consequently , 5 4
Telad o c u r g e s , Ru le 1 9 0

. 8 ( 1 ) ( L ) ( i) ( I I ) contemplates that a “phy sical examination” (whe ther “fa ce- tofac e” or throug h some other means) is m er el y o n e ty pe of “ac cepta

ble medical proce dure” throug h which a phy sician might permissibly make an i n i t i al d i agnosi s in a g iven case consistent
with the standard of car e. I n pronouncing that a phy sical examination—and, indeed, eac h of the

under [t he s t at u t e], the motor car rier must file an application under [t he statute] to opera te on public streets and highw ay s in this state.” Id

. (citing 43 Tex. Admin. Code § 218.14(c) and rela ted rule g overning

reg istration require ments and fe es, § 218.13).
Id

. 5 3 See, e.g. , The American Heritage Dictionary of the English Language 1740 (5th ed. 2011) 5 4 (def ining “such” as “[o] f this kind” and “[o] f a kind specifie d or implied,” and descr ibing the idiom “such as” to mean “[f]or example”); see also Martinez v. Harris Cnty. , 808 S.W .2d 257, 259 (Tex. App.—Houston [1st Dist.] 1991, writ denied) (holding that list of activities afte r “such as” was illust rative only and not exclusive); Board of Adjustment v. Levinson , 244 S.W .2d 281, 282–283 (Tex. Civ. App.—San Antonio 1951, no writ) (“The sy nony ms of ‘such as,’ are alike, simil ar, of the like kind; ‘such’ repr esenting the object as alre ady particula rized in terms which are not mentioned, being a desc riptive and re lative word, r efe rring to the specific article s mentioned.”).
19other examples of “ac cepta ble medical proce dures” mentioned in Rule 190.8(1)( L )(i)( I I ) or their equivalent—a

re all required in eve ry case , TMB’ s letter, in Teladoc ’s view, depar ts from that rule’s unambig uous tex t to an extent as to effe ctively rew rite it.

I n contra st, TMB insists that its letter mere ly “re states” Rule 190.8(1)( L )(i)( I I ), emphasizing two text ual fea tures of that enac tment. First, pointing to the conjunction “and” within
the rule’s enumer atio n o f “.

. . acc eptable medical prac tices such as patient history , mental

status examination, phy sical examination, and appropr iate diag nostic and l ab oratory testing,”

TMB urg es that “such as
. . . ” m u s t re fe r t o all four of the cited proce dures collective ly as
the exemplar of “ac cepta

ble medical prac tices.” Second, TMB insists that the concluding sentenc e
in Rule 190.8(1)( L )(i)( I I )—“A n online or tel ephonic evalua tion by questionnaire is inadequa te”—une quivocally bars phy sicians from rely ing only on a t elephone consultation
when establishing a phy sician-pa tient rela tionship. Teladoc counter s that in the cont ex t of Rule 190.8(1)(L )(i)( I I )’s use of “and” following “such as,” “and” is me rely the equivale nt of “or,”

as su gges t ed by Webster’s use of the following example to illust rate the definition of “such
as”—“ course fish such as car p, catf ish, and t h e l i k e. ” Were TMB’ s view of the rule corr ect, 5 5
Teladoc sug g ests, it would imply that “cour se fish such a s . . . ” in the Webster’s ill ustration must
refer to a confla tion of “ca rp, catf ish, and the like” that is unknown to nature , a nonsensi ca l
construction. As for Rule 190.8(1)( L )(i)( I I )’s last sentenc e, Teladoc acc uses TMB of rew riting the
rule ag ain by ignor ing the modifier “.

. . online or telephonic evalua tion by questionnaire

. . .” “B y questionnaire,” Teladoc observe s, denotes the use of a script or finite list of questions that are asked

W ebster’s Third New Int’l Dictionary 2283 (2002) ( defining “such” ). 5 5
20without reg ard to the person being questioned. Evaluati o n o r consultation without the use of a 5 6 questionnaire—suc h as the sorts of open-e nded questions that a doctor in sear ch of a diag nosis might ask, whe ther in per son or over the phone—a

re not prohibited, Te ladoc ur g es.
TMB also insists that Rule 190.8(1)( L )(i)( I I ) must be rea d “in context” wi t h i t s
2010 telemedicine rules. By this, TMB means that the two enac tments must be construed to impose

para llel require ments of a “fa ce- to-fac e” phy sical examinati o n as p ar t of a phy sician’s initial
evalua tion of a new patient. Were it otherwise, TMB rea sons, phy sicians could “eva de” the fac e-tofac e phy sical ex amination require ments imposed by the t elemedic ine rules “simply by picki n g u p

t h e telephone and calling the patient.” Teladoc replies that if the 2010 telemedicine rules have 5 7

any bear ing on the meaning of the 2003-ena cted Rule 190.8(1)( L )(i)( I I ), it is only to illust rate stark

text ual differ ence s betwee n the two rules, most notably the contra st betwee n Rule 174.8’s ref ere nce

to “

. . . acc eptable medical prac tices, including patient history , mental status examination, phy sical

See, e.g. , American Heritag e at 1 4 4 4 (def ining “questionnaire” as “[ a] form containing 5 6
a set of questions, espec ially one addre ssed to a statistically signific ant number of subjects as a way of g ather ing inf

ormation for a

survey ”).
To simil ar eff

ect, citing its response s to a comment from Teladoc reg arding the proposed 5 7 2010 te le me dicine rules, TMB emphasizes an excerpt in which it descr ibed Rule 174.8 as “consistent with and mirror[ing] the lang uag e of 22 TAC § 1 9 0

. 8 (1 )( L ).” 35 Tex. Reg

. 9085, 9090 (2010) (comment to adopted rule 22 Tex. Admin. Code § 174.8). This statement responde d to a comment conce rning a require ment within Rule 174.8 reg arding follow-up car e and, in context, would appe ar t o re fe r solely to that fea ture of the two enac tments, not the broade r corr elation TMB insinuates. See id

. Reg ardle ss, TMB’ s char acte rization of the rela tionship betwee n the telemedicine rules and the pree x isting Rule 190.8(1)( L )(i)( I I ) would be no more authoritative rega rd i n g the latter provision’s meaning than the simil ar ex-post asser tions contained in its J une 2011 letter. Cf. Entertainment Publ’ns , 292 S.W .3d a t 7 1 7

– 1 8 ( n o ti n g Comptroller’s Offic e’s attempt to portray new tax code interpre tation as one it “ha s consistently held”)

. 21examination

. . . and appropr iate diag nostic and labor at o ry testing” as compar ed to 5 8
Rule 190.8(1)( L )(i)( I I )’s “.

. . acc eptable medical prac tices such as patient his t o ry , m ental status examination, phy sical examination, and appropr iate diag nostic and labora tory testing.” 5 9

“I ncluding ,” Teladoc urg es, is a term of enlar g ement that encompa sses all that follows, in contra st 6 0

to the list of examples denoted by “such as.” Such text ual distinctions, as Teladoc emphasizes, must be g iven ef

fec t when construing Rule 190.8(1)(L )(i)( I I ). 6 1

At bottom, Tela d oc arg ues, TMB’ s letter amounts to a proce durally invalid
amendment to confor

m Rule 190.8(1)( L )(i)( I I ) to Rule 174.8 mere ly by decla ring that the

two text ually contra sting provisions actua lly mean the same thing. I n that reg ard, Teladoc also emphasizes that when promulg ating the curr ent version of Rule 174.8 ref err ing to “

. . . acc eptable
medical prac tices, including patient history , mental status examination, phy sical examination

. . . a n d

appropr iate diag nostic and laboratory testing” in 2010, TMB a ctually repla ced a prior ver sion that
had contained lang uag e para llel to Rule 190.8(1)( L )(i)( I I ) and ref err ing to “

. . . acc eptable medical

prac t i ces such as patient history , mental status examination, and appropr iate diag nostic and

22 Tex. Admin. C ode § 174.8(a )(2) (empha sis added). 5 8
Id . § 190.8(1)( L )(i)( I I ) (e mphasis added)

. 5 9
See Tex. Gov’t Code § 311.005(13) (“‘ I ncludes’ and ‘including ’ are terms of enlar g ement 6 0 and not of limit ation or exclusive enumer ation, and use of the terms does not c rea te a presumption that components not expressed ar e excluded.”)

.

See Railroad Comm’n v. Texas Citi zens for a Safe Fut u r e & Clean W ater , 336 S.W .3d 6 1 6 1 9 , 6 2 8 (Tex. 2011) (“When the l eg islature uses a word or phrase i n one portion of a st at u t e b u t excludes it from another , the term should not be implied wher e it has been ex cl u d ed.”) ; see also TGS-NOPEC , 340 S.W .3d at 439 (we presume that the enac tment’s lang uag e was chosen with car e, with eac h word include d (or omitted) purpose fully ).
22labora tory testing.” This history , Teladoc contends, betra y s not only TMB’ s understanding of the 6 2 signific ant differ ence in the meaning of “including ” versus “such as,” but its awa rene ss that a chang e
betwee n the two must proper ly be achie ved through t he APA’s notice-a nd-comment rulemaking

proce sses and not by

the nake d fiat it relies on he re.
We ag ree with Teladoc that TMB’ s pronounce ments in its J une 2011 l et t er ar e

tantamount to amendments to the exis ting text of Rule 190.8(1)( L )(i)( I I ), effec t i vely substitut ing “including ” for “such as,” thereby confor ming it to the 2010 telemedicine rules. Simi larl y , t o t he

extent the pronounce ment also rests upon Rule 190.8(1)( L )(i)( I I )’s last sentenc e, TMB’ s l etter
eff ectively deleted the modify ing p h r a s e “by questionnaire.” TMB’ s pronounce ments hardly “tra ck”
Rule 190.8(1)( L )(i)( I I ) in the manner of the Tx DOT notice in Sunset Transport ation —rathe r, they depar t from and e ffe ctively

chang e that text. 6 3

I n contending otherwise, TMB ultimately insists that even if Rule 190.8(1)( L )(i)( I I )
fails to unambig uously support its “interpr etation,” the letter is at least consistent with a rea sonable interpre tation to which that ambig uous rule would be susceptible and would be acc orded defe renc e
under the principles that g overn judicial revi ew o f ag ency rule constructions. But even if we 6 4

assume TMB’ s pronounce ment could somehow be rec onciled with Rule 190.8(1)( L )(i)( I I )’s text ,

S ee 35 Tex. Reg

. 9085 (2010) (codifie d at 22 Tex. Admin. Code § 174.8) (propose d 6 2 Apr. 30, 2010); 29 Tex. R eg. 6 088, 6089 (codifie d at 22 Tex. Admin. Code § 174.4 (Use of the I nterne t in Medica l Practice ) (propose d Apr. 23, 20 0 4 ), repeale d 35 Tex. Reg

. 9085 (2010) (empha sis added)

. An ear lier version of the same rule, promulg ated in 2003, had also contained the
same “such as” lang uag e. See 28 Tex. Reg

. 3325 (2003) (codifie d at 22 Tex. Admin. Code § 174.17 (Use of the I nterne t in Medical Prac tice), repeale d 29 Tex. Reg. 6088 ( 2004). Cf. Sunset Tr ansp ., Inc ., 357 S.W .3d at 704; Salazar , 304 S.W .3d at 904. 6 3 See, e .g. , TGS-NOPEC , 340 S.W .3d at 438. 6 4
23as the ag ency insists , the letter would still have the eff ect of amending the rule so as to adopt one of
the alt er n at i ve rea sonable constructions to which the curr ent text would be susceptible while reje cting another . To that extent, at least, the pronounc ement would have a leg al eff ect on private parties bey ond that ac h i ev ed t h rough the text of Rule 190.8(1)( L )(i)( I I ) alone. To hold that the

pronounce ment has no such eff ect beca use it “interpr ets” or “applies” Rule 190.8(1)( L )( i )( I I ) to
resolve an ambig uity would be, as previously sug g ested, logic ally inconsistent with the L eg islature’s expli cit rec o gnition that a “rule ” under the APA includes an “ag ency statement of g ener al applicability

that . . . interpre ts . . . law.” 6 5

See Tex. Gov’t Code § 2001.003(6)( A). T o the extent Texas Mutual Insurance Co. 6 5
v. Vista Community Medic al Center Hos p i t a l , 275 S.W .3d 538 (Tex. App.—Austin 2008, pet. denied) , could be construed as holding to the contra ry , we conclude it is not controlling

. Vista
conce rned disputes arising under a formal rule promulg ated by the Division of Workers’ Compensation that had imposed a “stop-lo s s ” l i m itation on reimburse ment pay ments made to hospitals. After administrative law judge s (AL J s) at the State Offic e of Administrative Hea ring s (SOAH) rea ched diverg ent conclusions reg arding the prope r co n struction of the stop-loss rule in deciding medical- reimburse ment dis p u te s , th e d ir e c to r o f SO A H ’ s me dical-r eview division prepa red
a one-pa g e memorandum advocating what the direc tor viewed as the proper construction of the rule, which SOAH AL J s followed for a period there afte r. See id

. at 545–46. I n rele vant part, this Court held that the memorandum was not itself a “rule ” void for failure to comply with APA rulemaking req u i re m en t s
. See id

. at 555–56. The Court rea soned in part that the memorandum was not a “state ag ency statement” beca use it had never been adopt ed o r ap p roved by the rele vant ag ency , the Division. See id

. at 555. The Court w ent on, howeve r, to c onclude that the memorandum was mere ly a statement reg arding SOAH’s “interna l manag ement” that “did not aff ect private rig hts” beca use “it [was] desig ned to corr ect [AL J ’s] inconsistent application or the Stop-L oss Ex ception” and “it did not chang e or amend [t he stop-loss rule]; it simply mandated internal consistency when apply ing the rule.” Id

. at 556. Vista ’s ass er t i o n t h at t his memorandum was purely “interna l” and had no impact on private rig hts is arg uably inconsistent with both El Paso Hospital and this Court’s
more rec ent jurisprudenc e like Entert a i nment Publications and W itcher , inasmuch as the rule construction advoca

ted in the memorandum was to be applied, and was applied, by SOAH AL J s in deciding medical fee disputes, plainly impacting private rig hts. Cf. El Paso Hosp. Dist. , 247 S.W .3d at 714–15 (ag ency ’s cut-off date aff ecte d h o s p i t als’ private rig hts); W itcher , 2014 WL 5654255, at *7 (empha siz ing g ener al applicability of the ag ency i n t er p retation and its impact on the private rig hts); Entertainment Publ’ns , 292 S.W .3d at 721 (noting that apply ing interpre tation to all
24Finally , TMB urg es that “sound public policy ” war rants a narr ow construction of the
APA’s “rule ” definition that would exclude the pronounce ments in its letter. “ I f this ty pe of le tter
constitutes a ‘rul e, ’” T M B insists , the “alter natives left to an ag ency
. . . that wishes to aler t a
reg ulated entity that it [i n the ag ency ’s opinion] is violating a statute or reg ulati o n ” wo u l d
be confine d to the following “poor option[ s]”: (1) “without war ning, simply initiate administrative

proce eding s”; (2) “send corr espondenc e stating that the entity is violating a rule but wi thout providing any additional explanation,” leaving the entity to “mer ely g uess at the basis for the alleg ed violation”; or (3) “initiate rulemaking proce eding s eac h time it wants to notify a reg ulated entity of

a possible violation.” The latter option is espec ially odious in TMB’ s view, quoting the following
familiar excerpt from this Court’s 1999 Brinkley opinion, seeming ly cited by this state’s administrative ag encie s with gr eate r fr equenc y and fe rvor than e ven the Te x as Constitut ion:

Ag encie s would be reduc ed to im p o t ence
. . . if bound to express their views as to ‘law,’ ‘policy ,’ and proce dural ‘re quireme n ts’ throug h contested- case hear ings or formal rules exclusively ; and they could not under such a theory exercise power s ex p l i ci t l y d eleg ated to them by the [L ]egislature

. . . . I f ever y expression by th e ag ency as to ‘law,’ ‘policy ,’ and proce dural ‘re quirements’ require s the promulg ation of a formal rule, the ag ency could no longe r ex er ci s e i ts ‘informe d discretion’ to choose adjudication as a means of making law and policy rathe r than rulemaking , a

brochur e-f

undraising firms aff

ecte d private rig hts). Simi larly , as for the sug g estion that the memorandum did not impact private rig hts beca use it repr esente d one of tw o competing constructions of the stop-loss rule, Vista cites no supporting authority bey ond attempting to contra st the memorandum with the cut-off “rule ” in El Paso Hospital , which it char ac t eriz ed as “contr adict[ing]” the underly ing formal rules. See Vista , 275 S.W .3d at 556. But leaving aside the merits of these asser

tions by the Vista Court, see Sunset Transp. , 357 S.W .3d at 704 (citing Vista as example wher e the distinction betwee n “a mere restate ment of a formally promulg ated rule” and “a statement that is itself a ‘rule’ ” was “el u s i v e” ), t h ey can be classified as dicta g iven the Court’s prec eding holding that the m emora ndum was not a “sta

te ag ency statement” a t all. See id . at 555.
25choice we have repe atedly said an ag ency has when it possesses bo t h adjudi cator y and rule making power s. 6 6

An ag ency ’s discretion to “mak[e] ‘law’ or ‘policy ’” throug h adjudication is not u n li mi te d, of course , as this Court has most rece ntly held in W

itcher , but the more critical obs erva tion here is that our

6 7
construction of the APA’s “rule ” definition does not imply the stark alterna tives Brinkley and TMB

sug g est. As the Texas Supreme Court observe d in Leeper , “Not ever y statement by an administrative

ag ency is a rule for which the APA presc ribes proce dures for adoption and for judicial revie w,” and 6 8
the Act define s “rule ” in a way that will exclude a consider ab l e rang e of unofficia l, individually
direc ted, t entative or other non-proscriptive ag ency or st aff issuance s co n cerning law or policy

. 6 9

But whe re, a s here , an ag ency ’s leg al or policy pronounce ments seek to contr ol the
conduct of a fre e people throug h the asser tion or threa tened asser

tion of State power, ag ency “impotence ” is hardly the rele vant conce rn under our Constit ution and laws. Rather, it is the risk that

ag encie s—whose leg itimate authority and very ex i s t en ce must derive from law and not mere ly

Brinkley v. Texas Lottery Comm’n , 986 S.W .2d 7 6 4 , 7 6 9 (Tex. App.—Austin 1999, 6 6 no pet.).
See W

itcher , 2014 WL 565425 5 , at * 1 2–13 (discussing principles that limit ad hoc 6 7 rulemaking ). Leeper , 893 S.W .2d at 443. 6 8
See Tex. Gov’t Code § 2001.003(6); Combs , 311 at 100–01 (noting that appellee s 6 9 could not point to any specific “stateme nt” b y t h e co mptroller); see also Ronald L

. Be al, Texas Administrati ve Practice & Procedure § 2.3.4 (2014) (illustrating examples of ag ency statements that would fall short of “ rules”)

. 26per c e iv e d “expediency ” —will stray from their leg al limit ations (per haps with the best of individual 7 0 intentions, but exceeding them never theless) throug h what fede ral courts have aptly termed a “ty ranny of small decisions” that sub s t an t i v el y asser t Ex ecutive or L eg islative power over the citizenry throug h forms calc ulated to avoid the meaning ful chec ks and bala n c e s th e F r a

me r s intended
the J udiciary to provide. I n very rec ently reje cting ag ency claims to an absolute rig ht to superse de 7 1
adver se trial cour

t judgments pe nding a

ppeal, the T exas Supreme Court cited similar conc erns:

The State’s position—boundl ess entitlement to superse de adver se non -m oney judgme nts—would vest unchec ked power in the executive branc h, at considera ble expense to the judicial branc h, not to mention the wider public we both se rve. The T e xa s Co n stitut ion divides g overning power among three branc hes, and p o w e r s e iz e d by one branch necessa

rily means power ceded by another

. Our S tate C ons t i tution, like Madison’s Fe dera l handiwork, is infused with Newtonian g enius: three rival branc hes locked in sy

nchronous orbit by competing interests—a m b i tion chec king ambition. These are abstrac t principles, but they have rea l-world ripple ef fe ct s on the lives of ever

y day Texans. This case is Ex hibit A. TRAP 24. 2(a) (3) g ives the trial court discretion, quite s e n s ib ly , to p r e v e n t the State from re- revoking Montalvo’s
cer tification—the ultimate profe ssional sanction—while it spends y ear s appea ling the court’s reve rsal of the State’s first revoc ation, something the trial co urt found “ar bitrary and capr icious.” The State—as y et unsupported by a victory on the merits in a ny court—wa

nts to strip Monta lvo of his livelihood while the appellate proce ss g rinds on
. . . . That’s a striking asser tion of unbridled executive power —to enfor ce

See, e.g ., Public Util. Comm’n v. City Pub. Serv s. Bd ., 53 S.W .3d 310, 316 (Tex. 2001) 7 0 (“[W] hen the L eg islature expressly confe rs a power on an ag ency , it also impliedly intends that the ag ency have whateve r power s are rea sonably nece ssary to fulfill its functions or duties. An ag ency may not, howeve r, exercise what is eff ectively a new power , or a power contra dictory to the statute, on the theory

that such a pow er is expedient for a dminist rative pur poses.”)

. See Iowa League of Citi es v. Environ mental Prot. Agenc y , 711 F.3d 844, 873 7 1 (8th Cir. 2013) (quoting Professionals & Patients for Customized Care v. Shalala , 56 F.3d 592, 596 (5th Cir. 1995)).
27a d

mi n is tr a tive order s that a trial court has reve rsed—a nd TRAP 24

. 2 ( a ) ( 3 ) r e c o g n iz e s the judiciary ’s authority

to say no. 7 2

Wit h simil ar percep t iveness, the L eg islature, throug h the APA, has enable d aff ecte d citizens to
invoke judicial jurisdiction, throug h section 2001.03 8, to test the “validity ” or “applica bility ” of

ag ency pronounc ements that rise to the level of “rule s”—including those that “interpr et” law or policy —and require d that the further chec ks of transpar ency , p u b l i c participa tion, and rea soned justification must prec ede such asser tions of ag ency authority

. We mus t gi v e effect to these important safe g uards, a s the L eg islature has intende d.

In re State Bd.

for Educator Certification , No. 13-0537, 2014 Tex. L EXI S 1208, at *17–18 7 2 (Tex. Dec

. 19, 2014); see Tex. Const. art. I I , § 1 (“The power s of the Gover nment of the State of Tex as s h all be divided into three distinct depar tments, eac h of which shall be confide d to a separ ate body of mag istracy , to wit: Those which are L eg islative to one; those which are Ex ecutive to another , and thos e which are J udicial t o another ; and no person, or collection of persons, being of one of these depar

tments, shall exercise any power proper ly attache d to either of the others, except in the i n s t an ces here in expressly permitted.”) ; see also City of Dallas v. Stewart , 361 S.W .3d 562, 577 (Tex. 2012) (citi ng approving ly to scholarship sug g esting that administrative ag encie s, in assuming adjudicator

y , rulemaking , and administrative functions i n a m an ner not obviously contemplated by the tripartite constitutional structure , suffe r fr o m a “chr onic ‘leg itimacy crisis’” (citing Richard H. Fa llon, J r., Legitimacy and the C onstitut ion , 118 Har v. L

. Rev. 1787, 18 4 2

– 43 (2005))

. To the extent TMB arg ues that its letter rese mbles those that Brinkley held to be “simply advisory g uidelines” that “have no leg al eff ect on private persons,” see Brinkley , 986 S.W .2d at 770- 71 & nn. 9 & 10, we observe that Brinkley ’s analy sis was premised on the v i ew t h at agency pronounce ments of law have no materia l eff ect on private rig hts unless issued in the form of formal rules or contested- case order s. Id

. at 769. T h at premise has been erode d, to say the least, by this Court’s prec edents that hav e b ee n i nformed by the Texas Supreme Court’s intervening El Paso Hospital decision. I n short, if Brinkley would imply a differe nt result here, we need g o no far ther than to conclude it is di stinguishable.
28We hold that TMB’ s pronounce ments reg arding Rule 190.8(1)( L )(i)( I I ) contained in

its J une 2011 letter are a “rule ” as a matter of law. Acc ording ly , we sustain Teladoc ’s first issue and
need not r eac h its second issue, which it ar g ues in the alter native. 7 3

CONCLUSION
Ha v i n g sustained Teladoc ’s first issue on appea l, we reve rse the district cour t ’s judgme nt and rende r summary judgme nt decla ring that TMB’ s pronounce ments reg arding
Rule 190.8(1)( L )(i)( I I ) contained in its J une 2011 letter are a “rule ” under the APA and, there fore , invalid under sec tion 2001.035 of that Act.

__________________________________________ Bob Pembe rton, J ustice

Be fore Chief J ustice Jones, J ustices Pemberton a nd Field

Reverse d and Rende red
Filed: De cembe r 31, 2014

See Tex. R. App. P . 47.1. 7 3
29