Court Opinion

ID: 9394681
Source: CourtListenerOpinion
Date Created: 2023-05-16 12:07:33.027865+00
Date Added: 2024-06-11T17:19:01.783693
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                     NO. 03-22-00172-CV

   Texas Education Agency; Edward O’Neil, Director of Texas Education Agency; and
                Mike Morath, Commissioner of Education, Appellants

                                                v.

                            Devereux Texas League City, Appellee

              FROM THE 459TH DISTRICT COURT OF TRAVIS COUNTY
 NO. D-1-GN-21-007028, THE HONORABLE AMY CLARK MEACHUM, JUDGE PRESIDING

                           MEMORANDUM OPINION

               Devereux Texas League City sued the Texas Education Agency (TEA), as well as

TEA Commissioner Mike Morath and TEA Director Edward O’Neil (the Officials), seeking

declaratory and injunctive relief after the Officials revoked Devereux’s eligibility to receive

government funds for certain services it offered. The TEA and the Officials filed a plea to the

jurisdiction, which the trial court denied. The TEA and the Officials perfected this interlocutory

appeal from the trial court’s order. We will reverse the trial court’s order and render judgment

dismissing Devereux’s case.

                     FACTUAL AND PROCEDURAL BACKGROUND

               Federal law provides mandates to “ensure that all children with disabilities have

available to them a free appropriate public education [(FAPE)] that emphasizes special education

and related services designed to meet their unique needs and prepare them for further education,
employment, and independent living.” 20 U.S.C. § 1400(d)(1)(A); accord 34 C.F.R. §§ 300.17,

.101(a) (2023). For a state to receive assistance under the Individuals with Disabilities Education

Act, see 20 U.S.C. §§ 1400–1450, the state must submit a plan of policies and procedures that

meets—to the satisfaction of the Secretary of Education—conditions set forth in relevant

Department of Education regulations, see 34 C.F.R. § 300.100 (2023) (citing 34 C.F.R.

§§ 300.101–.176 (2023)).

               Special-needs and disabled children sometimes receive their FAPEs through

placements in private facilities where the students can both receive their education and live

full-time. These are known as “nonpublic residential placements.” In Texas, the TEA has

promulgated rules governing contracts for nonpublic residential placements among its broader set

of rules intended to set forth Texas’s plan for implementing federal policies for disabled students.

See 19 Tex. Admin. Code § 89.1092 (2020) (Texas Education Agency, Contracting for Residential

Educational Placements for Students with Disabilities). A Texas local education agency (LEA),

see 34 C.F.R. § 300.28(a) (2023), with responsibility for a disabled student “may contract with

a . . . private facility, institution, or agency inside or outside of this state for the provision

of services to students with disabilities.” Tex. Educ. Code § 29.008(a). The LEA may also

“contract for residential placement of a student when the student’s admission, review, and

dismissal . . . committee determines that a residential placement is necessary in order for the

student to receive a” FAPE. 19 Tex. Admin. Code § 89.1092(a). In the context of the contracting

process between the LEA and the private facility, the “contract for residential placement,” see

Tex. Educ. Code § 29.008(a), and “the facility’s education program,” see 19 Tex. Admin. Code

§ 89.1092(a)(2), “must be approved by” the TEA Commissioner to receive government funds. The

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Commissioner is to keep a list of the facilities he has approved for contracting.            See id.

§ 89.1092(b)(1)–(3).

               Devereux’s petition alleges that it runs a campus of facilities in southeast Texas at

which it offers nonpublic residential placements to Texas and non-Texas disabled students. In

2021, following an investigation of Devereux’s facilities, the TEA and the Officials revoked

Devereux’s approval for contracting with Texas LEAs. The TEA sent Devereux a Notification

of Approval Status Change to notify it that it was no longer approved for contracting. The

Notification stated that Devereux’s approval status was changed because of “Specific Areas of

Noncompliance” explained in an enclosure sent with the letter. The enclosure included allegations

that children at Devereux’s facilities had been unlawfully restrained or secluded and cited statutes

and regulations that TEA personnel believed Devereux had violated. Devereux disputed the

allegations and asserted that any violations occurred outside the educational realm of its program,

but the TEA refused to reconsider its position and notified Devereux that its “facility is no longer

approved to offer nonpublic residential placements, to include any placements made by LEAs.”

               Devereux sued the TEA and the Officials, seeking declaratory and injunctive relief.

In its claim against the TEA, Devereux alleged that “[t]his Court has subject matter jurisdiction

over this matter because Devereux is seeking injunctive relief against the TEA for violation of

Devereux’s procedural due process rights under the Constitution.” In its claim against the

Officials, Devereux alleged that “this Court has subject matter jurisdiction over this matter because

Devereux brings this suit against individuals Edward O’Neill and Mike Morath in their official

capacit[ies] for directly contradicting the TEA’s own policies and acting outside the scope of their

authority.” In addition to injunctive relief, Devereux sought “a Declaration that the Defendants’

decision to end Devereux’s eligibility to offer nonpublic residential placements is invalid, a

                                                 3
violation of due process, and is beyond the scope of authority provided to the Defendants under

Chapter 7 of the Texas Education Code.” The essence of Devereux’s complaint is that the statutes

and rules on which the TEA relied for its actions do not give the TEA authority to regulate

Devereux’s residential facilities but apply only to Devereux’s educational programs. Devereux

did not allege that any statute was unconstitutional, only that the actions of TEA and the Officials

violated its constitutional rights and exceeded the Officials’ statutory authority.

               The TEA and the Officials filed a plea to the jurisdiction, arguing that the court

lacked subject-matter jurisdiction over Devereux’s claims because they are barred by sovereign

immunity and a lack of standing. The trial court denied the plea. The TEA and the Officials

perfected this interlocutory appeal. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(8).

                                   STANDARD OF REVIEW

               We review a grant or denial of a plea to the jurisdiction de novo. See Matzen v.

McLane, 659 S.W.3d 381, 388 (Tex. 2021); Texas Dep’t of Parks & Wildlife v. Miranda,

133 S.W.3d 217, 226 (Tex. 2004). A plaintiff must “allege facts that affirmatively demonstrate

the court’s jurisdiction” to hear the cause. Harris Cnty. v. Annab, 547 S.W.3d 609, 612 (Tex.

2018) (quoting Texas Ass’n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993)).

When, as here, a plea to the jurisdiction challenges only the pleadings, we determine from the

pleadings alone whether the plaintiff has alleged facts that affirmatively demonstrate the court’s

jurisdiction. Matzen, 659 S.W.3d at 388. This determination is a question of law that we review

de novo. Annab, 547 S.W.3d at 612.

                                                  4
                                           DISCUSSION

               In their sole appellate issue, the TEA and the Officials contend that the trial court

erred by denying their plea to the jurisdiction, whether because of sovereign immunity or lack of

standing. We divide our discussion of this appeal into, respectively, Devereux’s suit against the

TEA and its ultra vires suit against the Officials.

Suit against the TEA

               Devereux pleaded claims against the TEA for declaratory and injunctive relief,

asserting a denial of a due-process interest. Sovereign immunity is not a bar for suits seeking

declaratory or injunctive relief for violations of constitutional rights. 1 See City of Elsa v. M.A.L.,

226 S.W.3d 390, 392 (Tex. 2007) (suits for injunctive relief “may be maintained against

governmental entities to remedy violations of the Texas Constitution”); City of Beaumont v.

Bouillion, 896 S.W.2d 143, 149 (Tex. 1995) (“[S]uits for equitable remedies [including declaratory

judgment] for violation of constitutional rights are not prohibited.”); Texas Health & Hum.

Servs. Comm’n v. Sacred Oak Med. Ctr. LLC, No. 03-21-00136-CV, 2022 WL 2251656, at *8

(Tex. App.—Austin June 23, 2022, no pet.) (mem. op.) (“[I]t is well settled that “‘suits for

injunctive relief’ may be maintained against governmental entities to remedy violations of the

Texas Constitution.” (quoting City of Elsa, 226 S.W.3d at 392)); see also Honors Acad., Inc. v.

Texas Educ. Agency, 555 S.W.3d 54, 60 (Tex. 2018) (“[I]t is well settled that trial courts may

       1
          On the other hand, a suit for violation of statutory rights may not be brought against a
governmental entity but must be brought against government officials as an ultra vires claim. See,
e.g., Texas Dep’t of Transp. v. Sefzik, 355 S.W.3d 618, 623 (Tex. 2011) (dismissing suit against
state agency based on alleged violation of statutory rights but remanding to give plaintiff
opportunity to replead to bring suit against state officials as ultra vires claim); City of El Paso v.
Heinrich, 284 S.W.3d 366, 371–72 (Tex. 2009) (holding that governmental immunity did not bar
suit against city officials for alleged violations of statute but barred same claims brought against
governmental entities).

                                                  5
review an administrative action [if] the action adversely affects a vested property right or otherwise

violates a constitutional right.” (quoting In re Office of the Attorney Gen., 456 S.W.3d 153, 157

(Tex. 2015)); Continental Cas. Ins. Co. v. Functional Restoration Assocs., 19 S.W.3d 393, 404

(Tex. 2000) (“When the Legislature remains silent or denies a right of judicial review,

administrative decisions may nevertheless be attacked in court if they adversely affect a vested

property right or otherwise violate some provision of the State or Federal Constitution.”). 2

               But even when sovereign immunity would not otherwise bar a cause of action, the

plaintiff bringing the suit must plead a viable claim for injunctive relief: “While it is true that

sovereign immunity does not bar a suit to vindicate constitutional rights, . . . immunity from suit

is not waived if the constitutional claims are facially invalid.” Klumb v. Houston Mun. Emps.

Pension Sys., 458 S.W.3d 1, 13 (Tex. 2015); see also Abbott v. Mexican Am. Legislative Caucus,

Tex. House of Representatives, 647 S.W.3d 681, 686 (Tex. 2022) (“Although the UDJA generally

waives immunity for declaratory-judgment claims challenging the validity of statutes, we have

held that ‘immunity from suit is not waived if the constitutional claims are facially invalid.’”

(quoting Klumb, 458 S.W.3d at 13)). Thus, if Devereux has not pleaded a viable claim for a

constitutional violation, the TEA’s immunity is not waived.

               Devereux’s constitutional claim against the TEA for declaratory and injunctive

relief is brought under the federal Due Process Clause and the Texas Constitution’s Due Course of

Law Clause. Because the two clauses are so similar, “we have traditionally followed contemporary

federal due process interpretations of procedural due process issues” when applying either clause.

Honors Acad., 555 S.W.3d at 61 (internal quotation marks omitted) (quoting University of Tex.

       2
       We recognize there is some contrary authority. See El Paso Indep. Sch. Dist. v. McIntyre,
584 S.W.3d 185, 197–99 (Tex. App.—El Paso 2018, no pet.).

                                                  6
Med. Sch. at Houston v. Than, 901 S.W.2d 926, 929 (Tex. 1995)). A two-part test governs a

due-process claim: we must determine whether plaintiffs (1) have a liberty or property interest that

is entitled to due-process protection and, (2) if so, we must determine what process is due. Mosley

v. Texas Health & Hum. Servs. Comm’n, 593 S.W.3d 250, 264 (Tex. 2019).

               Devereux argues that it has a vested interest in having the TEA approve Devereux

for contracting for purposes of receiving government funds for nonpublic residential placements.

But Devereux has not identified, nor have we found, any statute giving it a right to judicial review

of a decision not to approve it for contracting for purposes of receiving government funds for its

nonpublic residential placements. Accordingly, in order to have a viable claim for a due-process

violation, Devereux must plead a legitimate claim of entitlement to continued government funding:

“Before any substantive or procedural due-process rights attach, however, the citizen must

have a liberty or property interest that is entitled to constitutional protection. . . . To have a

constitutionally protected property interest, a person must have a ‘legitimate claim of entitlement’

rather than a mere ‘unilateral expectation.’” Honor Acad., 555 S.W.3d at 61 (quoting Board of

Regents of State Colls. v. Roth, 408 U.S. 564, 577 (1972)).

               But Devereux has not alleged a basis for having any entitlement to (and thus a

vested property interest in) being approved for contracting. The text and structure of the statute

and regulations that create the government’s contracting-approval power do not give Devereux

such an entitlement. First, both sides identify Education Code Section 29.008 as the statutory

source of the Officials’ authority to approve or not approve contracts for nonpublic residential

placements at facilities like Devereux’s. That statute provides in part:

       Each contract for residential placement must be approved by the commissioner.
       The commissioner may approve a residential placement contract only after at least

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       a programmatic evaluation of personnel qualifications, adequacy of physical plant
       and equipment, and curriculum content. The commissioner may approve either the
       whole or a part of a facility or program.

Tex. Educ. Code § 29.008(a). That language conditions the Commissioner’s power to approve a

facility or program on a prior “programmatic evaluation of personnel qualifications, adequacy of

physical plant and equipment, and curriculum content,” see id., but the statute nowhere gives

facilities the right to be approved. It cannot reasonably be said that the statute requires approval

for every contract submitted, because (a) such a reading would render meaningless the statute’s

implied requirement that contracts are not enforceable before being approved and (b) the statute

contemplates that some contracts will indeed not be approved, including those for which the

programmatic evaluation has not yet taken place or those with companies whose facilities fail the

programmatic evaluation. Approval under Section 29.008(a) thus does not rise to the level of a

legitimate claim of entitlement.

               Both sides next identify provisions of the Administrative Code as granting the

relevant approval authority. The main such provisions are, first, that when a facility provides

educational services to a student under a contract with an LEA, “the facility’s education program

must be approved by the commissioner of education in accordance with subsection (d)” of the

same section. 19 Tex. Admin. Code § 89.1092(a)(2). The same section elsewhere provides for a

“commissioner’s list of approved residential education programs,” on which facilities might or

might not appear. See id. § 89.1092(b)(1), (2). The referenced subsection (d) provides:

       (d) Residential facilities that provide educational services must have their
       educational programs approved for contracting purposes by the commissioner.

               (1) If the education program of a residential facility that is not approved by
               the commissioner is being considered for a residential placement by a local
               school district, the school district should notify TEA in writing of its intent

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               to place a student at the facility. TEA shall begin approval procedures
               and conduct an onsite visit to the facility within 30 calendar days after TEA
               has been notified by the local school district. Approval of the education
               program of a residential facility may be for one, two, or three years.

               (2) The commissioner shall renew approvals and issue new approvals only
               for those facilities that have contract students already placed or that have a
               pending request for residential placement from a school district. This
               approval does not apply to residential facilities that only provide related
               services or residential facilities in which the local accredited school district
               where the facility is located provides the educational program.

Id. § 89.1092(d)(1), (2).

               These provisions of the Administrative Code are similar to Education Code

Section 29.008(a) in that none of them limit or condition in any way the TEA Commissioner’s

power to approve or not approve a facility. There are, for example, conditions to be met before

a program may enjoy placement on the approved list, such as the “onsite visit.”                   See id.

§ 89.1092(d)(1). But there are no limitations or conditions on denying, revoking, or removing a

program from the approved list. Devereux therefore has not pleaded a legitimate claim of

entitlement to approval to receive government funds for nonpublic residential placements.

Accordingly, the TEA’s immunity is not waived for Devereux’s constitutional claim for

declaratory and injunctive relief. The trial court erred in denying the TEA’s plea to the jurisdiction.

Suit against the Officials

               Devereux seeks to avoid the Officials’ sovereign immunity by pleading an ultra

vires claim against them. The Officials, as government officials sued in their official capacities,

generally enjoy sovereign immunity. See Van Boven v. Freshour, 659 S.W.3d 396, 401 (Tex.

2022); Honors Acad., 555 S.W.3d at 57, 68. But sovereign immunity does not bar a claim against

a government officer for acting without legal authority or for failing to perform a purely ministerial

                                                  9
act, a claim known as an ultra vires suit. See Van Boven, 659 S.W.3d at 401–02; Schroeder v.

Escalera Ranch Owners’ Ass’n, 646 S.W.3d 329, 332 (Tex. 2022). “To fall within this ultra vires

exception . . . a suit must not complain of a government officer’s exercise of discretion, but rather

must allege, and ultimately prove, that the officer acted without legal authority or failed to perform

a purely ministerial act.” Houston Belt & Terminal Ry. v. City of Houston, 487 S.W.3d 154, 161

(Tex. 2016) (internal quotation marks omitted) (quoting City of El Paso v. Heinrich, 284 S.W.3d

366, 372 (Tex. 2009)). The Supreme Court of Texas has explained how officials’ “discretion” in

exercising the powers granted to them is central to ultra vires analysis:

       As we said in Heinrich, governmental immunity protects exercises of discretion,
       but when an officer acts beyond his granted discretion—in other words, when he
       acts without legal authority—his acts are not protected. Thus, “discretion,” as we
       have used the term in this context, cannot mean limited discretion that is otherwise
       constrained by the principles of law. Rather, our ultra vires caselaw uses the term
       in its broad sense. Accordingly, the principle arising out of Heinrich and its
       progeny is that governmental immunity bars suits complaining of an exercise of
       absolute discretion but not suits complaining of either an officer’s failure to
       perform a ministerial act or an officer’s exercise of judgment or limited discretion
       without reference to or in conflict with the constraints of the law authorizing the
       official to act. Only when such absolute discretion—free decision-making without
       any constraints—is granted are ultra vires suits absolutely barred.

Id. at 163 (citations omitted).

               The TEA Commissioner has broad authority to approve or deny a contract for a

nonpublic residential placement. The language of Education Code Section 29.008(a) quoted

above establishes this breadth of discretion. Although that language places conditions on the

Commissioner’s power to approve contracts for placements, the statute does not contain any

conditions or restrictions on his power to disapprove contracts. This feature distinguishes this

statute from other grants of authority that have supported ultra vires claims where, for example,

the grants require the decisionmaker to act only “according to” or “in accordance with” another

                                                 10
law. See, e.g., Van Boven, 659 S.W.3d at 402–03 (concluding that because regulation empowered

agency to act “according to applicable federal rules and statutes,” claim that agency had failed to

follow relevant federal rules stated valid ultra vires claim); Houston Belt & Terminal Ry.,

487 S.W.3d at 166–67 (concluding that because ordinance empowered official to act “in

accordance with and subject to” remainder of ordinance, claim that official misapplied definition

from elsewhere within ordinance stated valid ultra vires claim).           Also, Section 29.008(a)’s

language is broad enough to include approval of the residential aspect of a program as well as its

educational aspect—the statute speaks to the Commissioner’s power to “approve a residential

placement contract” as a whole contract or discrete parts of it.

               Section 29.008(a) is instead like the authority-granting city ordinance in Schroeder,

under which the plaintiffs failed to state a valid ultra vires claim. There, the ordinance’s only

restriction on a zoning commission’s authority to approve a submitted plat was that the

commission “must ‘consider the Preliminary Plat application, the Director’s report, State law, and

compliance with’” the zoning code. Schroeder, 646 S.W.3d at 334–35 (emphasis added). The

plaintiffs there failed to state a valid ultra vires claim because while the relevant ordinance “limits

the discretion of what the [Zoning C]ommission may consider, it does not otherwise restrict the

Commission’s exercise of its discretion to determine conformity” of a submitted plat. Id. at 335.

Put simply, because the ordinance required only that the commission “consider” certain items and

because the commission had indeed considered those items before approving the submitted plat,

the plaintiffs could not state a valid ultra vires claim. See id. (“Provided that the Commissioners

fully consider the applicability of [zoning code] requirements to a plat, the [zoning code] commits

to them the discretion to determine a plat’s conformity for approval purposes.”).

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               Similarly here, Section 29.008(a) does not place express conditions or limitations

on the Officials’ authority to disapprove or revoke such contracts. Accordingly, Devereux has not

alleged and cannot allege that the statute imposes ministerial duties on the Officials, nor that the

Officials have acted beyond their authority under the statute by refusing to approve placement

contracts with Devereux. This is true even if the Officials have otherwise made what might appear

to be an erroneous decision. See, e.g., Hall v. McRaven, 508 S.W.3d 232, 242 & n.4 (Tex. 2017)

( “Our intermediate courts of appeals have repeatedly stated that it is not an ultra vires act for an

official or agency to make an erroneous decision while staying within its authority,” and citing

cases); Gamboa v. Das, No. 03-20-00440-CV, 2021 WL 3669330, at *3 (Tex. App.—Austin

Aug. 19, 2021, no pet.) (mem. op.) (“Although Gamboa is dissatisfied with the results of the

administrative hearing, an ultra vires claim must challenge a government official’s authority,

‘not the quality of the official’s decisions.’” (quoting Honors Acad., 555 S.W.3d at 68));

Creedmoor–Maha Water Supply Corp. v. Texas Comm’n on Env’t Quality, 307 S.W.3d 505,

517–18 (Tex. App.—Austin 2010, no pet.) (“These are allegations that TCEQ reached an incorrect

or wrong result when exercising its delegated authority, not facts that would demonstrate TCEQ

exceeded that authority.”).

               In its relevant regulations, the TEA has interpreted applicable statutes to require

denial or revocation of approval for contracting if the Department of State Health Services has

not given the facility at issue valid licensure: “A school district may contract for a residential

placement of a student only with either public or private residential facilities that maintain current

and valid licensure by the . . . Department of State Health Services for the particular disabling

condition and age of the student.” 19 Tex. Admin. Code § 89.1092(a)(1). In the present case, the

Department of State Health Services did in fact place a temporary suspension on Devereux’s

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licensure, and Devereux does not challenge the validity of that period of probation or the TEA’s

regulation quoted above.

               Instead, Devereux argues that the Officials “have acted outside the scope of their

legal authority by: (1) wrongfully revoking [Devereux]’s ability to offer nonpublic residential

placements based on erroneous findings of statutory noncompliance; (2) depriving [Devereux] of

due process; and (3) arbitrarily determining that [Devereux] must wait an entire year before it can

apply for re-approval.” As for the first of these arguments, there are no discernible statutory limits

on the Officials’ discretion to revoke approval for contracting after initially having granted it, to

deny re-approval, or to decline to approve a contract for a nonpublic residential placement. See

Tex. Educ. Code § 29.008(a); see also 19 Tex. Admin. Code § 89.1092. Without such limits,

Devereux cannot allege or show that the Officials exceeded their statutory authority.

               Next, under the due-process argument, we reiterate here what we stated above:

Approval for contracting under Section 29.008(a) of the Education Code or Title 19,

Section 89.1092 of the Texas Administrative Code does not rise to the level of a legitimate claim

of entitlement and so cannot support a claim of denial of due process.

               Finally, the year delay in applying for re-approval, even if it could constitute an

error or abuse of discretion, is not an alleged harm that can now be redressed through prospective

relief. “Ultra vires suits . . . do not address past conduct” but instead “are available to require a

government actor to comply with the law in the future.” Texas Educ. Agency v. Houston Indep.

Sch. Dist., 660 S.W.3d 108, 110 (Tex. 2023). Because the year that Devereux’s argument refers

to has already passed, injunctive relief is unavailable. This claim thus cannot fall into the ultra

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vires exception. We hold that Devereux has not pleaded a valid waiver of or exception to the

Officials’ sovereign immunity. 3

                 The trial court therefore erred in denying the plea to the jurisdiction. We sustain

the TEA and the Officials’ sole appellate issue.

                                          CONCLUSION

                 We reverse the trial court’s denial of the plea to the jurisdiction and render

judgment dismissing Devereux’s suit.

                                               __________________________________________
                                               J. Woodfin Jones, Justice

Before Chief Justice Byrne, Justices Smith and Jones*

Reversed and Rendered

Filed: May 10, 2023
*
 Before J. Woodfin Jones, Chief Justice (Retired), Third Court of Appeals, sitting by assignment.
See Tex. Gov’t Code § 74.003(b).

       3
           As a result, we need not address the issue of standing.

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