Court Opinion

ID: 4390134
Source: CourtListenerOpinion
Date Created: 2019-04-24 14:39:11.09598+00
Date Added: 2024-06-11T14:37:33.171763
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                      NO. 03-18-00360-CV

     Graylin Gant, Jay Heichelheim, Stephen Holt, Sherif Saudi, and Charles Braden,
                                       Appellants

                                                 v.

   Hon. Gregory W. Abbott, Kenny Koncaba, W. B. Boney, Trey Hill, Kelly K. Lovell,
 Henry S. Porretto, Wallace R. Hogan, Jr., Chris Henry, Derek Tracy, Clinton Schuessler,
  Wendy Morrison, David Manney, Jon Halvorsen, Christos Sotirelis, Mark Saunders,
  Scot E. Smith, Scott Mitchell, Matthew Bush, Chris Gutierrez, Michael Godnich, and
                                  David Dion, Appellees

     FROM THE DISTRICT COURT OF TRAVIS COUNTY, 261ST JUDICIAL DISTRICT
      NO. D-1-GN-17-003229, HONORABLE DUSTIN M. HOWELL, JUDGE PRESIDING

                                          OPINION

               Appellants Graylin Gant, Jay Heichelheim, Stephen Holt, Sherif Saudi, and Charles

Braden are five ship pilots licensed by the U.S. Coast Guard. They seek the ability to apply for

Texas deputy branch pilot certification and branch pilot licensure in Galveston County without going

through the current process, claiming that the process is unconstitutional in that it grants an

impermissible monopoly to the Galveston-Texas City Pilots Association (Gal-Tex). Gal-Tex is a

private pilot association made up of all of Galveston County’s currently licensed branch pilots. The

application process for deputy branch pilot certificates and pilot licenses is overseen by the board

of pilot commissioners for Galveston County ports (the Board). See Tex. Transp. Code §§ 67.011

(explaining the composition of the Board), .017 (listing duties of the Board). Appellants submitted
“applications” to the Board in a form that the Board determined was incomplete, so the Board

declined to consider those applications for deputy branch pilot certification or pilot licensure. In

response to the Board’s refusal to consider their applications, Appellants sued the five

Commissioners of the Board in their individual official capacities and the Governor (collectively,

the State appellees). The Galveston County ship pilots (the members of Gal-Tex) intervened.

Appellants sought declaratory and injunctive relief under the Administrative Procedures Act (APA)

and the Uniform Declaratory Judgments Act (UDJA) on the grounds that sections 67.033(4),

67.034(3), and 67.035 of the Texas Transportation Code violate the Monopoly Clause of the Texas

Constitution and that the Board failed to adopt rules in accordance with the APA. See Tex. Const.

art. I, § 26 (“Perpetuities and monopolies are contrary to the genius of a free government, and shall

never be allowed, nor shall the law of primogeniture or entailments ever be in force in this State.”);

Tex. Civ. Prac. & Rem. Code §§ 37.001-.011 (UDJA); Tex. Gov’t Code §§ 2001.001-.902 (APA).

The Governor filed a plea to the jurisdiction, and the remaining parties filed competing motions for

summary judgment. The Commissioners moved for summary judgment, arguing that (1) the APA

does not apply to the Board because it is not a state agency, (2) the Galveston County pilot

application process does not create an unconstitutional monopoly, and (3) the court lacked

jurisdiction to consider appellants’ challenges to the Transportation Code because they did not sue

the Board, but instead sued the Commissioners in their official capacities. The Intervenors moved

for summary judgment, arguing that the Galveston County pilot application process does not create

an unconstitutional monopoly. Appellants moved for summary judgment, arguing that the three

challenged provisions of the Transportation Code create an unconstitutional monopoly and that the

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Board was required to adopt rules in compliance with the APA. Appellants also moved to transfer

venue to the Third Court of Appeals. Appellants’ motions were denied. The Governor’s plea to the

jurisdiction was granted, as were the Commissioners’ and Intervenors’ motions for summary

judgment. Appellants challenge the district court’s order denying their motion for summary

judgment and granting Appellees’ motions. We will affirm in part and vacate and dismiss in part.

The Galveston Act

                  The First Texas Legislature enacted a statewide pilotage act, which provided that

the governor appoint a five-member board of commissioners of pilots for each port whose

population and circumstances warranted it. See Act approved Apr. 17, 1846, 1st Leg., R.S., § 2,

1846 Tex. Gen. Laws 79, 79, reprinted in 1 H.P.N. Gammel, The Laws of Texas 1822-1897, at 1385,

1385 (Austin, Gammel Book Co. 1898) (now codified at Tex. Transp. Code § 63.001). In each of

the ports, the pilot boards oversee numerous aspects of pilotage, including the process for becoming

a deputy branch pilot or branch pilot. See Tex. Transp. Code § 63.003 (“Powers and Duties of

Board”). Over time, the Legislature created several port-specific acts, including the Galveston

County Pilots Licensing and Regulatory Act (Galveston Act). See id. §§ 67.001-.083. Like the

statewide pilotage act, the Galveston Act provides that the board of pilot commissioners for the port

of Galveston County is composed of five commissioners appointed by the governor and it lists the

Board’s duties as including oversight of the process for becoming a deputy branch pilot or branch

pilot. See id. §§ 67.011 (providing for gubernatorial appointment of five board commissioners from

Galveston County), .017 (1)-(4), (13) (listing board duties relating to pilot licensing and

certification).

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                Among other duties imposed by the Galveston Act, the Board must (1) “recommend

to the governor the number of pilots necessary to serve each Galveston County port,” (2) “accept

applications for deputy branch pilot certificates or pilot licenses and determine whether each

applicant is qualified,” (3) “provide names of qualified applicants for certificates to each pilot

association office of Galveston County,” (4) “submit to the governor the names of persons who have

qualified under this chapter to be appointed as branch pilots,” and (5) “approve a training program

for deputy branch pilots.” Id. § 67.017(1)-(4), (13). A person seeking to become a deputy branch

pilot or branch pilot must meet certain eligibility requirements and “must give to the board a written

application in the form and manner required by board rule.” Id. § 67.035; see id. §§ 67.033

(qualifications for branch pilot license), .034 (qualifications for deputy branch pilot certificate). In

considering applications for certificates and licenses, the Board “may examine and decide on the

qualifications of an applicant for the position of branch pilot or deputy branch pilot.” Id. § 67.036.

Applicants selected for branch pilot licensure by the Board must file a bond and oath, after which

“the board shall certify to the governor that a person licensed as a branch pilot has qualified.” Id.

§ 67.037(a); see id. § 67.039 (bond and oath requirements). Then, “[o]n receipt of the board’s

certification, the governor shall issue to the person . . . a commission to serve as a branch pilot to and

from Galveston County ports.” Id. § 67.037(b). Unlike branch pilots, who are chosen by the Board

and commissioned by the Governor, deputy branch pilots are appointed by currently licensed branch

pilots. Id. § 67.038.

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Gal-Tex

               The parties agree that every Galveston County branch pilot belongs to Gal-Tex and

that Gal-Tex is involved in the application process for deputy branch pilots and branch pilots. The

Board relies on Gal-Tex to let the Board know when additional deputy branch pilots or branch pilots

are needed. Gal-Tex then publishes notice that the Board is accepting applications for deputy branch

pilot certification or branch pilot licensure. The letter sent to applicants along with the application

for deputy branch pilot certification opens by saying, “The Galveston-Texas City Pilots appreciate

your interest in becoming a deputy branch pilot with this organization,” and includes a list of Gal-

Tex’s requirements for applicants that are separate from the statutory requirements. These

requirements are: (1) an applicant must be licensed by the United States Coast Guard (USCG),

(2) depending on the type of USCG license, the applicant may be required to also document a certain

number of hours of qualifying service, (3) all applicants must have sailed on the qualifying USCG

license for a minimum of 900 days, and (4) “[n]o candidate may be related to any branch pilot

currently serving with the Galveston-Texas City Pilots.” Although the application does not mention

Gal-Tex, an attached release authorizes both the Board and Gal-Tex to investigate statements made

on the application; perform a background check on the applicant, including obtaining a credit report,

a criminal record check and a Marine Index Bureau Report; contact former employers; and obtain

copies of Coast Guard records. The applicant’s signature on this form would also release the Board

and Gal-Tex from “any and all claims” related to any investigation performed relating to the

application. By its own terms, the application for deputy branch pilot certification must be sent to

the Board. After the Board reviews the applications, it forwards to Gal-Tex the applications that are

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approved for candidacy as prospective deputy branch pilots. The members of Gal-Tex will offer

interviews to all applicants found qualified by the Board and will then select the required number

of deputy branch pilots. Once the application cycle is closed, Gal-Tex informs the Board of the

selected applicants and the results of each applicant’s background check, physical examination, and

drug screen.

The Challenged Statutory Provisions

               Section 67.033 of the Galveston Act sets out the statutory requirements of eligibility

for branch pilots. The portions relevant here provide that “[t]o be eligible for a license as a branch

pilot, a person must . . . have at least two years’ service as a deputy branch pilot and successfully

complete the board-approved training program,” and “[t]o be eligible for a certificate as a deputy

branch pilot, a person must . . . be appointed by a branch pilot.” Id. §§ 67.033(4), .034(3).

Appellants argue that these statutory requirements grant an unconstitutional monopoly to Gal-Tex

because, since every branch pilot is a member of Gal-Tex, no one can become a deputy branch pilot

without being appointed by a member of Gal-Tex, and no one can go on to become a branch pilot

without having first been appointed a deputy branch pilot by a member of Gal-Tex. They challenge

these provisions as facially unconstitutional. In addition, Appellants bring an as-applied challenge

to the requirement that “[t]o apply for a branch pilot’s license or a deputy branch pilot’s certificate,

a person must give to the board a written application in the form and manner required by board rule.”

Furthermore, Appellants specifically complain that the Governor and the Board are required to adopt

rules under the APA that would permit Appellants to apply for deputy branch pilot certification or

branch pilot licensure without granting an unconstitutional monopoly, that is, without Gal-Tex’s

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involvement. We will first address the Governor’s plea to the jurisdiction before turning to the

statutory challenges.

Governor’s Plea to the Jurisdiction

                Our jurisdiction over the merits of this case extends no further than the jurisdiction

possessed by the district court. See Pearson v. State, 315 S.W.2d 935, 938 (Tex. 1958). We review

de novo a trial court’s ruling on a plea to the jurisdiction. Texas Dep’t of Parks & Wildlife

v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). We begin by analyzing the plaintiff’s live pleadings

to determine whether the plaintiff has met the initial burden of alleging facts that affirmatively

demonstrate the trial court’s jurisdiction to hear the cause. Id. (citing Texas Ass’n of Bus. v. Texas

Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993)). We construe the pleadings liberally, taking

them as true, and look to the pleader’s intent. Id.; Texas Logos, L.P. v. Brinkmeyer, 254 S.W.3d 644,

659 (Tex. App.—Austin 2008, no pet.). Mere unsupported legal conclusions are insufficient. See

Creedmoor-Maha Water Supply Corp. v. Texas Comm’n on Envtl. Quality, 307 S.W.3d 505, 515-16

& nn.7 & 8 (Tex. App.—Austin 2010, no pet.). If the pleadings fail to allege sufficient facts to

affirmatively demonstrate the trial court’s jurisdiction but also fail to affirmatively demonstrate

incurable defects in jurisdiction, the issue is one of pleading sufficiency, and the plaintiff should be

afforded the opportunity to amend. Miranda, 133 S.W.3d at 226-27. If, on the other hand, the

pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be

granted without allowing the plaintiff an opportunity to amend. Id. at 227. A plaintiff suing

the State must establish a waiver of sovereign immunity. Texas Nat. Res. Conservation Comm’n

v. IT-Davy, 74 S.W.3d 849, 855 (Tex. 2002). “Otherwise, sovereign immunity from suit defeats a

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trial court’s subject-matter jurisdiction.” Id. Sovereign immunity does not shield the state from ultra

vires claims seeking to prevent government officials from exceeding their statutory or constitutional

authority. City of El Paso v. Heinrich, 284 S.W.3d 366, 372 (Tex. 2009).

               The APA contains a waiver of sovereign immunity to the extent of creating a cause

of action for declaratory relief regarding the validity or applicability of a “rule.” Tex. Gov’t Code

§ 2001.038(a); see Texas Logos, L.P. v. Texas Dep’t of Transp., 241 S.W.3d 105, 123 (Tex.

App.—Austin 2007, no pet.) (“section 2001.038 is a grant of original jurisdiction and, moreover,

waives sovereign immunity”). Under the APA, a “rule” is “a state agency statement of general

applicability that: (i) implements, interprets, or prescribes law or policy; or (ii) describes the

procedure or practice requirements of a state agency.” Tex. Gov’t Code § 2001.003(6). When no

rule is being challenged, a claimant cannot obtain declaratory relief under the APA against the State,

its agencies, or its agents because sovereign immunity bars the cause of action. Slay v. Texas

Comm’n on Envtl. Quality, 351 S.W.3d 532, 545 (Tex. App.—Austin 2011, pet. denied).

               The Galveston Act assigns rulemaking authority to the Board, not the Governor,

through its general grant of rulemaking authority: “The board may adopt rules to carry out this

chapter.” Tex. Transp. Code § 67.016(b). This is the only rulemaking provision that applies to the

challenged statutory provisions in this case. Unlike the general grant of rulemaking authority, the

Galveston Act’s other rulemaking provisions are mandatory and relate to the work of already-

licensed pilots, though they also apply solely to the Board. See id. §§ 67.017(10), .070(d). In

addition to providing an independent grant of rulemaking authority, the Galveston Act provides

notice requirements for when the Board adopts a rule. See id. § 67.021.

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               Appellants do not argue that the Board failed to comply with the Galveston Act’s

rulemaking provisions.     Further, Appellants concede that the Board, which lacks statewide

jurisdiction, is not a “state agency” under the APA. See Tex. Gov’t Code § 2001.003(7) (defining

“state agency” as agency with “statewide” jurisdiction); Tex. Transp. Code § 67.015 (giving Board

“jurisdiction over the piloting of vessels in Galveston County, including intermediate stops and

landing places for vessels on navigable streams wholly or partially located in the board’s

jurisdiction”). As Appellants have observed, because the Board is not a state agency, it is not subject

to the APA or its rulemaking requirements. See Fort Worth & W. R.R. Co. v. Enbridge Gathering

(NE Texas Liquids), L.P., 298 S.W.3d 392, 397 (Tex. App.—Fort Worth 2009, no pet.) (holding that

an entity that lacked statewide jurisdiction is not a “state agency” within the meaning of the APA

and was therefore not required to follow APA procedures by appealing to the State Office of

Administrative Hearings before filing condemnation proceedings in the trial court). Despite the

Galveston Act’s independent rulemaking framework assigning rulemaking authority to the Board,

Appellants argue that the Governor is the state agency that should be responsible for adopting rules

for deputy branch pilot certification and branch pilot licensure because the Governor appoints the

Board. See Tex. Transp. Code § 67.011 (Board members are “appointed by the governor with the

advice and consent of the senate”). Appellants argue that because the application process adopted

by the Board necessarily involves Gal-Tex, the Governor was required, but failed, to adopt rules

under the APA that would have provided an application process that did not involve Gal-Tex.

However, the Governor’s responsibilities under the Galveston Act are limited. In addition to

appointing the Board, the Governor has a duty to commission branch pilots that the Board certifies

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as qualified. Id. § 67.037(b). Based on the Board’s recommendation, the Governor “shall appoint

the number of branch pilots necessary to provide adequate pilot services for each Galveston County

port.” Id. § 67.037(c), see id. § 67.017(1) (Board shall recommend the number of pilots necessary).

The Galveston Act does not contemplate the Governor making any rules for certification or

licensure. Appellants nonetheless urge that the Governor should have promulgated rules under the

APA to allow for certification or licensure outside of the current method that they allege violates the

constitution by creating an unconstitutional monopoly.

                We conclude Appellants are not challenging any “rule” within the meaning of the

APA; the procedures to which they object are promulgated by the Board (not a state agency) and

affect the interests of applicants for certification or licensure in Galveston County, rather than being

“generally applicable.” See El Paso Hosp. Dist. v. Texas Health & Human Servs. Comm’n,

247 S.W.3d 709, 714 (Tex. 2008) (“The term ‘general applicability’ under the APA references

‘statements that affect the interest of the public at large such that they cannot be given the effect of

law without public input.’” (quoting Railroad Comm’n of Tex. v. WBD Oil & Gas Co., 104 S.W.3d 69,

79 (Tex. 2003))). Appellants instead challenge the Governor’s alleged failure to promulgate

unspecified “rules” in the face of a statute that expressly delegates rulemaking to an entity other than

the Governor. See Tex. Transp. Code § 67.016(b). By its own terms, the APA does not apply to this

scenario. See Tex. Gov’t Code §§ 2001.003(6)-(7), .038; cf. Texas Comm’n on Envtl. Quality v.

Bonser-Lain, 438 S.W.3d 887, 894 (Tex. App.—Austin 2014, no pet.) (“the APA does not provide

a right to judicial review of an agency’s refusal to adopt rules”). We affirm the district court’s grant

of the Governor’s plea to the jurisdiction.

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Claims Against the Commissioners

               Appellants’ remaining claims are against the Board’s individual Commissioners. As

discussed above, because the Board is not subject to the APA, Appellants cannot pursue any claims

against the Commissioners through the APA. See Tex. Gov’t Code §§ 2001.003(7) (defining “state

agency” under the APA as an agency with “statewide” jurisdiction), .038(a) (creating a cause of

action for declaratory relief regarding the validity or applicability of an APA “rule”); Tex. Transp.

Code § 67.015 (Board’s jurisdiction). We therefore turn to Appellants’ UDJA claims challenging

the validity of sections 67.033(4), 67.034(3), and 67.035 of the Transportation Code.

               Appellants, the Commissioners, and the Intervenors each moved for summary

judgment. The district court denied Appellants’ motion and granted the others. Summary judgment

is proper if the movant establishes that there are no genuine issues of material fact and that the

movant is entitled to summary judgment as a matter of law. Tex. R. Civ. P. 166a(c). We review de

novo the trial court’s summary-judgment rulings. Valence Operating Co. v. Dorsett, 164 S.W.3d 656,

661 (Tex. 2005). When, as here, the parties seek summary judgment on overlapping issues and the

trial court grants one motion and denies the others, we consider all of the summary-judgment

evidence and issues presented and, if the trial court erred, render the judgment the trial court should

have rendered. Id.

               Appellants seek declarations that sections 67.033(4) and 67.034(3) are facially invalid

and that section 67.035 is invalid as applied under Article I, section 26, of the Texas Constitution.

The UDJA generally does not enlarge a trial court’s jurisdiction, and a request for declaratory relief

does not alter a suit’s underlying nature. Heinrich, 284 S.W.3d at 370. “While the DJA waives

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sovereign immunity for certain claims, it is not a general waiver of sovereign immunity.” Id. at 388.

“Consequently, sovereign immunity will bar an otherwise proper DJA claim that has the effect of

establishing a right to relief against the State for which the Legislature has not waived sovereign

immunity.” Id. “For claims challenging the validity of ordinances or statutes, however, the

Declaratory Judgment Act requires that the relevant governmental entities be made parties, and

thereby waives immunity.” Id. at 373 n.6 (citing Tex. Civ. Prac. & Rem. Code § 37.006(b) (“In any

proceeding that involves the validity of a municipal ordinance or franchise, the municipality must

be made a party and is entitled to be heard, and if the statute, ordinance, or franchise is alleged to be

unconstitutional, the attorney general of the state must also be served with a copy of the proceeding

and is entitled to be heard.”)); see Texas Educ. Agency v. Leeper, 893 S.W.2d 432, 446 (Tex. 1994)

(“The DJA expressly provides that persons may challenge ordinances or statutes, and that

governmental entities must be joined or notified. . . . The Act thus contemplates that governmental

entities may be—indeed, must be—joined in suits to construe their legislative pronouncements.”);

see also Texas Lottery Comm’n v. First State Bank of DeQueen, 325 S.W.3d 628, 633, 634 & n.4

(Tex. 2010) (construing Leeper to say that “because the DJA permits statutory challenges and

governmental entities may be bound by those challenges, the DJA contemplates entities must be

joined in those suits”; “when the validity of ordinances or statutes is challenged, the DJA waives

immunity to the extent it requires relevant governmental entities be made parties” (emphasis

in original)).

                 Although Appellants have sued the Commissioners in their official capacities, they

have not sued the Board. Other than an assertion that the Commissioners failed to promulgate any

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rule in accordance with the APA, which does not apply to the Board, Appellants have not alleged

an ultra vires act by the Commissioners. Appellants’ UDJA claims challenge as unconstitutional

statutory provisions governing the application process for deputy branch pilot certification and

branch pilot licensure. If Appellants were to succeed, the result would impact the Board’s

procedures for accepting applications. Under the circumstances, the Board was required to be a party

to this suit. See Patel v. Texas Dep’t of Licensing & Regulation, 469 S.W.3d 69, 76 (Tex. 2015)

(noting that recent Texas Supreme Court precedents stand for the principle that when the

constitutionality of a statute is at issue, state entities must be parties to UDJA challenges);

DeQueen, 325 S.W.3d at 633, 634 & n.4 (the UDJA contemplates entities must be joined in suits

challenging the validity of a statute). Because the Board is not a party, the UDJA’s limited waiver

of immunity does not apply. The district court therefore lacked jurisdiction to address the merits of

Appellants’ claims under the UDJA.

Conclusion

               We conclude that Appellants have failed to affirmatively allege facts that invoke the

district court’s jurisdiction. We are not aware of any way they could cure these jurisdictional defects

through repleading. Accordingly, we affirm the district court’s grant of the Governor’s plea to the

jurisdiction and the grant of the Commissioners’ motion for summary judgment on the grounds that

the court lacked jurisdiction, and we vacate the district court’s grant of the Intervenors’ summary-

judgment motion and dismiss Appellants’ suit for want of jurisdiction.

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                                             __________________________________________
                                             Gisela D. Triana, Justice

Before Justices Goodwin, Baker, and Triana

Affirmed in Part, Vacated and Dismissed in Part

Filed: April 24, 2019

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