Clint Indep. Sch. Dist. v. Marquez

487 S.W.3d 538

Clint Independent School District, Petitioner,

v.Sonia Herrera Marquez, Claudia Garcia, and Alicia Gomez, for and on behalf of their minor children, Respondents

No. 14–0903

Supreme Court of Texas.

Argued November 4, 2015

Opinion delivered: April 1, 2016

Brendan K. McBride, The McBride Law Firm, Robert Darin Darby, Escamilla, Poneck & Cruz, LLP, San Antonio TX, Jeffrey Lee Dorrell, Hanszen Laporte, LLP, Houston TX, Juan J. Cruz, Orlando Juarez Jr., J. Cruz & Associates, LLC, Laredo TX, Teresa Gutierrez, Attorney at Law, Austin TX, for Petitioner.

Jason E. Wright, Ralph Irad Miller, Weil, Gotshal & Manges LLP, John O'Connor, Attorney at Law, Dallas TX, Carlos E. Cárdenas, Law Offices of Carlos Eduardo Cárdenas, John Untereker, Attorney at Law, Joseph (Sib) Abraham Jr. (Deceased), Law Offices of Joseph (Sib) Abraham, Jr., El Paso TX, Eleanor Gilbane, Law Offices of Eleanor Heard Gilbane PLLC, Melanie Gray, Winston & Strawn LLP, Meredith Bishop Parenti, Parenti Law PLLC, Houston TX, James C. Harrington, Wayne Nicholas Justice, Krause Yang, Texas Civil Rights Project, Austin TX, for Respondents.

Angela Olalde, Greer Herz & Adams, League City TX, for Amicus Curiae El Paso Interreligious Sponsoring Organization and The Border Network for Human Rights.

Holly McIntush, Thompson & Horton LLP, Austin TX, John David Thompson III, Thompson & Horton LLP, Houston TX, for Amicus Curiae The Texas The Texas Association of School Boards' Legal Assistance Fund.

Justice Boyd, delivered the opinion of the Court.

This Court has previously addressed, and is even now considering, a well-known series of constitutional challenges to the way Texas funds its public schools.¹ In each of these cases, school districts and others alleged that the State's school-finance system unconstitutionally raises and distributes money to support the various school districts throughout the state.² This case presents a new twist: students' parents allege that a single school district unconstitutionally distributes its funds among the schools within the district. We cannot address the merits of these claims today, however, because we must first answer the preliminary question of whether Texas law requires the parents to seek relief through an administrative process before they can file suit in court. Because we conclude that the parents must first exhaust their administrative remedies, we reverse the court of appeals' judgment and dismiss the case for lack of jurisdiction.

I.Background

Sonia Herrera Marquez, Claudia Garcia, and Alicia Gomez (collectively, the parents) have children who attend schools within the Clint Independent School District. Relying on the district's own financial reports, the parents assert that the district allocates more money—as much as $3,512 more per student per year—to schools in the town of Clint than to comparable schools that their children attend in the communities of Montana Vista and Horizon City. According to the parents, their children's schools have more students who are “economically disadvantaged” or need bilingual education—two categories for which the State provides the district with additional funds. The parents believe more of those funds should go to their children's schools. Instead, the district allocates less to the schools that need more, and students at these “disfavored schools” do worse on standardized tests, drop out at higher rates, are less likely to graduate, and suffer other harms. The parents filed suit asking the court to enjoin the district from continuing its funding allocations, asserting in two causes of action that the district is violating the Texas Constitution's guaranties of “equal rights”³ and a “general diffusion of knowledge.”⁴

The district filed a plea to the jurisdiction, arguing that the trial court must dismiss the parents' claims because (1) the district enjoys governmental immunity, (2) the claims present a “political question” that courts cannot address, and (3) the parents failed to exhaust their administrative remedies before filing suit. The parents admitted that they did not first seek administrative relief but asserted that the exhaustion-of-administrative-remedies requirement does not apply to their claims. The trial court dismissed the suit, concluding that the parents should have first sought administrative relief. The court of appeals reversed, reasoning that Texas law does not require the parents to exhaust administrative remedies because their claims are “solely [for] violations of their children's state constitutional rights.” 445 S.W.3d 450, 456. The court of appeals remanded the case for the trial court to consider the district's immunity and political-question arguments. Id. We granted the district's petition for review.

II.Exhaustion of Administrative Remedies

When the Legislature creates an administrative agency, it may grant the agency authority to resolve disputes that arise within the agency's regulatory arena. See City of Houston v. Rhule, 417 S.W.3d 440, 442 (Tex. 2013). If the Legislature expressly or impliedly grants an agency sole authority to make an initial determination in such disputes, the agency has exclusive jurisdiction, and a party “must exhaust its administrative remedies before seeking recourse through judicial review.” Id. ; see also Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 221 (Tex. 2002) (explaining that an agency impliedly obtains exclusive jurisdiction “when a pervasive regulatory scheme indicates that Congress intended for the regulatory process to be the exclusive means of remedying the problem to which the regulation is addressed” (quoting Andrew G. Humphrey, Antitrust Jurisdiction Remedies in an Electric Utility Price Squeeze, 52 U. Chi. L. Rev. 1090, 1107 n.73 (1985) )). If the party files suit before exhausting exclusive administrative remedies, the courts lack jurisdiction and must dismiss the case. Rhule, 417 S.W.3d at 442 ; see also Essenburg v. Dallas Cty., 988 S.W.2d 188, 189 (Tex. 1998) (per curiam) (“[A] plaintiff's failure to exhaust administrative remedies may deprive courts of subject matter jurisdiction in the dispute.”).

The requirement that parties exhaust administrative remedies does not deprive parties of their legal rights. Rhule, 417 S.W.3d at 442 ; see Tex. Educ. Code § 7.057(b) (stating that an administrative appeal to the Commissioner of Education “does not deprive any party of any legal remedy”). Instead, it honors the Legislature's intent that “the appropriate body adjudicates the dispute” first, Essenburg, 988 S.W.2d at 189, and thereby “ensure[s] an orderly procedure to enforce those rights.” Rhule, 417 S.W.3d at 442. By requiring the agency to address the complaints first, the law permits the agency to apply its expertise and exercise its discretion to resolve the issue and to develop a complete factual record if the courts later get involved. See McKart v. United States, 395 U.S. 185, 194, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969) ; see also Kenneth Culp Davis, Administrative Law Doctrines of Exhaustion of Remedies, Ripeness for Review, and Primary Jurisdiction: 1, 28 Tex. L. Rev. 168, 169 (1949) (“Premature judicial intervention may defeat the basic legislative intent that full use should be made of the agency's specialized understanding within the particular field.”). A party who obtains relief through the administrative process avoids the expense and delay of litigation. Woodford v. Ngo, 548 U.S. 81, 89, 126 S.Ct. 2378, 165 L.Ed.2d 368 (2006) ; McKart, 395 U.S. at 195, 89 S.Ct. 1657. And if the outcome of the administrative process leaves the party dissatisfied, it may file suit and have the courts review the agency's decision.

Tex. Water Comm'n v. Dellana, 849 S.W.2d 808, 810 (Tex. 1993) ; see Ronald L. Beal, Texas Administrative Practice and Procedure , § 5.5.5, at 5–34 (2015) (“The purpose of the [primary-jurisdiction] doctrine is to assure that the agency will not be bypassed on what is specifically committed to it; the district court will remain open after the agency has acted.”). In this appeal, we cannot grant or deny the parents the relief they are seeking; instead, we decide only whether the law requires them to first seek that relief through an administrative process before they can seek redress from the courts.

A. Administrative Remedies for “School–Law” Complaints

The Texas Constitution requires the Legislature to “establish and make suitable provision for the support and maintenance of an efficient system of public free schools.” Tex. Const. art. VII, § 1. To fulfill this duty, the Legislature has established the Texas Education Agency (TEA), the office of the Commissioner of Education, the State Board of Education (SBOE), and local school districts throughout the state.⁵ The TEA consists of the Commissioner and agency staff. Tex. Educ. Code § 7.002. The SBOE must fulfill its duties “with the advice and assistance of the commissioner.” Id. § 7.102(b). School districts “have the primary responsibility for implementing the state's system of public education and ensuring student performance in accordance with [the Education Code],” id. § 11.002, while the Commissioner serves as “the educational leader of the state,” id. § 7.055(b)(1).

Regarding disputes that arise within the education system, the Legislature has provided that, with limited statutory exceptions not at issue here,

a person may appeal in writing to the commissioner if the person is aggrieved by:

(1) the school laws of this state; or

(2) actions or decisions of any school district board of trustees that violate:

(A) the school laws of this state; or

(B) a provision of a written employment contract between the school district and a school district employee, if a violation causes or would cause monetary harm to the employee.

Id. § 7.057(a). However, “[a] person is not required to appeal to the commissioner before pursuing a remedy under a law outside of [the school laws] to which [the school laws] make[ ] reference...