Tex. Educ. Agency v. Devereux Tex. League City

1

Texas Education Agency; Edward O'Neil, Director of Texas Education Agency; and Mike Morath, Commissioner of Education, Appellants v. Devereux Texas League City, Appellee

No. 03-22-00172-CV

Court of Appeals of Texas, Third District, Austin

May 10, 2023

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

Before Byrne Chief Justice, Smith and Jones Justices.^[*]

MEMORANDUM OPINION

J Woodfin Jones, Justice

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 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 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.

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 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...