Rule Challenges Under APA 2001.038 in Texas
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Karen L. Watkins
Assistant Attorney General
Administrative Law Division
Views expressed are those of the presenters, do not constitute legal advice,
and are not official opinions of the Office of the Texas Attorney General.
A claimant might name you as a party to his suit
If the claimant conducts discovery, you might
•
Have to produce documents (hard and electronic)
•
Be deposed
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A claimant’s challenge to the validity or applicability of rule
Applicability
•
Does the rule apply in the specific circumstances?
Validity
•
Was it properly adopted under the APA?
•
Is it consistent with and authorized by the agency’s
enabling statute and the constitution?
Tex. Gov’t Code
§
2001.038(a).
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A person with a legal right or privilege
If the rule
•
Interferes or threatens to interfere with the right or
privilege, or
•
Impairs or threatens to impair the right or privilege
Tex. Gov’t Code
§
2001.038(a).
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Can only be brought in Travis County district courts
Agency must be made a party
Claimant does not need to raise the challenge at agency
first
Cannot be used to delay or stay an agency hearing to
suspend, revoke, or cancel a license after the agency has
sent notice of hearing
Tex. Gov’t Code §2001.038(b) – (e).
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If all the stars align, the court of appeals may be the first
court to rule on the challenge if
•
The court or a party requests transfer to 3
rd
COA,
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District court finds that “public interest requires a
prompt, authoritative determination” of the challenge,
and
•
COA agrees to the transfer.
Tex. Gov’t Code
§
2001.038(f)
.
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A written agency rule adopted in compliance with the APA
An agency’s statement, generally applicable, that
•
Implements, interprets, or prescribes law or policy; or
•
Describes the procedure or practice requirements of the
agency; but NOT
•
An agency statement concerning internal agency
management or organization not affecting private rights.
Tex. Gov’t Code
§
2001.003(6)
.
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A letter to company informing it that its practices were
violating agency rule.
Teledoc, Inc. v. Tex. Med. Bd.
, 453
S.W.3d 606 (Tex. App.—Austin 2014, pet. denied).
A cut-off date for submitting data used to determine
reimbursement rate.
El Paso Hosp. Dist. v. Tex. Health and
Human Servs.
, 247 S.W.3d 709 (Tex. 2008).
Customary practice of imposing reciprocal sanctions on
licensee sanctioned in another jurisdiction.
Tex. State Bd.
of Pharm. v. Witcher
, 447 S.W.3d 520 (Tex. App.—Austin
2014, pet. denied).
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Enforcement of a statute, as plainly worded, is not a rule.
Tex. Alco. Bev. Comm’n v. D. Houston, Inc.
, No. 03-13-
000327-CV, 2017 WL 2333272 (Tex. App.—Austin May 25,
2017, pet. denied).
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Creative claimants will frequently allege additional causes of
action so that they can name additional defendants,
including board or commission members and executive and
other directors.
See e.g.
Hyundai Motor Amer. v. New
World Car Nissan, Inc., et al.
, 581 S.W.3d 831 (Tex. App.—
Austin 2018, no pet.) (claimant named agency, board, board
chair, and executive director as defendants).
Creative claimants also seek very broad discovery.
•
Depositions of named individuals
•
Hundreds of thousands of documents
•
E-discovery from everyone
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Explore the unique aspects of 2001.038 rule challenges in Texas, including what constitutes a rule challenge, who may bring one, and where they can be filed. Learn about the process, requirements, and potential outcomes of these challenges under the Texas Government Code. Discover how individuals with legal rights or privileges can challenge the validity and applicability of agency rules with key insights provided by Karen L. Watkins, Assistant Attorney General of the Administrative Law Division.
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Presentation Transcript
Rule Challenges Under APA 2001.038 Karen L. Watkins Assistant Attorney General Administrative Law Division Views expressed are those of the presenters, do not constitute legal advice, and are not official opinions of the Office of the Texas Attorney General.
Why might you care? A claimant might name you as a party to his suit If the claimant conducts discovery, you might Have to produce documents (hard and electronic) Be deposed
What is a 2001.038 rule challenge? A claimant s challenge to the validity or applicability of rule Applicability Does the rule apply in the specific circumstances? Validity Was it properly adopted under the APA? Is it consistent with and authorized by the agency s enabling statute and the constitution? Tex. Gov t Code 2001.038(a).
Who may bring a 2001.038 challenge? A person with a legal right or privilege If the rule Interferes or threatens to interfere with the right or privilege, or Impairs or threatens to impair the right or privilege Tex. Gov t Code 2001.038(a).
Unique aspects of rule challenges Can only be brought in Travis County district courts Agency must be made a party Claimant does not need to raise the challenge at agency first Cannot be used to delay or stay an agency hearing to suspend, revoke, or cancel a license after the agency has sent notice of hearing Tex. Gov t Code 2001.038(b) (e).
Unique aspects of rule challenges (cont d) If all the stars align, the court of appeals may be the first court to rule on the challenge if The court or a party requests transfer to 3rd COA, District court finds that public interest requires a prompt, authoritative determination of the challenge, and COA agrees to the transfer. Tex. Gov t Code 2001.038(f).
What is considered a rule? A written agency rule adopted in compliance with the APA An agency s statement, generally applicable, that Implements, interprets, or prescribes law or policy; or Describes the procedure or practice requirements of the agency; but NOT An agency statement concerning internal agency management or organization not affecting private rights. Tex. Gov t Code 2001.003(6).
Example rules not adopted under APA A letter to company informing it that its practices were violating agency rule. Teledoc, Inc. v. Tex. Med. Bd., 453 S.W.3d 606 (Tex. App. Austin 2014, pet. denied). A cut-off date for submitting data used to determine reimbursement rate. El Paso Hosp. Dist. v. Tex. Health and Human Servs., 247 S.W.3d 709 (Tex. 2008). Customary practice of imposing reciprocal sanctions on licensee sanctioned in another jurisdiction. Tex. State Bd. of Pharm. v. Witcher, 447 S.W.3d 520 (Tex. App. Austin 2014, pet. denied).
Practical Defenses Available to Agency Enforcement of a statute, as plainly worded, is not a rule. Tex. Alco. Bev. Comm n v. D. Houston, Inc., No. 03-13- 000327-CV, 2017 WL 2333272 (Tex. App. Austin May 25, 2017, pet. denied). Section 2001.038 cannot be used to determine how an agency s rule should apply to specific facts. LMV-AL Ventures, LLC v. Tex. Dep t of Aging and Disability Servs., 520 S.W.3d 113 (Tex. App. Austin 2017, pet. denied).
Considerations for Agency When Rule Challenge is Filed Creative claimants will frequently allege additional causes of action so that they can name additional defendants, including board or commission members and executive and other directors. See e.g.Hyundai Motor Amer. v. New World Car Nissan, Inc., et al., 581 S.W.3d 831 (Tex. App. Austin 2018, no pet.) (claimant named agency, board, board chair, and executive director as defendants). Creative claimants also seek very broad discovery. Depositions of named individuals Hundreds of thousands of documents E-discovery from everyone
