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txt) as the File Type. Enter a file name (without suffix) and click on the Save button for text editing later. Park v. Texas Department of Health, No. 04-97-00338-CV (Tex.App. Dist.4 07/22/1998) [1] [2] [3] [4] [5] Texas Court of Appeals No. 04-97-00338-CV 1998.TX.1047 <http://www.versuslaw.com> July 22, 1998 DAVID PARK, APPELLANT v. THE TEXAS DEPARTMENT OF HEALTH, APPELLEE Sitting: Catherine Stone, Justice Paul W. Green, Justice Karen Angelini, Justice The opinion of the court was delivered by: Catherine Stone, Justice From the 38th Judicial District Court, Medina County, Texas Trial Court No. 96-11-13912-CV Honorable Mickey R. Pennington, Judge Presiding AFFIRMED David Park appeals from an order granting the Texas Department of

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Health's plea to the jurisdiction, thereby dismissing Park's suit for declaratory judgment. In his sole point of error, Park argues there is no evidence to support the trial court's decision. We hold that because Park failed to exhaust his administrative remedies, the trial court properly concluded it lacked jurisdiction. [13] [14] Factual and Procedural Background Park is a beekeeper who collects honey from honeycombs and places it in large containers for sale and shipment to honey processors. In May 1995, the Texas Department of Health (TDH) sent Park written notification to renew his "food manufacturer" license which had expired three years earlier. Under the provisions of the Texas Food, Drug and Cosmetic Act, TDH regulates the licensing of food manufacturers. See Tex. Health & Safety Code Ann. § 431.222 (Vernon Supp. 1998) *fn1 ; 25 Tex. Admin. Code § 1.33 (Food and Drug Act). Apparently Park ignored the notifi-cation, which prompted a visit from a State Food and Drug Investigator on October 1, 1996, who investigated Park's "firm" and verified that Park was operating as a food manufacturer. In late October 1996 Park received a second letter from TDH confirming the findings of the recent inspection. The letter instructed Park to fill out the appropriate license applications and pay the fees due, and outlined the possible repercussions of operating as an unlicenced food manufacturer. In response to the letter, Park filed suit against TDH seeking a declaratory judgment. Park alleged that TDH's conduct was outside the scope of its delegated authority, essentially arguing that he was not a food manufacturer, but a grower or cultivator of a raw agricultural commodity. TDH filed a plea to the jurisdiction of the court, arguing that the doctrines of exhaustion of administrative remedies and primary jurisdiction deprived the trial court of the authority to entertain Park's declaratory action. The trial court granted TDH's motion, dismissing Park's suit. Standard of Review A plea to the jurisdiction challenges the court's authority to determine the subject matter of the cause of action. Dolenz v. Texas State Bd. of Med. Exam., 899 S.W.2d 809, 811 (Tex. App.- Austin 1995, no writ). If the court lacks jurisdiction, it must dismiss the suit. See North Alamo Water Supply Corp. v. Texas Dep't of Health, 839 S.W.2d 455, 459 (Tex. App.-Austin 1992, writ denied). A challenge to jurisdiction

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presents a question of law and is determined solely from a review of the plaintiff's petition. Id. at 457; Hernandez v. Texas Workers' Compensation Ins. Fund, 946 S.W.2d 904, 906 (Tex. App.-Eastland 1997, no writ). Since the trial court was not required to hear evidence on Park's plea, we overrule his point of error to the extent he claims the trial court erred in failing to receive evidence. [17] In reviewing the trial court's order of dismissal for want of jurisdiction, we take as true the facts plead in Park's petition and determine whether the petition supports jurisdiction in the trial court. See Hernandez, 946 S.W.2d at 906; Huston v. Federal Deposit Ins. Corp., 663 S.W.2d 126, 129 (Tex. App.-Eastland 1983, writ ref'd n.r.e.). Accordingly, we must review Park's petition to determine if the trial court properly ruled on the jurisdictional challenge. Plaintiff's Petition Park asserted in his petition that his suit was brought pursuant to the Tex. Civ. Prac. & Rem. Code Ann. § 37.001 (Vernon 1997) (Uniform Declaratory Judgment Act), and not pursuant to Tex. Gov't. Code Ann. § 2001.001 (Vernon Pamp. 1998) (administrative Procedure Act), and asserted that Park was unaware of any administrative filings against him by TDH. Park also asserted that TDH entered and inspected Park's premises, obtained a sample of honey, provided Park with an inspection report noting certain alleged deficiencies, and thereafter sent him a letter informing him that he needed to renew his license as a food manufacturer. Park alleged that all of these actions by TDH were "outside the scope of [TDH's] delegated authority" because Park was not a "food manufacturer" as defined by Chapter 431 of the Texas Health and Safety Code. In support of this allegation Park further alleged that he does not combine, purify, process, or package food for sale through a wholesale outlet and does not have a retail outlet. Rather, Park alleged that he takes raw honey from the comb of bee hives and sells it to processors who then put it in final form for consumption by the public. Accordingly, Park requested a declaratory judgment that he does not fall within the jurisdiction of TDH as a food manufacturer. Although we take as true the factual allegations in Park's petition, the legal Conclusions asserted by Park are not binding. Thus, we need not accept as true Park's Conclusions that he is not a food manufacturer and that the conduct of TDH is beyond its scope of authority.

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Exhaustion of Administrative Remedies The exhaustion of administrative remedies doctrine provides that, as a general rule, prior to court intervention, a party must first exhaust all available administrative remedies. City of Sherman v. Public Utility Comm'n, 643 S.W.2d 681, 683 (Tex. 1983); Westheimer Indep. Sch. Dist. v. Brockette, 567 S.W.2d 780, 785 (Tex. 1978). The exhaustion requirement concerns the timing of judicial review of administrative actions. Bandera Downs, Inc. v. Alvarez, 824 S.W.2d 319, 322 (Tex. App.-San Antonio 1992, no writ). As a practical matter, this doctrine prevents parties from seeking redress from courts before an administrative process runs its statutorily-created course. See id. An exception to the general rule allows a court to intercede before administrative remedies are exhausted when the administrative agency acts without jurisdiction. Texas Educ. Agency v. Cypress-Fairbanks I.S.D., 830 S.W.2d 88, 90 (Tex. 1992) (citing Westheimer Indep. Sch. Dist., 567 S.W.2d at 785). However, the mere claim that an administrative agency acted "ultra vires" does not authorize litigation before administrative remedies are exhausted. North Alamo Water Supply Corp., 839 S.W.2d at 459; see Texas Comm'n of Licensing & Regulation v. Model Search America, Inc., 953 S.W.2d 289, 292 (Tex. App.-Austin 1997, no writ). Relying upon Texas Dept. of Health v. Texas Health Enterprises, Inc., 871 S.W.2d 498 (Tex. App.-Dallas 1993, writ denied) and Public Utility Comm'n v. City of the Austin, 728 S.W.2d 907 (Tex. App.-Austin 1987, writ ref'd n.r.e.), Park urges that the "ultra vires" exception authorizes the trial court to entertain his declaratory action. We disagree with both Park's reliance on the above-mentioned authority and his assertion that his case falls with the exception to the exhaustion doctrine. In Health Enterprises, Inc., the Texas Department of Human Health Services (Human Services), the state body responsible for administering the federally funded Medicaid program, canceled its Medicaid vendor contract and withheld Medicaid vendor payments from Texas Health Enterprises, Inc., a nursing home, after the Texas Department of Health (TDH) revoked its Medicaid certification subject to an informal pretermination review and a full post-termination due process review. Texas Health Enterprises, Inc., 871 S.W.2d at 500. The nursing home

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successfully moved for summary judgment seeking to enjoin Human Services from suspending Medicaid payments pending its administrative appeal. Id. On appeal, in addition to other contentions, TDH and Human Services argued that the trial court erred in not requiring the nursing home to first exhaust its administrative remedies before granting relief. Id. at 507-08. The Fifth Court of Appeals rejected this argument, not due to the "ultra vires" exception as Park suggests, but because the suspension of the Medicaid payments was a question of law that was collateral to the decertification matter. Id. at 508. We do not find the instant case in the same posture. Here, the determination of whether Park must maintain a license as a "Food Manufacturer" pursuant to the Texas Food, Drug, and Cosmetic Act is neither a collateral matter to the instant dispute, nor a pure question of law. It is clear that the controversy Park desires to resolve in his declaratory action is the primary contention between the parties. Further, while we take as true the facts as alleged in Park's petition, we do not have to assume that all the facts necessary for the resolution of the issue have been stated or are fully developed. [25] Public Utility Comm'n is also distinguishable. The dispute in Public Utility Comm'n involved the constitutionality of section 26 (c) of the Public Utilities Regulatory Act (PURA). Public Utility Comm'n, 728 S.W.2d at 909. The controversy began when customers, dissatisfied over a recent rate increase, sought review of the Austin City Council's ratemaking actions. Id. While a decision was pending, the City of Austin filed a declaratory judgment under both the Uniform Declaratory Judgment Act and the Administrative Procedure and Texas Register Act, essentially arguing that section 26 (c) of PURA was unconstitutional due to the absence of legislatively established standards to review rates of municipally-owned utilities. Id. The trial court ruled in the City's favor. On appeal, the Austin Court of Appeals addressed the trial court's jurisdiction. Id. at 910-11. Relevant to Park's argument, the court stated that jurisdiction was proper under the Uniform Declaratory Act because both a real controversy existed between the parties and the entire controversy could be determined by judicial declaration. Id. at 911. However, unlike Public Utility Comm'n, the instant case does not involve a constitutional claim. The Austin Court of Appeals has previously noted that the Declaratory Judgments Act does not itself confer jurisdiction. Southwestern Bell Tel. Co. v. Public Utility Comm'n, 735 S.W.2d 663, 667 (Tex. App.-Austin 1987, no writ). Usually, in administrative proceedings, the trial court's jurisdiction under this Act has derived from its inherent power to hear and determine whether the agency action in controversy was ultra vires or unconstitutional. Id. Clearly, the latter consideration was present in

Public Utility Commission, and therefore, the exhaustion of remedies doctrine did not divest the trial court's authority to entertain a declaratory action. See also Model Search America, Inc., 953 S.W.2d at 292. [26] [27] Conclusion In the instant case, it is undisputed that (1) TDH has jurisdiction to oversee the licensing of food manufacturers, see Tex. Health & Safety Code Ann. §§ 431.222 (Vernon Supp. 1998); 25 Tex. Admin. Code § 1.33 (Food and Drug Act), and (2) that Park's claim does not involve a constitutional violation. Essentially, Park's claim of "ultra vires" involves a contention that TDH has wrongly decided that he is a food manufacturer as defined in the Texas Food, Drug and Comestic Act. The exhaustion doctrine allows agencies to first consider issues legislatively assigned to them, even if they might wrongly decide them. See North Alamo Water Supply Corp., 839 S.W.2d at 459. Accordingly, we conclude that because Park failed to exhaust his administrative remedies, the trial court properly concluded it lacked jurisdiction. The order of the trial court is affirmed. Catherine Stone, Justice DO NOT PUBLISH

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Opinion Footnotes

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*fn1 Section 431.221 (2) of the Act defines a "food manufacturer" as a person who combines, purifies, processes, or packages food for sale through a wholesale outlet. The term also includes a retail outlet that packages or labels food before sale and a person who represents itself as responsible for the purity and proper labeling of an article of food by labeling the food with the person's name and address. Tex. Health &

Safety Code Ann. § 431.221 (2) (Vernon Supp. 1998). 19980722