From your Browser's File menu select Save As...

or Save As File, then choose

Plain Text (*.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] Texas Court of Appeals

[2] No. 04-97-00338-CV

[3] 1998.TX.1047 <http://www.versuslaw.com>

[4] July 22, 1998

[5] DAVID PARK, APPELLANT

v.
THE TEXAS DEPARTMENT OF HEALTH, APPELLEE

[6] Sitting: Catherine Stone, Justice Paul W. Green, Justice Karen

Angelini, Justice

[7] The opinion of the court was delivered by: Catherine Stone, Justice

[8] From the 38th Judicial District Court, Medina County, Texas

[9] Trial Court No. 96-11-13912-CV

[10] Honorable Mickey R. Pennington, Judge Presiding

[11] AFFIRMED

[12] David Park appeals from an order granting the Texas Department of
 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] Factual and Procedural Background

[14] 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.

[15] Standard of Review

[16] 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
 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.

[18] Plaintiff's Petition

[19] 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.

[20] 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.
[21] Exhaustion of Administrative Remedies

[22] 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).

[23] 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.

[24] 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
 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] Conclusion

[27] 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.

[28] The order of the trial court is affirmed.

[29] Catherine Stone, Justice

[30] DO NOT PUBLISH

Opinion Footnotes

[31] *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