Sanadco Inc., a Texas Corporation Mahmoud Ahmed Isba Broadway Grocery, Inc. Shariz, Inc. Ruby & Sons Store, Inc. And Rubina Noorani v. Glenn Hegar, Individually and in His Official Capacity as Comptroller of Public Accounts Office of Comptroller of Public Accounts for the State of Texas And Ken Paxton, in His Official Capacity as Attorney General of the State of Texas
03-15-00430-CV
| Tex. App. | Aug 19, 2015Background
- Appellants Sanadco, Inc. et al. challenge a Texas Comptroller collection action under Tax Code §111.010 and related regulatory statutes.
- Appellants joined counter-petitioners seeking declaratory relief under the APA and seeking judicial review of agency rules (AP92, AP122) and related constitutional/ultra vires claims.
- The trial court denied requests for TRO/INJ and dismissed key claims; the Third Court of Appeals is asked to abate and extend the record and transfer the clerk’s record.
- The appeal concerns Chapter 112 prepayment requirements and whether they bar such tax-related and regulatory-APA-based challenges in light of Nestle and prior Austin court rulings.
- Appellants seek to overturn Chapter 112-based jurisdictional rulings and obtain relief under Government Code §2001.038 (declaratory judgment) and ultra vires theories.
- The record includes several Exhibits and Certifications indicating ongoing appellate proceedings and related motions in multiple Sanadco-related actions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is prepayment of taxes unconstitutional for petitions under contested-administrative review? | Sanadco argues Chapter 112 prepayment blocks access to open courts unlawfully. | Comptroller asserts Chapter 112 prepayment is a jurisdictional bar. | Unconstitutional prepayment requirements; Chapter 112 does not bar such petitions. |
| Does §112.108 apply to petitions for declaratory relief under §2001.038? | Plaintiffs contend §2001.038 claims bypass §112.108 constraints. | Defendant maintains §112.108 governs cross-petitions seeking tax relief. | §2001.038 declaratory claims are not subject to §112.108 limitations. |
| Were Sanadco’s and counter-plaintiffs’ claims improperly tethered to Sanadco’s deficiencies? | Joinders are proper; each party’s claims must be considered separately. | Counter-plaintiffs’ claims align with Sanadco’s deficiencies. | Joinder is proper; severable claims to be considered separately on remand. |
| Did Chapter 112 deprive jurisdiction over Sanadco’s constitutional/ultra vires claims? | APA §2001.038 provides jurisdiction for valid rules challenges; not barred by 112. | Chapter 112 deprives jurisdiction over these defenses. | Chapter 112 does not deprive jurisdiction; §2001.038 claims retain jurisdiction. |
Key Cases Cited
- R Commc'ns, Inc. v. Sharp, 875 S.W.2d 314 (Tex. 1994) (open courts; prepayment unconstitutional)
- Weck v. Sharp, 884 S.W.2d 153 (Tex. 1994) (declaratory judgments not barred; prepayment invalid)
- Richmont Aviation, Inc. v. Combs, No. 03-11-00486-CV (Tex.App.-Austin 2013) (reaffirming Chapter 112 open-courts concerns)
- Rylander v. Bandag Licensing Corp., 18 S.W.3d 296 (Tex.App.-Austin 2000) (Chapter 112 prepayment violates open courts; access imperiled)
- In re Nestle USA, Inc., 359 S.W.3d 207 (Tex. 2012) (discussed Chapter 112; distinguished Nestle from other contexts)