the Texas Education Agency and Mike Morath, Commissioner of Education, in His Official Capacity v. Academy of Careers and Technologies, Inc. D/B/A Academy of Careers and Technologies Charter School, 499 S.W.3d 130

Background

Academy of Careers and Technologies (ACT), an open‑enrollment charter school, received TEA notice in Dec. 2014 of intent to revoke its charter based on consecutive poor financial and academic ratings triggering mandatory revocation under Tex. Educ. Code §12.115.
ACT pursued TEA informal review and an appeal to SOAH; the SOAH ALJ upheld TEA’s revocation decision.
ACT sued in district court seeking declaratory and injunctive relief, alleging due‑process, takings, ultra vires rulemaking, retroactivity, open‑courts violations, and other constitutional claims; it moved for a temporary injunction to stop revocation and seizure of assets.
TEA filed a plea to the jurisdiction asserting sovereign immunity and that the SOAH decision is final and not judicially reviewable; TEA also argued ACT had no constitutionally protected property interest in its charter.
The trial court denied TEA’s plea and granted the temporary injunction; TEA appealed. The court of appeals, relying on its decision in Texas Education Agency v. American YouthWorks, concluded the trial court lacked subject‑matter jurisdiction.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether district court has jurisdiction over ACT’s claims despite SOAH review	ACT argued its constitutional claims (due process, takings, open courts) and statutory challenges waive sovereign immunity and permit district‑court review	TEA argued sovereign immunity bars suit; SOAH review is the exclusive review and ALJ decision is final	Held: No jurisdiction; sovereign immunity not waived for ACT’s claims; SOAH review adequate for due process
Whether ACT has a constitutionally protected property interest in its charter	ACT claimed entitlement to charter and associated protections (due process)	TEA argued charters are statutory privileges/contracts, not protected property interests	Held: ACT lacks a constitutionally protected property interest in its charter
Validity of Tex. Educ. Code §12.128 (state takeover of property purchased with state funds) and takings claim	ACT argued §12.128 is facially unconstitutional and seizure of assets would be a taking; sought preemptive relief	TEA argued statute is constitutional: charter schools are governmental units; state may reclaim property purchased with public funds; takings claim unripe until alleged unlawful seizure occurs	Held: §12.128 constitutional on its face; takings claim unripe (no current injury); does not waive immunity
Open‑courts challenge to prohibition on judicial review of ALJ decisions	ACT argued SOAH’s finality rule denies judicial remedy in violation of open‑courts provision	TEA argued there is no common‑law cause of action curtailed and SOAH review satisfies process	Held: Open‑courts claim fails (no cognizable common‑law claim and no due‑process violation); does not waive immunity

Key Cases Cited

Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217 (Tex. 2004) (standards for plea to jurisdiction and subject‑matter jurisdiction review)
Butnaru v. Ford Motor Co., 84 S.W.3d 198 (Tex. 2002) (purpose of temporary injunction is to preserve status quo)
City of Garland v. Dallas Morning News, 22 S.W.3d 351 (Tex. 2000) (de novo review of legal questions in injunctions)
LTTS Charter Sch., Inc. v. C2 Constr., Inc., 342 S.W.3d 73 (Tex. 2011) (charter schools are part of public‑education system and subject to statutory control)
Ivey v. State, 277 S.W.3d 43 (Tex. Crim. App. 2009) (principle that legislature may condition or withdraw statutory benefits)
Yancy v. United Surgical Partners Int’l, Inc., 236 S.W.3d 778 (Tex. 2007) (test for open‑courts clause violations)