Mike Morath, Commissioner of Education v. Sterling City Independent School District, Highland Independent School District, and Blackwell Consolidated Independent School District

MORATH, Mike Education, Petitioner,

STERLING CITY INDEPENDENT DISTRICT, Highland

SCHOOL Inde

pendent District, School and Black

well Consolidated Independent School

District, Respondents

NO. 14-0986

Supreme Court Texas.

Argued December

Opinion delivered: June

Rehearing September 20Í6 Denied

District, Blackwell Inde- Consolidated pendent District. School HECHT announced CHIEF JUSTICE Court of the delivered judgment GREEN, opinion, in which JUSTICE LEHRMANN, and JUSTICE JUSTICE joined. DEVINE of the Texas Education Section 42.2516 of Edu- requires the Code1 Commissioner adjustments state cation to make certain that his provides aid school districts “final not be determinations action, ultra vires appealed.”2 complain three school districts authority un- exceeded his Commissioner Legisla- hold that the der the statute. We of which the ture has the decisions made beyond review. complain districts judgment We therefore reverse case for appeals3 and dismiss the court jurisdiction. want of largely schools public Texas are funded by the Klusmann, Ellen ad valorem taxes also Beth Assistant local Solici- General, Pro- through the Foundation Attorney tor Office of the Gener- State School 1,000 (“FSP”). al, Texas Hodge, Attorney gram T. First Asst. over Daniel districts, General, Abbott, Greg and local tax revenues Attorney Gener- W. Texas, Mitchell, among vary widely them. To reduce al of F. Solicitor Jonathan General, General, provides funding Attorney disparities, the FSP Office Bunker-Henderson, “recaptures” Beth districts and property-poor Nichole Assis- General, Shelley Attorney property-rich Dahl- local districts. tant Nieto berg, Attorney Office of Aus- General years, For past school districts TX, Morath, tin Mike has not complained have the FSP Education. re- sufficiently equalized funding and have McCollom, O’Hanlon, school fi- peatedly challenged public T. L.

Kevin Leslie inefficient, Demerath, being system Austin inade- O’Hanlon McCollom & nance TX, of Article Independent quate, and unsuitable violation Sterling City School District, VII, Highland 1 of the Texas Independent Section Constitution.4 School 2014). (Tex.App.-Eastland § 3. 447 1. 42.2516. Educ. (codified Indep. Kirby, Edgewood § Sch. v. until 2009 as Dist. 1, 2009, (Tex.1989); 42.2516(1)); Indep. Leg., Edgewood Sch. § Act of June 81st S.W.2d 391 Tex, (Tex.1991); R.S., 57, Kirby, § ch. Gen. Laws Dist. 804 S.W.2d 491 3646], amending May Indep. Sch. Dist. v. [HB Act of Carrollton-Farmers Branch C.S., Dist., 12, 2006, Edgewood Leg., Indep. ch. Sch. 826 S.W.2d 489 3d 79th 1], (Tex.1992); Edgewood Indep. 48-49 Sch. Dist. v. [HB 2006 Tex. Gen. Laws allotment, equalize statutory funding The FSP’s efforts maximum value of among limiting per tax local property the districts local taxable student weighted prompted challenges average daily have rates also attendance (‘WAJDA”). operates the FSP as a statewide level VIII, prohibited by Article used in determining tax 1-e recapture.10 Togeth- er, agreed the Texas of Constitution.5 We components, these three with other rel- challenge Neeley considerations, v. with in West atively operate minor Orange-Cove Independent Consolidated per-WADA a determine district’s funding. District.6 School One of facet the extensive HB 1 Following Neeley, Legislature in 42.2516, changes, replaced Section limita- (“HB 1”), 1 2006 enacted Bill over- House tions on “compres- local tax rates with a hauling extremely the FSP.7 FSP is mechanism, lowering sion” tax rates complex, funding its formulas one-third.11 To “blunt the short-term ef- it in elaborate. some detail We described fects of compression” tax on school dis- this in the latest case involv- earlier Term tricts,12 a the statute included “hold harm- ing challenges constitutionality.8 to its expire less” that is in mechanism13 due out only generally Here need set more any 2017.14 For district school whose parts important to this case. funding statutory formulas under did not revenue, HB 1 target retained the basic reach a stated FSP’s structure. FSP of components, By Two its referred to as the would make difference.15 up the level, token, per-student if guaranteed basic allotment de- same a district’s reve- funding termine the level of a district nue its revenue as a FSP exceeded result component, equalized receives.9 A of formula its equal- third increases level, allotment, level, guaranteed ized wealth of product the basic basic lev- Meno, (Tex.1995); 42.2516(a), [HB 917 717 W. S.W.2d (formerly Code§ Educ. I] Tex (a-D). Orange-Cove Indep. Sch. Dist. v. Consol. Alanis, (Tex.2003); Neeley 107 S.W.3d 558 Dist., Orange-Cove Indep. W. Consol. Sch. Coal., Taxpayer 12. Student Tex. & Fairness (Tex.2005); 176 S.W.3d 746 Morath v. Tex. 490 S.W.3d at 838. Coal., Taxpayer & Student Fairness 490 826, (Tex.2016). S.W.3d 2016 WL2853868 2006, 12, C.S., Leg., May 13. Act 79th 3d of 5, 1.04, 45, § Tex. Gen. Laws ch. 2006 47 Meno, 737-738; Neeley, 5. 917 S.W.2d at 176 (formerly [HB 1] Tex. Educ. 751, (appeal S.W.3d at after remand 794-798 42.2516(b), (c)); Taxpayer § & see Tex. Stu Alanis, 563, 586); 107 Tex. S.W.3d Tax- Coal., S.W.3d at 838. dent Fairness 490 Coal., payer & Student 490 S.W.3d at Fairness 841. 2011, 28, C.S., Leg., 14. 82d 1st Act June 754, Neeley, 6. 176 S.W.3d at 794-798. 4, 57.18, .34, 32(a)(2), §§ 2011 Tex. ch. Gen. 5254, 5316, 1]; May [SB Laws Act 12, 2006, C.S., May Leg., Act 7. 79th 3d ch. 29, 2015, R.S., 448, 6, Leg., § ch. 84th 5, 1], 45 [HB Tex. Gen. Laws ——, 7]; see Tex. [HB Gen. Laws Coal, Taxpayer & Coal., Student Fairness Taxpayer 8. Tex. & Fairness Student ("[Additional State Aid for Tax S.W.3d at 863. presently 42.2516] Reduction under Section Id. 9. funding, FSP and is set about of total 1% 2017.”). expire 10. Coal., C.S., Taxpayer 15. Tex. Student Fairness May Leg., Act of & 79th 3d ch. Gen. 490 S.W.3d at 2006 Tex. Laws 46-49 ber of attendance credits that school required the

el, a “Clawback Provision” ,to steps equal amount year recover cost take aat since provision, repealed, revenue, excess. excess determined stated: commissioner.16 any provision Notwithstanding “Finality 42.2516 also included title, if “A Provision” which stated: determination in weighted student

local, per commissioner under this section daily for the mainte- average attendance may not appealed.”17 final operations of district nance and provisions Legislature included such year available throughout the FSP.18 increases to as a result 41.002, the level under Section provisions the “hold While harmless” 42.101, allotment under basic Section effect, were in the Commissioner applied guaranteed level under Section to five school the Clawback Provision dis- 1], by 42.302 made exceeds the [HB in- experienced tricts a had revenue to amount which a district entitled levels, target partly crease their due above (b) under Subsection school HB operation FSP under must: year, commissioner higher tax due to but also from revenues (1) reduce amount aid For dis- property these rise values.19 to provided the district that school tricts, year operative, first in the HB was year by equal amount the excess nearly per-WADA actual revenue was ...revenue, by the as determined commis- target Only twice revenue. per-WADA sioner; or parties three of the are districts following table appeal before us. The now

(2) per for a district with wealth per-WADA their shows for each greater than the applicable student compared to per-WADA their revenue as 41.002(a), described num- actual require purchase revenue: 4173, 12, C.S., 2006, May Leg., (redesignat- [HB 3646] 16. Act of 3d Gen. Laws 79th ch.'5, 1.04, 45, 42.2516(h)). § § as Gen. ed Tex. Laws Educ. Code Tex. (formerly [HB 1] Tex. Educ. Code 42.2516(h)), 1, 2009, repealed by § 42.2513(b), .25161(c), Act of June §§ Educ. Code Tex R.S., 1328, 57, Leg., .252(b), .2523(d), § .2518(d), .2521(c), 81st ch. 2009 Tex. ,2524(j), 4173, 3646], .260(d). Gen. Laws 4194 [HB 2006, C.S., 12, May Leg., Act of 3d just 79th 19. The school west of five districts Coke, Nolan, § Scurry, Sterling, ch. 2006 Tex. Gen. Laws Abilene in (formerly Taylor in- [HB 1] Their value Counties. Educ. 42.2516(f)), 1, 2009, mostly § Act due new wind farm amended of June creases were R.S., Leg., operations. 81st ch. 2009 Tex. funding Concerned in these dis- The total amounts determined be so than in greater tricts would much parts Commissioner and the attribut- districts, distinguished the Commissioner the- able FSP them, applied the Clawback in this table: shown Provision increases three These Districts20 the sued Com- Provision con- listed the Clawback but declaratory judgment missioner that tended he had broader authority ensure 4o his authority he had exceeded under the that "not district revenues did exceed tar- get Clawback argued Provision and thus acted ultra He that his determi- amounts. They with, vires. asserted the Clawback nations even were consistent and to, applied necessary operation Provision revenues proper to excess event, In resulting any above revenues from FSP. the Commissioner as- is, serted, operation of Finality precluded HB 1-that from the Provision three review, judicial components provision: and the trial court there- listed allotment, level, fore jurisdiction over the basic lacked Districts’ guaranteed Commis- and the level. The trial denied claim. The court the Commis- dispute part plea jurisdiction grant- sioner did sioner’s sought requested declaratory excess amounts he did ed re- recover the Districts’ lief, attorney not result components plus the three FSP fees and costs.21 districts, alleged In- Com Two more Robert Lee also that the Districts interpretation of the dependent Hermleigh missioner’s School In- District Clawback Provision violated Carrollton-Farmers Branch District, dependent School intervened . to Independent Edgewood District v. School Inde bring claims under different but District, (Tex. pendent 826 S.W.2d School them, against and those trial court ruled 1992), interpretation in that this exercised appeal. not on claims are levy too over the local with much control tax otherwise, law, affirmed, provided or is holding by appeal that the appeals court of conclusive, of the action his is final and had acted This to his decision.”24 matter submitted inap- Finality Provision was therefore the to the Texas Constitu- principle was added plicable.22 V, gives Section 8 tion 1985.25 Article petition granted jurisdiction “except general courts review.23 exclusive, orig- or appellate, in cases where jurisdiction may inal be conferred we have years, over well For other law on some Constitution or Legislature’s recognized the court, tribunal, body.”26 or administrative actions. judicial of executive limit review to limit Legislature’s power is principle “No explained: In action is not unlimited. review executive established, firmly more than that where of con- of claimed violations Judicial review authority, delegat special-and exclusive rights infringement vest- and’ stitutional any govern or officer of the property rights ed tribunal ed cannot be foreclosed.27 decision, may ment, Legislature But in other revising and no instances mode voters, cognizable by equity and thus courts law or out the authorization of local VII, grant any granted Article that could be violated Article Section relief ”); VIII, 1-e, equity.' re Texas Constitution. either courts of law In cf. (Tex. Entergy Corp., The trial court observed that the Districts ("An being 2004) challenge statute as unconstitu agency jurisdiction has exclusive and, face, on the cour agency tional its granted Legislature when t found that statute, Commissioner violated sole initial determi- to make an concluded that it did not need dispute.”). in a nation Nonetheless, reach the issue. constitutional expressly the trial court later addressed Gen., 27.See, e.g., Att’y re Office Districts’ contentions the Commission (Tex.2015) ("It is well settled § violated VII 3 and er’s demand Articles may trial review that an courts administrative 1-e, framing question §VIII as “whether only provides right a action if a statute exercise the statute.is an unconstitutional review, adversely judicial affects or the action holding control over local discretion” and . right property vested or a otherwise violates that, Com the court "found that the because Emps. right.”); Mun. constitutional Hous. authority statutory missioner acted within his 151, Ferrell, Sys. 158 Pension 248 S.W.3d v. against offsetting local excess revenues ("There (Tex.2007) right judicial re- no district, state revenues that were due view of an unless a stat- administrative order dis the statute not interfere with local does explicitly provides right that or the order ute appeal. cretion." did The Districts right."); violates a Stone v. Tex. constitutional Bd„ 385, Liquor 417 S.W.2d 385-386 Control 505, (Tex.App.-Eastland 22. 447 S.W.3d 513. 1967) (Tex. (“It is no is well that there settled 2014). right appeal order from an administrative (Oct. 9, 2015). Sup.Ct. 59 Tex. J. 7 23. provides or unless the for the same statute right unless the violates a constitutional order (1859). 253, Perry, Tex. 24. Keenan v. right.”); adversely or a vested affects Hancock, 231, City 150 Tex. v. Amarillo R.S., 14, 4,§ Leg., 25. See Tex. Res. 69th S.J. ("Judicial 788, (1951) review of Tex. Laws Gen. may pro- specifically action be administrative vided, Const, by legisla- specifically denied § 8. See Petro- art. also Dubai ture[, Kazi, (Tex.2000) specifi- legislature but even when] Co. v. leum review, cally judicial denies decisions an ("By jurisdic- courts have ‘the V, body in court provided by of the tion Article administrative attacked Constitution,’ 24.007, they provision State or if violate some Texas tex. Gov't Code (citations omitted)). ‘may any hear and determine cause that Federal Constitution.” final, an agency’s make executive’s actions final.28 utive an decision clear viola- tion of a governing might statute be sub- argue that Fi Districts ject review.30 The Court itself nality precludes only appeal Provision an view, has not endorsed that but in Klumb from the Commissioner’s determinations Municipal Employees v. Houston Pension under Section not an ultra vires System, involving a case agency same suit to declare his determinations invalid. Ferrell, and the same statutes as in provision But the also makes the Commis deciding assumed without Justice sioner’s determinations final. Houston suggestion might Brister’s be correct and Municipal System Pension Employees proceeded to conclude that pension Ferrell, we stated that ‘final “[t]he words its board had abused discretion.31 binding,’ an when used describe stated, however, that an ultra vires chal- decision, preclude judicial administrative lenge to executive action made final review.”29 The same true the word brought statute could not be absent a alone. argue “final” The Districts “manifest”, “conspicuous and irreconcil- Ferrell legislatively pre holds able” conflict between the action and the finality scribed for an executive decision authority statutory asserted precludes execu- review for an abuse discre tive.32 tion, The Court has never not for statutory allowed violation. The challenge to an Districts executive decision contend that made Commissioner final merely did not statute. abuse his discretion re covering exceeding target levels The Clawback Provision required the any reason other than the three listed Commissioner recover revenue exceed- Provision; rather, in the Clawback they ing target levels operation contend, the Commissioner exceeded HB 1 FSP under but not prohib- under statute. it him recovering revenue that for other reasons exceeded The effect of a levels. The making statute argue that executive is to Districts con- determination final broaden veyed by provision the executive’s was discretion. The Districts exclusive. The point to concurring opin Justice Blister's concedes the Districts’ Ferrell, that, ion in raising possibility interpretation of the statute is reasonable notwithstanding making a statute an exec- might prevail Finality absent the Pro- argue 28. The Districts if alleged clearly violating that Section 42.2516 the board was some gave the Commissioner the unreviewable au provision gives of the statute. [The statute] thority interpret he apply claims to the pension complete the board in- discretion to Provision, Clawback this statute be statute, would terpret the but not violate it.... But unconstitutionally delegation legisla of broad plaintiffs argue only the the board is power tive in violation of the constitutional statute, misinterpreting charge the we can- provision separation powers. for of See Tex. adjudicate interpreting without the statute Found., Boll WeevilEradication Inc. Lewel v. ourselves.”). len, (Tex. 1997). 952 S.W.2d But the detailed, very FSP is and the Commissioner (Tex.2015) (‘‘[W]e 31. 458 S.W.3d will inconsistently no asserts to act with purposes analysis assume for of our that the funding system the school it establishes. The exception ultra doctrine is an [the vires to nondelegation implicated. doctrine is not (citing judicial ban on statute]’s review.” Fer rell, (Brister, J., at concur 29. 248 S.W.3d at 158. ring))). (Brister, J., ("A concurring) 30. Id. at 160 dif- might presented plaintiffs ferent case the if 10-11. argues Commissioner.” Post acts But the Commissioner

vision. However, agree I the also with because Section under determinations Finality pre- Provision final, plurality “[t]he he the 42.2516are to to exceeding challenges the from cludes Districts’ school prevent districts decision,” ante at I inconsistent the FSP. Commissioner’s target revenue with circumstances, agree. judgment. concur In these oper- complex system is a must FSP

ate within constitutional boundaries. provisions of Section “hold harmless” by the the dis- plurality, As discussed designed to operate 42.2516were from pute arises the Commis- case legit- years. The Commissioner was fewa of decision sioner to clawback Education’s levels imately concerned that revenue several excess revenue from school dis- trespassed the Districts experienced by (“Districts”) pursuant former tricts sec- Though the Districts’ those boundaries. tion Education Code one funding in levels for excess Provision”). (“Clawback The Clawback sys- certainly no year posed threat requires the Provision whole, the tem as a Commissioner’s deter- provided of state “reduce the aid to treat those like all districts mination equal to an amount [a] ... with districts is school conflict revenue, excess determined manifest, con- much less a of state commissioner” when the “amount On spicuous, and irreconcilable conflict. local per student exceeds ... contrary, the Commissioner’s determi- amount to is entitled which a district not only with Section nation was consistent year” consequence as a ... [the] To aas whole. with FSP 42.2516but “of level increases cir- challenge in these allow Districts’ ..., ..., guar- allotment basic Legisla- cumstances would circumvent anteed level.” Educ. plain ture’s limitation on review. 42.2516(h) (2006). Here, the Commis- that his determination

sioner concedes part large “excess was revenue” based precludes Provision on increases in the Districts’ tax revenues. Finality “tax not one of the three challenges Districts’ As revenue” is categories un- in the the Dis- recover revenue them listed decision allege The trial tricts the Commissioner acted ultra Provision. der Clawback vires. jurisdiction to hear court therefore lacked According-

the Districts’ suit. judg- ly, appeals’ the court we reverse A ment and the case for dismiss want Belt Terminal said Houston & jurisdiction. “govern- Railway City Houston that immunity complaining mental bars suits BROWN, concurring. JUSTICE not an exercise absolute discretion but complaining I Com- of ... an exer- agree the dissent that “the suits officer’s with to ref- missioner’s several cise ... limited discretion without decision or in from the was not erence to conflict with million dollars constraints [Districts by authorizing the to authorized ... section of the law official act.” determination Code, (Tex.2016). Education thus 487 163 42.2516” S.W.3d Without discussion, plurality claims vires much concludes “the were ultra [Districts’ Provision .pleaded Clawback the Districts “[t]he that ... viable ultra vires claims; Commissioner] recover- but section 42.2516 contains a fi- prohibit [the nality provision. provision That plainly ... lev- ing exceeded states that determination “[a] to com- for reasons other than els” increases allotment, missioner this section level, under basic final may be appealed.” guaranteed level. Ante at 413. But as the Tex. Educ. Code 42.2516(i) (2006) § (emphasis added). out, by points enumerating dissent three no provision There was similar at issue in categories, plain language specific notes, plurality Houston Belt. As the to operates ] section “limit[ Municipal Employees Houston stated as to he discretion what System v. Pension Ferrell that “[t]he may recovering excess when consider” ‘final binding,’ words when used to Post 419. revenue. at decision, an pre describe administrative grant authority Similar (quot clude Ante review.” Belt, in Houston Director Public Works ing Sys. Pension Emps. Hous. Mun. 42.2516(h) provides the Commis section Ferrell, (Tex.2007)). 248 S.W.3d authority” to sioner with “some determine plurality, 1' find Similar “final and revenue, has excess but whether appealed” not be indistinct from authority to “he does not have make Thus, binding,” “final a con “[a]bsent way in a that conflicts with determination spicuous conflict” and irreconcilable be Belt, See Houston [the statute].” actions tween the Commissioner’s and his 167; see also S.W.3d at Educ. 42.2516(h), authority “any under section 42.2516(h) (2006) (allowing the Commis of the matter consideration further would to recover excess revenue under the sioner on the impérmissibly encroach unreview statute “as determined the commission able, authority afforded to discretionary er”). Not the plurality’s reading does under [Commissioner] [section of the Clawback Provision contradict See Klurnb v.‘ Hous. Mun. 42.2516].” plain language, but it also renders statute’s Emps. Sys., Pension 458 S.W.3d language listing categories the three (Tex.2015). is necessarily That standard is inconsistent with the superfluous and higher than pleading ultra expressio unius est exclusio principle of claim, and, I plurality, like the would naming —the of one or more im alterius being not foreclose that standard met. PAJ, See the exclusion others. plies concludes, is no plurality But there Co., v. Hanover Ins. Inc. See present conflict here. ante at such (Tex.2008) (Willett, J., joined by 412-13. Hecht, J., dissenting). Accordingly, argues that the fi- The dissent by employing categories hold that would nality. provision limited determina- specifically than listed in the three section,” made “under and “the tions 42.2516(h) to “excess determine section ... was Commissioner’s determination revenue,” beyond “acted the Commissioner granted the clawback outside actually the limits he of the discretion was 42.2516(h), his section him determina- making actions vires. granted,” 42.2516,” mak- tion section was ‘under’ Belt, Houston See inapplicable. ing finality provision See in Houston said Belt post at But we

B an ultra vires commit that an official can type of rele- determi- language Absent act when he “makfes] additional n hq[s] : which Belt nation [he] vant Houston dictates not Education make,” thorized Commissioner way [does] “in a the law but (emphasis allow.” 487 S.W.3d at three million dol- approximately See added) Paso v. City El (discussing from in local tax revenue lars (Tex. Heinrich, 371-78 S.W.3d ISD, CISD, City Blackwell and Sterling 2009)). Thus, here, the Commission while Although plurality Highland ISD. 42.2516(h) er’s under section determination inquiry essentially include broadens vires, it a deter was ultra was nonetheless construct, entire school finance to which 42.2516 mination under section agree they that the parties do not do so: Adopting finality applies. provision at issue here is former part Code finality interpretation the dissent’s specifically, for- and more section as meaningless, it deci provision renders (l). mer subsections his makes within sions Commissioner (h) says that subsection legal authority already immune authority to him clawback the gave Heinrich, judicial See review. (l) in and subsection question revenue (“To vires at 372 fall within ultra [the] final unappealable. his decisions made ... exception, allege suit ... must a (h) say The School Districts subsection did authority.” legal without officer [an] acted claims; him give not he his added)). ac (emphasis As the dissent mandate that the Districts reduce their knowledges, a construing “[i]n vires; ultra “excess revenue” was give must Post effect each word.” legal his determination lacked Las 419 (citing Columbia Med. Ctr. of (h), (i) Colinas, in Hogue, basis subsection subsection Inc. (Tex.2008) (“The Court must inter not make unreviewable. determination in pret the statute that renders manner question provided: in subsections any part meaningless statute Therefore, superfluous.”)). I would read (h) Notwithstanding any provision finality provision including title, amount of this if the of state and acts, but—per Klumb— Ferrell and weighted in per local student revenue irreconcilably conflicting ones. average daily for the mainte- attendance operations

nance the district year in available to the district school I would find While Commission- as a result increases to er acted including ultra vires tax reve- 11.002, the wealth level under Section in nues his determination of excess reve- 4-2.101, basic allotment under Section 42.2516(h), nue under section also would guaranteed and the level under finality provision find in section ... to which exceeds the amount 42.302 42.2516(i) exempts ac- the Commissioner’s a district is entitled under [the very tions from except review (b) for Subsection of] appli- limited circumstances which year, the commissioner must: Accordingly, I concur cable here. judgment. (1) the amount of state aid reduce provided for that school district JOHNSON, joined by JUSTICE year equal to the excess WILLETT, JUSTICE JUSTICE revenue, com- as determined GUZMAN, BOYD, and JUSTICE missioner; or part. concurring part dissenting (2) per for a with a parties strongly disagree about (Code) applicable au- greater whether the Education student than the by described Section Because the Commissioner’s determination 41.002(a), require the district to pur- in this case was the clawback outside au- chase a number of attendance credits thority granted by to. him subsection for that year equal at a cost to 42.2516(h), his determination was “un- revenue, the amount of excess as de- der” section 42.2516. To contrary, by termined the commissioner. determination Code,

was authorized was ultra vires, (il) A and was subject determination the commission- the limita- (l). tions in er under this For section is final subsection [42.2516] reasons below, appealed. expressed not be I concur in the dismissal of Sterling City claims ISD and 42.2516(h),(l § Xemphasis Educ. Tex. CISD, Blackwell as well as dismissal of added).1 parties agree that the Com- Highland ISD’s claim for it amounts missioner’s clawback determinations were already paid by purchasing attendance any not made on the basis of of the three credits. But I dissent the dismissal (h); rather, in specified factors subsection Highland ISD’s claim for prospective they were made on the basis of increased declaratory injunctive relief and the local tax collections based on sud- claims for attorney’s parties. fees as to all significant den in property increases values in the Districts. I. Jurisdiction

The plurality’s decision turns in part on 42.2516(Z), language This long subsection as it Court has recognized that should, light of that plain governmental subsection’s when a officer acts ultra language. But in larger part, plurali- vires—beyond granted authority—the ty’s decision turns on concept the overall unauthorized actions are not acts of the Program, Foundation School as it Hous. Belt Ry. City State. & Terminal not, light Houston, should plain language 154,161 (Tex.2016) (l). both Univ., subsections (citing Sign Fed. v. Tex. S. 42.2516(Z) language (Tex.1997)). of subsection is clear S.W.2d An officer determinations the Commissioner acts ultra failing vires for either per “under” section 42.2516 are unreviewable. form a exercising ministerial act or for But I disagree plurality’s with the conclu- limited conflict with discretion 42.2516(Z) sion that subsection by. authorizing a statute granted “broaden[s] the officer the executive’s explained discretion” and vests the act. in Houston Belt unlimited, Commissioner with unreview- that if an official’s is less than able discretion to make clawback determi- absolute and official outside acts nations authority specified outside the authority, in limited the acts vires. 42.2516(h). subsection Ante at 413. Un- Id. at To a grant 165. determine whether questionably, limited, Legislature may ju- limit of authority is absolute con dicial review of grant of.authority give the Commissioner’s deci- sider the effect However, sions. See id. body’s this enacting instance intent. Id. at 164- Legislature specifically limited question grant review is not whether the under, only as to a ... ing body grant “determination intended the official discretion, 42.2516(Z). authority section.” to exercise but rather Eduo. Code 12, 2006, May 1. The statutes in effect at the time of this case effect at that time. See Act of Leg., have since been amended. All references to 79th 3d ch. Gen. C.S. 2006 Tex. Laws the Education Code will be to the version in the discretion the ordinance grant- to official because mandated it whether intended making types 163-64. the of that Id. at data be used discretion. absolute at Id. the determination. Because Belt, City of Houston ordi- a In Houston alleged owners the Director property used of the Director Public Works gave nance (aerial photography) an method unreliable authority to Engineering determine and properties impervious, to classify their as on charges imposed “bene- drainage to be required while the ordinance the use of specified aon rate properties” fitted based data, digital map data or similar “reliable” impervious Id. square foot of surface. per pleadings allege a the were sufficient to defined “benefit- at 158-69. ordinance regard his viable ultra vires with surface,” claim “impervious property” ted and of of impervious the nature determination provided impervious that the area at properties. their Id. 168-69. on “shall be the basis surface determined map or other digital of- ... data similar plurality that subsection concludes Di- reliable data” -as the determined 42.2516(Z) the de- makes rector, property Id. Several filed owners under final terminations claiming the Director acted suit outside is, unappealable, Legislature that the using method he the did dis- granted complete' the Commissioner determining properties certain were bene- to make cretion clawback determinations determining and in the amount fitted regardless of the basis for the determina- impervious proper- surface area of those Municipal tion. In Ante at 413. Houston language ties. Id. We looked to the Ferrell, System Employees Pension the ordinance determine limits (Tex.2007), held that we authority, keeping Director’s mind precluded review where a stat- judicial was primary objective our an or- construing provided pension ute determina- board’s is to dinance ascertain effect to give “final But in binding.” tions were enacting Id. at body’s intent. 164-65. only- availability of case we addressed the As for the Director’s determination of review, pension not judicial whether properties proper- “benefitted which were complete did, board had discretion. We ties,” that he had we discretion concluded however, address the issue of the “final determination, but no to make the discre- binding provision” on the pension in a interpret way tion to the term con- a subsequent discretion in case. board’s trary Id. at itself. 166-67. definition Emps. See v. Hous. Pension Mun. Klumb prop- The ordinance defined a “benefitted (Tex.2015). Sys., into erty” discharges city one that Klumb, we considered whether courts 'drainage utility system. Id. at 165-66. authority to pension had review property alleged them owners theory board’s under an vires ultra actions properties not “benefitted” were because notwithstanding statutory judi- on ban city’s not they discharge did into drain- plaintiffs argued cial Id. 8. The review. they age system, discharged but rather System’s interpretation that the Pension bayous into natural that were not within “employee” term ultra statutory was “drainage system.” Id. definition it was with Construing' vires because conflict liberally in pleadings plain language the statute. Id. at 9. We favor, property owners’ concluded plaintiffs plead that the alleged vires failed owners an ultra concluded Further, claim. Director ultra vires claim had actionable while interpretation pension con- whether the sur- discretion determine board’s impervious, statutory it Id. at face was flict with the terms. was absolute under, however, not, foreclose the the Commissioner must cir- certain 10-11. We did particular possibility interpretation either reduce the amount cumstances .of provided despite require the statute could aid district or ban on the district to purchase review. at 11. attendance credits. Educ, 42.2516(h). explained Second, that the board violate amount, any “a conflict or required but manifest absent reduction at- or a statutory “conspicuous purchases to with terms” tendance credit be based conflict,” on and courts irreconcilable could .increases and at local not review the board’s actions. 10- revenue “as a result Id. increases to of” (1) three specified subject matters: level, (2) equalized wealth the basic allot- plurality says The that the effect of lan- ment, (3) guaranteed and level. guage limiting review such as that added). (emphasis 42.2516(Z) to in subsection is broaden the at executive’s discretion. Ante 413. But it a construing give we must statement, no effect to sug- cites for its each Columbia Med. word. Ctr. Colinas, limiting no Las gests Hogue, standard the discre- Inc. v. 271 S.W.3d afforded, (Tex.2008) (“The tion no reason to and dis- offers Court must not regard language interpret the clear subsection in a manner statute 42.2516(7) a specifying that determination any part renders meaning statute only “under less or If superfluous.”). [42.2516] this section speci final three Further, unappealable. plurality’s given fied factors are to be effect and accord longstanding ing language, statement conflicts rules to the statutory they with can statutory only construction to the effect that to what specify the Commis read consider, plain language of a to sioner limiting statute must as well as read says—no it and no more discretion as to mean what less— what consider, Otherwise, may that we not he language language do read into or (h) statute to or a except out avoid absurd subsection result increases “as to nonsensical results. See Union Carbide level under Section (Tex. 41.002, Corp. Synatzske, the basic allotment under Section 2014). 42.101, logic to plurality’s guaranteed hard un and the level under is, says surplusage, plurality substantively derstand. Section 42.302” is it is by specifically limiting judicial meaningless superfluous.. See id. review section of determinations under Klurnb, Just as the did sub- statute Legislature really not what it intended 42.2516(h) grants section discretion- broad said, but say—to rather what it not . ary authority to But the Commissioner. unlimited, un grant Commissioner discretion, given that the Com- even broad discretion to make clawback bounded de may outside missioner act what not. section terminations authorized granted may actions been him. His plurality Ante at And the 42.2516. “conspicu- or create a “manifest conflict” justify its attempt reading even does with ous and conflict” irreconcilable (or of, language into out as the case him statutory granting terms the discre- (l ) be) 42.2516(h) as subsections nec Klumb, tion to act. See or essary to absurd re avoid nonsensical Legislature intend- 11. Had sults. ed have discretion matter, As available to relevant to this subsection revenue all.excess First, district, just as a contains two mandates. -not result op factors, given could limit. tory three it Those districts in the of increases district, presume have— to consolidate with another must would tions have—and we so, average daily language property, purchase by omitting the detach said either credits, edu surplusage, attendance contract for the the Court’s decision makes nonresidents, Com- their by specifying the other factors the cation of or consolidate Id. But as could take into consideration. tax base with another district. missioner (courts Synatzske, briefing See posits 438 S.W.3d at the Commissioner them, here, pre- Commission-employed ex must statutes we find and as his “take trial, is not a suming Legislature pert words witness testified included case recapture it omitted This is a clawback include and case. intended omit”). it of subsec language words intended that turns on the 42.2516(h). Legislature provided tion agrees that Commis- Justioe Brown dealing discrep for with wealth property sioner’s actions were ultra vires because 42.2516(h) ancies, simply but subsection him the grant did not subsection does not authorize the Commissioner authority to as he did. clawback funds n it in manner in this deal with he did (Brown, J., concurring). Ante at 414-15 case. (1) that Yet Justice also concludes BROwn “conspicuous there is no irreconcilable Because Commissioner’s decision ac- conflict” the Commissioner’s between from the several million dollars authority tions and his under subsection Districts was a determination author not (2) 42.2516(h), is, under, the lack of such a con- by, ized section (l )’s flict, together provi- ultra vires with subsection for acts claims were Districts’ making the Commissioner’s determi- sion of the Commissioner for which suit would nations 42.2516 final and subject under section they lie and not to subsection were unappealable, precludes judicial 42.2516(i) review. for determinations which his However, Id. at 415. unappealable. because the Commis- But would be final and clawing actions in millions of though sioner’s back not claims even I would dismiss the not author- dollars from the Districts jurisdiction were for of on basis the want does, by the is no realistic Dis agree ized there I Court some way to his as characterize clawback actions tricts’ claims must dismissed less than anything being conspicuous relief, they for I ex retrospective are . conflict his and irreconcilable with statuto- plain below ry authority. Retrospective II. Relief plurality’s conclusion is essen

While City El Paso v. tially explained As that the Commissioner had any Heinrich, (Tex.2009), to: clawback' amounts attributable S.W.3d though may allege a viable reason whatsoever because the Code did even suit so, explicitly prohibit doing against governmental from him claim official, is, practical all not-argue pur- Commissioner does for suit Therefore, poses, against is that brbad. As the Court State. because, v. Texas Morath recently explained in are available remedies limited Coalition, Taxpayer and Student Fairness generally, retrospective monetary claims immunity. against 285386 are barred WL State 8(Tex.2016); Id. part recapture judgment of the school 374. But a that involves system impli- for payment money always finance which accounts districts does in- exceeding prospective with the statu cate immunity—claims junctive injunction exists, relief the date longer the Education no so (even requiring expenditure those no bottom line is matter how the Dis- funds) However, permissible. are “the money back or tricts receive credit prospective retrospective line between money they paid, they the net effect is neither retrospective damages. remedies self-evident self- agree recover Douglas executing.” (quoting Commissioner, Id. at 375 with the part. least in Laycock, American Modern Remedies 483 The Districts first assert that because (3d ed.2002)). the Commissioner did not challenge the Heinrich, Lilli El findings Heinrich sued the trial court’s that the Districts’ in- Paso Fireman & juries Policemen’s Pension ongoing adjust and the State can others, alleging owing Board and that her surviv- monies having due without to pay or benefits had been in violation money damages, reduced findings those binding sought state law. Id. at 369. She declara- on the Commissioner and this Court. tory injunction relief They to restore argue appellate her de novo review benefits from the date of the violation. Id. of the trial court’s conclusion of law that We concluded that Heinrich’s claims for permissible the relief prospec- constituted forward, prospective go relief but could tive relief must be conducted on the basis retrospective dismissed her claims for re- fact findings. uncontested Howev- er,. lief. Id. at City 380. And in Lowell v. when appellate courts conduct a de Baytown, (Tex.2011), review, 356 501 S.W.3d novo they independently determine “firefighters’ we held that claims for back each original issue and accord the court’s pay damages and related improper Quick for cal- decision no deference. City v. of culation of pay assignments Austin, for performed 109,116 (Tex.1998). 7 S.W.3d in past the are of retrospective the type argue The Districts next that the Com- governmental relief that we held barred missioner’s assertion that the Districts’ immunity in Heinrich.” claims are they only barred because

The trial of appeals sought court court retrospective and is an relief affirmative determined that ongo- based on the State’s defense that he waived because he failed to ing accounting set of ledgers request that included findings of fact to support it. I amounts to owed disagree. districts State and governmental A officer’s claim districts, amounts to that plaintiff only seeking owed State is retrospec- adjustments future ledgers to the to credit tive an damages not affirmative defense.-’ the Districts’ for the seeking accounts amounts retrospec-' We have treated claims they overcharged had been and for which five damages being by immunity barred they purchased had attendance credits from implicates subject did suit—which courts’ retrospective constitute relief. 447 jurisdiction—and dismissing matter 2014). Heinrich, 514 (Tex.App.-Eastland S.W.3d claims. See 284 S.W.3d at 380 (“[Heinrich’s] The Commissioner asserts that prospective claims for de- Sterling City claratory injunctive ISD and Blackwell against CISD and relief -the paid all required of mayor them Board and in members their by the purchasing forward, Commissioner via at- capacities may go official but we credits, only remedy tendance their is ret- retrospective against dismiss her claims them.”); Albert, rospective relief regardless City whether see also Dallas v. (Tex.2011) (“Because past damages those' repaid through 354 379 S.W.3d future to credits their account. The Com- sought only retrospective the Officers re- lief, points part missioner out that the declaratory judgment relevant their claims Therefore, dismissed.”). part all or a re- relief be demanded must requires relief act findings of fact neces- restraint some quest for was prejudicial applicant.,..”). preserve issue. to sary order to determining for oc- that the Dis- injury relief that addition Although past retrospective damages ongoing, relief tricts’ were the trial in the curred of appeals court and court also precluded by immuni- concluded suit, argue, damages required Districts and the that no was ty payment from found, inju- that the Districts’ because the State and Districts had an trial court relationship ongoing permit- see financial that “ongoing.” ries But how fail adjust they complaining ted the amounts The Districts are State owed are. remedy that money due from the dam- about a one-time clawback the Districts ages. I disagree for at 514. that they argue improperly was calculated S.W.3d remedy years. this past school the statute has would not substance involve Because amended, payment damages. not- injuries money since been these are past prohibiting retrospec- not re- that occurred in will ed Heinrich Albert, tive example, for relief was consistent with the modern occur. In. held justification is, for firefighters immunity, protect- police officers were ing seeking retrospective they public al- fisc. S.W.3d where at 375. relief immunity leged they damages equal The doctrine leaves it to the sustained Legislature re- to the when. difference between the amount determine tax in- already paid sources should shifted them their salaries pay money judgments. tended .use to paid. that should have been Lowell, 378-79; Olivares, Gay Eng’g, see & Brown Inc. (Tex.2015). (“Here, firefighters’ though Even claims back S.W.3d pay damages judgment require cal- improper related case Districts, for assignments performed money payment culation of it re pay past retrospective quired shifting the the the from type in are of state resources by governmental satisfy judgment relief that intended use to we held barred their added)). was, (emphasis past in on This in sub immunity Heinrich.” based activities. stance, prohibited retrospective relief. See explained Heinrich “under Alphonso Scott Support v. Crutch Life law, immunity prospec- for federal claims Ctr., 132, (Tex.App.-Austin S.W.3d injunctive permissible, tive relief are while denied) (“To pet. any extent re not,” for relief and claims retroactive are repayment by lief ... would result that “a concluded claimant who successful- past Commissioner of amounts withheld ly claim proves an is entitled to School, from the claims would these result injunctive prospective relief, as measured retroactive relief that is barred sov injunction.” 284 the date S.W.3d ereign immunity in with Hein accordance added). Here, (emphasis Dis- rich.”). injunctive requested requiring tricts relief to comply City also Commissioner with subsec- The Districts cite Round 42.2516(h). Whiteaker, tion But statute Rock v. 634-35 because .the amended, denied), requested prospec- (Tex.App.-Austin pet. had been where injunctive longer possi- appeals no the court of tive relief was Court stated Tex, Rem, recognized historically See that “suits to recov- ble. Civ. Prac. & (“A injunction may money property wrongfully er 65.011 be writ granted applicant ... taken or officials from if entitled withheld attorney’s rightful implicate their fees owners do sov- claims as- all because, in ereign concept, I immunity parties. remand those would claims to belongs proceedings. court further disputed never trial for state.” made But the court statement for equitable the context of claims back already for

pay per- work that been had

formed, which is not situation here.

I Districts’ hold that the claims to would money

recover the back from clawed them

are for relief and retrospective be must However,

dismissed. as

acknowledges jurisdictional (subject

challenge), Highland pro- ISD’s claims LLC, FUNDING, Petitioner, RSL spective injunctive regarding relief yet paid amounts it has not barred.

Accordingly, I remand that claim would PIPPINS, Morris, Cheveze D. Daniel P. proceedings. trial court further O’Brien, Metropolitan M. Donna Life Company, Insurance MetLife Insur- Attorney’s III. Fees Company Connecticut, ance attorney’s The tidal court awarded fees MetLife Investors USA Insurance jointly severally to the Districts. In a Company, Respondents declaratory proceeding, judgment a court “may costs award and reasonable and nec- 14-0457 No. essary attorney’s equitable fees Supreme of Texas. Court just.” PRAC, & Tex. Civ. Rem. Code § 37.009. I Because would hold July 1, OPINION DELIVERED: Districts ultra vires asserted viable claims but, contrary judgment the trial Rehearing- September Denied court, payments their to the State could recovered, Highland ISD’s barred, entirely claims are not would attorney’s issue of

remand the fees

trial court for it to consider whether an so, equitable

award is still just, if City what Lorena amount. See L.P., Holdings,

SMTP (Tex.2013).

IV. Conclusion concur in dismissal claims CISD,

Sterling and Blackwell City ISD Highland

well as claim for amounts ISD’s already

it has paid by purchasing attend-

ance But I the dis- credits. dissent Highland

missal of pro- ISD’s claim for

spective declaratory injunctive relief

Case Details

Case Name: Mike Morath, Commissioner of Education v. Sterling City Independent School District, Highland Independent School District, and Blackwell Consolidated Independent School District

Court Name: Texas Supreme Court

Date Published: Jun 24, 2016

Citation: 499 S.W.3d 407

Docket Number: NO. 14-0986

Court Abbreviation: Tex.