Graylin Gant, Jay Heichelheim, Stephen Holt, Sherif Saudi, and Charles Braden v. Hon. Gregory W. Abbott, Kenny Koncaba, W. B.Boney, Trey Hill, Kelly K. Lovell, Henry S. Porretto, Wallace R. Hogan, Jr., Chris Henry, Derek Tracy, Clinton Schuessler, Wendy Morrison, David Manney, Jon Halvorsen, Christos Sotirelis, Mark Saunders, Scot E. Smith, Scott Mitchell, Matthew Bush, Chris Gutierrez, Michael Godnich, and David Dion , 574 S.W.3d 625 ( 2019 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-18-00360-CV
Graylin Gant, Jay Heichelheim, Stephen Holt, Sherif Saudi, and Charles Braden,
Appellants
v.
Hon. Gregory W. Abbott, Kenny Koncaba, W. B. Boney, Trey Hill, Kelly K. Lovell,
Henry S. Porretto, Wallace R. Hogan, Jr., Chris Henry, Derek Tracy, Clinton Schuessler,
Wendy Morrison, David Manney, Jon Halvorsen, Christos Sotirelis, Mark Saunders,
Scot E. Smith, Scott Mitchell, Matthew Bush, Chris Gutierrez, Michael Godnich, and
David Dion, Appellees
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 261ST JUDICIAL DISTRICT
NO. D-1-GN-17-003229, HONORABLE DUSTIN M. HOWELL, JUDGE PRESIDING
OPINION
Appellants Graylin Gant, Jay Heichelheim, Stephen Holt, Sherif Saudi, and Charles
Braden are five ship pilots licensed by the U.S. Coast Guard. They seek the ability to apply for
Texas deputy branch pilot certification and branch pilot licensure in Galveston County without going
through the current process, claiming that the process is unconstitutional in that it grants an
impermissible monopoly to the Galveston-Texas City Pilots Association (Gal-Tex). Gal-Tex is a
private pilot association made up of all of Galveston County’s currently licensed branch pilots. The
application process for deputy branch pilot certificates and pilot licenses is overseen by the board
of pilot commissioners for Galveston County ports (the Board). See Tex. Transp. Code §§ 67.011
(explaining the composition of the Board), .017 (listing duties of the Board). Appellants submitted
“applications” to the Board in a form that the Board determined was incomplete, so the Board
declined to consider those applications for deputy branch pilot certification or pilot licensure. In
response to the Board’s refusal to consider their applications, Appellants sued the five
Commissioners of the Board in their individual official capacities and the Governor (collectively,
the State appellees). The Galveston County ship pilots (the members of Gal-Tex) intervened.
Appellants sought declaratory and injunctive relief under the Administrative Procedures Act (APA)
and the Uniform Declaratory Judgments Act (UDJA) on the grounds that sections 67.033(4),
67.034(3), and 67.035 of the Texas Transportation Code violate the Monopoly Clause of the Texas
Constitution and that the Board failed to adopt rules in accordance with the APA. See Tex. Const.
art. I, § 26 (“Perpetuities and monopolies are contrary to the genius of a free government, and shall
never be allowed, nor shall the law of primogeniture or entailments ever be in force in this State.”);
Tex. Civ. Prac. & Rem. Code §§ 37.001-.011 (UDJA); Tex. Gov’t Code §§ 2001.001-.902 (APA).
The Governor filed a plea to the jurisdiction, and the remaining parties filed competing motions for
summary judgment. The Commissioners moved for summary judgment, arguing that (1) the APA
does not apply to the Board because it is not a state agency, (2) the Galveston County pilot
application process does not create an unconstitutional monopoly, and (3) the court lacked
jurisdiction to consider appellants’ challenges to the Transportation Code because they did not sue
the Board, but instead sued the Commissioners in their official capacities. The Intervenors moved
for summary judgment, arguing that the Galveston County pilot application process does not create
an unconstitutional monopoly. Appellants moved for summary judgment, arguing that the three
challenged provisions of the Transportation Code create an unconstitutional monopoly and that the
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Board was required to adopt rules in compliance with the APA. Appellants also moved to transfer
venue to the Third Court of Appeals. Appellants’ motions were denied. The Governor’s plea to the
jurisdiction was granted, as were the Commissioners’ and Intervenors’ motions for summary
judgment. Appellants challenge the district court’s order denying their motion for summary
judgment and granting Appellees’ motions. We will affirm in part and vacate and dismiss in part.
The Galveston Act
The First Texas Legislature enacted a statewide pilotage act, which provided that
the governor appoint a five-member board of commissioners of pilots for each port whose
population and circumstances warranted it. See Act approved Apr. 17, 1846, 1st Leg., R.S., § 2,
1846 Tex. Gen. Laws 79, 79, reprinted in 1 H.P.N. Gammel, The Laws of Texas 1822-1897, at 1385,
1385 (Austin, Gammel Book Co. 1898) (now codified at Tex. Transp. Code § 63.001). In each of
the ports, the pilot boards oversee numerous aspects of pilotage, including the process for becoming
a deputy branch pilot or branch pilot. See Tex. Transp. Code § 63.003 (“Powers and Duties of
Board”). Over time, the Legislature created several port-specific acts, including the Galveston
County Pilots Licensing and Regulatory Act (Galveston Act). See id. §§ 67.001-.083. Like the
statewide pilotage act, the Galveston Act provides that the board of pilot commissioners for the port
of Galveston County is composed of five commissioners appointed by the governor and it lists the
Board’s duties as including oversight of the process for becoming a deputy branch pilot or branch
pilot. See id. §§ 67.011 (providing for gubernatorial appointment of five board commissioners from
Galveston County), .017 (1)-(4), (13) (listing board duties relating to pilot licensing and
certification).
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Among other duties imposed by the Galveston Act, the Board must (1) “recommend
to the governor the number of pilots necessary to serve each Galveston County port,” (2) “accept
applications for deputy branch pilot certificates or pilot licenses and determine whether each
applicant is qualified,” (3) “provide names of qualified applicants for certificates to each pilot
association office of Galveston County,” (4) “submit to the governor the names of persons who have
qualified under this chapter to be appointed as branch pilots,” and (5) “approve a training program
for deputy branch pilots.” Id. § 67.017(1)-(4), (13). A person seeking to become a deputy branch
pilot or branch pilot must meet certain eligibility requirements and “must give to the board a written
application in the form and manner required by board rule.” Id. § 67.035; see id. §§ 67.033
(qualifications for branch pilot license), .034 (qualifications for deputy branch pilot certificate). In
considering applications for certificates and licenses, the Board “may examine and decide on the
qualifications of an applicant for the position of branch pilot or deputy branch pilot.” Id. § 67.036.
Applicants selected for branch pilot licensure by the Board must file a bond and oath, after which
“the board shall certify to the governor that a person licensed as a branch pilot has qualified.” Id.
§ 67.037(a); see id. § 67.039 (bond and oath requirements). Then, “[o]n receipt of the board’s
certification, the governor shall issue to the person . . . a commission to serve as a branch pilot to and
from Galveston County ports.” Id. § 67.037(b). Unlike branch pilots, who are chosen by the Board
and commissioned by the Governor, deputy branch pilots are appointed by currently licensed branch
pilots. Id. § 67.038.
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Gal-Tex
The parties agree that every Galveston County branch pilot belongs to Gal-Tex and
that Gal-Tex is involved in the application process for deputy branch pilots and branch pilots. The
Board relies on Gal-Tex to let the Board know when additional deputy branch pilots or branch pilots
are needed. Gal-Tex then publishes notice that the Board is accepting applications for deputy branch
pilot certification or branch pilot licensure. The letter sent to applicants along with the application
for deputy branch pilot certification opens by saying, “The Galveston-Texas City Pilots appreciate
your interest in becoming a deputy branch pilot with this organization,” and includes a list of Gal-
Tex’s requirements for applicants that are separate from the statutory requirements. These
requirements are: (1) an applicant must be licensed by the United States Coast Guard (USCG),
(2) depending on the type of USCG license, the applicant may be required to also document a certain
number of hours of qualifying service, (3) all applicants must have sailed on the qualifying USCG
license for a minimum of 900 days, and (4) “[n]o candidate may be related to any branch pilot
currently serving with the Galveston-Texas City Pilots.” Although the application does not mention
Gal-Tex, an attached release authorizes both the Board and Gal-Tex to investigate statements made
on the application; perform a background check on the applicant, including obtaining a credit report,
a criminal record check and a Marine Index Bureau Report; contact former employers; and obtain
copies of Coast Guard records. The applicant’s signature on this form would also release the Board
and Gal-Tex from “any and all claims” related to any investigation performed relating to the
application. By its own terms, the application for deputy branch pilot certification must be sent to
the Board. After the Board reviews the applications, it forwards to Gal-Tex the applications that are
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approved for candidacy as prospective deputy branch pilots. The members of Gal-Tex will offer
interviews to all applicants found qualified by the Board and will then select the required number
of deputy branch pilots. Once the application cycle is closed, Gal-Tex informs the Board of the
selected applicants and the results of each applicant’s background check, physical examination, and
drug screen.
The Challenged Statutory Provisions
Section 67.033 of the Galveston Act sets out the statutory requirements of eligibility
for branch pilots. The portions relevant here provide that “[t]o be eligible for a license as a branch
pilot, a person must . . . have at least two years’ service as a deputy branch pilot and successfully
complete the board-approved training program,” and “[t]o be eligible for a certificate as a deputy
branch pilot, a person must . . . be appointed by a branch pilot.” Id. §§ 67.033(4), .034(3).
Appellants argue that these statutory requirements grant an unconstitutional monopoly to Gal-Tex
because, since every branch pilot is a member of Gal-Tex, no one can become a deputy branch pilot
without being appointed by a member of Gal-Tex, and no one can go on to become a branch pilot
without having first been appointed a deputy branch pilot by a member of Gal-Tex. They challenge
these provisions as facially unconstitutional. In addition, Appellants bring an as-applied challenge
to the requirement that “[t]o apply for a branch pilot’s license or a deputy branch pilot’s certificate,
a person must give to the board a written application in the form and manner required by board rule.”
Furthermore, Appellants specifically complain that the Governor and the Board are required to adopt
rules under the APA that would permit Appellants to apply for deputy branch pilot certification or
branch pilot licensure without granting an unconstitutional monopoly, that is, without Gal-Tex’s
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involvement. We will first address the Governor’s plea to the jurisdiction before turning to the
statutory challenges.
Governor’s Plea to the Jurisdiction
Our jurisdiction over the merits of this case extends no further than the jurisdiction
possessed by the district court. See Pearson v. State, 315 S.W.2d 935, 938 (Tex. 1958). We review
de novo a trial court’s ruling on a plea to the jurisdiction. Texas Dep’t of Parks & Wildlife
v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). We begin by analyzing the plaintiff’s live pleadings
to determine whether the plaintiff has met the initial burden of alleging facts that affirmatively
demonstrate the trial court’s jurisdiction to hear the cause. Id. (citing Texas Ass’n of Bus. v. Texas
Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993)). We construe the pleadings liberally, taking
them as true, and look to the pleader’s intent. Id.; Texas Logos, L.P. v. Brinkmeyer, 254 S.W.3d 644,
659 (Tex. App.—Austin 2008, no pet.). Mere unsupported legal conclusions are insufficient. See
Creedmoor-Maha Water Supply Corp. v. Texas Comm’n on Envtl. Quality, 307 S.W.3d 505, 515-16
& nn.7 & 8 (Tex. App.—Austin 2010, no pet.). If the pleadings fail to allege sufficient facts to
affirmatively demonstrate the trial court’s jurisdiction but also fail to affirmatively demonstrate
incurable defects in jurisdiction, the issue is one of pleading sufficiency, and the plaintiff should be
afforded the opportunity to amend. Miranda, 133 S.W.3d at 226-27. If, on the other hand, the
pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be
granted without allowing the plaintiff an opportunity to amend. Id. at 227. A plaintiff suing
the State must establish a waiver of sovereign immunity. Texas Nat. Res. Conservation Comm’n
v. IT-Davy, 74 S.W.3d 849, 855 (Tex. 2002). “Otherwise, sovereign immunity from suit defeats a
7
trial court’s subject-matter jurisdiction.” Id. Sovereign immunity does not shield the state from ultra
vires claims seeking to prevent government officials from exceeding their statutory or constitutional
authority. City of El Paso v. Heinrich, 284 S.W.3d 366, 372 (Tex. 2009).
The APA contains a waiver of sovereign immunity to the extent of creating a cause
of action for declaratory relief regarding the validity or applicability of a “rule.” Tex. Gov’t Code
§ 2001.038(a); see Texas Logos, L.P. v. Texas Dep’t of Transp., 241 S.W.3d 105, 123 (Tex.
App.—Austin 2007, no pet.) (“section 2001.038 is a grant of original jurisdiction and, moreover,
waives sovereign immunity”). Under the APA, a “rule” is “a state agency statement of general
applicability that: (i) implements, interprets, or prescribes law or policy; or (ii) describes the
procedure or practice requirements of a state agency.” Tex. Gov’t Code § 2001.003(6). When no
rule is being challenged, a claimant cannot obtain declaratory relief under the APA against the State,
its agencies, or its agents because sovereign immunity bars the cause of action. Slay v. Texas
Comm’n on Envtl. Quality, 351 S.W.3d 532, 545 (Tex. App.—Austin 2011, pet. denied).
The Galveston Act assigns rulemaking authority to the Board, not the Governor,
through its general grant of rulemaking authority: “The board may adopt rules to carry out this
chapter.” Tex. Transp. Code § 67.016(b). This is the only rulemaking provision that applies to the
challenged statutory provisions in this case. Unlike the general grant of rulemaking authority, the
Galveston Act’s other rulemaking provisions are mandatory and relate to the work of already-
licensed pilots, though they also apply solely to the Board. See id. §§ 67.017(10), .070(d). In
addition to providing an independent grant of rulemaking authority, the Galveston Act provides
notice requirements for when the Board adopts a rule. See id. § 67.021.
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Appellants do not argue that the Board failed to comply with the Galveston Act’s
rulemaking provisions. Further, Appellants concede that the Board, which lacks statewide
jurisdiction, is not a “state agency” under the APA. See Tex. Gov’t Code § 2001.003(7) (defining
“state agency” as agency with “statewide” jurisdiction); Tex. Transp. Code § 67.015 (giving Board
“jurisdiction over the piloting of vessels in Galveston County, including intermediate stops and
landing places for vessels on navigable streams wholly or partially located in the board’s
jurisdiction”). As Appellants have observed, because the Board is not a state agency, it is not subject
to the APA or its rulemaking requirements. See Fort Worth & W. R.R. Co. v. Enbridge Gathering
(NE Texas Liquids), L.P., 298 S.W.3d 392, 397 (Tex. App.—Fort Worth 2009, no pet.) (holding that
an entity that lacked statewide jurisdiction is not a “state agency” within the meaning of the APA
and was therefore not required to follow APA procedures by appealing to the State Office of
Administrative Hearings before filing condemnation proceedings in the trial court). Despite the
Galveston Act’s independent rulemaking framework assigning rulemaking authority to the Board,
Appellants argue that the Governor is the state agency that should be responsible for adopting rules
for deputy branch pilot certification and branch pilot licensure because the Governor appoints the
Board. See Tex. Transp. Code § 67.011 (Board members are “appointed by the governor with the
advice and consent of the senate”). Appellants argue that because the application process adopted
by the Board necessarily involves Gal-Tex, the Governor was required, but failed, to adopt rules
under the APA that would have provided an application process that did not involve Gal-Tex.
However, the Governor’s responsibilities under the Galveston Act are limited. In addition to
appointing the Board, the Governor has a duty to commission branch pilots that the Board certifies
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as qualified. Id. § 67.037(b). Based on the Board’s recommendation, the Governor “shall appoint
the number of branch pilots necessary to provide adequate pilot services for each Galveston County
port.” Id. § 67.037(c), see id. § 67.017(1) (Board shall recommend the number of pilots necessary).
The Galveston Act does not contemplate the Governor making any rules for certification or
licensure. Appellants nonetheless urge that the Governor should have promulgated rules under the
APA to allow for certification or licensure outside of the current method that they allege violates the
constitution by creating an unconstitutional monopoly.
We conclude Appellants are not challenging any “rule” within the meaning of the
APA; the procedures to which they object are promulgated by the Board (not a state agency) and
affect the interests of applicants for certification or licensure in Galveston County, rather than being
“generally applicable.” See El Paso Hosp. Dist. v. Texas Health & Human Servs. Comm’n,
247 S.W.3d 709, 714 (Tex. 2008) (“The term ‘general applicability’ under the APA references
‘statements that affect the interest of the public at large such that they cannot be given the effect of
law without public input.’” (quoting Railroad Comm’n of Tex. v. WBD Oil & Gas Co., 104 S.W.3d 69,
79 (Tex. 2003))). Appellants instead challenge the Governor’s alleged failure to promulgate
unspecified “rules” in the face of a statute that expressly delegates rulemaking to an entity other than
the Governor. See Tex. Transp. Code § 67.016(b). By its own terms, the APA does not apply to this
scenario. See Tex. Gov’t Code §§ 2001.003(6)-(7), .038; cf. Texas Comm’n on Envtl. Quality v.
Bonser-Lain, 438 S.W.3d 887, 894 (Tex. App.—Austin 2014, no pet.) (“the APA does not provide
a right to judicial review of an agency’s refusal to adopt rules”). We affirm the district court’s grant
of the Governor’s plea to the jurisdiction.
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Claims Against the Commissioners
Appellants’ remaining claims are against the Board’s individual Commissioners. As
discussed above, because the Board is not subject to the APA, Appellants cannot pursue any claims
against the Commissioners through the APA. See Tex. Gov’t Code §§ 2001.003(7) (defining “state
agency” under the APA as an agency with “statewide” jurisdiction), .038(a) (creating a cause of
action for declaratory relief regarding the validity or applicability of an APA “rule”); Tex. Transp.
Code § 67.015 (Board’s jurisdiction). We therefore turn to Appellants’ UDJA claims challenging
the validity of sections 67.033(4), 67.034(3), and 67.035 of the Transportation Code.
Appellants, the Commissioners, and the Intervenors each moved for summary
judgment. The district court denied Appellants’ motion and granted the others. Summary judgment
is proper if the movant establishes that there are no genuine issues of material fact and that the
movant is entitled to summary judgment as a matter of law. Tex. R. Civ. P. 166a(c). We review de
novo the trial court’s summary-judgment rulings. Valence Operating Co. v. Dorsett, 164 S.W.3d 656,
661 (Tex. 2005). When, as here, the parties seek summary judgment on overlapping issues and the
trial court grants one motion and denies the others, we consider all of the summary-judgment
evidence and issues presented and, if the trial court erred, render the judgment the trial court should
have rendered. Id.
Appellants seek declarations that sections 67.033(4) and 67.034(3) are facially invalid
and that section 67.035 is invalid as applied under Article I, section 26, of the Texas Constitution.
The UDJA generally does not enlarge a trial court’s jurisdiction, and a request for declaratory relief
does not alter a suit’s underlying nature. Heinrich, 284 S.W.3d at 370. “While the DJA waives
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sovereign immunity for certain claims, it is not a general waiver of sovereign immunity.” Id. at 388.
“Consequently, sovereign immunity will bar an otherwise proper DJA claim that has the effect of
establishing a right to relief against the State for which the Legislature has not waived sovereign
immunity.” Id. “For claims challenging the validity of ordinances or statutes, however, the
Declaratory Judgment Act requires that the relevant governmental entities be made parties, and
thereby waives immunity.” Id. at 373 n.6 (citing Tex. Civ. Prac. & Rem. Code § 37.006(b) (“In any
proceeding that involves the validity of a municipal ordinance or franchise, the municipality must
be made a party and is entitled to be heard, and if the statute, ordinance, or franchise is alleged to be
unconstitutional, the attorney general of the state must also be served with a copy of the proceeding
and is entitled to be heard.”)); see Texas Educ. Agency v. Leeper, 893 S.W.2d 432, 446 (Tex. 1994)
(“The DJA expressly provides that persons may challenge ordinances or statutes, and that
governmental entities must be joined or notified. . . . The Act thus contemplates that governmental
entities may be—indeed, must be—joined in suits to construe their legislative pronouncements.”);
see also Texas Lottery Comm’n v. First State Bank of DeQueen, 325 S.W.3d 628, 633, 634 & n.4
(Tex. 2010) (construing Leeper to say that “because the DJA permits statutory challenges and
governmental entities may be bound by those challenges, the DJA contemplates entities must be
joined in those suits”; “when the validity of ordinances or statutes is challenged, the DJA waives
immunity to the extent it requires relevant governmental entities be made parties” (emphasis
in original)).
Although Appellants have sued the Commissioners in their official capacities, they
have not sued the Board. Other than an assertion that the Commissioners failed to promulgate any
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rule in accordance with the APA, which does not apply to the Board, Appellants have not alleged
an ultra vires act by the Commissioners. Appellants’ UDJA claims challenge as unconstitutional
statutory provisions governing the application process for deputy branch pilot certification and
branch pilot licensure. If Appellants were to succeed, the result would impact the Board’s
procedures for accepting applications. Under the circumstances, the Board was required to be a party
to this suit. See Patel v. Texas Dep’t of Licensing & Regulation, 469 S.W.3d 69, 76 (Tex. 2015)
(noting that recent Texas Supreme Court precedents stand for the principle that when the
constitutionality of a statute is at issue, state entities must be parties to UDJA challenges);
DeQueen, 325 S.W.3d at 633, 634 & n.4 (the UDJA contemplates entities must be joined in suits
challenging the validity of a statute). Because the Board is not a party, the UDJA’s limited waiver
of immunity does not apply. The district court therefore lacked jurisdiction to address the merits of
Appellants’ claims under the UDJA.
Conclusion
We conclude that Appellants have failed to affirmatively allege facts that invoke the
district court’s jurisdiction. We are not aware of any way they could cure these jurisdictional defects
through repleading. Accordingly, we affirm the district court’s grant of the Governor’s plea to the
jurisdiction and the grant of the Commissioners’ motion for summary judgment on the grounds that
the court lacked jurisdiction, and we vacate the district court’s grant of the Intervenors’ summary-
judgment motion and dismiss Appellants’ suit for want of jurisdiction.
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__________________________________________
Gisela D. Triana, Justice
Before Justices Goodwin, Baker, and Triana
Affirmed in Part, Vacated and Dismissed in Part
Filed: April 24, 2019
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