General Practice, Solo and Small Firm Section of the State Bar of Texas

                                                                                                            ADMINISTRATIVE LAW

                                                                                                                        SPRING 2020




Hyundai Motor America v. New World Car Nissan, 581 S.W.3d 831 (Tex. App—Austin 2019)


Agency Changes to SOAH Judge’s PFD Pursuant to Section 2001.058(e): The Austin Court of Appeals finally issued an opinion detailing the parameters of an agency’s power to modify a PFD under the APA.  Held: An agency must explain with particularity its specific reason and legal basis for each change made. To meet this requirement, the agency must articulate a rational connection between an underlying agency policy and the altered finding of fact or conclusion of law.


Basic or Adjudicative Facts: When an agency changes basic facts, they are reviewed under a stricter standard than ultimate fact findings. Basic facts answer the questions of who, did what, when, how, why with what motive or intent and are roughly the kind of facts that go to a jury in a jury case. The resolution of adjudicative facts often requires making credibility determinations which a SOAH Judge is better suited to do than an agency or board reviewing the PFD. A SOAH Judge is a “disinterested hearings officer” to whom the Legislature has delegated the basic fact-finding. An agency cannot frustrate the delegation of the fact-finding role by ignoring the SOAH Judge’s findings which is disagrees with and substitute its own findings. Section 2001.058(e) does not provide for an agency to find basic facts in addition to those found by the SOAH Judge. If the agency substitutes findings of basic fact under this section, the agency exceeds its authority by doing so.


Ultimate Fact Findings: These are findings that usually do not concern the immediate parties but are general facts that help the tribunal decide questions of law and policy and discretion. Such a finding usually involves a conclusion of law or at least a determination of a mixed question of law and fact. When reviewing an agency’s findings of ultimate fact, a reviewing court is limited to the inquiry of whether the agency’s findings of basic fact reasonably support its findings of ultimate fact. The agency must identify which applicable law the SOAH Judge misinterpreted or misapplied, WHY that interpretation or application was incorrect or how the agency reached the opposite conclusion on the same basic facts.




Dyer v. T.C.E.Q, W.L. 5090568; Lexis 9023 (Tex. App.—Austin 2019, pet. filed)


Agency Changes to a SOAH Judge’s PFD Pursuant to Section 2003.047(m)-(n): Justice Goodwin in a 2-1 decision totally ignores the statutory authority governing the TCEQ as to the judicial review of its changes to a PFD. The governing law requires that the TCEQ give “an explanation” of its changes, Section 2003.047(m). However, the section goes on to provide that the TCEQ is subject to the APA unless its provisions are contradictory, Section 2003.047(n). Section 2001.058(e), that was just discussed in the Hyundai Motor decision supro, requires that when a change is made to the PFD, the agency must provide “a specific reason and legal basis,” Section 2001.058(e) (last sentence). Justice Goodwin refused to determine if these two statutory provisions were in conflict or not and simply held “an explanation” was the controlling factor and that did NOT require a detailed explanation of a change as mandated under Section 2001.058(e) (last sentence).  The explanation merely had to be “sufficient.”


Note:  This holding is absolutely incorrect and butchers the accepted canons of construction utilized by the Supreme Court when determining the applicability of two different statutory provision to a legal issue. The decision also wholly fails to apply the arbitrary and capricious standard of review of agency action but adds a new standard of “sufficiency” which the Court did not define.  This case is on petition to the Texas Supreme Court and let us hope they accept it and reverse it.




GS Texas Ventures, LLC v. PUC of Tex., W.L. 217179; Lexis 320 (Tex. App.—Austin 2020)


Agency Changes to SOAH Judge’s PFD Pursuant to Section 2003.049(g)-(h): Chief Justice Rose held: “We have not found authority for the proposition that the Commission must provide line-by-line explanations in changing or deleting an ALJ’s findings.” That holding is absolutely wrong. This Court is bound by its own precedent as set forth in the Hyundai decision, supra. Very recently, the Texas Supreme Court held that when words and phrases are set forth in one statute and then used again in another, if it is in the same context, the words will be understood in the same sense, Colorado County v. Staff, 510 S.W.3d 435, 452 (Tex. 2017). Both Sections 2001.058(e) (last sentence) and 2003.049(h) require that when an agency modifies the PFD, it must set forth “the specific reason and legal basis “ for the change or determination. Both are specifically dealing with PFD changes so they are utilized in the exact same context with the exact same standard. There is no question that the PUC must specifically justify each and every change of the PFD pursuant to Hyundai, supra.

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