murray-watson-jr-pecos-higher-education-authority-brazos-higher-education ( 2000 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-00-00139-CV
Murray Watson, Jr.; Pecos Higher Education Authority; Brazos Higher Education
Authority; Texas Bond Review Board; George W. Bush, Rick Perry, Carole
Keeton Rylander, James E. “Pete” Laney, Board Members;
and Jim Buie, Executive Director, Appellants
v.
North Texas Higher Education Authority, Inc. and Panhandle-Plains Higher
Education Authority, Inc., Appellees
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 250TH JUDICIAL DISTRICT
NO. GN0-00135, HONORABLE ERNEST C. GARCIA, JUDGE PRESIDING
In this case, we consider whether the declaratory judgment provision of the
Administrative Procedure Act1 authorizes a district court to exercise jurisdiction over appellees’2
challenge to the validity and applicability of the Texas Bond Review Board’s rule 190.2(e) during the
2000 school loan bond reservation process. Appellees filed a declaratory judgment action against the
1
Tex. Gov’t Code Ann. § 2001.038 (West 2000) (“APA”).
2
We refer to North Texas Higher Education Authority, Inc. (“North Texas”) and Panhandle-
Plains Higher Education Authority, Inc. (“Panhandle-Plains”) collectively as “appellees.”
Board3 and the Pecos defendants4 and sought to enjoin the Board temporarily from issuing bond
reservations for the 2000 bond reservation process. This is an accelerated, interlocutory appeal of
a denial of appellants’ pleas to the jurisdiction and a temporary injunction. See Tex. Civ. Prac. &
Rem. Code Ann. § 51.014(a)(4), (8) (West 1997 & Supp. 2000); Tex. R. App. P. 28.1. Because
appellees satisfy the requirements of section 2001.038 of the APA, we hold that the district court
properly exercised its jurisdiction. We further conclude that the district court did not abuse its
discretion when it enjoined the 2000 bond reservation process. Although we modify the temporary
injunction in our opinion, we affirm both district court orders.
FACTUAL AND PROCEDURAL BACKGROUND
The dollar amount of private activity bonds that a state may issue within any given
year is capped by a “state ceiling,” which is established by section 146(d) of the Internal Revenue
Code. In Texas, this system is further governed by chapter 1372 of the Texas Government Code.
Tex. Gov’t Code §§ 1372.001-.072 (West 2000). Chapter 1372 designates eleven percent of the
state ceiling, which amounts to $105.5 million for the 2000 bond reservation process,5 exclusively for
issuers of qualified school loan bonds. See id. § 1372.022.
3
For convenience, we designate the State actors collectively as “the Board.” This designation
refers to the Texas Bond Review Board and its members, George W. Bush, Rick Perry, Carole
Keeton Rylander, and James E. “Pete” Laney, and Jim Buie, Executive Director.
4
For ease of reference, we adopt the label “Pecos defendants,” as used by appellants Murray
Watson, Jr. (“Watson”), Pecos Higher Education Authority (“Pecos”) and Brazos Higher Education
Authority (“Brazos”) to refer to themselves.
5
The “2000 bond reservation process” identifies the process that commenced in October 1999
when issuers submitted applications to the Board and would have resulted in issuances of bond
reservations in Spring, 2000.
2
School loan bond amounts are reserved and allocated to higher education authorities
by the Board. See Tex. Gov’t Code Ann. § 1372.033. The Board issues reservations and allocates
bond amounts annually subject to a statutory limit of $35 million per issuer. See id. § 1372.037(5).
Due to these statutory limits, each applicant typically requests the maximum bond amount. Given
the percentage of the state ceiling available for school loan bonds, $105.5 million, and the maximum
limits imposed on each reservation, $35 million, only three higher education authorities anticipate
receiving a bond reservation in any given year even though Texas currently has a total of seven
authorities.
Prior to 1997, a lottery system determined the order of issuances of bond
reservations.6 In 1997, to ensure higher education authorities received bond reservations in a fair and
predictable manner, the Texas Legislature established a rotation system. 7 According to the school
loan allocation statute,8 “the board shall grant reservations in that category in reverse order of the
date of the most recent closing of qualified student loan bonds by each issuer.” Tex. Gov’t Code
Ann. § 1372.033(a) (emphasis added). Thus, the most recent recipient of a bond reservation holds
the lowest priority to receive a reservation in the upcoming year. See id.
6
See Act of May 29, 1995, 74th Leg., R.S., ch. 951, § 3, 1995 Tex. Gen. Laws 4739, 4740-41
(Tex. Rev. Civ. Stat. Ann. art. 5190.9a, § 3, since amended). The method by which bond amounts
are reserved and allocated was changed by the Texas Legislature in 1997. See Act of May 29, 1997,
75th Leg., R.S., ch. 1420, § 3, 1997 Tex. Gen. Laws 5316, 5318-19.
7
See Act of May 29, 1997, 75th Leg., R.S., ch. 1420, § 3, 1997 Tex. Gen. Laws 5316, 5318-19
(Tex. Rev. Civ. Stat. Ann. art. 5190.9a, § 3, since amended).
8
Tex. Gov’t Code Ann. § 1372.033 (West 2000). For convenience, we will refer to section
1372.033 as the “school loan allocation statute.”
3
Following the 1997 legislative session, the Board amended rule 190.2 to reflect the
shift from the lottery to the rotation system. 9 This administrative interpretation of the school loan
allocation statute included additional language addressing new issuers. See 22 Tex. Reg. 7025, 7026-
27 (1997), adopted 22 Tex. Reg. 9895 (1997). Pecos, in October 1999, was the first new issuer to
apply; thus, the Board had no reason to apply rule 190.2(e) before the Legislature recessed.
In 1989, Watson created Pecos as a higher education authority. Before then, Watson
had submitted applications in the Board’s school loan bond reservation process on behalf of Brazos.
Between March and May of 1989, Watson incorporated fourteen new higher education authorities
including Pecos. Although Watson received a charter for Pecos from the Secretary of State in April
1989, all fourteen higher education authorities remained dormant until 1999.
In 1999, when the Board commenced its annual process to issue school loan bond
reservations, Watson submitted applications for bond reservations on behalf of Pecos and Brazos.
When ranking the applications, the Board viewed Pecos as a new issuer. Pursuant to rule 190.2(e),
the Board assigned Pecos the first priority ranking. After the Board implemented the rotation
system, the final order of bond applicants was as follows: (1) Pecos, (2) Central Texas, (3) Greater
Texas Student Loan Corporation, (4) North Texas, (5) Abilene, (6) Panhandle-Plains, and (7) Brazos.
9
Prior to October 1999, this rule was codified as section 190.2(b)(3)(C). See 22 Tex. Reg.
7025, 7026-27 (1997), adopted 22 Tex. Reg. 9895 (1997) (codified at 34 Tex. Admin. Code
§ 190.2(e) (2000)). In October 1999, the Board adopted amendments to rule 190.2, which are not
relevant to this case. See 24 Tex. Reg. 8566, 8569 (1999) (to be codified as an amendment to 34
Tex. Admin. Code § 190.2(e)) (proposed July 9, 1999). For convenience, this opinion cites only to
the current codification of the provision.
4
Each applicant requested the maximum school loan bond reservation of $35 million.
As of October 1999, the Board determined that reservations would be issued to the top three
rankings, which were Pecos, Central Texas, and Greater Texas Student Loan Corporation. Because
Pecos received the first priority ranking due to its status as a new issuer, North Texas was relegated
to the fourth priority ranking and thus would not receive its anticipated bond reservation. Also, the
entry of Pecos to the process prevented Panhandle-Plains from advancing as expected under the
school loan allocation statute.
After negotiations between the parties failed to resolve the dispute, appellees filed suit.
In response, the Board filed a plea to the jurisdiction, asserting sovereign immunity; the Pecos
defendants filed a separate plea to the jurisdiction. The district court denied both pleas to the
jurisdiction and granted a temporary injunction in favor of appellees enjoining the Board from issuing
any bond reservations.
Subsequently, appellees filed an emergency motion for a temporary injunction with
this Court seeking to enjoin an issuance of bond reservations threatened by the Board. We granted
appellees’ motion, thereby prohibiting any issuance of bonds by the Board in the disputed 2000 bond
reservation process. We first address whether the district court had jurisdiction to consider this case.
DISCUSSION
Pleas to the Jurisdiction
Standard of Review
A challenge to subject matter jurisdiction raises a question of law; therefore, we are
required to conduct a de novo review. See Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928
5
(Tex. 1998). When deciding whether the district court properly exercised jurisdiction, we consider
the factual allegations made in good faith by the plaintiff. See Brannon v. Pacific Employers Ins. Co.,
224 S.W.2d 466, 469 (Tex. 1949). These allegations are accepted as true unless the defendant pleads
and proves that they were made fraudulently to confer jurisdiction. See Continental Coffee Prods.
Co. v. Cazarez, 937 S.W.2d 444, 449 (Tex. 1996). Appellees’ pleadings have not been challenged
as fraudulent. Consequently, we accept the allegations as true.
Specifically, a plea to the jurisdiction contests the district court’s authority to consider
a cause of action. See Tsumi, Inc. v. Texas Parks & Wildlife Dep’t, 23 S.W.3d 58, 60 (Tex.
App.—Austin 2000, pet. filed) (citing Amador v. San Antonio State Hosp., 993 S.W.2d 253, 254
(Tex. App.—San Antonio 1999, pet. denied), and State v. Benavides, 772 S.W.2d 271, 273 (Tex.
App.—Corpus Christi 1989, writ denied)). The plaintiff bears the burden of alleging facts to
demonstrate the district court properly exercised its subject matter jurisdiction. See Texas Ass’n of
Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993). Unless the face of the petition
affirmatively demonstrates a lack of jurisdiction, the district court must liberally construe the
allegations in favor of jurisdiction. See Peek v. Equipment Servs. Co., 779 S.W.2d 802, 804 (Tex.
1989). Here, the district court determined that it had jurisdiction under Texas Government Code
section 2001.038.
Section 2001.038 of the APA
Appellants urge that there is no statutory or constitutional authority that enables
appellees to challenge the Board’s decision to allocate a reservation to Pecos. However, the Board
6
concedes that the district court would have jurisdiction if the Board acted improperly. Appellees rely
predominantly on Texas Government Code section 2001.03810 as a statutory basis for jurisdiction.11
Texas Government Code section 2001.038 provides as follows:
(a) The validity or applicability of a rule, including an emergency rule adopted under
Section 2001.034, may be determined in an action for declaratory judgment if it
is alleged that the rule or its threatened application interferes with or impairs,
or threatens to interfere with or impair, a legal right or privilege of the
plaintiff.
Tex. Gov’t Code Ann. § 2001.038(a) (West 2000) (emphasis added). We have recognized that
section 2001.038 confers jurisdiction permitting judicial review of agency rules. See Texas Alcoholic
Beverage Comm’n v. Amusement & Music Operators, Inc., 997 S.W.2d 651, 655-56 (Tex.
App.—Austin 1999, pet. dism’d w.o.j.); Railroad Comm’n v. ARCO Oil & Gas, 876 S.W.2d 473,
10
Texas Government Code section 2001.038 was formerly referred to as section 12 of article
6252-13a of the Texas Civil Statutes. See Texas Educ. Agency v. Leeper, 893 S.W.2d 432, 442 n.12
(Tex. 1994); compare Act of Apr. 30, 1993, 73d Leg., R.S., ch. 268, § 1, 1993 Tex. Gen. Laws 583,
739 (Tex. Rev. Civ. Stat. art. 6252-13a, § 12, since amended), with Act of Apr. 3, 1975, 64th Leg.,
R.S., ch. 61, § 12, 1975 Tex. Gen. Laws 136, 141. Thus, references to section 12 in case law
indicate the prior law, which was codified without substantive change. See Act of Apr. 30, 1993, 73d
Leg., R.S., ch. 268, § 1, 1993 Tex. Gen. Laws 583, 583 (Tex. Rev. Civ. Stat. art. 6252-13a, § 12,
since amended). For convenience, this opinion will reference section 2001.038 solely.
11
Alternatively, appellees argue that the Uniform Declaratory Judgments Act (“Act”) provides
the district court with jurisdiction. See Tex. Civ. Prac. & Rem. Code Ann. ch. 37 (West 1997 &
Supp. 2000). They also contend that case law supports the district court’s jurisdiction. See Cobb
v. Harrington, 190 S.W.2d 709, 713-14 (Tex. 1945). The Texas Supreme Court has interpreted the
Act as “a procedural device for deciding cases already within a court’s jurisdiction,” which does not
create jurisdiction. See Texas Ass’n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 444 (Tex.
1993); Brinkley v. Texas Lottery Comm’n, 986 S.W.2d 764, 768 n.6 (Tex. App.—Austin 1999, no
pet.); Texas Comm’n of Licensing & Regulation v. Model Search Am., Inc., 953 S.W.2d 289, 290
(Tex. App.—Austin 1997, no writ). Because the discussion of jurisdiction in Cobb v. Harrington is
limited to the Uniform Declaratory Judgments Act, it fails to provide a further basis for jurisdiction.
See Cobb, 190 S.W.2d at 713-14.
7
479 (Tex. App.—Austin Feb. 4, 1994, writ denied); Texas Dep’t of Human Servs. v. ARA Living
Ctrs., 833 S.W.2d 689, 692-93 (Tex. App.—Austin 1992, writ denied); Southwestern Bell Tel. v.
Public Util. Comm’n of Tex., 735 S.W.2d 663, 669 (Tex. App.—Austin 1987, no writ).
In Southwestern Bell Telephone we reviewed whether a district court had jurisdiction
under section 2001.038 to consider the validity of a Public Utility Commission rule. Southwestern
Bell Tel., 735 S.W.2d at 667. We described section 2001.038 as empowering district courts in Travis
County to determine “‘[t]he validity or applicability of any rule.’” Id. at 669. We further opined that
“[t]he jurisdiction given in [section 2001.038] . . . to the Travis County district courts is an original
jurisdiction not appellate jurisdiction.” Id.12
Next, in ARA Living Centers we considered whether the district court had jurisdiction
under section 2001.038 to hear ARA’s challenge to the validity of agency rules promulgated by the
Texas Department of Human Services and to the Department’s attempts to apply these rules to ARA.
ARA Living Ctrs., 833 S.W.2d at 692-93. After disposing of the Department’s arguments concerning
the exhaustion of administrative remedies, primary jurisdiction, and governmental immunity doctrines,
we concluded that section 2001.038 gave the district court jurisdiction to hear ARA’s request for
declaratory relief. See id. at 693.
Likewise, in ARCO Oil & Gas we discussed whether a district court had jurisdiction
under section 2001.038 to hear a challenge to a Railroad Commission rule seeking declaratory relief.
ARCO Oil & Gas, 876 S.W.2d at 477-78. Although our discussion focused on the doctrine of
12
The provision restricts proper venue to Travis County district courts. See Tex. Gov’t Code
Ann. § 2001.038(b) (West 2000).
8
primary jurisdiction, we also held that in the absence of that doctrine, section 2001.038 conferred
jurisdiction on the district court. See id. at 479. Most recently, in Amusement & Music Operators,
Inc., we reiterated that section 2001.038 is a valid statutory basis for conferring jurisdiction when the
validity or application of an agency rule is challenged. Amusement & Music Operators, Inc., 997
S.W.2d at 655-56, 659.
The parties urge us to decide whether the Legislature has created a school bond
allocation system open to “all comers,” as the Board and Pecos defendants contend, or a closed
system, as appellees argue. We decline to examine the merits of this action until the trial court
renders a judgment. Accordingly, we limit our discussion to a review of whether appellees satisfy the
requirements of section 2001.038.
To establish jurisdiction under section 2001.038, a matter must concern the “validity
or applicability of a rule,” which “interferes with or impairs, or threatens to interfere with or impair,
a legal right or privilege of the plaintiff.” Tex. Gov’t Code Ann. § 2001.038(a) (West 2000).
Appellants contend that this suit is not a rule challenge but rather an attempt to obtain a judicial
review of an agency decision. To support their position that this suit deals with an agency decision,
appellants rely on our opinions in Southwest Airlines Co. v. Texas High-Speed Rail Authority and
S.C. San Antonio, Inc. v. Texas Department of Human Services. Southwest Airlines v. Texas High-
Speed Rail Auth., 863 S.W.2d 123, 124 (Tex. App.—Austin 1993, writ denied); S.C. San Antonio,
Inc. v. Texas Dep’t of Human Servs., 891 S.W.2d 773, 774-75 (Tex. App.—Austin 1995, writ
denied). However, Southwest Airlines and S.C. San Antonio, Inc. are inapposite to this case, because
both cases involve judicial review of agency proceedings with formal decisions.
9
Here, the record reveals no similar evidence of an agency proceeding or hearing
conducted by an agency examiner or an administrative law judge. Unlike the parties in Southwest
Airlines and S.C. San Antonio, Inc., the parties in this case have not engaged in discovery or received
a final agency order or a formal agency decision. We find that this case does not present a question
regarding an agency decision. Instead, we conclude the question before us concerns a challenge to
the validity and applicability of a Board rule.
Appellants further contend that neither the Board’s rules nor the Board’s threatened
application of its rules affect a legal right or privilege of the appellees. Appellants assert accurately
that appellees’ claim does not concern a constitutional or vested property right. Rather appellees
allege that a statutory right is affected. In particular, appellees argue that the school loan allocation
statute implicates a legal right or privilege. We agree.
Statutes create legal rights. See Westerman v. Mims, 227 S.W. 178, 184 (Tex. 1921)
(acknowledging that statutes “deal with legal obligations or duties and legal rights”); Gilmore v.
Waples, 188 S.W. 1037, 1041 (Tex. 1916) (“[T]he rights created and protected by a statute are legal,
as distinguished from political, rights . . . .”). Once the Board accepted appellees’ applications for
a bond reservation, appellees became qualified issuers who should have been ranked according to the
school loan allocation statute. This statute assigns priority rankings in reverse chronological order.
The Board concedes that “[w]ithout Pecos’s application, North Texas would have
received a reservation in the 2000 bond reservation process.” In effect, rule 190.2(e) and the Board’s
application of that rule permitted a new issuer to receive the first priority ranking and deprived
appellees of a legal right or privilege, namely, their statutory right to be ranked in reverse
10
chronological order during the bond reservation process. Rather than being ranked third, North
Texas was ranked fourth due to Pecos’s entry into the process. Similarly, Panhandle-Plains will
advance only two rankings rather than three because of the entry of Pecos. We conclude that the
Board’s application of this rule satisfies section 2001.038, which requires the presence of interference
or impairment, or a threat of interference or impairment, with a legal right or privilege of the
appellees.
The Pecos defendants further argue that section 2001.038 is inapplicable because
appellees have raised their challenge in an untimely manner. The Pecos defendants rely on dicta in
our prior opinions to support this contention. See Ford, Inc. v. Collins Ford, Inc., 912 S.W.2d 271,
275 (Tex. App.—Austin 1995, writ dism’d); Rutherford Oil Corp. v. General Land Office, 776
S.W.2d 232, 235 (Tex. App.—Austin 1989, no writ). We have stated previously that “[t]he purpose
of the statute is to obtain a final declaration of a rule’s validity before the rule is applied.” Ford, Inc.,
912 S.W.2d at 275 (citing Rutherford Oil Corp. v. General Land Office, 776 S.W.2d 232, 235 (Tex.
App.—Austin 1989, no writ)). Rutherford Oil, however, does not contain a timing requirement, and
we have not been cited to any case that does.
Moreover, the plain language of section 2001.038 contemplates the use of this
provision to challenge the validity and applicability of a rule. See Tex. Gov’t Code Ann.
§ 2001.038(a) (West 2000). No express language in section 2001.038 imposes a timing limitation
on invoking jurisdiction. See id.
Sovereign Immunity
11
The Board also argues that the doctrine of sovereign immunity prevents the district
court from exercising jurisdiction. We have previously held that section 2001.038 is “an express
waiver of governmental immunity from suit for an action that properly invokes that section.” ARA
Living Ctrs., 833 S.W.2d at 693; accord Amusement & Music Operators, Inc., 997 S.W.2d at 659.
The statute specifically provides, “The State agency must be made a party to the action.” Tex. Gov’t
Code Ann. § 2001.038(c) (West 2000). Accordingly, we reject the argument that sovereign immunity
erects a jurisdictional bar and protects the Board from appellees’ claims.
We hold that appellees’ suit satisfies the requirements of section 2001.038 and that
the district court properly exercised jurisdiction over this case. Accordingly, we overrule appellants’
first issue regarding jurisdiction.
Temporary Injunction
Appellants’ remaining issues concern the issuance of the temporary injunction. 13 A
review of a district court’s grant of a temporary injunction is strictly limited to whether the court
abused its discretion. See Davis v. Huey, 571 S.W.2d 859, 861-62 (Tex. 1978); State v.
Southwestern Bell Tel. Co., 526 S.W.2d 526, 528 (Tex. 1975). When a court misapplies the law or
concludes that a probable right of recovery exists, which is not reasonably supported by the evidence,
the court commits an abuse of discretion. See Southwestern Bell Tel. Co., 526 S.W.2d at 528. In
13
The Pecos defendants present the issue of whether the trial court erred when it permitted
supplementation of the administrative record. However, because no argument or legal authority to
support its position is provided in their brief, this complaint is waived. See Tex. R. App. P. 38.1(h);
Lakeway Land Co. v. Kizer, 796 S.W.2d 820, 827 (Tex. App.—Austin 1990, writ denied).
12
an interlocutory appeal from a temporary injunction, we do not review the merits. See Davis, 571
S.W.2d at 862; Amusement & Music Operators, Inc., 997 S.W.2d at 657-58.
In a temporary injunction hearing, the sole question before the court is whether the
applicant is entitled to preserve the status quo of the subject matter of the suit pending trial. See
Davis, 571 S.W.2d at 862. Due to the limited purpose of such a hearing, a court may exercise broad
discretion when deciding whether to issue a temporary injunction. See LaFaucheur v. Williams, 807
S.W.2d 20, 22 (Tex. App.—Austin 1991, no writ). We must determine whether the court’s decision
was “‘arbitrary, unreasonable, and without reference to guiding principles.’” Goode v. Shoukfeh, 943
S.W.2d 441, 446 (Tex. 1997) (quoting Mercedes-Benz Credit Corp. v. Rhyne, 925 S.W.2d 664, 666
(Tex. 1996)). We may not substitute our judgment for that of the trial court because the evidence
at a preliminary hearing may not be the same as that developed during a full trial on the merits. See
Davis, 571 S.W.2d at 862 (relying on Houston Belt & Terminal Ry. Co. v. Texas & New Orleans
R.R. Co., 289 S.W.2d 217 (Tex. 1956), and Transport Co. v. Robertson Transps., 261 S.W.2d 549
(Tex. 1953)).
Appellants contend that the temporary injunction was improper because the Board
acted within the scope of its authority. Appellants also assert that during this process, every
application was properly considered and ranked by priority. As stated previously, we refrain from
considering the merits of this case.
In addition, the Pecos defendants allege that the temporary injunction is improper
because appellees did not plead a cause of action and did not demonstrate a probable right of
recovery or a probable injury. Appellants further claim that the district court order and our order
13
issuing an injunction are defective because the scope of each order exceeds the pleadings and the
record.
To grant a temporary injunction, a trial court must find that a plaintiff pleaded a cause
of action and asserted a probable right to recover as well as a probable injury. See Sun Oil Co. v.
Whitaker, 424 S.W.2d 216, 218 (Tex. 1968); Amusement & Music Operators, Inc., 997 S.W.2d at
657 (citing Omniphone, Inc. v. Southwestern Bell Tel., 742 S.W.2d 523 (Tex. App.—Austin 1987,
no writ)). We first consider whether appellees pleaded a cause of action. In this case, appellees seek
declaratory relief on three grounds: (1) the Board violated section 1372.029 of the Texas
Government Code and rule 190.3(g)(5), which prevent the Board from accepting applications from
more than one project located at, or related to, a business operation at a program site in any given
year; (2) Pecos and Brazos constitute a single business entity under an alter ego or single business
theory; and (3) the Board promulgated an invalid rule when it interpreted the school loan allocation
statute in rule 190.2(e). We have previously found that a suit seeking a declaratory judgment
pursuant to section 2001.038 satisfies the prerequisite that a valid cause of action be asserted. See
Amusement & Music Operators, Inc., 997 S.W.2d at 657. Therefore, we find appellees’ requests for
declaratory relief comply with this preliminary requirement.14
We next consider whether these causes of action entitle appellees to relief. To
determine whether a probable right of recovery exists, we must examine rule 190.2(e) in light of the
14
Appellees further allege in their petition that because Pecos and Brazos are a single business
enterprise, the Board violated Texas Government Code section 1372.029 and rule 190.3(g)(5) of the
Texas Administrative Code when it accepted applications from both entities. Because of our
disposition of appellants’ first issue, we need not decide this issue.
14
school loan allocation statute. The Board is authorized to enact administrative rules “relating to
applications for review, the review process and reporting requirements.” See Tex. Gov’t Code Ann.
§ 1231.022(1) (West 2000). The Board has promulgated rule 190.2(e), which reads as follows:
Reservations shall be granted in reverse calendar year order of the most recent closing
of qualified student loan bonds by each issuer of qualified student loan bonds . . . with
the most recent closing being the last to receive a reservation and with those higher
education authorities that have never received a reservation for student loan bonds
being the first to receive a reservation, and, in the case of closings occurring on the
same date, reservations shall be granted in an order determined by the board by lot.
34 Tex. Admin. Code § 190.2(e) (2000) (emphasis added). By its terms, rule 190.2(e) addresses the
priority ranking of new issuers.
We note, however, that the “new issuer” language of rule 190.2(e) resembles the
Board’s mortgage allocation statute15 more closely than the school loan allocation statute. The
mortgage allocation statute specifically provides for new issuers as follows:
(c) Within the group of issuers given priority and within the group not given priority,
the board shall grant reservations in reverse order of the date of the most recent
closing of qualified mortgage bonds applicable to the housing finance
corporations, with a corporation that has never received a reservation for
mortgage revenue bonds being the first to receive a reservation and the
corporation that had the most recent closing being the last to receive a
reservation. If closings occurred on the same date, the board shall grant
reservations in the order determined by the board by lot.
15
Tex. Gov’t Code Ann. § 1372.032(c) (West 2000). For convenience, we refer to section
1372.032(c) as the “mortgage allocation statute.”
15
Tex. Gov’t Code Ann. § 1372.032(c) (West 2000) (emphasis added). In contrast, the school loan
allocation statute states the following:
If, on or before October 20, more than one issuer authorized by Section 53.47,
Education Code, to issue qualified student loan bonds applies for a reservation of the
state ceiling for qualified student loan bonds for the next program year, the board
shall grant reservations in that category in reverse order of the date of the most
recent closing of qualified student loan bonds by each issuer. The issuer that had
the most recent closing shall be the last to receive a reservation.
Id. § 1372.033(a) (emphasis added). Unlike rule 190.2(e) and the mortgage allocation statute, the
plain language of the school loan allocation statute does not address the priority ranking of new
issuers. The Board implemented rule 190.2(e) with respect to a new issuer for the first time in
October 1999. We conclude that the Board has not shown the existence of a “longstanding”
administrative policy and therefore, the theory of legislative acceptance or ratification may not apply
to these circumstances. We find the evidence sufficient to determine that the district court reasonably
concluded that a probable right to recover exists.
The final requirement to support a temporary injunction, probable injury, encompasses
three factors: imminent harm, irreparable injury, and no adequate remedy at law for damages. See
Transport Co., 261 S.W.2d at 553. The record reflects that the Board threatened to apply rule
190.2(e). As a result, the Board placed Pecos in the first priority position to receive a reservation.
This assignment of priority relegated North Texas to the fourth priority ranking. The Board’s
placement of Pecos in the first priority position also prevented Panhandle-Plains from rotating up the
priority rankings as it otherwise would have. We find that the record could reasonably support the
district court’s determination that appellees faced imminent harm.
16
Furthermore, the record indicates that the Board intends to continue to apply its rules
during subsequent bond reservation processes. Thus, neither North Texas nor Panhandle-Plains is
able to discern when it may receive a bond reservation. The record reveals that bond reservations
are essential to appellees’ ability to conduct business as well as provide services to its clients. Also,
the threatened inability to advance in priority ranking results in irreparable injury to appellees. We
conclude that the district court could have reasonably found that the record supported a finding of
irreparable injury.
Lastly, we review whether appellees had an adequate remedy at law available that
would render the grant of injunctive relief improper. When a remedy is complete, practical, and
efficient to the prompt administration of justice, it is viewed as adequate. See Bank of Southwest
N.A., Brownsville v. Harlingen Nat’l Bank, 662 S.W.2d 113, 116 (Tex. App.—Corpus Christi 1983,
no writ); Greater Houston Bank v. Conte, 641 S.W.2d 407, 410 (Tex. App.—Houston [14th Dist.]
1982, no writ). Damages have been found inadequate when difficulty arises in calculating damages
or if an award arrives too late. See T-N-T Motorsports, Inc. v. Hennessey Motorsports, Inc., 965
S.W.2d 18, 24 (Tex. App.—Houston [1st Dist.] 1998, no pet.); Bank of Southwest, 662 S.W.2d at
116. The loss of a bond reservation or ranking is difficult to quantify. Once a bond reservation is
issued, the bond amounts may not be recouped. We find no clear abuse of discretion in the district
court’s ruling. Appellants’ second issue is overruled.
By its terms, the temporary injunction restrains the Pecos defendants from issuing a
bond reservation. At oral argument, appellees conceded that no reason exists for the continued
enforcement of either temporary injunction against the Pecos defendants. Therefore, we modify the
17
district court’s temporary injunction and our order and writ of injunction dated March 6, 2000 to
exclude the Pecos defendants.
Although no longer enjoined, the Pecos defendants draw our attention to a clerical
error in the district court order and our order of March 6, 2000. Both orders refer to the “Fall
2000/Spring 2001 bond review reservation process,” which constitutes an inaccurate description.
“When the record reflects a clerical variance between a judgment announced in open court and the
judgment eventually signed by the trial judge, an appellate court can modify the judgment to correct
the mistake.” McLendon v. McLendon, 847 S.W.2d 601, 610 (Tex. App.—Dallas 1992, writ denied);
cf. Tex. R. App. P. 43.2. In this case, the judge announced his judgment in open court and
considered all objections raised to the form submitted by appellees’ counsel. Neither appellants nor
appellees referenced the “Fall 2000/Spring 2001 bond review reservation process” in their pleadings
or at the hearing. Rather, each party restricted its arguments to the most recent Board bond
reservation process in which applications were accepted in Fall 1999, and the Board anticipated
issuing reservations in Spring 2000. Because these discrepancies are clerical, we modify the district
court’s temporary injunction to cover the “2000 Texas Bond Review Board school loan bond
reservation process,” the time frame contemplated by all parties.
Furthermore, on March 6, 2000, in response to an emergency motion for a temporary
injunction filed by appellees to halt the Board’s threatened issuance of a bond reservation, we issued
an order and an accompanying writ of injunction. Our order also made reference to the “Fall
2000/Spring 2001 bond review reservation process.” Therefore, we also modify our order of March
6, 2000 to refer to the“2000 Texas Bond Review Board school loan bond reservation process.”
18
CONCLUSION
In light of our holding that the district court had jurisdiction to consider appellees’
claims under section 2001.038 of the APA, we affirm the district court’s order denying appellants’
pleas to the jurisdiction. Because we hold that the district court did not abuse its discretion in
granting the temporary injunction, we affirm the temporary injunction as modified.
Jan P. Patterson, Justice
Before Chief Justice Aboussie, Justices B. A. Smith and Patterson
Modified and, as Modified, Affirmed
Filed: October 19, 2000
Do Not Publish
19