Supermercado Teloloapan, Inc. D/B/A Teloloapan Meat Market v. City of Houston ( 2007 )

Affirmed and Majority and Dissenting Opinions filed December 18, 2007

Affirmed and Majority and Dissenting Opinions filed December 18, 2007.

In The

Fourteenth Court of Appeals

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NO. 14-06-00472-CV

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SUPERMERCADO TELOLOAPAN, INC.

D/B/A TELOLOAPAN MEAT MARKET, Appellant

V.

CITY OF HOUSTON, Appellee

On Appeal from the 80th District Court

Harris County, Texas

Trial Court Cause No. 05-60093

D I S S E N T I N G   O P I N I O N

In 2005, Supermercado, a grocery store operator, applied to the Texas Alcoholic Beverage Commission (the ACommission@) for an off-premise beer and wine permit.  To satisfy a condition for obtaining the permit, Supermercado requested the City to certify that the location of its store was in a Awet area@ and that the sale of beverages there was not prohibited by ordinance.  See Tex. Alco. Bev. Code Ann. ' 61.37 (Vernon 2007).  However, the City refused to certify the latter because it concluded that a charter school was located less than the required 300 feet from the store.

Supermercado thereafter sought a declaratory judgment in the trial court that the applicable ordinance and provision of the Texas Alcoholic Beverage Code (the ACode@) require that the distance be measured in a different manner than the City measured it.  After a bench trial, the trial court denied the relief sought by Supermercado and issued findings of fact and conclusions of law.     

Subject matter jurisdiction exists only by operation of law and cannot be conferred by consent or waiver.  Univ. of Tex. Sw. Med. Ctr. v. Loutzenhiser, 140 S.W.3d 351, 358 (Tex. 2004). Therefore, a court is obliged to ascertain that subject matter jurisdiction exists regardless whether the parties have raised it.  Id.

Texas district courts generally have jurisdiction over all actions except those for which jurisdiction has been conferred on some other court, tribunal, or administrative body.  Tex. Const. art. V, ' 8.  Therefore, where an administrative agency has exclusive jurisdiction over a determination, a complaining party must exhaust administrative remedies before seeking review in a district court; and a district court lacks subject matter jurisdiction, and must dismiss any such claims until the party has satisfied this requirement.  In re Sw. Bell Tel. Co., __ S.W.3d __, __ (Tex. 2007).^[1]

A party cannot circumvent an agency's exclusive jurisdiction by filing a declaratory judgment action if the subject matter of the action is one over which the Legislature intended the administrative agency to exercise exclusive jurisdiction.  Blue Cross Blue Shield of Tex. v. Duenez, 201 S.W.3d 674, 675 (Tex. 2006).^[2] An administrative agency has exclusive jurisdiction when the Legislature grants it the sole authority to make an initial determination in a matter and a pervasive regulatory scheme indicates that the Legislature intended for the regulatory process to be the exclusive means of remedying the problem to which the regulation is addressed.  Id.  at 675B76.  However, it is not essential that the statute contain an express grant of exclusive jurisdiction to the agency.^[3]

Unless otherwise specifically provided in the Code, the sale, distribution, transportation, and possession of alcoholic beverages is Agoverned exclusively@ by the Code.  Tex. Alco. Bev. Code Ann. ' 1.06 (Vernon 2007).  No person may sell, possess for the purpose of sale, distribute, or store liquor, unless he has obtained a permit for this privilege.  Id.  '' 26.03(a); 61.01 (Vernon 2007). Under the Code, the Commission is the only body that is authorized to issue alcoholic beverage permits (although a county judge is also authorized to deny them).^[4] See id.  '' 26.03(a), 61.33(a) (Vernon 2007).  The Code contains extensive procedures for permit applications, hearings, determinations, and appeals of determinations, including to the district courts.  See id. '' 11.01-75.05 (Vernon 2007).  The plain language of these provisions clearly indicates that this pervasive regulatory scheme is intended to be the exclusive means of seeking and litigating alcoholic beverage permits.

Because the certification sought from the City by Supermercado was one step in this permit application process, related directly to that process, and arises only in connection with such an application, this declaratory judgment action involves the same subject matter as that over which the Commission has exclusive jurisdiction.  See Duenez, 201 S.W.3d at 676;  Sells v. Roose, 769 S.W.2d 641, 643 (Tex. App.CAustin 1989, no writ).  Therefore, because Supermercado had not exhausted its administrative remedies, the district court lacked subject matter jurisdiction over the declaratory judgment action,^[5] and we should reverse the judgment

of the trial court and order the case dismissed for lack of subject matter jurisdiction.

/s/        Richard H. Edelman

Senior Justice

Judgment rendered and Majority and Dissenting Opinions filed December 18, 2007.

Panel consists of Chief Justice Hedges and Justices Fowler and Edelman.^* (Hedges, C.J. majority).

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^[1]           Though not applicable in this case, exceptions to the exhaustion rule include instances in which an official has acted without legal or statutory authority, the administrative agency lacks jurisdiction, or an administrative order violates a constitutional right or adversely affects a vested property right.  See Tex. Natural Res. Conservation Comm=n v. IT-Davy, 74 S.W.3d 849, 855 (Tex. 2002); Tex. Educ. Agency v. Cypress-Fairbanks Indep. Sch. Dist., 830 S.W.2d 88, 90 (Tex. 1992); Stone v. Tex. Liquor Control Bd., 417 S.W.2d 385, 385B86 (Tex. 1967).

^[2]           See Thomas v. Long, 207 S.W.3d 334, 342 (Tex. 2006).

^[3]           See Thomas, 207 S.W.3d at 340.

^[4]           See id. '' 61.31, 61.32, 61.34(a), 61.43(a) (Vernon 2007).

^[5]           See Duenez, 201 S.W.3d at 676.

^*           Senior Justice Richard H. Edelman, sitting by assignment.