Texas Health and Human Services Commission And Cecile Erwin Young, Executive Commissioner of the Texas Health and Human Services Commission v. Sacred Oak Medical Center LLC

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-21-00136-CV
Texas Health and Human Services Commission; and Cecile Erwin Young, Executive
Commissioner of the Texas Health and Human Services Commission, Appellants
v.
Sacred Oak Medical Center LLC, Appellee
FROM THE 250TH DISTRICT COURT OF TRAVIS COUNTY
NO. D-1-GN-21-000074, THE HONORABLE LORA J. LIVINGSTON, JUDGE PRESIDING
ORDER
PER CURIAM
Appellants, Texas Health and Human Services Commission and its Commissioner
(“Commission” or “State appellants”), have appealed the trial court’s March 22, 2021 order
granting appellee Sacred Oak Medial Center LLC’s application for temporary injunction and
denying the Commission’s plea to the jurisdiction. The underlying case arises from an order
issued by the Commission on December 21, 2020 (“December 2020 Order”), denying Sacred
Oak’s renewal application for the license for its psychiatric hospital and requiring it to cease
operations immediately. The trial court granted Sacred Oak’s application for a temporary
injunction, issuing an order restraining the Commission from enforcing the December 2020
Order and requiring the Commission to “immediately take all actions within its jurisdiction
that are necessary to restore Sacred Oak to the operational status quo that existed prior to [the
Commission’s] enforcement of the Order, which shall include reinstating and returning any
state license or certification from [the Commission] held and/or possessed by Sacred Oak on
December 20, 2020,” which would allow Sacred Oak to reopen its psychiatric hospital.
Because the State appellants are a state agency and the head of a state agency,
upon the filing of the notice of appeal, the trial court’s order was superseded by operation of law,
and the Commission asserted in the notice of appeal that it was not subject to being counter-
superseded under Texas Rule of Appellate Procedure 24.2(a)(3). See Tex. Civ. Prac. & Rem.
Code § 6.001(a); see also Tex. R. App. P. 24.2(a)(3) (“When the judgment is for something other
than money or an interest in property, . . . . [and] [w]hen the judgment debtor is the state, a
department of this state, or the head of a department of this state, the trial court must permit a
judgment to be superseded except in a matter arising from a contested case in an administrative
enforcement action.”). Sacred Oak filed a motion requesting that the trial court “refuse to
suspend enforcement of the judgment,” arguing that the trial court was not required to allow the
Commission to supersede the temporary injunction because this matter arises from a contested
case in an administrative enforcement action and thus the trial court has discretion to allow it to
post a counter-supersedeas bond. See Tex. R. App. P. 24.2(a)(3). In response, the Commission
argued that the trial court should decline to hear the motion because the Commission’s
accelerated interlocutory appeal was taken from the trial court’s denial of its plea to the
jurisdiction, and thus the appeal had stayed all other proceedings in the trial court. See Tex. Civ.
Prac. & Rem. Code § 51.014(b); see also In re Texas Educ. Agency, 441 S.W.3d 747, 751 (Tex.
App.—Austin 2014, orig. proceeding) (holding that trial court abused its discretion by issuing
orders denying agency’s right to supersedeas after Section 51.014(b) automatically stayed “all
other proceedings in the trial court”). The trial court subsequently issued a letter ruling in which
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it found that In re Texas Education Agency “is binding precedent on this court” and that “[t]here
is no indication that it has been overruled or revisited by the Third Court of Appeals or Texas
Supreme Court.” Therefore, the trial court stated that the hearing set on Sacred Oak’s Motion
to Refuse Suspension of Judgment would not go forward because “the trial court lacks the
discretion to hear the matter under binding Third Court precedent.”
Sacred Oak subsequently filed in this Court an “Emergency Motion for Review of
Denial of Counter-Supersedeas or for a Rule 29.3 Temporary Order,” which the Commission
opposes. For the reasons discussed below, we grant the alternative relief requested by Sacred
Oak, and pursuant to our authority under Texas Rule of Appellate Procedure, we order that the
trial court’s March 22, 2021 temporary injunction is reinstated and remains in effect, pending
disposition of the appeal.
BACKGROUND
The parties had previously entered into an Agreed Order on October 1, 2019, after
Sacred Oak had applied to renew its license on May 1, 2019, and the Commission had issued
April 18, 2019 and June 5, 2019 Notices of Violations and a proposed administrative penalty.
The Agreed Order resolved two Notices of Violation by probating the denial of Sacred Oak’s
renewal application for a period of twelve months, subject to Sacred Oak’s compliance with the
terms of the Agreed Order, which among other things, required Sacred Oak’s facility to hire an
outside consultant approved by the Commission to create a corrective action plan identifying
specific actions to be taken “to achieve sustained compliance with all applicable statutes and
regulations” and to provide the Commission with monthly reports detailing Sacred Oak’s
progress in implementing the specific actions identified in the plan and confirming whether
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Sacred Oak was sustaining compliance with all applicable statutes and regulations. The Agreed
Order allowed the Commission to deny the license renewal at any time during the probation
period if it found Sacred Oak had not made sufficient progress in implementing the plan
and achieving sustained compliance. The Agreed Order further provided that upon completion
of the corrective action plan, Sacred Oak was to request a survey by the Commission, and if
the Commission did not find that Sacred Oak had “achieved sustained compliance with all
applicable statutes and regulations by the end of the Probation Period, the Commission may deny
the license renewal.” After conducting the required post-probation survey, the Commission
identified deficient practices that it cited in the December 2020 Order in support of its finding
that Sacred Oak did not achieve sustained compliance with all applicable statutes and
regulations, which was the basis for its denial of Sacred Oak’s renewal application.
On January 7, 2021, Sacred Oak sued the Commission, arguing that the
Commission’s December 2020 Order failed to find that it did not comply with applicable statutes
and regulations that were the subject of the Notices that led to the Agreed Order. See Tex.
Health & Safety Code § 577.016(f) (establishing that facility in repeated noncompliance may be
scheduled for probation and “[d]uring the probation period, the hospital or facility must correct
the items that were in noncompliance and report the corrections to the department for approval”).
In its petition, Sacred Oak contends that to the extent the Commission alleged the occurrence of
different violations during the probation period as the basis for denying its renewal application,
Sacred Oak is entitled to a hearing and an opportunity to demonstrate or achieve compliance
before the Commission could deny its renewal application and order it to close. Id. § 577.016(b).
Sacred Oak seeks judicial review of the December 2020 Order, asserting that although it
submitted a request for a hearing on the order, the Commission had advised it that the request
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would be refused because the Commission’s decision is final.1 Id. § 577.018. Sacred Oak also
seeks a declaratory judgment that the denial of its license renewal and closure of its hospital are
void as ultra vires acts that violate the Texas Health and Safety Code and Texas Administrative
Code. Finally, it seeks injunctive relief requiring the Commission to withdraw its December
2020 Order, pending the administrative processes established by Texas Administrative Code
Title 26, Section 510.83 and Texas Health and Safety Code Section 577.016.
On February 1, 2021, the trial court conducted a hearing on the Commission’s
plea to the jurisdiction and Sacred Oak’s application for temporary injunction. At the hearing,
the Commission informed the court that although Sacred Oak’s application to the Commission
for an appeal of the December 2020 Order had been docketed with its appellate division, the
Commission intended to argue that Sacred Oak is not entitled to an administrative appeal, based
on the waiver clause in the Agreed Order.
On March 22, 2021, the trial court issued its order denying the plea to the
jurisdiction, granting Sacred Oak’s application for temporary injunction, and granting the
Commission’s motion to quash subpoenas for certain witnesses to appear at the temporary-
injunction hearing. In its order, the trial court made the following findings to support its grant of
the temporary injunction:
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The parties dispute the construction of certain clauses in the Agreed Order, including a clause
in which Sacred Oak “waives the right to a hearing or an appeal regarding the Commission
findings, assessment of the proposed administrative penalty and disposition of this case through
the Commission’s issuance of an Order,” and another clause stating that “[t]he Commission does
not waive the right to enforce this Order or to prosecute any other violations that Respondent
may hereafter commit. The Commission shall consider this Order and Respondent’s compliance
history in the processing of any other enforcement actions and the imposition of any subsequent
penalty.”
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Finding that Sacred Oak has demonstrated the likelihood of success on the merits
at trial, including that the December 21, 2020 Order . . . may violate Texas
Administrative Code §510.83 by purporting to deny Sacred Oak’s application for
renewal of its hospital license without providing prior notice of same, prior
opportunity to demonstrate or achieve compliance, and prior opportunity for a
hearing; and
Finding that irreparable harm and economic injury will be sustained by Sacred
Oak by the continued closure of the hospital and consequent disruption of its
business with the enforcement of the [December] Order . . . .
As a result, the trial court ordered that:
[the Commission] is RESTRAINED from enforcing the [December] Order and
that [the Commission] shall immediately take all actions within its jurisdiction
that are necessary to restore Sacred Oak to the operational status quo that existed
prior to [the Commission’s] enforcement of the Order, which shall include
reinstating and returning any state license or certification from [the Commission]
held and/or possessed by Sacred Oak on December 20, 2020, and thereafter
terminated and/or removed as a result of [the Commission’s] efforts to enforce
the Order (the “Licenses”, e.g., Psychiatric Hospital License No. 100390, issued
to Sacred Oak on May 26, 2017). In the event that a document evidencing any
such License was physically destroyed on or after December 21, 2020, [the
Commission] shall immediately issue or cause to be issued a new such document
to Sacred Oak. [The Commission] is further directed to immediately update its
electronic records to reflect that the Licenses are valid and existing, that Sacred
Oak’s credentials reflect the status quo that existed on December 20, 2020, and
that Sacred Oak can practice/operate in the State of Texas as it was authorized to
do so on December 20, 2020[.]
The trial court further ordered that the case is abated pending the outcome of the administrative
hearing docketed at the Commission and exhaustion of administrative remedies, but that “[s]uch
abatement does not affect and will not restrict the Court’s enforcement of this order and the
temporary injunction enjoining [the Commission’s] termination of the license, which shall in any
event remain in place pending a final hearing in this proceeding[.]” The trial court set a final
hearing in the matter for October 11, 2021.
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The Commission immediately filed its notice of appeal, and as described
above, after the trial court determined that it lacked discretion to hear Sacred Oak’s motion to
counter-supersede the judgment, Sacred Oak filed its Emergency Motion for Review of Denial of
Counter-Supersedeas or for a Rule 29.3 Temporary Order in this Court.
ANALYSIS
In its emergency motion, Sacred Oak argues that the trial court erred in
concluding that the Section 51.014(b) stay applied to its counter-supersedeas motion and that it
should have allowed Sacred Oak to counter-supersede the order. Accordingly, Sacred Oak
requests that this Court review the trial court’s ruling pursuant to Texas Rule of Appellate
Procedure 24.4(a), and upon review, that we reverse the trial court’s ruling that it could not hear
the counter-supersedeas motion and order that the temporary injunction will remain in effect
upon Sacred Oak’s posting of security in the amount of $10 (the same amount set by the trial
court in the temporary injunction). It also requests that we issue a temporary order under Rule
24.4(c) that the temporary injunction remain in effect, pending our consideration of this motion.
In the alternative, Sacred Oak requests that the Court issue a temporary order under Rule 29.3
that the temporary injunction remains in effect pending the disposition of this appeal, in order to
preserve the rights of the parties.
In response, the Commission argues that (1) the trial court properly decided that it
had no discretion to consider the counter-supersedeas motion, based on this Court’s 2014 opinion
in In re Texas Education Agency, 441 S.W.3d at 751, and on the supreme court’s more recent
holding in In re Geomet Recycling LLC, 578 S.W.3d 82, 91-92 (Tex. 2019), which affirms the
stay imposed by Section 51.014(b) in the TCPA context, and (2) we should deny Sacred Oak’s
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request for Rule 29.3 relief because Sacred Oak has not presented a showing of compelling
circumstances to establish a right to relief or fully explained the facts necessary to show that
the requested relief is necessary to preserve the parties’ rights. The Commission contends that
reinstating the temporary injunction would operate to change the status quo, not preserve it,
because Sacred Oak’s psychiatric hospital has been closed since the Commission issued its
December 2020 Order. The Commission also focuses on the facts leading to the December
Order, arguing that Sacred Oak’s facility was closed due to concerns about patient safety.
In reply, Sacred Oak points out that the Commission is incorrect that reinstating
the temporary injunction would change the status quo rather than preserving it, because in the
context of injunctive relief, the status quo is “the last, actual, peaceable, non-contested status
which preceded the pending controversy.” In re Newton, 146 S.W.3d 648, 651 (Tex. 2004)
(orig. proceeding). Thus, Sacred Oak argues, by restraining the Commission from enforcing the
December 2020 Order, the trial court properly required the Commission to restore the status
quo “that existed prior to [the Commission’s] enforcement of the December 2020 Order” by
“reinstating and returning any state license or certification from [the Commission] held and/or
possessed by Sacred Oak on December 20, 2020.” Moreover, the Commission stipulated in the
trial court that Sacred Oak would suffer irreparable harm and economic injury without the
temporary injunction, and Sacred Oak argues that the stipulated-to irreparable harm is the type
of “compelling circumstances” demonstrating that Rule 29.3 relief is “necessary to preserve
the parties’ rights.” In addition, Sacred Oak asserts the Commission’s characterization of certain
facts is disputed and that “[t]he essence of the parties’ dispute in this case is [the Commission’s]
false findings from [its November 2020] survey and its denial of Sacred Oak’s right to challenge
them before any tribunal.”
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Texas Civil Practice and Remedies Code Section 51.014(b) stay
Sacred Oak urges us to reconsider our 2014 holding in In re Texas Education
Agency and determine that the Section 51.014(b) stay does not apply to preclude the trial court
from conducting a counter-supersedeas hearing. Sacred Oak contends that because in a suit
against the State, the State routinely files a plea to the jurisdiction and an interlocutory appeal
of the denial of the plea, the application of the Section 51.014(b) automatic stay effectively
nullifies Rule 24.2(a)(3)’s provision allowing the trial court to retain discretion to grant counter-
supersedeas in a matter arising from a contested case in an administrative enforcement action.
However, not every case arising from a contested case in an administrative enforcement action
will necessarily be subject to the Section 51.014(b) automatic stay, so the Rule 24.2(a)(3)
exception is not actually nullified by the stay’s application. Taking into consideration that fact
and the Texas Supreme Court’s recent holding in In re Geomet, 578 S.W.3d at 87, which affirms
that a court of appeals is not authorized to lift the Section 51.014(b) stay either “altogether or for
a limited purpose,” we decline to reconsider our prior opinion in In re Texas Education Agency.
We conclude that the trial court correctly determined that it lacked discretion to consider Sacred
Oak’s motion to counter-supersede the temporary injunction.
Our authority to grant Rule 29.3 temporary relief to preserve the parties’ rights
Rule 29.3 allows us to “make any temporary orders necessary to preserve the
parties’ rights until disposition of the appeal.” The Texas Supreme Court recently confirmed that
courts of appeals have the power to provide relief from the State’s automatic right to supersedeas
under Rule 29.3, even when Rule 24.2(a)(3) applies to preclude a trial court from issuing a
counter-supersedeas order. See In re Texas Educ. Agency (In re TEA), 619 S.W. 3d 679, 692
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(Tex. 2021) (orig. proceeding) (holding “court of appeals was not without power to issue
temporary relief” under Rule 29.3 from State’s automatic superseding of trial court’s temporary
injunction); see also Texas Education Agency v. Houston Independent School Dist. (HISD),
609 S.W.3d 569 (Tex. App.—Austin 2020, order) (per curiam) (issuing temporary order
continuing trial court’s injunction pending disposition of appeal). In In re TEA, the supreme
court denied the state agency’s request for mandamus relief from this Court’s Rule 29.3
temporary order continuing the trial court’s temporary injunction for the duration of the appeal.
619 S.W.3d at 692. In that case, the trial court had enjoined the TEA’s Commissioner from
appointing a board of managers to replace HISD’s elected trustees, appointing a district-level
conservator, and lowering HISD’s accreditation status. Id. at 681.
In this context, in which Sacred Oak seeks a Rule 29.3 temporary order to protect
the right it would otherwise have under Rule 24.2(a)(3) to seek counter-supersedeas, it is
appropriate to consider the purpose of supersedeas. The purpose of supersedeas is “to preserve
the status quo by staying the execution or enforcement of the judgment or order appealed from
pending the appeal.” Id. at 681 (quoting Shell Petrol. Corp. v. Grays, 62 S.W.2d 113, 118
(1933)). However, as in In re TEA, “[i]nstead of preserving the status quo,” the Commission’s
“suspension of the temporary injunction would, in this case, have the contradictory effect of
permitting the status quo to be altered, because if compliance with the injunction were not
required,” Sacred Oak’s license to operate its facility, like “HISD’s manner of governance
and accreditation rating[,] could be changed from ‘the last, actual, peaceable non-contested
status [that] preceded the pending controversy.’” Id. (quoting Clint Indep. Sch. Dist. v. Marquez,
487 S.W.3d 538, 555 (Tex. 2016)). The last peaceable non-contested status before the controversy
here was that Sacred Oak’s psychiatric hospital was licensed and open.
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The procedural postures of this case and In re TEA are similar, with both cases
involving a trial court’s grant of a temporary injunction enjoining a State agency from taking or
enforcing final administrative action against a party governed by the agency’s regulations after
the parties have engaged in a lengthy administrative process. See id. at 681. The Commission
attempts to distinguish this case from the facts in HISD and In re TEA by arguing that part of this
Court’s rationale for granting Rule 29.3 relief was that the TEA’s decision was not yet final and
HISD had sued to prevent a final decision. Thus, the Commission argues, we were attempting to
preserve the status quo before the TEA made a final decision. The Commission contends that a
different analysis should apply here because the December 2020 Order is a final decision, which
required Sacred Oak to close, and thus a Rule 29.3 order allowing it to reopen will change the
status quo rather than preserving it.
This argument misconstrues the Court’s point in HISD, which was that absent our
“inherent power to make temporary orders to preserve the parties’ rights until disposition of
the appeal, the application of Rule 24.2(a)(3) would prevent a party from ever meaningfully
challenging acts by the executive branch that the party alleges to be both unlawful and
reviewable by courts and that it further alleges will cause it irreparable harm.” HISD, 609 S.W.3d
at 578. In HISD, unlike in this case, once the TEA issued a final decision, by statute that
decision would be unreviewable by any court; in contrast, here a disputed issue is whether
Sacred Oak is entitled to further review of the Commission’s decision in the December 2020
Order (with the Commission contending both that Sacred Oak waived its right to an appeal and
that it has failed to exhaust its administrative remedies). Thus, our point in HISD was not, as the
Commission argues, that the status quo was whatever the status was before the agency’s order
became final; it was that we have the power to preserve a party’s right to judicial review of acts
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that it alleges are unlawful and will cause it irreparable harm. See id. In this case, we note that
the Commission conceded at the hearing that Sacred Oak faced irreparable harm from continued
closure of the hospital if the Commission enforced the December 2020 Order, and it does not
dispute that Sacred Oak would be irreparably harmed by continued closure in its response to the
Rule 29.3 motion. And again, the status quo to be preserved is the last peaceable non-contested
status before the controversy, which in Sacred Oak’s case means that it was licensed and open.
One difference between this case and HISD is that the TEA’s rules specifically
provided that HISD’s right to a formal review of the Commissioner’s decisions was not a
contested-case hearing, id. at 575, while in this case Sacred Oak contends that it was improperly
denied its right to a contested-case hearing before the Commission denied its license renewal,
and there is now an administrative hearing docketed by the Commission’s appellate division.
Thus, but for the application of the Section 51.014(b) stay, the trial court would have retained
discretion under Rule 24.2(a)(3) to allow Sacred Oak to counter-supersede the temporary
injunction and likely would have granted its counter-supersedeas motion for the same reasons
that it granted the temporary injunction. As the supreme court noted in In re Texas Education
Agency, the Rule’s exception for matters arising from contested-case hearings left intact the
court’s holding in In re State Board for Educator Certification. In that case, construing Rule
24.2(a)(3) as it existed in 2014, the supreme court concluded:
TRAP 24.2(a)(3) gives the trial court discretion, quite sensibly, to prevent the
State from re-revoking Montalvo’s certification—the ultimate professional
sanction—while it spends years appealing the court’s reversal of the State’s
first revocation, something the trial court found “arbitrary and capricious.” The
State—as yet unsupported by a victory on the merits in any court—wants to strip
Montalvo of his livelihood while the appellate process grinds on, and if he
manages to regain his professional license after having been kicked out of his
profession for years—well, bygones. That’s a striking assertion of unbridled
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executive power—to enforce administrative orders that a trial court has reversed—
and TRAP 24.2(a)(3) recognizes the judiciary’s authority to say no.
In re State Bd. for Educator Certification, 452 S.W.3d 802, 809 (Tex. 2014). The fact that this
case falls into Rule 24.2(a)(3)’s exception for contested cases also supports our granting the
Rule 29.3 motion and reinstating the temporary injunction.
Finally, the magnitude of the parties’ competing rights that are at issue here is
similar to the magnitude of the parties’ rights that were at issue in In re TEA, including the
component of a public interest. In In re TEA, the supreme court noted that it was “sensitive to
[the TEA’s] concerns that protracted litigation without suspension of the temporary injunction
could delay remedial measures designed to protect students and improve academic achievement,”
619 S.W.3d at 690, and here we are equally sensitive to the patient-safety concerns alluded to by
the Commission. In its response, the Commission disputes Sacred Oak’s assertion that it has
“cared for 4,602 psychiatric patients without a single patient death or jeopardy to patient safety.”
The Commission points to its finding in the June 2019 Notice of Violation of ligature risks to
patients, which it asserts “posed a significant and serious risk to patient safety,” and to a
December 4, 2020 letter that the U.S. Department of Health & Human Services’ Centers for
Medicare & Medicaid Services division (CMS) issued to Sacred Oak.
As an initial matter, we note that under the Commission’s own rules, it could only
allow Sacred Oak to enter into a probation period if its facility’s noncompliance with the rules
“[does] not endanger the health and safety of the public.” 26 Tex. Admin Code § 510.83(4)
(2021) (Health & Human Servs. Comm’n, Enforcement). A review of the evidence presented to
the trial court at the temporary-injunction hearing shows that, as required by the Agreed Order,
Sacred Oak engaged an outside consultant to create and implement a corrective action plan for
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the violations addressed by the Agreed Order, including the ligature risks identified in the June
2019 Notice of Violation. According to the Corrective and Preventive Action Plan:
Actions to correct these deficiencies occurred immediately once identified. All
ligature risk[s] have been mitigated and the environmental assessment is an ongoing
living document that is discussed at committees routinely. All admitted patients
at risk of self-harm in 2019 and so far in 2020 have been safely discharged to an
outpatient therapy program — No patient harm has occurred in the facility.
In the December 2020 Order, which was based on deficiencies identified by the Commission in
its survey conducted at the end of Sacred Oak’s probation period, the Commission does not
allege that the ligature risks had not been mitigated or that there was any ongoing deficiency
in the area of suicide prevention. And while the CMS letter states that Sacred Oak “failed to
meet one or more Medicare requirements, including deficiencies that represent an immediate
jeopardy to patient health and safety,” the letter does not specify what those deficiencies are
beyond stating that Sacred Oak “was not in compliance with the following Conditions of
Participation: 42 CFR 482.12 Governing Body[;] 42 CFR 482.13 Patient Rights.” Moreover, as
Sacred Oak points out in its reply, the CMS letter was based on its review of records from
the Commission’s November 4, 2020 survey conducted at the end of Sacred Oak’s probation
period—the survey that alleges new deficiencies, which Sacred Oak disputes, and those disputed
deficiencies are the basis for Sacred Oak’s suit asserting its right to a hearing on those new
alleged violations.
We have reviewed the deficiencies cited by the Commission in the December
Order. We have also reviewed the evidence submitted to the trial court at the hearing, which
includes the corrective action plan created by Sacred Oak’s outside consultant, the monthly
reports that the consultant sent to the Commission, and the Commission’s post-probation survey
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report (which is the basis for the December 2020 Order). While we make no comments on the
merits of either party’s arguments regarding the deficiencies alleged by the Commission in the
December 2020 Order, we note that the alleged violations that appear to bear most directly on
patient safety relate to patient seclusions or restraints (which can include medication as well as
physical restraint), with the treatment of one patient (Patient #11) being cited in the December
2020 Order in connection with multiple alleged violations. We note that nothing in the December
2020 Order or the Commission’s survey report indicates that the treatment of Patient #11 ever
resulted in an immediate threat to the patient’s health or safety.
We further note that the Commission was receiving monthly reports from Sacred
Oak’s outside consultant regarding Sacred Oak’s progress in implementing the specific actions
identified in the corrective-action plan and confirming whether Sacred Oak was sustaining
compliance with all applicable statutes and regulations. Under the terms of the Agreed Order,
the Commission could have denied Sacred Oak’s license renewal at any time during the
probation period if it found Sacred Oak had not made sufficient progress in implementing the
plan and achieving sustained compliance. Instead, at the end of the period, when Sacred Oak
requested the Commission survey the facility as required by the Agreed Order, the Commission
“identified and cited deficient practices as outlined in the attached Statement of Deficiencies.”
Accordingly, “[a]s a result of the deficiencies found during the survey, the Commission [found
Sacred Oak] did not achieve sustained compliance with all applicable statutes and regulations by
the end of the probation period,” and denied Sacred Oak’s license renewal application. See also
26 Tex. Admin Code § 510.83(1)(J) (2021) (Health & Human Servs. Comm’n, Enforcement)
(allowing Commission to deny license for failure to comply with applicable requirements within
designated probation period). Notably, in opposing Rule 29.3 temporary relief, the Commission
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does not argue that it denied Sacred Oak’s license renewal on the basis of Commission Rule
510.83(3), which allows the Commission to “suspend a license for 10 days pending a hearing if
after an investigation the department finds that there is an immediate threat to the health or safety
of the patients or employees of a licensed facility.” 26 Tex. Admin Code § 510.83(3) (2021)
(Health & Human Servs. Comm’n, Enforcement). Because the Commission does not contend
that it probated or denied Sacred Oak’s license based on “an immediate threat to the health or
safety” of its patients or employees, nor does it point to such a violation having ever occurred
when arguing against the reinstatement of the trial court’s temporary injunction, in contrast to the
irreparable harm Sacred Oak will undisputedly suffer from continued closure, on balance, the
Court concludes that Sacred Oak has shown “compelling circumstances” that require the Court
to reinstate the trial court’s temporary injunction to preserve the parties’ rights. See McNeely v.
Watertight Endeavors, Inc., No. 03-18-00166-CV, 2018 WL 1576866, at *1 (Tex. App.—Austin
Mar. 23, 2018, order) (per curiam) (citing Lamar Builders, Inc. v. Guardian Sav. & Loan Ass’n,
786 S.W.2d 789, 791 (Tex. App.—Houston [1st Dist.] 1990, no writ) (requiring movant for Rule
29.3 relief to make a clear showing it is entitled to relief, including “compelling circumstances”
establishing necessity for relief). Accordingly, we grant Sacred Oak’s request for Rule 29.3
temporary relief and order that the trial court’s temporary injunction is reinstated to preserve the
parties’ rights until the disposition of this appeal.
It is ordered on June 9, 2021.
Before Justices Goodwin, Triana, and Kelly
Justice Goodwin not participating
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