Texas Board of Pardons and Paroles v. Stuart Feinblatt

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-0 1 -00 681 -CV

Texas Board of Pardons and Paroles , Appellant

v.

Stuart Feinblatt , Appellee

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 126TH JUDICIAL DISTRICT

NO. GN002722 , HONORABLE CHARLES F. CAMPBELL JR., JUDGE PRESIDING

The Texas Board of Pardons and Paroles (the Board) appeals the trial court's denial of its plea to the jurisdiction. (1) Stuart Feinblatt, a hearings examiner

employed by the Board, claims that after he reported allegedly illegal actions taken by the Board, he received a negative performance evaluation and

disciplinary action. He filed a whistleblower cause of action against the Board alleging retaliatory adverse employment actions; he later amended his complaint

to include a claim for retaliatory constructive discharge. See Tex. Gov't Code Ann. §§ 554.001 -.010 (West 1994 & Supp. 2002). The Board filed a plea to the

jurisdiction and a motion for summary judgment on the ground that Feinblatt's claim did not effect a waiver of its immunity as provided for in the Act. See id. §

554.0035 (West Supp. 2002). The Board contended that Feinblatt had failed timely to initiate administrative remedies as required by the whistleblower statute

and that he did not make a good- faith report to an appropriate law enforcement agency. See id. §§ 554.002, .006. The trial court denied the plea and the

motion for summary judgment. We hold that (1) initiation of internal grievance procedures is a statutory prerequisite to suit and that Feinblatt timely initiated

such procedures and (2) Feinblatt's good-faith belief is an element of his cause of action and not a statutory prerequisite to suit. We therefore affirm the

judgment of the trial court.

BACKGROUND

The statutory provisions relating to the Board are found in chapter 508 of the government code. See Tex. Gov't Code Ann. §§ 508.001 -.324 (West 1998 &

Supp. 2002). Board members determine various matters in connection with parole and mandatory supervision. Id. §§ 508.044, .045. The statute gives the

Board the power to determine:

which inmates are to be released on parole or mandatory supervision;

conditions of parole or mandatory supervision, including special conditions;

the modification and withdrawal of conditions of parole or mandatory supervision;

which releasees may be released from supervision and reporting; and

the continuation, modification, and revocation of parole or mandatory supervision.

Id. § 508.044(b) (West Supp. 2002). The Board employs hearings examiners to conduct hearings and recommend the appropriate action to the Board. See id.

§§ 508.281, .2811. It has implemented rules which govern this process.

Feinblatt was employed by the Board in various positions from February 1981 until January 2001. Most recently, he held the position of hearings examiner

with the Board for some seven years. He claims that he consistently received good employee evaluations and was never disciplined until 1999. Around that

time, Feinblatt became concerned about actions by certain Board members which he perceived to be illegal. In a January 25, 2000 letter to Travis County

District Attorney Ronald Earle, Feinblatt complained of "gross violations of the law and due process" in connection with five of the Board's decisions

concerning parole and mandatory supervision; he urged the D.A.'s office to initiate an investigation. Feinblatt contended that in each of the five cases, he as

hearing officer had concluded that the evidence was insufficient to support a finding that the parolee had violated a condition of his parole, but that contrary to

his recommendations, the Board voted to revoke parole. Feinblatt alleged that the Board's conduct violated the constitutional standards required for parole

hearings and the Board's own rules.

Feinblatt had previously voiced his opinion regarding the illegality of the Board's actions to his supervisors, which provoked the Board to begin an

investigation of Feinblatt in December 1999. The investigation concluded that Feinblatt had made insubordinate and inappropriate comments in the presence of

parole officers and others. Following a hearing on January 6, 2000, the Board reprimanded Feinblatt for insubordination. Feinblatt received twelve months'

disciplinary probation and five days' suspension without pay. (2) During his annual performance evaluation on May 23, Feinblatt's supervisors gave him poor

ratings, specifically noting the "many problems . . . with Mr. Feinblatt's excessive and inappropriate hearing officer's comments, [his] comments off the record,

procedural problems and inappropriate and unprofessional comments regarding the hearing process." The evaluation also listed complaints and concerns with

the way Feinblatt conducted parole hearings and drafted his reports. On June 15, Feinblatt signed the evaluation and indicated his protest of the ratings and his

opinion that "this evaluation can be nothing less than retaliation for my exercising my right to speak about Board misconduct. I protest strongly and urge

revision." On July 11, Feinblatt submitted a grievance in which he complained that the evaluation was unfair and requested a new evaluation; the Board did not

receive the grievance until July 17. He also referenced his belief that the evaluation was retaliatory in nature. On August 8, the Board rejected the grievance on

the ground that it was not received within the fifteen-day time limit prescribed in its internal grievance procedure.

On September 13, 2000, Feinblatt filed this suit. In December, the Board investigated Feinblatt's conduct as hearing officer at a parole hearing and concluded

that Feinblatt had violated Board policy by "fail[ing] to remain neutral and impartial and fail[ing] to follow proper hearing procedures." On January 24, 2001,

the Board recommended Feinblatt's dismissal. Feinblatt resigned on January 30, claiming he had been constructively discharged. On February 1, Feinblatt

received a letter from the Board dated January 29 advising him of his right to mediation. Feinblatt asserts that he was led to believe by Board employees that

mediation ceased to be available to him because he was no longer an employee after he resigned. He attempted to submit a grievance on April 2, but it was

again rejected as untimely. Feinblatt amended his whistleblower pleadings on May 29 to include constructive discharge as an additional adverse employment action.

Standard of Review (3)

Subject-matter jurisdiction is essential to the authority of a court to decide a case. Texas Ass'n of Bus. v. Texas Air Control Bd. , 852 S.W.2d 440, 443 (Tex.

1993). "A plea to the jurisdiction challenges the trial court's authority to determine the subject matter of a specific cause of action." Rylander v. Caldwell , 23

S.W.3d 132, 135 (Tex. App.--Austin 2000, no pet.) (quoting Texas State Employees Union/CWA Local 6184 v. Texas Workforce Comm'n , 16 S.W.3d 61, 65

(Tex. App.--Austin 2000, no pet.)). In order to prevail, the party asserting the plea to the jurisdiction must show that even if all the allegations in the plaintiff's

pleadings are taken as true, there is an incurable jurisdictional defect apparent from the face of the pleadings, rendering it impossible for the plaintiff's petition

to confer jurisdiction on the trial court. Id.

We review the district court's determination of subject-matter jurisdiction de novo . Mayhew v. Town of Sunnyvale , 964 S.W.2d 922, 928 (Tex. 1998). In

reviewing a trial court's ruling on a plea to the jurisdiction, we do not look at the merits of the case. Caldwell , 23 S.W.3d at 135 . Rather, we "construe the

pleadings in favor of the plaintiff," look to the pleader's intent, and accept the pleadings' factual allegations as true. Id. "The truth of the plaintiff's allegations is

at issue only if the defendant pleads and proves that the allegations were fraudulently made to confer jurisdiction on the court." Id. Further, "a court deciding a

plea to the jurisdiction is not required to look solely to the pleadings but may consider evidence and must do so when necessary to resolve the jurisdictional

issues raised." Bland Indep. Sch. Dist. v. Blue , 34 S.W.3d 547, 555 (Tex. 2000). On judicial review of a plea to the jurisdiction based on sovereign immunity,

our task is not to determine whether the plaintiff ultimately wins or loses; rather, our task is to decide whether the facts as alleged support jurisdiction in the

trial court. University of Tex. Med. Branch v. Hohman , 6 S.W.3d 767, 771 (Tex. App.--Houston [1st Dist.] 1999, pet. dism'd w.o.j.).

Exhaustion of Administrative Remedies

Section 554.006 of the Whistleblower Act requires that before filing suit, an employee must initiate internal grievance or appeal procedures. Tex. Gov't Code

Ann. § 554.006 ; Hohman , 6 S.W.3d at 774 ; see also Wilmer-Hutchins Indep. Sch. Dist. v. Sullivan , 51 S.W.3d 293, 294 (Tex. 2001) (stating that exhaustion of

administrative remedies is a prerequisite to trial court's jurisdiction in case involving disputed facts). The current version of the Act, which controls Feinblatt's

suit, states in part:

A public employee must initiate action under the grievance or appeal procedures of the employing state or local governmental entity relating to suspension or

termination of employment or adverse personnel action before suing under this chapter.

The employee must invoke the applicable grievance or appeal procedures not later than the 90th day after the date on which the alleged violation of this

chapter:

(1) occurred; or

(2) was discovered by the employee through reasonable diligence.

Tex. Gov't Code Ann.§ 554.006(a), (b). It is undisputed that Feinblatt submitted a grievance to the Board within ninety days of his constructive discharge. (4)

The Board asserts that because Feinblatt failed to submit his grievance within the fifteen-day period required by the Board's grievance policy, Feinblatt failed to

initiate grievance or appeal procedures as contemplated by section 554.006.

The Board argues that the requirement in subsection (a) that an employee "initiate action under the grievance or appeal procedures of the [employer]" mandates

that an employee comply with whatever time limit is imposed by the employer's procedures, not the ninety-day time limit in section 554.006(b). The Board

interprets the ninety-day limit as a "default" provision applicable only when the employer's internal grievance or appeal procedure has no specific provision, or

as the statutorily imposed maximum should the employer afford more than ninety days. Feinblatt responds that the Board's internal time limit may not trump the

statutory provision, which controls in all instances. Because both of his grievances were submitted within ninety days of the relevant adverse employment

action, he insists that he has fully complied with the statutory grievance requirement. For support, Feinblatt relies on Hohman's holding that the ninety-day

requirement in section 554.006(b) is the applicable time period within which an employee must initiate internal procedures. See Hohman , 6 S.W.3d at 774

("the employee must invoke the applicable grievance or appeal procedures not later than the ninetieth day after the date on which the alleged violation

occurred").

We agree with the Hohman decision that the ninety-day provision in the Act controls. The plain meaning of the statute does not support the Board's contrary

interpretation. The requirement that an employee initiate action under his employer's grievance procedure is found in subsection (a). That subsection is silent

as to how long an employee has to initiate this action. Subsection (b) refers to a time limit and states that an employee "must invoke the applicable . . .

procedures not later than the 90th day after the date" of the adverse action. The Board's position would both add language to subsection (a) and ignore the

express language in subsection (b). Moreover, the Board's reading would lead to absurd results. See Employees Ret. Sys. v. Jones , 58 S.W.3d 148, 153 (Tex.

App.--Austin 2001, no pet.) (statutory interpretation that would produce absurd result is to be avoided). Under the Board's interpretation, an employer could

restrict an employee's right to appeal a decision to one day and effectively shorten the ninety day period afforded by section 554.006.

Moreover, the Board's position does not further the policy reflected by the initiation requirement. We have noted that "requiring the exhaustion (5) of grievance

and appeal processes as provided in the whistleblower statute encourages compliance through voluntary resolution, conference, conciliation and informal

processes other than litigation." City of Austin v. Ender , 30 S.W.3d 590, 594 (Tex. App.--Austin 2000, no pet.). Additionally, this Court has recognized several

policies served by the exhaustion requirement:

[An] eminently practical reason for requiring exhaustion of remedies is that the complaining party may be successful in vindicating his rights in the

administrative process and never have to resort to court. Notions of administrative autonomy require further that the agency be given first opportunity to

discover and correct its own errors.

Gregg County v. Farrar , 933 S.W.2d 769, 775 (Tex. App.--Austin 1996, writ denied). As we have noted, the legislature intended that the governmental entity

be afforded the opportunity to correct its own errors by resolving disputes before being subjected to the expense and effort of litigation. Ender , 30 S.W.3d at

594 ; Gregg County , 933 S.W.2d at 775 . These purposes are served by a requirement that an employee initiate internal grievance or appeal procedures within

ninety days of the adverse action because the employer is put on notice of an employee's complaints before being subjected to suit, and both parties are afforded

an opportunity to resolve the dispute internally. Requiring an employee to submit a grievance within the Board's shorter time frame does not enhance these

purposes.

Moreover, in the instant case, the Board was on notice of Feinblatt's claims the day that Feinblatt resigned: "As I have been constructively discharged in

retaliation for whistleblowing, I must retire from agency service as of 1/31/2001." While not technically a grievance as defined by the Board's policy,

Feinblatt's statement alerted the Board to his whistleblower complaints. Feinblatt also submitted his formal grievance on April 2, within ninety days of his

resignation.

The Board next contends that Feinblatt failed to fully comply with its appeal or grievance procedure because he elected not to participate in the Board's

optional mediation procedure. The Board offers its employees an opportunity to mediate employment disputes; this procedure, however, is available only for a

fee of $50, to be paid by the employee. There is evidence in the record that mediation was not even available to Feinblatt once he resigned because he was no

longer an employee. Assuming that he was eligible to seek mediation, the fact that a governmental entity may offer its employees additional means by which to

resolve disputes does not work to engraft those procedures on the initiation requirement in section 554.006. See City of Houston v. Cotton , 31 S.W.3d 823, 825

(Tex. App.--Houston [1st Dist.] 2000, pet. denied). In Cotton , the employee followed the procedure outlined in the city's code for contesting a suspension. Id.

at 825 . The court rejected the city's argument that the employee was also required to make a report of the retaliation to an investigative office of the city: "As

required by the Whistleblower Act, Cotton initiated an appeal within 90 days of being terminated . . . . Once she was terminated, nothing in the Whistleblower

Act required Cotton to report the retaliation to the [investigative office] in a separate procedure." Id. Similarly, nothing in the Act required Feinblatt to

participate in mediation at his own expense and the fact that the alternative resolution option was available could not foreclose his pursuing the statutory

procedure. (6) Having concluded that Feinblatt satisfied section 554.006, we overrule the Board's second issue.

Good-Faith Report

The Board also asserts that Feinblatt failed to invoke the Act's waiver of immunity because he did not make a good-faith report of a violation of law and he did

not in good faith make the report to someone the employee "believes is authorized to (1) regulate under or enforce the law alleged to be violated in the report; or

(2) investigate or prosecute a violation of criminal law." Tex. Gov't Code Ann. § 554.002 . (7) In a whistleblower action, a plaintiff's good-faith report of illegal

activity to an appropriate law enforcement authority is an element of the cause of action. See Texas Dep't of Criminal Justice v. Terrell , 18 S.W.3d 272, 274

(Tex. App.--Tyler 2000, pet. denied); City of Fort Worth v. Zimlich , 975 S.W.2d 399, 408 (Tex. App.--Austin 1998), rev'd in part, remanded in part on other

grounds , 29 S.W.3d 62 (Tex. 2000). An element of a plaintiff's cause of action does not affect the trial court's subject-matter jurisdiction but rather the

employee's ability to ultimately prevail on the merits of the claim. See Dubai Petroleum Co. v. Kazi , 12 S.W.3d 71, 76-77 (Tex. 2000) (declining to treat

statutory requirement in a wrongful death case as a jurisdictional bar and instead holding that the requirement affects a plaintiff's "right under the statute to go

forward with this suit").

The Board asserts that Feinblatt's allegation that he made a good-faith report of the Board's illegal actions is fraudulent or made in bad faith because "no

reasonable [parole] hearing officer could ever believe that the Board, given its statutory mandate as the sole and final decision-maker in parole revocation

proceedings, does not have the authority to overrule one of its delegated hearing officers." Because Feinblatt's bad-faith allegations cannot confer jurisdiction

on the trial court, the Board argues that this Court should reverse the trial court's denial of its plea to the jurisdiction. See Sullivan, 51 S.W.3d at 294-95 (a party

cannot by his own conduct confer jurisdiction where none otherwise exists). The Board's argument is misplaced. The only relevant allegations at this stage are

Feinblatt's allegations regarding jurisdictional facts. As we have stated, whether Feinblatt acted in good faith affects the merits of his cause of action; it does

not affect the trial court's jurisdiction to hear the case. (8)

Alternatively, the Board suggests that this Court should analogize the waiver of sovereign immunity in the Whistleblower Act to the limited waiver in the

Texas Tort Claims Act. Compare Tex. Gov't Code Ann. §§ 554.001 -.010 (West 1994 & Supp. 2002), with Tex. Civ. Prac. & Rem. Code Ann. §§ 101.001 -.109

(West 1997 & Supp. 2002). A comparison of the relevant provisions, however, does not convince us to make this analogy. The Whistleblower Act contains a

broad waiver of immunity expressed in expansive language: "A public employee who alleges a violation of this chapter may sue the employing state or local

governmental entity for the relief provided by this chapter. Sovereign immunity is waived and abolished to the extent of liability for the relief allowed under

this chapter for a violation of this chapter. " Tex. Gov't Code Ann. § 554.0035 (West Supp. 2002) (emphasis added). The waiver provision in the Tort Claims

Act, however, is limited in scope:

A governmental unit in the state is liable for:

property damage, personal injury, and death proximately caused by the wrongful act or omission or the negligence of an employee acting within his scope of

employment if

the property damage, personal injury, or death arises from the operation or use of a motor-driven vehicle or motor-driven equipment; and

(B) the employee would be personally liable to the claimant according to Texas law; and

(2) personal injury and death so caused by a condition or use of tangible personal or real property if the governmental unit would, were it a private person, be

liable to the claimant according to Texas law.

Tex. Civ. Prac. & Rem. Code Ann. § 101.021 (West 1997).

Moreover, the supreme court has specifically addressed the waiver provision in the Tort Claims Act and emphasized that it is limited in scope. See Texas Dep't

of Criminal Justice v. Miller , 51 S.W.3d 583, 587 (Tex. 2001). The Act defines a narrow set of circumstances in which a governmental entity waives sovereign

immunity-- i.e ., for damages and personal injuries caused by motorized vehicles and equipment and for personal injuries caused by tangible personal

property--and leaves intact the government's immunity for all other claims. Because of this limited scope, the supreme court concluded, a plaintiff cannot

confer jurisdiction on the trial court by mere reference to the Tort Claims Act; rather, a plaintiff must plead specific facts that show that its case falls within the

narrowly defined circumstances of section 101.021. Id . Under the Tort Claims Act, certain facts that determine the success of a plaintiff's claim on the

merits--for example, whether the alleged harm was proximately caused by the use of tangible personal property--may also determine the trial court's ability to

entertain the claim. See id. at 587-89 . In contrast, the Whistleblower Act does not condition the waiver of immunity on the existence of the employee's good

faith. Therefore, an employee's lack of good faith does not deprive the court of jurisdiction but merely affects the employee's right to recover on the merits of

the claim.

Furthermore, we note that the Tort Claims Act serves different purposes and is guided by different policy concerns than is the Whistleblower Act. The Tort

Claims Act provides for a limited exception to the general rule that the government and its employees are immune from liability for their tortious acts. City of

Denton v. Van Page , 701 S.W.2d 831, 834 (Tex. 1986). By enacting the Tort Claims Act, the legislature intended to make a governmental entity liable only to

the extent that a private person would be liable under existing law. See State Dep't of Highways & Pub. Transp. v. Dopyera , 834 S.W.2d 50, 54 (Tex. 1992).

The Act does not create new duties on the part of governmental entities. Van Page , 701 S.W.2d at 834 .

The whistleblower statute has a twofold purpose: (1) protecting public employees from retaliation by their employer when, in good faith, an employee reports a

violation of law, and (2) securing lawful conduct on the part of those who direct and conduct the affairs of public bodies. Ender , 30 S.W.3d at 594 . It is

reasonable to expect that the legislature intended a broad waiver of immunity for whistleblower claims to accomplish these important policies. For all of these

reasons, we decline to analogize the broad grant of immunity in the Whistleblower Act to the limited waiver in the Tort Claims Act. Accordingly, we overrule

the Board's first issue.

CONCLUSION

We hold that while section 554.006 is a statutory prerequisite to suit, Feinblatt complied with its requirement to initiate internal grievance or appeal procedures

within ninety days. We also hold that section 554.002, which conditions an employee's right to recovery on his good-faith belief and actions, is an element of a

whistleblower cause of action that goes to an employee's ultimate recovery on the merits and is not a jurisdictional prerequisite to suit. Therefore, we affirm the

trial court's denial of the Board's plea to the jurisdiction.

MOTION FOR REHEARING

On motion for rehearing, the Texas Board of Pardons and Paroles asks this Court to reconsider our opinion in light of the supreme court's recent decision in

Texas Department of Transportation v. Needham , 45 Tex. Sup. Ct. J. 631 , 2002 Tex. LEXIS 1555 (Tex. May 9, 2002) which defines what the current

whistleblower statute means by "an appropriate law enforcement authority." We have carefully considered the holding in Needham, which reversed a jury

verdict because the aggrieved employee failed to report the alleged violation of law to an appropriate law enforcement authority, and we hold that it has no

bearing on our decision that this statutory requirement affects the ability of a whistleblower to prevail on the merits, but does not deprive the court of

jurisdiction to hear the cause of action. Because this appeal is taken from the denial of the Board's plea to the jurisdiction, Needham does not affect our

decision and we overrule the motion for rehearing.

Bea Ann Smith, Justice

Before Chief Justice Aboussie, Justices B. A. Smith and Yeakel

Affirmed

Filed: May 2, 2002

Publish

1. Appellee Stuart Feinblatt was employed by the Board, which is part of the Department of Criminal Justice. For convenience, we will refer to the Board and

the Department collectively as "the Board."

2. As the result of a grievance meeting initiated by Feinblatt, the probation was reduced to eight months and the suspension without pay was eliminated.

3. Our review is limited to the trial court's denial of the Board's plea to the jurisdiction. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(8) (West Supp. 2002).

Although a denial of a motion for summary judgment that is based on official immunity is an appealable interlocutory order, a denial of a motion asserting

sovereign immunity is not. See id. § 51.014(a)(5).

4. As noted, Feinblatt amended his original petition to include a claim for retaliatory constructive discharge. The parties's arguments regarding initiation of

internal appeal procedures refer both to Feinblatt's attempt to appeal his employee evaluation, which he received on May 23, 2000 and his constructive

termination, which occurred January 31, 2001. We deem the constructive discharge as "the alleged violation" for purposes of this opinion. See Tex. Gov't

Code Ann. § 554.006 (b) (West Supp. 2002); University of Tex. Med. Branch v. Hohman , 6 S.W.3d 767, 773-74 (Tex. App.--Houston [1st Dist.] 1999, pet.

dism'd w.o.j.) (holding that constructive discharge is "the alleged violation" giving rise to the plaintiff's cause of action, not the precipitating retaliatory acts).

Therefore, in this opinion we discuss Feinblatt's compliance with section 554.006 in relation to his constructive discharge only. Nonetheless, we find that

Feinblatt complied with section 554.006 regarding both the earlier performance evaluation and the constructive termination.

5. We note that some of the authorities on which we rely refer to the requirement imposed by section 554.006 as "exhaustion" of remedies. Prior to 1995,

section 554.006 required an employee to exhaust an employer's grievance or appeal procedures. See Act of May 4, 1993, 73d Leg., R.S., ch. 268, § 1, 1993

Tex. Gen. Laws 583 , 610, amended by Act of May 25, 1995, 74th Leg., R.S., ch. 721, § 6, 1995 Tex. Gen. Laws 3812 , 3813. The current version of section

554.006 requires that an employee timely initiate internal grievance or appeal procedures.

6. The Board additionally asserts that mediation was the only administrative remedy available to Feinblatt because once he resigned, he was no longer an

employee and thus not entitled to avail himself of the Board's employee grievance procedure. There is evidence in the record that contradicts the Board's

assertion. The Board's letter advising Feinblatt of his option to mediate the dispute states the following: "If you elect not to participate in mediation, no

response is necessary. You will still have the option of submitting a grievance should you[r] dismissal be eventually approved ." (Emphasis added.) Had

Feinblatt's dismissal been approved (which it may have been had he not first resigned), he would have ceased to become an employee. Yet the Board's own

letter states that he would have had the ability to submit a grievance regarding that decision. We therefore reject the Board's alternative argument.

7. For the purposes of the following discussion, we will refer to the good faith elements of section 554.002(a) and (b), i.e ., that the employee make a

good-faith report of a violation of law and make the report to an authority that the employee in good faith believes is an appropriate law enforcement authority,

as a single good faith requirement.

8. At oral argument, the Board argued that while in most cases an employee's good faith is a non-jurisdictional element of her cause of action, in this case, we

can determine Feinblatt's lack of good faith on a plea to the jurisdiction because as a matter of law , his belief in the Board's illegal conduct is patently

unreasonable. The Board's argument might have been appropriate in its motion for summary judgment as it goes to the merits of Feinblatt's claim; the only

issue before this Court, however , is that of jurisdiction .