Volkswagen Group of America, Inc. And Audi of America, Inc. v. John Walker III, in His Official Capacity as Chairman of the Texas Department of Motor Vehicles Board The Honorable Michael J. O'Malley, the Honorable Penny A. Wilkov, in Their Official Capacities as Administrative Law Judges for the State Office

ACCEPTED

03-15-00285-CV

5866156

THIRD COURT OF APPEALS

AUSTIN, TEXAS

6/29/2015 3:28:37 PM

JEFFREY D. KYLE

CLERK

NO. 03-15-00285-CV

FILED IN

IN THE THIRD COURT OF APPEALS 3rd COURT OF APPEALS

AUSTIN, TEXAS

AUSTIN, TEXAS

6/29/2015 3:28:37 PM

JEFFREY D. KYLE

Clerk

VOLKSWAGEN GROUP OF AMERICA, INC.

AND AUDI OF AMERICA, INC.

Appellants

v.

JOHN WALKER III, IN HIS OFFICIAL CAPACITY AS CHAIRMAN OF

THE TEXAS DEPARTMENT OF MOTOR VEHICLES BOARD, AND

THE HONORABLE MICHAEL J. O’MALLEY AND THE HONORABLE

PENNY A. WILKOV, IN THEIR OFFICIAL CAPACITIES AS

ADMINISTRATIVE LAW JUDGES FOR THE STATE OFFICE OF

ADMINISTRATIVE HEARINGS

Appellees

On Appeal from the 201st Judicial District Court, Travis County, Texas

Trial Court Cause No. D-1-GN-15-001186

Honorable Amy Clark Meachum, Presiding Judge

APPELLANTS VOLKSWAGEN GROUP OF AMERICA, INC. AND

AUDI OF AMERICA, INC.’S REPLY IN SUPPORT OF THEIR

VERIFIED MOTION FOR TEMPORARY RELIEF TO PROTECT THE

COURT’S JURISDICTION

__________________________________________________________________

Appellants Volkswagen Group of America, Inc. and Audi of

America, Inc. (collectively “Audi”) file this Reply in Support of Their

Verified Motion for Temporary Relief to Protect the Court’s Jurisdiction

(Audi’s “Motion for Temporary Relief”) and show:

DMSLIBRARY01:26052166.1

ARGUMENT

1. In response to Audi’s Motion for Temporary Relief, Appellees

and Intervenors principally claim that granting Audi temporary relief is

unnecessary merely because they allege Audi has an adequate remedy on

appeal after a final order in the underlying Contested Case is entered.1 As will

be shown below, the judicial review contemplated by Appellees and

Intervenors is illusory and inadequate. Moreover, Appellees and Intervenors

do not dispute that this Court has the inherent power to issue an order to

protect its jurisdiction during the pendency of this appeal and to keep this

appeal from being rendered moot; instead, they quibble over rules that make

this power applicable in certain situations, such as mandamus.2 In fact,

1 The administrative Contested Case is styled Budget Leasing, Inc. d/b/a Audi North

Austin and Audi South Austin v. Weitz, et. al. v. Volkswagen Group of America, Inc., et. al.,

MVD Docket No. 13-0008-LIC, SOAH Docket No. XXX-XX-XXXX.LIC, before the Texas

Department of Motor Vehicles, Motor Vehicle Division (the “Contested Case”).

2 Rule 43.6 of the Texas Rules of Appellate Procedure is not as limited as Appellees and

Intervenors would have this Court believe. Nothing in the text of Rule 43.6 limits its application

to only final judgments or to granting remittiturs; rather, it provides this Court with the

authority to “make any other appropriate order that the law and the nature of the case require.”

TEX. R. APP. P. 43.6 (emphasis added). Indeed, Rule 43.6 has been used by Texas Courts of

Appeals to justify actions outside of the context of final judgments and remittiturs, including

stays and abatements: cases which Intervenors tellingly fail to reference in their Response. E.g.,

In re Robinson, No. 08-01-00234-CV, 2001 WL 1137611, at *1 (Tex. App.—El Paso Sept. 27, 2001,

no pet.) (granting motion for rehearing and reinstating appeal pursuant to Rule 43.6); Bianchi v.

State, 444 S.W.3d 231, 234 (Tex. App.—Corpus Christi 2014, no pet.) (noting that court

previously used Rule 43.6 to stay district court’s judgment); Reyes v. State, 82 S.W.3d 351, 354

(Tex. App.—Houston [1st Dist.] 2001, pet. ref’d) (relying in part on Rule 43.6 to abate appeal

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Appellees and Intervenors cannot dispute that this Court has the inherent

power to protect its jurisdiction. See, e.g., Eichelberger v. Eichelberger, 582

S.W.2d 395, 398 (Tex. 1979) (providing that a court has inherent power “to aid

in the exercise of its jurisdiction”); Ammex Warehouse Co. v. Archer, 381 S.W.2d

478, 482 (Tex. 1964) (citing TEX. CONST. art. V, § 6) (“After an appeal is

perfected from a final appealable judgment, the Court of Civil Appeals is

expressly authorized to issue writs of mandamus and all other wrist

necessary to enforce its jurisdiction.”); Cleveland v. Ward, 285 S.W. 1063, 1068

(Tex. 1926), overruled on other grounds, Walker v. Packer, 827 S.W.2d 833 (Tex.

1992) (“[Our] power to issue all writs necessary to enforce our jurisdiction

finds its sanction in the Constitution, and exists, regardless of statutory

omissions or declarations.”); Madison v. Martinez, 42 S.W.2d 84, 86 (Tex. Civ.

App.—Dallas 1931, writ ref’d) (“Courts of Civil Appeals and the judges

thereof ‘may issue writs of mandamus and all other writs necessary to enforce

the jurisdiction of said courts.’”); see also ALJs’ Response at pg. 3 (recognizing

appellate court’s inherent authority to protect its jurisdiction). Audi expressly

relied on that power in its motion for temporary relief.

and remand case back to trial court to conduct hearing on appellant’s motions for new trial).

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A. AUDI HAS NO ADEQUATE REMEDY ON APPEAL IF THIS COURT DOES NOT

ACT TO PROTECT ITS JURISDICTION.

2. Unless this Court issues a temporary order in this case, Audi

will be harmed by Appellees’ ultra vires remand of the contested case, and

the Court will lose jurisdiction over this dispute. Audi filed this litigation in

the district court to enjoin Appellees from conducting and completing

remand proceedings in an administrative Contested Case pursuant to

invalid ultra vires3 orders.4 To be clear, Audi is harmed by the mere ultra vires

Remand Order and is further harmed by the Appellees’ improper activities to

carry out that ultra vires order, which are occurring now. If this Court finds

that Appellees committed ultra vires acts and that exhaustion of

administrative remedies is not required, then the Remand Order (CR 928-29)

was improper and the Contested Case record was improperly re-opened on

remand. Therefore, Audi should never have had to participate in the ultra

vires remand procedure which continues today. That harm cannot be cured

by regular appeal. Instead, it must be stopped now before the remand

proceeding is completed.

3 A state official who acts wholly outside his or her relevant statutory authority, commits

an ultra vires act. E.g., Texas Dept. of Transp. v. Sefzik, 355 S.W.3d 618, 621 (Tex. 2011) (citing Fed.

Sign of Tex. S. Univ., 951 S.W.2d 401, 404 (Tex. 1997) (providing that an ultra vires claim “may be

brought against a state official for non-discretionary acts unauthorized by law.”); Texas Parks

and Wildlife Dept. v. Sawyer Trust, 354 S.W.3d 384, 393 (Tex. 2011) (citing City of El Paso v.

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3. While the merits of the instant appeal are relevant to the

analysis of whether these acts are ultra vires, and will be briefed in more

detail in Audi’s brief (due on July 1), this case revolves around Appellees’

commission of the following ultra vires acts:

 Appellee John Walker III (“Chairman Walker”) exceeded his

authority by remanding the Contested Case to Appellees the

Honorable Michal J. O’Malley and the Honorable Penny A.

Wilkov, Administrative Law Judges with the State Office of

Administrative Hearings (“SOAH”) (the “ALJs”), in violation of

Section 2001.058(e) of the Administrative Procedure Act;

 Chairman Walker exceeded his authority by requesting the

ALJs to consider the April 30 Letter, which was not timely filed,

in violation of Section 2301.709(a) of the Texas Occupations

Code (the “Code”);

 Chairman Walker exceeded his authority by issuing a Remand

Order which exceeded the scope of the order approved by a

majority vote of the Board, in violation of Section 2301.709(c) of

the Code; and,

Heinrich, 284 S.W.3d 366, 376 (Tex. 2009)) (providing that an ultra vires suit is one in which a

party claims that a state official has acted “outside his authority”); Heinrich, 284 S.W.3d at 372

(defining an ultra vires act as occurring where an “officer acted without legal authority or failed

to perform a purely ministerial act.”); City of Sherman v. Public Util. Comm’n, 643 S.W.2d 681,

682-83, 686 (Tex. 1983) (enjoining Texas Public Utilities Commission [“PUC”] from remanding

case back to hearing examiner where PUC did not have subject-matter jurisdiction over case

and, thus, exceeded its statutory authority).

4 Audi filed the underlying action in the Travis County District Court (Cause No. D-1-

GN-15-0001186), requesting injunctive relief to prevent Appellees from conducting the ultra

vires: 1) remand of the Contested Case; 2) reopening of evidence after issuance of the PFD; 3)

issuance of a new PFD by the ALJs; and, 4) issuance of a new final decision. The Supreme Court

has specifically approved of the use of a declaratory judgment action/request for prospective

injunctive relief as the proper process for assessing whether individual state actors, like

Appellees, have exceeded their statutorily authorized powers in an underlying administrative

proceeding, like the Contested Case. Heinrich, 284 S.W.3d at 369.

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 The ALJs exceeded their authority in violation of SOAH Rule

155.153 by issuing an Order on March 3, 2015 reopening the

record in the Contested Case after the ALJs had already issued

a proposal for decision (“PFD”).5

4. Audi is, and has been, entitled to enjoin these ultra vires remand

proceedings in the Contested Case without waiting for the issuance of a

5 The fact that the ALJs have already reopened the record does not yet moot the

underlying relief Audi requested from the trial court. Audi is entitled to an injunction barring

any further proceedings on remand in the Contested Case pursuant to the ALJs’ order reopening

the record. Heinrich, 284 S.W.3d at 369 (“[A] claimant who successfully proves an ultra vires

claim is entitled to prospective injunctive relief . . . .”); (cf. ALJs’ Response at pp. 4-5). If the ALJs

were correct that once an ultra vires act is committed it can never be enjoined, no ultra vires

lawsuit could ever be filed, as it would always be not ripe, because the ultra vires act has not

been committed, or moot, because it has. Such is not the law.

Further, as Audi has pointed out in its briefing to the trial court, and will brief in full for

this Court, the ALJs’ claim that their interpretation of Rule 155.153—that it allows ALJs to

reopen the record after issuance of a PFD—is entitled to total deference is incorrect. (cf. Id.at pg.

7). First, SOAH Rule 155.153 on its face does not grant the ALJs any discretion to reopen the

record after the issuance of a PFD. Second, several administrative law judges have interpreted

this provision literally. E.g., Texas Department of Insurance v. Maria D. Mondragon, SOAH Docket

No. XXX-XX-XXXX.C, ALJ’s Response to Exceptions at 2, Oct. 23, 2014 (“Because I have issued the

PFD, I no longer have the authority to issue an order re-opening the record); Petitioner v. Tax

Division, Texas Comptroller of Public Accounts, 2014 WL 4694594, SOAH Docket No. 304-13-

3572.26, Comptroller’s Decision at *1, June 16, 2014 (“[T]he ALJ is precluded from reopening the

record once a PFD has been issued.”); Petitioner v. Tax Division, Texas Comptroller of Public

Accounts, 2014 WL 4694592, SOAH Docket No. XXX-XX-XXXX.26, Comptroller’s Decision at *6,

June 9, 2014 (“[O]nce the ALJ issues the PFD, he is not authorized to reopen the record to admit

additional evidence . . . .”).

SOAH Rule 155.3(a) also provides that the ALJs have power to “modify and supplement

the requirements of this chapter” only if doing so will not “unduly prejudice” a party or

“contravene applicable statutes.” The only way the ALJs could justify their re-opening of the

record after the issuance of a PFD is if they directly “contravene” SOAH Rule 155.153. No

reasonable person could construe a wholesale waiver of Rule 155.153 as merely “modifying” or

“supplementing” it.

Finally, administrative rules have the same legal force as statutes, and are interpreted in

the same manner as statutes. E.g., Ellis v. Reliant Energy Retail Servs., L.L.C., 418 S.W.3d 235, 248

(Tex. App.—Houston [14th Dist.] 2013). While Texas courts defer to agency interpretations of

their own rules, the interpretation cannot be “inconsistent with the plain language of the statute

or plainly erroneous.” E.g. Southwest Royalties, Inc. v. Combs, No. 03-12-00511-CV, 2014 WL

4058950, at *3 (Tex. App.—Austin Aug. 13, 2014) (citing Combs v. Roark Amusement & Vending,

L.P., 422 S.W.3d 632, 635 (Tex. 2013)). The ALJs’ interpretation of Rule 155.153 is clearly

erroneous and contrary to its plain language.

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final order after remand in the Contested Case. Audi need not exhaust its

administrative remedies before seeking judicial intervention to enjoin

Appellees’ ultra vires acts; rather, the rule in Texas is that Audi may enjoin

Appellees’ ultra vires acts as soon as they occur. Sherman, 643 S.W.2d at 683,

685; Westheimer Indep. Sch. Dist. v. Brockette, 567 S.W.2d 780, 785 (Tex. 1978);

Yamaha Motor Corp. v. Motor Vehicle Division, 860 S.W.2d 223, 229 (Tex.

App.—Austin 1993, writ denied); Appraisal Review Board of Harris County

Appraisal District v. O’Connor & Assocs., 267 S.W.3d 413, 419 (Tex. App.—

Houston [14th Dist.] 2008, no pet.) (citing cases).6 Audi sought that relief

from the district court in this case, but the district court dismissed this case

without reviewing the merits—omitting a necessary step in the evaluation

of its jurisdiction in a case like this. See, e.g., Southwestern Bell Tel. L.P. v.

Emmett, _ S.W.3d _, 2015 WL 1285326 at *3 (Tex.). Audi is entitled to

prospective relief by way of this lawsuit. Heinrich, 284 S.W.3d at 369, 378.

Therefore, unless this Court stays the Appellees’ actions on remand during

the pendency of this appeal, Audi’s available relief (halting the remand)

will be rendered unavailable because the remand will be completed before

6 Intervenors fret that the granting of this Motion will “flood” the courts with ultra vires

lawsuits and applications for injunctions. (Intervenors’ Response at pg. 24). Yet, the ultra vires rule

has been an exception to the exhaustion of remedies doctrine for decades without such a “flood.”

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this Court can consider the merits of the case.

5. This Court will not be in a position to rule on the merits of this

appeal until after remand proceedings in the Contested Case are completed in

August or September 2015. This is not speculative. It is highly probable, given

that Intervenors have specifically requested—after Audi filed the instant

Motion—that the already expedited remand proceedings be placed on the

Texas Motor Vehicle Board’s agenda for August 2015, well before this Court

will resume its oral argument docket in September. (See Audi’s previously

filed Supplement to its Motion for Temporary Relief, Affidavit of Billy M.

Donley at ¶ 3 (noting that Intervenors submitted a letter to the ALJs on June

15, 2015 stating that they had submitted their final reply to Audi’s briefing

early and wanted the record closed that day “[i]n the interest of expediting

this matter and in hopes of getting this case placed on the Board’s agenda for

its August meeting . . . .”).)

6. Once the remand proceedings in the Contested Case are

completed, there will be nothing left for the trial court to enjoin. Thus, Audi

will be left with no adequate remedy in this appeal because none of the

prospective and immediate injunctive relief to which Audi is entitled will

be possible. Heinrich, 284 S.W.3d at 369; City of Sherman, 643 S.W.2d at 683,

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685 (providing that immediate intervention into administrative

proceedings is permissible to challenge ultra vires acts without waiting to

exhaust administrative remedies). Indeed, to force Audi to delay

remedying Appellees’ ultra vires act until an appeal from a final order in

the Contested Case would render the ultra vires exception to the exhaustion

of remedies doctrine espoused in City of Sherman meaningless.

B. RULE 52 OF THE TEXAS RULES OF APPELLATE PROCEDURE DOES NOT

EXPLICITLY APPLY TO AUDI’S INSTANT MOTION.

7. Tellingly, Intervenors (the prospective transferees of the

dealership) not the actual parties, Appellees (the Board Chair and the ALJs),

claim that Audi’s Motion for Temporary Relief is improper, arguing that

Audi is only entitled to temprorary relief if it filed an original petition in

this Court.7

8. But Intervenors have not cited this Court to any authority

holding that Audi is required to file an original petition in order to be

entitled to temporary relief, nor do they cite the Court to any authority

stating that this Court cannot protect its own jurisdiction via temporary

7 Rule 52 of the Texas Rules of Appellate Procedure provides that:

An original appellate proceeding seeking extraordinary relief—such as a writ of habeas

corpus, mandamus, prohibition, injunction, or quo warranto—is commenced by filing a

petition with the clerk of the appropriate appellate court . . . .

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relief once it acquired jurisdiction over this case via Audi’s filing of a

regular appeal.8

9. As this Court must remember, Audi brought this case in the

district court pursuant to the procedure specifically outlined in the Texas

Supreme Court’s Heinrich decision. This appeal is the result of a final

dismissal of that action. Thus, the typical posture, mandamus, underlying

most requests for temporary relief is not present here. But a mandamus

proceeding should not be a necessary prerequisite to obtaining temporary

relief to protect the Court’s jurisdiction. Instead, as discussed above, this

Court has the inherent power to protect its jurisdiction which Audi

8 All of the cases referenced by Intervenors regarding compliance with Rule 52 were cases

in which the appellant filed an original petition with the Court of Appeals. E.g., In re Brown, No.

08-03-00092-CV, 2003 WL 1563987, at *1 (Tex. App.—El Paso Mar. 27, 2003) (referencing TEX. R.

APP. P. 52.3) (denying original petition for writ of injunction because not necessary to protect

jurisdiction and stating in dicta that petition was insufficient because unverified with no record

to support the claim of damage); In re Dyer, No. 14-10-00923-CR, 2010 WL 3795893, at *1 (Tex.

App.—Houston [14th Dist.] Sept. 30, 2010) (referencing TEX. R. APP. P. 52.3(k)) (denying original

petition for writ of prohibition because no pending appeal on file and stating in dicta that

relator failed to include copies of orders complained of); In re Ince, No. 07-11-00445-CV, 2011

WL 6032718, at *1 (Tex. App.—Amarillo Dec. 5, 2011) (dismissing original petition for writ of

mandamus against district clerk because failed to include: name of all parties and counsel, table

of contents, index of authorities, statement of the case, basis of Court’s jurisdiction, concise

statement of issues, statement of facts, concise arguments, short conclusion, verified, copy of

order in appendix, or certificate of service); In re Johnson, No. 07-12-00406-CV, 2012 WL 5059838,

at *1 (Tex. App.—Amarillo Oct. 17, 2012) (citing TEX. R. APP. P. 52.3) (dismissing original

petition for writ of mandamus because it “wholly fails to comply with the requirements of

appellate rule 52.3” and because “it does not demonstrate a clear abuse of discretion by Judge

Green.”); In re Palmore, No. 07-05-0269-CV, 2005 WL 1979076, at *1 (Tex. App.—Amarillo Aug.

17, 2005) (dismissing original petition for writ of mandamus because relator failed to pay filing

fee, to name respondent in petition, identify parties and counsel, include table of contents,

statement of the case, and certificate of service).

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invoked by way of its motion.

10. Even though Texas cases have considered original petitions for

extraordinary relief to protect the appellate court’s jurisdiction while an

appeal is pending, none of these cases held that such a petition is the only

way an appellant, like Audi, can request the Court of Appeals to enter an

order to protect its jurisdiction. E.g., Duncan v. Dripping Springs Indep.

School Dist., 612 S.W.2d 644, 645-46 (Tex. App.—Austin 1981, no writ)

(discussing Nelson v. Blanco Indep. School Dist., 386 S.W.2d 636 (Tex. Civ.

App.—Austin 1965, writ ref’d n.r.e.)) (considering original petition for writ

of injunction to protect appellate court’s jurisdiction while other appeal

pending, but making no mention of whether such an original petition is

required under any rule of appellate procedure); In re Gruebel, 153 S.W.3d

686, 688 (Tex. App.—Tyler 2005) (same); EMW Mfg Co. v. Lemons, 724

S.W.2d 425, 425-26 (Tex. App.—Fort Worth 1987) (same); see also In re Dyer,

No. 14-10-00923-CR, 2010 WL 3795893, at *1 (Tex. App.—Houston [14th

Dist.] Sept. 30, 2010) (denying petition for writ of prohibition because no

pending appeal on file); In re Olson, 252 S.W.3d 747, 747 (Tex. App.—

Houston [14th Dist.] 2008) (denying petition for writ of injunction because

relator had not filed an appeal that would give appellate court any

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jurisdiction to consider original petition).

11. Indeed, nothing in the text of Rule 52 provides that this Court

can only enter an order to protect its jurisdiction upon receiving an original

petition seeking extraordinary relief. Audi has yet to find any controlling

authority on point— although Audi has found cases where courts have

considered, and even granted, motions for injunctions in pending appeals

outside of original petitions for extraordinary relief. See, e.g., State v. Assoc.

Metals Corp., 595 S.W.2d 924, 925 (Tex. App.—Houston [14th Dist.] 1980, no

writ) (granting motion to stay/for injunction to preserve appellate court

jurisdiction in pending appeal).

12. Thus, Audi’s Motion for Temporary Relief should not be

denied because this case was filed pursuant to the dictates of the Supreme

Court’s Hienrich decision, not as an original proceeding.

13. Alternatively, to the extent this Court finds that Rule 52 is the

exclusive means by which Audi may seek an injunction from this Court to

protect its jurisdiction, Audi asks that the Court stay its ruling on Audi’s

Motion for Temporary Relief and grant Audi leave to file an original

proceeding under Rule 52.

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C. AUDI HAS ACTED DILIGENTLY AND IN GOOD FAITH AT ALL TIMES.

14. Finally, Intervenors, not Appellees, attempt to distract this Court

from the merits of Audi’s Motion for Temporary Relief by claiming that

Audi has not been diligent in seeking judicial relief and that Audi has not

acted in good faith. (Intervenors’ Response at pp. 27-30). Intervenors’

arguments are meritless.

15. Audi has diligently prosecuted the underlying contested case,

district court case and this appeal. At the February 13, 2015 Board meeting,

and even prior thereto, Audi argued that the Board was not authorized to

remand the case to SOAH for further proceedings. After the Board’s

February 13, 2015 remand vote, Audi worked tirelessly to both: (1)

convince the Board and the ALJs to refrain from conducting unlawful

remand proceedings and (2) to perform a thorough research of Texas case

law on the scope and applicability of the ultra vires doctrines to the actions

taken by Chairman Walker and, subsequently on March 3, 2015, the ALJs.

These efforts included Audi’s Emergency Motion to Vacate or Modify

Statutory Stay and to Stay Further Proceedings, which was denied by the

ALJs.9 After filing the underlying district court case, Audi attempted to

9 The ALJs denied Audi’s request to stay the proceedings, but stated that relief from the

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secure a hearing on its TRO and its Motion for Temporary Injunction on

earlier dates than they were ultimately heard, but was prevented by Travis

County’s local rules and docketing procedures. Smith Affidavit at ¶ 3.

16. Audi filed the instant appeal days after the trial court granted

Appellees’ Pleas to the Jurisdiction over Audi’s objections. Audi waited to

file the instant Motion to ensure it had a clear understanding of when the

ALJs would likely close the record and have the underlying Contested

Case forwarded along to the Board for a final decision. Id. at ¶ 4. While

Audi requested an extension to file its brief on appeal, such an extension is

irrelevant to this Motion because it has no bearing on when the Court will

meet for its oral arguments in the Fall.

17. Intervenors make much of the “massive amount of time and

resources” spent by the parties in challenging the remand proceedings, yet

fail to acknowledge that the remand is an ultra vires act which the Texas

Supreme Court has said may be challenged by the type of lawsuit brought

by Audi. Heinrich, 284 S.W.3d at 370-371. As such, Audi is not responsible

for the expenses incurred by the parties in the ultra vires remand

proceedings; rather, the Appellees, whose actions exceed their authority

statutory stay was not necessary for Audi to seek relief in the Travis County district court.

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and necessitated the lawsuit, are.

18. Finally, Intervenors’ request for sanctions is without merit and

should be denied. Audi has acted in good faith at all times and has not

“grossly misstat[ed] or omitt[ed] an obviously important and material fact”

or filed a “clearly groundless” motion with this Court. (Cf. Intervenors’

Response at pg. 30). As described above, Audi has a good faith basis for

believing that this Court can grant Audi’s Motion based on the Court’s

inherent power to protect its jurisdiction. Therefore, Intervenors’ request

for sanctions under Rule 52.11 of the Texas Rules of Appellate Procedure

should be denied.

19. As such, this Court should enter a temporary order barring

Appellees from conducting further remand proceedings in the Contested

Case and from completing the remand process during the pendency of this

appeal to protect this Court’s jurisdiction and to prevent this appeal from

being rendered moot.

WHEREFORE, PREMISES CONSIDERED, Appellants Volkswagen

Group of America, Inc. and Audi of America, Inc. respectfully request that

this Court grant temporary relief preventing Appellees from conducting

further remand proceedings in the Contested Case, from issuing a PFD

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based on the remand, and from entertaining, issuing, signing or entering a

Final Decision based on the remand until this Court rules on the merits of

Audi’s appeal. Audi also requests such other and further relief, both

general and specific, at law and in equity, to which it may be entitled.

Respectfully submitted,

KING & SPALDING LLP

By: /s/ S. Shawn Stephens

S. Shawn Stephens

Texas Bar No. 19160060

sstephens@kslaw.com

James P. Sullivan

Texas Bar No. 24070702

jsullivan@kslaw.com

1100 Louisiana, Suite 4000

Houston, Texas 77002

Telephone: (713) 751-3200

Facsimile: (713) 751-3290

Billy M. Donley

Texas Bar No. 05977085

Mark E. Smith

Texas Bar No. 24070639

BAKER & HOSTETLER LLP

811 Main Street, Suite 1100

Houston, Texas 77002

Telephone: (713) 751-1600

Facsimile: (713) 751-1717

Attorneys for Appellants

Volkswagen Group of America,

Inc. and Audi of America, Inc.

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CERTIFICATE OF CONFERENCE

As required by TEX. R. APP. P. 10.1, I conferred counsel for Appellees

on the merits of Their Verified Motion for Temporary Relief to Protect the

Court’s Jurisdiction. Dennis McKinney, counsel for Appellee John Walker

III, is now opposed. Kimberly Fuchs, Counsel for Appellees Michael J.

O’Malley and Penn A. Wilkov, is opposed. Dent M. Morton, counsel for

Appellees Ricardo M. Weitz; Hi Tech Imports North, LLC; Hi Tech

Imports, South, LLC; and Hi Tech Imports, LLC, is opposed. Therefore, I

assume that they are all opposed to this reply to their response to the

motion.

/s/ S. Shawn Stephens

S. Shawn Stephens

CERTIFICATE OF COMPLIANCE

I certify that on June 29, 2015, that this Appellants’ Reply in Support

of their Motion for Temporary Relief was produced in Microsoft Word,

which indicates that it contains 4,059 words, excluding the exempted

portions of Rule 9.4(i)(1) of the Texas Rules of Appellate Procedure, and

thus does not exceed the 15,000 word limit provided for by Rule 9.4(i).

/s/ S. Shawn Stephens

S. Shawn Stephens

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CERTIFICATE OF SERVICE

I certify that on June 29, 2015, I used the Court’s electronic case filing

system to file this Motion for Temporary Order to Protect the Court’s

Jurisdiction and to serve this document on counsel for appellees as follows:

William R. Crocker Kimberly Fuchs

crockerlaw@earthlink.net kimberly.fuchs@texasattorneygeneral.gov

807 Brazos, Ste. 1014 Assistant Attorney General

Austin, Texas 78701 Texas Attorney General’s Office

P.O. Box 12548

Counsel for Appellees Ricardo Austin, Texas 78711-2548

M. Weitz; Hi Tech Imports

North, LLC; Hi Tech Imports, Counsel for Appellees Michael J. O’Malley and

South, LLC; and Hi Tech Penny A. Wilkov

Imports, LLC

J. Bruce Bennett Dennis McKinney

jbb.chblaw@sbcglobal.net dennis.mckinney@texasattorneygeneral.gov

Cardwell, Hart & Bennett, Assistant Attorney General

LLP Texas Attorney General’s Office

807 Brazos, Suite 1001 P.O. Box 12548

Austin, Texas 78701 Austin, Texas 78711-2548

Counsel for Appellees Ricardo Counsel for Appellee John Walker III

M. Weitz; Hi Tech Imports

North, LLC; Hi Tech Imports,

South, LLC; and Hi Tech

Imports, LLC

18

DMSLIBRARY01:26052166.1

Joseph W. Letzer

jletzer@burr.com

Dent M. Morton

dmorton@burr.com

Burr & Forman, LLP

420 20th Street N., Suite 3400

Birmingham, AL 35203

Counsel for Appellees Ricardo

M. Weitz; Hi Tech Imports

North, LLC; Hi Tech Imports,

South, LLC; and Hi Tech

Imports, LLC

/s/ S. Shawn Stephens

S. Shawn Stephens

19

DMSLIBRARY01:26052166.1

NO. 03-15-00285-CV

IN THE THIRD COURT OF APPEALS

AUSTIN, TEXAS

VOLKSWAGEN GROUP OF AMERICA, INC.

AND AUDI OF AMERICA, INC.

Appellants

vs.

JOHN wALKER III, IN ms OFFICIAL CAPACITY AS CHAIRMAN OF

THE TEXAS DEPARTMENT OF MOTOR VEHICLES BOARD, AND THE

HONORABLE MICHAEL J. O'MALLEY AND THE HONORABLE

PENNY A. WILKOV, IN THEIR OFFICIAL CAPACITIES AS

ADMINISTRATIVE LAW JUDGES FOR THE STATE OFFICE OF

ADMINISTRATIVE HEARINGS

Appellees

On Appeal from the 201st Judicial District Court, Travis County, Texas

Trial Court Cause No. D-1-GN-15-001186

Honorable Amy Clark Meachum, Presiding Judge

AFFIDAVIT OF MARKE. SMITH

STATE OF TEXAS §

§

COUNTY OF HARRIS §

1. On this date, Mark E. Smith personally appeared before me, the

undersigned Notary Public, and after being duly sworn stated the following under

oath:

2. My name is Mark E. Smith. I am currently over the age of twenty-one

(21 ). I have never been convicted of a felony or a crime of moral turpitude. I am

DMSLIBRAR YO I :25801724.1

I

under no legal disability and I am fully competent to make this Affidavit. I am

one of Appellants Volkswagen Group of America, Inc. and Audi of America, Inc. 's

(collectively "Audi") counsel. I have personal knowledge of the facts stated in this

affidavit, and they are true and correct.

3. Audi has diligently prosecuted the underlying contested case, district

court case and this appeal. At the February 13, 2015 Board meeting, and even prior

thereto, Audi argued that the Board was not authorized to remand the case to

SOAH for further proceedings. After the Board's February 13, 2015 remand vote,

Audi worked tirelessly to both: (1) convince the Board and the ALJs to refrain

from conducting unlawful remand proceedings and (2) to perform a thorough

research of Texas case law on the scope and applicability of the ultra vires

doctrines to the actions taken by Chairman Walker and, subsequently on March 3,

2015, the ALJs. These efforts included Audi's Emergency Motion to Vacate or

Modify Statutory Stay and to Stay Further Proceedings, which was denied by the

ALJs-the ALJs denied Audi's request to stay the proceedings, but stated that

relief from the statutory stay was not necessary for Audi to seek relief in the Travis

County district court. After filing the underlying district court case, Audi attempted

to secure a hearing on its TRO and its Motion for Temporary Injunction on earlier

dates than they were ultimately heard, but was prevented by Travis County's local

rules and docketing procedures.

606861707. I 2

4. Audi filed the instant appeal days after the trial court granted

Appellees' Pleas to the Jurisdiction over Audi's objections. Audi waited to file the

instant Motion to ensure it had a clear understanding of when the ALJs would

likely close the record and have the underlying Contested Case forwarded along to

the Board for a final decision .

.rt--

Signed this _}f_ day of June, 2015.

/It

SUBSCRIBED and SWORN to before me on this Q.q day of June, 2015,

to certify which witness my hand and official seal.

~J,~

Notary Public in and for the

State of Texas

606861707.1 3