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

6498582

THIRD COURT OF APPEALS

AUSTIN, TEXAS

8/14/2015 10:40:14 AM

JEFFREY D. KYLE

CLERK

CAUSE NO. 03-15-00285-CV

FILED IN

IN THE COURT OF APPEALS 3rd COURT OF APPEALS

AUSTIN, TEXAS

FOR THE THIRD DISTRICT OF TEXAS

8/14/2015 10:40:14 AM

AUSTIN, TEXAS

JEFFREY D. KYLE

Clerk

Volkswagen Group of America, Inc. and Audi of America, Inc. of Texas

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

Honorable Amy Clark Meachum, Presiding Judge

BRIEF OF APPELLEES O’MALLEY AND WILKOV

KEN PAXTON KIMBERLY L. FUCHS

Attorney General of Texas State Bar No. 24044140

Administrative Law Division

CHARLES E. ROY Office of the Attorney General of Texas

First Assistant Attorney General P.O. Box 12548, Capitol Station

Austin, Texas 78711-2548

SHELLEY DAHLBERG Telephone: (512) 475-4195

Associate Deputy Attorney General for Facsimile: (512) 320-0167

Civil Litigation

ATTORNEYS FOR APPELLEES

DAVID A. TALBOT, JR. THE HONORABLE MICHAEL J. O’MALLEY

Chief, Administrative Law Division AND THE HONORABLE PENNY A. WILKOV

August 14, 2015

REFERENCE TO THE PARTIES

Appellants, Volkswagen Group of America, Inc. and Audi Group of America,

Inc., will be referred to as “Audi.” Appellee John Walker III will be referred to as

“Walker.” Appellee Budget Leasing and Appellees Ricardo M. Weitz, Hi Tech

Imports North, LLC, Hi Tech Imports South, LLC, and Hi Tech Imports, LLC, will

be referred to collectively as “Intervenors.” Appellees Michael J. O’Malley and

Penny A. Wilkov will be referred to as “SOAH ALJs.”

REFERENCES TO THE RECORD

Clerk’s record will be referenced as: C.R. [Page]

Appendix will be referenced as: App. [Letter]

ii

TABLE OF CONTENTS

Reference to the Parties............................................................................................. ii

References to the Record .......................................................................................... ii

Table of Contents ..................................................................................................... iii

Table of Authorities ...................................................................................................v

Statement of the Case.............................................................................................. vii

Statement Regarding Oral Argument ..................................................................... vii

Statement Regarding Oral Argument ..................................................................... vii

Issues Presented ..................................................................................................... viii

1. Response to Audi’s issue 1: The trial court did not err in finding Audi had

failed to state a proper ultra vires claim capable of overcoming Defendants’

entitlement to immunity and granting Defendants O’Malley and Wilkov’s

plea to the jurisdiction ................................................................................. viii

2. Response to Audi’s issue 2: The trial court did not err in dismissing Audi’s

case because no proper ultra vires claim was asserted, and Audi has the

opportunity to challenge the remand through a suit brought under the APA

after exhaustion of administrative remedies ................................................ viii

Statement of Facts ......................................................................................................1

Summary of the Argument.........................................................................................2

Argument....................................................................................................................3

I. The trial court did not err in finding Audi had failed to state a proper ultra

vires claim capable of overcoming Defendants’ entitlement to immunity and

granting Defendants O’Malley and Wilkov’s plea to the jurisdiction ............ 3

A. Audi has not stated a proper ultra vires claim ...................................... 3

1. None of the cases cited by Audi involve cases on remand .........4

2. SOAH’s interpretation of Rule 155.153 must be given

deference .....................................................................................5

iii

B. Audi cannot overcome the SOAH ALJs entitlement to sovereign

immunity ............................................................................................... 5

C. The trial court was correct in deciding the plea to the jurisdiction

without looking at additional evidence ................................................. 7

II. The trial court did not err in dismissing Audi’s case because no proper ultra

vires claim was asserted, and Audi has the opportunity to challenge the

remand through a suit brought under the APA after exhaustion of

administrative remedies ................................................................................... 9

A. Immunity and the exhaustion requirement are not waived if no proper

ultra vires claim is pled ......................................................................... 9

B. Even if a proper ultra vires claim is pled, sovereign immunity is only

waived for claims for prospective injunctive relief .............................. 9

C. Audi’s claims are properly brought in a suit for judicial review after

exhaustion of administrative remedies ................................................ 11

Conclusion and Prayer .............................................................................................11

Certificate of Compliance ......................................................................................133

Certificate of Service ...............................................................................................13

iv

TABLE OF AUTHORITIES

CASES

Andrade v. NAACP of Austin,

345 S.W.3d 1 (Tex. 2011) ..........................................................................................8

City of El Paso v. Heinrich,

284 S.W.3d 366 (Tex. 2009) ........................................................................... 3, 9, 10

Coastal Habitat Alliance v. Pub. Util. Comm’n of Tex.,

294 S.W.3d 276 (Tex. App.—Austin 2009, no pet.) .................................................6

Creedmoor-Maha Water Supply Corp. v. Tex. Comm’n on Envtl. Quality,

307 S.W.3d 505 (Tex. App.—Austin 2010, no pet.) .................................................8

Hendee v. Dewhurst,

228 S.W.3d 354 (Tex. App.—Austin 2007, pet. denied) ..........................................7

KEM Tex., Ltd. v. Tex. Dep’t of Transp.,

No. 03-08-00468-CV, 2009 WL 1811102

(Tex. App.—Austin Jun. 26, 2009, no pet.)...............................................................6

Klumb v. Houston Mun. Emps. Pension Sys.,

405 S.W.3d 204 (Tex. App.—Houston [1st Dist.] 2013) ..........................................8

N. Alamo Water Supply Corp. v. Tex. Dep’t of Health,

839 S.W.2d 455 (Tex. App.—Austin 1992, writ denied)

aff’d 458 S.W.3d 1 (Tex. 2015) .................................................................................6

State v. Sledge,

36 S.W.3d 152 (Tex. App.—Houston [1st Dist.] 2000, pet. denied) ........................6

Sw. Pharmacy Solutions, Inc. v. Tex. Health and Human Servs. Comm'n,

408 S.W.3d 549 (Tex. App.–Austin 2013, pet. denied) ............................................5

Westheimer Indep. Sch. Dist. v. Brockette,

567 S.W.2d 780 (Tex. 1978) ......................................................................................5

v

STATUTES

Tex. Gov't Code

Tex. Gov’t Code § 2001.171....................................................................................10

Tex. Gov’t Code § 2001.174(2)(A) .........................................................................11

STATE OFFICE OF ADMINISTRATIVE HEARINGS ORDERS1

In the Matter of Ricardo M. Weitz, et al. v. Volkswagen Group of America, Inc.,

et al., SOAH Docket No. 0608-13-4599.LIC, Remand Order No. 15 (Jun. 16,

2015) ........................................................................................................................10

RULES

1 Tex. Admin. Code § 155.153 (2008) .....................................................................9

Tex. R. Civ. P. 329b ...................................................................................................5

1

Proposal for decisions and orders of the State Office of Administrative Hearings are available on

the internet at: http://www.soah.state.tx.us/PFDSearch/Search.asp and Westlaw©.

vi

STATEMENT OF THE CASE

Nature of the case: Audi filed suit against ALJs Michael J. O’Malley

and Penny A. Wilkov and Department of Motor

Vehicles (DMV) Chairman John Walker III. In

its lawsuit, Audi alleged Defendants committed

ultra vires acts by remanding a case to the State

Office of Administrative Hearings (SOAH).

Budget Leasing and Appellees Ricardo M. Weitz,

Hi Tech Imports North, LLC, Hi Tech Imports

South, LLC, and Hi Tech Imports, LLC

intervened in the case. After the trial court denied

Audi’s request for a temporary restraining order,

Defendants filed pleas to the jurisdiction,

asserting that Audi had failed to state proper ultra

vires claims against any of the Defendants and had

failed to overcome Defendants’ entitlement to

immunity.

Trial court: 201st Judicial District Court, Travis County,

Texas; The Honorable Judge Amy Clark

Meachum, presiding.

Trial court disposition: The trial court granted Defendants O’Malley and

Wilkov’s Plea to the Jurisdiction and Defendant

Walker’s Plea to the Jurisdiction, dismissing the

case.

STATEMENT REGARDING ORAL ARGUMENT

Defendants O’Malley and Wilkov take the position that oral argument is not

necessary in this case, but requests the right to make an argument should oral

argument be granted.

vii

ISSUES PRESENTED

1. Response to Audi’s issue 1: The trial court did not err in finding Audi had failed

to state a proper ultra vires claim capable of overcoming Defendants’

entitlement to immunity and granting Defendants O’Malley and Wilkov’s plea

to the jurisdiction.

2. Response to Audi’s issue 2: The trial court did not err in dismissing Audi’s case

because no proper ultra vires claim was asserted, and Audi has the opportunity

to challenge the remand through a suit brought under the APA after exhaustion

of administrative remedies.

viii

CAUSE NO. 03-15-00285-CV

IN THE COURT OF APPEALS

FOR THE THIRD DISTRICT OF TEXAS

AUSTIN, TEXAS

Volkswagen Group of America, Inc. and Audi of America, Inc. of Texas

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

Honorable Amy Clark Meachum, Presiding Judge

BRIEF OF APPELLEES O’MALLEY AND WILKOV

TO THE HONORABLE JUSTICES OF THE THIRD COURT OF APPEALS:

STATEMENT OF FACTS

This case stems from a contested case proceeding involving Audi and the

intervenors. The contested case was referred to the State Office of Administrative

Hearings (SOAH) by the Department of Motor Vehicles (DMV). C.R. 117-148. The

underlying dispute involves the sale of two auto dealerships. C.R. 367-369. After a

hearing, SOAH issued a proposal for decision (PFD), agreeing with Audi that the

intervenors were not currently qualified buyers, but setting out the conditions that

the buyers would need to meet to become qualified. C.R. 399-502.

The DMV did not enter a final decision based on the PFD, but rather dismissed

the case for failure to comply with procedural requirements. C.R. 503-505. On

motion for rehearing, the DMV set aside its dismissal and remanded the case to

SOAH for a finding on whether the procedural requirements were, in fact, met. C.R.

168-169.

The only issue in this case is based on Audi’s claim that Chairman Walker

committed an ultra vires act by remanding a case to SOAH and that the SOAH ALJs

committed an ultra vires act by accepting a remand from the DMV and conducting

procedures in accordance with it.

SUMMARY OF THE ARGUMENT

Audi alleges the ALJs violated SOAH procedural Rule 155.153 by accepting

a case remanded to them by the DMV. The rule at issue states that an Administrative

Law Judge may reopen evidence in a case if the PFD has not issued. ALJs regularly

accept cases remanded to them, and that rule has never been interpreted by SOAH

or a court to prevent ALJs from reopening the record on remand. The ALJs have

not committed ultra vires acts, and Audi’s claim fails on its face. Audi is also

requesting retroactive relief, and such relief is barred by qualified immunity.

Because no proper ultra vires claim was stated, Audi is required to exhaust its

2

administrative remedies before complaining about the SOAH ALJs’ orders in district

court. The trial court rightly granted the Plea to the Jurisdiction.

ARGUMENT

I. The trial court did not err in finding Audi had failed to state a proper

ultra vires claim capable of overcoming Defendants’ entitlement to

immunity and granting Defendants O’Malley and Wilkov’s plea to the

jurisdiction.

A. Audi has not stated a proper ultra vires claim.

Audi has not stated a valid cause of action against SOAH. Although Audi

mischaracterizes its complaint against the SOAH ALJs as an ultra vires claim, its

own pleadings fail to identify any actions that the SOAH ALJs have taken that could

be properly characterized as ultra vires. An ultra vires act occurs when an official

acts without constitutional or statutory authority, or in violation of the constitution

or a statute. City of El Paso v. Heinrich, 284 S.W.3d 366, 372 (Tex. 2009). Audi’s

claim against the SOAH ALJs is simply an allegation that they violated a procedural

rule, SOAH Rule 155.153, by accepting a case remanded to SOAH by the DMV.

SOAH has always interpreted Rule 155.153 to mean it cannot take new

evidence concerning a Proposal for Decision that has already been issued. However,

SOAH has also always interpreted Rule 155.153 to allow the taking of additional

evidence in a remand proceeding in which a new supplemental or amended proposal

for decision will be issued. This interpretation can only be an ultra vires act if Audi

3

can show that SOAH’s interpretation of its own rule is inconsistent with its statutory

authority. Audi has made no attempt to do so.

Audi asserts that Rule 155.153 provides an “express prohibition” on

reopening the record if a PFD is issued. Brief at 46. In fact, Rule 155.153(d) does

not prohibit anything. It simply gives SOAH ALJs the ability to reopen the record

if new issues arise after the record has been closed, but before the ALJ has issued a

proposal for decision. The rule does not address remands, and there is nothing in

the text of the rule suggesting that SOAH does not have the authority to accept

remands. In fact, the statutes cited by Audi show that SOAH does regularly accept

remands. Brief at 22-23. Further, Texas Government Code section 2001.175(c)

specifically authorizes a district court to order SOAH to consider evidence not

already in the record. If Rule 155.153 was meant to prohibit remands except where

explicitly authorized, it could have easily done so. But nothing in the Rule indicates

it applies to remands at all.

1. None of the cases cited by Audi involve cases on remand.

Audi argues that SOAH has consistently ruled that it cannot reopen cases once

a Proposal for Decision has issued. However, none of the cases they cite are

applicable, as none of them were on remand. A remand reopens a case, and will

result in a new Proposal for Decision.

4

The process at SOAH is akin to the process in the court system. If a district

court receives a request to reconsider an issue or admit new evidence outside of its

plenary power, it cannot do so. Tex. R. Civ. P. 329b. However, if a case is remanded

by an appellate court to develop the factual record, the trial court again has the ability

to admit evidence and make rulings in a case.

2. SOAH’s interpretation of Rule 155.153 must be given

deference.

An agency is given deference to its interpretation of its own rules. Sw.

Pharmacy Solutions, Inc. v. Tex. Health and Human Servs. Comm'n, 408 S.W.3d

549, 561 (Tex. App.–Austin 2013, pet. denied) (citing R.R. Comm'n v. Tex. Citizens

for a Safe Future & Clean Water, 336 S.W.3d 619, 629 (Tex. 2011)). It is certainly

reasonable for SOAH to interpret its rule in a way that allows it to consider additional

evidence in a remand proceeding when asked by an agency or a court. “Courts

generally hold that administrative bodies are entitled to and should exercise the

duties and functions conferred by statute without interference from the courts.”

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

B. Audi cannot overcome the SOAH ALJs entitlement to sovereign

immunity.

As explained above, Audi failed to plead a proper cause of action. However,

even if it had, it would also be required to demonstrate that the cause of action waives

the state’s immunity. “A party who sues the State must have an independent waiver

5

of immunity from suit for each claim in the suit.” State v. Sledge, 36 S.W.3d 152,

156 (Tex. App.—Houston [1st Dist.] 2000, pet. denied).

Texas courts have held that it is not ultra vires for an agency to incorrectly

interpret the law; thus, a claim based on this allegation will fail to waive sovereign

immunity or confer jurisdiction upon the court and may also be held as redundant to

a suit for judicial review. See Coastal Habitat Alliance v. Pub. Util. Comm’n of Tex.,

294 S.W.3d 276, 285 (Tex. App.—Austin 2009, no pet.); N. Alamo Water Supply

Corp. v. Tex. Dep’t of Health, 839 S.W.2d 455, 458-59 (Tex. App.—Austin 1992,

writ denied) (“The fact that the [agency] might decide ‘wrongly’ in the eyes of an

opposing party does not vitiate the agency’s jurisdiction to make an initial

decision.”); KEM Tex., Ltd. v. Tex. Dep’t of Transp., No. 03-08-00468-CV, 2009

WL 1811102 (Tex. App.—Austin Jun. 26, 2009, no pet.)(mem. op.).

Although Audi recognizes SOAH does have the authority to accept remands

in certain cases, it argues SOAH should have “honored” section 2001.058(e) of the

APA by telling the Board that it only has the authority to change a finding, not issue

a remand. Brief at 41-42. Audi has not explained how failing to handle the situation

this way is an ultra vires act. Even if Audi’s interpretation of the APA was correct,

6

the SOAH ALJ’s decision to accept the remand from the DMV could be, at most, an

incorrect decision, not an ultra vires act. 2

As explained above, misinterpreting the law is not an ultra vires act, and

sovereign immunity is not waived. Not only has Audi failed to show its

interpretation of the APA is correct, but it has failed to state an ultra vires claim

capable of overcoming immunity against the SOAH ALJs even if Audi’s position

were taken as true. At best, Audi has claimed the SOAH ALJs have misinterpreted

the law in terms of the remand. This assertion is inadequate to state an ultra vires

claim, and Audi has failed to waive the SOAH ALJs entitlement to sovereign

immunity.

C. The trial court was correct in deciding the plea to the jurisdiction

without looking at additional evidence.

In Hendee v. Dewhurst, the Third Court of Appeals clearly explained:

It is also well-established that where a trial court’s jurisdiction depends

upon whether a state official’s acts are within her constitutional or

statutory authority, such as when a plaintiff alleges ultra vires action to

avoid sovereign immunity, the trial court may sometimes be able to

decide the jurisdictional issue as a matter of law based on the pleadings

by construing the constitutional and statutory provisions defining the

actor’s authority and ascertaining whether the acts alleged would

exceed that authority.

2

SOAH disagrees with Audi’s interpretation of Government Code section 2001.058(e). That

section merely sets out the criteria for an agency to change a finding of fact or conclusion of law,

or to vacate or modify an order issued by a SOAH ALJ. That section does not otherwise limit the

authority of a state agency, and specifically does not preclude an agency from remanding a

contested case hearing to SOAH for further actions.

7

Hendee v. Dewhurst, 228 S.W.3d 354, 368 (Tex. App.—Austin 2007, pet. denied).

Plaintiffs must plead facts that demonstrate the Defendants acted in contravention of

constitutional or statutory authority or failed to perform a ministerial act; suits that

seek to control discretionary decisions are barred. See, e.g., Andrade v. NAACP of

Austin, 345 S.W.3d 1, 10-12 (Tex. 2011) (failure to plead viable constitutional claim

bars suit against government entity); Klumb v. Houston Mun. Emps. Pension Sys.,

405 S.W.3d 204, 224 (Tex. App.—Houston [1st Dist.] 2013) aff’d 458 S.W.3d 1

(Tex. 2015) (when “plaintiff’s constitutional claim is facially invalid, the trial court

must grant a . . . plea to the jurisdiction asserting governmental immunity”);

Creedmoor-Maha Water Supply Corp. v. Tex. Comm’n on Envtl. Quality, 307

S.W.3d 505, 515-16 (Tex. App.—Austin 2010, no pet.) (“if the plaintiff alleges only

facts demonstrating acts within the officer’s legal authority and discretion, the claim

seeks to control state action, and is barred by sovereign immunity”).

Here, Audi failed to state an ultra vires claim against the SOAH ALJs or

overcome sovereign immunity as a matter of law, and additional evidence would not

have aided the court in determining whether SOAH can accept a remand from the

DMV, the only issue in the case against SOAH. The sole issue is whether the SOAH

rules expressly prohibit remands and if so, whether the SOAH procedural rules can

form the basis of an ultra vires claim. The issue is purely one of legal interpretation.

8

Audi’s evidence, mainly related to the procedural history of the underlying case, is

irrelevant to the very narrow issue here.

II. The trial court did not err in dismissing Audi’s case because no proper

ultra vires claim was asserted, and Audi has the opportunity to challenge

the remand through a suit brought under the APA after exhaustion of

administrative remedies.

A. Immunity and the exhaustion requirement are not waived if no

proper ultra vires claim is pled.

For the reasons stated above, Audi’s ultra vires claim against the SOAH ALJs

is not proper. In addition, the SOAH ALJs are immune to the type of relief requested

by Audi. Audi asks this Court to declare that the SOAH ALJs have committed ultra

vires acts by 1) reopening the record; 2) considering untimely evidence;

3) conducting a remand hearing; and 4) conducting the remand procedure on a

compressed schedule. Brief at 39. A judgment declaring these acts to be ultra vires

would be barred by sovereign immunity.

B. Even if a proper ultra vires claim is pled, sovereign immunity

is only waived for claims for prospective injunctive relief.

As the state’s waiver of immunity for ultra vires claims is limited to

prospective injunctive relief, an order declaring this previous act to be ultra vires

would be retrospective relief, and thus barred by sovereign immunity. City of El

Paso v. Heinrich, 284 S.W.3d at 376.

Rule 155.153 says:

(a) Judge’s authority and duties. The judge shall have the authority and duty to:

9

(1) conduct a full, fair, and efficient hearing;

(2) take action to avoid unnecessary delay in the disposition of the proceeding;

(3) maintain order; and

(4) reopen the record when justice requires, if the judge has not issued a

dismissal, proposal for decision, or final decision.

1 TEX. ADMIN. CODE § 155.153 (2008) (State Office of Admin. Hearings, Rules of

Procedure

The rule only involves SOAH’s ability to reopen the record. The record has

already been reopened and closed again. State Office of Admin. Hearings, In the

Matter of Ricardo M. Weitz, et al. v. Volkswagen Group of America, Inc., et al.,

SOAH Docket No. 0608-13-4599.LIC, Remand Order No. 15 (Jun. 16, 2015)

(remand order closing the record).3 As the state’s waiver of immunity for ultra vires

claims is limited to prospective injunctive relief, an order declaring this previous act

to be ultra vires would be retrospective relief, and thus barred by sovereign

immunity. City of El Paso v. Heinrich, 284 S.W.3d at 376.

Audi has not stated a proper ultra vires claim, and its claim against the SOAH

ALJs is redundant to a suit for judicial review. To complain about the SOAH ALJs’

rulings, Audi must exhaust its administrative remedies before challenging those

orders in district court.

Audi has a right to judicial review of the final decision that will be issued in

the pending contested case, pursuant to section 2001.171 of the Administrative

3

The second PFD was issued on August 13, 2015. The parties will now have the opportunity to

file exceptions to the PFD in the SOAH case.

10

Procedure Act (APA). However, that right accrues only to a person “who is

aggrieved by a final decision in a contested case” and “who has exhausted all

administrative remedies.” Tex. Gov’t Code § 2001.171. Upon such a judicial review

after the DMV issues its final decision in this case, section 2001.174 of the APA

provides for reversal or remand of a decision in a contested case if the substantial

rights of the appellant have been prejudiced because the decision was entered in

violation of a constitutional or statutory provision. Tex. Gov’t Code

§ 2001.174(2)(A).

C. Audi’s claims are properly brought in a suit for judicial review

after exhaustion of administrative remedies.

If Audi is dissatisfied with this PFD and the subsequent final decision issued

by the DMV, it will have a chance to argue and develop its case through a suit for

judicial review in district court under the Administrative Procedure Act. Audi can

then argue that the remand was improper. If it is dissatisfied with the actions of the

district court, it will once again have the opportunity to appeal to this Court. This

Court will, ultimately, have the opportunity to rule on whether the remand was

proper.

CONCLUSION AND PRAYER

For the reasons stated above, SOAH ALJs ask this Court to affirm the trial

court’s granting of the SOAH ALJ’s Plea to the Jurisdiction.

11

Respectfully submitted,

KEN PAXTON

Attorney General of Texas

CHARLES E. ROY

First Assistant Attorney General

SHELLEY DAHLBERG

Associate Deputy Attorney General for Civil

Litigation

DAVID A. TALBOT, JR.

Chief, Administrative Law Division

/s/ Kimberly L. Fuchs

KIMBERLY L. FUCHS

State Bar No. 24044140

Administrative Law Division

Office of the Attorney General of Texas

P.O. Box 12548, Capitol Station

Austin, Texas 78711-2548

Telephone: (512) 475-4195

Facsimile: (512) 320-0167

kimberly.fuchs@texasattorneygeneral.gov

ATTORNEYS FOR APPELLEES, 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

12

CERTIFICATE OF COMPLIANCE

I certify that the Brief of Appellees O’Malley and Wilkov submitted complies

with Rule 9 of the Texas Rules of Appellate Procedure and the word count of this

document is 2,654. The word processing software used to prepare this filing and

calculate the word count of the document is Microsoft Word 2013.

Date: August 14, 2014

/s/ Kimberly L. Fuchs

KIMBERLY L. FUCHS

Attorney for Appellees

SOAH Administrative Law Judges

O’Malley and Wilkov

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing Brief of Appellees

O’Malley and Wilkov has been served on August 14, 2015, on the following parties

and/or counsel-of-record via electronic transmission, e-mail and/or facsimile:

S. Shawn Stephens J. Bruce Bennett

Texas Bar No. 19160060 State Bar No. 02145500

James P. Sullivan Cardwell, Hart & Bennett, LLP

Texas Bar No. 24070702 807 Brazos, Suite 1001

King & Spalding LLP Austin, Texas 78701

1100 Louisiana, Suite 4000 Telephone: (512) 322-0011

Houston, Texas 77002 Facsimile: (512) 322-0808

Telephone: (713) 751-3200 jbb.chblaw@sbcglobal.net

Facsimile: (713) 751-3290

sstephens@kslaw.com Attorneys for Appellees

jsullivan@kslaw.com Ricardo M. Weitz, Hi Tech Imports North,

LLC, Hi Tech Imports South, LLC, and

Attorneys for Appellants Hi Tech Imports, LLC

Volkswagen Group of Americas, Inc.

and Audi of America, Inc.

13

Billy M. Donley Joseph W. Letzer

State Bar No. 05977085 State Bar No. 24030763

Mark E. Smith Dent M. Morton

State Bar No. 24070639 State Bar No. 24056645

Baker & Hostetler LLP Burr & Forman, LLP

811 Main Street, Suite 1100 420 20TH Street N, Suite 3400

Houston, Texas 77002 Birmingham, AL 35203-5210

Telephone: (713) 751-1600 Telephone: (205) 251-3000

Facsimile: (713) 751-1717 Facsimile: (205) 458-5100

bdonley@bakerlaw.com jletzer@burr.com

mesmith@bakerlaw.com dmorton@burr.com

Attorneys for Appellants Attorneys for Appellees

Volkswagen Group of Americas, Inc. Ricardo M. Weitz, Hi Tech Imports North,

and Audi of America, Inc. LLC, Hi Tech Imports South, LLC, and

Hi Tech Imports, LLC

William R. Crocker Dennis McKinney

State Bar No. 5091000 State Bar No. 13719300

Attorney at Law Assistant Attorney General

807 Brazos, Ste 1014 Administrative Law Division

Austin, Texas 78701 Office of the Attorney General of Texas

P.O. Box 1418 P.O. Box 12548, Capitol Station

Austin, Texas 78767 Austin, Texas 78711-2548

Telephone: (512) 478-5611 Telephone: (512) 475-4020

Facsimile: (512) 474-2540 Facsimile: (512) 320-0167

crockerlaw@earthlink.net dennis.mckinney@texasattorneygeneral.gov

Attorney for Appellee Attorney for Appellee

Budget Leasing, Inc. d/b/a John Walker III, in his official capacity as

Audi North Austin and Chairman of the Texas Department of

Audi South Austin Motor Vehicles Board

/s/ Kimberly L. Fuchs

KIMBERLY L. FUCHS

Attorney for Appellees

SOAH Administrative Law Judges

O’Malley and Wilkov

14