John Gannon, Inc. v. the Texas Department of Transportation James M. Bass, in His Official Capacity as Executive Director of the Texas Department of Transportation And Kyle Madsen, in His Official Capacity as Director of Right of Way for the Texas Department of Transportation

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-18-00696-CV

John Gannon, Inc., Appellant

v.

The Texas Department of Transportation; James M. Bass, in His Official Capacity as

Executive Director of The Texas Department of Transportation; and Kyle Madsen, in

His Official Capacity as Director of Right of Way for The Texas Department of

Transportation, Appellees

FROM THE 98TH DISTRICT COURT OF TRAVIS COUNTY

NO. D-1-GN-18-001981, THE HONORABLE LORA J. LIVINGSTON, JUDGE PRESIDING

MEMORANDUM OPINION

John Gannon, Inc. (JGI) appeals from the trial court’s order granting the motion

to dismiss for want of jurisdiction filed by the Department of Transportation (the Department)

and James Bass and Gus Cannon in their official capacities (the Officials).1 In the underlying

suit, JGI sued the Department under the Administrative Procedure Act (the APA Claim) and the

Officials under the Uniform Declaratory Judgments Act (the UDJA Claim). For the following

reasons, we conclude that the trial court has jurisdiction over the APA Claim but not the UDJA

Claim. We therefore affirm the order in part and reverse and remand in part.

1

Kyle Madsen succeeded Cannon and we therefore substitute Madsen as a party to the

lawsuit. See Tex. R. App. P. 7.2(a). For convenience, when referring to filings or arguments

made in court, we will refer to the Department and the Officials collectively as the Department.

BACKGROUND

JGI owns and operates outdoor advertising signs—billboards—that are often

located next to Texas highways. The Department is a state agency tasked with regulating

commercial signs along the State’s highways. See Tex. Transp. Code §§ 391.002, .065, .068(b).

Before proceeding to the procedural history and the merits of this jurisdictional dispute, a general

understanding of the legal history and framework is necessary.

Legal History and Framework

The Texas Transportation Code provides that the State, pursuant to its eminent

domain authority, may condemn and acquire real property. See id. §§ 203.051–.052. As

explained by the Department, historically billboards were generally not acquired through

condemnation although billboard owners were often joined in the proceedings as owning

leasehold interests in the land. Rather, billboard owners could receive relocation assistance

benefits to remove and move the billboard. For example, before 2004, if the State condemned

the property on which a billboard was located, the billboard owner may have been eligible to

receive relocation benefits and a relocation permit pursuant to the Department’s former rule

21.160 if the sign was “designated by the owner as personal property.” See 43 Tex. Admin.

Code § 21.160(c)(10) (2003) (Relocation) (“A permit may be issued pursuant to this section if a

sign is designated by the owner as personal property and the sign owner receives relocation

benefits, or if the sign is designated by the owner as realty, valued and purchased according to

the department’s sign valuation schedules, and retained by the sign owner. . . . Relocation

benefits will be paid in accordance with Subchapter G of this chapter.”), repealed by

35 Tex. Reg. 10634, 10634 (2010), adopted by 36 Tex. Reg. 2418, 2418 (2011); see also

2

43 Tex. Admin. Code § 21.116 (Moving and Related Expense Payments) (promulgated to take

effect in 2002 and providing that when person is required to relocate as result of acquisition of

right-of-way for highway project, Department will pay reasonable expenses of relocating

displacee and displacee’s business and personal property so long as eligibility requirements

are met).2

In 2004, the Department amended section 21.160 to clarify that billboards are

personal property, not real property. See 29 Tex. Reg. 8779, 8779–80 (2004), adopted by

29 Tex. Reg. 11389, 11389 (2004) (to be codified as amendment to 43 Tex. Admin.

Code § 21.160) (explaining that “[t]here has been confusion due to the language included in

§ 21.160(c)(10) that the department may consider sign structures as real property” and that

“[t]his section is contrary to current department policy, and § 21.160 is amended to delete any

reference to the treatment of signs as real property for relocation assistance purposes”); Harris

County v. Clear Channel Outdoor, Inc., No. 14-07-00226-CV, 2008 WL 1892744, at *1 (Tex.

App.—Houston [14th Dist.] Apr. 29, 2008, no pet.) (mem. op.) (noting that “[p]rior to

December 2004, both [Department] policy and federal law considered billboards removed for

transportation projects to be real property and required that the billboard owner be compensated

for the loss of the sign or the cost of relocating the sign,” but that Department changed

regulations to “dictate[] that billboards affected by transportation projects would no longer be

treated as real property and the sign owners would no longer be offered compensation for the

loss of the sign”). In 2011, the Department repealed section 21.160 and other related regulations

and replaced them with a new subchapter that subdivided former section 21.160 across multiple

2

Rules cited from title 43 of the Texas Administrative Code were promulgated by the

Department. Unless otherwise stated, cited rules refer to the current version.

3

sections. See 36 Tex. Reg. 2418, 2418 (2011) (noting that “[a] majority of the new rules have

nonsubstantive changes” and “[t]he department adopts a new rule organizational structure that

subdivides the current rules into smaller sections and reorganizes them so that the new rules

logically follow the sign permitting process”). Thus, the relevant rules at issue in this appeal

providing for relocation, relocation benefits, relocation permits, and locational and spacing

requirements were spread across multiple new sections. See id. at 2452–53 (noting that these

requirements would be codified at sections 21.192 (Permit for Relocation of Sign),

21.193 (Location of Relocated Sign), 21.195 (Relocation of Sign within Municipality), and

21.196 (Relocation Benefits) of title 43 of Texas Administrative Code).

In 2015, a dispute between the State and a billboard owner arising out of a

condemnation proceeding reached the Texas Supreme Court. See State v. Clear Channel

Outdoor, Inc., 463 S.W.3d 488 (Tex. 2015). The State argued that the condemnation of land did

not take the billboards on that land because billboards are personalty, not fixtures. See id. at 493.

The Texas Supreme Court, however, rejected the State’s argument, holding:

Clear Channel’s billboards were fixtures if a unified fee-holder would have

intended them to become a permanent part of the land. . . . The billboards were

firmly embedded in the earth; their removal required that the poles be cut and the

signs dismantled. Moreover, the billboards were perfectly suited to the use of the

realty, which was outdoor advertising alongside a busy freeway. On this record,

the hypothetical holder of a unified fee would have intended the billboard

structures to become a part of the real estate as a matter of law.

Id. at 495–96. But, as noted, the Texas Supreme Court limited its holding to “this record” and

further stated:

This is not to say that all sign structures are necessarily fixtures. Different

construction methods may make a billboard structure more portable than those in

this case. Were a sign less firmly embedded in the ground, more easily moveable,

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or located on land not actually useful for advertising, it might well remain

personalty. Courts are to determine whether any particular billboard is a fixture in

a condemnation case based on the Logan test as framed from the perspective of a

holder of the unified fee.

Id. at 496 (citing Logan v. Mullis, 686 S.W.2d 605, 607–08 (Tex. 1985)).

On March 29, 2016, Cannon issued a memorandum titled “Guidance for Impacted

Off-Premise Billboards as Part of Highway Transportation Projects.” On June 9, Cannon issued

a document titled “Amended Guidance for Impacted Off-Premise Billboards Affected by

Highway Transportation Projects” (the Amended Guidance) that expressly “clarifie[d] and

replace[d]” the March guidance document. The Amended Guidance stated, as relevant here:

• In light of recent Texas Supreme Court case-law, the Right of Way Division has revised

how it treats billboards in the course of acquiring property as part of a highway

construction project.

• Effective immediately for new acquisitions where no initial offer has been previously

made, all off-premise billboards will be treated as realty.

• For the sign structure owner to be eligible for a relocation permit . . . they will need

to retain the structure for its salvage value and follow the current . . . relocation

permitting regulations.

• In conclusion, [the Department]’s policy is that all billboards are treated as realty. In

addition, this will ensure the timely removal of the signage from the real property that is

the subject to the highway construction project.

The Amended Guidance continued by stating, “Effective the date of this guidance the following

procedures,” listed below as relevant to this appeal, “will be followed”:

• [T]he billboard structure owner will not be provided reimbursement of expenses to

relocate the billboard structure as a billboard structure cannot be the subject of duplicate

payments as both an item of real estate and for relocation[.]

• If the billboard structure owner chooses to retain the structure and this is properly

reflected in the deed, [the Department] will provide the sign owner[] a Notice to Vacate

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at a date certain that corresponds with the language in the deed, which should be no less

than 60 days prior to the date on which the land on which the sign is erected is needed for

construction purposes.

• If the billboard structure owner does not remove the structure per the deed and Notice to

Vacate, the ownership shall revert back to the state for removal. The sign structure

owner will forfeit the salvage value paid to the state AND their eligibility for a relocation

permit . . . .

• If the billboard structure owner does not choose to retain the structure, then they will not

be provided the ability to apply for a relocation permit under the current . . . permitting

regulations and any application by the sign owner would be treated as an application for a

new permit.

The Amended Guidance closed by stating, “All Right of Way Manuals will be updated

as needed.”

In September 2017, the Department proposed the repeal and amendment of

certain regulations that concerned outdoor signs because “[t]he Texas statutes regulating outdoor

advertising were ruled unconstitutional” as the “definition of ‘sign’ was overinclusive.”

42 Tex. Reg. 4770, 4770 (2017), adopted by 43 Tex. Reg. 1446, 1446 (2018) (citing AusPro

Enters., LP v. Texas Dep’t of Transp., 506 S.W.3d 688 (Tex. App.—Austin 2016, pet. granted,

judgm’t vacated w.r.m.)). As relevant here, the Department amended section 21.192 to “require

that a sign must be timely removed from the construction site to be eligible for the relocation

provisions” and repealed section 21.196 “as relocation benefits are an aspect of the purchase of

the right of way and not the sign permit process.” 43 Tex. Reg. 1446, 1450 (2018).

Procedural History

On April 24, 2018, JGI sued the Department and the Officials, seeking

declaratory relief under the APA, see Tex. Gov’t Code § 2001.038, and the UDJA, see Tex. Civ.

Prac. & Rem. Code §§ 37.001–.011. In its APA Claim, JGI challenged the validity of the

6

Amended Guidance and “any Department policy related to its enforcement or enactment” on two

grounds. First, JGI challenged the Amended Guidance as an invalid rule that eliminates rights

under “State and Federal authorities” that allegedly guarantee billboard owners “reimbursement

of reasonable moving expenses when signs are relocated to accommodate a highway project.”

See Tex. Gov’t Code § 2001.038 (providing for challenge to validity of rule). Second, JGI

claims that the Amended Guidance is voidable because it was not adopted in substantial

compliance with the APA. See id. § 2001.035 (“A rule is voidable unless a state agency adopts it

in substantial compliance with Sections 2001.0225 through 2001.034.”). In its UDJA Claim, JGI

sought attorney’s fees and a declaration that the Officials “have acted ultra vires by committing

non-discretionary acts and exceeded their statutory authority in adopting and enacting the

[Amended] Guidance [Document] and [the Department’s] new policy for treatment of signs

displaced by State construction projects.” See Tex. Civ. Prac. & Rem. Code §§ 37.004

(providing for declaratory relief), .009 (providing for attorney’s fees).

In response, the Department filed a plea to the jurisdiction, moved for protection

from discovery, and moved to dismiss JGI’s claims for want of jurisdiction. The Department

made three primary arguments. First, it argued that “after the Clear Channel decision, the State

can no longer consider billboards to be personal property and is required to acquire and

compensate for billboard structures.” And while the “Amended Guidance may have expressed

the law contained in the Clear Channel decision, the . . . Amended Guidance did not constitute

[a] rule[] subject to rule-making procedures,” nor does it “affect any private rights” because

“billboard owners do not have the right to the issuance of commercial sign permits.” Thus,

according to the Department, because there is no rule, JGI “cannot seek relief under [section]

2001.038 [of the Texas Government Code] and sovereign immunity bars the claim.” Second, the

7

Department argued that the claims are moot because the Department “has adopted new rules that

address both relocation assistance benefits and commercial sign permits.” Third, the Department

argued that the trial court lacks jurisdiction over the UDJA Claim because JGI “may not seek

relief under the UDJA when such relief would be redundant to relief under the APA.”

JGI countered that the Amended Guidance constitutes a rule under the APA’s

definition of “Rule.” See Tex. Gov’t Code § 2001.003(6) (defining “Rule”). JGI asserted that

the Amended Guidance affects its private rights because it:

(1) eliminate[s] a billboard owner’s statutorily-guaranteed right to receive

reimbursement of relocation expenses incurred as a result of a highway project,

and (2) require[s] sign owners to accept the State’s offer for the acquisition of a

billboard in eminent domain before an arbitrary and shifting deadline, or else

forfeit the right to relocate the sign using [the Department’s] relaxed relocation

criteria.

JGI noted, however, that the Clear Channel Court neither held “that all billboards were to be

treated as realty” nor “address[ed] the statutory and regulatory scheme for reimbursement of

relocation expenses or issuance of relocation permits.” Thus, according to JGI, the Amended

Guidance is a rule, and jurisdiction exists under section 2001.038. JGI also argued that the APA

Claim is not moot because “[t]he newly revised Administrative Code, including Sections 21.164

and 21.192, provides no authority for [the Department] to hold that a sign owner’s permit

application is contingent on the sign owner’s actions before the special commissioners’ hearing”

and “the Property Code and other provisions of the Administrative Code remain in place and

continue to provide sign owners with the right to relocation assistance.” Finally, JGI asserted

that “Defendants may be sued under both the APA and the UDJA because JGI seeks separate

relief against the separate parties—JGI challenges the legality of the Guidance, as well as

Defendants’ authority to implement and enforce the Guidance.”

8

After a hearing, the trial court granted the Department’s motion to dismiss for

want of jurisdiction and denied its motion for protection from discovery as moot. In a letter, the

trial court explained that “[a]mong other reasons,” it dismissed the APA Claim because “the . . .

Amended Guidance [is] not [a] rule[] as [it] did not include the amendment or repeal [of] a prior

rule,” see id. § 2001.003(6)(b) (noting that “Rule” “includes the amendment or repeal of a prior

rule”), and dismissed the UDJA Claim because “[JGI] has not demonstrated a live case or

controversy.” JGI now appeals from this order.

STANDARD OF REVIEW

A plea to the jurisdiction challenges the trial court’s authority to decide a case.

Heckman v. Williamson County, 369 S.W.3d 137, 149 (Tex. 2012). Here, the Department

challenges jurisdiction based on sovereign immunity and mootness, questions of law we review

de novo. Id. at 226 (mootness); Texas Dep’t of Transp. v. Sefzik, 355 S.W.3d 618, 620 (Tex.

2011) (sovereign immunity). In assessing a plea to the jurisdiction, our analysis begins with the

live pleadings, and we determine whether the facts alleged affirmatively demonstrate that

jurisdiction exists. Heckman, 369 S.W.3d at 150. We may also consider evidence submitted to

negate the existence of jurisdiction. Id. We construe the plaintiff’s pleadings liberally, taking all

factual assertions as true, and look to the plaintiff’s intent. Id. If jurisdiction is affirmatively

negated, a plea to the jurisdiction must be granted. Id.

DISCUSSION

JGI raises three issues on appeal: whether the Amended Guidance constitutes a

rule, whether sovereign immunity applies to the APA and UDJA Claims, and whether JGI should

have been afforded the right to conduct discovery. In response, the Department also raises a

9

standing issue as to whether the claims are moot. We begin our analysis with whether the

Amended Guidance constitutes a rule.

Is the Amended Guidance a rule?

Section 2001.038 of the APA is a “legislative grant of subject-matter jurisdiction,

so that valid claims raised pursuant to that provision are not barred by sovereign immunity.”

Texas Dep’t of Pub. Safety v. Salazar, 304 S.W.3d 896, 903 (Tex. App.—Austin 2009, no pet.).

Section 2001.038 thus waives sovereign immunity for a claim for declaratory relief regarding the

“validity or applicability of a rule . . . if it is alleged that the rule or its threatened application

interferes with or impairs, or threatens to interfere with or impair, a legal right or privilege of the

plaintiff.” Tex. Gov’t Code § 2001.038(a); see El Paso Hosp. Dist. v. Texas Health & Human

Servs. Comm’n, 247 S.W.3d 709, 713 (Tex. 2008); Texas Dep’t of Transp. v. Sunset Transp.,

Inc., 357 S.W.3d 691, 700 (Tex. App.—Austin 2011, no pet.). “[A] challenged agency action

that constitutes a ‘rule’ is among the facts (more precisely, a mixed question of law and fact) that

must exist in order for a claimant to successfully invoke, via section 2001.038, a trial court’s

subject-matter jurisdiction over the claim for relief authorized by the statute.” Slay v. Texas

Comm’n on Envtl. Quality, 351 S.W.3d 532, 544 (Tex. App.—Austin 2011, pet. denied).

Whether an agency action is a rule “is distinct from and precedes the issue” of whether the

plaintiff is entitled to relief under section 2001.038. Id. at 545.

The APA provides that a rule (1) is an “agency statement of general applicability”

that either “implements, interprets, or prescribes law or policy” or describes an agency’s

“procedure or practice requirements”; (2) “includes the amendment or repeal of a prior rule”; and

(3) “does not include a statement regarding only the internal management or organization of a

10

state agency and not affecting private rights or procedures.” Tex. Gov’t Code § 2001.003(6)(A)–

(C); see El Paso Hosp. Dist., 247 S.W.3d at 714. In determining whether an agency statement is

a rule, “we consider the intent of the agency, the prescriptive nature of the policy, and the

context in which the agency statement was made.” Texas State Bd. of Pharmacy v. Witcher,

447 S.W.3d 520, 533 (Tex. App.—Austin 2014, pet. denied as improvidently granted); see

Combs v. Entertainment Publ’ns, Inc., 292 S.W.3d 712, 722 (Tex. App.—Austin 2009, no pet.)

(citing Texas Educ. Agency v. Leeper, 893 S.W.2d 432, 443 (Tex. 1994)). But an agency’s

insistence that its statement is not a rule is not determinative. See El Paso Hosp. Dist.,

247 S.W.3d at 714–15 (rejecting agency’s argument that statement “is not a rule itself, but rather

its interpretation of the [existing] rule”). Agency pronouncements that “advise third parties

regarding applicable legal requirements . . . may be ‘interpretations’ of law that constitute ‘rules’

under the APA,” but informal agency statements merely restating formally promulgated rules are

not. LMV-AL Ventures, LLC v. Texas Dep’t of Aging & Disability Servs., 520 S.W.3d 113, 121

(Tex. App.—Austin 2017, pet. denied) (quoting Sunset Transp., 357 S.W.3d at 703). JGI asserts

that the Amended Guidance satisfies each element of the APA’s definition and is not an informal

agency statement merely restating formally promulgated rules.

The parties do not dispute that the Amended Guidance is a “state agency

statement.” The Department is a state agency. See Texas Dep’t of Transp. v. City of Sunset

Valley, 146 S.W.3d 637, 641 (Tex. 2004) (describing Department as state agency). The

Amended Guidance purports to speak for the Department, conveying its official position on

policy matters and stating what the Department “will allow” or “will provide” and what “will not

be provided.” And the Department does not contend that the writer Cannon—the director for the

Department’s right of way division—was acting with anything less than the Department’s full

11

authority. See generally 43 Tex. Admin. Code § 1.1 (Texas Transportation Commission); see id.

§ 1.1(b)(1)(L), (O), (b)(2) (providing that Commission will “adopt rules for the operation of the

department” and “establish policy necessary to carry out the duties and functions of the

department and the commission” and may delegate functions listed under paragraph (1) to

executive director who may further delegate functions to employee of department). We therefore

conclude that the Amended Guidance is a “state agency statement.” See Teladoc, Inc. v. Texas

Med. Bd., 453 S.W.3d 606, 614 (Tex. App.—Austin 2014, pet. denied) (concluding letter is

“state agency statement” when “it purports to speak for the Board, conveying its official position,

and there is no contention that the writer, the agency’s general counsel, was acting with anything

less than the Board’s full authority”); Entertainment Publ’ns, 292 S.W.3d at 718, 721–22

(holding that letter signed by “Assistant Director of Tax Administration” conveying

Comptroller’s construction of tax laws was “rule” under APA; noting that “the Comptroller does

not contend that the signer of the letter was acting with anything less than her full authority”).

“The term ‘general applicability’ under the APA references ‘statements that affect

the interest of the public at large such that they cannot be given the effect of law without public

input.’” El Paso Hosp. Dist., 247 S.W.3d at 714 (quoting Railroad Comm’n v. WBD Oil & Gas

Co., 104 S.W.3d 69, 79 (Tex. 2003)). The Amended Guidance is generally applicable because it

affects the class of owners of off-premise billboards. The Amended Guidance expressly declares

that it is “[e]ffective immediately for new acquisitions where no initial offer has been previously

made,” that “the Right of Way Division has revised how it treats billboards in the course of

acquiring property as part of a highway construction project,” and that “all billboards are treated

as realty.” See id. (holding that because agency statement “affect[s] all hospitals receiving

reimbursement for inpatient Medicaid services,” it is one “of general applicability”).

12

The Amended Guidance also “implements, interprets, or prescribes law or policy”

and describes the Department’s “procedure or practice requirements.” It implements and

interprets law by stating that the Department has revised how it treats billboards “[i]n light of

recent Texas Supreme Court case-law.” And the Department’s intent is clear that it is

prescribing law or policy that would be binding: the Amended Guidance declares that

“[e]ffective the date of this guidance the following procedures will be followed” and then lists

the procedures to be followed, and it prescribes new policy by stating that the Department’s

“policy is that all billboards are treated as realty.” See Badger Tavern, L.P. v. Hegar,

No. 03-18-00291-CV, 2018 WL 4322383, at *4 (Tex. App.—Austin Sept. 11, 2018, pet. denied)

(mem. op.) (noting “retroactivity pronouncement” meets definition of rule because it is generally

applicable and “is a statement by the Comptroller that informs the public of the Comptroller’s

intention to apply the new record-keeping requirement to ‘all pending cases’”); Witcher,

447 S.W.3d at 529 (“[A] distinction exists between nonbinding evaluative guidelines that take

into consideration case-specific circumstances—which have been held not to be a rule—and

policies that dictate specified results without regard to individual circumstances, which have

been held to be a rule.”); Entertainment Publ’ns, 292 S.W.3d at 718, 722 (noting that legal

interpretation in Comptroller’s letter constituted rule because it would bind agency employees

and “unambiguously express[ed] an intent to apply this interpretation . . . in all future cases

involving brochure-fundraising firms, regardless of whether the particular circumstances of each

transaction might have resulted in different tax treatment”).

In a letter, the trial court explained that the Amended Guidance is not a rule

because it does not include the amendment or repeal of a prior rule. But although a “Rule”

according to the APA “includes the amendment or repeal of a prior rule,” Tex. Gov’t Code

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§ 2001.003(6)(B), “an agency statement is not required to amend or repeal a prior rule in order to

meet the APA’s definition of ‘rule,’” EATX Coffee, LLC v. Texas Alcoholic Beverage Comm’n,

No. 04-16-00213-CV, 2016 WL 7119038, at *3 (Tex. App.—San Antonio Dec. 7, 2016, pet.

dism’d) (mem. op.). In other words, although the fact that an agency statement amends or

repeals prior rules may be a sufficient condition for the statement to constitute a rule, it is not a

necessary condition. See Teladoc, 453 S.W.3d at 616 (noting that “‘includes’ denotes that a

‘rule’ may include agency statements beyond those that amend or repeal an existing rule”).

Nevertheless, the Amended Guidance does effectively amend or repeal prior

rules. When the Amended Guidance was implemented, section 21.196(a) stated that

“[r]elocation benefits will be paid in accordance with Subchapter G of this chapter (relating to

Relocation Assistance and Benefits) for the relocation of a sign under § 21.192 of this division

(relating to Permit for Relocation of Sign).” 43 Tex. Admin. Code § 21.196(a) (2016)

(Relocation Benefits). But the Amended Guidance provides that “the billboard structure owner

will not be provided reimbursement of expenses to relocate the billboard structure as a billboard

structure cannot be the subject of duplicate payments as both an item of real estate and for

relocation” and “that all billboards are treated as realty.” The Department argues that this is

merely a restatement of the law following Clear Channel. But Clear Channel expressly limited

its holding by noting that a billboard may, or may not, be realty depending on the circumstances

of each case. 463 S.W.3d at 496 (“This is not to say that all sign structures are necessarily

fixtures. . . . Courts are to determine whether any particular billboard is a fixture in a

condemnation case based on the Logan test as framed from the perspective of a holder of the

unified fee.”). The Amended Guidance makes the determination that all billboards constitute

14

fixtures notwithstanding Clear Channel’s limitation and thus cannot be construed as a mere

restatement of the law enunciated in Clear Channel.

Additionally, in 2016, section 21.192 provided that “[a] sign may be relocated in

accordance with this section . . . if the sign is legally erected and maintained and will be within

the highway right of way as a result of a highway construction project.” 43 Tex. Admin. Code

§ 21.192(a) (2016) (Permit for Relocation of Sign). But the Amended Guidance effectively

amended section 21.192(a) by imposing additional timing requirements for removal of the

structure from the land—i.e., by the date listed on the Notice to Vacate but no later than 60 days

prior to when the land is needed for construction purposes—which, if not complied with, will

result in the owner “forfeit[ing] . . . their eligibility for a relocation permit.”3

Thus, the Amended Guidance has a “legal effect or significance independent of

what is already contained” in Clear Channel and sections 21.196(a) and 21.192, and therefore

constitutes an amendment or repeal of prior rules. See Teladoc, 453 S.W.3d at 615. For these

same reasons, the Amended Guidance is not a statement regarding only the agency’s internal

management or organization but rather is a statement that affects the billboard owners’ private

rights. See Sunset Transp., 357 S.W.3d at 703 (noting that agency statement must “bind the

agency or otherwise represent its authoritative position in matters that impact personal rights”);

Slay, 351 S.W.3d at 546 (“Although the distinction between a ‘rule’ and an agency statement that

concerns only ‘internal management or organization . . . and not affecting private rights’ may

3

The Department argues that the Amended Guidance did not amend or repeal prior rules

because in 2018 section 21.196 was repealed and section 21.192 was amended. Although the

Department’s actions following the issuance of the Amended Guidance may affect whether the

claims are moot, as discussed further below, these actions have no bearing on whether the

Amended Guidance constituted “the amendment or repeal of a prior rule.” Tex. Gov’t Code

§ 2001.003(6)(B) (emphasis added).

15

sometimes be elusive, the core concept is that the agency statement must in itself have a binding

effect on private parties.”); Texas Mut. Ins. v. Vista Cmty. Med. Ctr., LLP, 275 S.W.3d 538, 556

(Tex. App.—Austin 2008, pet. denied) (“The 2005 Staff Report did not affect private rights

because it did not change or amend Rule 134.401; it simply mandated internal consistency when

applying the rule.”). We therefore conclude that the Amended Guidance constitutes a rule

susceptible to challenge under section 2001.038 of the Texas Government Code and that

sovereign immunity is waived as to the APA Claim. See Texas Dep’t of State Health Servs.

v. Balquinta, 429 S.W.3d 726, 745 (Tex. App.—Austin 2014, pet. dism’d) (concluding that when

plaintiff challenges validity of rule and alleges that rule interferes with or impairs its legal right

or privilege, section 2001.038 waives sovereign immunity as to that claim).

Is the APA Claim moot?

The Department argues that, even if the Amended Guidance could be considered

a rule, “JGI’s complaints are moot because [the Department] has adopted new rules that address

both relocation assistance benefits and commercial sign permits for billboards within the

highway right of way as a result of a highway construction project.” Cf. Valley Baptist Med. Ctr.

v. Gonzalez, 33 S.W.3d 821, 822 (Tex. 2000) (per curiam) (concluding that when appeal became

moot, “there ceased to be a live controversy” and court no longer had jurisdiction as opinion

would be advisory). Specifically, the Department argues that by amending section 21.192 and

repealing section 21.196 in 2018, it “add[ed] the requirement that a commercial sign owner

timely remove the billboard from the [Department] construction project in order to qualify for a

relocation permit at a new highway location” and “no longer provide[d] relocation assistance

benefits for moving billboards.”

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As an initial matter, the Department’s arguments before this Court make clear that

the Department intends to continue relying on and utilizing the Amended Guidance. Thus, it

appears that the Department is arguing that with the 2018 amendment of section 21.192 and

repeal of section 21.196, the Amended Guidance has become an informal agency statement

merely restating formally promulgated rules—i.e., section 21.192 and the implications following

the repeal of section 21.196—which would change its status so that it is no longer a rule as

defined by the APA. See LMV-AL Ventures, 520 S.W.3d at 121 (noting that informal agency

statements merely restating formally promulgated rules are not rules as defined by the APA).

We disagree.

Although the Department may have repealed section 21.196, which provided

relocation assistance benefits for moving billboards, JGI argues in its APA Claim that it is

entitled to relocation benefits under federal and state statutes and state regulations and policies.

In its petition, JGI contests the Amended Guidance’s pronouncement that “the billboard structure

owner will not be provided reimbursement of expenses to relocate,” alleging that:

The [Amended] Guidance violates JGI’s substantive rights afforded under the

Uniform [Relocation Assistance and Real Property Acquisition Policies Act of

1970, 42 U.S.C. 4622], the Texas Property Code [Tex. Prop. Code § 21.046], the

Texas Administrative Code [43 Tex. Admin. Code § 21.116], and [the

Department]’s Relocation Assistance Manual. As described above, under these

State and Federal authorities, billboard owners are guaranteed reimbursement of

reasonable moving expenses when signs are relocated to accommodate a highway

party. [The Department’s Amended] Guidance purports to eliminate these rights

and simultaneously replace them with an illegal, Department-enacted policy.

The Department argues in briefing before this Court that JGI’s cited “State and Federal

Authorities” apply only to personal property and that JGI “seeks an unsupported interpretation of

the law such that, in addition to recovering compensation . . . it would also be entitled to recover

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relocation assistance benefits to move billboards that have been acquired by the State, and to

obtain sign relocation permits for billboards that have been acquired by the State.”4 But the

Department’s position concerns questions to be determined on the merits, not at the plea to the

jurisdiction stage. See Sunset Transp., 357 S.W.3d at 702 (noting that determining whether

appellees have invoked subject matter jurisdiction in rule challenge under section 2001.038

“does not require us to delve into the merits of the claims—nor would such an inquiry be proper”

(citation omitted)).

Regarding section 21.192, a comparison of that regulatory provision with the

Amended Guidance reveals that the Amended Guidance imposes additional requirements. As

JGI argues, “The [Department]’s [Amended] Guidance amends this simple requirement [of

timely removal] by imposing additional, arbitrary restraints on sign owners.” Section 21.192, as

relevant here and as amended in 2018 with added text italicized, provides:

A commercial sign that has been timely removed from a department construction

project site may be relocated in accordance with this section [and other specified

regulations] if the sign is legally erected and maintained and will be within the

highway right of way as a result of a highway construction project[.]

43 Tex. Admin. Code § 21.192(a) (emphases added); see 42 Tex. Reg. 4770, 4788 (2017)

(proposing amended text); 43 Tex. Reg. 1446, 1450 (2018) (adopting amendment language). As

relevant here, the Amended Guidance, in contrast, states:

4

In its motion to dismiss before the trial court, the Department argued: “JGI’s complaint

is also moot because JGI cannot demonstrate that any alleged rule is invalid or inapplicable. As

discussed [in the motion], [the Department]’s position that relocation assistance benefits are only

available for the moving of personal property, and position that obtaining a commercial sign

permit for a sign within the highway right of way as a result of a highway construction project is

subject to the owner timely removing the sign from the State’s project, are not in violation of

any statute.”

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If the billboard structure is not retained by the structure owner during acquisition

of the property, the billboard structure owner and the owner of the structure

permit (one in the same or not), would not be eligible for a relocation permit,

under 43 T.A.C. §21.192[.] . . . [The Department] will allow the billboard

structure owner to retain the structure for its salvage value and follow the current

Outdoor Advertising relocation permitting regulations . . . . If the billboard

structure owner chooses to retain the structure and this is properly reflected in the

deed, [the Department] will provide the sign owner[] a Notice to Vacate at a date

certain that corresponds with the language in the deed, which should be no less

than 60 days prior to the date on which the land on which the sign is erected is

needed for construction purposes. If the billboard structure owner does not

remove the structure per the deed and Notice to Vacate, the ownership shall revert

back to the state for removal. The sign structure owner will forfeit the salvage

value paid to the state AND their eligibility for a relocation permit under the

Outdoor Advertising permitting regulations.

Thus, JGI argues that the Amended Guidance goes beyond the timely removal requirement by

“requir[ing] sign owners to retain a structure ‘during acquisition of the property’ or lose

eligibility for a relocation permit” and imposing the 60-day requirement.

The Amended Guidance’s text does not “track” section 21.192’s language, but

rather “depart[s] from and effectively change[s] that text”—in other words, the Amended

Guidance imposes new requirements. See Teladoc, 453 S.W.3d at 620 (concluding that agency’s

“pronouncements . . . are tantamount to amendments to the existing text” of rule at issue because

they “hardly ‘track’” rule’s language, “rather, they depart from and effectively change that text”

and that “even if we assume TMB’s pronouncement could somehow be reconciled with [the

rule’s] text, as the agency insists, the letter would still have the effect of amending the rule

so as to adopt one of the alternative reasonable constructions to which the current text

would be susceptible while rejecting another”); see also LMV-AL Ventures, 520 S.W.3d at 122

(distinguishing Teladoc because “[i]n this case, by contrast, DADS’s interpretation does not

amend Rule 92.62, create a new rule, or impose new requirements”).

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The Department argues that any difference between the Amended Guidance and

section 21.192 is a proper exercise of its discretion: “As for the particulars of effecting timely

removal of a billboard pursuant to revised § 21.192, [the Department] certainly has discretion to

determine how that provision is met.” While this may be true, the Department may not exercise

its discretion by informally making (1) a “statement of general applicability” (2) that “does not

include a statement regarding only the internal management or organization of a state agency and

not affecting private rights or procedures” and (3) that “implements, interprets, or prescribes law

or policy” or “describes the procedure or practice requirements of a state agency,” unless it

substantially complies with the APA’s rulemaking requirements. Tex. Gov’t Code

§ 2001.003(6); see id. § 2001.035 (providing that rule is voidable unless adopted in substantial

compliance with APA).

In sum, section 2001.038 of the Texas Government Code permits a rule challenge

“if it is alleged that the rule or its threatened application interferes with or impairs, or threatens to

interfere with or impair, a legal right or privilege of the plaintiff.” Id. § 2001.038(a). JGI has

alleged that the Amended Guidance—which we have already determined is a rule—“interferes

with or impairs, or threatens to interfere with or impair” its legal rights or privileges under the

cited “State and Federal Authorities,” regardless of the Department’s amendments of section

21.192 and repeal of section 21.196.5 A live controversy exists between JGI and the Department

as to these issues that concern “[t]he validity and applicability” of the Amended Guidance as a

rule, and thus the APA Claim is not moot. See id. Accordingly, we reverse the trial court’s

order dismissing the APA Claim.

5

JGI also pleaded, “The newly revised Administrative Code, including §§ 21.164 and

21.192, provides no authority for [the Department] to hold that a sign owner’s permit application

is contingent on the sign owner’s actions before the Special Commissioners’ hearing.”

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Does the trial court have jurisdiction over the UDJA Claim?

Having concluded that the Amended Guidance constitutes a rule for the purpose

of the APA Claim and that there exists a live controversy as to the validity of the rule, we turn to

JGI’s UDJA Claim. For its UDJA Claim, JGI pleaded:

JGI seeks a declaration that Defendants, Gus Cannon and James Bass, have acted

ultra vires by committing non-discretionary acts and exceeded their statutory

authority in adopting and enacting the [Amended] Guidance and [the

Department]’s new policy for the treatment of signs displaced by State

construction projects, and therefore the [Amended] Guidance, and any

Department policy related to its enforcement or enactment, are invalid.

The Department responded that the UDJA Claim is barred by the redundant remedies doctrine.

“Under the redundant remedies doctrine, courts will not entertain an action

brought under the UDJA when the same claim could be pursued through different channels.”

Patel v. Texas Dep’t of Licensing & Reg., 469 S.W.3d 69, 79 (Tex. 2015). Here, the UDJA

Claim seeks the same relief as the relief pleaded for in the APA Claim—invalidation of the

Amended Guidance and any Department policy related to its enforcement or enactment. See

Texas Dep’t of Pub. Safety v. Salazar, No. 03-11-00478-CV, 2013 WL 5878905, at *9 (Tex.

App.—Austin Oct. 31, 2013, pet. denied) (mem. op.) (concluding that redundant remedies

doctrine bars UDJA claim when relief sought “is essentially the same as the relief that they

sought through their [APA] claims” and that “a party may not seek relief under the [UDJA] when

that relief is redundant to relief available under the [APA]”); Texas State Bd. of Plumbing

Exam’rs v. Associated Plumbing-Heating-Cooling Contractors of Tex., Inc., 31 S.W.3d 750, 753

(Tex. App.—Austin 2000, pet. dism’d by agr.) (“When a plaintiff files a proceeding that only

challenges the validity of an administrative rule, the parties are bound by the APA and may not

seek relief under the UDJA because such relief would be redundant.”); cf. SWEPI LP v. Railroad

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Comm’n, 314 S.W.3d 253, 269–70 (Tex. App.—Austin 2010, pet. denied) (“A declaratory

judgment claim ‘will not lie’ when it is ‘redundant’ of a parallel administrative appeal and the

‘remedy under the APA is the same as that provided under the [UDJA]’—reversal of the

agency’s final order.” (quoting Texas Mun. Power Agency v. Public Util. Comm’n, 260 S.W.3d 647,

651 (Tex. App.—Austin 2008, no pet.))).

Because we have concluded that the Amended Guidance is a rule under the APA,

we also conclude that JGI’s UDJA Claim that is predicated upon the ultra vires exception is

barred by the redundant remedies doctrine. See Sunset Transp., 357 S.W.3d at 705 (noting that

“[a]ssuming that appellees replead under section 2001.038, we agree with appellants that

appellees’ UDJA claims [which are predicated upon the ultra vires exception] would be

redundant remedies” and “would be subject to dismissal”); Salazar, 304 S.W.3d at 906 n.7 (“To

the extent the Appellees also seek relief under the UDJA in connection with these rule

challenges, we dismiss those claims for want of jurisdiction on the ground that a party may not

seek relief under the UDJA when such relief would be redundant to relief under the APA.”). If

JGI were to prevail on an ultra vires claim, the only relief generally available would be

prospective injunctive relief, which JGI has requested in its petition. See City of El Paso

v. Heinrich, 284 S.W.3d 366, 373–76 (Tex. 2009) (noting that “retrospective monetary claims

[for ultra vires claims] are generally barred by immunity” and that generally “a claimant who

successfully proves an ultra vires claim is entitled to prospective injunctive relief”); McLane Co.

v. Texas Alcoholic Beverage Comm’n, 514 S.W.3d 871, 877 (Tex. App.—Austin 2017, pet.

denied) (noting that if plaintiff were to prevail on ultra vires claim, its only relief would be

prospective). But this remedy is essentially redundant to the remedies available under the APA.

We have held that courts possess jurisdiction to award injunctive relief “in connection with a

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declaratory judgment invalidating a rule under APA section 2001.038.” Balquinta, 429 S.W.3d

at 750. And we have concluded that there is no harmful error—and indicated that there is no

error at all—in the “assertion of jurisdiction over the claims for injunctive relief to the extent

they are also addressed, as a formal matter, to the [state agency official] in his official capacity.”

Id. We rested this conclusion on the following reasoning:

[T]he distinction [between suing “the State” or an agency versus suing a human

agent of “the State” to reassert “the State’s” control] has far less significance

where, as here, sovereign immunity has been waived so as to permit a claim

directly against a state agency (one agent of “the State”) and the claimant

formally pleads that claim, alternatively or additionally, against a human agent of

“the State.” In those circumstances, the distinction amounts merely to two

different ways to plead for the same remedy against the same defendant.

Id. (emphasis added); see id. at 750 n.115 (suggesting that “the injunctive-relief claims against

DSHS and the Commissioner, in his official capacity, are considered to be the same claim for

relief against the same party” and explaining that “[a]lternatively, this ultra-vires theory would

become relevant—and would not provide merely a redundant remedy—if, as appellants urge,

injunctive relief cannot be obtained against DSHS by virtue of APA section 2001.038”); cf.

Heinrich, 284 S.W.3d at 372 (noting that “ultra vires suits do not attempt to exert control over

the state—they attempt to reassert the control of the state” and “these suits do not seek to alter

government policy but rather to enforce existing policy”). Having concluded that the UDJA

Claim is barred by the redundant remedies doctrine, we affirm the trial court’s order as to the

dismissal of the UDJA Claim.

Should JGI have been afforded the opportunity to conduct discovery?

We need not decide whether JGI should have been afforded the opportunity to

conduct discovery, as the trial court has not made a decision on the merits as to that issue. The

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trial court merely denied as moot the Department’s motion for protection from discovery.

Because we have concluded that the cause should not be dismissed for lack of jurisdiction, we

reverse the order denying as moot the motion for protection from discovery.

CONCLUSION

For these reasons, we reverse the trial court’s order as to the dismissal of the APA

Claim, affirm the order as to the dismissal of the UDJA Claim, and reverse the order as to the

denial of the motion for protection from discovery. We remand the cause for further proceedings

consistent with this opinion.

__________________________________________

Melissa Goodwin, Justice

Before Justices Goodwin, Baker, and Kelly

Affirmed in Part; Reversed and Remanded in Part

Filed: October 9, 2020

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