The Travis Central Appraisal District (TCAD) won a victory in the Third Court of Appeals in its effort to reverse the appraisal review board’s decision to reduce the 2019 appraised value of a Texas Disposal Systems’ landfill from $21.2 million to $2.8 million. In Travis Central Appraisal District v. Texas Disposal Systems Landfill, Inc. (No. 03-20-00122-CV), TCAD challenged the ARB’s reduction of value on the basis of unequal appraisal in a Travis County district court. The trial court granted TDS’s plea to the jurisdiction, which argued that TCAD “improperly relied on a 2017 general resolution by its board of directors—issued two years before the ARB order—to satisfy [Section 42.02(a), Tax Code’s] requirement” that the chief appraiser obtain the consent of the CAD board before challenging an ARB order. TDS had previously withdrawn a plea to the jurisdiction arguing that TCAD had no standing to pursue an appeal on market value because the ARB determined on the unequal appraisal protest.
In a memorandum opinion authored by Justice Goodwin, the court of appeals reversed. With respect to the unequal appraisal challenge, the court considered whether §42.02(a)’s language requiring the chief appraiser to obtain “written approval” from the board of directors to pursue an appeal of an ARB order determining a taxpayer protest was jurisdictional—meaning that the chief appraiser’s failure to comply strictly with this requirement stripped the trial court of jurisdiction to hear the appeal. With no explicit precedent to rely on, the court’s analysis turned on SCOTX’s in Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71, 76-77 (Tex. 2000) and its progeny. In Dubai, SCOTX signaled a departure from the traditional rule that “strict compliance with all statutory prerequisites is necessary to vest a trial court with jurisdiction” (citations omitted). Under the post-Dubai jurisprudence, the “classification of a matter as one of jurisdiction . . . opens the way to making judgments vulnerable to delayed attack for a variety of irregularities that perhaps better ought to be sealed in a judgment.” In Tex. Mut. Ins. v. Chicas, 593 S.W.3d 284, 286 (Tex. 2019), SCOTX approved of the post-Dubai approach to judicial appeals from administrative decisions, stating that “the focus of post-Dubai, is to strengthen the finality of judgments and reduce the possibility of delayed attacks.”
Rejecting TDS’s argument that other precedent suggested that §42.02(a) is jurisdictional, the court of appeals noted that the cases it cited referred to taxpayer appeals under other provisions of the Code and questioned whether those decisions survived Dubai. In any event, the court applied a Dubai analysis to §42.02(a), finding that the statute contains no clear legislative intent to make the statutory requirement jurisdictional, as other statutes involving governmental entities do. TDS maintained that §42.02(a)’s use of the term “entitled to appeal” to characterize the effect of the board’s written approval means that the chief appraiser has no right to appeal until he or she obtains the written approval of the board. The court of appeals did not consider this language clear enough to confer a jurisdictional bar, especially in light of SCOTX precedent considering statutory deadlines as nonjurisdictional post-Dubai. The policy considerations of allowing final judgments to be subject to collateral attack, in the court’s view, outweighed any negative consequences of reading the statute as nonjurisdictional. After all, the court noted, the case could merely have been abated to allow the chief appraiser to get approval, further indicating that the Legislature did not mean the statute to bar jurisdiction.
Moreover, the court of appeals held that “to the extent that the district court granted the Landfill’s second plea to the jurisdiction and dismissed the cause on the ground that the chief appraiser lacked capacity to appeal the ARB order, we conclude that it erred.” In other words, if §42.02(a), as TDS argued, means that without written approval the chief appraiser had no authority [i.e., capacity] to appeal, the statute is not jurisdictional because defects involving capacity may either be waived or the trial court should abate the case to permit the plaintiff to cure the defect. Again, if the Legislature wanted the statute to be jurisdictional, it can always say so.
Finally, the court of appeals held that TCAD’s appeal of market value could proceed even though the ARB did not issue an order determining market value. TDS argued that since the ARB issued no order, there was nothing for TCAD to appeal. The court of appeals saw through this, pointing out that TCAD’s appeal does not challenge the ARB’s market value determination, but its “equal appraisal value determination on the ground that it is below market value.” TDS kept trying, asserting that “TCAD’s de novo theory is at odds with the exclusive-remedies scheme established by the Property Tax Code” and that “[p]ermitting a district court to resolve new protest grounds would denigrate the administrative hearing process and the exclusive-remedies scheme established by the Property Tax Code.” As the court of appeals observed, this argument overlooks the fact that even if one considers the ARB process as an “administrative hearing,” it exists for taxpayer protests only. The appraisal district, on the other hand, has “no prior administrative remedy to exhaust at the ARB stage” and cannot initiate that process. Until the ARB issued its order reducing the value of the property, the appraisal district had no grievance to appeal. Thus, there is no impediment to TCAD’s challenge.
This case has obvious importance for property tax lawyers and taxing districts, but we report on it here because of the broader implications of the court of appeals’ Dubai analysis. Texas law is littered with provisions that predicate litigation on the plaintiff’s compliance with a deadline for doing something. In the absence of crystal-clear legislative intent (that is, expressed in the language of the statute itself), SCOTX since 2000 has moved away from allowing relatively technical violations to destabilize the finality of judgments. The best plan is always to strictly comply with statutory requirement, which TCAD failed to do here. But if that doesn’t happen, defendants should carefully read Dubai and its progeny before jumping at a plea to the jurisdiction.
