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Law does not waive sovereign immunity for constitutional claims unless they involve challenge of a state statute

The Texas Uniform Declaratory Judgment Act does not waive sovereign immunity for federal constitutional claims which do not also accompany a challenge to a state statute, a Texas appellate court ruled in a March decision.

Third Court of Appeals, Austin, Texas

Third Court of Appeals, Austin, Texas

(Fuentes vs. Texas Appraiser Licensing and Certification Board and The Texas Real Estate Commission)

The licensee at the center of the case, Eleazar Fuentes, was licensed as a real-property appraiser. In 2018, the Texas Appraiser Licensing Certification Board revoked that license and imposed a $10,000 fine in response to Fuentes’s making false statements in appraisal reports.

Fuentes appealed, seeking to overturn the revocation and to obtain declaratory and injunctive relief under the state’s Uniform Declaratory Judgment Act. He claimed that the board violated his constitutional rights by selectively enforcing the state’s real estate laws against him while simultaneously ignoring similar behavior from its own investigators.

Fuentes’s essential claim was that the investigator working on his case made false statements and conducted an incomplete examination of Fuentes’s work, and that board investigators had made similar transgressions in cases against other licensees.

A district court dismissed Fuentes’s claims under the Act, finding, among other things, that the board was protected from Fuentes’s constitutional claims by sovereign immunity under the U.S. Constitution. Fuentes appealed to the Texas Court of Appeals for the Third District, in Austin, which issued a decision in favor of the board on March 20.

On appeal, Fuentes argued that the Uniform Declaratory Judgment Act waives sovereign immunity for Texas for actions involving constitutional issues or those involving the validity of a statute.

While there was merit to the claim, it was only partially true, the court held. “It is true that the UDJA generally authorizes claimants ‘whose rights, status, or other legal relations are affected by a statute’ to ‘have determined any question of construction or validity arising under the . . . statute . . . and obtain a declaration of rights, status, or other legal relations thereunder,'” wrote Justice Jeff Rose for the court.

“But this authorization is not a grant of jurisdiction to entertain such a claim— the UDJA generally ‘does not enlarge the trial court’s jurisdiction but is ‘merely a procedural device for deciding cases already within a court’s jurisdiction.”

Unfortunately for Fuentes, his selective-enforcement claim did not challenge the validity of the state’s Appraiser Licensing Act, only the board’s allegedly- selective application of the Act. Because Fuentes was not challenging the validity of the statute, there was no case to carry along his constitutional claims, and sovereign immunity would continue to protect the state against those claims.

More unfortunately for Fuentes, although normally a court would allow him to replead his case in an acceptable form, the court held that the facts alleged by Fuentes would not through any additional pleading establish jurisdiction over his selective enforcement claims.

Although Fuentes claimed that the board impermissibly treated him differently under the law than its own investigators, he had failed to allege any facts that could actually establish that the board’s decision to differentiate between appraisers in his position and appraisers in the position of the board’s investigators was unreasonable. He thus had no claim and would not be allowed to replead.