Univ. of Houston v. Barth - First Court of Appeals (Texas)

This is an interlocutory appeal of the trial court’s denial of appellant’s, the University of Houston (UH), plea to the
jurisdiction. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(8) (Vernon 1997 & Supp.2004–2005)
(authorizing interlocutory appeal of denial of plea to jurisdiction).

Appellee, Stephen Barth, a tenured professor at the UH Conrad N. Hilton College of Hotel Management (Hilton
College), filed suit against UH under the Whistleblower Act, See Tex. Gov’t Code Ann. § 554.002 (Vernon 2004),
contending that his supervisor retaliated against him after Barth reported alleged accounting violations.

In seven issues, UH contends that the trial court erred in denying its plea and supplemental plea to the
jurisdiction because (1) Barth did not timely file all of his grievances, (2) Barth did not timely file suit, and (3)
several of the acts complained of were not “adverse personnel actions” as defined in the Whistleblower Act.

Factual & Procedural Background

Barth is a tenured professor at Hilton College. In 1998, one of Barth’s colleagues told him that Alan Stutts, Dean
of Hilton College, was pressuring him to perform what he termed “questionable” accounting transactions and
practices. Barth reported these alleged violations to (among others) UH Provost Ed Sheridan and UH’s general
counsel. On January 14, 2000, Barth discovered he had been denied a 1999 merit raise he contends he
deserved under the merit evaluation guidelines. Barth filed a grievance on March 10, 2000. On August 17,
2000, two weeks after receiving final notice that he would not be given a 2000 merit raise, Barth filed his second
grievance. On November 21, 2000, Barth filed a third grievance. Eventually, the second and third grievances
were consolidated into a single grievance. Barth complained that, as retaliation for reporting accounting
irregularities, Stutts: (1) attempted to breach Barth’s supplementary compensation agreement; (2) intimidated
Barth’s assistant and other faculty members with whom Barth worked closely; (3) denied Barth travel money; (4)
wrote an arbitrary and capricious evaluation of Barth’s performance; (5) withdrew support for Barth’s academic
initiatives; (6) encouraged an associate to file a false discrimination claim against him; (7) alienated the students
and faculty from Barth; (8) excluded Barth from an on-line graduate program; (8) excluded Barth from internal
and external communications; and (9) defamed Barth before students and faculty.

The provost responded in part to the first grievance on May 31, 2000 and responded to the second and third
grievances, and the issues remaining from the first grievance, in a letter dated June 5, 2001. Barth filed suit on
July 5, 2001. However, correspondence between Barth and the provost continued until the fall. Although the
provost noted in his June 5 letter that “[S]ince you have chosen not to appeal any of the Grievance Committee
recommendations to me, I now regard this grievance procedure as ended,” Barth responded on June 18 with a
request for just such an appeal. In a letter dated September 5, 2001, the provost noted, “[I]n response to your
statement that the grievance process has been concluded, I wish to state it is not concluded, at least not due to
any action or decision on my part.”

There was no further action taken in regard to Barth’s grievances and the suit went forward. After the trial court
denied UH’s plea and supplemental plea to the jurisdiction, this interlocutory appeal ensued.

Plea to the Jurisdiction

A plea to the jurisdiction is a dilatory plea that seeks dismissal of a case for lack of subject-matter jurisdiction.
Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). Subject-matter jurisdiction is essential to the
authority of a court to decide a case. See Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998).
Governmental immunity from suit defeats a trial court’s jurisdiction and so it may be raised by a plea to the
jurisdiction. See Tex. Dep’t of Transp. v. Jones, 8 S.W.3d 636, 639 (Tex. 1999).

Nature of Provisions of Whistleblower Act

As a preliminary matter, we address Barth’s contention that this Court has no jurisdiction to consider this appeal
because the trial court could not entertain UH’s plea to the jurisdiction as a matter of law. Based on the Texas
Supreme Court’s decision in Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71, 76 (Tex. 2000), in which the Supreme
Court determined that the failure to allege and prove a statutory prerequisite to a statutory cause of action was
not a jurisdictional defect, Barth contends that the limitations provision and grievance requirements of the
Whistleblower Act are likewise not jurisdictional.

In making this argument, Barth relies on authority in which our sister appellate courts held that the provisions of
the Whistleblower Act are not jurisdictional and asks us to overrule this Court’s decision to the contrary in a case
directly on point here. See Tex. S. Univ. v. Carter, 84 S.W.3d 787, 792 (Tex. App.—Houston [1st Dist.] 2002, no
pet.) (holding that statutory prerequisite that plaintiff in Whistleblower action timely initiate grievance before filing
suit is jurisdictional issue that may be challenged by plea to jurisdiction). We recognize that other courts of
appeal have applied Kazi to the Whistleblower Act and held that its statutory prerequisites are not jurisdictional.
See, e.g., Univ. of Houston v. Elthon, 9 S.W.3d 351 (Tex. App.—Houston [14th Dist.] 1999, pet. dism’d w.o.j.);
Castleberry Indep. Sch. Dist. v. Doe, 35 S.W.3d 777 (Tex. App.—Fort Worth 2001, pet. dism’d w.o.j.); Tex. Dep’t
of Mental Health & Mental Retardation v. Olofsson, 59 S.W.3d 831 (Tex. App.—Austin, 2001, pet. dism’d).
However, none of the cases addressing whether the Whistleblower Act’s provisions are jurisdictional has been
reviewed by the Texas Supreme Court. In University of Texas Southwestern Medical Center at Dallas v.
Loutzenhiser, 140 S.W.3d 351, 360 (Tex. 2004), the Texas Supreme Court, in addressing whether certain
provisions of the Tort Claims Act.Tex. Civ. Prac. & Rem. Code Ann. §§ 101.021–.022 (Vernon 1997) were
jurisdictional, distinguished a statutory presentment provision from a statutory exhaustion of remedies provision,
noting that an exhaustion requirement seeks to ensure that “the appropriate body adjudicates the dispute—the
hallmark of a jurisdictional statute.” Id. at 361 (citing Essenburg v. Dallas County, 988 S.W.2d 188, 189 (Tex.
1998)). The Whistleblower Act requires initiation of remedies via the governmental entity’s grievance or appeal
procedure before a party may file suit, but does not require exhaustion of remedies. See Tex. Gov’t Code Ann. §
554.006 (Vernon 2004). Thus, whether the Act’s requirements are jurisdictional is open to question. But this
question has not yet been directly answered; rather, the court has expressly refrained from answering it. See
Univ. of Tex. Med. Branch at Galveston v. Barrett, 159 S.W.3d 631, 632 (Tex. 2005) (observing “[W]e need not
decide here whether the failure to meet these requirements [of section 554.006] deprives the court of
jurisdiction over the action.”). Accordingly, Carter, which is directly on point and in which this Court held—albeit
for reasons not applicable here—that the requirements of section 554.006 are jurisdictional, governs disposition
of the issue in the case before us. See Carter, 84 S.W.3d at 792; accord Harris County v. Lawson, 122 S.W.3d
276, 281 (Tex. App.—Houston [1st Dist] 2003, pet. denied) disapproved of on other grounds by Barrett, 159 S.
W.3d at 633) (following holding in Carter and reiterating that Kazi did not overrule Hohman).

We therefore hold that the limitations provisions in the Whistleblower Act are jurisdictional; thus, we examine UH’
s plea to the jurisdiction to determine whether the trial court erred in denying the plea.

Standards of Review

Because subject-matter jurisdiction presents a question of law, we review the district court’s decision de novo.
Mayhew, 964 S.W2d at 928. In reviewing a trial court’s ruling on a plea to the jurisdiction, we do not look at the
merits of the case; rather, we construe the pleadings in favor of the plaintiff, look to the pleader’s intent, and
accept the pleadings’ factual allegations as true. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446
(Tex. 1993). We indulge every reasonable inference and resolve any doubts in the nonmovant’s favor. See Sci.
Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997). However, if a plea to the jurisdiction challenges
the existence of jurisdictional facts, we consider relevant evidence submitted by the parties when necessary to
resolve the jurisdictional issues raised, as the trial court is required to do. See Bland, 34 S.W.3d at 555
(confining evidentiary review to evidence that is relevant to jurisdictional issue). When the consideration of a trial
court’s subject matter jurisdiction requires the examination of evidence, the trial court exercises its discretion in
deciding whether the jurisdictional determination should be made at a preliminary hearing or await a fuller
development of the case, mindful that this determination must be made as soon as practicable. Id. at 554. If the
evidence creates a fact question regarding the jurisdictional issue, then the trial court cannot grant the plea to
the jurisdiction, and the fact issue should be resolved by the fact finder. See Tex. Dep’t of Parks & Wildlife v.
Miranda, 133 S.W.3d 217, 227–28 (Tex. 2004).

The Whistleblower Act prohibits retaliation against public employees who, in good faith, report violations of law
by their employers. Tex. Gov’t Code Ann. § 554.002 (Vernon 2004). Because the statute is remedial in nature,
we construe its provisions liberally to effectuate its legislative purpose—to enhance openness in government
and compel the government’s compliance with the law by protecting those who inform authorities of wrongdoing.
See Castaneda v. Tex. Dep’t of Agric., 831 S.W.2d 501, 503 (Tex. App.—Corpus Christi 1992, writ denied).

Time Limits

In its second, fourth, and fifth issues, UH contends Barth did not timely file his grievances. In making this
argument, UH focuses solely on the date that each alleged adverse personnel action occurred. However, the
Whistleblower Act requires an employee, before filing suit, to initiate action under the grievance procedure of
the employer before filing suit, “not later than the 90th day after the date on which the alleged violation of this
chapter: (1) occurred; or (2) was discovered by the employee through reasonable diligence. Tex. Gov’t Code
Ann. § 554.006 (a), (b). Barth argues that, at a minimum, there is a fact issue as to whether Barth should have
filed his grievances earlier. We agree. The continuing-violation doctrine has been applied to the Whistleblower
Act. See Univ. of Tex.—Pan Am. v. De Los Santos, 997 S.W.2d 817, 820 (Tex. App.—Corpus Christi 1999, no
pet.). Under this doctrine, the focus is on what event, in fairness and in logic, should have alerted the average
layman to protect his rights. See Glass v. Petro-Tex Chem. Corp., 757 F.2d 1554, 1560 (5th Cir. 1985). There
are sufficient factual allegations in Barth’s pleadings that could invoke the continuing-violation doctrine; whether
that doctrine applies and which acts triggered the 90-day limitations period are issues that should be resolved
by the trier of fact. See Hill v. Burnet County Sheriff’s Dep’t, 96 S.W.3d 436, 442 (Tex. App.—Austin 2002, pet.
denied) (noting that court, in reviewing ruling on plea to jurisdiction, only determines whether plaintiff’s pleadings
are sufficient to invoke jurisdiction).

In its first issue, UH argues that Barth did not timely file suit. The Whistleblower Act provides that, “if a final
decision is not rendered before the 61st day after the date procedures are initiated . . . the employee may elect
to (1) exhaust the applicable procedures” and sue not later than the 30th day after exhausting them or (2)
terminate the procedures initiated and sue within the time remaining of the 90-day limitations period. See Tex.
Gov’t Code Ann. § 554.006(d). Here, 90 days had long since elapsed, thus Barth’s only choice was to bring suit
not later than the 30th day after exhausting the grievance procedures.

Although UH contends that the procedure was exhausted on May 31, 2000, when the provost sent his initial
letter to Barth, the record does not entirely support this contention. It was not until the letter of June 5, 2001 that
the provost wrote, “I now regard this grievance procedure as ended.” A reasonable inference from this comment
is that the grievance procedure was not ended before the provost wrote this letter. Because appellant filed suit
on July 5, therefore, his suit was timely. If the continuing correspondence between Barth and the provost did not
prolong the process, and if the provost’s remark in his letter, dated September 5, 2001, that “I wish to state it
[the grievance procedure] is not concluded, at least not due to any action or decision on my part” likewise had
no effect on whether the procedure was exhausted, UH still cannot prevail. In Lawson, this Court held that, as
statutory prerequisites to filing a Whistleblower lawsuit, an employee who timely initiates the grievance
procedure is entitled to file suit after giving the employer at least 60 days to reach a final decision. 122 S.W.3d
at 283–84. Barth filed suit after 60 days had elapsed, and 30 days after receiving a letter in which the provost
decreed the process finished.

We hold that the fact issues present in the questions of timely grieving and timely filing in this case precluded
the trial court from granting the plea to the jurisdiction on the basis of limitations. See Miranda, 133 S.W.3d at
227-28 (holding that if evidence creates fact question regarding jurisdiction, trial court cannot grant plea to
jurisdiction, and the fact issue should be resolved by fact finder).

We overrule the first, second, fourth, and fifth issues.

Adverse Personnel Actions

In its third and sixth issues, UH contends that the trial court lacked subject-matter jurisdiction because the
actions about which Barth complained were not adverse personnel actions. In its seventh issue, it contends that
sovereign immunity shields it from liability for defamation.

The Whistleblower Act defines an adverse personnel action as “an action that affects a public employee’s
compensation, promotion, demotion, transfer, work assignment, or performance evaluation.” Tex. Gov’t Code
Ann. § 554.001(3) (Vernon 2004). This is a broad definition, as has been recognized by the courts. See, e.g.,
Tex. Dep’t of Mental Health & Mental Retardation v. Rodriguez, 63 S.W.3d 475, 481 (Tex. App.—San Antonio
2001, pet. denied) (rejecting state agency’s narrow construction of what constituted adverse personnel action).
Any of the acts about which Barth complained in his grievances, and which underlie his suit, could reasonably
be construed by a jury to be acts that, although only indirectly in some instances, “affected” Barth’s
“compensation, promotion, demotion, transfer, work assignment, or performance evaluation.” We further note
that Barth did not file a cause of action for defamation; rather he contended that his supervisor’s defamatory
remarks were one of the actions that affected his employment.

As in the question of limitations, which (if any) of the acts about which Barth complains constituted adverse
personnel actions is a contested fact issue that should be resolved by the trier of fact. See Hill, 96 S.W.3d at
442 (court did not need to determine whether retaliatory acts constituted constructive discharge, thus were not
adverse action; court needed only to determine whether pleadings invoked trial court’s jurisdiction); see also
Miranda, 133 S.W.3d 227–28.

We overrule the third, sixth, and seventh issues.

We affirm the trial court’s denial of UH’s plea to the jurisdiction and supplemental plea to the jurisdiction.

Laura Carter Higley

Justice

Panel consists of Chief Justice Radack and Justices Higley and Bland.

Justice Bland concurring.

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