Specific administrative regulation controls over general deadlines under Texas Administrative Procedures Act says 3rd Court of Appeals.

AGAP Life Offerings, LLC, et al v. Texas State Securities Board, et al, 03-11-00535-CV (Tex. App. – Austin, November 26, 2013).

This is an administrative law case, where the primary issue with whether a party can be relieved of the obligation under the Administrative Procedure Act and file suit after the 30th day an administrative decision is reached. A question was also raised about then an administrative decision is final, thereby triggering the clock.  The court goes through a lengthy statutory construction analysis which can be helpful to attorney’s who either deal with administrative law matters, or an entity which creates its own administrative law procedures.

In this case, Securities Commissioner of the State of Texas issued an emergency order prohibiting AGAP Life Offerings, (“AGAP”) from engaging in various business activities. The specifics are not important for the holding.  AGAP sought judicial a review of the decision. The Commissioner filed a plea to the jurisdiction asserting that the suit for judicial review was not timely. Ultimately, the district court granted the Commissioner’s plea and AGAP appealed.

While the Administrative Procedures Act sets out general regulations, the Securities Act sets out particular circumstances for an emergency cease and desist order and the manner they can be challenged. The Securities Act Act specifies that unless “a person against whom the order is directed requests a hearing” within 31 days of being served, the order is final and nonappealable.  Approximately two weeks after the order was entered, AGAP filed a motion for rehearing which Commissioner did not act on. AGAP waited to seek judicial review until after the passing of the 45-day deadline by which motions for rehearing are overruled by operation of law under the Administrative Procedure Act. The Commissioner argued that the Securities Act makes emergency orders are immediately final and appealable upon their issuance. Parties seeking judicial review of an agency order are excused from the obligation of filing a motion for rehearing and must instead file a suit for judicial review within 30 days of an agency order being issued. AGAP urged that its suit was timely because it filed the suit within 30 days of its motion for rehearing being overruled by operation of law.

The Third Court of Appeals analyzed the two competing Acts and held that by including the phrase “immediately final for purposes of enforcement and appeal,” in the Securities Act the legislature evidenced its intent to make orders immediately appealable.  And while the court notes it is not necessary to consider (because of the specific statutory language of the Acts), I was pleased to see an analysis of the statutory construction principle of specific acts controlling over general. When there is a conflict between a general provision and a more specific one, the specific “provision prevails as an exception to the general provision, unless the general provision is the later enactment and the manifest intent is that the general provision prevail.”  The Securities Act provisions are more specific and so those deadlines control over the general Administrative Procedures Act provisions. As a result, trial court properly granted the plea to the jurisdiction.

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