by Ryan Philip Pitts, an associate in the appellate practice group of Haynes Boone, LLP’s Houston office.

This article addresses an unexplored but substantial restriction on when the “primary jurisdiction” doctrine may apply to relegate a matter to an agency rather than a court. The restriction is that an agency cannot have primary jurisdiction over “inherently judicial” issues. Considering what “inherently judicial” means is worthwhile because—as the previous Texas Supreme Court term has demonstrated—the intersecting jurisdiction of courts and administrative agencies raises more questions today than ever before.

The primary jurisdiction doctrine, a judicial creation,[1]The primary jurisdiction doctrine has its origins in Texas & Pacific Railway Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 440-41 (1907) (White, J.). became a fixture of Texas law in 1961 by way of Gregg v. Delhi-Taylor Oil Corp.[2]344 S.W.2d 411 (Tex. 1961). The doctrine had been previously articulated in Kavanaugh v. Underwriters Life Ins. Co., 231 S.W.2d 753, 755 (Tex. App.—Waco 1950, writ ref’d). The doctrine forms the second of a two-sided inquiry about who decides legal disputes—agencies or courts—that in some fashion touch upon a regulated area. The first question is of exclusive jurisdiction. If an agency has exclusive jurisdiction to make an initial determination in a dispute, a court lacks jurisdiction to do so.[3]See Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 220-22 (Tex. 2002). Primary jurisdiction asks a different question: whether the agency should resolve a dispute or matter, at least initially, because of its special expertise and policy-making responsibilities.[4]See id. While exclusive jurisdiction goes to a court’s jurisdiction, primary jurisdiction is merely “prudential” (not mandatory) in nature.[5]See id Unlike exclusive jurisdiction, primary jurisdiction works as an issue-by-issue tool. If it applies, a court may stay the litigation while an agency answers a discrete question within its province—the litigation resuming afterwards.[6]See id. at 221 (“[T]he court should abate the lawsuit and suspend finally adjudicating the claim until the agency has an opportunity to act on the matter.”); e.g., In re Sw. Bell Tel. Co., L.P., … Continue reading

As it has developed since 1961, the Texas iteration of the primary jurisdiction doctrine requires a three-part analysis. The first inquiry is whether the court and the agency have concurrent jurisdiction.[7]Cash Am. Int’l, Inc. v. Bennett, 35 S.W.3d 12, 18 (Tex. 2000) (“Primary jurisdiction is an administrative law doctrine that arises when a court and an agency have concurrent original jurisdiction … Continue reading If they do, a court asks whether “the issue is one inherently judicial in nature.”[8]Gregg, 344 S.W.2d at 415. Critically, an agency cannot have primary jurisdiction over an “inherently judicial” issue. For issues that are not “inherently judicial,” the court makes a final, normative inquiry, “Should the agency decide this issue?” The relevant factors are (1) whether the agency has relevant experts on staff, and (2) whether “great benefit” would derive from a uniform agency determination, whereas courts and juries may reach different results under similar fact situations.[9]Forest Oil Corp. v. El Rucio Land & Cattle Co., Inc., 518 S.W.3d 422, 429–30 (Tex. 2017). Another caveat is that primary jurisdiction does not arise “when the administrative agency is … Continue reading

While the “normative” question has garnered much attention, the “inherently judicial” restriction has not. To date, while the Texas Supreme Court has labeled a few types of claims “inherently judicial,” it has not explained what work the words do or what they mean. And the federal doctrine of primary jurisdiction does not even ask the “inherently judicial” question.[10]See, e.g., Occidental Chem. Corp. v. La. Pub. Serv. Comm’n, 810 F.3d 299, 309 (5th Cir. 2016) (“No fixed formula exists for applying the doctrine of primary jurisdiction. In every case the … Continue reading So, this article quickly traces the development of the “inherently judicial” restriction and provides thoughts on what the “inherently judicial” restriction might mean under Texas law.

The “inherently judicial” restriction has an interesting, intermittent past in the Texas Supreme Court. In early cases, it was noted, reiterated, and called an “exception” to primary jurisdiction.[11]See Amarillo Oil Co. v. Energy-Agri Prods., Inc., 794 S.W.2d 20, 26 (Tex. 1990); Foree, 431 S.W.2d at 316; State v. Harrington, 407 S.W.2d 467, 474 (Tex. 1966); Gregg, 344 S.W.2d at 415-16. Then, for decades, the restriction disappeared from the Texas Supreme Court’s jurisprudence; it was simply was not mentioned in primary jurisdiction cases.[12]See Kallinen v. City of Houston, 462 S.W.3d 25, 28-29 (Tex. 2015); Sw. Bell, 226 S.W.3d at 403-04; Butnaru v. Ford Motor Co., 84 S.W.3d 198, 208 (Tex. 2002); Subaru, 84 S.W.3d at 220-21; Cash, 35 … Continue reading That stint ended in 2017. In Forest Oil Corp. v. El Rucio Land and Cattle Co., Inc., for the first time since 1990, the Texas Supreme Court reaffirmed that, “The doctrine of primary jurisdiction does not apply to claims that are inherently judicial in nature.”  [13]518 S.W.3d at 430  Of some interest, the court of appeals decision in Rucio had recited this notion in a footnote; but the Texas Supreme Court brought it to the fore.[14]See Forest Oil Corp. v. El Rucio Land & Cattel Co., Inc., 446 S.W.3d 58, 73 n.5 (Tex. App.—Houston [1st Dist.] 2014, pet. granted), aff’d, 518 S.W.3d 430 (Tex. 2017). Between 1990 and 2017, the Texas Supreme Court’s focus was on “the policies underlying the primary jurisdiction doctrine,” that is, the normative question.[15]Cash, 35 S.W.3d at 18.

One can speculate on why the inherently judicial restriction went unmentioned by the high court for so long—a subtle attempt at conformity with federal law, the subsuming of the “inherently judicial” inquiry within the “normative” analysis, or the granting of petitions for review on cases that just did not implicate it. Whatever the explanation, the inherently judicial restriction has returned, and the Texas courts of appeals never stopped applying it.[16]The “inherently judicial” restriction remained alive and well in the Texas courts of appeal. See, e.g., Ring Energy v. Trey Res., Inc., 546 S.W.3d 199, 212 (Tex. App.—El Paso 2017, no pet.); … Continue reading So what does it mean?

The Texas Supreme Court has given substantive commentary in only two opinions. In Gregg, the Court simply noted, without explanation, that a “question of trespass” is inherently judicial.[17]344 S.W.2d at 415. However, in an important footnote, the Court expressed skepticism about whether primary jurisdiction should encroach on the traditional realm of judicial competence.[18]Id. at 413 n.5. It noted, “There are good arguments that the rule of ‘primary jurisdiction’ has been carried at least far enough, particularly where the question is essentially judicial in nature.”[19]Id Quoting law review articles, the Court worried:

The trouble is that if the primary jurisdiction rule is to apply whenever there is an expert adjudicating body available, then the rule must have unlimited applicability in the regulated industries. Logically, this leaves the courts no jurisdiction in that area at all.[20]Id. (quoting Israel Gonvisser, Primary Jurisdiction: The Rule and its Rationalizations, 65 Yale L.J. 315, 329 (1956)

Gregg offers two clues about what “inherently judicial” means. First, trespass questions are “inherently judicial.” Second, the worry animating the inherently judicial restriction was that administrative agencies would come to oust the courts of jurisdiction in regulated areas (which, today, implicates most industries).

Nearly fifty years later, in Rucio, the Court devoted two paragraphs to the inherently judicial restriction.[21]518 S.W.3d at 429-30. It concluded that trespass, negligence, negligence per se, fraud, assault, intentional battery, and breach of contract claims (labeled “common-law claims”)—as pleaded—‌were “all inherently judicial” because they did not depend “on the standards of regulatory compliance” and the regulatory regime did not otherwise “supplant [the] common-law duties.”[22]518 S.W.3d at 430. Rucio thus provides further clues. First, claims that turn on “common-law duties” (as trespass in Gregg) have been deemed “inherently judicial.” Second, the “inherently judicial” restriction has some relationship to “standards of regulatory compliance” and duties created by a regulatory regime, as opposed to duties recognized by the common law.

Piecing these jurisprudential clues together, a rule seems to emerge that “inherently judicial” means those matters which would exist absent the regulatory regime because of independent footing in the common law (or presumably some other, non-regulatory source, like a statutory action). This rule protects the core competence of courts while allowing primary jurisdiction to be invoked for issues contingent on the regulatory regime. Recent decisions from the Texas Supreme Court on exclusive jurisdiction lend some support to this rule formulation. For example, in two decisions—In re Texas-New Mexico Power Co. and In re CenterPoint Energy Houston Electric, LLC—the Court held that claims turning on common-law duties, as distinguished from regulatory duties, belong before the courts, not administrative agencies involved in the same subject matter.[23]See In re CenterPoint Energy Hous. Electric, LLC, No. 19-0777, 2021 WL 2671808, at *9 (Tex. June 30, 2021) (“[I]t is for a court—not the PUC—to decide whether the common law or statutes and … Continue reading

But there are problems. Notably, if “inherently judicial” refers to the packaging of the action—not substance and subject matter—plaintiffs will have great latitude to plead into the “inherently judicial” restriction given the malleability of common-law theories such as negligence and contract breach. Would that spell the end of primary jurisdiction in all but the most technical cases that likely fall within exclusive jurisdiction in any case? Moreover, what of tasks such as contract and statutory interpretation? Arguing that contract and statutory interpretation is not “inherently judicial” appears problematic; courts were interpreting contracts and statutes long before administrative agencies. In an appropriate case, such unresolved questions are ripe for consideration by the Texas Supreme Court.

*      *      *

The primary jurisdiction doctrine offers courts a tool with which to obtain an agency’s determination of issues within the agency’s special province. But the “inherently judicial” restriction, while yet to be fully expounded, appears to impose a substantial limitation on the primary jurisdiction doctrine’s usefulness under Texas law—one which does not exist in the federal version of the doctrine.[24]One practical note. A thorny choice of law question might well lurk given the substantive differences between the Texas and federal primary jurisdiction doctrines. See, e.g., Penny v. Sw. Bell Tel. … Continue reading Time will tell.

References

References
1 The primary jurisdiction doctrine has its origins in Texas & Pacific Railway Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 440-41 (1907) (White, J.).
2 344 S.W.2d 411 (Tex. 1961). The doctrine had been previously articulated in Kavanaugh v. Underwriters Life Ins. Co., 231 S.W.2d 753, 755 (Tex. App.—Waco 1950, writ ref’d).
3 See Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 220-22 (Tex. 2002).
4 See id.
5 See id
6 See id. at 221 (“[T]he court should abate the lawsuit and suspend finally adjudicating the claim until the agency has an opportunity to act on the matter.”); e.g., In re Sw. Bell Tel. Co., L.P., 226 S.W.3d 400, 404 (Tex. 2007) (“Once the PUC has made its determinations regarding the interconnection agreements, then the trial court may proceed with its adjudicative function.”).
7 Cash Am. Int’l, Inc. v. Bennett, 35 S.W.3d 12, 18 (Tex. 2000) (“Primary jurisdiction is an administrative law doctrine that arises when a court and an agency have concurrent original jurisdiction over a dispute.”).
8 Gregg, 344 S.W.2d at 415.
9 Forest Oil Corp. v. El Rucio Land & Cattle Co., Inc., 518 S.W.3d 422, 429–30 (Tex. 2017). Another caveat is that primary jurisdiction does not arise “when the administrative agency is powerless to grant the relief sought and has no authority to make incidental findings which are essential to the granting of the relief.” Foree v. Crown Cent. Petro. Corp., 431 S.W.2d 312, 316 (Tex. 1968).
10 See, e.g., Occidental Chem. Corp. v. La. Pub. Serv. Comm’n, 810 F.3d 299, 309 (5th Cir. 2016) (“No fixed formula exists for applying the doctrine of primary jurisdiction. In every case the question is whether the reasons for the existence of the doctrine are present and whether the purposes it serves will be aided by its application in the particular litigation.”) (quotation omitted); Elam v. Kan. City S. Ry. Co., 635 F.3d 796, 811 (5th Cir. 2011) (same).
11 See Amarillo Oil Co. v. Energy-Agri Prods., Inc., 794 S.W.2d 20, 26 (Tex. 1990); Foree, 431 S.W.2d at 316; State v. Harrington, 407 S.W.2d 467, 474 (Tex. 1966); Gregg, 344 S.W.2d at 415-16.
12 See Kallinen v. City of Houston, 462 S.W.3d 25, 28-29 (Tex. 2015); Sw. Bell, 226 S.W.3d at 403-04; Butnaru v. Ford Motor Co., 84 S.W.3d 198, 208 (Tex. 2002); Subaru, 84 S.W.3d at 220-21; Cash, 35 S.W.3d at 18-19. While the Court did recite the “inherently judicial” proposition in Texas Rice Land Partners Ltd. v. Denbury Green Pipeline-Tex., LLC, it was in the eminent domain context. 363, S.W.3d 192, 198-99 (Tex. 2012).
13 518 S.W.3d at 430
14 See Forest Oil Corp. v. El Rucio Land & Cattel Co., Inc., 446 S.W.3d 58, 73 n.5 (Tex. App.—Houston [1st Dist.] 2014, pet. granted), aff’d, 518 S.W.3d 430 (Tex. 2017).
15 Cash, 35 S.W.3d at 18.
16 The “inherently judicial” restriction remained alive and well in the Texas courts of appeal. See, e.g., Ring Energy v. Trey Res., Inc., 546 S.W.3d 199, 212 (Tex. App.—El Paso 2017, no pet.); Mitz v. Tex. State Bd. of Veterinary Med. Examiners, 278 S.W.3d 17, 24 (Tex. App.—Austin 2008, pet. dism’d); In re Discovery Operating, Inc., 216 S.W.3d 898, 904 (Tex. App.—Eastland 2007, orig. proceeding); In re Apache Corp., 61 S.W.3d 432, 436 (Tex. App.—Amarillo 2001, orig. proceeding); SWEPI, L.P. v. Camden Res., Inc., 139 S.W.3d 332, 339 (Tex. App.—San Antonio 2004, pet. denied); City of Galveston v. Flagship Hotel, Ltd., 73 S.W.3d 422, 425 (Tex. App.—Houston [1st Dist.] 2002, no pet.); Legend Airlines, Inc. v. City of Fort Worth, 23 S.W.3d 83, 91 (Tex. App.—Fort Worth 2000, pet. denied); TCI Cablevision of Dallas, Inc. v. Owens, 8 S.W.3d 837, 849 (Tex. App.—Beaumont 2000, pet. dism’d).
17 344 S.W.2d at 415.
18 Id. at 413 n.5.
19 Id
20 Id. (quoting Israel Gonvisser, Primary Jurisdiction: The Rule and its Rationalizations, 65 Yale L.J. 315, 329 (1956)
21 518 S.W.3d at 429-30.
22 518 S.W.3d at 430.
23 See In re CenterPoint Energy Hous. Electric, LLC, No. 19-0777, 2021 WL 2671808, at *9 (Tex. June 30, 2021) (“[I]t is for a court—not the PUC—to decide whether the common law or statutes and regulatory actions provide the duty by which an electric utility’s tort liability must be judged.”); In re Texas-New Mexico Power Co., 625 S.W.3d 42, 44 (Tex. June 25, 2021) (holding that a “negligence claim asserted against [an] electric utility does not involve its rates, operations, and services” and thus falls outside the PUC’s exclusive jurisdiction”).
24 One practical note. A thorny choice of law question might well lurk given the substantive differences between the Texas and federal primary jurisdiction doctrines. See, e.g., Penny v. Sw. Bell Tel. Co., 906 F.2d 183, 187-88 (5th Cir. 1990) (applying Texas law and the “inherently judicial” limitation to a primary jurisdiction question).