Machete's Chop Shop, Inc. v. Texas Film Commission

483 S.W.3d 272, 2016 Tex. App. LEXIS 953, 2016 WL 368534
CourtCourt of Appeals of Texas
DecidedJanuary 29, 2016
DocketNO. 03-14-00098-CV
StatusPublished
Cited by16 cases

This text of 483 S.W.3d 272 (Machete's Chop Shop, Inc. v. Texas Film Commission) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Machete's Chop Shop, Inc. v. Texas Film Commission, 483 S.W.3d 272, 2016 Tex. App. LEXIS 953, 2016 WL 368534 (Tex. Ct. App. 2016).

Opinion

OPINION

Scott K, Field, Justice

Machete’s Chop Shop, Inc. (Machete) sued the Texas Film Commission (the Commission); the Music, Film, Television, and Multimedia Office (the Office), Office of the Governor; Heather Page, in her official capacity as Director of the Texas Film Commission; and Greg Abbott,1 in his official capacity" as Governor of the State of Texas, (collectively, the State Defendants), seeking declaratory relief regarding the Commission’s handling of Machete’s application for a grant from the State’s Moving Image’ Industry Incentive Program (the Program). See Tex. Civ. Prac. & Rem. Code §§ 37.001-.011 (UDJA). Machete also sought a declaration that- a statute and two rules governing the Program were unconstitutionally vague or, in the alternative/ that the rules were invalid as applied to Machete. See Tex. Gov’t Code § 2001.038 (permitting challenge to validity or applicability of agency rules). The State Defendants filed a plea to the jurisdiction, asserting that the suit was barred by sovereign immunity.2 The trial court granted,the plea to the jurisdiction without specifying the ground on which it relied and dismissed Machete’s claims against the State Defendants. Machete appeals. We will affirm the trial court’s judgment.

BACKGROUND

The Moving Image Industry Incentive Program is a grant program established by the Legislature and administered by the Music, Film, Television, and Multimedia Office3 for production companies that produce moving image projects in the state. See id. § 485.022(a). To qualify for a grant, a project must meet certain statutory requirements for levels of in-state spending, in-state filming, and employment of Texas residents. Id. § 485.023(l)-(3). Even if a production company meets those statutory requirements:

[276]*276the [0]ffice is not required to act on any grant application and may deny an application because of inappropriate content or content that portrays Texas or Texans in a negative fashion, as determined by the [0]ffice, in a moving image project. In determining whether to act. on or deny a grant application, the [Ojffice shall consider general standards of decency and respect for the diverse beliefs of the citizens of Texas.

Id. § 485.022(e). The Office assigned administration of the Program to the Commission which, pursuant to legislative directive, developed administrative rules to govern the procedure for the submission of grant applications and the awarding of Program grants. Id. § 485.022(b); 13 Tex. Admin. ■ Code §§ 121.1~.14 (2010) (Tex. Film Comm’n, Texas Moving Image Industry Incentive Program).4 As did the statute, the rules implementing the Program also permitted the Commission to deny a grant application based on “inappropriate content or content that portrays Texas or Texans in a negative fashion.” See Tex. Admin. Code § 121.4(b) (2010) (Tex. Film Comm’n, Ineligible Projects). Specifically, Rule 121.4(b) provided:

Not every project will qualify for a grant, The State of Texas is not required to make grants to projects that include inappropriate content or content that portrays Texas or Texans in a negative fashion. As part of the preliminary application process, the Texas Film Commission will review the content document, and will advise the potential applicant on whether the content will exclude the project from receiving a grant.

Id. Rule 121.14 also permitted the Commission to refuse to award grant money after a project’s completion. Rule 121.14(a) provided:

An applicant’s eligibility for funds can be revoked after the project is completed for reasons such as obscene or inappropriate content, failure to meet minimum qualification requirements, failure to provide requested documentation, providing false information, or inability to complete the project.

Id. § 121.14(a) (2010) (Tex. Film Comm’n, Revocation and Recapture of Incentives).

In 2009, Machete submitted an application for a grant in connection with its production of the feature film Machete. Thereafter, the Commission notified Machete that it had reviewed the application and “approved [it] for acceptance into the incentive program.” The Commission also advised Machete that “approval of an incentive application does not guarantee payment of incentive funds.”- The Commission’s director at the time, Bob Hudgins, also sent Machete a form titled “Initial Content Verification” in which the director stated that he had reviewed Machete’s initial content and attested that it fulfilled the initial content requirement for the Program.5 Hudgins also advised Machete that this assessment of the initial project content “pertain[ed] only to the qualification of the application” and that “[i]f the final content is determined to be in violation of the rules and regulations of the incentive program, the project [would] not be eligible to receive funds” from the Program.

After Machete was released in September 2010, Machete provided the Commis[277]*277sion information verifying its final in-state expenditures, in-state production days, and employment of Texas residents. According to Machete, Hudgins resigned his position as the Commission’s director effective November 30, 2010. On December 1, 2010, the Commission’s deputy director, Carol Pirie, sent Machete a letter stating that “[biased on the final review of content,. the feature MACHETE does not qualify for a grant from the Texas Moving Image Industry Incentive Program.” Pi-rie informed Machete that the determination not to award the grant was pursuant to Government Code subsection 485.022(e), which provided that the Commission “may deny an application because of inappropriate content or content that portrays Texas or Texans in a negative fashion, as determined by the office.” Tex. Gov’t Code § 485.022(e). According to Machete, Heather Page, Hudgins’s successor as the Commission’s director, ratified the denial of a Program grant based on Machete’s content.

In July 2013, Machete sped the Commission and Page, in her official capacity as the Commission’s director, and later amended its petition to add as defendants the Office, the Office of the Governor, and Abbott, in his official capacity as Governor of the State of Texas. Machete’s suit was brought pursuant to the UDJA and asserted that (1) Page and Abbott had acted ultra vires in denying Machete’s application for a Program grant; and (2) the phrase “substantial changes” in Government Code subsection. 485.022(f), the phrase “extreme difference” in Rule 121.4(c), and the criteria for revoking a project’s eligibility for a grant in Rule 121.14(a) were all impermissibly vague, both as written and as applied, in violation of the Due Process Clause of the Fourteenth Amendment to the United States Constitution and the Due Course of Law provision of the Texas Constitution. Machete also challenged the validity of Rules 121.4(c) and 121.14(a) on the ground that they were unconstitutionally vague and did not further the Program’s purpose. The State Defendants filed a plea to the jurisdiction seeking dismissal of the entire suit.

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Cite This Page — Counsel Stack

Bluebook (online)
483 S.W.3d 272, 2016 Tex. App. LEXIS 953, 2016 WL 368534, Counsel Stack Legal Research, https://law.counselstack.com/opinion/machetes-chop-shop-inc-v-texas-film-commission-texapp-2016.