In the Courts

Water Cases

Milton v. United States, 36 F.4th 1154 (Fed. Cir. 2022).

In this case, landowners and corporations downstream from Barker Dam and Addicks Dam on the Buffalo Bayou (the “Landowners”) sued the United States (the “Government”) in the Court of Federal Claims and asserted takings claims due to property damage resulting from controlled flooding by the U. S. Army Corps of Engineers (“USACE”) during Hurricane Harvey. The Barker Dam and Addicks Dam were built to control flooding in Buffalo Bayou with large reservoirs behind each for flood control. Due to the extensive rainfall during Hurricane Harvey, the USACE started releasing water from the dams, resulting in millions of dollars in property damage, with some properties being flooded for more than 11 days, and some properties being flooded with water reaching 8 feet above the first floor. The Landowners alleged that the flooding constituted a taking of their property as flowage easements.

The Government filed motions to dismiss and for summary judgment against the Landowners, arguing that neither Texas law nor federal law recognized the Landowners’ claims. When the lower court granted the motions in favor of the Government, the Landowners appealed the decision to the Federal Circuit Court of Appeals.

The Court of Appeals analyzed several issues, including whether the Government was immune from the Landowners’ claims and whether the Landowners identified a cognizable property interest. After a thorough analysis of each point by the Government, the Court of Appeals reversed the lower court and determined that the Government was not protected against the Landowners by sovereign immunity, and that “the Court of Federal Claims erred in concluding that Appellants failed to assert a cognizable property interest.” The Court of Appeals remanded the case for further proceedings on the Landowners’ takings claims.

Post Oak Clean Green Inc. v. Guadalupe Cnty. Groundwater Conservation Dist., No. 04-21-00087-CV, 2022 WL 2135546 (Tex. App.—San Antonio Jun. 15, 2022, no pet. h.).

Post Oak Clean Green, Inc. filed an application with the Texas Commission on Environmental Quality (“TCEQ”) for a permit to construct and operate a landfill located within the boundaries of the Guadalupe County Groundwater Conservation District (the “District”). The District objected to the landfill, arguing that the location of the proposed landfill would violate its Rule 8.1, which states, “In no event may waste or sludge be permitted to be applied in any manner in any outcrop area of any aquifer within the . . . District.” During the next five years, Post Oak and other intervening parties, including the District, participated in TCEQ’s administrative review process of Post Oak’s permit application.

Ultimately, TCEQ issued an order authorizing Post Oak to construct and operate the landfill at the proposed site. The District, in turn, filed an administrative appeal to overturn the TCEQ’s order. The District also sued Post Oak in a separate lawsuit asserting a claim under the Uniform Declaratory Judgments Act (“UDJA”). The District’s UDJA claim requested a declaration that the District’s Rule 8.1 prohibited construction of the proposed landfill. TCEQ intervened in the District’s lawsuit against Post Oak. Together, TCEQ and Post Oak filed pleas to the jurisdiction alleging, among other things, that the redundant remedies doctrine barred the District’s request for declaratory relief. When the trial court denied the pleas to the jurisdiction, TCEQ and Post Oak appealed the decision.

On appeal, the Fourth Circuit Court of Appeals reversed the trial court’s decision and concluded that the redundant remedies doctrine barred the District’s UDJA claim. Under the redundant remedies doctrine, courts will not entertain an action brought under the UDJA when the same claim could be pursued through different channels. Even though the District claimed that the relief sought by its UDJA claim and its administrative appeal were different, the court concluded that the claims sought the same relief: blocking Post Oak’s landfill. Because the District’s UDJA claim sought the same relief as its administrative appeal, the court dismissed the UDJA claim for lack of jurisdiction under the redundant remedies doctrine.

Louisiana v. Am. Rivers, 142 S. Ct. 1347 (2022).

The U.S. Supreme Court recently issued an emergency order temporarily reinstating the Trump Administration’s 2020 Rule governing EPA’s Clean Water Act Section 401 Certification Rule, codified at 40 C.F.R. Part 121. The Court’s decision stays an order by the Northern District of California to vacate the 2020 Rule, pending the Ninth Circuit’s ruling on appeal. A group of states and industry organizations, claiming they would “otherwise suffer irreparable harm,” had asked the Supreme Court to stay the Northern District of California’s order, and the Supreme Court granted the stay in a one-paragraph opinion. The opinion did not provide any justification for the stay. Justice Kagan dissented, observing that the applicants did not “cit[e] a single project that the court’s ruling threatens, or is likely to threaten, in the time before the appellate process concludes.” Even if the 2020 Rule is upheld by the Ninth Circuit, the EPA is working to revise the rule and restore power to states and tribes. On June 9, EPA released a proposal to revoke the 2020 Rule.

Litigation Cases

TCEQ does not have jurisdiction to adjudicate surface water right disputes.

Pape Partners, Ltd. v. DRR Fam. Prop. LP, No. 21-0049, 2022 WL 1592723 (Tex. May 20, 2022).

On May 20, 2022, the Texas Supreme Court held that the Texas Commission on Environmental Quality (“TCEQ”) does not have jurisdiction to adjudicate conflicting claims of ownership to surface water rights, and these claims are the responsibility of the courts.

Pape Partners and related parties bought a 1,086-acre farm in McLennan County from Lola Robinson, including the right to divert water from the Brazos River for irrigation under a permit that TCEQ issued to Robinson years prior. Originally these water rights were in two permits, but were consolidated into one permit that included an adjacent tract with appurtenant water rights that Robinson had previously owned. That tract was later sold to DRR Family Properties. TCEQ updated its records in response to chain-of-title documentation submitted by Pape, DRR, and other nearby landowners. The update reflected Pape’s right to irrigate only 821 acres.

Pape filed suit in district court, seeking a declaration that it owned surface water rights to the entire 1,086-acre farm. DRR moved to dismiss the claims for lack of subject-matter jurisdiction, arguing that TCEQ has exclusive jurisdiction to determine ownership of surface water rights.

The Supreme Court explained the presumption in favor of district court jurisdiction and the corresponding rule that an agency may only exercise powers delegated by the Legislature in clear and express statutory language. The Court then turned to Chapters 5 and 11 of the Water Code. The Court explained that the inclusion of “water rights adjudication” in Section 5.013(a) refers to the Water Rights Adjudication Act in Chapter 11. The provisions of Chapter 11, in turn, demonstrate that water-rights adjudication is a term of art for TCEQ’s process of allocating the rights to the water of a particular source through permits. That process, which is outlined in Chapter 11, requires a district court to determine all issues of law and fact independently of TCEQ. Nothing in the statute gives TCEQ the authority to decide conflicting claims to water rights acquired with the title to land.

Bottom line: The TCEQ process for surface water rights adjudication is limited. If there is a dispute about who owns the water rights, that dispute must be taken to court through a trespass to try title action.

Street lights are a governmental function, and hence immunity applies.

City of Austin v. Findley, No. 03-21-00015-CV, 2022 WL 1177605 (Tex. App.—Austin Apr. 21, 2022, no pet. h.).

Faced with very limited waivers of governmental immunity, plaintiffs are increasingly challenging governmental actions as being “proprietary,” and hence not protected by immunity.

In Findley, the plaintiffs argued their injuries were due in part to the City’s failure to properly illuminate the area near train tracks. They sued the City, arguing that street illumination was a proprietary function, and that immunity therefore did not attach.

The court explained that proprietary functions of a City are not protected by governmental immunity, but governmental functions and activities that are closely related or necessary to those governmental functions are protected by governmental immunity. Although Plaintiffs claimed the provision of street lighting qualified as operation of a public utility and was therefore a proprietary function, the court agreed with the City’s argument that the provision of street lighting was closely related to two listed governmental functions in the Torts Claims Act (TTCA), street construction and design and regulation of traffic. The court cited evidence in the case that showed the purpose of the City’s provision of street lighting was to assist drivers.

The court also distinguished this case from a prior case involving unmaintained power lines that arced and caused a fire (City of Austin v. Liberty Mutual). The court indicated that in Liberty Mutual, the injury resulted from the maintenance and operation of power lines as a public utility, which is a proprietary function and not protected by governmental immunity, as opposed to the street lighting plan that had the stated purpose of providing adequate lighting for drivers to navigate the road safely, which is closely related to two government functions and is protected by governmental immunity.

Bottom line: Most things cities do will be within their governmental functions. But they should be aware that there continues to be liability for actions that are within their proprietary powers.

Supreme Court declines to stay agency use of interim cost of carbon to set federal policy.

Louisiana v. Biden, No. 2:21-CV-01074, 2022 WL 438313 (W.D. La. Feb. 11, 2022) (issuing preliminary injunction).
Louisiana v. Biden, No. 22-30087, 2022 WL 866282 (5th Cir. Mar. 16, 2022) (issuing stay of preliminary injunction pending ongoing appeal).
Louisiana v. Biden, No. 21A658, 2022 WL 1671759 (U.S. May 26, 2022) (denying application to vacate stay of preliminary injunction).

On May 26, 2022, the Supreme Court of the United States denied an application to vacate the 5th Circuit stay on a preliminary injunction against agencies using the interim social cost of greenhouse gases to set federal policy. The denial was issued without comment and allows the continued use of this metric, pending the outcome of the appeal in front of the 5th Circuit based on the substance of the case.

The dispute began after President Biden issued an executive order reforming the Interagency Working Group on the Social Cost of Greenhouse Gases, granting them authority to issue estimates on the social cost of greenhouse gases and requiring federal agencies to consider these estimates in their cost-benefit analysis for new regulations and policy decisions.

In February 2021, the group issued new interim estimates, returning to the 2016 estimates while adjusting for inflation. Louisiana and nine other states, including Texas, challenged this executive order and asked for a preliminary injunction on the implementation of the interim estimates. The States argued that (1) the estimates were not created through the requisite notice-and-comment process under the Administrative Procedures Act (APA), (2) the President and federal agencies lack the authority to enforce these estimates as they are substantively unlawful, and (3) the Government Defendants acted outside of their authority by basing policy on global considerations. After finding that the States had standing, the interim estimate was reviewable, and the States would likely succeed on the merits, the District Court granted the preliminary injunction.

The Government Defendants appealed to the 5th Circuit and asked the court to stay the injunction pending the appeal before the 5th Circuit. The Government argued that the States lacked standing, their claims were not ripe, and the interim estimates are not reviewable since they are not final agency action under the APA. The 5th Circuit granted the stay on the preliminary injunction, stating that the Government Defendants were likely to succeed on the merits since the States lack standing. The court reasoned that the injury to the States is merely hypothetical, since the claims are based on speculative regulations that may result from including these interim estimates as one of many factors and may place an increased burden on the States. Additionally, the alleged injury is untraceable to a specific agency action as one of many factors, and the States did not challenge a specific regulation or action. The 5th Circuit also noted that the preliminary injunction would cause more harm to the Government than the stay of the injunction would cause to the States. The appeal based on the substance of the case is before the 5th Circuit.

Bottom line: With the United States Supreme Court denying the application to vacate the stay of the preliminary injunction, the interim estimates of the social costs of greenhouse gases will continue to be used by agencies as a factor when conducting a cost-benefit analysis during rulemaking procedures, pending the outcome of the ongoing appeal.

GOVERNMENTAL IMMUNITY – Whistleblower Act:

City of Fort Worth v. Pridgen, No. 20-0700, 2022 WL 1696036 (Tex. May 27, 2022).

On May 27, 2022, the Texas Supreme Court addressed the proper interpretation of a “good faith report of a violation of law” under the Texas Whistleblower Act. Primarily, this case focused on determining if the actions of two employees constituted a “report.”

Pridgen and Keyes were veteran law enforcement officers employed by the Fort Worth Police Department responsible for investigating allegations of police misconduct. In December 2016, a video depicting Officer William Martin’s forceful arrest of a woman and her daughter went viral. Pridgen and Keyes investigated the incident, concluding that Officer Martin committed several criminal violations and should be terminated. They assert they reported these recommendations to their supervisor, Chief Fitzgerald, on multiple occasions.

Several months later, Officer Martin’s previously undisclosed body camera video and other confidential files were released and posted on a public website. After an investigation into the source of the leak, Internal Affairs concluded that Pridgen had downloaded the files to a thumb drive and that Keyes had been in Pridgen’s office at the time of the download. Pridgen and Keyes were placed on detached duty and demoted.

Pridgen and Keyes sued the City under the Texas Whistleblower Act, alleging the City took adverse action against them in response to their “good faith reports” of Officer Martin’s alleged “violations of law.” The City claimed Pridgen and Keyes failed to allege facts necessary to waive governmental immunity. The City also claimed that Pridgen and Keyes did not “in good faith report a violation of law,” because (1) they merely conveyed “their opinions” regarding internal policies and the consequences they believed were appropriate, and (2) they lacked a subjectively and objectively reasonable belief that Martin violated the law.

The Supreme Court agreed with the City, holding that a “report” requires the provision of information as opposed to mere conclusions or opinions. The Whistleblower Act is aimed at finding and addressing government mismanagement as a matter of public interest, so a public employee must convey information that furthers this purpose by exposing or corroborating a violation of law or otherwise provide relevant, additional information that will help identify or investigate illegal conduct. The Court also held that the Act’s “good faith” limitation applies to all the Act’s components, including the “report” requirement. The Court rejected the City’s arguments that (1) to “report” under the Act, an employee must “disclose” new information, and (2) information conveyed as part of an employee’s job duties does not constitute a “report.” Although a disclosure of new information can be a report, it is not the only type of communication protected by the Act. Public employees in positions that investigate misconduct are best positioned and equipped to convey information regarding government illegality.

However, the Court determined that Pridgen and Keyes failed to “report” under the Act because (1) their “reports” were not geared toward exposing, corroborating, or otherwise providing information pertinent to identifying or investigating governmental illegality, and (2) they did not “corroborate” any facts that were unverified or subject to dispute. The Court concluded that these recommendations amount to conclusions and opinions that do not trigger the Act’s protections. Therefore, the Act does not waive the City’s immunity from suit.

Bottom line: City of Fort Worth v. Pridgen confirms that the waiver of immunity by the Texas Whistleblower Act is fact-specific. In order to be strong enough to waive immunity, a report must convey information that exposes or corroborates a violation of law or otherwise provide relevant, additional information that will help identify or investigate illegal conduct.

Cutting off utility service for non-payment is not a constitutional taking.

City of Baytown v. Schrock, No. 20-0309, 2022 WL 1510310 (Tex. May 13, 2022).

On May 13, 2022, the Texas Supreme Court held that there was no evidence of a regulatory taking by the City of Baytown when the city refused to connect utility services to Schrock’s property because of past-due utility bills for services provided to a previous tenant. Schrock owns a rental property and lost a tenant after the city refused to connect utilities. Instead of paying the past-due amount and getting the utilities reconnected, Schrock sued the city, claiming that the refusal to connect utilities constituted a taking in violation of the Texas or United States Constitution.

The Supreme Court of Texas, following its decision in City of Houston v. Carlson, 451 S.W.3d 828 (Tex. 2014), concluded that the city’s enforcement action did not regulate land use in a manner that constituted a taking or permanently deprived Schrock of his property. Additionally, the city’s ordinance was unrelated to land use, and it provided a means to redress the enforcement actions related to the past-due bills. For these reasons, this was not a regulatory taking.

In a concurrence, Justice Young wrote to address the scope of takings under the Texas Constitution and suggest lack of causation as an additional reason for reversing the court of appeals’ judgment.

While the city ordinance prohibiting the connection of new utility service at properties encumbered by outstanding utility bills was in violation of Texas Government Code Section 552.0025, the enforcement of the ordinance did not constitute a regulatory taking, so it did not waive governmental immunity.

Bottom line: The most interesting thing about this case—aside from the query about what type of litigant would leave a rental property unoccupied for years to pursue litigation rather than pay a past-due utility bill—is Justice Young’s concurrence. Justice Young posits that the Texas Constitution provides broader protection against takings than does the United States Constitution. The exact practical effect of that observation is unanswered. But Justice Young expressly invites litigants in the future to explore that issue, implicitly signaling an openness to a broader view of takings jurisprudence.

Supreme Court outlines discretion to interpret statutes for purposes of ultra vires claims.

Van Boven v. Freshour, No. 20-0117, 2022 WL 1815048 (Tex. June 3, 2022).

Schroeder v. Escalera Ranch Owners’ Ass’n, Inc., No. 20-0855, 2022 WL 1815042 (Tex. June 3, 2022).

Jones v. Turner, No. 21-0358, 2022 WL 1815031 (Tex. June 3, 2022).

On June 3, 2022, the Texas Supreme Court issued three opinions clarifying (maybe?) the scope of the ultra vires exception to governmental immunity.

In the first, the Court held that the Texas Medical Board acted ultra vires by revising a temporary sanction against a physician in the National Practitioner Data Bank instead of voiding it after the Board found the allegations unproven.

The case began when two patients filed complaints against Dr. Van Boven. The Board temporarily restricted his license to practice medicine and reported the suspension to the National Practitioner Data Bank via an Initial Report, in accordance with the Department of Health and Human Services (“HSS”) Guidebook. The Guidebook requires an Initial Report to be filed when an adverse action is taken against a physician. A Void Report withdraws an Initial Report entirely and is used when the adverse action is “overturned on appeal.” A Revision-to-Action Report creates a separate action that pertains to the Initial Report but does not withdraw the Initial Report and is used to modify a previously reported adverse action.

Eighteen months after the restriction on Van Boven’s license was issued, an ALJ concluded the Board did not prove the allegations, and the Board issued a Final Order reinstating his medical license. Van Boven urged the Board to submit a Void Report, but the Board instead submitted a Revision-to-Action Report, causing the Initial Report to remain as part of the physician’s record.

Van Boven sought a writ of mandamus, arguing that the Board officials acted ultra vires. The Texas Supreme Court agreed with the physician, holding that the Board was not given absolute discretion to interpret the HHS’s reporting requirements, but instead was required by federal law to report information in the form and manner prescribed by HHS. The Court determined that while the Initial Report was not explicitly overturned, the temporary restriction was functionally overturned by the ALJ and the Final Order when both concluded that the basis for the order had not been proven. Since this superseded the temporary suspension, the Guidebook required a Void Report to be filed. By failing to file a Void Report, the Board acted ultra vires.

* * *

In another opinion issued on the same day, the Court held that the duty to interpret the Unified Development Code (“UDC”) had been committed to the discretion of a city’s planning commission. In Schroeder v. Escalera Ranch Owners’s Ass’n, the Court addressed the developer’s application to the City of Georgetown’s Planning and Zoning Commission for approval of a preliminary plat for a new subdivision. Escalera Ranch residents asserted that the plan would add excessive traffic to Escalera Parkway and did not conform to the City’s UDC. The Commission concluded the plat did conform to UDC requirements, so it had a duty under state law to approve the conforming plat.

The Escalera Ranch Owners’ Association sued the Commission members for mandamus relief, asserting that the plat was nonconforming. In a plea to the jurisdiction, the Commissioners argued that once they determined that the plat was conforming, they had a ministerial duty to approve the plat. The trial court granted the Commissioners’ plea.

The Supreme Court agreed with the Commissioners, concluding that governmental immunity protected the Commissioners’ determination of conformity. The Court explained that governmental immunity for the Commissioners had not been waived by statute, and the Association’s claim did not fall within the ultra vires exception. The Court reasoned that (1) there was no ministerial duty to deny a nonconforming plat, and (2) there was no clear abuse of discretion by the Commissioners because the Commissioners fully considered the proper materials, and the duty to interpret the UDC had been committed to the Commissioners’ discretion.

* * *

In the last ultra vires case of the term, the Texas Supreme Court held that taxpayers have standing to challenge alleged misallocation of tax revenue by city officials, and they sufficiently pleaded ultra vires acts by alleging the city officials had no discretion in so misallocating the funds.

Two Houston taxpayers sued city officials for allegedly underfunding the Dedicated Drainage and Street Renewal Fund established under the City Charter, which mandated that a certain amount of ad valorem tax revenue be spent “exclusively” on drainage and street maintenance. Taxpayers alleged that in Fiscal Year 2020 there was a shortfall of about $50 million to the Fund.

City Officials filed a plea to the jurisdiction asserting governmental immunity, arguing the pleadings did not show that they acted outside their authority. The trial court denied the plea to the jurisdiction.

The Supreme Court also disagreed with the City’s arguments and held that Taxpayers pleaded sufficient facts showing that public funds were expended on allegedly illegal activity. Their calculations showed a measurable misallocation and alleged that the money was spent on services that would not have received those funds if City Officials had allocated them properly. The Court also reviewed the immunity question and held that the Charter gave the City Officials no discretion in allocating these funds.

In this case, decided the same day as Van Boven and Schroeder, the Court further clarifies that government officials are not protected by governmental immunity when they act ultra vires and exercise discretion that is not granted through statute.

Bottom line: Distinguishing between Van Boven and Schroeder, the Court clarifies that a significant factor in determining whether an act falls within the ultra vires exception to governmental immunity is the level of discretion in the statute. In Van Boven, the governing statute did not grant discretion in determining which form to file with the Data Bank. In Schroeder, the UDC granted the Commission discretion to determine the plat’s conformity as long as it considered the proper factors. And in Jones, the City had no discretion in applying funds as set out by a formula in the City’s charter.

Air and Waste Cases

Builders Recovery Sers., LLC v. Town of Westlake, No. 21-0173, 2022 WL 1591976, (Tex. May 20, 2022).

In Builders Recovery Services v. Town of Westlake, the Texas Supreme Court held that general-law municipalities do not have authority to impose “gross revenue” based fees on waste service providers. Builder Recovery Services (“BRS”) is a construction site waste management company that contracts with Westlake. The town enacted an ordinance requiring waste management companies to obtain a license to operate in the town and pay a monthly license fee based on a percentage of BRS’ gross revenue. BRS brought a declaratory judgment action claiming that Westlake lacks authority to require a license or impose a licensing fee based on a percentage of BRS’s revenue. According to the Texas Supreme Court, general-law cities can require a license but can only assess fees that are calibrated to cover the cost of administration and oversight of the license.

Adkisson et al. v. Jacobs Eng’g Grp., Inc., No. 21-5801, 2022 WL 2115049 (6th Cir. 2022).

Jacobs Engineering Group Inc. (“Jacobs”) is a corporation that is wholly owned by the Tennessee Valley Authority (“TVA”), a federal governmental agency. The plaintiffs were injured during a coal ash cleanup, removal, and recovery project at the plant. A jury found that Jacobs was generally liable for its failure to
warn workers of the dangers of exposure to fly ash, failure to supply gas masks, and failure to implement other safety measures. Jacobs filed several motions seeking “derivative immunity from suit based on its status as a government contractor” before appealing to the 6th Circuit. The 6th Circuit affirmed the district court’s denial of Jacobs’s derivative immunity claims.

U.S. government entities generally have sovereign immunity from suit, and derivative immunity is available to government contractors for suits that arise from actions performed in a governmental capacity. However, the Court found that, in this case, the U.S. had waived its immunity from torts suits under the Federal Torts Claim Act. Therefore, since the TVA was not immune from the litigation, neither was Jacobs as a government contractor.

Ohio v. EPA, No. 22-1081 (D.C. Cir. filed May 12, 2022).

The Clean Air Act includes a waiver provision that allows states to adopt motor vehicle emissions standards that are as-strict or stricter than those set by EPA. This waiver was revoked by the Trump Administration in 2019 and subsequently reinstated by the Biden Administration in March 2022. Ohio, Texas, and several other states filed suit to challenge the EPA’s authority to reinstate the waiver. The states argue that EPA cannot selectively waive the Clean Air Act’s preemption for California alone because that favoritism violates the states’ equal sovereignty. California, several other cities and states, and a group of carmakers including Ford and BMW filed motions to intervene to protect the waiver.

The D.C. Circuit Court’s decision may have sweeping implications for greenhouse gas emissions standards across the nation. In the 54 years since Congress enacted the waiver provision in the Clean Air Act, the EPA has granted California almost every waiver sought, and 17 states have adopted its rigorous tailpipe emissions rules. At this time, the D.C. Circuit Court has not yet ruled on any of the motions to intervene or set a procedural schedule.

Utility Case

In our January 2022 newsletter, we addressed a Texas Supreme Court case asking whether certain statutory rules of construction should also apply to contested case orders: Public Utility Commission (“PUC”) and Southwestern Electric Power Company (“SWEPCO”), Petitioners, v. Texas Industrial Energy Consumers, et al., Respondents., No. 21-0817 (Tex. Sep. 20, 2021).

The case arises out of a PUC decision wherein the Commission found a 2008 order regarding SWEPCO’s Certificate of Convenience and Necessity (“CCN”) ambiguous as to whether carrying costs were included in the cap on capital costs. The Commission relied on evidence from the administrative record to find the cap was not intended to include carrying costs. The trial court affirmed the PUC final order. The Third Court of Appeals then reversed and remanded to the PUC for further proceedings based on an application of the “plain meaning” rule of construction.

The Petition argues against the Third Court of Appeal’s application, asserting that contested case orders should consider the evidentiary record.

Since January, TIEC and Cities Advocating for Reasonable Deregulation (“CARD”) have filed responses to the Petition. TIEC argues that “[t]he court of appeals properly gave effect to the plain language…” and “applied well-established and uncontroversial interpretative principles, including that unambiguous language should be given effect.” TIEC’s response focuses on the effect of reversing the court of appeals decision by predicting that such a decision “would leave agency orders open to constant reinterpretation, preventing orders in contested cases from ever becoming final.”

CARD makes a similar argument: “While an agency is entitled to interpret its own order for administrative purposes, it may not use the occasion to interpret the order to amend a prior final order.” Both TIEC and CARD assert that the Petition fails to present any issue warranting the Court’s review.

This case presents the question of what is acceptable, and perhaps required, in rendering contested case orders. Depending upon the answer, it may have lasting implications on the nature and interpretation of agency decisions. We will continue to update as this case continues to evolve.

“In the Courts” is prepared by James Muela in the Firm’s Water Practice Group; James Parker and Wyatt Conoly in the Firm’s Litigation Practice Group and Michelle White, a UT School of Law student; Jeff Reed in the Firm’s Air and Waste Practice Group and Lauren Alexander-Bachelder, a UT School of Law student; and Roslyn Dubberstein in the Firm’s Energy and Utility Practice Group. If you would like additional information or have questions related to these cases or other matters, please contact James at 512.322.5866 or jmuela@lglawfirm.com, or James at 512.322.5878 or jparker@lglawfirm.com, or Wyatt at 512.322.5805 or wconoly@lglawfirm.com, or Jeff at 512.322.5835 or jreed@lglawfirm.com, or Roslyn at 512.322.5802 or rdubberstein@lglawfirm.com.