Slay v. TEX. COM'N ON ENVIRONMENTAL QUALITY
351 S.W.3d 532
| Tex. App. | 2011Background
- Palmer Barge site is a seventeen-acre facility in Port Arthur with tanks containing hazardous substances.
- Ownership shifted to Union Texas, then to Chester L. Slay, Jr. and related trusts; Slay acted as operator for the site.
- TCEQ inspectors found benzene above safe levels in on-site tanks in 1999; EPA later designated the site as a Superfund site.
- TCEQ pursued penalties for five regulatory violations, based on its 2002 Penalty Policy, with ED proposing a total of $596,625 and ALJ recommending $1,500.
- TCEQ Commissioners issued a final order imposing $177,500; Plaintiffs challenged via APA sections 2001.038 and 2001.174 in district court.
- The district court held the Penalty Policy was not a rule and dismissed the 2001.038 claim for lack of jurisdiction but upheld the judicial-review claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court had jurisdiction over 2001.038 claim | Plaintiffs contend 2001.038 waives sovereign immunity for challenging a rule. | Penalty Policy is not a rule; 2001.038 does not apply post-final order. | District court lacked jurisdiction over 2001.038 claim |
| Whether Penalty Policy is a rule under APA | Penalty Policy constitutes a binding rule affecting private rights. | Penalty Policy is an enforcement guideline not a rule with binding effect. | Penalty Policy is not a rule |
| Whether the agency order is supported by substantial evidence | Penalties were overstated and calculations flawed; misapplied continuing events. | Record shows reasonable basis; evidence supports penalties within discretion. | Final penalties sustained; supported by substantial evidence |
| Whether retroactive application of Penalty Policy is unlawful | Using 2002 policy for 1999 violations is ex post facto. | Policy has no legal effect on private rights and does not retroactively bind. | Not retroactive; policy not controlling private rights |
| Whether alteration of ALJ findings by TCEQ was permissible | Modifications to ALJ conclusions were arbitrary and unsupported. | Amendments were based on record and explained; within agency discretion. | Amendments sustained; not arbitrary |
Key Cases Cited
- Pend Oreille Oil & Gas Co., Inc. v. Railroad Comm'n of Tex., 817 S.W.2d 36 (Tex. 1991) (substantial evidence standard and agency review framework)
- Entertainment Publ'ns, Inc. v. Texas Alcoholic Beverage Comm'n, 292 S.W.3d 720 (Tex. App.-Austin 2013) (noting when agency statements bind private parties; rule vs. guidance)
- Brinkley v. Texas Lottery Comm'n, 986 S.W.2d 764 (Tex. App.-Austin 1999) (internal management statements cannot bind private rights unless enforceable)
- Texas Logos, L.P. v. Texas Dep't of Transp., 241 S.W.3d 105 (Tex. App.-Austin 2007) (section 2001.038 standing and rule challenge principles)
- El Paso Hosp. Dist. v. Texas Health & Human Servs. Comm'n, 247 S.W.3d 709 (Tex. 2008) (APA notice-and-comment considerations in rule challenges)
- Combs v. City of Webster, 311 S.W.3d 85 (Tex. App.-Austin 2009) (jurisdictional pleading standards in APA challenges)