Texas Commission on Environmental Quality and Dos Repúblicas Coal Partnership v. Maverick County, City of Eagle Pass, Environmental Defense Fund, Walter Herring, Ernesto Ibarra, Gabriel De La Cerda, Mike Hernandez, Boulware and Anson Family, Ltd., and Maverick County Environmental and Public Health Association
No. 19-1108
Supreme Court of Texas
February 11, 2022
Argued October 27, 2021
In 2013, Dos Repúblicas Coal Partnership (DRCP) applied to the Texas Commission on Environmental Quality for renewal of a permit for wastewater discharge at a coal mine. TCEQ granted the permit. Years later, the primary question before this Court is whether, all along, DRCP was the correct permit applicant. We hold that it was.
The parties agree that TCEQ rules required both “the operator and the owner [of the facility]” to apply for a permit.
The court of appeals disagreed. Applying its precedent, it understood “operator” to mean “the entity responsible for [the] personal performance of causing the [facility] to function.” See Heritage on San Gabriel Homeowners Ass’n v. Tex. Comm’n on Env’t Quality, 393 S.W.3d 417, 430 (Tex. App.—Austin 2012, pet. denied). Because DRCP hired a contractor to personally perform the daily running of the mine, the court of appeals concluded that the contractor is the mine’s “operator” and therefore a required—but absent—permit applicant.
Applying the rule’s definition of “operator” to this case, we hold that substantial evidence supports TCEQ’s conclusion that DRCP—despite having contracted out the day-to-day running of the mine—remains “responsible” for the “overall operation” of the mine. The “personal performance” requirement proposed by Respondents imposes an additional limiting factor not dictated by the rules themselves. By requiring that a permit applicant have responsibility only for the facility’s overall operation, the rule is best read to reject—rather than embrace—the narrowing “personal performance” requirement that dictated the outcome below. The judgment of the court of appeals is reversed, and the case is remanded to that court for consideration of the parties’ remaining arguments.
I.
The Legislature authorized TCEQ to “issue permits and amendments to permits for the discharge of waste or pollutants into or adjacent to water in the state.”
Once TCEQ’s executive director determines an application is “administratively complete,” the applicant must provide public notice of its intent to obtain the permit.
In 2009, DRCP acquired a coal mine in Maverick County. It contracted with Camino Real Fuels, LLC (CRF) to “develop, construct, operate and perform on-going reclamation at the Mine and to remove and deliver coal from the Mine” to DRCP. The mine is near the City of Eagle Pass. Wastewater from the mine may flow into nearby waterways that feed into the Rio Grande River, from which the City gets its water supply. Because of these wastewater discharges, DRCP needed a TPDES permit. See
DRCP’s predecessor held a TPDES permit for the mine dating to 1994 (renewed in 2001, 2006, and 2011) that was set to expire on September 1, 2015. DRCP alone applied for the renewal of the permit. DRCP started the renewal process in September
In January 2014, TCEQ’s executive director determined DRCP’s application administratively complete. See
At relevant times during the administrative process, Maverick County, the City of Eagle Pass, the Environmental Defense Fund, Walter Herring, Ernesto Ibarra, Gabriel De La Cerda, Mike Hernandez, Boulware and Anson Family, Ltd., and the Maverick County Environmental and Public Health Association (collectively “Permit Contestants”) opposed the permit. See
On January 15, 2015, DRCP requested that TCEQ refer the application to SOAH for a contested case hearing.
In April 2016, the ALJs issued a proposal for decision (PFD), recommending TCEQ grant the permit with “the addition of a boron limit and a requirement that aluminum be monitored.” On the “operator” question, the ALJs found that DRCP was both the owner and the operator of the mine. They noted that while CRF performed the day-to-day work of running the mine, CRF was merely a contractor acting under DRCP’s direction. The ALJs acknowledged testimony that DRCP only had “financial responsibility” for the mine, while CRF had “operational responsibility.” They pointed to other evidence, however, tending to show that DRCP was responsible for the overall operation of the mine despite CRF’s responsibility for day-to-day activities:
DRCP is solely responsible for the acquisition and maintenance of all interests and rights in real property and the reserves, provides its requirements and expectations to CRF, approves every plan and budget prior to the incurrence of any costs by CRF, pays all actual costs during design and construction of the Mine, pays all operation costs during production at the Mine, and is required to retain, maintain, and comply with all permits.
PFD at 16. The ALJs also noted that a DRCP representative visits the mine daily to provide oversight.
TCEQ largely agreed with the PFD, but it found that the boron limit and aluminum monitoring requirements were unnecessary. See
contested case). DRCP intervened. Permit Contestants raised the same issues they raised before SOAH, with the addition of an objection to TCEQ’s modification of the PFD. The district court held that DRCP was not the mine’s operator and that TCEQ’s decision to the contrary “was not reasonably supported by substantial evidence considering the reliable and probative evidence in the record as a whole, and was arbitrary and capricious.” The district court affirmed TCEQ’s decision on all other issues. Cf.
Both sides appealed. 628 S.W.3d 497, 500 (Tex. App.—Austin 2019). DRCP and TCEQ appealed the “operator” issue. Id. Permit Contestants appealed on issues affirmed by the district court. Id. The court of appeals affirmed the district court’s holding that DRCP was not the “operator” of the mine. Id. Relying on its prior decision in Heritage v. TCEQ, 393 S.W.3d 417, the court of appeals understood “operator” to mean “the entity responsible for its personal performance of causing the [facility] to function.” 628 S.W.3d at 506. Applying this definition, the court of appeals concluded that substantial evidence did not support TCEQ’s finding that DRCP was the mine’s operator. Id. at 511. As a result, the application lacked the required applicant and should have been denied. Id. at 511–12. Having concluded that the permit should not have been granted regardless of its substantive content, the court of appeals held it lacked jurisdiction over the remaining issues regarding the content of the permit. It vacated the district court’s judgment as to those issues. Id. at 512.
TCEQ and DRCP ask this Court to reinstate TCEQ’s decision in its entirety. They argue that the court of appeals departed from the plain text of TCEQ’s administrative definition of “operator” by employing the court’s own definition. They also complain of the court of appeals’ application of the substantial-evidence rule. Permit Contestants contend that Heritage’s “more precise” definition of “operator” controls and, applying that definition, there is no substantial evidence to support TCEQ’s conclusion that DRCP is the mine’s operator. The parties also dispute whether the court of appeals should have—and, indeed, could have—addressed Permit Contestants’ remaining issues after ruling on the “operator” issue.
II.
Courts reviewing agency action under the Administrative Procedure Act may reverse or remand agency orders, and:
shall reverse or remand the case for further proceedings if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
(A) in violation of a constitutional or statutory provision;
(B) in excess of the agency’s statutory authority;
(C) made through unlawful procedure;
(D) affected by other error of law;
(E) not reasonably supported by substantial evidence considering the reliable and probative evidence in the record as a whole; or
(F) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.
The parties agree that we should review TCEQ’s conclusion that DRCP is the mine’s “operator” under subpart E,
III.
The parties’ arguments can be distilled into three questions: (1) how to define “operator”; (2) whether there was substantial evidence that DRCP is the mine’s “operator”; and (3) whether the court of appeals should have ruled on the remaining issues. We address each question in turn.
A.
Before we can apply the substantial-evidence rule to TCEQ’s decision that DRCP is the mine’s operator, we must understand the meaning of the word “operator,” as TCEQ’s rules use it. This definitional inquiry raises a predicate legal question, which we address de novo. See R.R. Comm’n v. Tex. Citizens for a Safe Future & Clean Water, 336 S.W.3d 619, 624 (Tex. 2011).
The Legislature conferred on TCEQ very broad discretion to set the requirements for permit applications of this sort. See
all information reasonably required by [TCEQ].” Id. The Legislature authorized TCEQ to promulgate rules governing TPDES permits. See
Courts interpret agency regulations “using the same principles we apply when construing statutes.” Patients Med. Ctr. v. Facility Ins. Co., 623 S.W.3d 336, 341 (Tex. 2021). The starting point is the rule’s plain text. TGS–NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 439 (Tex. 2011). As with statutes, when a rule “assigns a particular meaning to a term, we are bound by” it. Id. It is often stated that courts will uphold an agency’s interpretation of its own rule if the interpretation “is reasonable and does not contradict [the rule’s] plain language.” R.R. Comm’n, 336 S.W.3d at 625 (quotation omitted). Even so, courts must first determine what the rule’s text means before they can decide whether the agency’s interpretation contradicts the text. See, e.g., Harris Cnty. Appraisal Dist. v. Tex. Workforce Comm’n, 519 S.W.3d 113, 119 (Tex. 2017).
The rule at issue requires both “the operator and the owner [of the facility]” to apply for a TPDES permit.
§ 305.43(a).1 Another provision defines the term “operator” as “[t]he person
Following its precedent, the court of appeals understood “operator” to mean “the entity responsible for its personal performance of causing the facility to function.” 628 S.W.3d at 505 (quoting Heritage, 393 S.W.3d at 430). In Heritage, landowners challenged TCEQ’s order concluding that Waste Management was the “operator” of a landfill. 393 S.W.3d at 422, 426.2 The court of appeals agreed with TCEQ. In so
doing, it relied on dictionary definitions of “operates”—“to cause to function usu[ally] by direct personal effort”—and “operation”—“doing or performing especially of action.” 393 S.W.3d at 428–30 (citing WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY (2002)). After lengthy analysis, the court summarized its understanding of “operator” using the “personal performance” language quoted above. Id. at 430.3
It bears noting that Heritage affirmed TCEQ’s decision that Waste Management was the “operator” and therefore the correct applicant. When Heritage is read in its context, as all judicial decisions should be, the court employed the “personal performance” concept not to exclude parties from the definition of “operator” but to explain why the definition included Waste Management. And it did so within a statutory scheme that gives TCEQ remarkably broad discretion to determine which entities must file applications. See
Nevertheless, the court of appeals below applied the “personal performance” paraphrase as if it were the governing definition of “operator.” Applying Heritage in this way was error. A judicial paraphrase of a legislatively supplied rule of decision—no matter how well-reasoned or suitable to the case then before the court—does not become the rule of decision applicable to future cases. That role is reserved for the text chosen by the Legislature—or, in this case, by an
agency acting with the Legislature’s permission. See PHI, Inc. v. Tex. Juv. Just. Dep’t, 593 S.W.3d 296, 305 (Tex. 2019) (holding that a description of a statute in a judicial “opinion is not itself the rule of decision. That role is reserved for the statute.”).
Here, the governing definition of “operator,” to which courts are not free to add or subtract verbiage, is “[t]he person responsible for the overall operation of a facility.”
So what does it mean to be “responsible for the overall operation of the facility”? Permit Contestants argue that “operation” entails “flipping the switches”—personally performing the tasks required to operate the facility. TCEQ and DRCP, on the other hand, argue that “operation” entails the ultimate authority to make decisions about how the facility will be operated. In a vacuum, neither is an unreasonable understanding of the word “operation.” But we are not in a vacuum. We are applying the text of the rule. And the rule itself tells us what kind
of operation it envisions—“overall operation.” We need look only at the modifier “overall,” a word chosen by the rulemakers, to resolve the parties’ disagreement about the rule’s meaning.4
The question, properly framed, is not what “operation” means. Looking at the entire definition, the questions are what “overall operation” means, and what it means to be “responsible” for it. When we focus on all the words contained in the rule—not on dictionaries defining one of them—it becomes clear that TCEQ’s approach is well-supported by the text of its rule. The court of appeals erred by excluding from “operator” those entities who are responsible for overall operations even though they may not conduct daily operations.5
facility.” In other cases, undue focus on these extraneous words might inject limiting or expanding factors not justified by the text of the rule. If TCEQ wants to amend its rules’ definition of “operator” to include these additional concepts, it should do so through the appropriate process, not through litigation.
B.
We next address whether substantial evidence supports TCEQ’s conclusion
In the Findings of Fact section of its Order granting the permit, TCEQ concluded the following:
40. Based on the Contract Mining Agreement signed by Mr. Gonzalez Saravia Coss, DRCP is solely responsible for the acquisition and maintenance of all interests and rights in real property and the reserves, provides its requirements and expectations to CRF, approves every plan and budget prior to the incurrence of any costs by CRF, pays all actual costs during design and construction of the Eagle Pass Mine, pays all operation costs during production at the
Eagle Pass Mine, and is required to retain and maintain all permits.
41. DRCP has an office in Eagle Pass, and a DRCP representative visits the site on a daily basis to oversee all the functions for which it has responsibility.
42. DRCP has ownership and control of mine operations, including activities subject to the TPDES permit; has responsibility over permit compliance, including the TPDES permit; is integrally involved in the activities at the Eagle Pass Mine; and has financial responsibility over the operations at the Eagle Pass Mine.
Based on these findings of fact, TCEQ concluded that DRCP was the proper permittee as both the mine’s owner and its operator.
Permit Contestants object to TCEQ’s conclusion primarily because, in their view, it cannot be squared with Heritage’s emphasis on personal performance, which they contrast with financial responsibility or high-level oversight. We have already explained why the court of appeals should not have viewed “operation” as entailing only personal performance. Any analysis of the evidence through the Heritage lens is therefore unhelpful, and this renders most of Permit Contestants’ arguments about the evidence inapposite.6 As explained above, the rule’s definition of “operator” includes the decision-making entity with responsibility for overall operations, even if that entity is not personally performing the operations. This understanding of who qualifies as an
“operator” must inform the inquiry into whether substantial evidence supports the conclusion that DRCP is one.
Viewing the record as a whole and employing an understanding of “operator” based solely on the rule’s text, we
all the functions for which [DRCP] has responsibility.” See TCEQ Order, Findings of Fact at 5, findings 40–42.9
All of this evidence together demonstrates “a reasonable basis in the record” on which TCEQ could have concluded that DRCP is not merely a passive owner who has given responsibility for overall operations to someone else. Instead, substantial evidence supports TCEQ’s conclusion that DRCP was the entity “responsible for the overall operation of the facility” and therefore the correct permit applicant.
C.
Permit Contestants raised several other objections to substantive elements of TCEQ’s decision, such as whether TCEQ properly conducted its “antidegradation review” and whether the permit should impose stricter limits on aluminum and boron. The district court affirmed TCEQ’s decision on all these issues.
After holding DRCP was not the mine’s operator and thus the incorrect permit applicant, the court of appeals decided it could not reach the remaining issues and vacated the part of the district court’s judgment addressing them. 628 S.W.3d at 512. The court of appeals held that addressing the remaining issues would amount to rendition of an advisory opinion. For this proposition, it cited only the general prohibition on advisory opinions. See Valley Baptist Med. Ctr. v.
Gonzalez, 33 S.W.3d 821, 822 (Tex. 2000) (“Under article II, section 1 of the Texas Constitution, courts have no jurisdiction to issue advisory opinions.”).
The APA provides that a court reviewing an agency decision after a contested case “may affirm the agency decision in whole or in part.”
“The distinctive feature of an advisory opinion is that it decides an abstract question of law without binding the parties.” Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 444 (Tex. 1993). We see nothing “abstract” in the parties’ ongoing, vigorous dispute over TCEQ’s
scientific and environmental findings regarding this mine. The parties are engaged in a lengthy, complicated, and very expensive administrative process, of which judicial review is but a part—and of which the parties’ scientific and environmental disputes are but a part. Cases like this one frequently bounce back and forth between the agency and the courts or between levels of the court system. It may turn out, when the dust settles, that one element or another of a court’s decision ended up being irrelevant to the ultimate outcome. That does not mean the court lacked jurisdiction to decide that part of the case. Even assuming the remaining issues were rendered superfluous by the court of appeals’ resolution of the “operator” question, the possibility remained that this Court would take a different view of the “operator” question, as we have done. The dispute over the remaining issues therefore remained live, and its resolution still impacted the parties’ rights—even though the extent to which it did depended on how the case progressed in the future. Resolving the remaining issues would not have amounted to an advisory opinion by the court of appeals.10
The prudential practice of courts to decline to reach issues not necessary to the disposition of a case should not be confused with the constitutional prohibition on advisory opinions. There is overlap between
Petitioners argue the court of appeals was obliged to reach the remaining issues. It observes that the APA allows courts of appeals to “affirm the agency decision . . . in part.”
TCEQ further contends that the court of appeals was obligated by Rule of Appellate Procedure 47.1 to reach the remaining issues. Rule 47.1 requires courts of appeals to “hand down a written opinion that . . . addresses every issue raised and necessary to final disposition of the appeal.” TCEQ argues that resolution of the remaining issues was “necessary to final disposition of the appeal” because the improper-applicant problem did not infect the entire proceeding. TCEQ suggests the improper-applicant problem can be fixed on remand to the agency without necessarily disturbing TCEQ’s findings on other matters, although it does not clearly state how this would happen. Permit Contestants disagree. They argue that, if the applicant is improper, the entire process has been for naught and must be completely redone. If that is true, as they argue, then it was not necessary for the court of appeals to review TCEQ decisions that would need to be decided anew in a second proceeding.
We need not resolve this dispute, which raises doubtful questions of administrative procedure that would be better decided by this Court on more complete briefing. One way or another, the court of appeals’ judgment will be reversed, and this case will be remanded to the court of appeals for consideration of the remaining issues. Whether the court of appeals was obligated by Rule 47.1 to address those issues in the past, it appears it will be obligated to address them in the future—assuming the parties maintain their current positions.
Finally, TCEQ and DRCP ask this Court to address the remaining issues without the benefit of the court of appeals having done so. “When presented with an issue the court of appeals could have but did not
decide, we may either remand the case or consider the issue ourselves.” RSL Funding, LLC v. Newsome, 569 S.W.3d 116, 124 (Tex. 2018) (citing TEX. R. APP. P. 53.4). “[O]rdinarily a case will be remanded to the court of appeals for further proceedings when we reverse the judgment of the appeals court and the reversal necessitates consideration of issues raised in but not addressed by that court.” State v. Ninety Thousand Two Hundred Thirty-Five Dollars & No Cents in U.S. Currency ($90,235), 390 S.W.3d 289, 294 (Tex. 2013). We conclude that our review of these issues, if it becomes necessary, would benefit from the court of appeals having addressed them first. We will take the ordinary course and remand the remaining issues for consideration by the court of appeals.
IV.
The judgment of the court of appeals is reversed. The part of the district court’s judgment vacated by the court of appeals is reinstated without regard to the merits. The case is remanded to the court of appeals for further proceedings consistent with this opinion.
James D. Blacklock
Justice
OPINION DELIVERED: February 11, 2022