CPS Energy, Time Warner Cable Texas LLC, and Southwestern Bell Telephone Company D/B/A AT&T// Public Utility Commission of Texas v. Public Utility Commission of Texas// Cross-Appellee, CPS Energy, Time Warner Cable Texas LLC and Southwestern Bell Telephone Company D/B/A AT&T

ACCEPTED

03-14-00340-CV

5210597

THIRD COURT OF APPEALS

AUSTIN, TEXAS

5/8/2015 12:32:17 PM

JEFFREY D. KYLE

CLERK

No. 03-14-00340-CV

IN THE THIRD COURT OF APPEALS FILED IN

3rd COURT OF APPEALS

AUSTIN, TEXAS AUSTIN, TEXAS

5/8/2015 12:32:17 PM

APPELLANTS, CPS ENERGY, TIME WARNER CABLE TEXAS

JEFFREY D. KYLE

LLC, AND SOUTHWESTERN BELL TELEPHONE COMPANY Clerk

D/B/A AT&T// CROSS-APPELLANT, PUBLIC UTILITY

COMMISSION OF TEXAS

V.

APPELLEE, PUBLIC UTILITY COMMISSION OF TEXAS// CROSS-

APPELLEE, CPS ENERGY, TIME WARNER CABLE TEXAS LLC

AND SOUTHWESTERN BELL TELEPHONE COMPANY D/B/A

AT&T

On appeal from D-1-GN-13-001238 (Consolidated)

in the 250th Judicial District Court, Travis County, Texas

POST SUBMISSION BRIEF OF APPELLANT CPS ENERGY

CPS ENERGY HERRERA & BOYLE, PLLC

Gabriel Garcia Alfred R. Herrera

ggarcia@cpsenergy.com State Bar No. 09529600

Carolyn Shellman aherrera@herreraboylelaw.com

cshellman@cpsenergy.com

816 Congress Avenue, Suite 1250

CPS Energy Austin, Texas 78701

145 Navarro (512) 474-1492 (Voice)

P.O. Box 1771 (512) 474-2507 (Facsimile)

San Antonio, Texas 78296

(210) 353-5689 (Voice)

(210) 353-6832 (Facsimile)

May 8, 2015

IDENTITY OF PARTIES AND COUNSEL

The following is a complete list of all parties to the trial court’s judgment,

and the names and addresses of all trial and appellate counsel:

Counsel for Public Utility Commission Counsel for CPS Energy:

of Texas:

Alfred R. Herrera

Douglas Fraser HERRERA & BOYLE, PLLC

Megan Neal 816 Congress Avenue, Suite 1250

Office of the Attorney General Austin, TX 78701

P.O. Box 12548, Capitol Station Phone: (512) 474-1492

Austin, Texas 78711-02548 Fax: (512) 474-2507

Phone: (512) 463-2012 aherrera@herreraboylelaw.com

Fax: (512) 457-4610

douglas.fraser@texasattorneygeneral.gov

megan.neal@texasattorneygeneral.gov

Counsel for AT&T Texas: Counsel for CPS Energy:

Paul A. Drummond Gabriel Garcia

Natalie L. Hall Carolyn Shellman

AT&T Legal Department CPS Energy

1010 N. St. Mary’s, 14th Floor 145 Navarro

San Antonio, Texas 78215 P.O. Box 1771

Phone: (210) 351-4830 San Antonio, TX 78296

Fax: (210) 886-2127 Phone: (210) 353-5689

paul.drummond@att.com Fax: (210) 353-6832

natalie.hall@att.com ggarcia@cpsenergy.com

cshellman@cpsenergy.com

No. 03-14-00340-CV

APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF i

Counsel for AT&T Texas: Counsel for AT&T Texas:

Michael T. Sullivan J. David Tate

Mayer Brown LLP Katherine C. Swaller

71 S. Wacker Drive Thomas Ballo

Chicago, IL 60606 AT&T Legal Department

Phone: (312) 782-0600 816 Congress Avenue, Suite 1100

Fax: (312) 706-8689 Austin, Texas 78701

msullivan@mayerbrown.com Phone: (512) 457-2304

Fax: (512) 870-3420

jon.david.tate@att.com

katherine.swaller@att.com

thomas.ballo@att.com

Counsel for Time Warner Cable Texas Counsel for Time Warner Cable

LLC: Texas LLC:

Valerie P. Kirk J.D. Thomas

Melissa Lorber J. Aaron George

Enoch Kever PLLC Sheppard Mullin Richter &

600 Congress Avenue, Suite 2800 Hampton LLP

Austin, Texas 78701 1300 I Street, N.W.

Phone: (512) 615-1200 11th Floor East

Fax: (512) 615-1198 Washington DC 20005

vkirk@enochkever.com Phone: (202) 218-0000

mlorber@enochkever.com Fax: (202) w218-0020

dthomas@sheppardmullin.com

ageorge@sheppardmullin.com

No. 03-14-00340-CV

APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF ii

TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL .................................................. i

TABLE OF CONTENTS............................................................................... iii

INDEX OF AUTHORITIES ......................................................................... iv

STATEMENT OF FACTS ..............................................................................1

SUMMARY OF ARGUMENT .......................................................................2

ARGUMENT ...................................................................................................3

Findings of Fact 84-87 and Conclusions of Law 26 and 27 are

Improper Advisory Opinions .......................................................................3

The Uniform Declaratory Judgment Act does not Apply to this Case ........7

Findings of Fact 84-87 and Conclusions of Law 26 and 27 Result in

an Unconstitutional Delegation of Power ....................................................9

CONCLUSION ................................................................................................9

CERTIFICATE OF SERVICE ..................................................................... 11

CERTIFICATE OF COMPLIANCE............................................................ 12

No. 03-14-00340-CV

APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF iii

INDEX OF AUTHORITIES

Cases

Brinkley v. Texas Lottery Comm'n, 986 S.W.2d 767 (Tex. App.—

Austin 1999, no pet.) ........................................................................ 4, 5

Central Power & Light Co. v. Public Util. Comm'n, 36 S.W.3d 547

(Tex.App.-Austin 2000, pet. denied).................................................... 7

City of Waco v. Tex. Nat. Res. Conservation Comm'n, 83 S.W.3d 169

(Tex. App.—Austin 2002, pet. denied) ............................................ 5, 8

Firemen's Ins. Co. v. Burch, 442 S.W.2d 331 (Tex. 1969) ............................ 8

Railroad Comm'n v. CenterPoint Energy Res. Corp., 03–13–00533–

CV, 2014 WL 4058727, at *2-3 (Tex. App.—Austin, no pet.) ........... 5

Robinson v. Parker, 353 S.W.3d 753 (Tex. 2011) ..................................... 5, 7

Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440

(Tex. 1993) ....................................................................................... 5, 8

Trinity Settlement Servs., LLC v. Texas State Secs. Bd., 417 S.W.3d

494 (Tex. App.—Austin 2013, pet. denied) ......................................... 5

TXU Electric v. Public Utility Commission, 51 S.W.3d 275

(Tex. 2001) ........................................................................................... 5

Statutes and Rules

47 C.F.R. §1.1409(e) .......................................................................... 1, 3, 4, 6

TEX. CIV. PRAC. & REM. CODE §§ 37.001–.011 ............................................. 8

TEX. GOV'T CODE ANN. § 2001.174 ................................................................ 7

TEX. UTIL. CODE ANN. § 54.204 ................................................................. 3, 7

TEX. UTIL. CODE ANN. § 54.204(c)......................................................... 2, 4, 9

TEX. UTIL. CODE ANN. § 54.205 ..................................................................... 3

No. 03-14-00340-CV

APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF iv

STATEMENT OF FACTS

The Court entertained oral argument in this case on April 22, 2015.

On April 20, 2015, the Public Utility Commission (“Commission”), through

its attorney, the Attorney General of Texas (“Attorney General”), filed a

letter in which the Commission asserted that the Court does not have

jurisdiction to decide whether the Commission’s ruling regarding the

applicability of amendments the Federal Communications Commission

(“FCC”) adopted with an effective date of June 8, 2011 was correct. As the

Attorney General’s Letter states, “[t]hose amendments [to 47 C.F.R.

1.1409(e)] became effective on June 8, 2011 — several months after the

time period for which the Commission determined the maximum allowable

pole-attachment rate.” 1

Thus, the Commission’s Findings of Fact 84-87 and Conclusions of

Law 26 and 27 purported to address rights and facts which have not arisen

and thus the Commission adjudicated matters which are contingent,

uncertain, or rest in the future, thereby comprising an advisory opinion. As

stated in the Attorney General’s Letter, “we determined the Court does not

1

See Letter from Megan Neal, Assistant Attorney General to Honorable Jeffrey D.

Kyle, Clerk, Court of Appeals, Third District of Texas (April 20, 2015)

(“Attorney General’s Letter”) (addressing CPS Energy’s Appellant’s Point of

Error No. 2, Findings of Fact 84-87, and Conclusion of Law 27).

No. 03-14-00340-CV

APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF 1

have jurisdiction to decide one of the issues … [t]his Court and the Texas

Supreme Court have held that statements about the future are advisory 2 … .”

SUMMARY OF ARGUMENT

CPS Energy agrees with the Attorney General that the Commission

issued an advisory opinion regarding the applicability of the June 8, 2011

amendments to the FCC’s rules. As CPS Energy explained at oral

arguments, in this proceeding the Commission has consistently over-reached

in applying its limited authority to CPS Energy, a municipally owned utility

(“MOU”). This issue is yet another example of the Commission exceeding

its jurisdiction in reviewing the disputes in this case.

CPS Energy respectfully urges the Court to reverse the Commission’s

Order on Rehearing with regard to Findings of Fact 84-87 and Conclusions

of Law 26 and 27 because those determinations are improper advisory

opinions.

Should the Court conclude that the Commission’s decision regarding

the applicability of the FCC’s amended rules is not an advisory opinion,

nonetheless the Court should reverse the Commission’s ruling because the

2 The Attorney General’s Letter does not refer to Conclusion of Law 26, but that

conclusion of law suffers from the same flaws as Conclusion of Law 27.

No. 03-14-00340-CV

APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF 2

Commission’s interpretation of Utilities Code § 54.204(c) would result in an

unconstitutional delegation of power to a federal agency. 3

ARGUMENT

Findings of Fact 84-87 and Conclusions of Law 26 and 27 are Improper

Advisory Opinions

The Commission limited its review in this proceeding to the billing

years 2005 through 2010, which also matched the evidence in the record.

See Conclusion of Law 24 (“[t]he inputs set out in the findings of fact are

reasonable for use in the Maximum rate formula for test years 2004 through

2009 (billing years 2005 through 2010)”); Conclusion of Law 25 (“[t]he

maximum allowable pole-attachment rates set forth in the findings of fact for

test years 2004 through 2009 (billing years 2005 through 2010) comply with

PURA §§ 54.204 and 54.205”); Findings of Fact 42-83A (all limited to

billing years 2005 though 2010).

However, the Commission then went outside the record before it and

unnecessarily concluded that the June 8, 2011 amendments to 47 C.F.R.

1.1409(e) applied prospectively to the parties. See Conclusions of Law 26

and 27 (Conclusion of Law 26: “Changes in 47 U.S.C. § 224(e) are

3

See Brief of Appellant, CPS Energy at 16-21 (September 5, 2014) (“CPS Brief”)

(addressing delegation issue in Point of Error No. 2).

No. 03-14-00340-CV

APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF 3

incorporated into PURA § 54.204 without legislative action;” and

Conclusion of Law 27: “[t]he FCC’s June 8, 2011 amendment to 47 C.F.R.

1.1409(e) applies to CPS Energy under PURA § 54.204(c)”); Findings of

Fact 84-87 (describing the “Methodology Going Forward”). 4 Further, the

Commission made the sweeping conclusion that not only did the June 8,

2011 amendment affecting the Telecom Formula apply to the parties, but

that any future changes to FCC regulations that govern pole attachment rates

are incorporated into PURA § 54.204 without action by the Texas

Legislature.

As conceded by the Attorney General’s Letter, these conclusions were

advisory only. See Attorney General’s Letter at 1 (“we determined the Court

does not have jurisdiction to decide one of the issues … [t]his Court and the

Texas Supreme Court have held that statements about the future are advisory

… .”)

“The separation-of-powers doctrine prohibits courts from issuing

advisory opinions.” Brinkley v. Texas Lottery Comm'n, 986 S.W.2d 767,

770 (Tex. App.—Austin 1999, no pet.) “The distinctive feature of an

advisory opinion is that it decides an abstract question of law without

4 The Commission in its Order on Rehearing made similar statements. See,

Commission’s Order on Rehearing at 6 and 22.

No. 03-14-00340-CV

APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF 4

binding the parties.” Brinkley, 986 S.W.2d at 767; citing Tex. Ass'n of Bus.

v. Tex. Air Control Bd., 852 S.W.2d 440, 444 (Tex. 1993). “The court will

not declare rights on facts which have not arisen or adjudicate matters which

are contingent, uncertain, or rest in the future.” Brinkley at 768. “An

opinion issued in a case that is not ripe would address only a hypothetical

injury rather than remedying actual or imminent harm.” City of Waco v.

Tex. Nat. Res. Conservation Comm'n, 83 S.W.3d 169, 175 (Tex. App.—

Austin 2002, pet. denied). “Ripeness ‘is a threshold issue that implicates

subject matter jurisdiction ... [and] emphasizes the need for a concrete injury

for a justiciable claim to be presented.’” Robinson v. Parker, 353 S.W.3d

753, 755 (Tex. 2011).

A decision by a state agency that is advisory or unripe is similarly

invalid. See TXU Electric v. Public Utility Commission, 51 S.W.3d 275, 287

(Tex. 2001) (holding that the Commission’s prospective adjustment for

acquired debt was advisory and thus premature); R.R. Comm'n v.

CenterPoint Energy Res. Corp., 03–13–00533–CV, 2014 WL 4058727 at

*2-3 (Tex. App.—Austin, no pet.); citing Trinity Settlement Servs., LLC v.

Texas State Secs. Bd., 417 S.W.3d 494, 506 (Tex. App.—Austin 2013, pet.

denied) (“[i]n the administrative-law context, moreover, avoiding premature

litigation over administrative determinations prevents courts from

No. 03-14-00340-CV

APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF 5

‘entangling themselves in abstract disagreements over administrative

policies …’”).

In this case the parties provided evidence for the 2005-2010 billing

years and the Commission made findings based on that evidence. The

Commission’s analysis of the June 8, 2011 amendments to 47 C.F.R.

1.1409(e), which was incorporated into the case as a result of the Conclusion

of Law 26, had no bearing on the evidence before it. As the Attorney

General’s Letter concedes, “those amendments [to 47 C.F.R. 1.1409(e)]

became effective on June 8, 2011 — several months after the time period for

which the Commission determined the maximum allowable pole-attachment

rate.” The Commission’s Findings of Fact 84-87 and Conclusions of Law

26 and 27, therefore, “declare[d] rights on facts which have not arisen or

adjudicate[d] matters which are contingent, uncertain, or rest in the future,”

in violation of the Court’s ruling in Brinkley and similar cases. Brinkley,

986 S.W.2d at 768.

CPS Energy respectfully urges the Court to adopt the Commission’s

concession that Findings of Fact 84-87 and Conclusions of Law 26 and 27

were advisory opinions. As CPS Energy discusses above, the Commission

made determinations of facts and law unripe for decision. The effect of such

findings is to remove the Commission’s subject matter jurisdiction to issue

No. 03-14-00340-CV

APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF 6

those findings and conclusions. See Robinson, 353 S.W.3d at 755

(“[r]ipeness ‘is a threshold issue that implicates subject matter

jurisdiction’…”). CPS Energy thus respectfully urges the Court to find that

the Commission’s determinations have no legal effect and to reverse the

Commission’s Order on Rehearing regarding Findings of Fact 84-87 and

Conclusions of Law 26 and 27.5

The Uniform Declaratory Judgment Act does not Apply to this Case

At the oral argument, AT&T argued that the Commission’s findings

were not advisory opinions because the case was brought as a declaratory

judgment action. AT&T’s argument lacks merit for two reasons.

First, CPS Energy did not file the case under the Uniform Declaratory

Judgment Act (“UDJA”). CPS Energy instead filed the case as a petition for

enforcement under Utilities Code § 54.204. Indeed, the style of the case is

“Petition of CPS Energy for Enforcement Against AT&T Texas and Time

Warner Cable Regarding Pole Attachments” and CPS Energy’s petition was

5

It is appropriate for the Court to reverse the Commission’s decision in this case if

the decision prejudices substantial rights of CPS Energy. TEX. GOV'T CODE ANN.

§ 2001.174 (West 2000); Central Power & Light Co. v. Public Util. Comm'n, 36

S.W.3d 547, 561-562 (Tex.App.—Austin 2000, pet. denied). In this case, Time

Warner Cable Texas LLC (“Time Warner”) is seeking damages against CPS

Energy in a related case in Bexar County District Court. If the Commission’s

advisory opinion about the FCC’s June 8, 2011 amendments stands untouched,

Time Warner will undoubtedly use that opinion to seek damages against CPS

Energy in the Bexar County litigation. Therefore, CPS Energy’s substantial rights

will be prejudiced and it is appropriate to reverse the Commission’s decision.

No. 03-14-00340-CV

APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF 7

titled “Petition and Request for Enforcement of CPS Energy.” Order on

Rehearing at 1. Therefore, any case law interpreting the UDJA is

inapplicable to this case. See, e.g., City of Waco, 83 S.W.3d at 177

(analyzing ripeness requirements for UDJA actions).

Second, even if considered to be a declaratory judgment action, Texas

courts have consistently held that a declaratory judgment action does not

expand a tribunal’s subject matter jurisdiction. “[W]e have interpreted the

Uniform Declaratory Judgments Act, TEX. CIV. PRAC. & REM. CODE §§

37.001–.011, to be merely a procedural device for deciding cases already

within a court’s jurisdiction rather than a legislative enlargement of a court’s

power, permitting the rendition of advisory opinions.” Tex. Ass'n of Bus.,

852 S.W.2d at 444; see also Firemen's Ins. Co. v. Burch, 442 S.W.2d 331,

333 (Tex. 1969) (“the Legislature could not and has not by the passage of

the Uniform Declaratory Judgments Act, empowered the district courts to

render advisory opinions”). Consequently, even had the parties filed a

declaratory judgment action, which they did not, the Commission would

have lacked subject matter jurisdiction to issue Findings of Fact 84-87 and

Conclusions of Law 26 and 27 since those determinations were advisory and

unripe.

No. 03-14-00340-CV

APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF 8

Findings of Fact 84-87 and Conclusions of Law 26 and 27 Result in an

Unconstitutional Delegation of Power

If the Court concludes that the Commission’s decision regarding the

applicability of the FCC’s June 8 2011 amendments to its rules were not an

advisory opinion, then as CPS Energy explained in its Point of Error No. 2,

the Commission’s interpretation of Utilities Code § 54.204(c) results in an

unconstitutional delegation of power to a federal agency. See CPS Brief at

16-21. CPS Energy respectfully refers the Court to its briefs for its

arguments on that issue. Id.

Conclusion

The Commission exceeded its jurisdiction on several occasions and

Findings of Fact 84-87 and Conclusions of Law 26 and 27 are examples of

this overstepping of jurisdictional authority. See CPS Brief at 16-47 (Points

of Error Nos. 2-5). As the Attorney General recognized, the Commission

issued an advisory opinion about the applicability of the June 8, 2011

amendments to the FCC’s rules. The record only addressed billing years

2005-2010 and thus the dispute upon which the Commission issued its

opinion was unripe. The Commission’s opinion was also an

unconstitutional delegation of power.

No. 03-14-00340-CV

APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF 9

For all of these reasons, CPS Energy respectfully urges the Court to

find that Findings of Fact 84-87 and Conclusions of Law 26 and 27 have no

legal effect and remand the case to the Commission with instructions to

issue an order consistent with the Court’s opinion.

Respectfully submitted,

CPS Energy HERRERA & BOYLE, PLLC

Gabriel Garcia Alfred R. Herrera

ggarcia@cpsenergy.com State Bar No. 09529600

Carolyn Shellman aherrera@herreraboylelaw.com

cshellman@cpsenergy.com

816 Congress Avenue, Suite 1250

CPS Energy Austin, Texas 78701

145 Navarro (512) 474-1492 (Voice)

P.O. Box 1771 (512) 474-2507 (Facsimile)

San Antonio, Texas 78296

(210) 353-5689 (Voice) By: /s/ Alfred R. Herrera

(210) 353-6832 (Facsimile) Alfred R. Herrera

ATTORNEYS FOR CPS ENERGY

No. 03-14-00340-CV

APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF 10

CERTIFICATE OF SERVICE

I hereby certify that on this the 8th of May, 2015, a true and correct

copy of Appellant CPS Energy’s Post Submission Brief was served upon

all parties listed below by certified mail, return receipt requested, or hand

delivered.

By: /s/ Alfred R. Herrera

Alfred R. Herrera

Counsel for Public Utility Commission Counsel for CPS Energy:

of Texas:

Alfred R. Herrera

Douglas Fraser HERRERA & BOYLE, PLLC

Megan Neal 816 Congress Avenue, Suite 1250

Office of the Attorney General Austin, TX 78701

P.O. Box 12548, Capitol Station Phone: (512) 474-1492

Austin, Texas 78711-02548 Fax: (512) 474-2507

Phone: (512) 463-2012 aherrera@herreraboylelaw.com

Fax: (512) 457-4610

douglas.fraser@texasattorneygeneral.gov

megan.neal@texasattorneygeneral.gov

Counsel for AT&T Texas: Counsel for CPS Energy:

Paul A. Drummond Carolyn Shellman

Natalie L. Hall Gabriel Garcia

AT&T Legal Department CPS Energy

1010 N. St. Mary’s, 14th Floor 145 Navarro

San Antonio, Texas 78215 P.O. Box 1771

Phone: (210) 351-4830 San Antonio, TX 78296

Fax: (210) 886-2127 Phone: (210) 353-5689

paul.drummond@att.com Fax: (210) 353-6832

natalie.hall@att.com cshellman@cpsenergy.com

ggarcia@cpsenergy.com

No. 03-14-00340-CV

APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF 11

Counsel for AT&T Texas: Counsel for AT&T Texas:

Michael T. Sullivan J. David Tate

Mayer Brown LLP Katherine C. Swaller

71 S. Wacker Drive Thomas Ballo

Chicago, IL 60606 AT&T Legal Department

Phone: (312) 782-0600 816 Congress Avenue, Suite 1100

Fax: (312) 706-8689 Austin, Texas 78701

msullivan@mayerbrown.com Phone: (512) 457-2304

Fax: (512) 870-3420

jon.david.tate@att.com

katherine.swaller@att.com

thomas.ballo@att.com

Counsel for Time Warner Cable Texas Counsel for Time Warner Cable

LLC: Texas LLC:

Valerie P. Kirk J.D. Thomas

Melissa Lorber J. Aaron George

Enoch Kever PLLC Sheppard Mullin Richter &

600 Congress Avenue, Suite 2800 Hampton LLP

Austin, Texas 78701 1300 I Street, N.W.

Phone: (512) 615-1200 11th Floor East

Fax: (512) 615-1198 Washington DC 20005

vkirk@enochkever.com Phone: (202) 218-0000

mlorber@enochkever.com Fax: (202) w218-0020

dthomas@sheppardmullin.com

ageorge@sheppardmullin.com

CERTIFICATE OF COMPLIANCE

The Word document properties feature states there are 1,961 words in this

document.

By: /s/Alfred R. Herrera

Alfred R. Herrera

No. 03-14-00340-CV

APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF 12

APPENDIX I:

Referenced Case Law and Statutes

(Excludes Items Provided with CPS Energy’s

Previous Briefs)

No. 03-14-00340-CV

APPENDIX I:

Referenced Case Law and Statutes

(Excludes Items Provided with CPS Energy’s Previous Briefs)

Cases

1. Brinkley v. Texas Lottery Comm'n, 986 S.W.2d 767 (Tex. App.—

Austin 1999, no pet.)

2. City of Waco v. Tex. Nat. Res. Conservation Comm'n, 83 S.W.3d 169

(Tex. App.—Austin 2002, pet. denied)

3. Firemen's Ins. Co. v. Burch, 442 S.W.2d 331 (Tex. 1969)

4. Railroad Comm'n v. CenterPoint Energy Res. Corp., 03–13–00533–

CV, 2014 WL 4058727, at *2-3 (Tex. App.—Austin, no pet.)

5. Robinson v. Parker, 353 S.W.3d 753 (Tex. 2011)

6. Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440

(Tex. 1993)

7. Trinity Settlement Servs., LLC v. Texas State Secs. Bd., 417 S.W.3d

494 (Tex. App.—Austin 2013, pet. denied)

8. TXU Electric v. Public Utility Commission, 51 S.W.3d 275

(Tex. 2001)

Statutes and Rules

9. 47 C.F.R. §1.1409(e)

10. TEX. CIV. PRAC. & REM. CODE §§ 37.001–.011

11. TEX. UTIL. CODE ANN. § 54.205

Brinkley v. Texas Lottery Com’n, 986 S.W.2d 764 (1999)

obtain a declaratory judgment that certain machines,

986 S.W.2d 764 denominated “eight-liners,” are not “gambling devices” as

Court of Appeals of Texas, defined by the Texas Penal Code. See Tex. Penal Code

Austin. Ann. § 47.01(B)(4) (West Supp.1998). He applied for an

injunction against enforcement of any criminal or

Shannon BRINKLEY, d/b/a Krane–Ko Vending, administrative penalties for operating “eight-liners,” and

Appellant, in a civil-rights action prayed for compensatory damages.

v. The trial court dismissed his causes of action for want of

TEXAS LOTTERY COMMISSION, Appellee. jurisdiction. Brinkley appeals. We will affirm the

judgment.

No. 03–97–00252–CV | Feb. 4, 1999.

Owner of electronic machines similar to slot machines

filed action seeking, in part, declaratory judgment that his THE CONTROVERSY

machines were not gambling devices. The District Court,

Travis County, 250th Judicial District, John K. Dietz, J.P., The Bingo Enabling Act, administered and enforced by

dismissed his causes of action for want of jurisdiction. the Texas Lottery Commission, provides as follows:

Owner appealed. The Court of Appeals, John Powers, J.

(Retired), held that: (1) cause of action seeking A game of chance other than bingo

declaratory judgment that machines were not gambling ... may not be conducted or allowed

devices sought improper advisory opinion; (2) trial court during an occasion when bingo is

lacked jurisdiction to grant requested injunctive relief in played.... This subsection does not

absence of allegations of probable injury; (3) prohibit the exhibition and play of

Commission’s advisory letters were not “rules” within an amusement machine that is not a

meaning of provision of Administrative Procedure Act gambling device as defined by

(APA) authorizing declaratory judgments to determine Section 47.01, Penal Code.

validity of rules; and (4) Commission was not subject to

suit under § 1983 or federal civil rights conspiracy statute. Tex.Rev.Civ. Stat. Ann. art. 179d, § 11(k) (West

Supp.1998). Section 47.01 of the Penal Code defines

Affirmed. “gambling device.”1

1

Attorneys and Law Firms “Gambling device” means any electronic,

electromechanical, or mechanical contrivance not

*766 Ira E. Tobolowsky, Tobolowsky & Burk, P.C., excluded under Paragraph (B) that for a consideration

Dallas, for Appellant. affords the player an opportunity to obtain anything of

value, the award of which is determined solely or

partially by chance, even though accompanied by some

John Cornyn, Atty. Gen., Matthew L. Rienstra, Asst. Atty.

skill, whether or not the prize is automatically paid by

Gen., Admistrative Law Division, Austin, for Appellee. the contrivance. The term:

Before Chief Justice ABOUSSIE, Justices B.A. SMITH ***

and POWERS.* (B) does not include any electronic,

*

Before John Powers, Senior Justice (retired), Third electromechanical, or mechanical contrivance

Court of Appeals, sitting by assignment. See Tex. Gov’t designed, made, and adapted solely for bona

Code Ann. § 74.003(b) (West 1998). fide amusement purposes if the contrivance

rewards the player exclusively with noncash

merchandise prizes, toys, or novelties, or a

representation of value redeemable for those

items, that have a wholesale value available

Opinion from a single play of the game or device of not

more than 10 times the amount charged to play

JOHN POWERS, Justice (Retired). the game or device once or $5, whichever is

less.

Texas Penal Code Ann. § 47.01(4)(B) (West

Shannon Brinkley sued the Texas Lottery Commission to Supp.1998).

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Brinkley v. Texas Lottery Com’n, 986 S.W.2d 764 (1999)

formulated or adopted in compliance with the rulemaking

provisions of Texas Government Code sections

2001.021–.037;3

The Commission licenses and regulates some 2,500

bingo-parlors. Many licensees allow the operation of 3

“eight-liners” in their parlors. Eight-liners are electronic See Tex. Gov’t Code Ann. §§ 2001.021–.037 (West

1998).

machines (similar to “slot machines”) that dispense gift

certificates redeemable for prizes. The machines do not

all operate in the same manner; their operation and payout

can be configured in a variety of ways. (3) an application for injunction restraining the

Commission and “all others” from interfering with the

*767 The Commission received numerous complaints and operation of Brinkley’s eight-liners in bingo parlors,

inquiries from licensees who were uncertain about whether by raids, harassment, criminal prosecution,

whether the particular machines in their parlors were set forfeiture and seizure of Brinkley’s eight-liners, or any

up to operate legally. In response, the Commission sent to other way; and

its licensees letters setting forth criteria by which the

licensees might ascertain the legal status of machines in (4) actions for injunctive relief and compensatory

their parlors. The letters included a warning that illegally damages, under 42 United States Code sections 1983 and

operated machines exposed licensees to administrative 1985, for violation of Brinkley’s civil rights under color

and criminal penalties.2 The Commission noted in the of state law.4

letters that application of the stated criteria would not

necessarily determine the legality of the machines and 4

See 42 U.S.C. §§ 1983, 1985 (1994).

“the agency cannot guarantee that the use of the

eight-liners is necessarily legal.” The letters concluded:

“we hope this helps answer questions you may have in

regard to this issue.” The Commission filed pleas to the jurisdiction,

contending the trial court lacked subject-matter

2

jurisdiction because (1) the actions were barred by the

The Commission may impose administrative penalties doctrine of sovereign immunity; (2) Brinkley lacked

for violations of the Bingo Enabling Act. standing to assert the actions alleged; (3) the trial court

Law-enforcement authorities enforce the Texas Penal

lacked jurisdiction to determine legal relationships under

Code.

a penal statute; and (4) there existed no justiciable

controversy. The trial court denied the plea of sovereign

immunity but sustained the pleas on the other grounds

Brinkley does not hold a Commission license to operate a claimed and dismissed the actions. Brinkley contends the

bingo parlor. He owns several eight-liners that he trial court possessed jurisdiction on the grounds discussed

formerly operated in a space he leases within a licensed below.

bingo parlor. When Brinkley’s lessor received the

Commission’s letters, he refused to allow Brinkley to

continue the operation of his eight-liners in the bingo

parlor.

UNIFORM DECLARATORY JUDGMENTS ACT

Brinkley pleaded against the Commission the following

[1] [2] [3] [4]

causes of action: The separation-of-powers doctrine prohibits

courts from issuing advisory opinions. Texas Ass’n of

(1) An action under the Uniform Declaratory Judgments Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 444

Act for a judicial determination that eight-liners are not (Tex.1993); Firemen’s Ins. Co. v. Burch, 442 S.W.2d 331,

gambling devices under section 47.01(4)(B) of the Texas 333 (Tex.1969); Morrow v. Corbin, 122 Tex. 553, 62

Penal Code, and that the Commission’s interpretation of S.W.2d 641, 647 (1933). The distinctive feature of an

section 47.01 is unconstitutional; advisory opinion is that it decides an abstract question of

law without binding the parties. Alabama State Fed’n of

(2) an action for declaratory judgment under section Labor v. McAdory, 325 U.S. 450, 461, 65 S.Ct. 1384, 89

2001.038 of the Texas Government Code that the L.Ed. 1725 (1945); Texas Ass’n of Bus., 852 S.W.2d at

Commission’s letters constitute “rules,” as defined by 444; Firemen’s Ins. Co., 442 S.W.2d at 333; California

section 2001.003(6) of the Administrative Procedure Act, Prods. Inc. v. Puretex Lemon Juice, Inc., 160 Tex. 586,

and that the “rules” are invalid because they were not 334 S.W.2d 780, 783 (1960). An opinion is advisory

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2

Brinkley v. Texas Lottery Com’n, 986 S.W.2d 764 (1999)

when the judgment sought would not constitute specific Air Control Bd., 852 S.W.2d 440, 444 (Tex.1993).

relief to a litigant or affect legal relations. Reuter v. *768

Cordes–Hendreks Coiffures, 422 S.W.2d 193, 196

(Tex.Civ.App.—Houston [14th Dist.] 1967, no writ).

“The court will not declare rights on facts which have not

arisen or adjudicate matters which are contingent,

uncertain, or rest in the future.” 26 C.J.S. Declaratory INJUNCTIVE RELIEF

Judgments, § 28 (1956).

[7] [8]

[5] [6]

The trial court also lacked jurisdiction to grant the

Brinkley alleged that he sustained “irreparable injury injunctive relief requested.7 Injunctions may not issue

to vested property rights with no adequate remedy at law” unless it is shown that the respondent will engage in or is

because his lessor, “as a result” of the Commission’s engaging in the activity to be enjoined. See State v.

letters, demanded that Brinkley remove his machines. Morales, 869 S.W.2d 941, 946–47 (Tex.1994). Brinkley

Elsewhere in his petition, Brinkley’s allegations are seeks to enjoin the Commission and “all others” from

susceptible of a construction that the letters prevent his interfering with the operation of his eight-liners in bingo

operating his machines in other bingo parlors. We believe parlors in any way, including the prohibition of raids,

Brinkley’s cause of action under the UDJA requires an harassment, criminal prosecution, and forfeiture and

advisory opinion. Brinkley and the Commission are the seizure of his machines. Brinkley alleged only that the

only parties to the lawsuit and Brinkley is not a licensee Commission sent the advisory letters to about 2,500

subject to the Commission’s regulation.5 Brinkley licensees. He has not alleged that the Commission

necessarily speculates that a declaratory judgment, threatens to impose upon him (he is not a licensee)

holding that eight-liners are not gambling devices, may administrative penalties nor that law enforcement

induce his lessor or other bingo-parlor licensees to allow authorities (not parties here) threaten to prosecute him

him to operate his machines, however configured, in their under the criminal law. He has not alleged that the

parlors. This is a contingency, an uncertainty, a Commission, unless restrained, will enforce against him

hypothesis upon which a court may not decide the legal any sanction within its power to enforce. We decline to

issues raised in Brinkley’s petition. See Coalson v. City hold as a matter of law that the Commission’s sending of

Council of Victoria, 610 S.W.2d 744, 747 (Tex.1980) the advisory letters to a large number of its licensees

(suit to declare invalid city charter-amendment initiative constituted a showing of “probable injury” to Brinkley.

requires advisory opinion because voters might See id. at 946–47; Transport Co. v. Robertson Transports,

disapprove proposed amendment); Central Sur. & Ins. Inc., 152 Tex. 551, 261 S.W.2d 549, 552 (1953)

Corp. v. Anderson, 445 S.W.2d 514, 515 (Tex.1969) (suit (requiring showing of “probable injury” if respondent not

for declaratory judgment that insurer liable to pay restrained). Absent allegations of fact showing a probable

judgment, in advance of judgment against tort defendant, injury, a court is without jurisdiction to grant the

requires advisory opinion); see generally Texas Ass’n of injunctive relief requested. See Morales, 869 S.W.2d at

Bus., 852 S.W.2d at 444.6 942, 946–47; see also *769 Texas Employment Comm’n

v. Martinez, 545 S.W.2d 876, 877–78 (Tex.Civ.App.—El

5

The Commission regulates amusement machines Paso 1976, no writ).

pursuant to article 179d of the Texas Revised Civil

Statutes (Bingo Enabling Act) which is concerned only 7

Brinkley requested injunctive relief pursuant to section

with those amusement machines located in bingo halls.

65.011 of the Texas Civil Practice & Remedies Code

See Tex.Rev.Civ. Stat. art. 179d (West 1998). Outside

and section 16.29 of the Texas Business & Commerce

of bingo halls, law enforcement personnel are charged Code (Injury to Business Reputation or Trade Name or

with the enforcement of Texas Penal Code section Mark); Tex. Civ. Prac. & Rem.Code Ann. § 65.011

47.01 which prohibits the use of “gambling devices.”

(West 1997); Tex. Bus. & Com.Code Ann. § 16.29

Tex. Penal Code § 47.01 (West 1994 & Supp.1998).

(West Supp.1998).

6

The Uniform Declaratory Judgments Act, found in the

Texas Civil Practice & Remedies Code, is a procedural

device for deciding cases already within a court’s

jurisdiction; the statute does not enlarge a court’s ADMINISTRATIVE PROCEDURE

jurisdiction so as to authorize the rendition of advisory ACT—DECLARATORY JUDGMENT

opinions. See Tex. Civ. Prac. & Rem.Code Ann. §§

37.001–.011 (West 1997); Texas Ass’n of Bus. v. Texas Section 2001.038 of the Administrative Procedure Act

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3

Brinkley v. Texas Lottery Com’n, 986 S.W.2d 764 (1999)

(APA) creates a cause of action for declaratory judgment promulgated through the notice-and-comment procedures

to determine the validity or applicability of an agency rule of APA sections 2001.022–.037, or bind particular

when it “is alleged that the rule or its threatened litigants by the Commission’s order adjudicating a

application interferes with or impairs, or threatens to contested case conducted under the procedures set forth in

interfere with or impair, a legal right or privilege of the APA sections 2001.051–.147. The same is true in general

plaintiff.” Tex. Gov’t Code Ann. § 2001.038 (West 1998). of most constitutive statutes and enabling acts delegating

For purposes of section 2001.038 and all other sections in power to administrative agencies.

Chapter 2001 of the Texas Government Code, the word

“rule” The legislature intends that administrative agencies

exercise effectively the powers delegated to them. See

(A) means a state agency statement of general Sexton v. Mount Olivet Cemetery Ass’n, 720 S.W.2d 129,

applicability that: 137 (Tex.App.—Austin 1986, writ ref’d n.r.e.). Agencies

would be reduced to impotence, however, if bound to

(i) implements, interprets, or prescribes law or express their views as to “law,” “policy,” and procedural

policy; or “requirements” through contested-case decisions or

formal rules exclusively; and they could not under such a

(ii) describes the procedure or practice requirements theory exercise powers explicitly delegated to them by the

of a state agency; legislature. How, under such a theory, could an agency

practically express its views to an informal conference or

(B) includes the amendment or repeal of a prior rule;

advisory committee, or state its reasons for denying a

and

petition to adopt a rule, or file a brief in a court or agency

(C) does not include a statement regarding only the proceeding? See Tex. Gov’t Code Ann. §§ 2001.021,

internal management or organization of a state .031, .058 (West 1998).

agency and not affecting private rights or

procedures. The foregoing are only examples derived from the APA

itself. If every expression by the agency as to “law,”

Tex. Gov’t Code Ann. § 2001.003(6) (West 1998) “policy,” and procedural “requirements” requires the

(emphasis added). promulgation of a formal rule, the agency could no longer

exercise its “informed discretion” to choose adjudication

[9]

Brinkley contends the trial court had jurisdiction of his as a means of making law and policy, rather than

cause of action for declaratory judgment, under section rulemaking, a choice we have repeatedly said an agency

2001.038 of the APA, because the Commission letters has when it possesses both adjudicatory and rulemaking

amounted to a “rule” as defined in section 2001.003(6). powers. See, e.g., Madden v. Texas Bd. of Chiropractic

We disagree. Exmr’s, 663 S.W.2d 622, 626 (Tex.App.—Austin 1984,

writ ref’d n.r.e.); *770 State Bd. of Ins. v. Deffebach,

[10]

“Not every statement by an administrative agency is a 631 S.W.2d 794, 799 (Tex.App.—Austin 1982, writ ref’d

rule for which the APA prescribes procedures for n.r.e.). If the agencies were so restricted, they would be

adoption and for judicial review.” Texas Educ. Agency v. deprived, as a practical matter, of the power to adjudicate;

Leeper, 893 S.W.2d 432, 443 (Tex.1994). This an agency could make valid “law” or “policy” only

observation refers to the fact that administrative agencies through the straight-jacket of rulemaking, even though the

routinely issue letters, guidelines, and reports, and agency might be quite unable to do so for any number of

occasionally file briefs in court proceedings, any of which reasons as noted in El Paso v. Public Util. Comm’n, 883

might contain statements that intrinsically implement, S.W.2d 179, 188–89 (Tex.1994).8

interpret, or prescribe law, policy, or procedure or

practice requirements. Are all such statements therefore 8

The legislature may, by statute, require an agency to

“rules” within the meaning of APA section 2001.003(6) make formal rules with regard to particular matters. See

and 2001.038? They are not for several reasons. Railroad Comm’n v. Shell Oil Co., 146 Tex. 286, 206

S.W.2d 235, 241 (1947). The agency would be bound,

It does not appear that the legislature has delegated to the of course, to enact rules in compliance with the

legislative mandate. It may also be that a constitutional

Commission a power to bind others by ukase—a naked

provision requires, in particular circumstances, that the

proclamation contained, for example, in a letter, a set of agency promulgate a formal rule before attempting to

guidelines, or a report, or by a statement in a brief filed in bind private persons by the agency’s view of “law,”

a court proceeding. It appears instead that the “policy,” or procedural “requirements.” See, e.g.,

Commission may bind others generally only by a rule Madden v. Texas Bd. of Chiropractic Exmr’s, 663

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Brinkley v. Texas Lottery Com’n, 986 S.W.2d 764 (1999)

S.W.2d 622, 626–27 (Tex.App.—Austin 1984, writ ed.1994).10

ref’d n.r.e.). Such matters are not involved in the

present controversy. 9

The letters sent by the Commission in this instance

were, on their face, simply advisory guidelines; they

did not purport to express a final opinion on the legality

The very text of the APA rejects the theory that every of eight-liners of any particular kind. We have

previously noted the valuable role such advisory

agency pronouncement regarding “law,” “policy,” and

opinions serve in administration. See Texas Comm’n of

procedural “requirements” requires the promulgation of a Licensing and Regulation v. Model Search America,

formal rule. That theory would destroy, for example, the Inc., 953 S.W.2d 289 (Tex.App.—Austin 1997, no

distinction between “rules” and “policies” found in writ). As we stated in that opinion,

section 2001.058(b), (c), and (e); the word “policies” is [T]o permit suits for declaratory judgments upon

rendered meaningless because under that theory mere informal, advisory, administrative opinions

“policies” could only exist in the form of “rules.” might well discourage the practice of giving such

opinions, with a net loss of far greater proportions

We need not belabor the point. The definition in section than any possible gain.

Id. at 293 quoting, Helco Prods. Co. v. McNutt, 137

2001.003(6) is sufficiently flexible to allow agencies to F.2d 681, 684 (D.C.Cir.1943). Considering the

perform their functions without unnecessary procedural number of bingo-parlor licensees and the variety of

obstacles; the definition expressly excludes from the ways in which eight-liners can be configured, the

definition of a “rule” any agency statements regarding practical value of the letters is obvious. Nothing in

only the internal management or organization of an the letters purports to foreclose an individual licensee

agency that do not affect private rights or procedures. See from seeking, if he wishes, a formal opinion from the

Tex. Gov’t Code Ann. § 2001.003(6)(C) (West 1998). Commission regarding particular eight-liners. While

This statutory exclusion encompasses any agency private parties may voluntarily comply with such

statement regarding “law,” “policy,” or procedural guidelines, they are not legally bound to do so.

“requirements” made outside the rulemaking and

contested-case context; such statements have no legal

effect on private persons absent a statute that so provides 10

The first Commission letter stated:

or some attempt by the agency to enforce its statement TO ALL BINGO LICENSEES:

against a private person, as in Madden where the agency The Texas Lottery Commission has received

attempted to enforce, in the course of adjudicating a complaints regarding the use of gambling devices

contested case, its policy of what constituted a “bona fide at locations where bingo is being conducted. The

reputable chiropractic” school. See Madden, 663 S.W.2d specific complaints concern the operation of

devices popularly known as “Eight Liners.”

at 626–27. At that point, an affected person may

The Texas Lottery Commission considers these

challenge, if he wishes, the validity or applicability of the devices to be gambling devices as defined by

agency statement on whatever grounds may be applicable. Section 47.01(4) of the Texas Penal Code, as a

Until then, the agency’s pronouncements regarding “law,” result of the method of operation and payoff of

“policy,” and procedural “requirements” remain merely these devices.

informal views, effective only upon and within the Please be aware that Section (11(k)) of the Bingo

agency’s internal management and organization.9 See Enabling Act, Texas Revised Civil Statutes Article

Leeper, 893 S.W.2d at 443 (state board of education 179d, provides the following: “A game of chance

resolution stating guidelines for school districts pending other than bingo may not be conducted or allowed

statutory revision); United Parcel Serv., Inc. v. Oregon during an occasion when bingo is played. This

subsection does not prohibit the exhibition and

Transp. Comm’n, 27 Or.App. 147, 555 P.2d 778, 780 play of an amusement machine that is not a

(1976) (commission statement consenting to city’s gambling device as defined by Section 47.01,

designation of truck route); Reynolds Sch. Dist. v. Oregon Penal Code.”

Sch. Employees, 58 Or.App. 609, 650 P.2d 119, 123 Therefore, effective September 1, 1996, the

(1982) (agency statement made in adjudication of Commission will refer any incident of use by a

previous contested case); United States v. Fitch Oil Co., licensee of the aforementioned device(s) in an

676 F.2d 673, 678 (Temp.Emer.Ct.App.U.S.1982) illegal manner which is detected after September

(statement of Secretary of Energy); Durnin v. Allentown 1, 1996 to the appropriate law enforcement agency

Fed. Sav. and Loan Ass’n, 218 F.Supp. 716, 721 for criminal prosecution and will initiate an

appropriate administrative disciplinary action.

(E.D.Pa.1963) (letter from supervisory agent of Federal This notice is intended to make licensees aware of

Home Loan Bank Board); 1 Davis and Pierce, the agency’s position and to afford an opportunity

Administrative *771 Law Treatise § 3.5 at 120 (3d to licensees for voluntary compliance.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 5

City of Waco v. Texas Natural Resource Conservation Com’n, 83 S.W.3d 169 (2002)

and PURYEAR.

83 S.W.3d 169

Court of Appeals of Texas,

Austin. BEA ANN SMITH, Justice.

CITY OF WACO, Appellant,

v. This appeal concerns whether a dispute about the Texas

TEXAS NATURAL RESOURCE CONSERVATION Natural Resource Conservation Commission’s (the

COMMISSION; and Jeffrey A. Saitas, as Executive TNRCC’s) permit-issuing process is ripe for judicial

Director, Appellees. review by the district court. The Bosque River, a tributary

of the Brazos River, is located northwest of the city of

No. 03–01–00217–CV. | May 9, 2002. | As Modified Waco. Segments 1226 and 1255 of the North Bosque

on Overruling of RehearingJune 21, 2002. River have been listed as having impaired water quality

due to high levels of nutrients. See 30 Tex. Admin. Code

§§ 307.1–.10 (2001) (Tex. Natural Res. Conservation

City and dairy producers’ association filed action seeking Comm’n, Tex. Surface Water Quality Standards). Near its

declaratory judgment that Texas Natural Resources point of confluence with the Brazos River, the Bosque

Conservation Commission (TNRCC) order regulating River forms Lake Waco, which provides the sole source

future permits for confined animal feeding operations of drinking water for approximately 150,000 people in

(CAFOs) was invalid, TNRCC withdrew order and filed and around Waco; the lake is also used extensively for

motion to dismiss action as moot and not ripe, and city recreational activities. The water quality of Lake Waco,

amended petition to seek declaratory relief that TNRCC’s which is a “sink” for any dissolved pollutants in the

interim policy of continuing to issue any permits violated Bosque River, has been affected. Numerous dairy

state regulation. The 353rd Judicial District Court, Travis operations are located northwest of Waco in Erath County

County, Paul Davis, J., dismissed actions. City appealed. in the Bosque River watershed. The dairies must seek

The Court of Appeals, Bea Ann Smith, J., held that: (1) confined animal feeding operation (CAFO) permits from

dispute had to be evaluated in terms of ripeness, not the TNRCC because the agricultural waste from their

mootness; (2) question of whether federal regulation, as operations, which becomes dissolved in runoff or is

adopted by state law, operated to prohibit TNRCC from otherwise discharged, ultimately discharges into the river.

approving any new CAFO permits until TNRCC adopted

necessary pollution-reduction measures presented purely [1]

This dispute arose when the TNRCC promulgated an

legal inquiry, which would not benefit from development order in February 2000 regulating future permits for

of additional facts in connection with specific permit CAFOs. Both the City of Waco (the City) and the Texas

application; and (3) facts underlying dispute were Association of Dairymen (the Dairymen) filed actions for

sufficiently developed to make dispute ripe for review; declaratory judgments attacking the order. The TNRCC

and on rehearing, Smith, J., held that: (4) sovereign responded by withdrawing the order and moving to

immunity did not bar city’s suit; and (5) city was not dismiss both actions as moot and not ripe. The City

seeking advisory opinion, and thus suit was not amended its petition to seek declaratory relief that the

hypothetical and presented real controversy that would be TNRCC’s interim policy of continuing to issue any

resolved by declaratory relief sought. permits violates state regulations. The district court

dismissed the actions. Both the Dairymen and the City

Reversed and remanded. appealed the dismissal of their suits for declaratory relief.

However, following oral argument, the Dairymen

voluntarily dismissed their appeal.1 The only remaining

Attorneys and Law Firms

issue before us is the ripeness of the City’s suit for

*172 Jackson B. Battle, Brown McCarroll L.L.P., Austin, declaratory relief.2

for appellant.

1

The TNRCC filed a motion to dismiss the Dairymen’s

Anthony C. Grigsby, Linda B. Secord, Assistant appeal on the ground that legislative action had mooted

Attorneys General, Natural Resources Division, Austin, the association’s appeal. Because the Dairymen

for appellees. voluntarily dismissed their appeal, we overrule the

TNRCC’s motion.

Before Chief Justice ABOUSSIE, Justices B.A. SMITH

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City of Waco v. Texas Natural Resource Conservation Com’n, 83 S.W.3d 169 (2002)

water have caused excessive growth of algae and other

2

The TNRCC’s motion to dismiss the Dairymen’s and aquatic plants, which in turn potentially cause distaste and

the City’s claims asserted mootness and ripeness odor in drinking water and, under certain circumstances,

grounds. After a hearing, the trial court granted the contribute to the depletion of dissolved oxygen.

motion. The order states that “[a]fter considering the

motion, the responses, and the evidence filed in support Under the federal Clean Water Act, a state is required to

of the motion and responses, the court: GRANTS the “identify those waters within its boundaries for which the

motion and DISMISSES [the consolidated causes].” In effluent limitations required by [the Act] are not stringent

its brief, the TNRCC asserts that the City’s claims is

enough to implement any water quality standard

moot and not ripe. While the City’s original claims may

have been rendered moot by the TNRCC’s action

applicable to such waters.” 33 U.S.C. § 1313(d)(1)(A)

revoking its order, it amended its petition to state a (2001). In 1998, the TNRCC listed two segments of the

different claim based on the TNRCC’s policy. We Bosque River as “impaired under narrative water quality

conclude therefore that the issue should be analyzed in standards related to nutrients and aquatic plant growth.”

terms of ripeness. Once the TNRCC identified the water segments as

impaired, it was required to develop a Total Maximum

Daily Load (TMDL), which is a plan for assimilation of

Specifically, the City seeks a declaration that the TNRCC the pollutants that are present in the water. See id. §

may not grant any additional *173 permits for CAFOs in 1313(d)(1)(C).3 The TNRCC describes a TMDL as

the Bosque River watershed until it complies with certain

3

federal regulations that have been incorporated into state Under the Clean Water Act, the TNRCC is also

law. See 30 Tex. Admin. Code § 305.538 (1999) (Tex. required to develop a “continuing planning process” for

Natural Res. Conservation Comm’n, Prohibitions for reducing the pollution and bringing the water segments

TPDES Permits) (“no permit may be issued under the up to state water quality standards for nutrients and

conditions prohibited in 40 Code of Federal Regulations § pathogens. See 33 U.S.C. § 1313(e) (2001). This

process must include, in part, plans for “effluent

122.4, as amended”). The City maintains that it seeks

limitations and schedules of compliance at least as

resolution of a pure question of law: whether section stringent as those [required under provisions of the

122.4(i) operates to bar all new permits until the TNRCC Clean Water Act],” “the incorporation of all elements

has developed an implementation scheme to reduce of any applicable area-wide waste management plans,”

pollution in the two impaired segments of the Bosque total maximum daily loads for pollutants in accordance

River. The TNRCC contends that its compliance with the with subsection (d), and “adequate implementation,

regulations can only be determined in the context of a including schedules of compliance, for revised or new

permit application on the facts presented by a particular water quality standards.” Id.

application. Because we agree with the City that its

request for declaratory relief presents a determination of

law, we reverse the district court’s order of dismissal and

remand this cause for consideration on the merits. a quantitative plan that determines the amount of a

particular pollutant that a water body can receive and

still meet its applicable water quality standards. In

other words, TMDLs are the best possible estimates of

the assimilative capacity of the water body for a

FACTUAL AND PROCEDURAL BACKGROUND pollutant under *174 consideration. A TMDL is

commonly expressed as a load, with units of mass per

During the 1980s, the dairy industry expanded greatly in time period, but may be expressed in other ways also.

the North Bosque River watershed. Erath County became TMDLs must also estimate how much the pollutant

the leading county in the state for milk production. This load needs to be reduced from current levels in order to

reflects a trend in the dairy industry away from small, achieve water quality standards.

geographically scattered dairies toward large-scale, More than three years after the TNRCC identified the

clustered dairy operations. In early 2001, the TNRCC watershed as impaired, the TNRCC had still not

estimated that there were 41,000 milk cows concentrated established a TMDL plan. Although the agency

along the Bosque River watershed. The waste produced “anticipated” in late 1999 that it would be able to

by these concentrated operations has impaired the water submit a proposed TMDL to the Environmental

quality of the adjacent stretches of the North Bosque Protection Agency (EPA) by the spring of 2000, the

River. The TNRCC has identified the primary source of TNRCC did not complete a TMDL until early 2001.

the pollution to be phosphorus, which is a nutrient found The TNRCC has now sent a TMDL to the EPA for

in animal waste. The large amounts of phosphorus in the

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2

City of Waco v. Texas Natural Resource Conservation Com’n, 83 S.W.3d 169 (2002)

approval; at the time the parties submitted their briefs

in this cause, however, the TMDL had not been The Executive Director of the TNRCC testified that the

approved by that agency. agency will exercise its discretion to grant new permits as

The TMDL confirms that a major controllable source of long as the additional discharge will not worsen the

the phosphorus in the water comes from the dairy farms “environmental status quo” of the impaired river. The

concentrated in the watershed. It recommends that forty to agency also points to a rule that it says embodies this

sixty percent reductions in phosphorus loadings in some policy. See 30 Tex. Admin. Code § 321.33 (2001) *175

areas and fifty percent overall will be needed to reduce (Tex. Natural Res. Conservation Comm’n, Confined

the potential for problematic algae growth. The City notes Animal Feeding Operations, Applicability).5 The City

various problems with the proposed TMDL. The City argues that the TNRCC’s current discretionary policy is at

argues that its recommendations are based on now odds with state law which requires that a sufficient

outdated information; the number of permits currently allocation be available for the water to receive the

pending with the TNRCC, if approved, would increase the additional loading and still meet state water quality

number of authorized cows by 20,000, so the previously standards. See id. § 305.538 (1999) (prohibiting permit

recommended levels of the TMDL will not achieve that would violate 40 C.F.R. § 122.4). The City sought a

attainment of water quality standards.4 In addition, the declaration that

TMDL does not establish the amount of phosphorus

loadings, allocated among the dairies and other 5

The current administrative code is cited for

dischargers, that could be tolerated without violating convenience.

water quality standards for pathogens and nutrients. Nor

does it implement compliance schedules for the dairies

and other dischargers to reduce the pathogens in the two

impaired water segments. until the TNRCC promulgates legally binding

regulations to implement TMDLs for nutrients and

4

The TMDLs are based on data that was collected pathogens in the two Bosque Segments that contain

during the mid–1990s. The TNRCC has noted similar load allocations and other measures that will assure

concerns with the reliability of the data. An interagency compliance with the state water quality standards, no

memo states that the TMDL’s “demonstration of permit may be issued to construct or operate a new

feasibility is based in large part on computer model

CAFO ... within the watershed.

simulations that estimated the amount of dairy waste to

be applied and otherwise disposed of based on the The TNRCC argues that the City’s suit would not be

number of dairy cows existing or permitted in the ripe until the TNRCC issued a specific permit. The

watershed. If the waste projection changes significantly district court agreed with TNRCC and dismissed the

due [to] increasing number of animals, the model suit. The City now appeals from that judgment.

numbers are less useful for supporting TMDL

approval.”

DISCUSSION

Compounding these failures with respect to existing [2] [3] [4] [5]

Ripeness implicates subject-matter jurisdiction

dischargers, the City asserts that the TNRCC has

and emphasizes the requirement of a concrete injury in

worsened the situation by approving new applications for

order to present a justiciable claim. Waco Indep. Sch.

additional discharges of waste into the already polluted

Dist. v. Gibson, 22 S.W.3d 849, 851 (Tex.2000);

river. With the exception of certain small operations, the

Patterson v. Planned Parenthood, 971 S.W.2d 439, 442

dairies in the watershed are required to obtain CAFO

(Tex.1998). Ripeness is concerned with when an action

permits from the TNRCC that allow them to discharge

can be brought and seeks to conserve judicial time and

waste from their operations. The City asserts that since

resources for real and current controversies rather than

declaring the segments impaired, the TNRCC has

hypothetical or remote disputes. Gibson, 22 S.W.3d at

continued to grant permits for new and expanded uses

851; Patterson, 971 S.W.2d at 442–43. Courts of this

under an evolving “interim policy.” Although this interim

state may not issue advisory opinions. Patterson, 971

policy has taken slightly different forms in recent years,

S.W.2d at 443; Texas Ass’n of Bus. v. Texas Air Control

the City asserts that every phase of the policy grants the

Bd., 852 S.W.2d 440, 444 (Tex.1993). An opinion issued

agency the discretion to issue new permits, contrary to the

in a case that is not ripe would address only a hypothetical

regulations prohibiting additional CAFOs until the

injury rather than remedying actual or imminent harm.

TNRCC implements measures that will improve the water

See Texas Ass’n of Bus., 852 S.W.2d at 444.

quality to meet state standards.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3

City of Waco v. Texas Natural Resource Conservation Com’n, 83 S.W.3d 169 (2002)

[6] [7] [8]

In determining whether a cause is ripe for judicial new discharger required by paragraph (i) of this

consideration, we look to see whether the facts have section if the Director determines that the Director

sufficiently developed to show that an injury has already has adequate information to evaluate the

occurred, or is likely to occur. Patterson, 971 S.W.2d at request. An explanation of the development of

442. A claimant is not required to show that the injury has limitations to meet the criteria of this paragraph

already occurred, provided the injury is imminent or (i)(2) is to be included in the fact sheet to the

sufficiently likely. Gibson, 22 S.W.3d at 852; Patterson, permit under § 124.56(b)(1) of this chapter.

971 S.W.2d at 442. Likewise, a person seeking a

declaratory judgment need not have incurred actual 40 C.F.R. § 122.4(i) (2001) (Envtl. Prot. Agency, Nat’l

injury; a declaratory judgment action will lie if the facts Pollutant Discharge Elimination Sys., Prohibitions)

show the presence of “ripening seeds of a controversy.” (emphasis added). The City interprets section 122.4(i)

Texas Dep’t of Banking v. Mount Olivet Cemetery Ass’n, to mean that “no discharge permit may be issued to a

27 S.W.3d 276, 282 (Tex.App.-Austin 2000, pet. denied) new CAFO within the impaired watershed until the

(quoting Texas Dep’t of Pub. Safety v. Moore, 985 TNRCC promulgates regulations to implement TMDLs

S.W.2d 149, 153–54 (Tex.App.-Austin 1998, no pet.)). for phosphorous and pathogens in the two Bosque

Segments that contain load allocations and compliance

[9] schedules.”

The City contends that its claim that section 122.4(i) of

the Code of Federal Regulations, which has been Under the TNRCC’s interpretation, section 122.4(i) does

incorporated into state law, prohibits the TNRCC from not obligate the agency to develop load allocations and

issuing permits for new6 CAFOs in the watershed until the compliance schedules before it issues a new discharge

TNRCC develops compliance schedules and pollutant permit; rather, it merely limits the TNRCC’s ability to

load allocations is ripe. Section 122.4(i) reads: issue permits that would “cause or contribute to the

violation of water quality standards.” Whether a new

6 permit will cause or contribute to the violation of water

A CAFO that currently operates under a permit may

also seek a permit for additional or expanded uses. quality standards, the agency continues, depends on the

Section 122.4(i) applies only to a permit for a new specific conditions and terms of a given permit. The

source or discharger. See 40 C.F.R. § 122.4(i) (2001). TNRCC argues that the City’s claim does not present a

Therefore, the City has stipulated that its appeal is pure question of law because the agency’s compliance

limited to permits for new CAFOs. with section 122.4(i) can only be determined in the

context of an application for a permit. Thus, according to

the TNRCC, the City’s claim is not ripe until the agency

approves a permit, because only at that point can one

No permit may be issued [t]o a new source or a new determine whether the permit will cause or contribute to a

discharger, if the discharge from its construction or violation of water standards. The agency also emphasizes

operation *176 will cause or contribute to the violation that variations between state and federal law affect

of water quality standards. The owner or operator of a whether a particular permit violates section 122.4(i).

new source or new discharger proposing to discharge

into a water segment which does not meet applicable The City responds that the particular conditions of any

water quality standards or is not expected to meet those permit are irrelevant because under the agency’s rules and

standards even after the application of the effluent policy, every new permit to discharge into impaired

limitations required by sections 301(b)(1)(A) and waters violates section 122.4(i). The City points to the

301(b)(1)(B) of CWA, and for which the State or rules governing CAFOs,7 which specifically authorize

interstate agency has performed a pollutants load discharges in “chronic or catastrophic rainfall events.” See

allocation for the pollutant to be discharged, must 30 Tex. Admin. Code §§ 321.31(b), .32(8), .34,

demonstrate, before the close of the public comment .39(f)(19)(E) (2001) (Tex. Natural Res. Conservation

period, that: Comm’n, Concentrated Animal Feeding Operations).

*177 The City also maintains that the TNRCC’s own

(1) There are sufficient remaining pollutant load evidence indicates that only about half of the waste

allocations to allow for the discharge; and produced by CAFOs is ever “collectible.” Even if all of

the “collectible waste” is prevented from entering the

(2) The existing dischargers into that segment are watershed, other uncollectible waste is not. Therefore,

subject to compliance schedules designed to bring issuing an additional permit without pollutant load

the segment into compliance with applicable water allocations and compliance schedules will violate section

quality standards. The Director may waive the 122.4(i), regardless of the conditions that are imposed.

submission of information by the new source or Furthermore, according to the City, differences between

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4

City of Waco v. Texas Natural Resource Conservation Com’n, 83 S.W.3d 169 (2002)

state and federal law are not relevant to its declaratory liberally construed. Tex. Civ. Prac. & Rem.Code Ann. §

judgment suit, which is premised solely on the basis of 37.002; Moore, 985 S.W.2d at 153.

state law. The City notes that section 122.4(i) has been

[13]

incorporated into and become part of state law, and that The TNRCC also questions the fitness of the issues for

its claim is based on the TNRCC’s failure to implement decision, asserting that the City’s request will affect

standards to comply with state, not federal, water quality additional parties who are not present to defend their

standards. interests. The City responds that it is questionable that any

such additional parties would have adequate standing to

7

These are the rules that currently govern the CAFO participate in a challenge to an individual permit.

permit process. See Tex. Water Code Ann. § Furthermore, the TNRCC’s assertion does not go directly

26.503(b)(1) (West Supp.2002) (stating that an to the ripeness inquiry, which determines when an action

individual permit must “provide for management and may be brought, that is, “whether the facts have

disposal of waste in accordance with Subchapter B, developed sufficiently so that an injury has occurred or is

Chapter 321, Title 30, Texas Administrative Code”). likely to occur, rather than being contingent or remote.”

See Patterson, 971 S.W.2d at 442. The facts have

sufficiently developed as between the TNRCC and the

[10]

We conclude that the question of whether section City such that the dispute is not hypothetical. In addition,

122.4(i) operates to prohibit the TNRCC from approving an interested *178 party may intervene in the proceedings

any new discharge permits until it adopts the necessary on remand. See Tex.R. Civ. P. 60.

pollution-reduction measures presents a purely legal

inquiry. In determining ripeness, courts should examine Moreover, the denial of judicial review will result in

(1) the fitness of the issues for judicial decision, and (2) hardship to the City. Under the APA, a permit issued in a

the hardship occasioned to a party by the court’s denying contested case is final, even while an appeal is pending.

judicial review. Office of Pub. Util. Counsel v. Public See Tex. Gov’t Code Ann. § 2001.144. The effect of

Util. Comm’n, 843 S.W.2d 718, 724 (Tex.App.-Austin forcing the City to wait until the TNRCC has granted

1992, writ denied). The City’s claim poses a purely legal another permit means, in effect, that Lake Waco could

question-the interpretation of section 122.4(i)-which will become more polluted with the additional discharge while

not benefit from the development of additional facts in the parties litigate their dispute. Moreover, the City could

connection with a specific permit application. The suffer multiple harms from multiple additional CAFOs,

TNRCC asserts that the issues are not fit for decision and be forced to make this same legal argument in

because the City has failed to challenge a final agency numerous appeals. Thus, the City’s claim satisfies both

action. Citing provisions in the Water Code and the prongs of the ripeness inquiry.

Administrative Procedure Act (APA), the TNRCC

emphasizes that judicial review is limited to agency Furthermore, the City’s claim is appropriately brought

rulings, orders, decisions, or other acts, or the validity or pursuant to the Declaratory Judgment Act. Under that act,

applicability of a rule. See Tex. Water Code Ann. § 5.351 a claimant must show that (1) a justiciable controversy

(West 2000); Tex. Gov’t Code Ann. § 2001.038 (West exists as to the rights and status of the parties; and (2) the

2000). controversy will be resolved by the declaration sought.

Moore, 985 S.W.2d at 153. There is a justiciable

[11] [12]

The City, however, has asserted a different basis controversy between the parties regarding the effect of

for its lawsuit, specifically, sections 37.002–.004 of the section 122.4(i) on the agency’s permitting process. The

Uniform Declaratory Judgments Act (UDJA). See Tex. City asserts that the TNRCC has a duty to improve the

Civ. Prac. & Rem.Code Ann. §§ 37.002–.004 (West water quality of the impaired river segments without

1997). Under that Act, a claimant’s access to judicial further delay, and that the agency has no discretion to

review is not limited to review of agency rules; instead, issue new CAFO permits until it takes these affirmative

the Act provides a basis by which a claimant can obtain a steps. The TNRCC responds that it has the discretion to

declaration of rights, status, or other legal relations under grant additional permits that do not worsen the

a writing or a statute. See id. § 37.004. A suit under the environmental status quo. A declaration regarding the

UDJA is not confined to cases in which the parties have a effect of section 122.4(i) on the agency’s authority to

cause of action apart from the Act itself. Texas Dep’t of issue new CAFO permits will resolve this controversy.

Pub. Safety v. Moore, 985 S.W.2d 149, 153 Therefore, we hold that the trial court had jurisdiction to

(Tex.App.-Austin 1998, no pet.). The legislature intended hear the City’s claim under the UDJA and that the issue is

the UDJA to be remedial, to settle and afford relief from ripe for adjudication.8

uncertainty and insecurity with respect to rights, and to be

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 5

Firemen’s Ins. Co. of Newark, N. J. v. Burch, 442 S.W.2d 331 (1968)

has not been determined. On December 7, 1966, Jesse L.

442 S.W.2d 331 and Dorothy Burch filed this suit in the form of a

Supreme Court of Texas. declaratory judgment against Firemen’s Insurance

Company of Newark, New Jersey. The insurance

FIREMEN’S INSURANCE COMPANY OF company filed a cross-action and the trial court entered a

NEWARK, NEW JERSEY, Petitioner, declaratory judgment decreeing that:

v. ‘(T)he defendant Firemen’s Insurance

Jesse L. BURCH et ux., Respondents. Company of Newark, New Jersey, is

obligated by virtue of its Policy No.

No. B—914. | Oct. 9, 1968. | Rehearing Denied Oct.

30, 1968. | Second Rehearing Denied and Dissenting AFT 322361 to defend Larry J.

Opinion Jan. 22, 1969. Buttler in Cause No. 152,097 styled

Dorothy M. Burch, et vir v. Sarah C.

Buttler, et vir, in the 53rd Judicial

Suit for declaratory judgment to determine liability of District Court of Travis County,

insurer of automobile. The 53rd District Court, Travis Texas, and that since Larry J. Buttler

County, Jones, J., rendered judgment that insurer was is liable for the torts of his wife, Sarah

obligated to defend defendant husband of driver and since C. Buttler, committed during their

husband was responsible for torts of wife was obligated to marriage, the defendant, Firemen’s

pay any judgment rendered against him, and insurer Insurance Company of Newark, New

appealed. The Austin Court of Appeals, Third Supreme Jersey, is obligated by virtue of Policy

Judicial District, 426 S.W.2d 306, affirmed District Court No. AFT 322361 to pay on behalf of

judgment and insurer brought error. The Supreme Court, Larry J. Buttler any judgment

Norvell, J., held that whether insurer had duty to defend rendered against him in said Cause

defendant husband of driver was justiciable issue but that No. 152,097 to the full extent of its

District Court had no power to render advisory opinion on policy coverage, * * *.’

hypothetical question of whether insured was liable for

wife’s torts before it had been established that she was

liable to plaintiff. The court also declared that the insurance company was

not obligated to defend Sarah C. Buttler1 and was ‘not

Affirmed in part and reversed in part. obligated to pay any judgment rendered against her’ in the

case of Burch v. Buttler. This declaratory judgment was

Smith, J., dissented on Motion for Rehearing. affirmed by the Court of Civil Appeals. 426 S.W.2d 306.

1

Larry Buttler and Sarah Buttler have been divorced and

at the time of the rendition of judgment in this cause,

Attorneys and Law Firms May 10, 1967, Sarah was the wife of Hilton Cromier.

She will, however, be referred to herein as Sarah

*332 Small, Herring, Craig, Werkenthin & Shannon, C. Buttler.

C. Small, Jr., Charles Herring and Bob E. Shannon,

Austin, for petitioner.

[1]

The question of the insurance company’s duty to

Garey, Colbert & Kidd, Joe Colbert, Austin, for

defend presented a justiciable issue. No complaint is

respondents.

made of the trial court’s disposition of this issue and that

Opinion portion of the trial court’s judgment relating thereto will

not be disturbed. However, that portion of the decree

NORVELL, Justice. which attempts to declare the liability of the insurance

company upon any judgment *333 which may hereafter

be rendered in the case of Burch v. Buttler is purely

advisory in nature and beyond the power and jurisdiction

On December 1, 1965, Dorothy Burch was injured in a of the district court to render. Accordingly, such portion

collision between the car in which she was riding and an of the trial court’s judgment is vacated.

automobile driven by Sarah Buttler, the wife of Larry

[2] [3] [4]

Buttler. Dorothy Burch and her husband, Jesse L. Burch, This court has repeatedly held that under our

sued Sarah and Larry Buttler for damages and this action Constitution, the judicial power does not embrace the

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Firemen’s Ins. Co. of Newark, N. J. v. Burch, 442 S.W.2d 331 (1968)

giving of advisory opinions. Morrow v. Corbin, 122 tex. Burch v. Buttler. At present, the question is

553, 62 S.W.2d 641 (1933); California Products, Inc. v. hypothetical—‘If Mrs. Buttler be held liable to Mrs.

Puretex Lemon Juice, Inc., 160 Tex. 586, 334 S.W.2d 780 Burch for damages in tort, is Larry Buttler to be held

(1960); United Services Life Insurance Co. v. Delaney, liable also although he did not aid or abet in the conduct

396 S.W.2d 855 (Tex.Sup.1965), and authorities therein of his wife, which is alleged to be tortious.’ Should this

cited. Article 5, s 8 of the Texas Constitution, Vernon’s question be answered, then the following ‘iffy’ question

Ann.St. does not empower the district courts to render arises. If Larry Buttler be held liable for his wife’s tort,

such opinions and as jurisdiction is a matter of should the liability of the petitioner insurance company be

constitutional delineation, the Legislature could not and limited to the amount of his interest in the community

has not by the passage of the Uniform Declaratory estate of the marriage subject to execution?

Judgments Act, empowered the district courts to render

advisory opinions. In 1960, this court again reiterated the

principle that the giving of such opinions is not a judicial Of course, If Mrs. Burch should fail to establish her case

function, but that in governmental affairs, the duty to against Mrs. Buttler, the questions raised by petitioner’s

render advisory opinions is vested in the executive branch points would be purely academic and we would have had

of government and that in private business, the giving of a considerable amount of judicial wheel spinning for

legal advice is the function of the legal profession. nothing.

California Products, Inc. v. Puretex Lemon Juice, Inc.,

160 Tex. 586, 334 S.W.2d 780 (1960). Also in the *334 We can well appreciate that the parties would prefer

Puretex case, this court cited and quoted from Ladner v. a definite answer by this court to the questions posed by

Siegel, 294 Pa. 368, 144 A. 274 (1928), as correctly petitioner’s points rather than to take an ‘educated guess’

laying down the proposition that the Declaratory based upon a study of our prior decided cases and

Judgments Act gives the court no power to pass upon authoritative materials as to what we would hold,—as, if

hypothetical or contingent situations, or determine and when the questions are presented in justiciable form.

questions not then essential to the decision of an actual However, the giving of advice as to proposed or possible

controversy, although such questions may in the future settlements is not a judicial function. As a practical matter

require adjudication. if for no other reason, this must be left to the profession.

In Lide v. Mears, 231 N.C. 111, 56 S.E.2d 404 (1949),

Puretex controls this case. The parties have posed a cited with approval in the Puretex case, the North

problem which is hypothetical, ‘iffy’ and contingent. Carolina Supreme Court said:

Firemen’s Insurance Company, as petitioner here, ‘There is much misunderstanding as

presents the following points of error: to the object and scope of this

‘The Court of Civil Appeals erred in holding that Larry legislation (Uniform Declaratory

Buttler was legally obligated within the terms of the Judgment Act). Despite some notions

insurance policy here involved to pay damages to the contrary, it does not undertake

occasioned by the tort of his wife (Sarah Buttler) even to convert judicial tribunals into

though he in no way participated therein.’ counsellors and impose upon them the

duty of giving advisory opinions to

‘The Court of Civil Appeals erred in failing to hold that in any parties who may come into court

any event Larry Buttler’s legal obligation for a tort of his and ask for either academic

wife, not participated in nor aided or abetted by him, enlightenment or practical guidance

should be the amount of his interest in the community concerning their legal affairs. Town

estate of the marriage subject to execution and of Tryon v. Duke Power Co., 222

consequently petitioner’s liability under its policy would N.C. 200, 22 S.E.2d 450; Allison v.

be limited to such amount.’ Sharp, 209 N.C. 477, 184 S.E. 27;

Poore v. Poore, 201 N.C. 791, 161

[5]

The contentions raised by these points present S.E. 532; Anderson on Declaratory

interesting questions of law as is demonstrated by the Judgments, section 13. This

opinion of the Court of Civil Appeals. The question posed observation may be stated in the

is whether or not under the facts of this case, Larry Buttler vernacular in this wise: The Uniform

is liable for the torts of his wife, Sarah Buttler. But, no Declaratory Judgment Act does not

court has yet decided whether Mrs. Buttler has committed license litigants to fish in judicial

a tort which would render her liable in damages to Mrs. ponds for legal advice.’

Burch. That is the issue involved in the untried cause of

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2

Railroad Com’n of Texas v. CenterPoint Energy Resources..., Not Reported in...

2014 WL 4058727

2014 WL 4058727

Only the Westlaw citation is currently available. MEMORANDUM OPINION

SEE TX R RAP RULE 47.2 FOR DESIGNATION

AND SIGNING OF OPINIONS. MELISSA GOODWIN, Justice.

MEMORANDUM OPINION *1 The Texas Railroad Commission (the Commission)

Court of Appeals of Texas, appeals the trial court’s reversal in part of its final orders

Austin. in three annual review proceedings under cost-of-service

adjustment (COSA) tariffs involving essentially identical

The RAILROAD COMMISSION OF TEXAS, issues. CenterPoint Energy Resources Corp. d/b/a

Appellant CenterPoint Energy Entex and CenterPoint Energy Texas

v. Gas (CenterPoint) and Texas Gas Service Company, a

CENTERPOINT ENERGY RESOURCES CORP. Division of ONEOK, Inc. (Texas Gas) (the Utilities) sued

d/b/a CenterPoint Energy Entex and CenterPoint for judicial review of final orders issued by the

Energy Texas Gas, Appellee. Commission denying the Utilities’ recovery of certain

The Railroad Commission of Texas, Appellant expenses for meals, lodging, and other items and ordering

v. certain guidelines for recovery of similar expenses in

Texas Gas Service Company, a Division of future COSA reviews. Because we conclude that the

ONEOK, Inc., Appellee. Utilities’ claims are not ripe, we reverse the trial court’s

The Railroad Commission of Texas, Appellant judgment and dismiss the Utilities’ claims.

v.

CenterPoint Energy Resources Corp. d/b/a

CenterPoint Energy Entex and CenterPoint Energy

Texas Gas, Appellee.

FACTUAL AND PROCEDURAL BACKGROUND

Nos. 03–13–00533–CV, 03–13–00534–CV,

03–13–00535–CV. | Aug. 14, 2014. In April 2010, the Utilities applied for cost-of-service

adjustments to their rates pursuant to annual reviews

authorized under their respective COSA tariffs for certain

From the District Court of Travis County, 98th Judicial service areas. Rates for the affected customers were

District, No. D–1–GN–10–003981, Stephen Yelenosky, initially determined in contested case hearings that

Judge Presiding. resulted in the adoption of tariffs with COSA clauses. A

From the District Court of Travis County, 200th Judicial COSA clause is a formula included in a utility’s tariff that

District, No. D–1–GN–10–003983, Stephen Yelenosky, allows adjustments to customer charges without the

Judge Presiding. necessity of a full-blown “Statement of Intent” rate case.

From the District Court of Travis County, 126th Judicial See Texas Coast Utils. Coal. v. Railroad Comm’n, 423

District, No. D–1–GN–10–003982, Stephen Yelenosky, S.W.3d 355, 357, 374 (Tex.2014) (upholding authority of

Judge Presiding. Commission to adopt gas utility rate schedule providing

for automatic annual adjustments based on increases or

Attorneys and Law Firms decreases in utility’s cost of service, i.e., COSA clause).

The terms of a COSA clause vary depending on what is

Douglas Fraser, Assistant Attorney General, approved as part of the tariff in the rate case. The tariffs in

Environmental Protection Division, Kellie E. Billings, these cases provide that the annual rate adjustment is to be

Assistant Attorney General, Environmental Protection & determined by a calculation based on calendar year

Admin. Law Division, Austin, TX, for Appellant. operating expenses, return investment, and certain taxes.

If the resulting change is positive, the amount charged

Dane McKaughan, Greenberg Traurig, LLP, Austin, TX, goes up; if it is negative, the amount charged goes down.

for Appellee. The adjustment is capped at 5% of the customer charge

that was in effect at the end of the preceding calendar year

Before Justices PURYEAR, GOODWIN, and FIELD.

in CenterPoint’s tariffs and at the percentage change in

the Consumer Price Index for All Urban Consumers in

Texas Gas’s tariff. These were the first COSA filings

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Railroad Com’n of Texas v. CenterPoint Energy Resources..., Not Reported in...

2014 WL 4058727

made by the Utilities under their respective tariffs. and reversed the final orders, finding that the Commission

acted arbitrarily and capriciously by imposing a new

A COSA tariff annual review is a streamlined procedure policy in the orders and that the policy was made through

that does not include a hearing; instead, the adjustment is unlawful procedure and was not supported by substantial

determined following staff review of the evidence filed by evidence. These appeals followed.

the utility. In each of the present cases, the Commission

questioned and ultimately disallowed certain expenses for

meals, travel, and other items for which the Utilities could

not produce itemized receipts.1 In its final orders, the

Commission made certain findings of fact and DISCUSSION

conclusions of law concerning the disallowed expenses

and included two “ordering paragraphs” requiring the In its first issue, the Commission argues that the Utilities’

Utilities to meet certain evidentiary criteria for recovery claims are not ripe and they therefore seek an

of similar expenses in the future.2The two ordering impermissible advisory opinion.3The Commission

paragraphs provided: contends that the Utilities request a predetermination of a

hypothetical matter that could arise in the future, which is

1

not a matter fit for judicial consideration. The Utilities

The removal of the disputed expenses did not result in argue that the orders “expressly appl [y] ... to future

any change to the Utilities’ proposed adjustments, and

COSA proceedings,”“mandate the manner in which all

the record reflects that the Utilities withdrew their

requests for the questioned expenses.

future rate adjustments filed pursuant to the applicable

COSA tariff will be resolved,” and “fundamentally

change the way in which COSA adjustments are

calculated in future COSA proceedings.”They further

2

In each case, calculation errors not relevant to this contend that the orders place “obligations and burdens on

appeal were corrected and a nunc pro tunc order issued. [them] now, and that failure to abide by these new

obligations and burdens could bar recovery in a future

COSA proceeding.”Thus, the Utilities contend, they seek

real relief and an opinion that will affect “all COSA cases

*2 IT IS FURTHER ORDERED that [the Utilities] [they] will file in the future,” not an advisory opinion.

shall not include any employee or contractor expenses

from employee or contractor expense reports 3

The Commission also contends that the Utilities lack

reimbursement in future COSA filings that cannot be standing because in their motions for rehearing, they

supported by a detailed itemized receipt which shows did not challenge the Commission’s final decisions on

the specific amounts and line item charges. rate adjustments and instead attacked only the

underlying findings of fact and conclusions of law. This

IT IS FURTHER ORDERED that [the Utilities] Court has held that to have standing to seek judicial

shall identify and justify each meal expense that review, one must be aggrieved by the final order and

exceeds $25.00 per person and any lodging expense not merely by an underlying finding or conclusion, see

over $150.00 per person per night that [the Utilities] GTE Sw. Inc. v. Public Util. Comm’n of Tex., 37

S.W.3d 546, 548 (Tex.App.-Austin 2001, no

propose[ ] to include in future COSAs. pet.)(citing Champlin Exploration, Inc. v. Railroad

The Utilities filed motions for rehearing complaining that Comm’n, 627 S.W.2d 250, 252 (Tex.App.-Austin 1982,

the findings of fact, conclusions of law, and ordering writ ref’d n.r.e.)). However, the Utilities’ motions for

paragraphs concerning the disallowed expenses were rehearing expressly challenged the ordering paragraphs

statements of new policy, not backed by any rule or as well as the findings and conclusions. We overrule

guideline, and were therefore made through unlawful the Commission’s first issue as to this argument.

procedure, arbitrary and capricious, and not supported by

substantial evidence. The Commission denied the motions

for rehearing, and the Utilities filed suits for judicial “The courts of this state are not empowered to give

review asserting the same claims. See Tex. Util.Code § advisory opinions[, and] [t]his prohibition extends to

105.001(a) (any party to proceeding before Commission cases that are not yet ripe.”Patterson v. Planned

entitled to judicial review under substantial evidence Parenthood of Hous. & Se. Tex., Inc., 971 S.W.2d 439,

rule). The Commission filed motions to dismiss based, in 443 (Tex.1998) (citations omitted). The ripeness doctrine

part, on its contention that the Utilities were requesting “serves to avoid premature adjudication” and “focuses on

advisory opinions because their claims are not ripe. The whether the case involves ‘uncertain or contingent future

trial court denied the Commission’s motions to dismiss events that may not occur as anticipated, or indeed may

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2

Railroad Com’n of Texas v. CenterPoint Energy Resources..., Not Reported in...

2014 WL 4058727

not occur at all.’ “ Perry v. Del Rio, 66 S.W.3d 239, 250 Exam’rs, 278 S.W.3d 17, 25 (Tex.App.-Austin 2008, pet.

(Tex.2001) (citations omitted). “A case is not ripe when dism’d), with Beacon Nat’l Ins. Co. v. Montemayor, 86

its resolution depends on contingent or hypothetical facts, S.W.3d 260, 267–68 (Tex.App.-Austin 2002, no pet.).

or upon events that have not yet come to pass.” Patterson,

971 S.W.2d at 443. “Ripeness is both a question of The Utilities attempt to characterize their claims as ripe

timing, that is, when one may sue, a question of by arguing that the language of the ordering paragraphs

discretion, or whether the court should hear the suit, and will require them to meet evidentiary requirements in all

not whether it can hear the suit.” Atmos Energy Corp. v. future annually required COSA filings and that the orders

Abbott, 127 S.W.3d 852, 858 (Tex.App.-Austin 2004, no place “obligations and burdens” on them now. Tellingly,

pet.)(internal citations omitted) (citing Perry, 66 S.W.3d however, the Utilities argue that their failure to meet these

at 249–50; Patterson, 971 S.W.2d at 442; City of Waco v. obligations and burdens could bar recovery in a future

Texas Natural Res. Conserv. Comm’n, 83 S.W.3d 169, COSA proceeding. This perceived threat as to future

177 (Tex.App.-Austin 2002, pet. denied)). “In the COSA filings does not rise to the level of imminent or

administrative-law context, moreover, avoiding premature likely injury so as to present a justiciable claim. See Mitz,

litigation over administrative determinations prevents 278 S.W.3d at 25 (contrasting actual initiation of

courts from ‘entangling themselves in abstract administrative action suggesting imminent proceeding in

disagreements over administrative policies’ while that case with mere perceived threat in Beacon Nat’l, 86

simultaneously allowing the agency to perform its S.W.3d at 267–68). And while we may consider

functions unimpeded.” Trinity Settlement Servs., LLC v. intervening events that occur after a decision in the lower

Texas State Secs. Bd., 417 S.W.3d 494, 506 court, see Perry, 66 S.W.3d at 250, the Utilities have not

(Tex.App.-Austin 2013, pet. denied) (quoting Patterson, presented any evidence that the Commission has taken

971 S.W.2d at 443). The determination of ripeness any steps to impose the requirements on them since

depends on “(1) the fitness of the issues for judicial issuing the final orders or that there is any existing or

decision; and (2) the hardship occasioned to the party by continuing threat of liability or penalty. Cf. Mitz, 278

the court’s denying judicial review.” Atmos Energy, 127 S.W.3d at 25–26 (constitutional claim ripe for review

S.W.3d at 858 (citing Perry, 66 S.W.3d at 250 (citing considering continuing threat of civil and criminal

Abbott Labs. v. Gardner, 387 U.S. 136, 149, 87 S.Ct. liability against practitioners and direct effect act had on

1507, 18 L.Ed.2d 681 (1967); City of Waco, 83 S.W.3d at business enterprise); Patel v. Texas Dep’t of Licensing &

177)). Ripeness should be decided on the basis of all the Regulation, No. 03–11–00057–CV, 2012 Tex.App.

information available to the court, and we may consider LEXIS 6187, at *23,2012 WL 3055479 (Tex.App.-Austin

intervening events that occur after the decision in the July 25, 2012, pet. granted) (constitutional claims ripe

lower court. Perry, 66 S.W.3d at 250; 13 Charles Alan where appellants subject to continuing threat of civil and

Wright, Arthur R. Miller, & Edward H. Cooper, Federal criminal liability, as well as administrative penalties and

Practice & Procedure § 3532.1, at 136–37 (2d ed.1984). sanctions). Thus, the Utilities have not established that

enforcement is imminent or sufficiently likely, see Trinity

*3 We do not believe the Utilities have affirmatively Settlement, 417 S.W.3d at 506; Atmos Energy, 127

established that the issues they presented were fit for S.W.3d at 856; City of Waco, 83 S.W.3d at 175, and we

review and that the failure to address those issues would conclude that the Utilities’ issues are not fit for judicial

constitute a hardship on the Utilities. See Perry, 66 review, see Perry, 66 S.W.3d at 250; Atmos Energy, 127

S.W.3d at 250; Atmos Energy, 127 S.W.3d at 858. S.W.3d at 858.

Whether there may be an actual controversy between the

Utilities and the Commission is too uncertain and *4 To prevail, the Utilities must show that they would

speculative to support the Utilities’ contention that their suffer hardship if judicial review is withheld until

claims are ripe. Because the Utilities complain of future enforcement of the requirements in the ordering

enforcement, they must show that enforcement is paragraphs. See Perry, 66 S.W.3d at 250; Atmos Energy,

“imminent or sufficiently likely.” See Trinity Settlement, 127 S.W.3d at 858. Hardship is shown when the statute,

417 S.W.3d at 506; Rea v. State, 297 S.W.3d 379, 383 rule, or policy at issue “ ‘requires an immediate and

(Tex.App.-Austin 2009, no pet.)(to establish ripeness, significant change in the plaintiffs’ conduct of their affairs

plaintiffs must demonstrate injury is imminent, direct, and with serious penalties attached to noncompliance.’ “ Mitz,

immediate, not merely remote, conjectural, or 278 S.W.3d at 26 (quoting Abbott Labs. v. Gardner, 387

hypothetical); Atmos Energy, 127 S.W.3d at 856; City of U.S. 136, 153, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967)).

Waco, 83 S.W.3d at 175. A perceived threat of When the requirement at issue has a direct and immediate

enforcement does not create a justiciable controversy. impact on the party’s business and places it in jeopardy of

Compare Mitz v. Texas State Bd. of Veterinary Med. sanction or penalty, that is sufficient to show a hardship.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3

Robinson v. Parker, 353 S.W.3d 753 (2011)

54 Tex. Sup. Ct. J. 1640

353 S.W.3d 753 David A. Furlow, Thompson & Knight, L.L.P., Levi

Supreme Court of Texas. James Benton, Benton Massey PLLC, Houston, TX, for

Amicus Curiae Francis M. Kubosh.

Carroll G. ROBINSON, Bruce R. Hotze, and

Jeffrey N. Daily, Petitioners, Opinion

v.

Annise D. PARKER, Mayor; City of Houston; Justice GREEN delivered the opinion of the Court.

Houston City Council, et al., Respondents.

No. 08–0658. | Argued Nov. 18, 2009. | Decided In this case, we are asked to decide (1) whether citizens

Aug. 26, 2011. | Rehearing Denied Oct. 21, 2011. who signed a petition proposing a local ballot initiative

have standing to assert their declaratory judgment claims

that the voter-approved initiative is valid and must be

enforced; and (2) the validity of the voter-approved

Synopsis initiative. Because the citizens’ claims are not ripe,

Background: Citizens, who were sponsors of however, we cannot reach those issues.

citizen-initiated referendum proposition, brought action

against city, mayor, and city council, seeking declaratory

judgment that the proposition was valid and must be

enforced. The 333rd District Court, Harris County, Joseph

J. Halbach, J., granted citizens motion for summary I

judgment. Defendants appealed. The Houston Court of

Appeals, 260 S.W.3d 463, reversed, concluding that Petitioners Carroll G. Robinson, Bruce R. Hotze, and

citizens lacked standing. Citizens filed petition for review. Jeffrey N. Daily are citizens of Houston who participated

to varying degrees in efforts to place a proposition

regarding city revenues and spending on the ballot for

public referendum. Hotze and Daily organized the petition

[Holding:] The Supreme Court, Paul W. Green, J., held drive and helped draft the final language of the proposal.

that citizens’ declaratory claims were not ripe. All three Petitioners signed the petition, donated time and

money to campaigns promoting the passage of the

proposition, and voted in favor of it.

Judgments of Court of Appeals and District Court

vacated; case dismissed. On November 2, 2004, Houston voters passed the

proposition, called Proposition 2, as well as Proposition 1,

which the Houston City Council had placed on the ballot

Attorneys and Law Firms by its own act in response to Prop. 2.1 Prop. 1 garnered

more votes, with 280,596 favorable votes, or 64% of the

*753 William A. ‘Andy’ Taylor, Amanda Eileen Staine

total, as opposed to 242,697 favorable votes for Prop. 2,

Peterson, Andy Taylor & Associates, P.C., Houston, TX,

or 56% of the total. However, the City of Houston

for Carroll G. Robinson.

determined that, because Prop. 1 and Prop. 2 conflict,

Scott J. Atlas, Bill White for Texas, Patrick W. Mizell, Prop. 2 was ineffective and unenforceable. The City based

Stacey Neumann Vu, Vinson & Elkins LLP, Stephen that determination both on what Petitioners refer to as

Douglas Pritchett Jr., David M. Gunn, Beck Redden & Prop. 1’s “poison pill provision,”2 and on the

Secrest, L.L.P. Arturo G. Michel, City Attorney, City of conflicting-ordinance provision in the Houston City

Houston Legal Dept., Patrick Zummo, Law Offices of Charter. See Hous., Tex., Code Ordinances, City Charter

Patrick Zummo, John Berchmans Daily, Weil Gotshal & art. IX, § 19 (2006) (“[A]t any election for the adoption of

Manges LLP, Houston, TX, *754 Melanie Plowman amendments if the provisions of two or more proposed

Sarwal, Weil Gothshal & Manges LLP, Austin, TX, for amendments approved at said election are inconsistent the

Bill White. amendment receiving the highest number of votes shall

prevail.”). The mayor therefore *755 did not certify the

Jonathan Day, Andrews Kurth LLP, Warren W. Harris, results of the passage of Prop. 2 to the secretary of state,

Bracewell & Giuliani, LLP, Houston, TX, for Amicus and the city council did not enter an order in the city

Curiae Continental Airlines, Inc. records declaring that Prop. 2 had been adopted. See

Robinson v. Parker, 353 S.W.3d 753 (2011)

54 Tex. Sup. Ct. J. 1640

LOC. GOV’T CODEE §§ 9.005(b) (requiring city council Code Ordinances, City Charter art. III, § 1; art. VI-a, § 7;

to pass an ordinance declaring the adoption of an art. IX, § 20 (2006). The trial court ultimately granted

initiative that receives a majority of the vote), 9.007 summary judgment in favor of Petitioners. The court of

(requiring mayor to certify results of an election that appeals, however, ruled that Petitioners lacked standing to

passes a charter amendment to the secretary of state). assert their claims, relying on our holding in Brown v.

Todd, 53 S.W.3d 297, 305 (Tex.2001). 260 S.W.3d 463,

1

Prop. 2 was described on the ballot as: 470–72 (Tex.App.-Houston [14th Dist.] 2008, pet. filed).

The City Charter of the City of Houston shall be The court remanded the case to the trial court to allow

amended to require voter approval before the City Petitioners to amend their pleadings and establish

may increase total revenues from all sources by standing. Id. at 466.

more than the combined rates of inflation and

population, without requiring any limit of any Robinson, Hotze, and Daily petition for review on two

specific revenue source, including water and sewer grounds.3 First, they assert that the court of appeals erred

revenues, property taxes, sales taxes, fees paid by when it determined that Petitioners lack standing. Second,

utilities and developers, user fees, or any other

sources of revenues.

they ask us to consider the merits of their claim that Prop.

Prop. 1 was described on the ballot as: 2 should be enforced.

The Charter of the City of Houston shall be

amended to require voter approval before property 3

The current Houston mayor has been substituted for her

tax revenues may be increased in any future fiscal predecessor. See TEX.R.APP. P. 7.2(a) (automatic

year above a limit measured by the lesser of 4.5% substitution when public officer is party in official

or the cumulative combined rates of inflation and capacity).

population growth. Water and sewer rates would

not increase more than the cumulative combined

rates of inflation and population growth without

prior voter approval. The Charter Amendment also

requires minimum annual increases of 10% in the

senior and disabled homestead property tax

exemptions through the 2008 tax year. II

[1] [2] [3] [4]

Ripeness “is a threshold issue that implicates

subject matter jurisdiction ... [and] emphasizes the need

2

Prop. 1 provides: for a concrete injury for a justiciable claim to be

If another proposition for a Charter amendment presented.” Patterson v. Planned Parenthood of Hous. &

relating to limitations on increases in City Se. Tex., 971 S.W.2d 439, 442 (Tex.1998). In evaluating

revenues is approved at the same election at which

this proposition is also approved, and if this

ripeness, we consider “whether, at the time a lawsuit is

proposition receives the higher number of filed, the facts are sufficiently developed ‘so that an injury

favorable votes, then this proposition shall prevail has occurred or is likely to occur, rather than being

and the other shall not become effective. contingent or remote.’ ” Waco Indep. Sch. Dist. v. Gibson,

22 S.W.3d 849, 851–52 (Tex.2000) (emphasis in original)

(quoting Patterson, 971 S.W.2d at 442). Although a claim

Petitioners sought relief from the court of appeals, which is not required to be ripe at the time of filing, if a party

granted their petition for writ of mandamus, holding that cannot demonstrate a reasonable likelihood that the claim

the City had failed to perform the ministerial duties of will soon ripen, the case must be dismissed. See Perry v.

certifying the results to the secretary of state and entering Del Rio, 66 S.W.3d 239, 251 (Tex.2001).

an order declaring the charter amendments to have been [5]

adopted. In re Robinson, 175 S.W.3d 824, 826–32 The record is silent as to whether the City has, in fact,

(Tex.App.-Houston [1st Dist.] 2005, orig. proceeding). failed to comply with the Prop. 2 spending caps. As the

On the same day that they petitioned for mandamus relief, parties acknowledged at oral argument, the record in this

Petitioners filed the underlying suit seeking a declaratory case indicates that then-mayor Bill White, in response to

judgment that Prop. 2 is effective and must be enforced. Prop. 2’s inclusion in the City Charter, stated his intention

While that case was pending, the city council passed an to comply with the caps Prop. 2 imposed. In an attempt to

ordinance recognizing that both Prop. 1 and Prop. 2 had show noncompliance, Petitioners presented several

passed but also declaring that Prop. 1 had received the documents with their post-submission brief. Petitioners

higher number of votes. As a result, both propositions point to a May 2009 letter from then- *756 controller

became part of the Houston City Charter. See Hous., Tex., Annise Parker, who is now mayor of Houston, stating that

the controller’s office is “no longer responsible for

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2

Texas Ass’n of Business v. Texas Air Control Bd., 852 S.W.2d 440 (1993)

along with two Intervenors,1 filed counterclaims seeking a

852 S.W.2d 440 declaration *442 that the same statutes and regulations

Supreme Court of Texas. comport with those constitutional provisions.

TEXAS ASSOCIATION OF BUSINESS, Appellant, 1

The League of Women Voters and the Lone Star

v. Chapter of the Sierra Club intervened in the suit and

TEXAS AIR CONTROL BOARD and Texas Water were aligned as defendants with the Texas Air Control

Commission, Appellees. Board and the Texas Water Commission. Justice

Doggett contends that the standing of the Intervenors

No. C–9556. | March 3, 1993. | Rehearing Overruled should be addressed along with TAB’s. We disagree.

May 5, 1993. Standing concerns a party’s faculty to invoke the

court’s subject matter jurisdiction. Once it has been

invoked by a plaintiff, a court’s subject matter

Business association sought declaratory judgment that jurisdiction is not affected by the status of defendants

statutes authorizing administrative agencies to assess fines or intervenors aligned in interest with defendants.

for violation of environmental laws are unconstitutional.

The 250th District Court, Travis County, upheld statutes,

and direct appeal was taken. The Supreme Court, Cornyn, Following a bench trial, the trial court denied the relief

J., held that: (1) statutes authorizing Air Control Board sought by TAB, and as requested by the State and

and Water Commission to assess fines prior to judicial Intervenors, declared that section 4.041 of the Texas

review violate open courts guarantee of Texas Clean Air Act, sections 26.136 and 27.1015 of the Texas

Constitution, but (2) statutes do not violate constitutional Water Code, and section 8b of the Texas Solid Waste

right to jury trial. Disposal Act, as well as the rules and regulations

promulgated under those statutes, are constitutional with

Affirmed in part and reversed in part. regard to the open courts and jury trial provisions. We

affirm the trial court’s judgment as it relates to TAB’s

Doggett, Gammage, and Spector, JJ., concurred, jury trial challenge and reverse its judgment as to TAB’s

dissented, and filed opinions. open courts challenge.

An overview of the regulatory scheme enacted by the

Attorneys and Law Firms legislature and these agencies is essential to an

understanding of this case. In 1967, the Texas Legislature

*441 R. Kinnan Golemon, James W. Checkley, Jr., Albert

enacted the Clean Air Act of Texas. Clean Air Act of

R. Axe, Jr., Scott R. Kidd and Douglas W. Alexander,

Texas, 60th Leg., R.S., ch. 727, 1967 Tex.Gen.Laws

Austin, for appellant.

1941. The Clean Air Act was designed to safeguard the

Douglas G. Caroom, Mary E. Kelly, Dan Morales, Nancy state’s air resources without compromising the economic

N. Lynch, William D. Dugat, III and Amy R. Johnson, development of the state. Id. at § 1. The Act created the

Austin, for appellees. Texas Air Control Board and granted it the authority to

promulgate regulations to accomplish the Act’s goals. Id.

at § 4(A)(2)(a). In the event the Air Control Board

determined that a violation of its regulations had

occurred, it was authorized to enforce those regulations in

OPINION district court. Upon a judicial determination that a

violation of the Air Control Board’s regulations had

occurred, two cumulative remedies were available,

CORNYN, Justice. injunctive relief to prohibit further violations and

assessment of a fine ranging from $50 to $1,000 for each

The Texas Association of Business (TAB), on behalf of day the violations persisted. Id. at § 12(B).

its members, brought this declaratory judgment action

seeking a ruling that statutes empowering two state In 1969, the Texas Legislature enacted the Solid Waste

administrative agencies to levy civil penalties for Disposal Act. Solid Waste Disposal Act, 61st Leg., R.S.,

violations of their regulations conflict with the open ch. 405, 1969 Tex.Gen.Laws 1320. The express purpose

courts and jury trial provisions of the Texas Constitution. for this legislation was to protect public health and

The administrative agencies denied TAB’s claims, and welfare by regulating the “collection, handling, storage,

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Texas Ass’n of Business v. Texas Air Control Bd., 852 S.W.2d 440 (1993)

unconstitutional denial of a jury trial and violation of our standing is unrelated to the separation of powers doctrine

constitution’s open courts provision. has since been disavowed). Under this doctrine,

governmental authority vested in one department of

4

“An appeal may be taken directly to the supreme court government cannot be exercised by another department

from an order of a trial court granting or denying an unless expressly permitted by the constitution. Thus we

interlocutory or permanent injunction on the ground of have construed our separation of powers article to prohibit

the constitutionality of a statute of this state.” courts from issuing advisory opinions because such is the

TEX.GOV’T CODE § 22.001(c). function of the executive rather than the judicial

department.6 Firemen’s Ins. Co. v. Burch, 442 S.W.2d

331, 333 (Tex.1969); Morrow v. Corbin, 122 Tex. 553, 62

S.W.2d 641, 644 (Tex.1933). Accordingly, we have

interpreted the Uniform Declaratory Judgments Act,

TEX.CIV.PRAC. & REM.CODE §§ 37.001–.011, to be

I. Standing merely a procedural device for deciding cases already

within a court’s jurisdiction rather than a legislative

Before we reach the merits of this case, we first consider enlargement of a court’s power, permitting the rendition

the matter of the trial court’s jurisdiction, as well as our of advisory opinions. Firemen’s Ins. Co., 442 S.W.2d at

own; specifically we determine whether TAB has 333; United Serv. Life Ins. Co. v. Delaney, 396 S.W.2d

standing to challenge the statutes and regulations in 855, 863 (Tex.1965); California Prods., Inc. v. Puretex

question. Because TAB’s standing to bring this action is Lemon Juice, Inc., 160 Tex. 586, 334 S.W.2d 780 (1960).

not readily apparent, and because our jurisdiction as well

as that of the trial court depends on this issue, we 6

The analysis is the same under the federal constitution.

requested supplemental briefing on standing at the oral See e.g. Correspondence of the Justices, Letter from

argument of this case. In response, the parties insist that Chief Justice John Jay and the Associate Justices to

any question of standing has been waived in the trial court President George Washington, August 8, 1793 in

and cannot be raised by the court for the first time on Laurence H. Tribe, American Constitutional Law 73 n.

appeal. We disagree. 3 (2nd ed. 1988).

[1]

Subject matter jurisdiction is essential to the authority

of a court to decide a case. Standing is implicit in the [4] [5]

The distinctive feature of an advisory opinion is that

concept of subject matter jurisdiction. The standing it decides an abstract question of law without binding the

requirement stems from two limitations on subject matter parties. Alabama State Fed’n of Labor v. McAdory, 325

jurisdiction: the separation of powers doctrine and, in U.S. 450, 461, 65 S.Ct. 1384, 1389, 89 L.Ed. 1725

Texas, the open courts provision. Subject matter (1945); Firemen’s Ins. Co., 442 S.W.2d at 333; Puretex

jurisdiction *444 is never presumed and cannot be Lemon Juice, Inc., 160 Tex. at 591, 334 S.W.2d at 783.

waived.5 An opinion issued in a case brought by a party without

standing is advisory because rather than remedying an

5

Justice Doggett confuses subject matter jurisdiction actual or imminent harm, the judgment addresses only a

with personal jurisdiction. Only the latter can be hypothetical injury. See Allen v. Wright, 468 U.S. 737,

waived when uncontested. See TEX.R.CIV.P. 120a. 751, 104 S.Ct. 3315, 3324, 82 L.Ed.2d 556 (1984). Texas

courts, like federal courts, have no jurisdiction to render

such opinions.

[2] [3]

One limit on courts’ jurisdiction under both the state

[6]

and federal constitutions is the separation of powers The separation of powers doctrine is not the only

doctrine. See TEX.CONST. art. II, § 1; Valley Forge constitutional basis for standing. Under federal law,

Christian College v. Americans United for Separation of standing is also an aspect of the Article III limitation of

Church and State, 454 U.S. 464, 471–74, 102 S.Ct. 752, the judicial power to “cases” and “controversies.” Sierra

757–60, 70 L.Ed.2d 700 (1982); Warth v. Seldin, 422 U.S. Club v. Morton, 405 U.S. 727, 731, 92 S.Ct. 1361, 1364,

490, 498, 95 S.Ct. 2197, 2204, 45 L.Ed.2d 343 (1975); 31 L.Ed.2d 636 (1972). To comport with Article III, a

see also, Antonin Scalia, The Doctrine of Standing as an federal court may hear a case only when the litigant has

Essential Element of the Separation of Powers, 18 been threatened with or has sustained an injury. Valley

SUFFOLK U.L.Rev. 881, 889 n. 69 (1983) (noting that Forge Christian College, 454 U.S. at 471, 102 S.Ct. at

the dicta of Flast v. Cohen, 392 U.S. 83, 100, 88 S.Ct. 758. Under the Texas Constitution, standing is implicit in

1942, 1952, 20 L.Ed.2d 947 (1968), suggesting that the open courts provision, which contemplates access to

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3

Texas Ass’n of Business v. Texas Air Control Bd., 852 S.W.2d 440 (1993)

the courts only for those litigants suffering an injury. objections to join a real party in interest or to a party’s

Specifically, the open courts provision provides: capacity to sue rather than to jurisdictional standing.

See International Depository, Inc. v. State, 603 A.2d

All courts shall be open, and every 1119, 1122 (R.I.1992) (addressing real party in interest

person for an injury done him, in objection); Princess Anne Hills Civ. League, Inc. v.

his lands, goods, person or Susan Constant Real Estate Trust, 243 Va. 53, 413

reputation, shall have remedy by S.E.2d 599, 603 n. 1 (1992) (addressing real party in

interest objection); Sanford v. Jackson Mall Shopping

due course of law. Ctr. Co., 516 So.2d 227, 230 (Miss.1987) (addressing

real party in interest objection); Jackson v. Nangle, 677

TEX. CONST. art. I, § 13 (emphasis added). Because P.2d 242, 250 n. 10 (Alaska 1984) (addressing real

standing is a constitutional prerequisite to maintaining a party in interest objection); Poling v. Wisconsin

suit under both federal and Texas law, we look to the Physicians Serv., 120 Wis.2d 603, 357 N.W.2d 293,

more extensive jurisprudential experience of the federal 297–98 (App.1984) (addressing real party in interest

courts on this subject for any guidance it may yield. objection); Torrez v. State Farm Mut. Auto. Ins. Co.,

130 Ariz. 223, 635 P.2d 511, 513 n. 2 (App.1981)

(addressing real party in interest objection); Brown v.

Under federal law, a lack of standing deprives a court of

Robinson, 354 So.2d 272, 273 (Ala.1977); Cowart v.

subject matter jurisdiction because standing is an element City of West Palm Beach, 255 So.2d 673, 675

of such *445 jurisdiction. Carr v. Alta Verde Indus., 931 (Fla.1971) (addressing capacity objection).

F.2d 1055, 1061 (5th Cir.1991); Simmons v. Interstate

Commerce Comm’n, 900 F.2d 1023, 1026 (7th Cir.1990);

M.A.I.N. v. Commissioner, Maine Dept. of Human Serv., [7]

Subject matter jurisdiction is an issue that may be

876 F.2d 1051, 1053 (1st Cir.1989); Haase v. Sessions,

raised for the first time on appeal; it may not be waived

835 F.2d 902, 908 (D.C.Cir.1987); Page v. Schweiker,

by the parties. Texas Employment Comm’n v.

786 F.2d 150, 153 (3d Cir.1986); see also Lujan v.

International Union of Elec., Radio and Mach. Workers,

Defenders of Wildlife, 504 U.S. 555, 112 S.Ct. 2130, 119

Local Union No. 782, 163 Tex. 135, 352 S.W.2d 252, 253

L.Ed.2d 351 (1992); Heckler v. Mathews, 465 U.S. 728,

(1961); RESTATEMENT (SECOND) OF JUDGMENTS

737, 104 S.Ct. 1387, 1394, 79 L.Ed.2d 646 (1984);

§ 11, comment c (1982). This court recently reiterated

Warth, 422 U.S. at 511, 95 S.Ct. at 2211. Other states

that axiom in Gorman v. Life Insurance Co., 811 S.W.2d

have followed this analysis in construing their own

542, 547 (Tex.), cert. denied, 502 U.S. 824, 112 S.Ct. 88,

constitutions.7 See e.g., Prudential–Bache Sec., Inc. v.

116 L.Ed.2d 60 (1991). Because we conclude that

Commissioner of Revenue, 412 Mass. 243, 588 N.E.2d

standing is a component of subject matter jurisdiction, it

639, 642 (1992); Bennett v. Board of Trustees for Univ. of

cannot be waived and may be raised for the first time on

N. Colorado, 782 P.2d 1214, 1216 (Colo.App.1989), cert.

appeal.8

denied, 797 P.2d 748 (Colo.1990); Pace Constr. Co. v.

Missouri Highway and Transp. Comm’n, 759 S.W.2d

8

272, 274 (Mo.App.1988); Terracor v. Utah Bd. of State Justice Doggett disagrees that standing is a component

Lands & Forestry, 716 P.2d 796, 798–99 (Utah 1986); of subject matter jurisdiction, yet he declines to explain

State by McClure v. Sports and Health Club, Inc., 370 what role standing plays in our jurisprudence. From his

harsh critique of the doctrine, it seems that he not only

N.W.2d 844, 850 (Minn.1985), appeal dism’d, 478 U.S. objects to the conclusion that standing cannot be

1015, 106 S.Ct. 3315, 92 L.Ed.2d 730 (1986); Smith v. waived but also to the conclusion that standing is a

Allstate Ins. Co., 483 A.2d 344, 346 (Me.1984); Ardmare requirement to initiate a lawsuit.

Constr. Co. v. Freedman, 191 Conn. 497, 467 A.2d 674,

675 n. 4, 676–77 (1983); Horn v. County of Ventura, 24

Cal.3d 605, 156 Cal.Rptr. 718, 726, 596 P.2d 1134, 1142 [8]

If we were to conclude that standing is unreviewable on

(1979); Stewart v. Board of County Comm’rs of Big Horn

appeal at least three undesirable consequences could

County, 175 Mont. 197, 573 P.2d 184, 186, 188 (1977);

result. First and foremost, appellate courts would be

State ex rel. Albritton v. Moore, 238 La. 728, 116 So.2d

impotent to prevent lower courts from exceeding their

502, 504 (1959).

constitutional and statutory limits of authority. Second,

appellate courts could not arrest collusive suits. Third, by

7

Of the states listed by Justice Doggett, only Illinois, operation of the doctrines of res judicata and collateral

Iowa, Kentucky, New York, South Dakota, and perhaps estoppel, judgments rendered in suits addressing only

Ohio, Pennsylvania and Washington actually treat hypothetical injuries could bar relitigation of issues by a

jurisdictional standing as waivable. See 852 S.W.2d at

469. The other state cases cited deal with the waiver of

litigant who eventually suffers an actual injury. We

therefore hold that standing, as a component of subject

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4

Trinity Settlement Services, LLC v. Texas State Securities Bd., 417 S.W.3d 494 (2013)

Blue Sky L. Rep. P 75,042

417 S.W.3d 494 Attorneys and Law Firms

Court of Appeals of Texas,

Austin. *497 Hector De Leon, Benjamin S. De Leon, Thomas P.

TRINITY SETTLEMENT SERVICES, LLC, Washburn, George B. Ward, De Leon & Washburn, P.C.,

Appellant Austin, TX, for Appellant.

v.

The TEXAS STATE SECURITIES BOARD and Lesli Gattis Ginn, Assistant Attorney General, Financial

John Morgan, in his Official Capacity as Litigation, Tax, and Charitable Trusts Division, Austin,

Commissioner of the Texas State Securities T

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