Untitled Texas Attorney General Opinion

ATTORNEYGENERAL OF TEXAS

GREG ABBOTT

June 20,2005

The Honorable Troy Fraser Opinion No. GA-0334

Chair, Committee on Business and Commerce

Texas State Senate Re: Application of conflict of interest law and the

Post Office Box 12068 Open Meetings Act to the governing board of a

Austin, Texas 7871 l-2068 groundwater conservation district (RQ-0304-GA)

Dear Senator Fraser:

You request a legal opinion on the following issues:

(1) conflicts of interest involving the members of a

groundwater conservation district board;

(2) the meaning of “contemplated litigation” within

Government Code section 55 1.07 1(l)(A); and

(3) the exclusion of a board member who has threatened to

sue the groundwater conservation district from a district executive

session meeting to discuss the threat of litigation.’

You ask several questions in connection with each issue. Some of these involve questions of fact

that cannot be resolved in an attorney general opinion. See, e.g., Tex. Att’y Gen. Op. Nos. GA-01 39

(2004) at 5, JC-0328 (2000) at 4,0-2911 (1940) at 2. We will address the other questions in relation

to the applicable topic.

I. Backmound

You are specifically concerned about the Clear-water Underground Water Conservation

District (the “GCD” or “district”).2 The district, which has common boundaries with Bell County,

was created under Texas Constitution article XVI, section 59 pursuant to special law and is subject

‘Letter from Honorable Troy Fraser, Chair, Senate Business and Commerce Committee, to Honorable Greg

Abbott, Texas Attorney General (Dec. 2 1,2004) (on file with Opinion Committee, also available at http://www.oag

.state.tx.us) [hereinafter Request Letter].

*Telephone Conversation with Daniel Womack, Legislative Assistant to Senator Fraser (Mar. 4, 2005)

[hereinafter Telephone Conversation with Daniel Womack].

The Honorable Troy Fraser - Page 2 (GA-0334)

to Water Code chapter 36. See Act of May 27, 1989,71st Leg., R.S., ch. 524, $0 1,3,6(a), 1989

Tex. Gen. Laws 1728, 1729, amended by Act of Apr. 25,2001,77th Leg., R.S., ch. 22,200l Tex.

Gen. Laws 32,32-34 (relating to the election of district directors). See aZso TEX.WATERCODEANN.

$36.001(l) (V emon Supp. 2004-05). Four of the district’s five directors are elected according to

county commissioner precincts, and the other director is elected at large. See Act of Apr. 25,2001,

77th Leg., R.S., ch. 22, $ 1,200l Tex. Gen. Laws 32-33. The directors serve four-year terms. See

id. at 33.

You summarize the events that caused the district to raise these issues. See Request Letter,

supru note 1, at l-2. You state that the general manager of a nonprofit water supply corporation

(“WSC” or “corporation”) served on the district’s board of directors (the “board “) at a time when

the water supply corporation applied to the district for a groundwater well permit. See id. The

district scheduled a permit hearing pursuant to chapter 36 of the Water Code and required the board

member who was also general manager of the corporation (“director/general manager”) to fill out

an affidavit stating his interest in the corporation pursuant to Local Government Code section

171.004. See id. at 2.

Local Government Code chapter 17 1, which regulates conflicts of interest involving local

public officers, applies to the district’s directors. See TEX. WATERCODEANN. 0 36.058 (Vernon

2000) (director of district is subject to Local Government Code chapter 171); see also TEX. Lot.

GOV’T CODEANN. ch. 171 (Vernon 1999 & Supp. 2004-05). Section 171.004 sets out the duty of

a local public officer who has a substantial interest in a business entity or in real property:

(a) If a local public official has a substantial interest in a business

entity or in real property, the official shall file, before a vote or

decision on any matter involving the business entity or the real

property, an affidavit stating the nature and extent of the interest and

shall abstain from further participation in the matter if:

(1) in the case of a substantial interest in a

business entity the action on the matter will have a

special economic effect on the business entity that is

distinguishable from the effect on the public; or

(2) in the case of a substantial interest in real

property, it is reasonably foreseeable that an action on

the matter will have a special economic effect on the

value of the property, distinguishable from its effect

on the public.

Id. 6 17 1.004(a) (Vernon 1999). See also id. 5 17 1.002 (defining “substantial interest” in a business

entity or real property).

Pursuant to chapter 17 1, a board member with a substantial interest in a business entity shall

disclose his interest prior to a vote or decision on any matter involving the entity and “shall abstain

The Honorable Troy Fraser - Page 3 (GA-0334)

from further participation in the matter if. . . the action on the matter will have a special economic

effect on the business entity that is distinguishable from the effect on the public.” Id. 0

171.004(a)(l). A knowing violation of section 171.004 is a Class A misdemeanor. See id. 3

171.003(b).

A person has a substantial interest in a business entity if “funds received by the person from

the business entity exceed 10 percent of the person’s gross income for the previous year.” Id. 0

171.002(a)(2). See also Tex. Att’y Gen. Op. Nos. GA-0068 (2003) at 3-4, JM-424 (1986) at 2 (a

nonprofit corporation is a business entity within chapter 171). Thus, if the district board member’s

salary as general manager of the nonprofit water supply corporation exceeded ten percent ofhis gross

income for the previous year, he had a substantial interest in the corporation. Presumably, the

director/general manager did have the requisite interest in the water supply corporation because, as

you inform us, he filed the affidavit stating the nature and extent of his interest in the water supply

corporation as required by Local Government Code section 17 1.004. See Request Letter, supra note

1, at 2.

You state as follows:

After completing the required affidavit, the affected board member

made comments to the other GCD board members and the staff of the

GCD that his employer, the WSC, expected the GCD to grant the

WSC a permit that authorized a specific amount of groundwater

production. . . . The affected board member also stated that the WSC

intended to file suit against the GCD if the WSC was not granted a

well permit with the authorized groundwater production amounts it

desired.

Id.

You further state that the district board of directors called an executive session as authorized

by the Texas Open Meetings Act, see TEX. GOV’T CODEANN. ch. 55 1 (Vernon 2004), id. tj 551.071,

“to discuss the.threat made by the WSC to file suit against the GCD.” Request Letter, supra note

1, at 2. “The affected board member informed the other GCD board members and the GCD staff that

he intended to attend the executive session in which his employer’s threat to file suit and the affected

board member’s conflict of interest would be discussed.“3 Id. The board’s concern about the

affected board member’s attending the executive session caused it to raise the questions at issue here.

See id.

3The affected board member did not attend the executive session to discuss the threatened litigation, nor had

the WSC filed any litigation against the district as of March 4,2005. See Telephone Conversation with Daniel Womack,

supra note 2.

The Honorable Troy Fraser - Page 4 (GA-0334)

II. Meaniw of “Further ParticiDation” in a Matter

We turn to your first inquiry. Section 171.004 prohibits an interested official from “further

participation” in a matter before the governmental body involving his business entity or real property

if board action on the matter will have a special economic effect on the business entity or value of

the real property. See TEX. Lot. GOV’T CODE ANN. $ 171.004(a) (Vernon 1999). You ask us to

define the phrase “further participation” as used in section 17 1.004(a).

Chapter 171 does not define “participation,” but this office has defined the terms

“participates” and “participation” in former article 988b, Revised Civil Statutes: the predecessor of

Local Government Code chapter 171 .5 See Tex. Att’y Gen. Op. No. JM-379 (1985). Former article

988b, section 3 provided that a local public official commits an offense if he knowingly

participates in a vote or decision on a matter involving a business

entity in which the local public official has a substantial interest . . . .

Act of May 30, 1983,68th Leg., R.S., ch. 640, 6 3,1983 Tex. Gen. Laws 4079,408O (emphasis

added). See TEx. Lot. GOV’T CODE ANN. $ 171.003(a)(l) (V emon 1999) (violation of section

171.004 is a prohibited act). Former article 988b, section 4 provided that if a local public official

had “a substantial interest in a business entity that would be peculiarly affected by any official action

taken by the governing body” the official “before a vote or decision on the matter, shall file ‘an

affidavit . . . and shaZZabstainfiom furtherparticipation in the matter.” Act of May 30,1983,68th

Leg., R.S., ch. 640, 5 4, 1983 Tex. Gen. Laws 4079,4080-81 (emphasis added). See TEX. tic.

GOV’T CODE ANN. $ 17 1.004 (Vernon 1999) (Affidavit and Abstention From Voting Required).

Attorney General Opinion JM-379 considered the application of article 988b to a school

trustee who owned a substantial interest in a bank that was suing the school district over the property

tax valuation of its stock. The interested trustee abstained from voting for or against any matter

pertaining to the litigation but discussed the litigation with members of the board of trustees. See

Tex. Att’y Gen. Op. No. JM-379 (1985) at 1. This office determined that the interested trustee’s

discussions with other board members constituted “participation in the matter” within former article

988b, section 4 and concluded that “participation ‘in a vote or decision’ . . . [within former article

988bJ includes deliberating with the board about the matter.” See id. at 4-5. If the interested trustee

were able to discuss the matter with the other board members, he could influence the board’s final

action. See id. at 5.

You ask what “objective activities or conduct” may be considered “further participation in,”

as that phrase is used in section 171.004(a). Request Letter, supra note 1, at 3. We cannot

4Act of May 30,1983,68th Leg., R.S., ch. 640, $0 l-8,1983 Tex. Gen. Laws 4079,4079-82 (adopting article

988b, Revised Civil Statutes).

‘See Act of May 1, 1987, 70th Leg., R.S., ch. 149, $0 1, 49, 1987 Tex. Gen. Laws 707, 949-950, 1306

(repealing former article 988b, Revised Civil Statutes and reenacting it as chapter 17 1 of the Local Government Code);

see also Act of Feb. 2 1,1989,71 st Leg., R.S., ch. 1, $0 40-41, 1989 Tex. Gen. Laws 1,45-47 (act conforming Local

Government Code to certain acts of the 70th Legislature).

The Honorable Troy Fraser - Page 5 (GA-0334)

exhaustively describe all conduct that may constitute “further participation.” We point out, however,

that board members must in any case avoid deliberating by exchanging written communications or

communicating through a third party. SeegeneraZZy Tex. Att’y Gen. Op. No. JC-0307 (2000) at 5-6.

You also ask whether an affected board member’s attendance at an executive session of the

governmental body constitutes “further participation in the matter” if the executive session is called

(1) to discuss possible litigation contemplated by the affected board member or his employer, or (2)

to discuss the board member’s conflict of interest. See Request Letter, supru note 1, at 3. Chapter

171 does not answer this question, and neither the courts nor this office has considered whether

“further participation in the matter” also includes attending an executive session called to discuss

a matter in which a board member has a substantial interest.6

The language you ask us to construe helps define a penal offense. “A local public official

commits an offense if the official knowingly . . . violates Section 171.004,” which requires an

interested official to “abstain from further participation in the matter”under specified circumstances.

See TEX. Lot. GOV’T CODEANN. $0 171.003(a)(l), .004(a) (Vernon 1999). The offense is a Class

A misdemeanor. See id. 6 171.003(b).

Due process requires that criminal statutes give fair notice of activity that is outlawed. See

U.S. v. Lanier, 520 U.S. 259, 266 (1997). A criminal statute must give persons of ordinary

intelligence a reasonable opportunity to know what conduct is prohibited. See id.; Mm-graves v.

State, 34 S.W.3d 912, 920 (Tex. Crim. App. 2000). Moreover, “[plenal statutes are still strictly

construed.” Brown v. De La Cruz, 156 S.W.3d 560,565 (Tex. 2004); First Bank v. Tony’s TortiZZa

Fuctov, Inc., 877 S.W.2d 285, 287 (Tex. 1994). In “construing a criminal statute, we seek to

effectuate the intent of the Legislature, focusing on the statute’s literal text, and we attempt to discern

the fair, objective meaning ofthat text.” FaZZin v. State, 93 S.W.3d 394,395-96 (Tex. App.-Houston

[14th Dist.] 2002, pet. ref d) (quoting Boykin v. State, 818 S.W.2d 782, 785 (Tex. Crim. App.

1991)). If the language of a criminal statute is not plain a court may consider, in arriving at a

sensible interpretation, extratextual factors such as executive or administrative interpretations ofthe

statute or legislative history. See Boykin v. State, 818 S.W.2d 782,785-86 (Tex. Crim. App. 1991).

Given the requirement that a criminal statute give fair notice and the rules of construction stated by

the Texas Supreme Court and Court of Criminal Appeals, we will not adopt an expansive

interpretation of “further participation.“7

To determine whether “further participation” within section 17 1.004(a) includes “attendance

. . . at an executive session” on a matter in which a board member is substantially interested, we will

consider the meaning of the same word as used in other acts of a similar nature. See Brown v.

Darden, 50 S.W.2d261,263 (Tex. 1932); Tex. Bank& Trust Co. v. Austin, 280 S.W. 161,162 (Tex.

6We assume, without deciding, that any such executive session would be held only as authorized by the Open

Meetings Act.

%e court in Hamilton v. Town ofLos Gatos, 261 Cal. Rptr. 888,891 (Cal. Ct. App. 6thDist. 1989), construing

a California conflict of interest statute, determined that “to participate[] in making . . . a governmental decision” included

silent attendance at an executive session meeting. This conclusion was based on policy arguments underlying the statute

and the state open meetings act. No criminal provision was at issue.

The Honorable Troy Fraser - Page 6 (GA-0334)

1926); L&MSurco Mfg., Inc. v. Winn Tile Co., 580 S.W.2d 920,926 (Tex. Civ. App.-Tyler 1979,

writ dism’d); Tex. Att’y Gen. Op. No. GA-0251 (2004) at 3. We note that legislation expressly

concerned with meetings uses the terms “participation” and “attend” in a way that helps us construe

“further participation” in section 171.004(a).

The term “participate” has been defined as meaning “to take par-to share in common with

others.” Reardon v. State, 4 Tex. Ct. App. 602 (1878). See also XI OXFORDENGLISHDICTIONARY

268 (2d ed. 1989) (defining “participate” as “[t]o take or have a part or share of or in; to possess or

enjoy in common with others”); MERRIAM-WEBSTER’ COLLEGIATE

S DICTIONARY847 (10th ed.

1993) (defining “participate” as “to take part [as] in class discussions”). “Attend” has, in contrast,

been defined as “to be present.” MERRIAM-WEBSTER’COLLEGIATE S DICTIONARY74 (10th ed.

1993). In the context of Texas statutes on meetings, “attend’ means mere passive presence, while

“participate” means active engagement in the subject matter at issue in the meeting.

For example, the superintendent of a hospital district created under Health and Safety Code

chapter 282 “may attend board meetings and meetings of a board committee and may participate

in the discussion of matters within the superintendent’s functions, but . . . may not vote on matters

considered by the board.” TEX. HEALTH & SAFETY CODEANN. $ 282.027(d) (Vernon 2001)

(emphasis added). Under this provision, the superintendent may attend all meetings, that is, be

present at all meetings, but mayparticipate only in the discussion of matters within his function.

In another statute, the administrator of the Agricultural Finance Authority may “attend all meetings

and participate, but not vote, in all proceedings of the authority.” TEx. AGRIC.CODEANN. 6

58.015(c) (Vernon 2004) (emphasis added). See aZso TEX.Lot. GOV’T CODEANN. 0 111.007(a)

(Vernon 1999) (any taxpayer of a county “may attend and may participate” in a public hearing on

the proposed county budget) (counties with a population of 225,000 or less); TEX. TRANSP.CODE

ANN. $ 22.0745(d) (Vernon Supp. 2004-05) (nonvoting member on a joint airport board is not

entitled to “attend orparticipate in” a closed meeting of the joint board) (emphasis added). See aZso

Tex. Att’y Gen. Op. No. JC-0308 (2000) at 1 (“attendance” by a quorum of a state agency board at

a legislative committee hearing is subject to the Open Meetings Act if a board member participates

in the discussion).

We rely on the distinction between the terms “attend” and “participate in” a meeting as used

in Texas statutes to construe the phrase “further participation in the matter.” TEX. Lot. GOV’T CODE

ANN. 5 171.004(a) (Vernon 1999). Thus, the limit on “further participation” does not preclude the

interested public official from “attending’: meetings, including executive session meetings, relevant

to the matter in which he has a substantial interest.

A member of a governmental body does not “participate” in a matter for purposes of Local

Government Code section 171.004 by merely attending an executive session on the matter and

remaining silent during the deliberations. However, it may be wise for the interested public officer

to refrain from attending open or closed meetings that address the matter in which he is interested.

See Graham v. McGraiZ, 345 N.E.2d 888,891-92 (Mass. 1976) (advising public officer with conflict

of interest under state law to leave meeting).

The Honorable Troy Fraser - Page 7 (GA-0334)

III. “Pending or ContemDlated Litieation” in Government Code Section 551.071(1)(A)

You ask us to define the phrase “contemplated litigation” in section 551.071(l)(A) of the

Government Code, which authorizes a governmental body to hold an executive session concerning

pending or contemplated litigation. The section provides as follows:

A governmental body may not conduct a private consultation with its

attorney except:

(1) when the governmental body seeks the advice of its

attorney about:

(A) pending or contemplated litigation; or

(B) a settlement offer; or

(2) on a matter in which the duty of the attorney to the

governmental body under the Texas Disciplinary Rules of

Professional Conduct of the State Bar of Texas clearly conflicts with

this chapter.

TEX. GOV’T CODEANN. $55 1.071 (Vernon 2004). In particular, you ask whether “contemplated

litigation” within section 55 1.071(1)(A) may include a contested hearing before an administrative

agency or other governmental agency, including a groundwater conservation district. Request Letter,

supra note 1, at 3. Although you ask about governmental entities in general, we must limit our

answer to a contested hearing before the Clearwater Underground Water Conservation District

because this answer is based on provisions of chapter 36 and rules promulgated by this district. We

have found no provisions generally applicable to contested hearings conducted by local

governmental entities.

This office has concluded that a contested case under the Texas Administrative Procedure

Act, TEX. GOV’T CODEANN. ch. 2001 (Vernon 2000 & Supp. 2004-05), is “litigation” within the

context of the Public Information Act, id. ch. 552 (Vernon 2004), and the Open Meetings Act. See

Tex. Att’y Gen. LO-96-l 16, at 5-6; Tex. Att’y Gen. ORD-588 (1991) at 2. A “contested case”under

the Administrative Procedure Act is “a proceeding, including a ratemaking or licensing proceeding,

in which the legal rights, duties, or privileges of a party are to be determined by a state agency after

an opportunity for adjudicative hearing.” TEX. GOV’T CODEANN. $2001.003( 1) (Vernon 2000).

Open Records Decision 588 addressed the exception from public disclosure for information

“relating to litigation . . . to which the state or a political subdivision is or may be a party.” Id. 0

552.103(a) (Vernon 2004). It concluded that the term “1itigation”includes a “contested case” under

the Texas Administrative Procedure Act, id. ch. 2001 (Vernon 2000 & Supp. 2004-05). See Tex.

The Honorable Troy Fraser - Page 8 (GA-0334)

Att’y Gen. ORD-588 (1991) at 4.8 See also Tex. Att’y Gen. ORD-301 (1982) at l-2 (“‘litigation’

encompasses proceedings conducted in quasi-judicial forums as well as strictlyjudicial ones”) (cited

by Tex. Att’y Gen. ORD-588 (1991) at 2). “When a contested case is heard in a quasi-judicial

forum, discovery takes place and the evidence is presented at the administrative level, . . . [and] fact

questions are heard and resolved by the agency, regardless of whether the case reaches a court for

review under the substantial evidence rule.” Tex. Att’y Gen. ORD-588 (1991) at 4. Thus, “[slection

3(a)(3) [the predecessor of Government Code section 552.103(a)] can have its intended effect only

by applying it to information related to a contested case before an administrative agency “to which

the state . . . is, or may be, a party.” Id.

Relying on Open Records Decision 588, this office construed the term “litigation” within

Government Code section 551.071(1)(A) to include “contested cases” under the Texas

Administrative Procedure Act. See Tex. Att’y Gen. LO-96-l 16, at 5. Letter Opinion 96-l 16 noted

that “an adversary proceeding may encompass a proceeding conducted in a quasi-judicial forum as

well as in a judicial forum,” stating that

Government Code section 551.071 is designed to protect a

governmental body’s interests in an adversary proceeding, where to

discuss a pending proceeding with the governmental body’s attorney

in an open meeting would permit the opposing party to learn the

governmental body’s strategy, evidence, and vumerabilities.

Id. at 5-6. See also TEX.GOV'T CODEANN. 0 2001.003(2) (Vernon 2000) (“license” includes state

agency permit). Thus, a governmental body that is subject to the Administrative Procedure Act may

meet in executive session under section 55 1.071(l)(A) to deliberate about a “contested case” before

it.

We point out that Attorney General Letter Opinion 96-l 16 and Open Records Decision 588

conclude that a contested case under the Administrative Procedure Act is itself “litigation,” not

merely anticipated or contemplated litigation. We will also consider whether a contested permit

hearing before the Board of Directors of the Clear-water Underground Water Conservation District

is “litigation” within Government Code section 55 1.071(l)(A), not just “contemplated litigation.”

The district is not a state agency and is therefore not subject to the Administrative Procedure

Act. See id. 0 2001.003( 1) (“contested case” is a proceeding, in which a state agency determines the

legal rights, duties, or privileges of a party). We will examine the provisions governing the district’s

permitting authority to determine whether a permit hearing before the board is “litigation” for

purposes of the Open Meetings Act exception.

‘Open Records Decision 588 (199 1) addressed the former Texas Gpen Records Act, article 6252-l 7a, Revised

Civil Statutes, which was recoditied as Government Code chapter 552 in 1993 and renamed the “Public Information Act”

in 1995.See Act of May 4,1993,73d Leg., R.S., ch. 268, $1,1993 Tex. Gen. Laws 583,594; see aIso Act of May 29,

1995,74thLeg., ch. 1035,§ 1, 1995 Tex. Gen. Laws 5127,5127-42.

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A groundwater conservation district “shall require permits for the drilling, equipping, or

completing of wells or for substantially altering the size of wells or well pumps.” TEX. WATER

CODEANN. 0 36.113(a) (Vernon Supp. 2004-05). See id. $0 36.113(c) (information that a district

may require to be included in a permit application); 36.113 1 (Vernon 2000) (elements of permit

application). A district “shall promptly consider and act on each administratively complete

application for a permit.” Id. $ 36.114 (Vernon Supp. 2004-05). See also id. (“administratively

complete” applications include information required under sections 36.113 and 36.113 1).

The Clear-water Underground Water Conservation District conducts permit hearings in

accordance with procedural rules adopted under section 36.101. See id. $ 36.101(b) (the district

board shall adopt rules to implement chapter 36, including rules governing procedure before the

board). The district’s rules provide for notice of a permit hearing and authorize the presiding officer

to rule on motions and on the admissibility of evidence, administer oaths to persons presenting

testimony, and examine witnesses. See CLEARWATERUNDERGROUND WATER CONSERVATION

DISTRICT, DISTRICT RULES,Rules 8.10.2,8.10.3(c), (e)-(f) (2004).9 See also id. $8.10.5 (authority

of presiding officer to admit and exclude evidence).

Any interested person, including the district’s general manager, may appear at a hearing and

“present evidence, exhibits, or testimony, or make an oral presentation as determined by the Board.”

Id. Rule 8.10.4(a). See also id. Rule 3.1 (employment and duties of general manager of district).

A person who wishes to appear at a permit hearing must provide the district with specific

information, such as his name and address, whether he wishes to testify and whether he is contesting

the application. Id. Rule 8.10.4(a). The general manager of the district must state on the record

whether he “proposes denial, a partial grant, or full grant of the application.” Id.

The rules provide for uncontested and contested hearings. An uncontested hearing is defined

as follows:

Uncontested Hearings: If no interested persons contest the

application and the General Manager proposes to grant the

application, whether a partial or full grant, the application shall be

considered uncontested. . . . No Hearing Report shall be required for

an uncontested hearing.

Id. Rule 8.10.8.

If an interested person has appeared to contest the application, the presiding officer must

submit to the board a hearing report, which must include a summary of the subject matter of the

hearing, the evidence or public comments received, and the presiding officer’s recommendations for

board action. See id. Rule 8.10.7. Any person who participated in the hearing may review the report

and submit written exceptions to the report to the board. See id. Within 35 days after the final

hearing, the board must decide whether or not to issue a permit or a permit amendment and set the

9,4vuiZubZe

athttp://www.cleanvaterdistrict.org

(lastvisited

June17,2005).

The Honorable Troy Fraser - Page 10 (GA-0334)

permitted volume and other terms of the permit. See id. Rule 8.10.9. See aZso id. Rule 8.10.10

(request for rehearing and appeal).

After all administrative appeals to the district are final, a person or corporation “affected by

and dissatisfied with” a district order may file a suit against the district or its directors to challenge

the order’s validity. See TEX. WATERCODEANN. 6 36.25 1 (Vernon 2000). In trial of the suit, “[tlhe

burden of proof is on the petitioner, and the challenged law, rule, order, or act shall be deemed prima

facie valid.” Id. $ 36.253. “The review on appeal is governed by the substantial evidence rule as

defined by Section 2001.174, Government Code.” Id.

Thus, the district board finds facts and the courts review its decisions on permit applications

according to the substantial evidence rule of the Administrative Procedure Act. Moreover, a

contested permit hearing before the district board, as defined by its rules, places the applicant in an

adversarial relation to the district’s general manager or other person who contests the application.

It may ultimately lead to a lawsuit against the district by a person who is “affected by and dissatisfied

with” the district’s order on the contested permit application. Id. $36.25 1.

A contested permit hearing of the Clearwater Underground Water Conservation District

raises governmental interests like those at issue in Open Records Decision 588 and Attorney General

Letter Opinion 96-l 16. See Tex. Att’y Gen. LO-96- 116, at 5-6 (discussion of a pending proceeding

with the governmental body’s attorney in an open meeting would permit the opposing party to learn

the governmental body’s strategy, evidence, and vulnerabilities). We conclude that a contested

permit hearing before the Board of Directors of the Clear-water Underground Water Conservation

District is “litigation” that the district board may discuss in executive session under section

55 1.07 1(l)(A) of the Government Code. An uncontested permit hearing, as defined by the district’s

rules, is not an adversary proceeding. Thus, an uncontested permit hearing is neither “litigation” nor

“contemplated litigation” within the Open Meetings Act,” and the district board may not discuss it

in executive session under Government Code section 55 1.071(l)(A).

IV. Exclusion of a Board Member from an Executive Session and Related Ouestions

You ask whether a governmental body may exclude a board member from an executive

session under,~Government Code section 55 1.071(l)(A) to discuss contemplated litigation when the

board member or his employer has threatened to bring the litigation that the board will discuss. We

note that the affected board member did not attend the executive session to discuss the threatened

‘@Inview of our conclusion, we need not consider your general questions about the meaning of “contemplated

litigation.” But see TEX. GOV’T CODE ANN. $552.103(a) (Vernon 2004) (excepting from required disclosure under the

Public Information Act information related to “litigation . . . to which the state or a political subdivision . . . may be a

party”)(emphasis added); Tex. Att’y Gen. ORD-677 (2002) at 3 (mere conjecture that litigation may ensue is insufficient

to invoke exception); Tex. Att’y Gen. ORD-183 (1978) at 2 (exception requires reasonable anticipation of litigation

relating to a specific matter). See also Tex. Att’y Gen. ORD-35 1 (1982) at 2 (litigation was not reasonably anticipated

when individual merely threatened litigation in telephone conversation and did not follow with meaningful action).

The Honorable Troy Fraser - Page 11 (GA-0334)

litigation, nor has the Water Supply Corporation that employs him filed suit against the district.”

After this opinion was requested, the district board granted the permit over which the lawsuit was

threatened. See Clear-water Underground Water Conservation District Meeting Minutes (Jan. 25,

2005), Agenda Item 4.12 Thus, there is no need to answer this question at present. In addition, this

question raises important policy issues concerning the powers and duties of elected and appointed

board members and conflicts between their public responsibilities and their personal interests, issues

that cannot be satisfactorily addressed in the context of the district’s narrow hypothetical question.

Moreover, there is virtually no legal authority relevant to this inquiry.13 Given that question is moot,

and that it raises novel issues that cannot be resolved in the abstract, we will not address it.

You also ask us to define “adverse party.” See Request Letter, supra note 1, at 4. An

“adverse party’ is a party whose interests are opposed to another party to a legal action. See

Highsmith v. TyZerStateBank& Trust Co., 194. S.W.2d 142,145 (Tex. Civ. App.-Texarkana 1946,

writ ref’d); BLACK'S LAW DICTIONARY 1144 (7th ed. 1999). This office has used “adverse” and

“adverse party” consistently with these definitions. See Tex. Att’y Gen. ORD-55 1 (1990) at 4-5;

Tex. Att’y Gen. LO-89-77, at 3.

You ask whether a governmental body’s attorney-client privilege would be waived14 in

various circumstances. For example, you wish to know whether waiver would occur if a board

member who threatened to sue the board attended an executive session to discuss the proposed suit,

or if the board’s attorney provided certain legal memoranda information to all board members,

including a board member who is adverse to the board or may become adverse to the board.

Whether the privilege is waived in a particular case depends upon the relevant facts. See TEX. R.

EVID. 503; RepublicIns. Co. v. Davis, 856 S.W.2d 158,164 (Tex. 1993). This office cannot answer

questions of fact and therefore cannot answer these questions. See, e.g., Tex. Att’y Gen. Op. Nos.

GA-0139 (2004) at 5, GA-0003 (2002) at 1, JC-0328 (2000) at 4, H-56 (1973) at 3,0-2911 (1940)

at2.

We point out that a member of a governmental entity has a right of access to the entity’s

records when he requests them in his official capacity. As we stated in Attorney General Opinion

GA-0138:

“See Telephone Conversation with Daniel Womack, supra note 2.

‘ZAvuiluble at http://www.clearwaterdistrict.org (last visited June 17, 2005).

13This office and a New Jersey Court have both concluded that a school board member who has sued the school

board may be excluded from an executive session to discuss the pending litigation brought by the school board member.

See Tex. Att’y Gen. Op. No. JM-1004 (1989); see also Scotch Plains-Fanwood Bd. of Educ. v. Spertsen, 598 A.2d

1232, 1233 (N.J. Super. Ct. App. Div. 1991). We find no authority on excluding a board member who merely

contemplates litigation against his board.

14You ask about waiver of the attorney-client privilege under the Texas Rules of Evidence, not waiver of

Government Code section 552.103, which protects from disclosure under the Public Information Act “information

relating to litigation of a civil or criminal nature to which the state or a political subdivision is or may be a party.” TEX.

GOV’T CODE ANN. p 552.103(a) (Vernon 2004).

The Honorable Troy Fraser - Page 12 (GA-0334)

A member of a governing body has a right to access the

documents of that body. . . because of the member’s inherent powers

of office. While there do not appear to be Texas court decisions

directly concerning the issue, on several occasions this office has

observed that a member of a governing body has an inherent right of

access to the records of that body when requested in the member’s

official capacity and for the member’s performance of official duties.

See Tex. Att’y Gen. Op. Nos. JC-0283 (2000) at 3-4, JC-0120 (1999)

at 3-5, JM-119 (1983) at 3; Tex. Att’y Gen. LO-93-069, at l-2.

Tex. Att’y Gen. Op. No. GA-0138 (2004) at 3. See also Gabrilson v. Flynn, 554 N.W.2d 267,274

(Iowa 1996) (school board members generally should be allowed access to both public and private

records necessary for the proper discharge of their duties). Whether a member requests records in

his official capacity is a fact question that cannot be resolved in an attorney general opinion. See

Tex. Att’y Gen. LO-93-069, at 3. However, the fact that a board member has filed suit against the

board would raise the question whether he requested records about the lawsuit in his official

capacity.

We finally observe that a public officer holds a public trust, and he should discharge his

duties with honesty and integrity. See Alsup v. State, 238 S.W. 667,670 (Tex. Crim. App. 1922);

Jones v. State, 109 S.W.2d 244, 251 (Tex. Civ. App.-Texarkana 1937, no writ). Given these

responsibilities, a public officer who is suing or planning to sue his governmental body should avoid

using his public position to secure access to information related to the litigation, for example, by

voluntarily refraining from attending executive sessions regarding the litigation and from accepting

confidential documents related to the litigation.

The Honorable Troy Fraser - Page 13 (GA-0334)

SUMMARY

The directors of an underground water conservation district

are subject to chapter 171 of the Local Government Code, which

regulates conflicts of interest involving local public officials. Chapter

171 requires a local public official with a substantial interest in a

business entity or real property on which board action will have a

special economic effect to disclose his interest and abstain from

further participation in the matter. A violation of this requirement is

a Class A misdemeanor. When section 17 1.004(a) requires a local

public official to abstain from further participation in a matter, it does

not prohibit him from attending an executive session of his

governmental body held to discuss the matter.

A contested permit hearing before the Board of Directors of

the Clearwater Underground Water Conservation District is

“litigation” within Government Code section 55 1.07 1(l)(A).

Very truly yours,

GR&&i ABBOTT

Attorney General of Texas

BARRY R. MCBEE

First Assistant Attorney General

DON R. WILLETT

Deputy Attorney General for Legal Counsel

NANCY S. FULLER

Chair, Opinion Committee

Susan L. Garrison

Assistant Attorney General, Opinion Committee