Petition for Writ of Certiorari — AC Interests, L.P., Petitioner v. Texas Commission on Environmental Quality

APPENDIX TABLE OF CONTENTS

OPINIONS AND ORDERS

Order of the Texas Supreme Court Denying

Petition for Review (February 18, 2022) .................. 1a

Memorandum Opinion of the Court of Appeals,

First District of Texas (December 17, 2020) ............ 2a

Order Granting TCEQ Plea to Jurisdiction,

345th District Court, Travis County, Texas

(April 26, 2019) ....................................................... 20a

Opinion and Order of the Texas Supreme Court

Reversing and Remanding (March 23, 2018) ........ 22a

Dissenting Opinion of Justice Boyd, Joined by

Justice Johnson (March 23, 2018) ................... 44a

Entry of Judgment (March 23, 2018) .............. 63a

REHEARING DENIAL

Order of the Texas Supreme Court Denying

Motion for Rehearing oF Denial of Petition for

Review (April 22, 2022) .......................................... 65a

OTHER DOCUMENTS

Combined State ERC Summary Totals ................. 66a

App.1a

ORDER OF THE TEXAS SUPREME COURT

DENYING PETITION FOR REVIEW

(FEBRUARY 18, 2022)

SUPREME COURT OF TEXAS

________________________

AC INTERESTS, L.P.

v.

TEX. COMM’N ON ENVTAL. QUALITY

________________________

RE: Case No. 21-0078

COA #: 01-19-00387-CV

TC#: D-1-GN-005160

Today the Supreme Court of Texas denied the

Petition for review in the above-referenced case.

App.2a

MEMORANDUM OPINION OF THE COURT OF

APPEALS, FIRST DISTRICT OF TEXAS

(DECEMBER 17, 2020)

IN THE COURT OF APPEALS

FOR THE FIRST DISTRICT OF TEXAS

________________________

AC INTERESTS, L.P., FORMERLY

AMERICAN COATINGS, L.P.,

Appellant,

v.

TEXAS COMMISSION ON

ENVIRONMENTAL QUALITY,

Appellee.

________________________

No. 01-19-00387-CV

On Appeal from the 345th District Court

Travis County, Texas

Trial Court Case No. D-1-GN-14-0051601

Before: Terry ADAMS, Justice.

1 The Texas Supreme Court transferred this appeal from the

Third Court of Appeals in Austin to this Court, as a routine

docket-equalization matter. See Tex. Gov’t Code § 73.001. We are

unaware of any conflict between the Third Court’s precedent and

our own. See Tex. R. App. P. 41.3.

App.3a

MEMORANDUM OPINION

The dispute in this case arises from the airemission-credits program established by the Texas

Commission on Environmental Equality (the “TCEQ”).2

The purpose of the voluntary program “is to allow the

owner or operator of a facility . . . to generate emission

credits by reducing emissions beyond the level required

by any applicable local, state, or federal requirement,”

which the facility owner or operator then may use in

accordance with the program rules.3

Appellant AC Interests, L.P., formerly American

Coatings, L.P. (“AC Interests”), applied to the TCEQ

for emission credits. After the TCEQ denied the application, AC Interests sought judicial review but its

appeal of the decision to the district court was dismissed under Texas Rule of Civil Procedure 91a for lack

of proper statutory service. The Texas Supreme Court

reversed and remanded.4

On remand, the TCEQ filed a plea to the jurisdiction, arguing the case became moot when any emission

credits AC Interests might have generated at its facility

expired and, thus, any judgment rendered by a court

will be without any practical legal effect. The district

court granted the plea to the jurisdiction, and AC

Interests appealed the dismissal order.

In this appeal, AC Interests contends (1) the mootness doctrine does not apply, (2) the TCEQ’s denial of

2 See 30 Tex. Admin. Code §§ 101.300–.311.

3 See id. § 101.301.

4 AC Interests, L.P. v. Tex. Comm’n on Envtl. Quality, 543 S.W.3d 703

(Tex. 2018).

App.4a

emission credits is an unconstitutional taking, and (3)

it is entitled to a jury trial.

Based on the record and arguments presented to

us, we conclude the controversy is moot and affirm.

BACKGROUND

The TCEQ administers the Texas Clean Air Act,

which establishes a regulatory framework to “safeguard

the state’s air resources from pollution.”5 As part of the

Act’s implementation and to incentivize the voluntary

reduction of emissions, the TCEQ has adopted rules

authorizing it to grant emission credits, including emission reduction credits (“ERCs”).6 An ERC is a “certified

emission reduction . . . that is created by eliminating

future emissions and quantified during or before the

period in which emission reductions are made from a

facility.”7 They do not constitute a property right; rather,

they are a limited authorization to emit pollutants.8

And the TCEQ retains authority to “terminate or limit

such authorization.”9

One way a company may generate emission credits

is by permanently shutting down a facility that lawfully emits certain pollutants.10 The emission reduction

must be certified, meaning the reduction must be

5 See Tex. Health & Safety Code § 382.002(a); see also id.

§ 382.011(a)(1).

6 See 30 Tex. Admin. Code §§ 101.300–.304.

7 Id. § 101.300(10).

8 See id. § 101.302(k).

9 See id.

10 See id. §§ 101.302(a)(1), .303(a)(1)(A).

App.5a

“enforceable, permanent, quantifiable, real, and surplus.”11 If the TCEQ certifies the reduction, the facility

owner or operator may use, trade, sell, or bank the

emission credit for later use.12

Under this regulatory framework, AC Interests

asked the TCEQ to certify ERCs purportedly generated

at an AC Interests facility that had ceased emissions.

But the TCEQ denied the application, prompting AC

Interests to timely file a petition for judicial review in

December 2014.13

The petition alleged that the AC Interests facility

was destroyed by fire in July 2010. Although it obtained

a permit to reconstruct the facility from the TCEQ in

May 2013, AC Interests ultimately decided against

rebuilding. Instead, AC Interests applied for certification

of ERCs in October 2013—and then revised its application three times between November 2013 and

July 2014—based on a permanent-shutdown emissions

reduction strategy.14 The TCEQ denied the certification of ERCs, stating in its decision letter that AC

Interests had provided “contradictory emissions information” and that the TCEQ could not determine that

the emissions reduction was “quantifiable and real” or

“surplus.”

11 See id. § 101.302(d)(1)(A).

12 See generally id. §§ 101.306(a), .309(d).

13 A person “affected by” a TCEQ decision may appeal by filing

a petition in a Travis County district court. Tex. Health & Safety

Code § 382.032(a).

14 The regulatory framework for emission credit applications

provides that an application may be revised upon written notice

from TCEQ of its denial. See id. § 101.302(f)(3).

App.6a

According to AC Interests, the TCEQ’s refusal to

certify ERCs violated “statutory provisions, exceeded

[TCEQ’s] statutory authority, and was arbitrary and

capricious.” AC Interests requested in its petition

that, among other things, the district court: (1) set

aside the TCEQ’s decision; (2) remand to the TCEQ for

further administrative proceedings on AC Interests’s

application for ERC certification; and (3) order that

the “TCEQ issue an Emission Banking Credit and

Allowance Certificate to AC Interests,” along with

costs, attorney’s fees, and all other relief to which AC

Interests was entitled.

The district court initially dismissed AC Interests’s

appeal in March 2015 because AC Interests did not

timely serve the TCEQ with the petition for judicial

review. But the Texas Supreme Court reversed and

remanded, concluding that the late service did not

require dismissal.15

On remand, the TCEQ again sought dismissal

through a plea to the jurisdiction. The TCEQ asserted

for the first time that the appeal was moot because

any ERCs that could have been certified expired 60

months after the date of the emissions reduction at AC

Interests’s facility. By the TCEQ’s calculation, any

ERC that AC Interest might have generated expired

60 months after the facility shut down, which was

either the date of the facility fire, in July 2010, or the

date AC Interests decided not to reconstruct the

facility, in October 2013.16

15 AC Interests, L.P., 543 S.W.3d 714–15.

16 The TCEQ asserted its mootness contention for the first time

in its jurisdictional plea filed with the district court in November

2018. See id.; AC Interests, L.P. v. Tex. Comm’n on Envtl. Quality,

App.7a

In other words, according to the TCEQ, a live

controversy ceased to exist between the parties on July

31, 2015, during the prior appeal, or, at the latest, by

October 2018, and thus any decision by the district

court would be without “a practical legal effect on the

alleged controversy related to [the] TCEQ’s denial of

AC Interests’s ERC application.” The district court

granted the TCEQ’s plea to the jurisdiction.

STANDARD OF REVIEW

The district court’s subject matter jurisdiction may

be challenged through a plea to the jurisdiction. See

Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d

217, 225–26 (Tex. 2004); Bland Indep. Sch. Dist. v.

Blue, 34 S.W.3d 547, 554 (Tex. 2004). Whether subject

matter jurisdiction exists is a question of law we review

de novo. See Miranda, 133 S.W.3d at 226; see also

Chambers-Liberty Ctys. Navigation Dist. v. State, 575

S.W.3d 339, 345 (Tex. 2019). We look first to the pleadings to determine if the plaintiff has alleged facts that

affirmatively demonstrate the court’s jurisdiction to

hear the cause. See Miranda, 133 S.W.3d at 226. We

construe the pleadings liberally in favor of the plaintiff, looking to its intent, and accept as true the factual

allegations in the pleadings. Id. We also consider any

evidence introduced by the plaintiff that is relevant to

the jurisdictional inquiry. See City of Elsa v. Gonzalez,

325 S.W.3d 622, 625 (Tex. 2010). If the issue is one of

pleading sufficiency, the plaintiff should be afforded

521 S.W.3d 58 (Tex. App.—Houston [1st Dist.] 2016), rev’d by 543

S.W.3d at 707–15.

App.8a

the opportunity to amend unless the pleadings affirmatively negate jurisdiction. Miranda, 133 S.W.3d at

226–27.

MOOTNESS DOCTRINE

The Texas Clean Air Act permits a person adversely

affected by a TCEQ ruling to appeal, as AC Interests

did here, by filing a petition in a district court in

Travis County within 30 days of the ruling. Tex. Health

& Safety Code § 382.032(a). The primary question

before us, which we consider de novo, is whether AC

Interests’s appeal of the TCEQ’s refusal to certify

ERCs has become moot because the lifespan of the

resulting litigation has exceeded the lifespan of any

ERC that AC Interests may have generated by its

facility shutdown. See Tex. Nat. Res. Conservation

Comm’n v. IT-Davy, 74 S.W.3d 849, 855 (Tex. 2002)

(existence of subject matter jurisdiction is legal question

reviewed de novo); see also Speer v. Presbyterian Children’s Home & Serv. Agency, 847 S.W.2d 227, 229

(Tex. 1993) (mootness doctrine implicates subject matter

jurisdiction).

Courts are limited by the mootness doctrine to

deciding cases in which an actual controversy exists.

See, e.g., State ex rel. Best v. Harper, 562 S.W.3d 1, 6

(Tex. 2018). An actual controversy must exist between

the parties at every stage of the legal proceedings.

Williams v. Lara, 52 S.W.3d 171, 184 (Tex. 2001). Mootness may occur at any time, including on appeal. See

Heckman v. Williamson Cty., 369 S.W.3d 162, 166–67

(Tex. 2012) (“[C]ourts have an obligation to take into

account intervening events that may render a lawsuit

moot.”).

App.9a

Mootness occurs if a controversy ceases to exist or

the parties lack a legally cognizable interest in the

outcome. Allstate Ins. Co. v. Hallman, 159 S.W.3d 640,

642 (Tex. 2005). The same is true when a judgment

would not have any practical effect upon a then-existing

controversy. See Best, 562 S.W.3d at 6 (case is moot when

events make it impossible for court to grant relief

requested or otherwise affect parties’ rights or interests);

see also Heckman, 369 S.W.3d at 162 (same); City of

Hous. v. Kallinen, 516 S.W.3d 617, 622 (Tex. App.—

Houston [1st Dist.] 2017, no pet.) (same). When a case

becomes moot, the court loses jurisdiction and cannot

hear the case. Best, 562 S.W.3d at 6.

AC Interests timely sought judicial review of the

TCEQ’s decision to deny certification of ERCs, alleging

that the decision violated procedural and substantive

due process, was arbitrary and capricious, and exceeded

the TCEQ’s authority. The foundation of AC Interests’s

request for relief is its claimed entitlement to ERCs

based on the emission reductions achieved by the

permanent shutdown of its facility.

The TCEQ derives its argument that the controversy is moot from the rules for emission credit banking

and trading codified in the Administrative Code. See

30 Tex. Admin. Code §§ 101.300, et seq. Specifically, the

TCEQ looks to administrative rule 101.309(b), which

establishes a 60-month lifespan for emission credits:

Emission credits certified as part of an administratively complete EC-1 Form, Application

for Certification of Emission Credits, received

after January 2, 2001 shall be available for

use for 60 months from the date of the emission reduction.

App.10a

30 Tex. Admin. Code § 101.309(b)(3).17 The TECQ

argues that this case became moot 60 months after the

“date of the emission reduction” at AC Interests’s facility

—when the July 2010 fire shut down the facility and

emissions ceased as a result or, at the latest, when AC

Interests opted not to reconstruct the facility in October 2013 and instead applied for certification of ERCs.

See id. §§ 101.300(27) (shutdown means “permanent

cessation of an activity producing emissions at a

facility or mobile source”), 101.303(a)(1)(A) (emission

credits may be generated by “permanent shutdown

of a facility that causes a loss of capability to produce

emissions”). According to the TCEQ, because the

facility shutdown occurred more than 60 months ago

and any ERCs that AC Interests may have generated

have since expired, the courts can no longer grant AC

Interests any relief that will have a practical legal

effect.

AC Interests argues the district court erred by

accepting the TCEQ’s mootness argument because any

60-month “emission clock” has not yet expired in this

case for two reasons. First, AC Interests contends that

the language of rule 101.309(b)(3) prevents the clock

from starting before an application for certification of

17 The version of the rule 101.309 applicable in this case defines

the lifespan of an emission credit in subsection (b)(3). See Former

30 Tex. Admin. Code § 101.309(b)(3). In the current version of

the rule, the lifespan of an emission credit is moved to subsection

(b)(2) and amended in a non-substantive way to provide that an

“emission credit certified as part of an administratively complete

application received after January 2, 2001 shall be available for

use for 60 months from the date of the emission reduction.”

Current 30 Tex. Admin. Code § 101.309(b)(2). For the purpose of

this opinion, all citations to rule 101.309 are to the former

version of rule.

App.11a

emission credits is “administratively complete,” which

AC Interests asserts never occurred here because TCEQ

denied its applications. According to AC Interests,

an application is “administratively complete” once the

TCEQ has reviewed it and declared it so.

Second, AC Interests contends that, even if the

clock started running, the lifespan of an emission

credit should be tolled based on events that occurred

before and during litigation. Specifically, AC Interests

asserts that the clock stopped (1) when the TCEQ

initially denied the ERCs in December 2013, (2) when

the TCEQ finally denied the ERCs in November 2014,

(3) when the TCEQ initially moved to dismiss the case

due to untimely service in January 2015, and (4) when

the trial court erroneously dismissed in the case on

that motion in March 2015, forcing an appeal to the

Texas Supreme Court. We disagree.

Because the TCEQ is the agency charged with

administering the Texas Clean Air Act, the TCEQ’s

interpretation of rule 101.309 is entitled to deference

unless it is “plainly erroneous, or inconsistent with the

language of the statute, regulation, or rule.” TGSNOPEC Geophysical Co. v. Combs, 340 S.W.3d 432,

438 (Tex. 2011). We further construe administrative

rules, like statutes, using traditional principles of

statutory construction. Id.; Heritage on San Gabriel

Homeowners Ass’n v. Tex. Comm’n on Envtl. Quality,

393 S.W.3d 417, 424–25 (Tex. App.—Austin 2012, pet.

denied). Our primary objective is to give effect to the

intent of the issuing agency and legislature, “which,

when possible, we discern from the plain meaning of

the words chosen.” State v. Shumake, 199 S.W.3d 279,

284 (Tex. 2004) (addressing statutory construction);

see Rodriguez v. Serv. Lloyds Ins. Co., 997 S.W.2d 248,

App.12a

254 (Tex. 1999) (addressing rule construction). The

statute or rule must be considered as a whole. TGSNOPEC, 340 S.W.3d at 439. And its meaning may be

informed by factors that include the law’s objective.

See Shumake, 199 S.W.3d at 284; see also Tex. Gov‘t

Code § 311.023(1).

The plain language of rule 101.309(b)(3) does not

include any extension of the life of an emission credit

under the circumstances urged by AC Interests. See

30 Tex. Admin. Code § 131.309(b)(3). While the rule

defines the lifespan of emission credits “certified

as part of an administratively complete application

received after January 2, 2001,” nothing in the rule

suggests that the life of an emission credit is tolled until

an application is deemed administratively complete.

See id.

Neither does any language actually used in the

rule suggest that the life of an emission credit is tolled

during the administrative review of an application or

in litigation resulting from TCEQ’s decision on an

application for such credits. The rule unambiguously

states: “Emission credits . . . shall be available for use

for 60 months from the date of the emission reduction.”

30 Tex. Admin. Code § 101.309(b)(3) (emphasis added).

It does not define the life of an emission credit according to when the emission credit is finally certified by

the TCEQ, whether as part of the initial administrative

proceedings or after judicial review.

To hold that the rule incorporates a tolling mechanism would be to read additional language into the

rule, which is contrary to the rules of construction

App.13a

and not the role of this Court.18 See TGS-NOPEC, 340

S.W.3d at 439 (“We presume that the Legislature

chooses a statute’s language with care, including each

word chosen for a purpose, while purposefully omitting

words not chosen.”).

In addition, a conclusion that rule 101.309 does

not include a tolling mechanism is supported by reading

the administrative rules for emission credit banking

and trading as a whole. See TGS-NOPEC, 340 S.W.3d

at 439. In rule 101.304, for example, the TCEQ expressly

extended the lifespan of certain other emission credits

by one year. 30 Tex. Admin. Code § 101.304(e) (certain

18 Although AC Interests did not provide authority for its argument that the lifespan of an emission credit is tolled during the

period of any litigation arising from TCEQ’s decision on an application to certify emission credits in its initial appellate briefing,

at oral argument in this case AC Interests indicated that its

contention is premised on the equitable doctrines that toll statutory limitations periods. See generally Young v. United States,

535 U.S. 43, 49 (2002) (limitations periods are customarily subject

to equitable tolling, unless tolling would be inconsistent with text

of relevant statute). The authorities on which AC Interest relied

at oral argument concern the tolling of limitations when the

outcome of an initial case determines the viability of a subsequent

cause of action, for example, as in a legal malpractice action. See,

e.g., Hughes v. Mahaney & Higgins, 821 S.W.2d 154, 155 (Tex.

1991) (statute of limitations in legal malpractice case is tolled

until appeals are exhausted on underlying suit in which malpractice allegedly occurred); Pollard v. Hancshen, 315 S.W.3d 636, 638–

39 (Tex. App.—Dallas 2010, no pet.) (same). But this is not a case

that involves a second or dependent cause of action in which AC

Interests’s claim depends on an adjudication in another suit. AC

Interests timely filed its petition for judicial review within 30

days of the TCEQ’s decision. And the litigation-related delays

about which AC Interests complains occurred during the course

of the proceedings in this single action. The cases that AC

Interests provided us at oral argument are thus inapposite.

App.14a

mobile emission reduction credits “shall be available

for use for 72 months from the date of the emission

reduction in lieu of the provisions outlined in § 101.

309(b)(2) of this title (relating to Emission Credit

Banking and Trading”)). This suggests that any extension of credit life was intended to apply only in a

small subset of the potential population of emission

credits—a subset of mobile emission reduction credits

not at issue here—for a specified time period. See id.;

see also In re Bell, 91 S.W.3d 784, 790 (Tex. 2002)

(courts should presume that words excluded from

statute have been excluded purposefully and should

not insert words into statute except to give effect to

clear legislative intent).

A construction that does not extend the lifespan

of an emission credit also is consistent with the purpose

of the rules regulating and controlling air pollution

and contaminants, which is to aid the implementation

of the Texas Clean Air Act, and the Texas Clean Air Act

itself, which is to “safeguard the state’s air resources

from pollution by controlling or abating air pollution

and emissions of air contaminants, consistent with

the protection of public health, general welfare, and

physical property. . . . ” See Tex. Health & Safety Code

§ 382.002(a); see also 30 Tex. Admin. Code §§ 101.300–

.311. The Act provides that its provisions are to be

“vigorously enforced.” Tex. Health & Safety Code

§ 382.002(b).

Accordingly, for all these reasons, we conclude that

the plain language of rule 101.309 does not include

any tolling mechanism that would extend the lifespan

of an emission credit beyond “60 months from the date

of the emission reduction” for the purpose of this mootness analysis. See 30 Tex. Admin. Code § 101.309(b)(3).

App.15a

There may be a disagreement about the “date of

the emission reduction” in this case, but we need not

resolve that disagreement in order to determine mootness. Both parties tie the “date of emission reduction”

to the shutdown of AC Interests’s facility. See 30 Tex.

Admin. Code § 101.300(27) (defining “shutdown” as

“permanent cessation of an activity producing emissions

at a facility or mobile source”). Regardless of whether

the facility shutdown occurred in July 2010, as the TCEQ

asserts, or as late as October 2013, as AC Interests

asserts, both dates are more than 60 months in the past.

Neither AC Interests’s pleadings in the district

court nor its briefing in this Court include any argument

or allegation as to the usefulness of ERCs beyond their

60-month lifespan that might preserve the controversy

over TCEQ’s denial of ERCs. See generally Kallinen,

516 S.W.3d at 622 (case is not moot if some issue remains

in controversy). Based on the limited record before us,

we can discern none.19 For example, subpart (e) of rule

19 With a limited exception for the purpose of determining jurisdiction, not invoked here, our review on appeal is limited to the

facts in the record. Cf. Freedom Commc’ns, Inc. v. Coronado, 372

S.W.3d 621, 623–24 (Tex. 2012) (citing Tex. R. Evid. 201 and

noting that appellate court may take judicial notice of relevant

facts outside record to determine jurisdiction); Bridgeport Indep.

Sch. Dist. v. Williams, 447 S.W.3d 911, 916 (Tex. App.—Austin

2014, no pet.) (taking notice of letter not in appellate record as it

was undisputed and impacted court’s jurisdiction). In this case,

the appellate record includes only select pleadings and documents from the district court’s file and the record of the previous

service-related appeal. Although AC Interests’s briefing includes

citations to the administrative proceedings before TCEQ and it

appears that the administrative record was transmitted to the

district court, the administrative record itself was not designated

for inclusion in the appellate record or transmitted to this Court.

The only part of the administrative record before us is TCEQ’s

App.16a

101.309 suggests a permissible use of expired emissions

credits—”[r]eductions certified as emissions credits may

still be used by the original owner as an emission

reduction for netting purposes after the emission credits

have expired, as provided in § 116.150 of this title

(relating to New Major Source or Major Modification

in Ozone Nonattainment Areas).” 30 Tex. Admin. Code

§ 101.309(e). There are no netting allegations in either

AC Interests’s pleadings or briefing. AC Interests’s

only allegation as to the continued usefulness of the

expired emission credits concerns whether the litigationrelated delay will diminish their value in the “emission credit market.” But that allegation ignores that

emission credits are transferrable at “any time before

the expiration date of the emission credit[.]” 30 Tex.

Admin. Code § 101.309(d) (emphasis added).

Absent any basis for concluding either that the

emission credits AC Interests may have generated

have not expired or have some usefulness despite

their expiration, we hold that AC Interests’s request

for judicial review of the TCEQ’s denial of its applications for certification of ERCs is moot.20 Cf. Tex. Comm’n

decision letters, which were attached as exhibits to AC Interests’s

response to the plea to the jurisdiction.

20 Although there is not a prior Texas case that directly addresses

whether a claim involving emission credits becomes moot upon

the credits’ expiration, more than one federal case recognizes

that claims involving permits issued by the Environmental

Protection Agency can become moot during litigation upon the

expiration of the subject permit. See, e.g., DJL Farm LLC v. U.S.

Envtl. Prot. Agency, 813 F.3d 1048, 1051 (7th Cir. 2016) (agreeing

with agency and company that landowners’ action challenging

permits issued for construction and operation of carbon dioxide

was moot because challenged permits expired and, thus, court

could not award meaningful relief); Madison v. Tulalip Tribes of

App.17a

on Envtl. Quality v. Gonzales, No. 03-18-00803-CV, 2019

WL 5582236, at *1–2 (Tex. App.—Austin Oct. 30, 2019,

no pet.) (mem. op.) (dispute over air quality permit

became moot upon expiration of permit); City of

Shoreacres v. Tex. Comm’n on Envtl. Quality, 166 S.W.3d

825, 831 (Tex. App.—Austin 2005, no pet.) (dispute

over validity of permit became moot when requested

relief would no longer have any practical legal effect).

In that regard, AC Interests has not asserted or

established, in either this Court or the district court,

that any exception to the mootness doctrine preserves

its cause,21 and AC Interests reconfirmed that position

during oral argument. See, e.g., Gen. Land Office of Tex.

v. OXY U.S.A., Inc., 789 S.W.2d 569, 571 (Tex. 1990)

(identifying limited exceptions to mootness doctrine

for controversies that (1) are capable of repetition yet

evading review or (2) involve collateral consequences);

Wa., 163 Fed. Appx. 499 (9th Cir. 2006) (appeal challenging expired

permit governing storm water discharge was moot). We find

these cases to be persuasive for the purpose of our mootness

inquiry.

21 See, e.g., Ackels v. United States Envtl. Prot. Agency, 7 F.3d

862, 868 (9th Cir. 1993) (challenge to requirements of discharge

permits became moot when permits expired and permit requirements were not likely to be reimposed so as to invoke exception

to mootness doctrine); Humane Soc’y of United States v. Envtl.

Prot. Agency, 790 F.2d 106, 113 (D.C. Cir. 1985) (fact that experimental use permits expired before case reached oral argument

did not render moot petition for review because permits’ one-year

life span did not allow completion of review before expiration and

there was reasonable expectation that future permits would be

challenged by petitioner); Montgomery Envtl. Coal. v. Costle,

646 F.2d 568, 578–80 (D.C. Cir. 1980) (portion of appeal challenging

expired permits issued to sewage treatment plants was moot

when decision would be mere academic exercise but not moot as

to portion of appeal involving recurring issues).

App.18a

Williams, 52 S.W.3d at 184 (to invoke “capable of

repetition, yet evading review” exception to mootness

doctrine, “a plaintiff must prove that . . . ”) (emphasis

added). Moreover, there are no allegations in AC Interests’s pleadings that suggest to us the applicability of

any exception to the mootness doctrine. This jurisdictional defect is not one of pleading sufficiency that can

be cured by repleading. See Miranda, 133 S.W.3d at

227.

App.19a

CONCLUSION

Accordingly, having concluded that AC Interests’s

request for judicial review is moot, based on the record

and arguments presented to us, we hold the trial

court did not err by granting the TCEQ’s plea to the

jurisdiction.22

We affirm the trial court’s judgment.

Terry Adams

Justice

Panel consists of Justices Goodman, Landau, and

Adams.

22 Our conclusion on mootness precludes us from considering AC

Interests’ other issues challenging the constitutionality of rule

103.309 and asserting a right to a jury trial. See Williams, 52

S.W.3d at 184 (court loses jurisdiction when case becomes moot).

Accordingly, we do not reach those issues.

App.20a

ORDER GRANTING TCEQ PLEA

TO JURISDICTION, 345TH DISTRICT

COURT, TRAVIS COUNTY, TEXAS

(APRIL 26, 2019)

IN THE DISTRICT COURT OF TRAVIS COUNTY,

TEXAS, 345TH JUDICIAL DISTRICT

________________________

AC INTERESTS, L.P., FORMERLY

AMERICAN COATINGS, L.P.,

Plaintiff,

v.

TEXAS COMMISSION ON

ENVIRONMENTAL QUALITY,

Defendant.

________________________

No. D-1-GN-14-005160

Before: Hon. Jan SOIFER,

345th District Court, Travis County.

ORDER GRANTING THE

TEXAS COMMISSION ON ENVIRONMENTAL

QUALITY’S PLEA TO JURISDICTION

On April 18, 2019, the Court heard arguments on

the Texas Commission on Environmental Quality’s

(the Commission) Plea to the Jurisdiction and AC

Interests’ Request for a Jury Trial. After considering

the same and hearing argument of counsel, the Court

App.21a

finds that Defendant’s Plea to the Jurisdiction should

be granted.

IT IS THEREFORE ORDERED, ADJUDGED

AND DECREED that TCEQ’s Plea to the Jurisdiction

is GRANTED. All other relief sought that is not specifically granted herein is DENIED.

SIGNED on this 26th day of April 2019.

/s/ Hon. Jan Soifer

345th District Court,

Travis County

Approved as to Form:

/s/ Lisa McClain Mitchell

App.22a

OPINION AND ORDER OF THE

TEXAS SUPREME COURT

REVERSING AND REMANDING

(MARCH 23, 2018)

IN THE SUPREME COURT OF TEXAS

________________________

AC INTERESTS, L.P., FORMERLY

AMERICAN COATINGS, L.P.,

Petitioner,

v.

TEXAS COMMISSION ON

ENVIRONMENTAL QUALITY,

Respondent.

________________________

No. 16-0260

On Petition for Review from the

Court of Appeals for the First District of Texas

Argued October 11, 2017

JUSTICE DEVINE delivered the opinion of the Court, in

which CHIEF JUSTICE HECHT, JUSTICE GREEN, JUSTICE

GUZMAN, JUSTICE LEHRMANN, AND JUSTICE BROWN

joined.

JUSTICE BOYD filed a dissenting opinion, in which

JUSTICE JOHNSON joined.

JUSTICE BLACKLOCK did not participate in the decision.

App.23a

The Texas Clean Air Act provides that a person

adversely affected by a Texas Commission on Environmental Quality (TCEQ) ruling may appeal by filing a

petition in a Travis County District Court within 30

days of the ruling. Tex. Health & Safety Code § 382.

032(a), (b). The Act further requires serving citation

on the TCEQ within 30 days of filing the petition. Id.

§ 382.032(c). The petitioner here failed to meet this

latter requirement, and the district court dismissed the

appeal on the TCEQ’s motion. The court of appeals

affirmed, concluding that the service deadline was

mandatory and required dismissing the appeal. 521

S.W.3d 58, 62-63 (Tex. App.—Houston [1st Dist.] 2016)

(mem. op.). We do not understand the Act to require

dismissal under the circumstances here. Accordingly,

we reverse and remand.

I. Background

The TCEQ is charged with administering the

Texas Clean Air Act, which establishes a regulatory

scheme to “safeguard the state’s air resources from

pollution.” Tex. Health & Safety Code §§ 382.002(a),

.011(a)(1). As part of the Act’s implementation, the

TCEQ has adopted rules to regulate and control air

pollution and contaminants. See 30 Tex. Admin.

Code §§ 101.300-.304 (Tex. Comm’n on Envtl. Quality,

Emission Credit Program) (2018). These rules authorize

the TCEQ to grant Emission Reduction Credits (ERCs)

when certain authorized emissions are reduced or

eliminated under an emissions banking and trading

program. See id. § 101.301. A company may generate

ERCs, for example, by permanently shutting down a

facility that lawfully emits volatile organic compounds

or nitrogen oxides. Id. §§ 101.302(a)(1), .303(a)(1)(A).

App.24a

An ERC created under the TCEQ’s rules is a

limited authorization to emit pollutants. Id. § 101.

302(k). The emission reduction, however, must be

certified, which means that the reduction must be

“enforceable, permanent, quantifiable, real and surplus,”

among other things. Id. § 101.302(d)(1)(A). If the TCEQ

certifies the reduction, the company may trade or use

its ERCs within a designated area, for example, to

offset emissions from a new source. Id. § 101.306(a)(1).

In 2013, AC Interests asked the TCEQ to certify

ERCs. The TCEQ reviewed and denied the application.

This prompted AC Interests to seek judicial review.

AC Interests filed its petition in Travis County District Court on December 10, 2014, and hand delivered

a copy to the TCEQ a couple of days later. But AC

Interests did not formally serve the TCEQ until 58

days after filing the petition. In the interim, the TCEQ

moved to dismiss because it had not been served

within 30 days of the petition’s filing, per § 382.032(c).

The district court granted the motion and dismissed

the petition. AC Interests appealed, and this Court

transferred the appeal from the Third Court of Appeals

in Austin to the First Court in Houston, as a routine

docket-equalization matter. See Tex. Gov’t Code § 73.001

(granting the Supreme Court authority to transfer

appellate cases); see also Miles v. Ford Motor Co., 914

S.W.2d 135, 137 (Tex. 1995) (noting authority typically

exercised to equalize dockets). The First Court, applying

the Third Court’s precedent, affirmed the dismissal.

521 S.W.3d at 63 & n.3 (citing Tex. R. App. P. 41.3).

II. The Standard of Review

The TCEQ asserted Rule 91a as the basis for its

dismissal motion. See Tex. R. Civ. P. 91a. Rule 91a

App.25a

permits a party to “move to dismiss a cause of action

on the grounds that it has no basis in law or fact.” Id.

91a.1. “A cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought.” Id. “A cause of action has no

basis in fact if no reasonable person could believe the

facts pleaded.” Id. The motion must (1) state that it

is made pursuant to Rule 91a, (2) “identify each

cause of action to which it is addressed,” and (3) “state

specifically the reasons the cause of action has no

basis in law, no basis in fact, or both.” Id. 91a.2. The

court is not to consider evidence but “must decide the

motion based solely on the pleading of the cause of

action, together with any pleading exhibits permitted

by Rule 59.” Id. 91a.6.

The TCEQ’s motion does not address the pleadings

or the deficiency of any cause of action. It instead asks

the court to dismiss the appeal because AC Interests

failed to comply with a statutory requirement—the

timely service of citation. We review Rule 91a motions

de novo, but as the court of appeals correctly points

out, that was not the proper motion to file. See 521

S.W.3d at 60 (stating the matter is not one “that can

be resolved by looking only at the allegations in the

pleadings”). Even so, the court concluded that the

TCEQ’s motion was in substance a general motion to

dismiss that the court could review. Id. Further, because

the motion concerned a legal question requiring statutory construction—the consequences for AC Interests’s

failure to comply with the Clean Air Act’s 30-day service

deadline—the court declared that the standard of

review was de novo. Id. at 61 (quoting City of Rockwall

App.26a

v. Hughes, 246 S.W.3d 621, 625 (Tex. 2008) (“Statutory

construction is a legal question we review de novo.”).

We agree that the TCEQ’s dismissal motion is

premised on matters of statutory construction rather

than on any matter subject to Rule 91a and, therefore,

treat it as a general motion to dismiss or dilatory plea

premised on the TCEQ’s interpretation of the statute.

Cf. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554

(Tex. 2000) (“The purpose of a dilatory plea is not to

force the plaintiffs to preview their case on the merits

but to establish a reason why the merits of the plaintiff’s claim should never be reached.”); Kelley v. Bluff

Creek Oil Co., 309 S.W.2d 208, 214 (Tex. 1958) (noting

“a speedy and final judgment may be obtained on the

basis of matters in bar and without the formality of a

trial on the merits, if the parties so agree”). AC Interests

complains here that its district court appeal should

not have been dismissed because either (1) the Clean

Air Act’s 30-day service deadline does not apply to AC

Interests, or (2) if it does, the requirement is neither

mandatory nor a legitimate basis for dismissal. We

consider these issues in turn.

III. Analysis

A. Does the Clean Air Act’s 30-day service

requirement in Tex. Health & Safety Code

§ 382.032(c) apply to AC Interests’s appeal?

In the court of appeals, AC Interests argued that

the 30-day-service requirement did not apply because

its TCEQ appeal was premised on the Water Code, not

the Clean Air Act. Like the Clean Air Act, the Water

Code requires that an appeal must be filed within 30

days of the TCEQ’s ruling. Tex. Water Code § 5.351(b).

App.27a

Unlike the Clean Air Act, the Water Code does not provide for the service of citation within 30 days of the

petition’s filing. Compare Tex. Water Code § 5.351,

with Tex. Health & Safety CODE § 382.032(c). Instead,

the Water Code provides for dismissal one year after

the petition’s filing if the plaintiff has not secured

proper service or prosecuted the suit within that time,

unless good cause exists for the delay. Tex. Water

Code § 5.353. AC Interests therefore concludes that its

service on the TCEQ a mere 58 days after the filing

of its petition was timely.

The court of appeals recognized that the Water

Code provides general authority for judicial review of

TCEQ rulings. See 521 S.W.3d at 62 (citing Tex. Water

Code § 5.351). The court also acknowledged that AC

Interests’s petition in the district court cites both the

Water Code and the Clean Air Act, but necessarily relies

on the Clean Air Act as “the authority for the TCEQ

to regulate air emissions.” Id. at 63. And because the

Clean Air Act not only authorizes the particular TCEQ

decision but also specifically provides for its judicial

review, the court concluded that the Clean Air Act

controls over the more general Water Code provision.

See id. (quoting “the traditional statutory construction

principle that the more specific statute controls over

the more general” from Horizon/CMS Healthcare

Corp. v. Auld, 34 S.W.3d 887, 901 (Tex. 2000)).

We agree that the Clean Air Act controls AC

Interests’s request for judicial review in the district

court and that the 30-day service requirement was

therefore applicable. See Tex. Health & Safety Code

§ 382.032(c).

App.28a

B. Is the Clean Air Act’s 30-day service

requirement in Tex. Health & Safety Code

§ 382.032(c) mandatory or directory?

The Clean Air Act provides successive 30-day

deadlines in connection with the appeal of a TCEQ

ruling. The first deadline is to file the petition that

initiates the appeal. Tex. Health & Safety Code § 382.

032(a)-(b). The second is to serve citation on the TCEQ.

Id. § 382.032(c). The parties agree that the filing

deadline is a mandatory, jurisdictional requirement

and that the service deadline is not jurisdictional. The

parties disagree about whether the service deadline is

mandatory and about what consequence follows failing

to meet this service deadline.

AC Interests argues that the service deadline is

directory and that, because AC Interests complied

with the statute’s essential purpose by hand-delivering

the petition to the TCEQ two days after filing, dismissal

is not required. It submits that statutory provisions

that “are included for the purpose of promoting the

proper, orderly and prompt conduct of business” are

not generally construed as mandatory, particularly

when the failure to comply will not prejudice the

rights of the interested parties. Chisholm v. Bewley

Mills, 287 S.W.2d 943, 945 (Tex. 1956). Moreover, a

timing provision that requires performing an act within

a certain time but does not specify the consequences

for noncompliance is, generally, construed as directory.

Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 495 (Tex.

2001). But, AC Interests concedes, this is not always

the case; the lack of a stated consequence cannot be

interpreted to defeat the statute’s essential purpose.

See Edwards Aquifer Auth. v. Chem. Lime, Ltd., 291

S.W.3d 392, 403 (Tex. 2009). AC Interests submits

App.29a

that § 382.032’s essential purpose is to provide a

process for appealing the TCEQ’s ruling and that the

two deadlines exist to expedite that process. It contends

that it substantially complied with that process by

timely filing its petition and providing actual notice of

the filing to the TCEQ two days later. See id. (noting

that the issue is not substantial compliance with the

filing deadline but rather substantial compliance with

the statute’s “application process, one requirement of

which was the filing deadline”).

The TCEQ responds that the language and purpose

of the statute demonstrate that the service requirement is mandatory. The statute states that “service of

citation must be accomplished within 30 days.” Tex.

Health & Safety Code § 382.032(c). (emphasis added).

The word “must” indicates a condition precedent “unless

the context in which the word or phrase appears necessarily requires a different construction,” according to

the Code Construction Act. Tex. Gov’t Code § 311.016.

The TCEQ therefore concludes that AC Interests had

to serve process within 30 days to accrue its right to

judicial review. But the TCEQ also concedes that serving

citation, unlike filing the petition, is not jurisdictional.

Nevertheless, it contends that the Legislature intended

the same mandatory effect because it used the same

mandatory term—”must”—and a similar timing provision. Thus, even though timely service is not a jurisdictional prerequisite, a failure to meet the deadline

should, according to the TCEQ, yield the same consequence: dismissal. Finally, the TCEQ submits that the

service deadline is not onerous because any party

appealing a TCEQ ruling knows where to serve the

TCEQ, having already appeared before the agency. The

TCEQ submits that “[i]n this respect, serving citation

App.30a

is more like filing a notice of appeal than serving

citation for a common-law lawsuit.” But the TCEQ

also submits that the service deadline does not merely

provide prompt notice of the appeal but also eliminates

any due-diligence argument that might otherwise excuse

late service.

The “fundamental rule” for determining whether

a statutory provision is mandatory or directory “is to

ascertain and give effect to the legislative intent.” Chisholm, 287 S.W.2d at 945. But the legislative intent is

often unclear when the Legislature creates a deadline

but expresses no penalty or consequence for failing to

meet it. In situations like that, we have acknowledged

that no “absolute test” exists for distinguishing the

mandatory from the directory. Id. And to punctuate

the point, we offered these additional observations sixty

years ago:

Although the word “shall” is generally construed to be mandatory, it may be and frequently is held to be merely directory. In

determining whether the Legislature intended

the particular provision to be mandatory or

merely directory, consideration should be given

to the entire act, its nature and object, and

the consequences that would follow from

each construction. Provisions which are not

of the essence of the thing to be done, but which

are included for the purpose of promoting the

proper, orderly and prompt conduct of business, are not generally regarded as mandatory.

If the statute directs, authorizes or commands

an act to be done within a certain time, the

absence of words restraining the doing thereof

afterwards or stating the consequences of

App.31a

failure to act within the time specified, may

be considered as a circumstance tending to

support a directory construction.

Id.

The words “shall” and “must” in a statute are generally understood as mandatory terms that create a duty

or condition. Wilkins, 47 S.W.3d at 493 (citing Tex.

Gov’t Code § 311.016(2), (3)). But we have cautioned

that such labels can be misleading absent context. See

State v. $435,000, 842 S.W.2d 642, 644 (Tex. 1992)

(per curiam). “More precisely the issue is not whether

‘shall’ [or ‘must’] is mandatory, but what consequences

follow a failure to comply.” Id. Thus, “[t]o determine

whether a timing provision is mandatory, we first look

to whether the statute contains a noncompliance penalty. If a provision requires that an act be performed

within a certain time without any words restraining

the act’s performance after that time, the timing

provision is usually directory.” Wilkins, 47 S.W.3d at

495. But, of course, we will not interpret silence regarding the consequences for noncompliance to undermine

the statute’s purpose. See Hines v. Hash, 843 S.W.2d

464, 468 (Tex. 1992) (stating that when the statute is

silent, we may look to its purpose for guidance). And

again “[t]he fundamental rule is to ascertain and give

effect to the legislative intent,” Chisholm, 287 S.W.2d

at 945, which “is best revealed” by the language

enacted. In re Office of Attorney Gen., 422 S.W.3d 623,

629 (Tex. 2013). We must, therefore, look at the Clean

Air Act’s text for clues of the intended consequence for

late service.

The Act states that a person affected by a TCEQ

ruling “may appeal the action by filing a petition.”

Tex. Health & Safety Code § 382.032(a) (emphasis

App.32a

added). “The petition must be filed within 30 days

after . . . the effective date of [the TCEQ’s] ruling.” Id.

§ 382.032(b). This means that a person may appeal

only if the petition complies with the 30-day filing requirement—i.e., a person who fails to comply may not

appeal; hence, any attempt to appeal should be dismissed. Filing a timely petition under the statute is a

jurisdictional requirement. See Tex. Gov’t CODE

§ 311.034. When a party’s failure to comply results in

a court lacking jurisdiction, the necessary consequence

for that failure is dismissal. Similarly, when the deadline

relates to the very act necessary to establish a claim,

right, or benefit under the statute, the deadline is

usually considered mandatory and its neglect fatal.

See, e.g., Chem. Lime, Ltd., 291 S.W.3d at 404-05

(holding that applicant was not entitled to a ground

water permit because it failed to submit proof of its

historical water usage by deadline). But no such consequence for failing to comply with the 30-day service

deadline is stated or necessary here. The Act states

that “[s]ervice of citation on the commission must be

accomplished within 30 days after the date on which

the petition is filed.” Id. § 382.032(c). It states only

a requirement, not a consequence; you “may appeal

. . . by filing a petition,” not by serving citation. Both

the service and petition deadlines “must” be met, but

only the petition deadline has a clear consequence for

noncompliance—you may not appeal.

The court of appeals dealt with this dilemma by

concluding that the service deadline was mandatory,

rather than directory, and required dismissal, relying

on precedent from the Austin Court of Appeals. 521

S.W.3d at 61-62 (following TJFA, L.P. v. Tex. Comm’n

on Envtl. Quality, 368 S.W.3d 727 (Tex. App.—Austin

App.33a

2012, pet. denied)); see also TEX. R. APP. P. 41.3 (requiring that the transferee court apply the transferor

court’s precedent in cases transferred by the Supreme

Court). TJFA dealt with a Solid Waste Act provision

that provided a similar 30-day deadline to serve the

TCEQ. TJFA, 368 S.W.3d at 729; see Tex. Health &

Safety Code § 361.321(c). The Austin Court held that

the 30-day service deadline was mandatory because

the statute did not expressly provide for any

exceptions and was written with mandatory language,

which had to be afforded some significance. TJFA, 368

S.W.3d at 735. Like the statute here, the Solid Waste

Act does not specify the consequence for noncompliance

with the service deadline. The Austin Court, however,

determined that the consequence for noncompliance

was dismissal because the Legislature placed the

service and filing deadlines in the same subsection.

This, the court reasoned, indicated that the service

deadline should be treated like the filing one. Id. at

735-36.

We are not convinced that this placement indicates

anything significant. But even if it does, the service

and filing deadlines here are in different subsections.

See Tex. Health & Safety Code § 382.032(b), (c). Thus,

what the court found significant in TJFA does little to

help resolve this case.

The TCEQ nevertheless argues that we must

afford some significance to the statute’s use of the

word “must,” which, under the Code Construction Act,

indicates a condition precedent “unless the context

. . . necessarily requires a different construction.” Tex.

Gov’t Code § 311.016. As a condition precedent, the

TCEQ claims, the statutory provision is mandatory,

App.34a

which means that AC Interests’s suit should be dismissed. But that argument misses the point. Even if

the service requirement is a condition precedent and,

hence, mandatory, that does not resolve what the

consequence is for late service. It is too quick to say

that “must” is mandatory language, therefore failure

to comply results in dismissal. See $435,000, 842

S.W.2d at 644 (noting that the issue is not the use of

mandatory language “but what consequences follow a

failure to comply”). That goes too far as a statutoryconstruction approach because it assumes, without

more, that any noncompliance with a condition precedent results in dismissal. But other possible consequences exist. See, e.g., Albertson’s, Inc. v. Sinclair,

984 S.W.2d 958, 961 (Tex. 1999) (per curiam) (noting

that failure to comply with mandatory notice provision

under worker’s compensation law did not require dismissal of action for judicial review); Hines v. Hash, 843

S.W.2d 464, 467-69 (Tex. 1992) (determining abatement

to be the consequence for failure to give required statutory notice); $435,000, 842 S.W.2d at 644 (concluding

that failure to hold forfeiture case hearing within statutorily required 30-day period did not require dismissal);

Tex. Dep’t of Pub. Safety v. Gratzer, 982 S.W.2d 88, 90-91

(Tex. App.—Houston [1st Dist.] 1998, no pet.) (holding

that officer’s failure to comply with statutory deadline

regarding notice of license suspension did not render

DWI-warning form inadmissible because statute did

not provide a consequence and driver did not assert

any prejudice).

We recently held in BankDirect Capital Finance,

LLC v. Plasma Fab, LLC that the failure to meet a

statutory timelimit could not be excused, but that situation is distinguishable from the present one. 519

App.35a

S.W.3d 76, 78 (Tex. 2017). There, the issue was whether

the Insurance Code permitted BankDirect, a premium

finance company, to cancel an insured’s policy even

though BankDirect did not comply with a statutory

timelimit for doing so. Id. at 79. The statute required

BankDirect to mail an intent-to-cancel notice to the

insured stating a deadline of not less than ten days to

cure the insured’s default. Id. at 80. BankDirect’s

notice did not provide this minimum deadline to cure.

Id. at 79. The statute in BankDirect, however, unlike

the statute here, states a consequence for such noncompliance: a finance company “may not cancel” an

insured’s policy unless the statutory notice is given.

Tex. Ins. Code § 651.161(a)-(b). Because BankDirect

did not comply with the statute, it was not allowed to

cancel the policy. See BankDirect, 519 S.W.3d at 86

(noting the statute’s “austere consequence for noncompliance: BankDirect ‘may not cancel’ the policy”).

Thus, BankDirect does not control this case.

The statutory provision at issue here does not state

a consequence and, importantly, no consequence is

logically necessary. See Tex. Health & Safety Code

§ 382.032(c). Contrast this with a jurisdictional requirement, where failure to comply results in dismissal because the failure means that jurisdiction never obtains.

See, e.g., id. § 382.032(a). In that situation, dismissal

is logically necessary though not explicitly stated. But

the service requirement here is not jurisdictional. See

Roccaforte v. Jefferson Cty., 341 S.W.3d 919, 925 (Tex.

2011) (holding that failure to give statutorily required

post-suit notice is not jurisdictional). That is, even if

it is a condition precedent to something, it is not a condition precedent to suit, and no other particular consequence for noncompliance is logically necessary. Hence,

App.36a

deeming the service requirement a “condition precedent” does not resolve the issue of what a court is to

do here.

The dissent, however, argues that subsections

(a), (b), and (c) are all conditions precedent to appeal.

Post at ___ (Boyd, J., dissenting). That is, the dissent

thinks that you “may appeal” only by (1) filing a

petition, (2) doing so within 30 days, and (3) serving

citation within 30 days. But that is not how the statute

is written. Nowhere does the statute state that a party

“may appeal” by filing a petition and serving citation.

It states, in subsection (a) only, how a party “may

appeal”: “by filing a petition.” Compare Tex. Health

& Safety Code § 382.032(a), with id. § 382.032(b), (c).

There is no conjunction linking subsections (a) and

(c), or (a) and any other subsection. See id. § 382.032.

Without a conjunction, there is no plain-language

argument that subsection (c) refers back to subsection

(a)’s “may appeal” language and, hence, is a condition

precedent to appeal. Subsection (c) states, in its entirety:

“Service of citation on the [TCEQ] must be accomplished

within 30 days after the date on which the petition is

filed. Citation may be served on the executive director

or any [TCEQ] member.” Id. § 382.03(c). We cannot

conclude from this that the service deadline, like the

petition-filing requirement, is a condition precedent to

appeal.

The dissent further argues that there is no principled reason to construe the petition deadline as a

condition precedent to appeal but not to do so for the

service deadline. Post at ___. Respectfully, we disagree.

Subsections (a) and (b) are linked because subsection

(b) lists the requirements for filing the petition

identified in subsection (a)—these requirements are

App.37a

simply what subsection (a) means by “filing a petition.”

If you do not meet these requirements, you have not

filed a petition and, therefore, may not appeal. We

think that conclusion is logically necessary given that

you must file a petition in order to appeal. But subsection (c) is not defining a term in subsection (a), and

again, does not in any way refer back to subsection (a)’s

“may appeal.” Thus, we cannot similarly conclude that

failing to meet the service deadline means that you

may not appeal.

The dissent’s argument that subsection (c) is just

as much a condition precedent to appeal as subsection (b) is a perfectly reasonable one, but it is based

on an inferential leap that is not needed when making

the same conclusion about subsection (b). That inference

is that the Legislature intended for subsection (a)’s

“may appeal” language to apply to subsection (c), too.

Such an inference is reasonable, and reasonable minds

will disagree about whether subsection (c) was meant

as a condition precedent to appeal. But that is exactly

the point: the dissent’s reading is reasonable and logical,

but it is not logically necessary. Also reasonable is

concluding that serving citation is a post-suit requirement or that its purposes was merely to provide notice.

All of these conclusions are reasonable, but they all

require us to make inferences beyond what the text

provides. None are logically necessary. Thus, the

dissent’s subsection (c) conclusion, though reasonable,

is principally distinct from our subsection (b) conclusion, which is logically necessary.

Of course, had AC Interests never served citation,

this failure to ever perform the condition precedent—

accomplishing service—means that AC Interests would

be prohibited from continuing to appeal. But that, by

App.38a

itself, still does not mean that failing to serve within

30 days requires dismissal. Dismissal might occur

eventually, as the Act’s one-year presumption-ofabandonment provision suggests: “If the plaintiff does

not prosecute the action within one year after the date

on which the action is filed, the court shall presume

that the action has been abandoned.” Tex. Health &

Safety Code § 382.032(d). Indeed, in that situation, a

court is required to “dismiss the suit on a motion for

dismissal . . . unless the plaintiff . . . can show good

and sufficient cause for the delay.” Id. But before one

year has elapsed, the only logically necessary consequence for failing to serve the citation is that, until it is

served, AC Interests cannot pursue a remedy under the

Act. After a year, this failure might result in dismissal.

See id. In that sense, serving citation is mandatory—

it must be done at some point. But AC Interests did

serve citation; it simply did so more than 30 days after

filing the petition. Thus, even if the service deadline

is mandatory and, hence, failing to ever accomplish

service—a condition precedent—could eventually result

in dismissal, that consequence is not logically necessary when service is merely beyond 30 days. So we are

back to the initial question: what is the consequence

for noncompliance with the service-of-citation deadline?

But the dissent protests that serving citation is a

constitutionally required step that is “inherent in the

act of filing a petition” and is jurisdictional. Post at ___.

Even if serving citation is jurisdictional, contra Roccaforte, 341 S.W.3d at 925, or constitutionally required,

doing so within 30 days is not. The 30-day deadline is

a creature of the statute, not the constitution or our

jurisdiction jurisprudence. And AC Interests did serve

citation on the TCEQ. What AC Interests did not do

App.39a

was serve citation within the statute’s 30-day deadline.

AC Interests did not fail to meet a constitutional or

jurisdictional requirement; it failed to meet a statutory

one. Thus, we cannot conclude that failing to meet this

statutory requirement implicates due-process concerns

or deprives a court of subject-matter jurisdiction.

As the above discussion demonstrates, that “must”

creates a condition precedent under the Code Construction Act does not determine the consequence for

noncompliance here. Even if the provision is mandatory

in the sense that failure to ever effect service cannot

be excused, the statute does not give any guidance for

determining the consequence for late service. This leaves

us with essentially the same question as before—is

the 30-day aspect of the service requirement mandatory

or directory?—with no statutory guidance to answer

it. But ironically, this lack of guidance is what guides

us. Our acknowledgment of this uninformed choice

between mandatory and directory is what informs our

analysis, because presuming that the provision here

is mandatory requires us to create a statutory consequence for noncompliance, which is the Legislature’s

job, not ours. Interpreting such a provision as directory

avoids this problem.

Presuming that the 30-day requirement is mandatory entails judicial guesswork to resolve the case.

Indeed, such a presumption requires choosing legal

consequences without any direction from the text. When

no stated or logically necessary consequence for noncompliance can be tethered to the text, choosing between

dismissal, abatement, or some other consequence

presents an intractable problem. Hence the presumption that a timing provision that fails to state the

consequences for noncompliance should be considered

App.40a

directory rather than mandatory. Wilkins, 47 S.W.3d

at 495; Chisholm, 287 S.W.2d at 945. But this presumption cannot be used to undermine the statute’s

purpose. Thus, when the statute is otherwise silent on

the subject, we look to its purpose for guidance in

divining the consequence for noncompliance. See Chem.

Lime, 291 S.W.3d at 404. In other words, if a particular

consequence is logically necessary to accomplish the

statute’s purpose, the courts will apply that consequence.

The statute’s purpose here is to provide a process

for the judicial review of TCEQ decisions. See Tex.

Health & Safety Code § 382.032 (“Appeal of Commission Action”). The successive 30-day deadlines indicate

a further purpose to expedite filing and notice and

presumably the appeal itself. Id. § 382.032(b)-(c). The

TCEQ emphasizes that the service requirement is not

merely a notice requirement but also a service-of-process

requirement, implying strict compliance. We, however,

see no textual basis to conclude that serving citation

within 30 days of filing the petition is so essential to

the statute’s purpose that the Legislature intended anything less than strict compliance to require dismissal.

Cf. Roccaforte, 341 S.W.3d at 926 (concluding under

another statute requiring expedited notice that the failure to strictly comply with the manner of notice was

not fatal because the statute’s purpose was not “to

create a procedural trap allowing a county to obtain

dismissal even though the appropriate officials have

notice of the suit”).

The dissent agrees with our identified purpose—

providing a process for judicial review and expediting

appeals—but claims that “construing the service-ofcitation requirement as a condition precedent to judicial review best promotes that purpose.” Post at ___.

App.41a

Maybe so, but that the dissent’s construction promotes

the purpose does not mean that the construction is

required to satisfy that purpose. Appeals under this

statute are more expedient when the 30-day deadline

is met, but missing that deadline does not make the

appeal so prolonged that it is delayed to the point of

failing this “expedience” purpose. That is, this particular deadline, even if it helps to make appeals more

expedient, is not so essential to “expediency” that failure

to meet the deadline necessarily entails dismissal. We

should be careful not to confuse incrementally promoting

a purpose with being fundamentally required by it—

i.e., just because “expediency” is a purpose does not

mean that being less-expedient requires dismissal.

Moreover, that dismissal under subsection (d) can

occur only after failing to “prosecute the action within

one year,” Tex. Health & Safety Code § 382.032(d),

shows that dismissal for missing this 30-day deadline

is not essential to the purpose. Because AC Interests

could sit on its hands for almost an entire year after

filing its petition and serving citation before the statute

allows for dismissal based on this lack of expediency,

delays short of that one-year mark cannot be so contrary to “expediency” that they require dismissal.

Indeed, even at the one-year mark, the statute allows

for AC Interests to avoid dismissal by showing “good

and sufficient cause for the delay.” Id. Whatever

consequence the Legislature might have had in mind

when writing subsection (c), we cannot conclude that

it was dismissal when subsection (d) allows for such a

significant delay, and then an opportunity to provide

an excuse, before dismissing.

The dissent also claims that the statute’s purpose

is to detail when the Legislature waives the TCEQ’s

App.42a

sovereign immunity. Post at ___. Even if we agreed with

this alleged purpose, there is no ambiguity regarding

what the Legislature has waived sovereign immunity

for: appealing “a ruling, order, decision, or other act”

of the TCEQ or executive director. Id. § 382.032(a).

There is nothing regarding the breadth of sovereign

immunity to broadly or narrowly construe here. The

TCEQ’s waiver of immunity is equally limited under

both our analysis and the dissent’s. We disagree

whether the service deadline is a condition precedent

to bringing an appeal, but that does not affect how

limited the waiver is. Regardless, immunity was waived

when AC Interests properly filed its petition. The dissent’s argument that serving citation is also required to

waive immunity rests on its premise that the service

deadline is jurisdictional and constitutionally required.

But we have already discussed why we disagree with

that argument. Thus, missing the 30-day deadline

cannot be so essential to the statute’s purpose that

dismissal is logically necessary.

Whatever gap a court must bridge between a

statute’s language and its intended result, it is a wider

gap if the statute’s language is presumed to be mandatory rather than directory. Thus, when a statutory

provision has mandatory language, but is not jurisdictional, and does not have an explicit or logically necessary consequence, we presume the provision was

intended as a direction rather than a mandate. Doing

so ends the judicial inquiry, or at least the difficult

part of it. Because such a provision is directory,

courts are not forced to blindly search for or invent a

particular consequence that the Legislature failed to

provide. But just because a provision such as this is

directory does not make it a mere suggestion that can

App.43a

be disregarded at will. If a party does not comply with

such a provision, an opposing party can, upon a showing

of prejudice, have that prejudice remedied as the court

determines that justice requires. This might mean, for

example, abatement, attorney’s fees, or expediting subsequent proceedings as appropriate. In extreme situations where the noncompliance prevents the opposing

party from adequately presenting its case, it might mean

dismissal. Failure to comply with a directory provision

has consequences, but they are not always fatal.

*****

Here, AC Interests served citation on the TCEQ

after the 30-day statutory deadline. Because the Legislature expressed no particular consequence for failing

to meet that deadline and none is logically necessary,

we presume that the Legislature intended the requirement to be directory rather than mandatory and that

the Legislature did not intend for late service to result

in the automatic dismissal of AC Interests’s appeal.

Because the court of appeals erred in upholding the

dismissal, we reverse its judgment and remand the

cause to the district court for further proceedings consistent with this opinion.

John P. Devine

Justice

Opinion Delivered: March 23, 2018

App.44a

DISSENTING OPINION OF JUSTICE BOYD,

JOINED BY JUSTICE JOHNSON

(MARCH 23, 2018)

IN THE SUPREME COURT OF TEXAS

________________________

AC INTERESTS, L.P., FORMERLY

AMERICAN COATINGS, L.P.,

Petitioner,

v.

TEXAS COMMISSION ON

ENVIRONMENTAL QUALITY,

Respondent.

________________________

No. 16-0260

On Petition for Review from the

Court of Appeals for the First District of Texas

JUSTICE BOYD, joined by JUSTICE JOHNSON,

dissenting

The Texas Clean Air Act provides that a person

“may appeal” a Texas Commission on Environmental

Quality decision “by filing a petition in a district court

of Travis County.” TEX. HEALTH & SAFETY CODE

§ 382.032(a). The petition “must be filed within 30 days

after” the decision’s effective date, id. § 382.032(b),

and service of citation on the Commission “must be

accomplished within 30 days after the date on which

the petition is filed,” id. § 382.032(c). AC Interests

App.45a

filed this suit to appeal the Commission’s decision to

deny AC Interests’s claim to certain emission-reduction

credits. It timely filed its petition within thirty days

after the Commission’s decision, but it did not serve

citation on the Commission until fifty-eight days later.

The primary issue is whether AC Interests may

pursue the appeal after missing the statute’s serviceof-citation deadline.

The Court holds that subsection (c)’s deadline is

merely “directory,” rather than “mandatory,” so AC

Interests’s failure to meet the deadline does not

preclude it from pursuing the appeal. Ante at ___. The

Court agrees that the deadline creates a condition

precedent, ante at ___, but it identifies no right or duty

that is conditioned on the precedent.1 Under the

Court’s reasoning, the deadline is a condition

precedent that conditions nothing at all. As a result,

the deadline means nothing at all. I disagree. The

deadline—which subsection (c) says the party “must”

meet—must be a condition on something, and the only

thing it can be a condition on is the right to pursue the

appeal. The statute’s plain language compels that result,

and that result promotes the statute’s apparent

purposes. I would hold that because AC Interests failed

to serve citation on the Commission within thirty

1 “A condition precedent is an event that must happen or be

performed before a right can accrue to enforce an obligation.”

Centex Corp. v. Dalton, 840 S.W.2d 952, 956 (Tex. 1992) (citing

Hohenberg Bros. Co. v. George E. Gibbons & Co., 537 S.W.2d 1, 3

(Tex. 1976)); see also Helton v. R.R. Com’n of Tex., 126 S.W.3d

111, 119 (Tex. App.—Houston [1st Dist.] 2003, pet. denied) (“By

not serving Harris with a copy of the petition for judicial review,

as mandated by section 2001.176(b)(2) of the APA, however,

Helton did not meet a necessary condition on which its right to

seek judicial review of the commission’s order depended.”).

App.46a

days, as the statute says a party who wants to appeal

a Commission decision “must” do, it cannot pursue

this appeal. Because the Court holds otherwise, I

respectfully dissent.

I.

The Statute’s Plain Language

The Clean Air Act prescribes a specific process for

those who want to appeal a Commission decision, and

it does so by using varying directives—”may,” “must,”

or “shall”—for each step along the way:

– A person “may” appeal the Commission’s

decision “by filing a petition in a district court

of Travis County.”2

– The petition “must be filed within 30 days”

after the decision’s effective date.3

– Service of citation on the Commission “must be

accomplished within 30 days” after the

plaintiff files the petition.4

– The citation “may” be served on the executive

director or any member of the Commission.5

– The plaintiff “shall” pursue the action with

reasonable diligence.6

– The court “shall” presume the action has been

abandoned if the plaintiff fails to prosecute the

2 Tex. Health & Safety Code § 382.032(a).

3 Id. § 382.032(b).

4 Id. § 382.032(c).

5 Id.

6 Id. § 382.032(d).

App.47a

action within one year after the date on which

the action is filed.7

– The court “shall” dismiss the suit upon the

attorney general’s motion, unless the plaintiff

“can show good cause for the delay.”8

We need not guess at the meanings of these

directives, as the Legislature has defined them in the

Code Construction Act. When a statute uses the term

“must,” it “creates or recognizes a condition precedent,”

Tex. Gov’t Code § 311.016(3); when a statute uses the

term “shall,” it “imposes a duty,” id. § 311.016(2); and

when a statute uses the term “may,” it “creates discretionary authority or grants permission or a power,”

id. § 311.016(1). These definitions apply to all statutes

“unless the context in which the word or phrase appears

necessarily requires a different construction” or “a

different construction is expressly provided by statute.”

Id. § 311.016. The Clean Air Act does not provide an

alternative meaning for these terms and, contextually,

nothing compels a contrary conclusion. In the context

of the Clean Air Act’s procedural provisions, affording

these words their statutorily prescribed meaning

enforces the orderly administrative process the Legislature provided for claimants to appeal the Commission’s decisions. See Tex. Health & Safety Code § 382.

032.

Applying the definitions the Legislature has

provided, I would follow a simple, plain-language

approach and construe the statutorily-required process

as follows:

7 Id.

8 Id.

App.48a

– “May” appeal: AC Interests had statutory permission to appeal the Commission’s decision, and

it could exercise that right “by filing a petition

in a district court of Travis County,” but it was

not required to appeal.

– “Must” file within thirty days: As a condition

precedent to pursuing its appeal, AC Interests

was required to file its petition within thirty

days after the decision’s effective date. If AC

Interests failed to file its petition within that

time frame, it could not pursue its appeal.

– “Must” accomplish service of citation within

thirty days: As another condition precedent to

pursuing its appeal, AC Interests was required

to accomplish service of citation within thirty

days after filing its petition. If AC Interests

failed to effectuate service within that time

frame, it could not pursue its appeal.

– “May” serve on director or members: In

effecting service, AC Interests had statutory permission to serve the citation either

on the Commission’s executive director or

any Commission member.

– “Shall” pursue with diligence: After it completed the first three steps, AC Interests had a

duty to prosecute its action with reasonable

diligence.

– “Shall” presume abandoned and “shall” dismiss:

If AC Interests failed to prosecute the appeal

within one year, the court had a duty to

presume that AC Interests had abandoned the

suit—and a duty to dismiss the suit—absent a

showing of good cause for the delay.

App.49a

The Court rejects this construction, at least of the

service-of-citation deadline, because the statute does

not expressly state that the suit will be dismissed if

the claimant fails to meet that deadline. Ante at ___.

According to the Court, even though the statute uses

the word “must,” even though that word creates a

condition precedent, and even though it is therefore

“mandatory” under any ordinary understanding, the

requirement is merely directory because the statute

does not expressly state that AC Interests cannot

pursue its appeal if it fails to effectuate service of

citation within thirty days.

This Court has struggled for decades—without

much meaningful success—to identify a clear standard

for determining whether a statutory requirement is

“mandatory” or “directory.” See Chisholm v. Bewley

Mills, 287 S.W.2d 943, 945 (Tex. 1956) (“There is no

absolute test by which it may be determined whether

a statutory provision is mandatory or directory.”). We

have said that, in general, in determining “whether

the Legislature intended a provision to be mandatory

or directory, we consider the plain meaning of the

words used, as well as the entire act, its nature and

object, and the consequences that would follow from

each construction.” Helena Chem. Co. v. Wilkins, 47

S.W.3d 486, 494 (Tex. 2001). When the statute expressly

states a consequence for noncompliance, of course, the

Court’s task is simply to apply that consequence. But

when the statute fails to expressly state a consequence

for noncompliance, our task becomes more difficult.

We have concluded that the absence of any stated

consequence “may be considered as a circumstance

tending to support a directory construction,” meaning

the statute imposes no consequence for noncompliance.

App.50a

Chisolm, 287 S.W.2d at 945. But we have also warned

that this holding “does not suggest that when no penalty

is prescribed, ‘must’ is non-mandatory.” Edwards

Aquifer Auth. v. Chem. Lime, Ltd., 291 S.W.3d 392,

404 (Tex. 2009).

Ultimately, we have concluded that when “the

statute is silent about consequences of noncompliance,

we look to the statute’s purpose in determining the

proper consequence of noncompliance.” Albertson’s,

Inc. v. Sinclair, 984 S.W.2d 958, 961 (Tex. 1999) (per

curiam); see Hines v. Hash, 843 S.W.2d 464, 468 (Tex.

1992) (“When the statute is silent, we have looked to

its purpose for guidance.”). Applying this approach

here, I conclude that the Clean Air Act requires timely

service of citation as a condition precedent to a suit for

judicial review both because the statute’s text and

context compel that result and because that result

best supports the statute’s presumed purposes.

II. Text and Context

Reading subsection 382.032(c)’s service-of-citation

deadline in context makes dismissal the only logical

consequence for noncompliance. Subsections (a), (b),

and (c) together stipulate that a person “may appeal”

a Commission decision by filing a petition, but the

petition must be filed within thirty days after the

decision, and service of citation must be accomplished

within thirty days after filing. The Court agrees that

a party who misses subsection (b)’s filing deadline

“may not appeal,” because that deadline is “jurisdictional” and “relates to the very act necessary to

establish a claim, right, or benefit under the statute.”

App.51a

Ante at ___.9 But according to the Court, a party who

misses subsection (c)’s service-of-citation deadline

may still appeal because subsection (a) says the party

“may appeal” by filing the petition, not by serving the

citation. Ante at ___. According to the Court, we can

only conclude that dismissal is the consequence for

failing to timely serve citation by “blindly searching”

the statute and then “creating” or “inventing” that

consequence. Ante at ___.

I disagree. If, as the Court suggests, merely filing

a petition is the sole condition precedent to appeal,

then the mere filing of a petition would always be

sufficient, and subsection (b)’s deadline for that filing

would not be a condition precedent. But if timely filing

the petition is also a condition precedent to the right

to appeal, as the Court agrees it is, then we must read

subsections (a) and (b) together to determine the effect

of missing that deadline. But then there is no

principled reason to read subsection (c)—or to understand its application to subsection (a)—differently

from subsection (b) and its application. Even after the

plaintiff has filed a petition, the trial court’s “jurisdiction

is dependent upon citation issued and served in a

manner provided for by law,” and “[a]bsent service,

waiver, or citation, mere knowledge of a pending suit

does not place any duty on a defendant to act.” Wilson

9 The Court cites to section 311.034 of the Government Code for

the proposition that “Filing a timely petition under the statute is

a jurisdictional requirement.” Ante at ___ (citing Tex. Gov’t Code

§ 311.034). But section 331.034 actually supports the notion that

serving citation and any embedded timing requirements are also

jurisdictional requirements. See Tex. Gov’t Code § 311.034

(“Statutory prerequisites to a suit, including the provision of

notice, are jurisdictional requirements in all suits against a

governmental entity.”).

App.52a

v. Dunn, 800 S.W.2d 833, 836–37 (Tex. 1990). Service

of citation, in other words, is effectively as “jurisdictional” as the filing of the petition, and equally as

“necessary to establish a claim, right, or benefit under

the statute.” Ante, at ___.

A claimant cannot obtain judicial review simply

by filing a petition. While subsection (a)— when read

alone—says that a person “may appeal by filing a

petition,” subsection (c) recognizes that inherent in

the act of filing a petition is the constitutionally required

step of serving process on the named defendant. The

“mere filing of the plaintiff’s petition is not all that is

required to ‘commence’ the suit,” Owen v. City of

Eastland, 78 S.W.2d 178, 179 (Tex. Comm’n App. 1935)

(addressing statutes of limitations), because “those

not properly served [with citation] have no duty to act,

diligently or otherwise,” Ross v. Nat’l Ctr. for the

Emp’t of the Disabled, 197 S.W.3d 795, 798 (Tex. 2006)

(per curiam). Initiating a lawsuit is always a two-step

process of filing and serving process, and subsections

(b) and (c) impose deadlines on both of those steps.

The Court asserts that subsections (a) and (b)

must be read together because both refer to the filing

of the petition and subsection (b) simply defines what

it means to file a petition as subsection (a) requires.

Ante at ___. Thus, according to the Court, if you file a

petition (as subsection (a) requires) but fail to file it

within thirty days (as subsection (b) requires), “you

have not filed a petition and, therefore, may not

appeal.” Ante at ___. The statute’s language does not

support that construction. If you file a petition but fail

to file it within thirty days, you have still filed a

petition, but you have not filed it timely. Because

subsection (b) says you “must” file it timely—making

App.53a

timely filing a condition precedent to appeal—you cannot

pursue the appeal even though you have filed a

petition. In the same way, because subsection (c) says

you “must” timely serve citation on the Commission,

you cannot pursue the appeal even though you have

timely filed the petition. Without service of citation,

the filed petition cannot provide any basis for judicial

review. For this reason, I conclude that the statute

requires that the consequence for failing to timely

serve citation on the Commission is dismissal of the

petition seeking judicial review. The person who elects

to appeal by filing a petition “must” timely file the

petition and “must” timely serve citation, and the

consequence for failing to comply with either requirement is simply that the person cannot appeal.

Under the Court’s approach, by contrast, the term

“must” requires dismissal if the person fails to timely

file the petition, but the same term imposes no

consequence at all if the person fails to timely serve

citation. The Court reasons that, unlike a “jurisdictional

requirement, where failure to comply results in dismissal,” subsection (c) “does not state a consequence

and, importantly, no consequence is logically necessary.”

Ante at ___.10 But serving citation is jurisdictional, as

is any requirement that can be fairly characterized as

a “statutory prerequisite.” See Tex. Gov’t Code § 311.034.

(“Statutory prerequisites to a suit, including the

10 The Court also cites Roccaforte v. Jefferson County, 341 S.W.3d

919, 925 (Tex. 2011) for the proposition that “failure to give

statutorily required post-suit notice is not jurisdictional.” Ante at

___. The statute in that case did not address service of citation,

but rather general notice. See Roccaforte, 341 S.W.3d at 927

(“Roccaforte’s claims against the county should not have been

dismissed for lack of notice.”).

App.54a

provision of notice, are jurisdictional requirements in

all suits against a governmental entity.”). The Court’s

construction improperly renders the service-of-citation

deadline completely meaningless. See Crosstex Energy

Servs., L.P. v. Pro Plus, Inc., 430 S.W.3d 384, 390 (Tex.

2014) (“We presume the Legislature chose statutory

language deliberately and purposefully. We must not

interpret the statute ‘in a manner that renders any

part of the statute meaningless or superfluous.’”) (citing

Tex. Lottery Com’n v. First State Bank of DeQueen, 325

S.W.3d 628, 635 (Tex. 2010) and quoting Columbia

Med. Ctr. of Las Colinas, Inc. v. Hogue, 271 S.W.3d 238,

256 (Tex. 2008)). If AC Interests can pursue this appeal

even though it failed to serve citation within thirty days,

then it is not true that the claimant “must” accomplish

service of citation within thirty days. According to the

Court’s reading, AC Interests “can,” “could,” “may,”

“might,” or even “should” serve citation within thirty

days, but it cannot be said that it “must” do so, even

though that’s what subsection (c) in fact says.

The Court attempts to avoid this reality by suggesting that “other possible consequences exist,” ante

at ___, but it cannot identify any other consequences

that could apply to the failure to timely serve citation

under subsection (c). The only “other consequence” the

Court suggests is abatement, ante at ___, but it makes

no effort to explain how abatement would ever be

appropriate to address the late service of citation, and

I cannot see how it would. The only “possible” consequence that could appropriately result from missing

the service-of-citation deadline is the one the statute

itself requires by using the word “must”: the loss of the

right to pursue the appeal. See, e.g., Edwards Aquifer,

291 S.W.3d at 404 (“The only penalty the [act at issue]

App.55a

suggests is that late applications will not be considered.”).

We have recognized that, when a particular statutory provision imposes a requirement without expressly

stating a consequence for noncompliance, other provisions of the same statute may provide guidance as to

what the consequence should be. In Helena Chemical,

for example, although the statute required that a

claim for arbitration be filed by a particular time, we

concluded that the failure to timely file the claim did

not require dismissal because another provision of the

statute required trial courts to take into account the

arbitrators’ findings “as to the effect of delay in filing

the arbitration claim.” 47 S.W.3d at 494. Here, however,

other statutory provisions support the conclusion that

the consequence for failing to timely serve citation is

dismissal.

First, the Legislature’s inclusion of a good-cause

exception for delay in subsection (d)—which applies

only after a claimant has timely filed its petition and

timely served citation— evidences the Legislature’s

intent that a claimant strictly comply with the filing

and service deadlines in subsections (a), (b), and (c),

none of which contain a good-cause exception. This is

not a novel concept. See PPG Indus., Inc. v. JMB/

Hous. Ctrs. Partners Ltd. P’ship, 146 S.W.3d 79, 84

(Tex. 2004) (“When the Legislature includes a right or

remedy in one part of a code but omits it in another,

that may be precisely what the Legislature intended.

If so, we must honor that difference.”). As the court of

appeals correctly noted, the thirty-day service provision

“does not have an exception for good and sufficient

cause.” 521 S.W.3d at 63; see also TJFA, L.P. v. Tex.

Com‘n on Envtl. Quality, 368 S.W.3d 727, 737 (Tex.

App.56a

App.—Austin 2012, pet. denied) (“The legislature’s

decision to not include a provision allowing a party to

explain why compliance with the deadline was not

achieved is instructive. This seems particularly true

in this case in light of the fact that in the very next

provision, the legislature afforded parties the ability

to explain why their suit should not be dismissed for

failure to pursue the claim ‘with reasonable diligence.’”).

Second, the Legislature’s decision to include a

specific time period compels the conclusion that dismissal is required, and that decision must be afforded some significance. See Edwards Aquifer, 291 S.W.3d

at 403 (“The importance of a fixed filing deadline is

apparent in the [Edwards Aquifer Authority Act]. The

Legislature picked a specific, calendar date by which

permit applications were required to be filed.”); TJFA,

368 S.W.3d at 735 (concluding that an analogous

provision regarding service of citation under the Solid

Waste Disposal Act was mandatory and that by

providing an explicit deadline, “the legislature has

indicated its intention to foreclose the possibility of

excusing delays between filing and executing service

due to diligent efforts at service undertaken by

plaintiffs”).

Recently, we noted that “absent statutory language

to the contrary, a statutorily imposed time period does

not allow for substantial compliance.” BankDirect

Capital Fin., LLC v. Plasma Fab, LLC, 519 S.W.3d 76,

83 (Tex. 2017). In addition, we have recognized that a

deadline “is not something one can substantially

comply with. A miss is as good as a mile.” Edwards

Aquifer, 291 S.W.3d at 403. And although the Court

may be concerned that dismissal is too harsh a remedy,

we noted in BankDirect that “[s]tatutes that impose

App.57a

timelines naturally burden those who miss them.” 519

S.W.3d at 85. When the statute’s words are clear,

equity must give way to certainty and predictability.

This is especially true in the service-of-citation context,

which generally requires strict compliance in one form

or another. See Wilson, 800 S.W.2d at 836; Uvalde

Country Club v. Martin Linen Supply Co., 690 S.W.2d

884, 885 (Tex. 1985) (per curiam) (“Moreover, failure

to affirmatively show strict compliance with the Rules

of Civil Procedure renders the attempted service of

process invalid and of no effect.”) (citing McKanna v.

Edgar, 388 S.W.2d 927, 929 (Tex. 1965)).11

11 See also Wilson, 800 S.W.2d at 836 (“Absent service, waiver,

or citation, mere knowledge of a pending suit does not place any

duty on a defendant to act.”); Royal Surplus Lines Ins. Co. v.

Samaria Baptist Church, 840 S.W.2d 382, 382–83 (Tex. 1992)

(“[U]se of certified mail by a public official to effect service of

process when a statute provides only for registered mail does not

violate our strict compliance standard for service of process.”);

McKanna, 388 S.W.2d at 929 (reversing default judgment when

plaintiff failed to strictly comply with rules for service of citation

and stating that its holding “is in accord with the established law

of this State that it is imperative and essential that the record

affirmatively show a strict compliance with the provided mode of

service”); In the Interest of K.M.C., No. 05-16-00635-CV, 2017 WL

745802, at *1 (Tex. App.—Dallas Feb. 27, 2017, no pet.) (mem. op.)

(“Strict compliance with the rules governing service of citation is

mandatory, and failure to comply constitutes error on the face of

the record.”); Nat’l Sur. Corp. v. Anderson, 809 S.W.2d 313, 316

(Tex. App.—Houston [1st Dist.] 1991, no writ) (“Because rule 101

applies and appellant was served more than 90 days after

issuance of the citation, the citation was void and appellant was

not required to answer”) (citing Lewis v. Lewis, 667 S.W.2d 910,

911 (Tex. App.—Waco 1984, no writ)); Lewis, 667 S.W.2d at 911

(“Since service of citation on defendant was 96 days after its

issuance, such was ineffective; defendant was not required to

answer; and the default judgment must be vacated.”); Mega v.

Anglo Iron & Metal Co. of Harlingen, 601 S.W.2d 501, 503 (Tex.

App.58a

III. The Statute’s Purposes

Even if we concluded that the statute’s plain

language does not make the timely service of citation

a condition precedent to pursuing the appeal, and we

were thus required to “look to the statute’s purpose in

determining the proper consequence of noncompliance,”

Albertson’s, 984 S.W.2d at 961, I would reach the same

conclusion. In the broadest sense, the Clean Air Act’s

“policy and purpose is ‘to safeguard the state’s air

resources from pollution by controlling or abating air

pollution and emissions of air contaminants.’” S.

Crushed Concrete, LLC v. City of Houston, 398 S.W.3d

676, 678 (Tex. 2013) (quoting Tex. Health & Safety

Code § 382.002(a)). The Court suggests that the Act’s

judicial-review provisions’ more specific purpose is to

“provide a process for the judicial review of [Commission] decisions” and “to expedite filing and notice

and presumably the appeal itself.” Ante at ___.

Even assuming that correctly states the statute’s

purpose, construing the service-of-citation requirement as a condition precedent to appeal best promotes

that purpose. By conditioning the right to appeal on

the claimant’s fulfillment of a duty to diligently and

timely seek such review, the statute ensures that any

Civ. App.—Corpus Christi 1980, no writ) (“The Texas Rules of Civil

Procedure relating to the issuance, service and return of citation

are generally regarded as mandatory, and failure to show

affirmatively a strict compliance with the Rules will render the

attempted service of process invalid and of no effect.”); Lemothe

v. Cimbalista by Gates, 236 S.W.2d 681, 681–82 (Tex. Civ. App.—

San Antonio 1951, writ ref’d) (“[A]ll other rules relating to the

issuing and serving of processes are generally regarded as

mandatory, and failure to comply with such rules renders the service

thereunder of no effect.”) (citations omitted).

App.59a

appeal from a Commission decision must be pursued

and resolved in an efficient and expedited manner.

This is consistent with other language in the statute,

which places particular emphasis on timeliness and

strict compliance, noting that each chapter must be

“vigorously enforced” and that violations of Commission

rules or orders must result in “expeditious initiation

of enforcement actions.” Tex. Health & Safety Code

§ 382.002(b). As a court, we have no power to say otherwise. Borowski v. Ayers, 524 S.W.3d 292, 305 (Tex.

App.— Waco 2016, pet. denied) (“The courts possess

no legislative powers; therefore, the courts cannot

excuse plaintiffs’ noncompliance with statutory requirements merely because defendants, despite plaintiffs’

noncompliance, are able to accomplish some of the

Legislature’s purpose in imposing the statutory requirements.”).

The Court, however, makes no effort to address

whether and how its construction supports this purpose.

Instead, it simply concludes that, even though the

statute’s purpose is to expedite the resolution of appeals

from Commission decisions, it finds “no textual basis

to conclude that serving citation within 30 days of

filing the petition is so essential to the statute’s

purpose that the Legislature intended anything less

than strict compliance to require dismissal.” Ante at

___. But because subsection (c) addresses constitutional

service of citation, without which the trial court lacks

jurisdiction, the Commission has no duty to appear or

take any action, and the suit cannot begin at all, until

citation is served. See Wilson, 800 S.W.2d at 836–37;

El Paso Indep. Sch. Dist. v. Alspini, 315 S.W.3d 144,

149 (Tex. App.—El Paso 2010, no pet.) (“Citation serves

the purposes of giving the court jurisdiction over the

App.60a

defendant, satisfying due process requirements, and

giving the defendant an opportunity to appear and

defend.”) (citing Cockrell v. Estevez, 737 S.W.2d 138,

140 (Tex. App.—San Antonio 1987, no writ)); Cockrell,

737 S.W.2d at 140 (“The purpose of citation is to give

the court proper jurisdiction of the parties and to

provide notice to the defendant that he has been sued

and by whom and for what so that due process will be

served and he will have an opportunity to appear and

defend the action.”); see also Tex. Nat. Res. Conservation

Com’n v. Sierra Club, 70 S.W.3d 809, 813 (Tex. 2002)

(“[A] ‘citation’ is directed to the defendant, telling the

defendant that he or she has been sued and commanding

the defendant to appear and answer the opposing

party’s claims.”).

Thus, service of citation is different from mere

notice, and we should be loath to confuse the two. See

Perez v. Perez, 59 Tex. 322, 324 (1883) (“The words

citation and notice are by no means synonymous.

. . . A notice is much less formal.”). Indeed, we have

observed that “service of citation” is “a term of art that

describes the formal process by which a party is

informed that it has been sued.” Sierra Club, 70 S.W.3d

at 813. Contrary to the Court’s suggestion, the statute

provides a “textual basis to infer that” service of

citation “is essential to the statute’s purpose” because,

until citation has been served on the Commission, the

process of judicial review cannot commence at all.

Beyond the Court’s identified purpose of expediting

appeals from Commission decisions, I would conclude

that another “purpose”—or, I would say, “effect”—of

the statute is to express the Legislature’s policy

decisions as to when to waive the Commission’s

sovereign immunity and allow for judicial review of

App.61a

executive-branch decisions. Because the statute

provides a limited waiver of immunity, we must

construe it narrowly in favor of retaining the State’s

immunity. See In re Smith, 333 S.W.3d 582, 587 (Tex.

2011) (“First, a statutory waiver of sovereign immunity

must be construed narrowly.”) (citing Mission Consol.

Indep. Sch. Dist. v. Garcia, 253 S.W.3d 653, 655 (Tex.

2008) (“We interpret statutory waivers of immunity

narrowly. . . . ”)); Wichita Falls State Hosp. v. Taylor,

106 S.W.3d 692, 697 (Tex. 2003) (“[W]hen construing

a statute that purportedly waives sovereign immunity,

we generally resolve ambiguities by retaining immunity.”); Tex. Nat. Res. Conservation Comm’n v. IT–

Davy, 74 S.W.3d 849, 854 (Tex. 2002) (“Subjecting the

government to liability may hamper governmental

functions by shifting tax resources away from their

intended purposes toward defending lawsuits and

paying judgments.”); Magnolia Petroleum Co. v. Walker,

83 S.W.2d 929, 934 (Tex. 1935) (“‘Legislative grants of

property, rights, or privileges must be construed

strictly in favor of the state. . . . ’”) (quoting Empire

Gas & Fuel Co. v. State, 47 S.W.2d 265, 272 (Tex.

1932)). Construing the statute to permit judicial

review only when the claimant has complied with the

statute’s express requirements best fulfills this purpose

of providing a limited waiver of immunity.

IV. Conclusion

The Clean Air Act allows a person to appeal a

Commission decision by filing a petition in a Travis

County district court. The petition “must” be filed

within thirty days after the decision and service of

citation “must” be accomplished within thirty days

after filing. The filing and service requirements are

conditions precedent to the right to pursue the appeal.

App.62a

The statute’s plain language compels this result, and

the statute’s effects likewise support this conclusion.

I would hold that because AC Interests failed to serve

citation on the Commission within thirty days, as the

statute says it “must” do, it cannot pursue this appeal.

Because the Court holds otherwise, I respectfully

dissent.

Jeffrey S. Boyd

Justice

Opinion delivered: March 23, 2018

App.63a

ENTRY OF JUDGMENT

(MARCH 23, 2018)

IN THE SUPREME COURT OF TEXAS

________________________

AC INTERESTS, L.P., FORMERLY

AMERICAN COATINGS, L.P.,

Petitioner,

v.

TEXAS COMMISSION ON

ENVIRONMENTAL QUALITY,

Respondent.

________________________

No. 16-0260

On Petition for Review from the

Court of Appeals for the First District of Texas

THE SUPREME COURT OF TEXAS, having heard

this cause on petition for review from the Court of

Appeals for the First District, and having considered

the appellate record, briefs, and counsel’s argument,

concludes that the court of appeals’ judgment should

be reversed.

IT IS THEREFORE ORDERED, in accordance

with the Court’s opinion, that:

1)

The court of appeals’ judgment is reversed;

App.64a

2)

The cause is remanded to the trial court for

further proceedings consistent with this

Court’s opinion; and

2)

AC Interests, L.P., shall recover, and the Texas

Commission on Environmental Quality shall

pay, the costs incurred in this Court and in

the court of appeals.

Copies of this judgment and the Court’s opinion

are certified to the Court of Appeals for the First

District and to the District Court of Travis County,

Texas, for observance.

Opinion of the Court delivered by Justice Devine,

joined by Chief Justice Hecht, Justice Green, Justice

Guzman, Justice Lehrmann, and Justice Brown

Dissenting opinion filed by Justice Boyd,

joined by Justice Johnson

Justice Blacklock did not participate in this decision

March 23, 2018

App.65a

ORDER OF THE TEXAS SUPREME COURT

DENYING MOTION FOR REHEARING OF

DENIAL OF PETITION FOR REVIEW

(APRIL 22, 2022)

SUPREME COURT OF TEXAS

________________________

AC INTERESTS, L.P.,

v.

TEX. COMM’N ON ENVTAL. QUALITY.

________________________

RE Case No. 21-0078

COA #: 01-19-00387-CV

TC#: D-1-GN-005160

Today the Supreme Court of Texas denied the

motion for rehearing of the above-referenced petition

for review. Justice Boyd notes his dissent from the

Court’s denial of the motion for rehearing.

App.66a

COMBINED STATE ERC SUMMARY TOTALS

COMBINED STATE ERC PLUS CALIFORNIA

LOCAL PROGRAM ERC SUMMARY TOTALS

ERC

Lifetime

Category

Total

% of

Total

Unlimited

Life (“UL”)

29

75.7

UL but

discounted

after 5 to 15

years

2

5.4

Discount up to 50%

2 or 5 Years

2

5.4

May be Renewed

Indefinitely in both

cases

Subtotal:

Effectively

UL

33

86.5

10 Years

4

10.8

5 Years, plus

time for

construction

1

2.7

Subtotal:

10 Years or

less

5

13.5

Total

38

100.00

Notes

UL with Certain

Conditions in both

cases