Cockrell Inv. Partners v. Middle Pecos Groundwater Conservation Dist.

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COCKRELL INVESTMENT PARTNERS, L.P., Appellant, v. MIDDLE PECOS GROUNDWATER CONSERVATION DISTRICT, TY EDWARDS, in his Official Capacity as General Manager of the MIDDLE PECOS GROUNDWATER CONSERVATION DISTRICT, and FORT STOCKTON HOLDINGS, L.P., Appellees.

No. 08-21-00200-CV

Court of Appeals of Texas, Eighth District, El Paso

March 8, 2023

Appeal from the 83rd District Court of Pecos County, Texas (TC# P-8277-83-CV)

Before Rodriguez, C.J., Palafox, and Soto, JJ.

OPINION

GINA M. PALAFOX, Justice

Appellant Cockrell Investment Partners, L.P. (Cockrell), appeals the trial court's judgment granting summary judgment in favor of Appellees, which include the Middle Pecos Groundwater Conservation District and its general manager, Ty Edwards, in his official capacity (collectively, the District), as well as Fort Stockton Holdings, L.P. (FSH) (collectively Appellees), and further appeals the court's order denying its cross motion for summary judgment. Cockrell sought judicial review of: (1) the District's decision to deny it party status as to FSH's application to renew its 2017 permit to produce and export 28, 400-acre feet of groundwater, and (2) the District's ultimate decision to renew FSH's permit for a three-year term. After initially denying the District and FSH's plea to the jurisdiction the trial court granted their motions for summary judgment. On appeal, Cockrell asserts the trial court erred in its interpretation of the applicable statutes and in finding it lacked jurisdiction to consider the claims asserted. Finding no error, we affirm.

I. Background

A. The parties

Cockrell Investment Partners, L.P., is a limited partnership that owns property located in Pecos County, Texas, and it holds certain permits issued by the District. The District is a governmental entity and political subdivision governing the groundwater underlying Pecos County, Texas. Ty Edwards served as general manager of the District during the relevant time alleged by Cockrell's suit. FSH is a limited partnership that owns a groundwater estate covering approximately 18, 000 acres of land, west of Fort Stockton, in Pecos County, Texas. FSH also submitted permit applications and received permits issued by the District.

In 2017, the District entered into a settlement agreement with FSH and a predecessor entity, resulting in the approval of two permit applications in favor of FSH: (1) a permit amending the amount of production in its historical and existing use permit (H&E permit), and (2) an export permit giving it the right to produce and export 28, 400-acre feet of groundwater for a three-year term. Cockrell then filed suit against the District, the District's board president, FSH, and another company, contesting the District's decision to deny it party status to FSH's two permit applications and asserting the underlying settlement agreement was void. This suit led to a prior appeal that was very recently resolved by this Court. See Cockrell Inv. Partners, L.P., v. Middle Pecos Groundwater Conservation Dist., No. 08-21-00017-CV, 2023 WL 2050024, at *1 (Tex. App.- El Paso Feb. 16, 2023, no pet. h.) (Cockrell I).^[1] After the trial court granted the District's plea to the jurisdiction, Cockrell appealed that ruling. We affirmed the trial court's decision after concluding that Cockrell failed to exhaust its administrative remedies before seeking judicial review.

B. The renewal application

But further events developed regarding the parties and the permits issued to FSH in 2017. The export permit giving FSH the right to produce and export 28, 400-acre feet of groundwater for a three-year term-was set to expire on July 18, 2020, if not renewed. On April 2, 2020, FSH sent a letter to the District regarding its application to renew the 2017 Regular Production Permit. The letter indicated it desired a renewal of its permit for an additional three-year period using the same terms and conditions including the export provisions and the Special Permit Conditions contained in the existing permit. FSH requested the District consider the letter as a renewal application pursuant to § 36.1145 of the Texas Water Code. See Tex. Water Code Ann. § 36.1145 (Operating Permit Renewal).

On May 18, 2020, Cockrell filed with the District a written request for party status in any hearing on FSH's application for permit renewal. Cockrell asserted FSH was conflating the statutory requirements of §§ 36.1145 and 36.122 of the Texas Water Code. It asserted the export component of the permit was "exclusively governed by Section 36.122 of the Texas Water Code[.]" See id. § 36.122 (Transfer of Groundwater Out of District). Additionally, Cockrell asserted it had a justiciable interest in FSH's request for a permit renewal.

On May 22, 2020, the District's general manger, Ty Edwards, informed FSH by letter that he had granted its renewal request pursuant to §§ 36.1145 and 36.122 of the Texas Water Code and Rule 11.8(f) of the District's rules.^[2] Edwards indicated the permit would be renewed for another three-year term "as long as FSH satisfactorily addresses Special Permit Conditions," as further detailed in the letter. Edwards also specifically advised as follows:

Please note that Rule 11.8(f) requires that I inform the District's Board of this decision, which the Board may overrule. Rule 11.8(f) also provides you with the right to appeal my decision to the Board. I intend to add items to the next District Board agenda as contemplated by Rule 11.8(f) and to provide the Board an opportunity to consider and act on Cockrell Investment Partners, L.P.'s Request for Party Status regarding the Renewal Application. Our next meeting is currently scheduled to be in person on Tuesday, June 16, 2020, at the Pecos County Courthouse, and I encourage you to attend. Between now and then, I look forward to working with you to satisfy the requirements of Special Permit Conditions 7, 9, 13, and 14.

On June 16, 2020, the District held a regular board meeting and permit hearing. Meeting minutes record that some argument occurred about whether FSH needed to comply with the requirements of § 36.122 of the Water Code, as well as whether a hearing needed to take place on FSH's permit renewal request. The minutes further reflect that Cockrell had requested party status. At the conclusion of the meeting, the minutes indicate the Board took no further action on the issue.

C. Cockrell files suit

On September 11, 2020, while Cockrell I remained pending on appeal, Cockrell filed its original petition and application for temporary injunction. The suit named several defendants to include the District, Ty Edwards, in his capacity as the District's general manager, FSH, the City of Abilene, the City of San Angelo, and the City of Midland. Under the Texas Uniform Declaratory Judgments Act (UDJA), Cockrell sought a declaration as to whether § 36.122 of the Water Code allowed a three-year export permit to be renewed or extended without the construction of a water conveyance system. Cockrell asserted § 36.122 of the Water Code required a permitholder to begin construction of a conveyance system such as to turn a three-year permit into a 30-year permit renewable under § 36.1145 of the code. Cockrell sought a judicial declaration interpreting the meaning of § 36.122 and a declaration that the District and Edwards both acted outside their scope of authority when they renewed FSH's permit. Additionally, Cockrell sought judicial review of the District's failure to conduct a hearing on FSH's application to renew its permit and its decision to deny it party status.

All defendants filed pleas to the jurisdiction. The city defendants, Abilene, San Angelo, and Midland, each asserted they were home rule municipalities vested with governmental immunity and Cockrell had failed to assert a valid waiver of immunity. The District also asserted that Cockrell had failed to allege a waiver of immunity, adding it was not an applicant nor a party to a contested case hearing that pertained to the renewal permit. Additionally, the District asserted there was no basis for declaratory relief due to the redundant remedies doctrine. Relying on a decision of the Supreme Court of Texas, they argued this doctrine precludes declaratory relief "where a party is seeking in the same action a different enforceable remedy, and a judicial declaration would add nothing to what would be implicit or express in a final judgment." See Patel v. Texas Dep't of Licensing & Regulation, 469 S.W.3d 69, 79 (Tex. 2015). Lastly, FSH alleged that Cockrell lacked standing.

The trial court held a hearing on the pleas to the jurisdiction on December 17, 2020. At the conclusion of the hearing, the trial court verbalized its intention to grant the pleas of the city defendants. But it further indicated it found it could be called upon to look at the meaning and application of the permitting process for permit renewals. As a result, the court denied the pleas to the jurisdiction asserted by the District, Edwards, and FSH. On January 11, 2021, the trial court entered a written order granting the city defendants their pleas to the jurisdiction. On the next day, the trial court entered a written order denying the pleas to the jurisdiction of FSH, the District, and Edwards.

D. Cross motions for summary judgment

On March 10, 2021, Cockrell filed a motion for partial summary judgment. Cockrell moved for partial summary judgment on its declaratory action claim and to declare Edwards had improperly renewed the 2017 export permit under the plain terms of the Texas Water Code. Cockrell asserted two grounds in support of its motion: (1) that the permit renewal provisions applicable to FSH's 2017 permit required it commence construction of a water conveyancing system to...