Texas Commission on Environmental Quality v. Maverick County

642 S.W.3d 537

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY and Dos Repúblicas Coal Partnership, Petitioners,

v.MAVERICK COUNTY, City of Eagle Pass, Environmental Defense Fund, Walter Herring, Ernesto Ibarra, Gabriel De La Cerda, Mike Hernandez, Boulware and Anson Family, Ltd., and Maverick County Environmental and Public Health Association, Respondents

No. 19-1108

Supreme Court of Texas.

Argued October 27, 2021

OPINION DELIVERED: February 11, 2022

Rehearing Denied April 22, 2022

Courtney Cox Smith, James D. Bradbury, for Amici Curiae The Texas Farm Bureau, The Texas Association of Dairymen, The Texas Cattle Feeders Association, The Texas Poultry Federation, The Texas Pork Producers Assoc, The Texas Egg Council.

Bill Davis, Austin, Brent Webster, Houston, Cynthia Woelk, Jeffrey C. Mateer, Austin, Shawn Cowles, Linda B. Secord, Priscilla M. Hubenak, Warren Kenneth Paxton, Austin, S. Grant Dorfman, Bellaire, Darren Lee McCarty, Judd E. Stone II, Daniel C. Wiseman, Austin, for Petitioner Texas Commission on Environmental Quality.

Leonard H. Dougal, Ali Abazari, Austin, Heather Heartfield, Jennifer Caughey, Houston, William (Bill) J. Cobb III, for Petitioner Dos Repúblicas Coal Partnership.

Robert Banse III, Thomas M. Weber, Austin, Paul Robert Tough, Adam Friedman, for Respondents Maverick County Environmental and Public Health Association, Environmental Defense Fund, De La Cerda, Gabriel, City of Eagle Pass, Ibarra, Ernesto, Hernandez, Mike, Boulware and Anson Family, Ltd., Herring, Walter.

Stacey Steinbach, for Amicus Curiae Texas Water Conservation Association.

David O. Frederick, for Respondent Maverick County.

Justice Blacklock delivered the opinion of the Court.

In 2013, Dos Repúblicas Coal Partnership (DRCP) applied to the Texas Commission on Environmental Quality for renewal of a permit for wastewater discharge at a coal mine. TCEQ granted the permit. Years later, the primary question before this Court is whether, all along, DRCP was the correct permit applicant. We hold that it was.

The parties agree that TCEQ rules required both "the operator and the owner [of the facility]" to apply for a permit. 30 TEX. ADMIN. CODE § 305.43(a). DRCP owns the mine. It hired a contractor to conduct day-to-day activities at the mine. The dispute is whether DRCP or the contractor is the mine's "operator." TCEQ's rules define "operator" as "[t]he person responsible for the overall operation of a facility." Id. § 305.2(24). TCEQ concluded that DRCP remains the mine's operator because it retains overall responsibility for the mine's operation despite having contracted away day-to-day duties.

The court of appeals disagreed. Applying its precedent, it understood "operator" to mean "the entity responsible for [the] personal performance of causing the [facility] to function." See Heritage on San Gabriel Homeowners Ass'n v. Tex. Comm'n on Env't Quality , 393 S.W.3d 417, 430 (Tex. App.—Austin 2012, pet. denied). Because DRCP hired a contractor to personally perform the daily running of the mine, the court of appeals concluded that the contractor is the mine's "operator" and therefore a required—but absent—permit applicant.

When a statute or rule defines its terms, courts should not construct a restated definition using alternative verbiage that adds or subtracts substantive requirements or limiting factors. The court of appeals erred by substituting a judicially crafted definition of "operator" for the definition provided by TCEQ's rules. Even if the definition supplied by the rule's drafters leaves room for interpretation in some cases, the touchstone must remain the text of the definition—not a judicial paraphrase of it.

Applying the rule's definition of "operator" to this case, we hold that substantial evidence supports TCEQ's conclusion that DRCP—despite having contracted out the day-to-day running of the mine—remains "responsible" for the "overall operation" of the mine. The "personal performance" requirement proposed by Respondents imposes an additional limiting factor not dictated by the rules themselves. By requiring that a permit applicant have responsibility only for the facility's overall operation, the rule is best read to reject—rather than embrace—the narrowing "personal performance" requirement that dictated the outcome below. The judgment of the court of appeals is reversed, and the case is remanded to that court for consideration of the parties’ remaining arguments.

I.

The Legislature authorized TCEQ to "issue permits and amendments to permits for the discharge of waste or pollutants into or adjacent to water in the state." TEX. WATER CODE § 26.027(a). As for who must apply for such a permit or what a permit application will look like, the Legislature vested TCEQ with broad discretion: "A person desiring to obtain a permit or to amend a permit shall submit an application to [TCEQ] containing all information reasonably required by [TCEQ]." Id. § 26.027(b). TCEQ has adopted administrative rules governing applications for a "Texas Pollutant Discharge Elimination System" (TPDES) permit, the permit for which DRCP applied. See generally 30 TEX. ADMIN. CODE § 305.1 et seq. One such rule—which the parties agree applies here—is that "it is the duty of the operator and the owner to submit an application for a permit." Id. § 305.43(a).

Once TCEQ's executive director determines an application is "administratively complete," the applicant must provide public notice of its intent to obtain the permit. TEX. WATER CODE § 5.552(b)(1). The executive director then "shall conduct a technical review of and issue a preliminary decision on the application." Id. § 5.553(a). The applicant must publish notice of the preliminary decision, which is then subject to public comment. Id. § 5.553(b)–(c). A public meeting and a contested case hearing may follow. See id. §§ 5.554 (requiring public meetings during the comment period), 5.556(a) (allowing for contested case hearings).

In 2009, DRCP acquired a coal mine in Maverick County. It contracted with Camino Real Fuels, LLC (CRF) to "develop, construct, operate and perform on-going reclamation at the Mine and to remove and deliver coal from the Mine" to DRCP. The mine is near the City of Eagle Pass. Wastewater from the mine may flow into nearby waterways that feed into the Rio Grande River, from which the City gets its water supply. Because of these wastewater discharges, DRCP needed a TPDES permit. See id. § 26.121.

DRCP's predecessor held a TPDES permit for the mine dating to 1994 (renewed in 2001, 2006, and 2011) that was set to expire on September 1, 2015. DRCP alone applied for the renewal of the permit. DRCP started the renewal process in September 2013. Relative to the existing permit, DRCP requested permission to alter its wastewater management practices in various ways, the technicalities of which are not relevant to our decision.

In January 2014, TCEQ's executive director determined DRCP's application administratively complete. See id. § 5.552(a). The executive director completed his technical review in December 2014, after which he issued a "Notice of Application and Preliminary Decision." See id. § 5.553(a). This document granted a "draft permit" and gave notice of a public meeting on the permit. See id. § 5.553(b)–(c) (requiring notice of public meeting). During the meeting, TCEQ took public comments. See id. §§ 5.554, 5.555(a) (requiring the executive director to respond to relevant and material public comments).

At relevant times during the administrative process, Maverick County, the City of Eagle Pass, the Environmental Defense Fund, Walter Herring, Ernesto Ibarra, Gabriel De La Cerda, Mike Hernandez, Boulware and Anson Family, Ltd., and the Maverick County Environmental and Public Health Association (collectively "Permit Contestants") opposed the permit. See id. § 5.556(a), (c), (d) (authorizing "affected person[s]" to contest the executive director's decision or request a contested case hearing). They challenged TCEQ's conclusion that DRCP was the mine's "operator" and raised many other environmental and property-rights complaints.

On January 15, 2015, DRCP requested that TCEQ refer the application to SOAH for a contested case hearing. Id. § 5.557(a). Permit Contestants were admitted as parties. In November 2015, two administrative law judges held a four-day hearing. In addition to considering a variety of substantive objections to the permit, the ALJs considered whether DRCP's contractor, CRF, should have applied as the mine's "operator."

In April 2016, the ALJs issued a proposal for decision (PFD), recommending TCEQ grant the permit with "the addition of a boron limit and a requirement that aluminum be monitored." On the "operator" question, the ALJs found that DRCP was both the owner and the operator of the mine. They noted that while CRF performed the day-to-day work of running the mine, CRF was merely a contractor acting under DRCP's direction. The ALJs acknowledged testimony that DRCP only had "financial responsibility" for the mine, while CRF had "operational responsibility." They pointed to other evidence, however, tending to show that DRCP was responsible for the overall operation of the mine despite CRF's responsibility for day-to-day activities:

DRCP is solely responsible for the acquisition and maintenance of all interests and rights in real property and the reserves, provides its requirements and expectations to CRF, approves every plan and budget prior to the incurrence of any costs by CRF, pays all actual costs during design and construction of the Mine, pays all operation costs during production at the Mine, and is required to retain, maintain, and comply with all permits.

PFD at 16. The ALJs also noted that a DRCP representative visits the mine daily to provide oversight.

TCEQ largely agreed with the PFD, but it found that the boron limit and aluminum monitoring requirements were unnecessary. See TEX. GOV'T CODE § 2003.047(m) (authorizing TCEQ to amend factual findings contained in a...