Ac Interests, L.P., Formerly American Coatings, L.P. v. Texas Commission on Environmental Quality

543 S.W.3d 703
CourtTexas Supreme Court
DecidedMarch 23, 2018
DocketNO. 16–0260
StatusPublished
Cited by42 cases

This text of 543 S.W.3d 703 (Ac Interests, L.P., Formerly American Coatings, L.P. v. Texas Commission on Environmental Quality) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ac Interests, L.P., Formerly American Coatings, L.P. v. Texas Commission on Environmental Quality, 543 S.W.3d 703 (Tex. 2018).

Opinion

John P. Devine, Justice

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).

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 *706 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 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.

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Cite This Page — Counsel Stack

Bluebook (online)
543 S.W.3d 703, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ac-interests-lp-formerly-american-coatings-lp-v-texas-commission-on-tex-2018.