Builder Recovery Services LLC v. the Town of Westlake, Texas

Opinion

In the Court of Appeals Second Appellate District of Texas at Fort Worth ___________________________ No. 02-20-00051-CV ___________________________

BUILDER RECOVERY SERVICES LLC, Appellant/Appellee

V.

THE TOWN OF WESTLAKE, TEXAS, Appellee/Appellant

On Appeal from the 236th District Court Tarrant County, Texas Trial Court No. 236-304811-18

Before Bassel, Womack, and Wallach, JJ. Memorandum Opinion by Justice Bassel MEMORANDUM OPINION

I. Introduction

Builder Recovery Services LLC (BRS) brought a declaratory-judgment action

challenging the Town of Westlake’s (the Town or Westlake) power (1) to pass an

ordinance requiring BRS to obtain a license from the Town in order for BRS to

conduct its temporary construction waste disposal business and (2) to impose a

license fee of 15% on BRS’s gross revenue. Both BRS and the Town have filed

appeals. In four issues, BRS argues that (1) the Town lacks the statutory authority to

require a license or to impose a license fee on commercial solid waste operators who

are the subject of the ordinance, (2) any right the Town has to require a license or to

impose a fee is preempted by another Texas statute, (3) the license fee is an invalid

occupation tax, and (4) the trial court erred in the amount of attorney’s fees that it

awarded BRS. In its appeal, the Town raises two points challenging (1) the trial

court’s declaration that the license fee is invalid and (2) the trial court’s award of

attorney’s fees to BRS.

We resolve these issues as follows:

1. The Town has statutory powers that carry with them the right to license

commercial solid waste operators, and another statute dealing with the

franchise of waste disposal operators does not deprive the Town of the

power to license those operators.

2 2. The Town’s act of licensing a commercial solid waste operator does not fall

within the ambit of a Texas statute that restricts the use of containers, and

that statute does not preempt the Town’s ability to require a license or to

impose a license fee.

3. The Town repealed the 15% license fee that BRS challenged, and this action

moots BRS’s challenge to the fee’s validity as BRS’s challenge is predicated

on the amount of the fee.

4. Our disposition of the various issues raised by the parties requires that we

reverse and remand the issue of attorney’s fees to the trial court.

II. Factual and Procedural Background

The trial court conducted a bench trial. The witnesses who testified were the

managing member of BRS and the town manager of Westlake. The following facts

were developed during the trial.

BRS contracts with homebuilders in Westlake to remove the temporary

construction waste that the builders generate. The builder places the waste generated

by the construction process into a “container” in the form of a dumpster that BRS

provides. The dumpster is towed to the site by a rig that has a skid or a trailer behind

a large pickup truck. The rig—which is composed of the truck, trailer, and

dumpster—weighs approximately 20,000 pounds when fully loaded.

BRS uses the public roads of Westlake to conduct its business though many of

the roads within the Town are private because they are located within private

3 developments. BRS makes as many as ten visits to each building site while a home is

under construction. When a dumpster is full, BRS places it on the trailer, covers it

with a tarp, and removes it from the building site. The waste is hauled from the

building site to a disposal facility in another city.

In conducting its business, BRS follows “best practices” by ensuring that the

waste is not spilled or blown out of the dumpster while being hauled. According to

BRS, the Town has never raised a complaint about how BRS has hauled waste, nor

has the Town ever accused BRS of illegal dumping. The Town’s witness

acknowledged that he was not aware of waste being blown from a BRS dumpster.

BRS also maintains insurance and conforms to the requirements of the Texas

Commission on Environmental Quality and the Occupational Safety and Health

Administration.

BRS offers a different type of service than Westlake’s franchised waste hauler,

Republic Services. Republic is obligated to pick up all residential trash in the Town,

as well as provide free solid waste services and recycling. BRS described its services as

being superior to those offered by Republic because its services are tailored to the

needs of homebuilders.

BRS is not the only provider of temporary construction waste services in

Westlake. The Town also provides temporary construction waste services through

Republic. At the time of trial, the Town also licensed other third-party vendors to

provide that service.

4 The process that led to the Town’s licensing third-party temporary

construction waste disposal vendors apparently began when BRS raised an issue with

the Town’s staff regarding whether Republic could be the sole hauler of temporary

construction waste. Westlake’s city council heard the complaints of BRS and other

companies that offered temporary construction waste services and the builders that

needed those services. The Town’s staff began exploring whether companies other

than Republic could provide temporary construction waste services. The city council

delegated the Town’s staff to meet with the builders to discuss amendments to the

Town’s ordinances in order to address the issue.

BRS claimed that the Town’s staff had indicated that if BRS would withdraw its

objection to a licensing scheme, the Town would implement a license fee for BRS of

3% of its gross revenue that was generated by hauling temporary construction waste

in Westlake. The Town acknowledged that it had offered BRS a 3% fee to encourage

it to participate in the licensure program. BRS objected to the Town’s offering it

special treatment and challenged the Town’s authority to base a license fee on a

percentage of gross revenue.

The Town eventually passed Ordinance No. 851 that amended Chapter 74 of

Westlake’s ordinances dealing with solid waste. See Westlake, Tex., Code of

Ordinances ch. 74, art. III, §§ 74-41–74-50 (2002),

https://library.municode.com/tx/westlake/codes/code_of_ordinances?nodeId=CO

5 OR_CH74SOWA_ARTIIICOSOWALIWAREMAOP.1 The ordinance requires that

“[c]ommercial solid waste operators collecting, transporting, or disposing of

commercial solid waste or temporary construction and demolition waste” obtain a

license from the Town. Id. § 74-44(a). The ordinance created a license-application

process, instituted a solid waste license fee of 15% of the operator’s gross revenue

generated from the collection of waste within Westlake, and required the operator to

provide monthly reports of its gross revenue to the Town. See id. §§ 74-45, 74-

46(l)(4), 74-47(a).

The ordinance not only contained the license fee but also regulated several

aspects of how the companies that obtained a commercial solid waste operator license

were to conduct their business and to provide information to the Town. See generally

id. § 74-46. The various other features of the ordinance included the following:

• “[I]t shall be the mandatory duty of any person owning or having control

over any property where construction requiring a building permit is

taking place and where the construction is being performed in relation to

a residential structure . . . , prior to the start of construction, to place

upon the property a dumpster, provided by the [T]own’s franchised or

licensed waste collector” and to place various items of waste in it. Id.

§ 74-5(a).

1 The electronic version of the Town’s ordinances states that it was last updated April 3, 2019.

6 • The dumpster should be placed in a location where it is screened from

public view and “removed from the building site immediately upon the

completion of construction.” Id.

• Licensees are to label their vehicles and containers with the license

number issued by the Town, to maintain their vehicles and containers, to

prevent spills or leaks, to clean up spills or leaks, and to maintain

insurance. See id. § 74-46(a), (c), (d), (e), (g).

• Licensees are required to maintain their Town licenses, maintain certain

records, permit the Town to examine their records, and to submit

reports detailing the amount of waste collected, where it was disposed

of, and the amount disposed of; the revenue generated; and the names of

customers and the services provided to them. See id. § 74-46 (i), (j), (k),

(l).

BRS complained that the ordinance “restrict[ed] the use of [its] containers by

requiring a license and . . . a 15 percent gross revenue fee for tax to the Town and [by]

submitting reports to the Town in a format [the Town] dictate[s].” BRS argued that

the ordinance violated Texas statutes because it restricts the use of BRS’s containers

and that the ordinance violates other aspects of Texas law. The Town’s witness

acknowledged that the ordinance did regulate “containers.”

7 BRS’s primary complaint about the license fee revolved around the failure to tie

the amount of the license fee to the amount of license-associated administrative

expenses incurred by the Town. BRS’s witness testified that when the fee was initially

proposed, he had asked the Town’s staff on several occasions about the basis for

establishing the amount of the fee and was told there was none.

The Town offered its view that the fee covered

[t]he administrati[on] and oversight of the solid waste services[,] . . . much like the oversight for Republic Services. It would include investigation on any issue regarding damage to City streets, damage to any public or other private properties, any issues with blowing debris, [and] discarded debris as a result of transportation of containers through the Town. It would also include investigation to identify the status of containers, the status of the licenses.

The fee generated by the franchise and license fees did not make the Town whole

when compared to the cost to administer and enforce the standards.

But the Town acknowledged that the expenses of its administrative oversight

were indeterminate. It had conducted no on-site investigations of BRS’s activities.

There was no administrative cost other than accepting payments by check. The Town

had conducted no “quantificational reports” about the impact of different trucks on

road maintenance. The Town had never prepared an estimate of the costs to

administer the license either before or after the passage of Ordinance No. 851. The

Town had never quantified its cost regarding whether the license fee should be 15%

or not. The registration fee for other contractors was $250, and the Town’s witness

was not aware of how long it took to process other licenses in comparison to a

8 commercial solid waste operator license, but he acknowledged that it took

approximately ten minutes to process a commercial solid waste operator license.

When BRS refused to obtain a license, the Town sent notification that BRS had

failed to comply with the ordinance and eventually cited BRS for a violation of the

ordinance. In response, BRS sued the Town, challenging the ordinance and seeking

declarations that the ordinance was invalid and that the license fee constituted an

unconstitutional occupation tax and also seeking a temporary injunction to prevent

the Town from enforcing the ordinance.2 BRS also sought to recover its attorney’s

fees.

The trial court conducted a hearing on the injunction request. The trial court,

however, did not issue a temporary injunction because the parties entered into a Rule

11 agreement that permitted BRS to continue to operate in the Town and to escrow

the license fees that accrued during the course of the litigation and that provided that

“[a]ll Escrow Funds will be disbursed to the prevailing party upon final resolution of

the lawsuit, which includes a final determination of any appeals.”

At the close of the testimony, the trial court announced that it was making only

one finding, which was

that the 15 percent license fee . . . for the collection of temporary solid waste from construction sites is unlawful and invalid under Section 361.0961 of the Texas Health and Safety Code, and I’m referring to the

BRS carried these requests for relief, other than the request for a temporary 2

injunction, into an amended petition that it filed later in the litigation.

9 15 percent license fee under the Town of Westlake, Texas, Code of Ordinances, Section 74-44, et seq.

In the trial court’s view, the Town could do what it needed to do “at a far less

onerous fee.” The trial court then recessed the matter to see if the parties could work

something out.

The trial court later conducted a hearing on BRS’s attorney’s fees claim. At

that hearing, the Town informed the trial court that it had amended its solid waste

ordinance. The Town entered the amended ordinance into evidence; the new

ordinance reduced the license fee for a commercial solid waste operator “to three

percent (3%) of the operator’s gross revenue[] from the collection, hauling, or

transporting of commercial and industrial solid waste collected within the [T]own.”

Westlake, Tex., Ordinance 901 (Dec. 2, 2019) (amending § 74-47(a)). The remainder

of the original ordinance challenged by BRS was left unchanged other than to clarify

the purpose of the ordinance.

BRS offered evidence that it had incurred attorney’s fees of $85,233. The trial

court determined that it would award BRS only ten percent of its requested fees and

summarized its reasoning as follows:

Hauling trash or materials or garbage or whatever we want to call it is different than electricians driving around or plumbers driving around or so forth, it seems to the [c]ourt. The likelihood that things will be left in the streets and roadways, whether they blow off or so forth, is real, certainly more so than other types of contractors.

The [c]ourt found earlier that the [Town] had the right to regulate these[] but felt that the fee was unreasonable. Given the fact that a

10 percentage of revenue is progressive, it affects the small haulers differently than the large haulers, and I think that . . . is fair and I think the amount of 3 percent is fair.

The [c]ourt recognizes that [BRS] had to bring this action to get this changed. The [c]ourt does not dispute that [$]82,000 -- or $85,233 were [fees] reasonably and necessarily incurred by [BRS].

. . . [T]he [c]ourt commends the [Town] of Westlake for passing that Ordinance 901[.] [T]he [c]ourt’s going to award $8,523 as attorney’s fees to [BRS], but feels that other than that, the [Town] was the prevailing party.

The trial court subsequently signed a final judgment that contains the following

declarations:

Count 1

Regarding the claims in Count 1 of [BRS’s] First Amended Petition, the [c]ourt rules as follows:

1. As to [BRS’s] request for declaratory judgment that “the Town has no authority under Section 364.034, Tex. Health & Safety Code, or other statute or Texas constitution to require a private operator to obtain a franchise, license, or pay fees to provide temporary solid waste collection services to a construction site within the Town’s limits and any such requirement is invalid,” the [c]ourt RENDERS judgment in favor of Westlake[] and hereby orders that [BRS] take nothing as to that claim.

2. As to [BRS’s] request for declaratory judgment that “Section 74-4, et seq., is invalid under Section 364.034, Tex. Health & Safety Code, to the extent the Town restricts the collection of temporary solid waste from construction sites to the Town’s franchisees and licensees,” the [c]ourt RENDERS judgment in favor of Westlake[] and hereby orders that [BRS] take nothing as to that claim.

3. As to [BRS’s] request for declaratory judgment that “Section 74-4, et seq., is preempted by and invalid under Section 361.0961, Tex.

11 Health & Safety Code[,]” the [c]ourt RENDERS judgment in favor of Westlake[] and hereby orders that [BRS] take nothing as to that claim.

4. As to [BRS’s] request for declaratory judgment that “the 15% license fee under Section 74-44, et seq., is unlawful and invalid under Section 361.0961(a)(3), Tex. Health & Safety Code,” the [c]ourt RENDERS judgment in favor of [BRS] and hereby declares that a 15% license fee as set forth by Ordinance No. 851 is unreasonable[,] null[,] and void. On this sole count[,] [BRS] is awarded reasonable attorney’s fees pursuant to Section 37.[009,] Tex. Civ. Prac. & Rem. Code[,] in the sum of $8,523[,] which the [c]ourt finds reasonable and necessary and just and equitable. [BRS] shall have post-judgment interest on such amount at the maximum allowable rate of interest.

Count 2

Regarding the claim in Count 2 of [BRS’s] First Amended Petition, as to [BRS’s] request for declaratory judgment that “Section 74- 44, et seq., of Ordinance [N]o. 851 establishing the 15% license fee, is an unconstitutional occupation tax and is invalid,” the [c]ourt RENDERS judgment in favor of Westlake[] and thereby orders that [BRS] take nothing as to that claim.

Though findings of fact and conclusions of law were requested, the trial court

did not enter any findings. BRS subsequently filed a notice of appeal.

III. Standard of Review

We review declaratory judgments under the same standards as other judgments

and decrees. Waldrop v. Waldrop, 552 S.W.3d 396, 401 (Tex. App.—Fort Worth 2018,

no pet.) (en banc op. on reh’g); see Tex. Civ. Prac. & Rem. Code Ann. § 37.010. The

procedure that the trial court uses to make its declarations determines the standard of

review that we apply on appeal. Waldrop, 552 S.W.3d at 401.

12 Here, the trial court conducted a bench trial. Though requested to do so, the

trial court did not enter findings of fact and conclusions of law, and neither party

challenges that failure. Thus, we review the trial court’s judgment as follows:

When the trial court does not enter findings of fact and conclusions of law, “all fact findings necessary to support the trial court’s judgment and supported by the evidence are implied.” Cadle Co. v. Parks, 228 S.W.3d 915, 916 (Tex. App.—Dallas 2007, no pet.) (citing Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990)). However, because the record before us includes a reporter’s record, these implied findings are not conclusive and may be challenged on sufficiency grounds. Id. “The judgment must be affirmed if it can be upheld on any legal theory that finds support in the evidence.” Id. “It is not necessary for the trial court to articulate the correct legal reason for its judgment.” Id. (citing I & JC Corp. v. Helen of Troy L.P., 164 S.W.3d 877, 884 (Tex. App.—El Paso 2005, pet. denied)).

Rourk v. Cameron Appraisal Dist., 305 S.W.3d 231, 234–35 (Tex. App.—Corpus

Christi–Edinburg 2009, pet. denied). Also, several of the trial court’s declarations turn

on a question of statutory construction, and thus, we apply a de novo standard of

review. Johnson v. Simmons, 597 S.W.3d 538, 540 (Tex. App.—Fort Worth 2020, no

pet.).

When we are tasked to determine whether a municipal ordinance conforms to a

legislative act, we have the two-pronged task of interpreting the legislative act and

then determining whether the ordinance conforms to it:

Our goal in interpreting any statute is to “ascertain and give effect to the Legislature’s intent as expressed by the language of the statute.” City of Rockwall v. Hughes, 246 S.W.3d 621, 625 (Tex. 2008). To determine that intent, we look first to the “plain and common meaning of the statute’s words.” State [ex rel. State Dept. of Highways & Pub. Transp.] v. Gonzalez, 82 S.W.3d 322, 327 (Tex. 2002). We examine statutes as a whole to contextually give meaning to every provision. Id. “Municipal ordinances

13 must conform to the limitations imposed by the superior statutes, and only where the ordinance is consistent with them, and each of them, will it be enforced.” Bolton v. Sparks, 362 S.W.2d 946, 950 (Tex. 1962); see also Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex. 1998) (“[I]n reviewing an ordinance, the court is to consider all the circumstances and [to] determine as a matter of law whether the legislation is invalidated by a relevant statute or constitutional provision.”).

City of Lorena v. BMTP Holdings, L.P., 409 S.W.3d 634, 641 (Tex. 2013).

IV. Analysis

A. How we generally determine the extent of the statutory authority exercised by the Town

The parties agree that Westlake is a general-law municipality. 3 Westlake’s

classification as a general-law municipality is pivotal because the classification of a

municipality under Texas law implicates how such a municipality must establish its

power to act. As a starting point, “[m]unicipalities are creatures of law that are

‘created as political subdivisions of the state . . . for the exercise of such powers as are

conferred upon them. . . . They represent no sovereignty distinct from the state and

possess only such powers and privileges as have been expressly or impliedly conferred

upon them.’” Town of Lakewood Vill. v. Bizios, 493 S.W.3d 527, 530 (Tex. 2016)

(quoting Payne v. Massey, 196 S.W.2d 493, 495 (Tex. 1946)). The “nature and source of

a municipality’s power” are tied to the municipality’s classification under Texas law as

either a home-rule, a general-law, or a special-law municipality. Id. at 531.

Various pleadings in our record and other cases describe Westlake as a Type A 3

general-law municipality, and we assume that it is. See, e.g., In re Town of Westlake, 211 B.R. 860, 862 (Bankr. N.D. Tex. 1997) (mem. op.); Huntress v. McGrath, 946 S.W.2d 480, 481 (Tex. App.—Fort Worth 1997, orig. proceeding).

14 The distinction between home-rule and general-law municipalities turns on the

source of their powers and whether, in the case of home-rule municipalities, they are

subject only to limitations placed on those powers by the Legislature, or in the case of

a general-law municipalities, they can act only if the legislature has expressly conferred

a power on them. Id. As the Texas Supreme Court explained,

Home-rule municipalities “derive their powers from the Texas Constitution” and “possess ‘the full power of self government and look to the Legislature not for grants of power, but only for limitations on their power.’” In re Sanchez, 81 S.W.3d 794, 796 (Tex. 2002) [(orig. proceeding)] (quoting Dall. Merchant’s & Concessionaire’s Ass’n v. City of Dallas, 852 S.W.2d 489, 490–91 (Tex. 1993)). Statutory limitations on home-rule municipal authority are ineffective unless they appear with “unmistakable clarity,” and even when they do, a municipality’s ordinance is only “unenforceable to the extent it conflicts with [a] state statute.” Id. Therefore, home-rule municipalities inherently possess the authority to adopt and enforce building codes, absent an express limitation on this authority. Unlike home-rule municipalities, general-law municipalities, such as the Town, “are political subdivisions created by the State and, as such, possess [only] those powers and privileges that the State expressly confers upon them.” Tex. Dep’t of Transp. v. City of Sunset Valley, 146 S.W.3d 637, 645 (Tex. 2004).

Id.

The more restrictive nature of a general-law municipality’s authority tightens

the standard we apply in determining whether a power may be implied from power

expressly granted to the municipality. As the Texas Supreme Court further explained,

[G]eneral-law municipalities have “only such implied powers as are reasonably necessary to make effective the powers expressly granted. That is to say, such as are indispensable to the declared objects of the [municipalities] and the accomplishment of the purposes of [their] creation.” Tri-City Fresh Water Supply Dist. No. 2 of Harris Cty. v. Mann, . . . 142 S.W.2d 945, 947 ([Tex.] 1940) (emphasis added); see also Foster v. City

15 of Waco, . . . 255 S.W. 1104, 1106 ([Tex.] 1923) (“A municipal power will be implied only when without its exercise the expressed duty or authority would be rendered nugatory.”). Thus, we strictly construe general-law municipal authority[,] and “[a]ny fair, reasonable, substantial doubt concerning the existence of power is resolved by the courts against the [municipality], and the power is denied.” Foster, 255 S.W. at 1106.

Id. at 536.

B. Why we overrule BRS’s first issue

1. Westlake has the power to license commercial solid waste operators.

As noted above, the trial court declared that BRS take nothing on its request

for a declaration that

the Town has no authority under Section 364.034, Tex. Health & Safety Code, or other statute or Texas constitution to require a private operator to obtain a franchise, license, or pay fees to provide temporary solid waste collection services to a construction site within the Town’s limits[,] and any such requirement is invalid[.]

In its first issue, BRS challenges whether “a general[-]law town has requisite statutory

authority to require a residential construction waste hauler to obtain a license and pay

a license fee.” BRS’s challenge takes two forms: first, the Town has no statutory

power to license; and second, the power to license in one statute is restricted by a

more specific Texas statute, which is Section 364.034 of the Health and Safety Code.

The initial question we address is whether the Town is given the statutory

power to license the commercial solid waste operators conducting business in the

Town. We hold that it does. The Town is empowered to adopt rules for regulating

16 solid waste collection, and that power carries with it the power to license those

conducting waste disposal activities in the Town.

Westlake bases its power to require a license on a statute that gives it broad

authority to regulate solid waste. The statute relied on by Westlake is categorical in its

wording: “A governing body may adopt rules for regulating solid waste collection,

handling, transportation, storage, processing, and disposal.” See Tex. Health & Safety

Code Ann. § 363.111(a).4 Westlake augments its argument that Section 363.111 gives

it broad authority to regulate solid waste by citing to Section 363.113 of the Health

and Safety Code that provides that “each municipality shall review the provision of

solid waste management services in its jurisdiction and shall assure that those services

are provided to all persons in its jurisdiction by a public agency or private person.”

See id. § 363.113.

BRS does not parse the language of the sections of the Health and Safety Code

that the Town relies on for its power to license. Instead, BRS argues that the cited

provisions do not vest the Town with licensing authority, and under the narrow

standard of implied authority derived from Bizios that we quoted above, the power to

license cannot be implied. We disagree. The Town has been delegated broad powers

to police and regulate all aspects of the stream of solid waste; the power to regulate

4 BRS makes no argument that the Town’s actions are in violation of the limitation contained in Subsection (b) of Section 363.111 that provides, “The rules may not authorize any activity, method of operation, or procedure prohibited by Chapter 361 (Solid Waste Disposal Act) or by rules or regulations of the commission or other state or federal agencies.” See Tex. Health & Safety Code Ann. § 363.111(b).

17 contained in Section 363.111 carries the power to license, and at the least, the power

can be implied from the powers expressly given the Town.

As a beginning point, waste disposal is an area that municipalities traditionally

have broad powers to regulate; indeed, one of the cases heavily relied on by BRS

noted a general-law municipality’s ability to regulate waste disposal. See Grothues v. City

of Helotes, 928 S.W.2d 725, 728 (Tex. App.—San Antonio 1996, no writ) (op. on

reh’g). Grothues described this power when it determined that a municipality could

impose a criminal sanction for the failure to use a city-franchised garbage service

though the relevant statute stated that the only “aid to enforcement” of the failure was

the suspension of service:

We do not believe [that] the [L]egislature intended this “aid to enforcement” to be the only means to accomplish this goal. To reach such a conclusion, we would have to ignore other grants of authority the [L]egislature has provided to general-law municipalities to safeguard the health and safety of its citizens. See Tex[.] Health & Safety Code Ann. § 122.005 . . . ; Tex[.] Power & Light Co. v. City of Garland, 431 S.W.2d 511, 517 (Tex. 1968) (city’s police powers extend to reasonable protection of public health and safety). The [L]egislature and the courts have long recognized the importance of garbage disposal to the enhancement of health and safety. The enforcement of a comprehensive garbage collection plan such as the City has adopted is clearly within the police power granted to all municipalities. Tex. Loc[.] Gov’t Code Ann. § 54.001 . . . ; cf. City of Breckenridge v. McMullen, 258 S.W. 1099, 1101 (Tex. [] App.—Fort Worth 1923, no writ) (a home-rule city) (upholding ordinance which assessed $100 per day penalty against one who hauled garbage within the city without a license). Moreover, we recognize that “[p]olice power is not static or unchanging. As the affairs of the people and government change and progress, so the police power changes and progresses to meet the needs.” City of Breckenridge v. Cozart, 478 S.W.2d 162, 165 (Tex. App.—Eastland 1972, writ ref’d n.r.e.).

18 Id. at 729 (footnote omitted).

Embedded in the quote from Grothues is a reference to the specific power given

by the Local Government Code to all municipalities that they may “enforce each rule,

ordinance, or police regulation of the municipality and may punish a violation of a

rule, ordinance, or police regulation.” See Tex. Loc. Gov’t Code Ann. § 54.001. 5

Grothues also cites a power that Westlake has as a Type A general-law municipality:

“(a) The governing body of a Type A general-law municipality may take any action

necessary or expedient to promote health or suppress disease, including actions to[]

. . . (3) abate any nuisance that is or may become injurious to the public health.” See

Tex. Health & Safety Code Ann. § 122.005(a)(3). Further, as a Type A general-law

municipality, Westlake “may adopt an ordinance, act, law, or regulation, not

inconsistent with state law, that is necessary for the government, interest, welfare, or

good order of the municipality as a body politic.” See Tex. Loc. Gov’t Code Ann.

§ 51.012.

Thus, Westlake is given the specific power in Section 363.111 to regulate the

various aspects of the stream of solid waste and is given broad powers outlined in the

preceding paragraph to protect its citizens through the exercise of its police powers.

A license is an inherent part of this regulatory power because it is one means for a

governmental agency to regulate activities that the Town is empowered to regulate

5 The term “municipality” as used in Section 54.001 encompasses general-law municipalities, home-rule municipalities, and special-law municipalities. See Tex. Loc. Gov’t Code Ann. § 1.005(3).

19 under Section 363.111 and pursuant to the police powers that protect the health and

safety of its citizens; the San Antonio Court of Appeals described the function of a

license as follows:

Historically governments have granted licenses, charters[,] and permits of various types as aids in regulating the activities of its citizens and others who conduct endeavors within the jurisdiction. The right of the government to so regulate is part of its police powers to secure the health, protection, and well[-]being of its citizens. The license, permit, or charter is the authorization of the government to conduct certain businesses or professions or otherwise engage in particular activities. The license or permit is a means of the government to assure that certain criteria are met by the one who wishes to conduct those activities. The criteria vary with the nature of the activity and the goals of the regulating government.

Ex parte Mata, 925 S.W.2d 292, 294 (Tex. App.—Corpus Christi–Edinburg 1996, no

pet.); see also Johnson v. City of Austin, 674 S.W.2d 894, 897 (Tex. App.—Austin 1984, no

writ) (“A ‘license’ has the purpose of regulation under the police power.”).

Further, though speaking to the powers of a home-rule municipality, in a case

cited by Grothues, this court many years ago quoted a number of authorities and

explained why the power to regulate the removal of waste carries with it a power to

license those conducting that activity:

The removal of garbage comes under the powers of a municipality, and it is within the police power of a city to pass ordinances and make regulations governing the same. In 2 Beach on Public Corporations, § 995, it is said:

“A by-law of a city prohibiting any person not duly licensed by its authorities from removing the house dirt and offal from the city is not in restraint of trade, but reasonable and valid, on the ground that, in the interest of public health, a

20 city is justified in providing for some general system for removing offensive substances from the streets by persons engaged by the city, and responsible for the work at such times as they are directed to attend to it.”

. . . Dillon on Municipal Corporations, § 369, is as follows:

“Our municipal corporations are usually invested with power to preserve the health and safety of the inhabitants. This is, indeed, one of the purposes of local government, and reasonable by-laws in relation thereto have always been sustained in England as within the incidental authority of corporations to ordain. It will be useful to illustrate the subject by reference to some of the adjudged cases. An ordinance of a city prohibiting, under a penalty, any person not duly licensed therefor by the city authorities from removing or carrying through any of the streets of the city any house dirt, refuse, offal, or filth[] is not improperly in restraint of trade[] and is reasonable and valid. Such a by- law is not in the nature of a monopoly[] but is founded on a wise regard for the public health. It was conceded that the city could regulate the number and kind of horses and carts to be employed by strangers or unlicensed persons, but practically it was considered that the main object of the city could be better accomplished by employing men over whom they have entire control, night and day, who are at hand, and able, from habit, to do the work in the best way and at the proper time.”

McMullen, 258 S.W. at 1101.

Also, as commentators on municipal authority note, the power to regulate

carries the power to license. See 9 Eugene McQuillin, The Law of Municipal Corporations

§ 26:34 (3d ed.) (“Municipal power to regulate businesses, occupations and activities

embraces or implies the power to license as a mode of regulation and to impose a

license fee or tax sufficient in amount to cover the cost of the regulation.”); see also

21 Ex parte Wade, 146 S.W. 179, 182 (Tex. Crim. App. 1912) (“It is a generally received

doctrine that the power granted to a municipality to regulate or to prohibit includes

the power to license as a means to those ends.”).

And as precedent supporting a conclusion that it has the power to license,

Westlake cites us to Flores v. State, which Westlake argues recognized that the power to

regulate carries the power to license. 33 S.W.3d 907, 915–16 (Tex. App.—Houston

[14th Dist.] 2000, pet. ref’d) (op. on reh’g). The appellant in Flores appealed her

conviction for violating an ordinance requiring entertainers employed at sexually

oriented businesses to obtain a permit from the City of Houston. Id. at 913. One of

appellant’s arguments was that the enabling legislation giving the city the power to

regulate sexually oriented businesses did not grant the authority to require an

entertainer to obtain a license or permit. Id. at 916. Flores noted that the Legislature

had found that allowing the unrestricted operation of sexually oriented businesses was

detrimental to public health, safety, and welfare and authorized cities to regulate those

businesses. Id. The specific statutory authority given permitted a city to determine

the location of such businesses and to require an operator of the business to obtain a

license. Id. The statutes placed no limitation on a city’s ability to regulate the

business’s employees. Id. Thus, Flores held that “[r]egulation of conduct may include

the requirement that an employee acting as an entertainer in a sexually oriented

enterprise hold a permit issued by the municipality.” Id. Though not as explicit as the

22 sources cited in the preceding paragraph, we agree with Westlake that Flores supports

the proposition that the power to regulate generally carries the power to license.

Here, the Town is given a specifically delegated authority to adopt “rules”

regulating the processing of solid waste. See Tex. Health & Safety Code Ann.

§ 363.111(a). One of the tools in the Town’s toolbox of regulation is the ability to

license.

The authorities that we have cited above also support a conclusion that the

power to regulate at the least should be implied because it is reasonably necessary to

carry out the power to regulate. BRS challenges this conclusion by arguing that to

imply the power to license from the power to regulate violates the limitations on

implied powers articulated in Bizios, 493 S.W.3d at 535–37. We would disagree with

BRS even if we were to conclude that we must imply the power to license from

Westlake’s express power to regulate. Again, the Texas Supreme Court in Bizios held

that the only implied powers that existed were those reasonably necessary, i.e.,

indispensable, to make effective the powers expressly given. Id. at 536. Bizios

involved the question of whether a municipality could impose building codes on

structures built in its extraterritorial jurisdiction (ETJ) when its statutory authority

granted it only the power to regulate plats and subdivisions in that jurisdiction. Id.

The Texas Supreme Court held that the power to regulate building codes was not

reasonably necessary or indispensable to the discreet power to regulate plats and

subdivisions. Id. We conclude that Bizios is inapposite. Our question is not one of

23 conflict between the exercise of two powers but whether the explicit power to

regulate generally implies the power to license. Based on the authority cited above, it

does.

Nor do we accept BRS’s argument that implying the Town’s authority to issue

a license is contrary to our holding in Town of Annetta South v. Seadrift Development, L.P.,

446 S.W.3d 823, 832 (Tex. App.—Fort Worth 2014, pets. denied). Annetta South

involved a question of whether an ordinance controlling lot size in a municipality’s

ETJ violated a Local Government Code provision prohibiting a municipality from

regulating the number of residential units that could be built on an acre of land in that

jurisdiction. Id. at 828–30. We concluded that the ordinance “was intended to be

exactly the type of regulation prohibited by [the Local Government Code]—an

implicit extension of the Town’s zoning-density ordinances into its ETJ under the

guise of cleverly drafted rules governing plats and subdivision of land.” Id. at 830.

Annetta South’s holding is also inapposite to our holding. As with Bizios, that question

does not involve the juxtaposition of an ordinance with a statute that shows that the

ordinance is prohibited.

As a backup to its statutory argument, BRS turns to an argument that it is a

good corporate citizen that follows the best practices in the conduct of its business

and that there is thus no need for the ordinance. As a practical matter, BRS’s vigilant

conduct does not mean that all commercial solid waste operators will be so vigilant.

24 And more specifically to the question at issue, whether it is reasonable to require

licenses from those following best practices is not a matter that we can second-guess.6

We cannot second-guess because it is BRS’s burden to establish that the

ordinance is invalid, and BRS does not carry that burden by claiming that minds might

differ regarding whether the Town’s exercise of its powers is reasonable. Instead,

BRS must conclusively show that no condition warranted the ordinance’s passage.

The Waco Court of Appeals summarized BRS’s burden and the prohibition on courts

second-guessing a municipality’s reasonable decisions as follows:

A municipal ordinance is presumed to be valid, and the burden of showing its invalidity rests on the party attacking it. See Safe Water Found. of Tex. v. City of Houston, 661 S.W.2d 190, 192 (Tex. App.—Houston [1st Dist.] 1983, writ ref’d n.r.e.); City of Waxahachie v. Watkins, . . . 275

6 BRS also argues that Westlake does not have power to license because the specific instances when a general-law municipality has been given the right to license does not include waste processors. BRS’s whole argument is as follows:

The Legislature has expressly granted general[-]law towns the express authority to require licenses for certain occupations in Chapter 251, Tex. Loc. Gov’t Code. These occupations include taxicabs (§ 215.004)[;] messengers (§ 215.030)[;] peddlers and pawnbrokers (§ 215.031)[;] and theatres, circuses[,] and other shows (§ 215.032). Temporary construction waste hauling is not a listed occupation. Westlake’s city council is only authorized to grant licenses and require fees for these specific occupations. § 215.033, Tex. Loc. Gov’t Code. Chapter 251 does not authorize Westlake to require BRS to obtain a license in order to operate as a private business within [the] Town[’s] boundaries.

Based on the discussion set out above, we conclude that the power to license comes with the power to create rules regulating solid waste. BRS cites us to no authority holding or statute providing that the fact that the Legislature has given a general-law municipality the explicit power to regulate certain businesses abrogates the power to license that comes with the power to regulate.

25 S.W.2d 477, 480 ([Tex.] 1955) (“Since it is an exercise of the legislative power of the City’s Council, the ordinance must be presumed to be valid.”); see also Esp[r]onceda v. City of San Antonio, No. 04-02-00561-CV, . . . 2003 WL 21203878[, at *1] (Tex. App.—San Antonio May 22, 2003, pet. denied) (mem. op. [on reh’g]). If reasonable minds may differ as to whether a particular ordinance has a substantial relationship to the public health, safety, morals, or general welfare, no clear abuse of discretion is shown[,] and the ordinance must stand as a valid exercise of the City’s police power. Quick, 7 S.W.3d at 117. When suit is filed attacking an ordinance passed under a municipality’s police powers, “the party attacking the ordinance bears an ‘extraordinary burden’ to show ‘that no conclusive or even controversial or issuable fact or condition existed’ [that] would authorize the municipality’s passage of the ordinance.” City of Brookside Vill. v. Comeau, 633 S.W.2d 790, 792–93 (Tex. 1982) (citing Thompson v. City of Palestine, 510 S.W.2d 579, 581 (Tex. 1974)).

Patterson v. City of Bellmead, No. 10-12-00357-CV, 2013 WL 1188929, at *6 (Tex.

App.—Waco Mar. 21, 2013, pet. denied) (mem. op.). The argument—that BRS

follows the best practice in the conduct of its business—does not meet the burden of

establishing that no condition could exist that warranted the passage of the Town’s

solid waste ordinance.

BRS also argues that the Town cannot require a license to simply use the

Town’s streets because, unlike a franchise, BRS has the legal right to use the Town’s

streets. See City of Garland v. Tex. Power & Light Co., 295 S.W.2d 925, 927–31 (Tex.

App.—Dallas 1956, no writ) (discussing franchise of city streets that was given to an

electric utility). The most that this argument gains for BRS is that the Town may have

had an invalid reason for passing the ordinance. But if the Town is empowered to

license commercial solid waste operators, as we hold that it is, that argument gains

BRS nothing. It does not carry BRS’s “‘extraordinary burden’ to show ‘that no

26 conclusive or even controversial or issuable fact or condition existed’ which would

authorize the municipality’s passage of the ordinance.” See Patterson, 2013 WL

1188929, at *6.

We have charted why we reject BRS’s argument that the Town lacks the ability

to license commercial solid waste operators. The power to license is part and parcel

of the ability to create rules regulating the solid waste process. BRS’s argument—that

the power cannot be implied—is unsupported by the authority it cites. Finally, none

of BRS’s challenges—that are based on its view of whether a license should be

required of it—constitute a viable challenge to the Town’s decision to require a

license.

2. Section 364.034 of the Health and Safety Code is not in conflict with the power to regulate that was given to the Town in Section 363.111.

In support of its first issue, BRS next argues that the authority of Section

363.111 conflicts with another statutory provision found in the Health and Safety

Code—Section 364.034. Compare Tex. Health & Safety Code Ann. § 363.111 with id.

§ 364.034. Because Section 364.034 is the more specific provision, BRS argues that it

limits any power found in Section 363.111. BRS’s argument creates a false

equivalence between the two provisions. Section 363.034 deals with the franchise of

private waste disposal services or a town’s contract with them; it does not prevent a

municipality from licensing operators who provide that service.

27 We refuse to be taken down the trail that BRS charts for us in its argument that

Section 364.034 deprives Westlake of the ability to license commercial solid waste

operators. Fundamentally, we reject BRS’s argument because it is an attempt to meld

the concepts of franchises governed by Section 363.034 with the privilege to regulate

an activity by a license that is provided in Section 363.111. The distinction between

the two concepts was explained by the Austin Court of Appeals as follows:

A “franchise” resulting from a contract made through an exercise of the City’s legislative or ordinance-making power is fundamentally different from a “privilege” granted by the City under its power to regulate the use of its streets[.] A “franchise” may grant a “privilege,” but a “privilege” is not necessarily a “franchise.” The word “privilege” is also used, for example, to signify the special right that may be enjoyed only under authority of a license, that is, a right not possessed by persons generally. A “license” has the purpose of regulation under the police power.

Johnson, 674 S.W.2d at 897 (citations omitted).

We next outline the structure of Section 364.034 to demonstrate that the

statute is not dealing with a license that governs the matters covered by the Town’s

ordinance in this matter but instead deals with the franchising of waste services, the

ability to force citizens to use those services, and the exceptions to this franchising

power:

• Section 364.034 begins by providing that a public agency may offer solid

waste disposal service, require the use of the service by persons within

the territory that it is offered, charge a fee for the service, and “establish

28 the service as a utility separate from other utilities in its territory.” Tex.

Health & Safety Code Ann. § 364.034(a).

• A person may opt out of using the service under certain circumstances,

including if “the person is a private entity that contracts to provide

temporary solid waste disposal services to a construction site or project

by furnishing a roll-off container used to transport construction waste or

demolition debris to a facility for disposal or recycling.” Id. § 364.034(a–

1)(2).

• The fee for the service may be collected by a county, a private or public

entity contracted to provide the service, or an entity contracted to collect

the fee. Id. § 364.034(b).

• If a person does not pay the required fee, the service may be suspended.

Id. § 364.034(d).

• The statute “does not apply to a person who provides the public or

private entity, public agency, or county with written documentation that

the person is receiving solid waste disposal services from another entity.”

Id. § 364.034(e). The subsection continues,

“Except as provided by Subsection (f), the governing body of a municipality may provide that a franchise it grants or a contract it enters into for solid waste collection and transportation services under this subchapter or under other law supersedes inside of the municipality’s boundaries any other franchise granted or contract entered into under this subchapter.”

29 Id. (emphasis added).

• “[A] political subdivision, including a county or a municipality, may not

restrict the right of an entity to contract with a licensed waste hauler for

the collection and removal of domestic septage or of grease trap waste,

grit trap waste, lint trap waste, or sand trap waste.” Id. § 364.034(f)

(emphasis added).

• A person is exempt from having the service provided by the agency if

“on the date the requirement is adopted, [the person] is receiving under

a contract in effect on that date solid waste disposal services at a level

that is the same as or higher than the level of services that otherwise

would be required.” Id. § 364.034(g).

• “This section does not apply to a private entity that contracts to provide

temporary solid waste disposal services to a construction project.” Id.

§ 364.034(h).

By its terms, Section 364.034 deals with a separate matter than the licensing of

those who handle waste. Id. § 364.034. Further, in Subsection (e), the statute speaks

to what it is dealing with as “a franchise it grants or a contract it enters into for solid

waste collection and transportation services under this subchapter,” not licensing. Id.

§ 364.034(e). Also, the argument—that Section 364.034 must be intended to be the

source of the Town’s power to license—is belied by the provision in Subsection (f)

30 forestalling a restriction on “the right of an entity to contract with a licensed waste

hauler for the collection and removal of domestic septage or of grease trap waste, grit

trap waste, lint trap waste, or sand trap waste.” See id. § 364.034(f) (emphasis added).

This language demonstrates that a waste hauler may be licensed but that Section

364.034 does not have any provision dealing with the licensing process. See generally id.

§ 364.034. The conclusion to be drawn is that the licensing power must be found

elsewhere. The provisions of Section 364.034 do not support BRS’s argument that

Section 364.034 is intended to prevent a municipality from licensing operators that

provide waste services.

In its effort to convince us that Section 364.034 restricts the ability to license,

BRS’s brief also charts how Section 364.034 has been amended over an almost thirty-

year period and places special emphasis on Grothues that we have cited previously. 928

S.W.2d at 726–31. But Grothues dealt with matters that are not in controversy in this

appeal; its holding dealt with the ability of a municipality to franchise waste disposal

and to enforce that franchise against those who did not want to use the franchised

service. Id. at 727–30. Grothues plotted the evolution of Section 364.034 and noted

that it had originally held in an opinion that was subsequently withdrawn that Helotes

“lacked authority to enter into the contract with Garbage Gobbler to exclusively

collect and dispose of solid waste within the city limits of Helotes because the franchise

exceed[ed] the City’s statutory authority as a general-law municipality.” Id. at 727

(emphasis added). Grothues then noted that while the matter was pending on

31 rehearing, “the [L]egislature [had] amended the County Solid Waste Control Act to

provide a general-law municipality with the authority to contract with a private

contractor for the collection and disposal of garbage and other solid waste.” Id.

Grothues and the statutory changes that it addressed are not the same matters that are

addressed in the Town’s ordinance.

BRS also cites us to the House Research Organization bill analysis that speaks

to why the Solid Waste Disposal Act required the amendment discussed in Grothues.

That analysis does not support BRS’s contention that the legislative amendment

discussed in Grothues was intended to address the ability of a municipality to license

commercial waste operators to ensure that they conformed to minimum standards of

safety and health; instead, it reinforces that the amendment dealt with a municipality’s

ability to franchise its waste disposal services:

[SUPPORTERS SAY:] The bill would allow many general[-]law cities to continue what they are already doing: contracting for waste disposal services. It would prevent lawsuits such as the recent case involving the City of Helotes from recurring in other cities.

Helotes was sued by a local resident who refused to pay a garbage collection fee because the resident maintained [that] the city did not have the authority to contract with a private company nor the authority to fine a resident for failing to pay the private company the garbage collection fee. [In Grothues,] [the] San Antonio Court of Appeals ruled that general[-]law municipalities, which derive their authority from statute rather than a home-rule charter, are not authorized to contract with other public agencies or with a private contractor for garbage collection without explicit statutory authority.

In the last 10 years, landfills have decreased from over 900 in 1986 to approximately 225 in 1995. Most cities, counties[,] and regional governments have closed their landfills and are contracting with private

32 solid waste companies. Without this bill, hundreds of contracts by general[-]law cities could be declared void. General[-]law municipalities will have no choice but to dispose of their garbage illegally or [to] spend millions of dollars to open and maintain landfills.

House Research Org., Bill Analysis, Tex. S.B. 1371, 74th Leg., R.S. (1995) (emphases

added), https://lrl.texas.gov/scanned/hroBillAnalyses/74-0/SB1371.pdf (last visited

Dec. 28, 2020).

Nor do other cases cited by the parties suggest that Section 364.034 limited the

power a town has under Section 363.111 to license a commercial solid waste operator

for health and safety concerns. BRS cites Adams v. City of Weslaco, No. 13-06-00697-

CV, 2009 WL 1089442 (Tex. App.—Corpus Christi–Edinburg Apr. 23, 2009, no pet.)

(mem. op.). Adams dealt with the attempt by a city to grant a franchise for the

collection of grease and grit. Id. at *1. The case examined then-existing Subsection

(e) of Section 364.034 to determine how that subsection impacted the city’s franchise

power and held that

the tension between the constitutional prohibition against monopolies and the police powers of a city to regulate garbage collection are alleviated by our interpretation of [Sub]section (e). We read the two sentences together to allow an opt-out and still allow enforcement of a duly authorized franchise, which by the very statutory limitation of its legislative grant, may not disallow an opt-out.

Id. at *8 (emphasis added in bold). The quoted holding does not address licensing

regulations of the type at issue before us.

The same is true of another case cited by the parties, Republic Waste Servs. of

Tex., Ltd. v. Tex. Disposal Sys., Inc., 848 F.3d 342 (5th Cir. 2016). Republic Waste dealt

33 with the question of whether Section 364.034 restricted a home-rule city’s ability to

enter into an exclusive contract for solid waste disposal services. Id. at 343. Republic

Waste concluded that the statute did not restrict a city’s home-rule authority to enter

into an exclusive contract for solid waste disposal services at a construction project.

Id. at 347. We cannot see the broad principle that BRS would apparently have us

draw from this case—that “[t]he thrust of the discussion in [Republic Waste] is that a

general[-]law town which lacks inherent authority like San [Angelo] would be

prohibited from regulating waste haulers like BRS.” [Emphasis added.]

Republic Waste also, at least tangentially, addresses BRS’s argument that

Subsection (h) of Section 364.034 excludes the Town from regulating BRS. As set

forth above, Subsection (h) provides, “This section does not apply to a private entity

that contracts to provide temporary solid waste disposal services to a construction

project.” Tex. Health & Safety Code Ann. § 364.034(h). Republic Waste describes the

function of this subsection as limiting the scope of the authority conferred by

Subsection (a) of the statute. 848 F.3d at 346. Again, it is an unsupportable inference

that being freed from the authority to grant a franchise can be translated into a

restriction on any power to license commercial solid waste operators to ensure that

they conduct their business safely.

At the end of the day, BRS’s argument funnels down to the contention that

because Section 364.034 of the Health and Safety Code is a more specific statute that

deals with the same ground as the regulatory power for waste disposal given a general-

34 law municipality in Section 363.111, under Section 311.026 of the Government Code,

Section 364.034 should trump Section 363.111. But the standard created by the

section of the Government Code invoked by BRS belies the conflict. Section 311.026

of the Government Code provides as follows:

(a) If a general provision conflicts with a special or local provision, the provisions shall be construed, if possible, so that effect is given to both.

(b) If the conflict between the general provision and the special or local provision is irreconcilable, the special or local provision prevails as an exception to the general provision, unless the general provision is the later enactment and the manifest intent is that the general provision prevail.

Tex. Gov’t Code Ann. § 311.026. This section counsels us to make an effort to

reconcile the allegedly conflicting sections and to allow the special section to prevail

only if the conflict is irreconcilable. See id. Here, we can achieve reconciliation

between the two sections. Section 364.034 deals with the power of a municipality to

franchise or to contract with persons to provide waste services. See Tex. Health &

Safety Code Ann. § 364.034. But that power or lack of power is not irreconcilable

with the distinct power in Section 363.111 to regulate those operators by license to

ensure that they conduct their business safely and so as not to become a nuisance. See

id. § 363.111.

Because the Town has the power to license commercial solid waste operators

and because Section 364.034 is not in conflict with Section 363.111 that gives the

Town the power to regulate, we overrule BRS’s first issue.

35 C. Why we reject BRS’s second issue and sustain the Town’s first point that Section 361.0961 of the Health and Safety Code does not preempt the Town’s ability to license commercial solid waste operators

In its second issue, BRS turns to another argument aimed at thwarting the

Town’s powers to regulate solid waste under Section 363.111. See id. In this

argument, BRS contends that Section 361.0961 of the Health and Safety Code

preempts the regulatory authority delegated in Section 363.111 and that the trial court

erred when it entered a declaration rendering judgment to the contrary. See id.

§§ 361.0961, 363.111. We conclude that the trial court’s declaration is correct. But

this holding also requires that we sustain the Town’s first point that challenges the

trial court’s declaration that the license fee charged by the Town violates Section

361.0961(a)(3) though, as we explain below, we conclude that the challenge to the

amount of the fee is moot. We conclude that requiring commercial solid waste

operators to be licensed does not fall within the ambit of Section 361.0961 and that

the statute does not have the unmistakable clarity needed for us to conclude that it

preempts the Town’s power to license those operators.

Section 361.0961 of the Health and Safety Code provides as follows:

(a) A local government or other political subdivision may not adopt an ordinance, rule, or regulation to:

(1) prohibit or restrict, for solid waste management purposes, the sale or use of a container or package in a manner not authorized by state law;

36 (2) prohibit or restrict the processing of solid waste by a solid waste facility, except for a solid waste facility owned by the local government, permitted by the commission for that purpose in a manner not authorized by state law; or

(3) assess a fee or deposit on the sale or use of a container or package.

(b) This section does not prevent a local government or other political subdivision from complying with federal or state law or regulation. A local government or other political subdivision may take any action otherwise prohibited by this section in order to comply with federal requirements or to avoid federal or state penalties or fines.

(c) This section does not limit the authority of a local government to enact zoning ordinances.

Id. § 361.0961.

BRS fashions two preemption arguments from Section 361.0961. First, BRS

relies on Subsection (a)(1) to argue that the Town’s ordinance restricts the sale or use

of a container—the dumpsters into which temporary construction waste is placed—in

a manner not authorized by state law. Second, BRS argues that the license fee

imposed by the Town’s ordinance violates Subsection (a)(3) because it assesses a fee

or a deposit for the sale or use of a container.

BRS supports its arguments by citing the Texas Supreme Court’s recent

opinion in City of Laredo v. Laredo Merchants Ass’n, which held that Section 361.0961

preempted the City of Laredo’s attempt to prohibit businesses from providing single-

use plastic or paper checkout bags. 550 S.W.3d 586, 590 (Tex. 2018). We look first to

City of Laredo for guidance on the preemption principles that we should apply.

37 The question that underlies any preemption determination is not whether the

Legislature can preempt a local regulation like Ordinance No. 851 but whether it has.

Id. at 593. The overarching principle that guides this determination is whether the

intent to impose a limitation on the municipality’s powers appears with “unmistakable

clarity.” Id. To decide if the State is acting with this level of clarity, the Texas

Supreme Court provided the following signposts to follow:

The mere “entry of the [S]tate into a field of legislation . . . does not automatically preempt that field from city regulation[.”] Rather, “local regulation, ancillary to and in harmony with the general scope and purpose of the state enactment, is acceptable.” Absent an express limitation, if the general law and local regulation can coexist peacefully without stepping on each other’s toes, both will be given effect or the latter will be invalid only to the extent of any inconsistency.

Id. (footnotes omitted). In the Texas Supreme Court’s view, Section 361.0961 clearly

expressed the Legislature’s intent to preempt certain acts of a municipality by its

language prohibiting a municipality from adopting an ordinance contrary to the

strictures of the section. Id. Thus, the question became whether the ordinance at

issue fell within the “ambit” of the statute. Id. at 593–94. In deciding whether the

ordinance fell within the “ambit” of the section’s prohibitions, the Texas Supreme

Court looked to the usual sources that guide statutory interpretation—the statutory

text and the plain meaning of its words. Id. at 594.

Here, neither party challenges whether the Town’s ordinance falls within

certain of Section 361.0961(a)’s ambits by involving solid waste management purposes

or the use of a “container.” See Tex. Health & Safety Code Ann. § 361.0961(a)

38 (stating that an ordinance may not be adopted that “prohibit[s] or restrict[s], for solid

waste management purposes, the sale or use of a container or package in a manner

not authorized by state law”). Instead, the parties’ first disagreement is whether the

ordinance prohibits or restricts the use of a container in a manner not authorized by

state law.

City of Laredo interpreted Section 361.0961(a)(1)’s language dealing with whether

a restriction was in a “manner not authorized by state law” and described Laredo’s

efforts to find authorization for its ordinance in a host of general state laws. 550

S.W.3d at 597. Those laws were not the express authority that Laredo needed to meet

Section 361.0961(a)(1)’s requirement that a prohibition or restriction be in a manner

authorized by state law. The opinion interpreted the “manner” language of the statute

in the following way:

But the [Texas Solid Waste Disposal] Act preempts local regulation “in a manner not authorized by state law[.”] The question is not whether a municipality has the power to regulate. Home-rule cities already have the power of self-governance unless restricted by state law. If “authorized by law” in the preemption provision referred only to the power municipalities already have, the restriction would have no effect. But the preemption provision applies to local regulation when the manner is not authorized by state law. Manner is how something can be done, not merely if it can be. A manner must be stated by, and not merely implied from, a grant of authority. The clear, stated intent of the Act is to control the manner of regulating the sale or use of containers or packages for solid waste management purposes. To conclude otherwise would render the statute meaningless.

By rescinding local control that would otherwise exist, the Act forbids home-rule cities from regulating that subject matter. By authorizing regulation only when municipalities are told how to

39 permissibly regulate, the Act requires an express authorization. These circumstances are functionally analogous to how general-law municipalities operate under the law. General-law municipalities lack the power of self-government and must look to the Legislature for express grants of power. So too must a home-rule city whose self-governance has been legislatively abrogated.

Id. at 598 (footnotes omitted).

Here, by Section 363.111, the Legislature specifically empowered the Town to

adopt “rules for regulating” almost every aspect of the handling of solid waste in

addition to the other statutes that we have enumerated that give the Town the ability

to enforce its police powers. See Tex. Health & Safety Code Ann. § 363.111.

Licensing is one of the integral means given to a governmental entity to regulate those

performing an activity that is subject to regulation. Thus, we conclude that licensing

is an express grant of power contained in Section 363.111. See id. We acknowledge

that the language we quoted from City of Laredo says that the manner of regulation

cannot be implied, but Section 363.111 provides that a municipality “may adopt rules

for regulating” solid waste. See id. We do not read the Texas Supreme Court’s

reference to mean that a power is not express unless every means to regulate an

activity is enumerated in the statute and prohibits a municipality from exercising a

common means of accomplishing regulation, such as licensing.

Nor do we construe the section’s words—“prohibit or restrict, for solid waste

management purposes, the sale or use of a container or package”—to be so broad as

to embrace the licensing of a commercial solid waste operator. See id. BRS is not

40 selling a container. The ordinance does not prohibit BRS from using a container in its

business. To the contrary, it does exactly the opposite; it permits BRS to operate a

business using a container. See id. Thus, the question is whether the ambit of the

statute reaches the licensing of a commercial solid waste operator because it restricts

the use of a container.

We must construe the word “use” in a way that it is not strained and looks to

the context in which it was used. See Hyde v. Harrison Cty., 607 S.W.3d 106, 112 (Tex.

App.—Houston [14th Dist.] 2020, pet. filed) (“We must not engage in forced or

strained construction; instead, we must yield to the plain sense of the words the

Legislature chose.”). Also, we must interpret the words of a statute in context.7

Subsection (a)(1) of Section 361.0961 does not specify who may use a

container. If the word “use” is so broad that it includes a business that provides a

7 As the Texas Supreme Court has previously noted, a word with such a broad definition as “use” should be placed in context:

Language cannot be interpreted apart from context. The meaning of a word that appears ambiguous when viewed in isolation may become clear when the word is analyzed in light of the terms that surround it. The word “use” poses some interpretational difficulties as well because of the different meanings attributable to it. “Use” and the “use of a license” therefore[] draw their meanings from context, so we look not only to the words themselves but [also] to the statute in its entirety to determine the Legislature’s intent. It is a fundamental principle of statutory construction and indeed of language itself that words’ meanings cannot be determined in isolation but must be drawn from the context in which they are used.

TGS–NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 441 (Tex. 2011) (footnotes omitted).

41 dumpster as part of its services, then every entity involved in the stream of processing

solid waste would be embraced by “use” because it is difficult to envision a waste

disposal business that would not use a container to hold the waste. The consequence

of such an interpretation would be that any time a company could conceive of a

situation in which an ordinance might have an impact on the company’s use of a trash

container, the company could argue that Subsection (a)(1) requires a showing of

explicit statutory authority permitting the restriction. As we have noted, the Town

has both a traditional police power to regulate waste collection and the statutory

authorization permitting the adoption of “rules for regulating solid waste collection,

handling, transportation, storage, [and] processing.” See Tex. Health & Safety Code

Ann. § 363.111(a). To stretch the word “use” to the point that it abrogates these

powers because the requirement of a license may impose a tangential restriction on

the use of a container by a business that provides dumpsters is both strained and

unreasonable. Further, nothing in the context supports such a strained interpretation.

Also, though the parties do not challenge that a dumpster is a container, City of

Laredo suggests that is too broad a reading of the term. See 550 S.W.3d at 597. The

opinion discusses one of Laredo’s arguments in which it apparently claimed that a

single-use plastic or paper checkout bag was not a container because it was not a solid

waste receptacle. Id. The opinion rejected this argument for the following reason:

The alternative limitation the City proposes—receptacles used to hold or transport solid waste—fares no better. The Act does use “container” in that sense but does not restrict the word to that meaning. The word

42 “package” does not appear elsewhere in the Act, but “packaging” does, and its use is consistent with the ordinary understanding of the term, not as a solid waste receptacle. The phrase “container or package” suggests analogous meanings, contrary to the City’s argument.

Id. (footnote omitted). A dumpster is not the type of container that is analogous to a

package. We glean from the Texas Supreme Court’s discussion that the use of the

word “container” does not go so far as to encompass a dumpster, and this reinforces

our conclusion that the ambit of Subsection (a)(1) reaches to the licensing of a

business that provides dumpsters.

Next, to adopt a meaning of Subsection (a)(1) going so far as to encompass

police-power regulation of commercial solid waste operators is out of context with

the section of the Health and Safety Code preceding Section 361.0961. Section

361.096(a) provides, “Except as specifically provided by this chapter, this subchapter

does not limit the powers and duties of a local government or other political

subdivision of the [S]tate as conferred by this or other law.” Tex. Health & Safety

Code Ann. § 361.096(a). For the reasons that we have outlined, Section 361.0961

does not specifically provide limitations on the powers that we conclude that the

Town holds to license commercial solid waste operators.

Finally, even BRS does not argue that the Town lacks the power to license

because that act in and of itself restricts the use of a container. Instead, BRS’s

argument harkens back to reliance on the contention that the ordinance conflicts with

Section 364.034:

43 In this case, Westlake as a general[-]law town is authorized to provide or regulate private (as opposed to public) solid waste collection only in § 364.034, Tex. Health & Safety Code; Grothues. The Texas Legislature has expressly exempted from [that] section a company like BRS “that contracts to provide temporary solid waste disposal services to a construction project.” § 364.034(h), Tex. Health & Safety Code. As a result, Westlake is attempting in Ordinance No. 851 to “restrict, for solid waste management purposes, the sale or use of a container or package in a manner not authorized by state law” in violation of § 361.0961, Tex. Health & Safety Code. The [L]egislature has expressly addressed operations like BRS’s by excluding them from statutory coverage, thus ensuring that Westlake’s restrictions on BRS’s restrictions are “not authorized by state law.”

We have already rejected BRS’s argument that Section 364.034 is a specific statute that

controls and overrides the powers of Section 363.111. Thus, we reject BRS’s

secondary argument that hinges on the same principle to argue that the ordinance acts

in a manner contrary to state law because it violates Section 364.034.

Further, in a preemption analysis, the various ways that Section 361.0961(a)(1)

is vague on the question of whether the requirement of a license falls within its ambit

also prompts the conclusion that the subsection does not preempt the ability of the

Town to license a waste processor with unmistakable clarity. Only by embracing the

unreasonably strained definition of “use” that we have already rejected could we reach

that conclusion.

We also reject BRS’s contention that a prohibition against the adoption of an

ordinance that “assess[es] a fee or deposit on the sale or use of a container or

package” encompasses the charging of a fee to obtain a license for commercial solid

waste operators. In essence, BRS would have us construe this language to mean that

44 because a commercial waste processor uses a container, any license fee is prohibited

by Subsection (a)(3). If we assume, as we do, that a municipality can license waste

processors, to adopt the construction advocated by BRS would mean that the

Legislature intended to prohibit a municipality from being able to charge any fee when

it licenses waste processors because the operator’s business uses a container. Again,

we will not adopt such a strained construction.

The question again devolves to whether a license fee is the assessment of a fee

for the “use” of a container. And again, that prompts the question regarding the use

of the container by whom. Two businesses “use” the dumpster as part of the service

that BRS provides. The first is a homebuilder that contracts with BRS. The Town

imposes no fee on that business. The second business is BRS when it hauls away the

waste from the construction site. BRS argues that Subsection (a)(3) must apply to it

because “BRS would not be in business in Westlake but for the use of its containers”

and that the licensing fee found in the Town’s ordinance requires “BRS to pay a

significant revenue percentage fee in order to use its containers within the Town

limits.”

The upshot of BRS’s argument is that a license fee on any business that uses a

container is the assessment of “a fee or deposit on the sale or use of a container or

package.” See id. § 361.0961(a)(3). That view argues for an interpretation of the

statute that every tangential governmental administrative cost imposed on a company

offering a container as part of its business falls within the ambit of the statute’s

45 language and that such a fee is prohibited by the statute. In turn, that would mean

that the company benefiting from the ability to operate its business within a

municipality would force the taxpayers to bear any administrative cost associated with

the license because we must read Subsection (a)(3) to mean that an administrative cost

is a fee for the use of a container. Such an interpretation would require so slavish a

devotion to the literal definition of “use” to require a strained interpretation. It would

also require us to adopt that interpretation when nothing in the context of the statute

indicates that “use” should be given so broad a reach, and that interpretation is

antithetical to the powers given a municipality to regulate those operating a waste

disposal business. And for the reason we stated above, we question whether a

dumpster is appropriately considered a container as that term is used in Subsection

(a)(3). See id.

As discussed above, Subsection (a)(3) does not speak with the specificity for us

to conclude that it “limit[s] the powers and duties of a local government or other

political subdivision of the state as conferred by this or other law.” Compare id., with id.

§ 361.096. And Subsection (a)(3) does not have the unmistakable clarity for us to

conclude that it preempts the powers of a town to license commercial solid waste

operators.

Thus, we overrule BRS’s second issue, and we sustain the Town’s first point.

46 D. Why we conclude that BRS’s third issue—challenging the validity of the amount of the 15% license fee—is now moot

We have addressed the questions that result from the Town’s ordinances as

they exist presently, such as whether the Town may require a license and whether it is

deprived of that power by other provisions of Texas law. Now, we turn to whether

we should review the remaining question involving the ordinance—the validity of the

amount of the 15% license fee that was in controversy during the trial of this matter.8

The record shows that the Town has replaced the original fee of 15% of gross

revenue originally imposed with a fee of 3% of gross revenue. Westlake, Tex.,

Ordinance 901. As explained below, an issue challenging the validity of an ordinance

becomes moot when a municipality substantially alters that ordinance and the

exceptions to the mootness doctrine are not applicable. We conclude that on the

issue of the amount of the license fee, the Town’s ordinance has been substantially

altered, and neither the possibility of repetition of the imposition of the license fee in

the amount challenged nor the collateral consequences of the imposition of the 15%

license fee avoid mootness.

We may not decide an issue that is moot because such a decision is advisory,

and the rendition of an advisory decision violates the doctrine of separation of

powers. Trulock v. City of Duncanville, 277 S.W.3d 920, 923–24 (Tex. App.—Dallas

In its third issue, BRS challenges the trial court’s determination that the fee 8

was not an unconstitutional occupation tax.

47 2009, no pet.). Mootness implicates the standing of a party, and if the controversy

becomes moot at any stage of the proceeding, standing may be lost. Id. at 924.9

The general principles that we apply in testing an issue’s mootness are whether

“(1) there are no live controversies between the parties[,] and (2) any decision

rendered by the appellate court would be an advisory opinion.” Id. To apply the

doctrine of mootness to a legislative enactment, there must be a significant change to

the enactment. Id.; Long Term Care Pharm. All. v. Tex. Health & Human Servs. Comm’n,

249 S.W.3d 471, 478–79 (Tex. App.—Eastland 2007, no pet.) (discussing and quoting

Ne. Fla. Chapter of the Associated Gen. Contractors of Am. v. City of Jacksonville, Fla., 508

U.S. 656, 113 S. Ct. 2297 (1993)).

There are two exceptions to the doctrine of mootness: “(1) the issue is ‘capable

of repetition, yet evading review[,’] and (2) the collateral consequences doctrine.”

Trulock, 277 S.W.3d at 924. The capable-of-repetition-yet-evading-review exception is

rarely used and is usually raised as a challenge to unconstitutional acts. PNC Bank,

N.A. v. RPCG-GP I, LLC, No. 05-19-00411-CV, 2020 WL 1486846, at *1 (Tex.

App.—Dallas Mar. 27, 2020, no pet.) (mem. op.) (citing and quoting Tex. A & M

Univ.–Kingsville v. Yarbrough, 347 S.W.3d 289, 290 (Tex. 2011)). That exception is

limited to situations where the following circumstances are simultaneously present:

(1) the challenged action was in its duration too short to be fully litigated prior to its cessation or expiration, or the party cannot obtain review

Mootness raises a question of subject-matter jurisdiction, which we review 9

de novo. See Trulock, 277 S.W.3d at 923.

48 before the issue becomes moot; and (2) there is a reasonable expectation that the same complaining party would be subjected to the same action again.

Id. “The mere physical or theoretical possibility that the same party may be subjected

to the same action again is not sufficient to satisfy” the exception’s requirement that

there be a reasonable expectation of repetition. Trulock, 277 S.W.3d at 924–25. “The

‘collateral consequences’ exception has been applied when prejudicial events have

occurred “whose effects continued to stigmatize helpless or hated individuals long

after the unconstitutional judgment had ceased to operate.” PNC Bank, 2020 WL

1486846, at *1 (citing In re Sierra Club, 420 S.W.3d 153, 158 (Tex. App.—El Paso

2012, orig. proceeding)).

Here, both parties attack the trial court’s declarations that involve the original

15% license fee. BRS’s attack is that the license fee is a disguised, prohibited

occupation tax and that it has the characteristics of such a tax because its primary

purpose is to raise revenue and not for the purpose of regulation. BRS also argues

that the Town failed to establish a nexus between its cost to administer the license and

the amount of the 15% fee. The distinction cited by BRS is the correct test for

distinguishing between a license fee and an occupation tax.10

10 The cases highlighting the distinction were summarized by the Fifth Circuit in a case applying Texas law:

To determine whether a fee is in reality an occupation tax, Texas courts consider “whether the primary purpose of the exaction, when the statute or ordinance is considered as a whole, is for regulation or for raising

49 The Town’s rejoinder is that the fee must be presumed valid and that whether

the fee is valid is a fact question that turns on the issue of reasonableness. A fee may

be valid if it covers the cost of regulation or bears some reasonable relationship to the

legitimate object of the licensing ordinance.11 As the Town argues, “BRS did not

meet its heavy burden to establish the unreasonableness of the license fee adopted” in

the ordinance. Also, the Town contends that the fee should be upheld because of the

revenue.” City of Houston [v. Harris Cty. Outdoor Advert. Ass’n,] 879 S.W.2d [322,] 326 [(Tex. App.—Houston 1994, writ denied)]. “Revenue,” as used by Texas courts, “means the amount of money [that] is excessive and more than reasonably necessary to cover the cost of regulation.” Producers Ass’n of San Antonio v. City of San Antonio, 326 S.W.2d 222, 224 (Tex. [] App.—San Antonio 1959, writ ref’d n.r.e.); see also Tex. Boll Weevil Eradication Found., Inc. v. Lewellen, 952 S.W.2d 454, 461 (Tex. 1997) (“The critical issue is whether the assessment is intended to raise revenue in excess of that reasonably needed for regulation.”). Whether a fee is reasonably necessary to cover the cost of regulation is a question of fact. [Harris Cty. Outdoor Advert. Ass’n], 879 S.W.2d at 326.

El Paso Apartment Ass’n v. City of El Paso, 415 F. App’x 574, 581 (5th Cir. 2011). 11 As we have previously explained,

The “critical issue” in determining the assessment’s primary purpose is “whether the assessment is intended to raise revenue in excess of that reasonably needed for regulation.” . . . Lewellen, 952 S.W.2d [at] 461[.] “To be reasonable, a license fee cannot be excessive nor more than reasonably necessary to cover the cost of granting the license and of exercising proper police regulation, or it must bear some reasonable relationship to the legitimate object of the licensing ordinance.” Harris Cty. Outdoor Advert. Ass’n, 879 S.W.2d at 326–27.

City of Bedford v. Apartment Ass’n of Tarrant Cty., Inc., No. 02-16-00356-CV, 2017 WL 3429143, at *4 (Tex. App.—Fort Worth Aug. 10, 2017, pet. denied) (mem. op.).

50 deference due a legislative body’s determination of the need or legitimacy of a

particular ordinance.

We outline these arguments to show how much they depend on the issue of

whether the amount of the 15% fee was properly calculated to match the needs of the

Town. Because that specific fee no longer exists, we cannot advise the parties about

the propriety of how to calculate a nonexistent fee. Such an opinion would constitute

an advisory opinion, which we are prohibited from rendering. Thus, we conclude that

the issues about the 15% fee’s validity are moot because we are asked to advise about

the propriety of a fee that no longer exists and to test the reasonableness of the now-

imposed fee in the vacuum of having no record by which we may determine its

propriety.

But BRS argues that we should press ahead in our review because live issues

remain for us to review. BRS asserts that

the new ordinance does not resolve the controversy between the parties. BRS’[s] position is that any license fee imposed on a particular occupant based on a percentage of the business’[s] revenue is an unconstitutional tax. The new ordinance still assesses the revenue percentage fee in order for BRS to use its container.

In essence, BRS’s argument is that the Town cannot make any showing that the 3%

fee in the new ordinance is reasonable because it is based on a percentage of revenue.

To analyze that argument, we would have to prejudge an issue that has not been

litigated. At this point, we have no idea how the Town went about determining the

propriety of a 3% fee. As BRS itself acknowledges, “No discovery or trial testimony

51 was obtained regarding the 3% fee amount.” Also, we are not prejudging the issue,

but we note that a license fee calculated on the basis of gross revenue is not per se

invalid. See McQuillin, The Law of Municipal Corporations § 26:47 (“The amount of

license taxes or fees may be based on the amount of business done or sales made,

measured by gross sales, gross receipts, or gross income.” (footnotes omitted)). One

Texas case has permitted a license fee based on a percentage of revenue. See Reed v.

City of Waco, 223 S.W.2d 247, 254–55 (Tex. App.—Waco 1949, writ ref’d). Further,

though BRS contends that a license fee cannot be based on a percentage of revenue, it

cites no case to establish that proposition. Thus, the state of the law is not such that

we can say with certainty that the Town could never justify a licensing fee based on a

percentage of revenues, and we lack a record to test whether the Town’s decision to

impose such a fee was valid.

BRS also argues that it has escrowed $7,000 in fees pursuant to the Rule 11

agreement that addressed how it would operate during the pendency of the lawsuit

with the Town and that the agreement provides that “all escrow funds ‘shall be

disbursed to the prevailing party upon final resolution of the lawsuit, which includes a

final determination of any appeals.’” BRS argues that the escrow of the license fee

means that the controversy involving the validity of the 15% fee is still at issue. To

support its argument, BRS cites our opinion in City of Bedford, 2017 WL 3429143, at

*3. As we read City of Bedford, the controversy was not mooted after repeal of an

ordinance because the City had already collected a number of challenged fees. City of

52 Bedford cited Lowenberg v. City of Dallas for its holding that “render[ed] judgment for

[the] plaintiffs in [a] declaratory-judgment tax-refund suit and explain[ed] that [the]

city ‘cannot extract millions in unlawful fees and fines, decide the whole thing was a

mistake, keep the money, and insist the whole matter is moot’ and that ‘[f]or those

who paid, the controversy remains real.’” Id. at *6 (citing and quoting Lowenberg v. City

of Dallas, 261 S.W.3d 54, 57–58 (Tex. 2008)). We conclude that the situation in this

case is not parallel to City of Bedford or Lowenberg. The repeal of Ordinance No. 851’s

effect on the terms of the Rule 11 agreement is an issue involving that agreement.

The mechanism of the Rule 11 agreement puts this case in a different posture than

the Town’s having collected the fee and then trying to avoid the issue of the fee’s

validity by amending the ordinance. The question of how the parties litigate who is

the prevailing party differs from the mooted question of whether the now-repealed

15% license fee is valid. See, e.g., Epps v. Fowler, 351 S.W.3d 862, 864–66 (Tex. 2011)

(analyzing use of term “prevailing party” in earnest-money contract).

With respect to the exceptions to the mootness doctrine, we conclude that

based on the Town’s action of repealing the 15% license fee, there is not a reasonable

likelihood that it will impose a fee in that amount in the future. We also conclude that

BRS will suffer no lasting stigma as a collateral effect of the repealed fee.

Accordingly, we overrule BRS’s third issue as moot.

53 E. Why we remand the issue of attorney’s fees to the trial court

Both BRS and the Town attack the trial court’s award of attorney’s fees. 12 BRS

argues that if we reverse any of the trial court’s determinations about the validity of

the ordinance or whether the license fee is an occupation tax, we should remand the

issue of attorney’s fees. The Town argues that the trial court erred by deciding that

the 15% license fee was “unreasonable pursuant to Health and Safety Code Section

391.0961” and predicating an award of attorney’s fees based on that decision. We do

not reach the propriety of the 15% license fee because we conclude that question is

moot. Thus, we conclude that the trial court should be able to reassess its award of

attorney’s fees in the light of our ruling, and we remand the issue of attorney’s fees to

the trial court. See Tex. Cent. R.R. & Infrastructure, Inc. v. Miles, No. 13-19-00297-CV,

2020 WL 2213962, at *3–4 (Tex. App.—Corpus Christi–Edinburg May 7, 2020, pet.

filed) (mem. op.) (remanding matter to trial court to redetermine equitable and just fee

award under Texas Civil Practice and Remedies Code Section 37.009 in light of

appellate court’s decision). Accordingly, without regard to the merits, we sustain

BRS’s fourth issue and the Town’s second point.

V. Conclusion

We resolve this appeal as follows. Having overruled BRS’s first and second

issues, we affirm the portion of the trial court’s judgment that includes the following

declarations:

12 BRS does so in its fourth issue, and the Town does so in its second point.

54 1. As to [BRS’s] request for declaratory judgment that “the Town has no authority under Section 364.034, Tex. Health & Safety Code, or other statute or Texas constitution to require a private operator to obtain a franchise, license, or pay fees to provide temporary solid waste collection services to a construction site within the Town’s limits and any such requirement is invalid,” the [c]ourt RENDERS judgment in favor of Westlake[] and hereby orders that [BRS] take nothing as to that claim.

2. As to [BRS’s] request for declaratory judgment that “Section 74-4, et seq., is invalid under Section 364.034, Tex. Health & Safety Code, to the extent the Town restricts the collection of temporary solid waste from construction sites to the Town’s franchisees and licensees,” the [c]ourt RENDERS judgment in favor of Westlake[] and hereby orders that [BRS] take nothing as to that claim.

3. As to [BRS’s] request for declaratory judgment that “Section 74-4, et seq., is preempted by and invalid under Section 361.0961, Tex. Health & Safety Code[,]” the [c]ourt RENDERS judgment in favor of Westlake[] and hereby orders that [BRS] take nothing as to that claim.

With respect to BRS’s third issue, we held that the appeal of the following

declaration is moot:

Count 2

Regarding the claim in Count 2 of [BRS’s] First Amended Petition, as to [BRS’s] request for declaratory judgment that “Section 74- 44, et seq., of Ordinance [N]o. 851 establishing the 15% license fee, is an unconstitutional occupation tax and is invalid,” the [c]ourt RENDERS judgment in favor of Westlake[] and thereby orders that [BRS] take nothing as to that claim.

Accordingly, we dismiss as moot the portion of BRS’s appeal challenging that

declaration, vacate the declaration, and dismiss BRS’s claims challenging the 15%

license fee as an unconstitutional occupation tax.

55 Having sustained the Town’s first point, we reverse the portion of the

judgment containing the following declaration to the extent that it declares a license

fee is unlawful and invalid under Section 361.0961(a)(3) of the Texas Health and

Safety Code, and we render judgment that BRS take nothing as to that claim:

4. As to [BRS’s] request for declaratory judgment that “the 15% license fee under Section 74-44, et seq., is unlawful and invalid under Section 361.0961(a)(3), Tex. Health & Safety Code,” the [c]ourt RENDERS judgment in favor of [BRS] and hereby declares that a 15% license fee as set forth by Ordinance No. 851 is unreasonable[,] null[,] and void.

To the extent that this declaration determines the 15% license fee is invalid on a basis

other than it constitutes a violation of Section 361.0961(a)(3), we determine that

BRS’s appeal of that portion of the declaration is moot, vacate the trial court’s

declaration invaliding the 15% license fee to the extent it does so for reasons other

than it is invalid under Section 361.0961(a)(3), and dismiss BRS’s claims challenging

the 15% license fee as an unconstitutional occupation tax.

Having sustained, without regard to the merits, BRS’s fourth issue and the

Town’s second point that were predicated on the attorney’s fees that were awarded

based on the preceding declaration, we reverse and remand the issue of attorney’s fees

to the trial court.

/s/ Dabney Bassel

Dabney Bassel Justice

Delivered: January 7, 2021