Edwards Aquifer Authority v. Chemical Lime, Ltd., No. 03-04-00379-CV (TX 2/10/2006)
| Decision Date | 10 February 2006 |
| Docket Number | No. 03-04-00379-CV.,03-04-00379-CV. |
| Parties | EDWARDS AQUIFER AUTHORITY; GREGORY M. ELLIS, GENERAL MANAGER OF THE AUTHORITY, IN HIS OFFICIAL CAPACITY; AND CAROL PATTERSON, MICHAEL BELDON, LEVI JACKSON, RAFAEL ZENDEJAS, SUSAN HUGHES, DOUG MILLER, KEN BARNES, BAILEY BARTON, HUNTER SCHUEHLE, LUANA BUCKNER, BRUCE GILLELAND, ROGELIO MUNOZ, GEORGE RICE, JOHNNY A. RODRIGUEZ, JR., AND CHERYL GILPIN, IN THEIR OFFICIAL CAPACITIES, Appellants, v. CHEMICAL LIME, LTD., Appellee. |
| Court | Texas Supreme Court |
Appeal from the District Court of Comal County, 22nd Judicial District, No. C2002-0547 A, Honorable Charles R. Ramsay, Judge Presiding.
Reversed and Rendered.
Before Chief Justice LAW, Justices B. A. SMITH and PEMBERTON.
In the 1993 Edwards Aquifer Authority (EAA) Act, the legislature established a new regulatory scheme to govern use of groundwater from the aquifer and a new agency, appellant Edwards Aquifer Authority (the Authority), to administer the regime. The legislature granted a preference under the EAA Act's permitting regime to existing users of aquifer water. To obtain the preference, the EAA Act provided that existing users had to file with the Authority a declaration of historical use by March 1, 1994—exactly six months after the EAA Act's effective date. Intervening legal developments barred implementation of the EAA Act until 1996, when the supreme court rejected constitutional challenges to the EAA Act and vacated an injunction against its enforcement in Barshop v. Medina County Underground Water District, 925 S.W.2d 618 (Tex. 1996). In lieu of the then-expired 1994 statutory deadline, the Authority, relying on an interpretation of Barshop, set by rule a deadline of December 30, 1996—six months after the Barshop opinion was issued—for existing users to file declarations of historical use. Appellee Chemical Lime, Ltd., whose New Braunfels plant had used aquifer water since the early 1900s, filed its declaration on January 17, 1997. Over three years later, the Authority rejected Chemical Lime's declaration for being untimely filed, thereby depriving Chemical Lime of preference as an existing user.
Chemical Lime sought a declaration in district court that the Authority's filing deadline rule was not authorized by the EAA Act and Barshop, and, in the alternative, that Chemical Lime had substantially complied with the filing requirements. The district court rendered judgment invalidating the rule and declared both that Chemical Lime's declaration had been timely filed as a matter of law and that Chemical Lime had substantially complied with the filing requirements even if the Authority's deadline was proper. It also awarded Chemical Lime attorney's fees. The Authority appeals this judgment.
Barshop compels us to reverse the district court's judgment invalidating the Authority's filing deadline rule and render judgment that Chemical Lime's filing was untimely as a matter of law. Under these circumstances, moreover, we are required to render judgment awarding the Authority its attorney's fees.
As its name suggests, Chemical Lime produces lime, a product used in road construction, steel manufacture, water treatment, and the removal of sulfur compounds from emissions from coal-fired plants.1 In 1999, Chemical Lime bought APG Lime, including a lime-production plant in New Braunfels. This plant, in operation since 1907, uses water for lime processing, dust suppression, the cooling of equipment, drinking water, and sanitation. The plant's sole water source is well water from the Edwards Aquifer, an underground system of water-bearing formations that includes all or parts of Atascosa, Bexar, Caldwell, Comal, Guadalupe, Hays, Medina, and Uvalde counties. See Barshop, 925 S.W.2d at 624-25.
The Edwards Aquifer Authority is a conservation and reclamation district created by the legislature in 1993 and empowered to regulate groundwater withdrawals by well from the aquifer. See Act of May 30, 1993, 73d Leg., R.S., ch. 626, §§ 1.02, 1.14, 1.41, 1993 Tex. Gen. Laws 2350, 2350-2372 (EAA Act); see Tex. Const. art. XVI, § 59(a). Because this appeal concerns procedural requirements relating to the Authority's regulation of the aquifer, it is helpful first to examine these requirements—and various legal developments that ultimately delayed their effect—in order to place the Authority's appellate issues in context.
Among other limitations, the EAA Act imposed aquifer-wide limits on water withdrawals by non-exempt wells and empowered the Authority to allocate the caps among wells through a permit system.2
EAA Act § 1.14(b) & (c). The legislature gave "existing users" preference under the permit system. See id. § 1.16. "Existing users" were defined as persons who withdrew and beneficially used underground water from the aquifer on or before June 1, 1993. Id. § 1.03(10). "An existing user may apply for an initial regular permit by filing a declaration of historical use of underground water withdrawn from the aquifer during the historical period from June 1, 1972, through May 31, 1993." Id. § 1.16(a). The Authority was authorized initially to grant regular permits solely to existing users who properly filed a declaration of historical use and who established "by convincing evidence beneficial use of underground water from the aquifer." Id. § 1.16(d). Existing users were entitled to an amount of water equal to their maximum beneficial use of water during any one calendar year of the historical period unless the total amount of such maximums by all existing users in the aquifer exceeded 450,000 acre-feet per year through the year 2007 and 400,000 acre-feet per year thereafter. Id. §§ 1.14(b), (c), 1.16(e). If total maximum historical usage exceeded this level, the legislature required the Authority to reduce proportionately the amounts of withdrawals under the permits as necessary to meet the cap. Id. § 1.16(e). Conversely, to the extent that unallocated water within the cap remained after the issuance of permits to existing users who properly applied, the Authority was authorized to issue additional regular permits, subject to the cap. Id. § 1.18(a).
As originally enacted, the EAA Act required existing users to file their "declaration of historical use" on or before March 1, 1994. Id. § 1.16(b). This date was exactly six months after the original effective date of the EAA Act, September 1, 1993. See id. § 4.02. Until the Authority actually began granting regular permits, existing users could continue to beneficially withdraw and beneficially use water, provided it was not wasted. Id. § 1.17.
The Barshop litigation and other delays
The EAA Act also provided that the Authority's board of directors would be appointed by various governing bodies affected by the Authority. Id. § 1.09. This appointment procedure was required to be submitted to the United States Department of Justice for administrative preclearance under section 5 of the Voting Rights Act. See 42 U.S.C.A. § 1973c (West 2003). The Department refused preclearance on the basis that the EAA Act contemplated appointive rather than elective selection of the Authority's board. This made the appointment provision unenforceable. See id. The legislature did not attempt to remedy the EAA Act's section 5 problem until its next regular session in 1995. Thus, the EAA Act's original September 1, 1993 effective date and its March 1, 1994 deadline for existing users to file declarations of historical use both passed during a period in which the EAA Act was made unenforceable by federal law.
In 1995, the legislature amended the EAA Act to change the board's selection method from appointment to election. Act of May 29, 1995, 74th Leg., R.S., ch. 261, § 1, 1995 Tex. Gen. Laws 2505, 2505-17 (amendments to the EAA Act).3 The legislature provided that these amendments would take effect on August 28, 1995, and the Department of Justice precleared the amended EAA. Id. at 2517; Barshop, 925 S.W.2d at 625. However, the legislature did not amend the EAA Act's original March 1, 1994 historical use declarations filing deadline or otherwise address how this expired deadline was to be adjusted.
Six days before the amendments to the EAA Act were to take effect, a group of local underground water conservation districts and agricultural interests brought a constitutional challenge to the EAA Act in the district court of Medina County and sought to restrain its administration and enforcement. The district court held the EAA Act unconstitutional and enjoined the State from enforcing it. Barshop, 925 S.W.2d at 625. The effective date of the EAA Act, as amended, passed while the State was enjoined from enforcing it. On direct appeal, the Texas Supreme Court, in an opinion issued on June 28, 1996, found the EAA Act constitutional, dissolved the district court's injunction, and remanded for consideration of the State's entitlement to attorney's fees. Id. at 637-38.
The supreme court in Barshop rejected the plaintiffs' argument that the EAA Act effected an unconstitutional taking of existing users' property rights by imposing a then-impossible March 1, 1994 deadline to file the historical use declaration. Id. at 628. Eschewing a literal interpretation of the deadline provision, the supreme court construed it as merely "directory" rather than "mandatory." Id. at 628-30. The statutory deadline, in other words, merely manifested the broader legislative intent "that declarations of historical use [are] to be filed six months after the Authority becomes effective." Id. at 630. The court explained that the legislature "obviously intended that existing users would have preference over future users" and thus "provided existing users the opportunity to file their declarations with the Authority after the effective date of the Act but before allocation of water to other potential users." Id. at 629...
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