In re Edwards Aquifer Authority

• Decision Date: 18 October 2006
• Docket Number: No. 04-06-00254-CV.,04-06-00254-CV.
• Citation: 217 S.W.3d 581
• Parties: In re EDWARDS AQUIFER AUTHORITY.
• Court: Texas Court of Appeals

217 S.W.3d 581

In re EDWARDS AQUIFER AUTHORITY.

No. 04-06-00254-CV.

Court of Appeals of Texas, San Antonio.

October 18, 2006.

Rehearing Overruled December 5, 2006.

Original Mandamus Proceeding.¹

Darcy Alan Frownfelter, Andrew S. (Drew) Miller, Hunter Burkhalter, Ken Slavin, Kemp Smith P.C., Austin, for appellant.

Tom Joseph, Tom Joseph, P.C., San Antonio, Brian E. Berwick, Asst. Atty. Gen., Austin, for appellee.

Sitting: SARAH B. DUNCAN, Justice, (concurring in the judgment only) SANDEE BRYAN MARION, Justice, REBECCA SIMMONS, Justice.

OPINION

PER CURIAM.

Relator Edwards Aquifer Authority ("Authority") seeks a writ of mandamus compelling the Honorable Donna S. Rayes, Judge of the 81st Judicial District Court, Atascosa County, Texas, to vacate orders denying a motion to strike a jury demand and setting review of the Authority's administrative permitting decision under the substantial evidence de novo rule. The law requires the Authority's permitting decisions to be reviewed under the substantial evidence rule by a judge sitting without a jury. Because the trial court did not apply the law properly and the Authority's appellate remedy is inadequate, we will conditionally grant the writ.

FACTUAL AND PROCEDURAL BACKGROUND

The Edwards Aquifer Authority is a constitutionally-created conservation and reclamation district that regulates groundwater. The real parties in interest, Burrell Day and Joel McDaniel, landowners in Atascosa County, applied to the Authority for a permit to withdraw groundwater from the Edwards Aquifer. After a contested hearing before the State Office of Administrative Hearings, an administrative law judge recommended that the Authority issue a groundwater permit but in a much smaller amount than Day and McDaniel had requested. The Authority signed an order adopting the administrative law judge's proposal for decision on March 11, 2003.

Day and McDaniel filed a petition asking the district court to reverse the Authority's permit order and remand the matter to the Authority.² Their suit seeks a "judgment" on several factual findings, and alleges the Authority's permitting decision was an unconstitutional "taking," and that the Edwards Aquifer Act and § 11.021(a) of the Texas Water Code violate the Texas Constitution.³ The petition includes a jury demand.

Relying on Chapter 36 of the Texas Water Code, the Authority moved to strike the jury demand and to limit the scope of the trial to the record presented in the administrative hearing as required by the substantial evidence rule. See TEX. WATER CODE ANN. § 36.253 (Vernon 2000); TEX. GOV'T CODE ANN. §§ 2001.174, 2001.175(e) (Vernon 2000). The trial court denied both motions, set the matter for a jury trial, and ordered the "appeal from the decision of the Edwards Aquifer Authority [ ] be heard under the `SUBSTANTIAL EVIDENCE DE NOVO' Rule." The Authority then brought this original proceeding to challenge these orders.

STANDARD OF REVIEW

Mandamus relief is available if the trial court abuses its discretion and there is no adequate remedy by appeal. Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex.1992) (orig.proceeding). A trial court's failure to analyze or apply the law correctly constitutes an abuse of discretion. Id. at 840. When a party has a clear right to avoid a jury trial and the trial court refuses to strike a jury demand, a writ of mandamus may issue to correct the error. In re Prudential Ins. Co., 148 S.W.3d 124, 138-40 (Tex.2004) (orig.proceeding) (directing the trial court to quash a jury demand and set case on the nonjury docket when the parties had contractually waived their right to jury trial); In re Wells Fargo Bank Minnesota N.A., 115 S.W.3d 600, 611-12 (Tex.App.-Houston [14th Dist.] 2003, orig. proceeding) (same); Union Pacific Fuels, Inc. v. Johnson, 909 S.W.2d 130, 135 (Tex.App.-Houston [14th Dist.] 1995, orig. proceeding) (granting mandamus relief when the trial court erred in setting a plea in abatement for jury trial).

JUDICIAL REVIEW OF AUTHORITY PERMITTING DECISIONS

Texas recognizes a range of standards for reviewing administrative decisions: (1) pure trial de novo; (2) pure substantial evidence; and (3) substantial evidence de novo. G.E. Am. Commc'n v. Galveston Cent. Appraisal Dist., 979 S.W.2d 761, 764 (Tex.App.-Houston [14th Dist.] 1998, no pet.). Pure trial de novo review permits the reviewing court to conduct an independent fact-finding proceeding in which new evidence is taken and all issues are determined anew. Id. Pure substantial evidence review authorizes the reviewing court to consider only the factual record made before the administrative body and determine if its findings are reasonably supported by substantial evidence. Id. Substantial evidence de novo review, a hybrid standard, allows the reviewing court to hear additional evidence in existence at the time of the administrative hearing, regardless of whether it was actually introduced at the administrative hearing. Id. at 764-65.

When applying the substantial evidence rule, a reviewing court looks only at the record made before the administrative body and determines if its findings are reasonably supported by substantial evidence. Pretzer v. Motor Vehicle Board, 125 S.W.3d 23, 32-33 (Tex.App.-Austin 2003), aff'd in part, rev'd in part, 138 S.W.3d 908 (Tex.2004); Dallas County Civil Serv. Comm'n v. Warren, 988 S.W.2d 864, 869-70 (Tex.App.-San Antonio 1999, no pet.) (holding the trial court erred in submitting substantial evidence issue to the jury). The trial court may not substitute its judgment on factual issues for that of the administrative body. Warren, 988 S.W.2d at 869-70. Review under the substantial evidence rule presents purely a legal issue, and a trial of the fact issues by a judge or jury is avoided. Id. at 870; Bank of North America v. State Banking Board, 492 S.W.2d 458, 459 (Tex.1973).

Chapter 36, Subchapter H, of the Texas Water Code, titled "Judicial Review," outlines the procedure for judicial review of decisions, rules, and orders made by groundwater districts. See TEX. WATER CODE ANN. §§ 36.251-36.254 (Vernon 2000). These provisions incorporate well-established principles of traditional substantial evidence review. Section 36.251 authorizes persons "affected by and dissatisfied with" any order made by a groundwater district to challenge the validity of the order by filing suit against the district. Id. at § 36.251. In the trial of the suit, the petitioner has the burden of proof and the challenged order is deemed prima facie valid. Id. at § 36.253. The review is governed by the substantial evidence rule "as defined by Section 2001.174, Government Code." Id. Section 2001.174 of the Government Code requires a reviewing court to reverse or remand if the complaining party's substantial rights have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: in violation of a constitutional or statutory provision; in excess of the agency's statutory authority; made through unlawful procedure; affected by other error of law; not reasonably supported by substantial evidence considering the reliable and probative evidence in the record as a whole; or are arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion. See TEX. GOV'T CODE ANN. § 2001.174(2)(A)-(F) (Vernon 2000). Judicial review under section 2001.174 is conducted by a trial judge sitting without a jury and is confined to the administrative record. TEX. GOV'T CODE ANN. § 2001.175(e) (Vernon 2000) (detailing the procedures for substantial evidence review under § 2001.174 of the Government Code).

DOES CHAPTER 36 GOVERN THE UNDERLYING PROCEEDING?

The Authority argues the trial court erred in not applying the judicial review provisions found in Chapter 36⁴ to Day's and McDaniel's appeal. Day and McDaniel counter that the application of Chapter 36 is barred by collateral estoppel and their appeal is based solely on the Authority's administrative rules.

Chapter 36 applies to "any district or authority created under Section 52, Article III, or Section 59, Article XVI, Texas Constitution, that has the authority to regulate the spacing of water wells, the production from water wells, or both." See TEX. WATER CODE ANN. § 36.001(1) (Vernon Supp. 2006). The Authority was created as a conservation and reclamation district under Section 59, Article XVI, of the Texas Constitution, and has the authority to regulate both the spacing of water wells and water well production. See Act of May 30, 1993, 73rd Leg., R.S., ch. 626, §§ 1.02, 1.11(b), 1.13-1.23, 1.25-1.26,1.31, 1.33, 1.35, 1993 Tex. Gen. Laws 2350, 2351-66. Additionally, the Edwards Aquifer Act confers on the Authority "all of the rights, powers privileges, authority, functions, and duties provided by the general law of this state, including Chapters 50, 51, and 52, Water Code, applicable to an authority created under Article XVI, Section 59, of the Texas Constitution." See id. § 1.08(a). In 1995, Chapter 52 of the Water Code was recodified and many of its provisions were placed in Chapter 36. See Act of May 29, 1995, 74th Leg., R.S., ch. 933, §§ 2, 6, Tex. Gen. Laws 4673, 4679, 4701. Based on the plain language of the statute, we hold that Chapter 36 of the Water Code applies to the Authority.⁵

Day and McDaniel contend that collateral estoppel bars the application of Chapter 36 to their appeal. As a general rule, collateral estoppel extends only to those issues of fact or law that were expressly or necessarily determined in the prior action. SWEPI, L.P. v. Camden Resources, Inc., 139 S.W.3d 332, 339 (Tex. App.-San Antonio 2004, pet. denied). To invoke collateral estoppel on the basis of a prior administrative order, a party must show the administrative agency was acting in a judicial capacity and resolved disputed issues of fact properly before it which the parties had an adequate opportunity to litigate. Id. Day and McDaniel do not meet...