Maverick Cnty. v. R.R. Comm'n of Tex., Dos Republicas Coal P'ship, Camino Real Fuels, LLC, NO. 03-14-00257-CV

CourtCourt of Appeals of Texas
Writing for the CourtMelissa Goodwin, Justice
PartiesMaverick County, City of Eagle Pass, Maverick County Hospital District, Maverick County Environmental and Public Health Association, and George Baxter, Appellants v. Railroad Commission of Texas, Dos Republicas Coal Partnership, Camino Real Fuels, LLC; and North American Coal Company, Appellees
Docket NumberNO. 03-14-00257-CV
Decision Date29 December 2015

Maverick County, City of Eagle Pass, Maverick County Hospital District, Maverick
County Environmental and Public Health Association, and George Baxter, Appellants
v.
Railroad Commission of Texas, Dos Republicas Coal Partnership, Camino Real Fuels, LLC;
and North American Coal Company, Appellees

NO. 03-14-00257-CV

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

December 29, 2015


FROM THE DISTRICT COURT OF TRAVIS COUNTY, 261ST JUDICIAL DISTRICT
NO.
D-1-GV-13-000416, HONORABLE DARLENE BYRNE, JUDGE PRESIDING

MEMORANDUM OPINION

Maverick County, the City of Eagle Pass, Maverick County Hospital District, Maverick County Environmental and Public Health Association (MCEPHA), and George Baxter appeal the district court's judgment affirming the Railroad Commission's order granting the application of Dos Republicas Coal Partnership (DRCP) for renewal, revision, and expansion of its surface coal mining and reclamation permit. Appellants participated in the contested case hearing as protestants against the permit and, following the grant of the permit, filed three separate suits for judicial review that were consolidated.1 DRCP, the mine owner; The North American Coal Corporation (NACC); and Camino Real Fuels, LLC, (CRF), a subsidiary of NACC and the mine

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operator (collectively Intervenors), intervened to defend DRCP's permit. For the reasons that follow, we affirm the district court's judgment.

FACTUAL AND PROCEDURAL BACKGROUND

In 1994, the Commission approved the application of DRCP's predecessor in interest, Dos Republicas Resources Company (DRRC), for a surface coal mining and reclamation permit. In 2000, the Commission issued the permit.2 The permit was to expire in three years if mining had not begun, subject to exceptions that excuse failure to begin mining in certain circumstances. See Tex. Nat. Res. Code § 134.072. In 2003, DRRC sought an extension of the permit, and in early 2004, the Commission invoked an exception and renewed the permit until April 11, 2005, which led to litigation. In October 2004, DRRC filed an application for renewal and revision of the permit, but the renewal process was abated pending resolution of the litigation on the 2004 renewal. On April 10, 2005, one day before the permit was to expire, DRRC initiated construction on a sedimentation pond. In 2007, this Court upheld the 2004 renewal.3 In 2008, DRRC filed a "complete replacement" of the 2004 application and sought a renewal, revision, and expansion of the permit area. This "replacement" was "Supplement No. 1." In January 2009, DRRC transferred the permit to DRCP. DRCP filed five additional supplements, substantially revising the 2008 application.

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Public participation was initiated in June 2011. Numerous persons contested the permit, and a contested case hearing was held for 19 days between January and May 2012. Following the hearing, the hearing examiner issued a proposal for decision (PFD), subsequently amended, recommending approval of the permit with conditions. The Commission issued its final order adopting the amended PFD and approving the permit in January 2013. Appellants filed motions for rehearing and motions under Commission Rule 12.222 requesting a hearing on the reasons for the decision. See 16 Tex. Admin. Code § 12.222 (Railroad Comm'n of Tex., Administrative Review).4 The Commission denied the motions for rehearing and the motions under Commission Rule 12.222. Appellants sought rehearing of the decision on their Rule 12.222 motions and were notified by the examiner that no further action would be taken. The district court upheld the Commission's order, and this appeal followed.

STANDARD OF REVIEW

We review the Commission's decision under the "substantial evidence" standard. See Tex. Gov't Code § 2001.174; Railroad Comm'n of Tex. v. Torch Operating Co., 912 S.W.2d 790, 792-93 (Tex. 1995) (applying substantial evidence standard of Administrative Procedure Act (APA) to Commission decision). This standard requires that we reverse or remand a case for further proceedings "if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are (A) in violation of a constitutional or statutory provision; (B) in excess of the agency's statutory authority; (C) made through unlawful procedure;

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(D) affected by other error of law; (E) not reasonably supported by substantial evidence considering the reliable and probative evidence in the record as a whole; or (F) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion." Tex. Gov't Code § 2001.174(2). In reviewing fact-based determinations under this standard, we may not substitute our judgment for that of the agency but rather must determine whether, considering the reliable and probative evidence in the record as a whole, some reasonable basis exists in the record for the agency's action. See id. § 2001.174(2)(E); Texas Indus. Energy Consumers v. CenterPoint Energy Hous. Elec., LLC, 324 S.W.3d 95, 105 n.60 (Tex. 2010). "Thus, the agency's decision will be sustained if the evidence is such that reasonable minds could have reached the conclusion the agency must have reached in order to justify its action." Texas Health Facilities Comm'n v. Charter Med.-Dall., Inc., 665 S.W.2d 446, 453 (Tex. 1984). We presume that the agency's findings, inferences, conclusions, and decisions are supported by substantial evidence, and the burden is on the contestant to demonstrate otherwise. See Froemming v. Texas State Bd. of Dental Exam'rs, 380 S.W.3d 787, 790 (Tex. App.—Austin 2012, no pet.). We must affirm the agency's findings if they are supported by more than a scintilla of evidence. Mireles v. Texas Dep't of Pub. Safety, 9 S.W.3d 128, 131 (Tex. 1999) (per curiam).

The parties' issues also require us to construe applicable statutes and rules. Statutory construction is a question of law that we review de novo. See Railroad Comm'n v. Texas Citizens for a Safe Future & Clean Water, 336 S.W.3d 619, 624 (Tex. 2011). Our primary concern is the express statutory language. See Galbraith Eng'g Consultants, Inc. v. Pochucha, 290 S.W.3d 863, 867 (Tex. 2009). We apply the plain meaning of the text unless a different meaning is supplied by

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legislative definition or is apparent from the context or the plain meaning leads to absurd results. Marks v. St. Luke's Episcopal Hosp., 319 S.W.3d 658, 663 (Tex. 2010). "We generally avoid construing individual provisions of a statute in isolation from the statute as a whole[,]" Texas Citizens, 336 S.W.3d at 628, we must consider a provision's role in the broader statutory scheme, see 20801, Inc. v. Parker, 249 S.W.3d 392, 396 (Tex. 2008), and we presume that "the entire statute is intended to be effective," Tex. Gov't Code § 311.021(2). We construe administrative rules in the same manner as statutes. TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 438 (Tex. 2011).

DISCUSSION

Denial of the County's Motion to Compel Disclosure

The County, in its first issue, and the City and the Hospital District, in their issue II(D) and (E), argue that the hearing examiner abused her discretion in denying the County's motion to compel disclosure of documents sought by the Kickapoo Tribe prior to its withdrawal from the proceeding. The Kickapoo Tribe served DRCP with a request for disclosure under Rule 194 of the Texas Rules of Civil Procedure. See Tex. R. Civ. P. 194.2. DRCP partially responded to the request, and the County moved to compel disclosure of all documents, tangible things, reports, models, or data reviewed by or prepared by or for DRCP's experts in anticipation of their testimony. See id. R. 194.2(f))(4)(A). The hearing examiner granted the motion and ordered DRCP to supplement its responses to the Kickapoo Tribe's request for civil procedure Rule 194.2(f) disclosures. DRCP produced some documents and withheld others that were described on a privilege log attached to its supplemental disclosures. The withheld documents were primarily communications among counsel

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for DRCP and its 13 designated expert witnesses, which DRCP contended were protected by the attorney-client and work product privileges.

The County filed a second motion to compel, seeking disclosure of 120 of the 137 documents listed on the privilege log.5 The County argued that they were discoverable under civil procedure Rules 192.3(e)(6) and 194.2(f)(4)(A) and the supreme court's decision in In re Christus Spohn Hospital Kleberg, 222 S.W.3d 434 (Tex. 2007) (orig. proceeding). See Tex. R. Civ. P. 192.3(e)(6) (providing that party may discover all documents, tangible things, reports, models, and data compilations that have been provided to, reviewed by, or prepared by or for expert in anticipation of testimony), 194.2(f)(4) (providing that party may request disclosure of same); Christus Spohn, 222 S.W.3d at 438 (citing civil procedure Rule 192.5(c)(1) and holding that work product privilege does not protect documents provided to testifying expert). In its response, DRCP argued that Commission Rule 1.81 does not contemplate civil procedure Rule 194 requests for disclosure, that the examiner has discretion to tailor discovery, and that communications with the experts were protected under section 2001.092 of the APA. See Tex. Gov't Code § 2001.092 (providing for discovery of potential parties and witnesses and expert reports but excluding discovery of communications between agents, representatives, and employees of party and between party and its agents, representatives, and employees) (party-agent communications); 16 Tex. Admin. Code §§ 1.81(a) (Forms and Scope of Discovery in Protested Contested Cases) (listing forms of discovery but not including requests for disclosure), 1.85 (Discovery Orders) (providing that examiner may

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refuse to compel discovery for certain specified reasons or "other good cause in the interest of justice"). DRCP asked the examiner...

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