Smith v. Houston Chemical Services, Inc.

• Citation: 872 S.W.2d 252
• Decision Date: 19 January 1994
• Docket Number: No. 3-92-482-CV,3-92-482-CV
• Parties: Phillip SMITH, Sr.; Phillip Smith, Sr. Family; Mike Jackson; Harris County, Texas; and Texas Water Commission, Appellants, v. HOUSTON CHEMICAL SERVICES, INC., Appellee.
• Court: Court of Appeals of Texas

Page 252

872 S.W.2d 252

Phillip SMITH, Sr.; Phillip Smith, Sr. Family; Mike Jackson; Harris County, Texas; and Texas Water Commission, Appellants, v. HOUSTON CHEMICAL SERVICES, INC., Appellee.

No. 3-92-482-CV.

Court of Appeals of Texas Austin.

Jan. 19, 1994.

Rehearing Overruled March 30, 1994.

Robert M. Long, McElroy & Sullivan, L.L.P., Austin, for Phillip Smith, Sr. and Phillip Smith, Sr. Family.

Mike Jackson, State Representative, Dist. 29, LaPorte, David H. Melasky, Houston, for Harris County, TX.

Dan Morales, Atty. Gen., Nancy E. Olinger, Linda B. Secord, Asst. Attys. Gen., Austin, for TX Water Com'n.

Paul Seals, Akin, Gump, Strauss, Hauer & Feld, L.L.P., Austin, for Houston Chemical Services.

Before POWERS, KIDD and B.A. SMITH, JJ.

POWERS, Justice.

After a contested-case hearing, the Texas Water Commission issued to Houston Chemical Services, Inc., a permit to construct and operate a commercial hazardous and nonhazardous industrial solid-waste facility. The trial court, on judicial review, affirmed the agency order authorizing the permit. The dissatisfied parties appeal to this Court. ¹ See Solid Waste Disposal Act, Tex. Health & Safety Code Ann. § 361.001-.510 (West 1992) ("Act"); ² Administrative Procedure Act, Act of May 4, 1993, 73d Leg., R.S., ch. 268, sec. 1, §§ 2001.001-.902, 1993 Tex.Sess.Law Serv. 587, 737-54 (to be codified as Administrative Procedure Act, Tex.Gov't Code Ann. §§ 2001.001-.902) (effective Sept. 1, 1993). ³ We will affirm the trial-court judgment.

THE CONTROVERSY

Houston Chemical applied for a permit to build the facility in Harris County near the City of LaPorte. See Act § 361.003(3)-(4). Harris County, the City of LaPorte, Smith, the Honorable Mike Jackson, and others appeared in the contested case in opposition to the application. After hearing evidence and legal argument in the case, the examiner recommended in his proposal for decision that the application be denied. See APA § 2001.062. The Commission, however, approved the application, and in its final order directed issuance of the permit. Smith, Jackson, and Harris County sued the Commission in a Travis County district court as authorized by section 361.321 of the Act. Houston Chemical intervened to protect its interest acquired under the permit.

The trial court affirmed the Commission order after trial. This appeal ensued. Smith, Jackson, Harris County, and the Commission collectively bring numerous points of error. We will discuss these points

separately or jointly as their contents suggest.

THE COMMISSION'S APPEAL

After trial but before the district court rendered judgment, the Commission requested leave of court to amend its preceding answer by filing a third amended original answer. The new pleading would have conceded several material allegations pleaded against the validity of the agency's final order. The Commission prayed in the new pleading that the trial court, based on these concessions, render judgment denying Houston Chemical's application for the permit. The trial court denied leave to file the third amended original answer. See Tex.R.Civ.P. 63.

In a single point of error, the Commission contends the trial court abused its discretion. See Yowell v. Piper Aircraft Corp., 703 S.W.2d 630, 634 (Tex.1986) (trial court decision whether to allow trial amendment may be overturned only upon showing abuse of discretion). Harris County makes the same contention in its points of error one and two; Smith and Jackson complain of the ruling in their point of error 458.

It is readily apparent that the trial court lacked authority to render judgment denying Houston Chemical's application--the sole relief the Commission requested in its proposed third amended original answer. The granting or denying of an application under the Act is an executive function committed exclusively to the Commission. The terms of APA § 2001.174 empower a reviewing court merely to remand a case to the agency if it reverses an agency order granting an application. See Davis v. City of Lubbock, 160 Tex. 38, 326 S.W.2d 699, 714 (1959); Short v. W.T. Carter & Bro., 133 Tex. 202, 126 S.W.2d 953, appeal dismissed, 308 U.S. 513, 60 S.Ct. 140, 84 L.Ed. 438 (1939); Daniel v. Tyrrell & Garth Inv. Co., 127 Tex. 213, 93 S.W.2d 372, 375-76 (1936).

In all events, the Commission's motion stated no grounds for the relief it requested; and the agency did not explain its failure to concede before trial the invalidity of its final order. The agency did not contend, for example, that it had acted without jurisdiction in rendering the order, and the agency does not make that contention now. Undoubtedly the Commission has a continuing duty to protect the public interest, but this duty also existed at the time the agency rendered its final order. The order is presumed to be valid in its adjudication of the public interest and Houston Chemical's private interest that arose under the permit. The Commission was obliged to assert some basis for its unusual action and it has not done so, either in the trial court or in this Court. It appears to be the Commission's position in both the trial court and this Court that the agency simply has an absolute right, as a matter of law, to obtain a reversal of its order, cancellation of the permit, and a recall of the case for no reason at all, merely by conceding the allegations attacking its order. We find no authority for that position and no legal error in the trial court's action. We therefore overrule the complaint that the trial court abused its discretion. See generally Landon v. Jean-Paul Budinger, Inc., 724 S.W.2d 931 (Tex.App.--Austin 1987, no writ); W. Wendell Hall, Revisiting Standards of Review in Civil Appeals, 24 St. Mary's L.J. 1045, 1050-53 (1993).

HEAT-SURGE VENT

In their point of error "I.A.1," Smith and Jackson complain the Commission violated an agency rule dealing with permit applications; Harris County raises the same complaint in its point of error sixteen. They refer to the following:

Houston Chemical plans to affix a heat-surge vent to the top of a rotary kiln in which will occur the first burning of the waste materials. The vent is a safety device, designed to open on an emergency basis to relieve pressure in the rotary kiln should the pressure rise to a dangerous level. Secondly, both the Commission and the Texas Air Control Board (the latter was a party in the contested case, owing to the air-quality aspects of the proposed facility) have a rule that provides:

The owner or operator must demonstrate that the facility or unit will not cause or contribute to a condition of air pollution as defined in the Texas Clean Air Act 31 Tex.Admin.Code §§ 120.31, 335.367(a)(2) (1989) (emphasis added). Finally, Houston Chemical, in its application and evidence, did not treat the heat-surge vent as a distinct and separate emissions source; hence the company made no showing of waste characteristics, emissions estimates, and dispersion modeling concerning the vent as an independent item. In submitting proposed findings of fact and conclusions of law to the Commission, the Air Control Board followed suit and did not treat the heat-surge vent as an independent emissions source. See Act § 361.073(e)-(g).

(TCAA). Such demonstration shall be based on waste characteristics, emissions estimates, and dispersion modeling and shall be submitted as part of the permit application.

In its findings, the Commission included the following ultimate fact: "Potential fugitive air emissions from the opening of the heat surge vent will not pose a threat to human health or the environment." This conclusion rests on the following rationale expressed in the Commission's findings of underlying fact: The vent will not open except under emergency conditions; the likelihood of an emergency will be minimized by the design of the facility; the waste-feed cut-off system will activate before the build-up of pressure reaches a level sufficient to open the heat-surge vent; and a separate modeling analysis for the vent, as an independent emissions source, is unnecessary because of the limited likelihood that the emergency heat-surge valve will ever open; however, owing "to the location of the heat surge vent [behind] the secondary combustion phase of the incineration system, the occurrence and nature of fugitive emissions resulting from an opening of the heat-surge vent will be monitored." The Commission's permit therefore requires continuous monitoring of the heat-surge vent as well as checks at fifteen-minute intervals for any emissions that might issue from the vent. If the vent should open, the permit requires that Houston Chemical notify the Board and the Commission within twenty-four hours, and provide within fifteen days a written report of the incident.

Smith, Jackson, and Harris County view as immaterial the Commission's foregoing justification regarding the heat-surge vent. They reason that Commission rule 335.367(a)(2) required three things: (1) that Houston Chemical demonstrate that the heat-surge vent "will not cause or contribute to a condition of air pollution"; (2) that any demonstration in that regard must "be based on waste characteristics, emissions estimates, and dispersion modeling" and no other basis is sufficient for the purpose; and (3) that the demonstration must "be submitted as part of the permit application."

We hold there was no prejudicial error. Under the Commission's rule 335.367(a)(2) and the Air Control Board's rule 120.31, the operator "must demonstrate that the facility or unit will not cause or contribute to" air pollution. (emphasis added). The emphasized words are defined in a way that includes equipment components such as a heat-surge valve, indicating that the requisite demonstration may be made for the facility or unit as a whole and not necessarily for each equipment component. See Act § 361.003(39).

More importantly, we believe the Commission was, in all events, free to depart from a...