State v. Associated Metals & Minerals Corp., A2408

• Decision Date: 01 April 1981
• Docket Number: No. A2408,A2408
• Citation: 616 S.W.2d 305
• Parties: STATE of Texas, Appellants, v. ASSOCIATED METALS & MINERALS CORPORATION, dba Gulf Chemical and Metallurgical Company, Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 305

616 S.W.2d 305

STATE of Texas, Appellants, v. ASSOCIATED METALS & MINERALS CORPORATION, dba Gulf Chemical and Metallurgical Company, Appellee.

No. A2408.

Court of Civil Appeals of Texas, Houston (14th Dist.).

April 1, 1981.

Rehearing Denied May 6, 1981.

Mark White, Atty. Gen., John W. Fainter, Jr., First Asst. Atty. Gen., Ted L. Hartley, Executive Asst. Atty. Gen., Douglas G. Caroom, Jim Mathews, Asst. Attys. Gen., Austin, James R. Ansell, Asst. County Atty., Galveston, for appellants.

F. Walter Conrad, Jr., Robert E. Morse, III of Baker & Botts, Houston, McLeod, Alexander, Powel & Apffel, Galveston, for appellee.

Before J. CURTISS BROWN, C. J., and PAUL PRESSLER and JUNELL, JJ.

J. CURTISS BROWN, Chief Justice.

This is an appeal by the State of Texas from the modification of an agreed judgment between the State and Gulf Chemical and Metallurgical Company pursuant to a suit brought by the Texas Air Control Board through the State for violations of the Texas Clean Air Act.

The State and Galveston County prosecuted an enforcement action against Associated Metals and Minerals, Inc., doing business as Gulf Chemical and Metallurgical Company (Gulf Chemical or Gulf), in August of 1975, alleging violations of the Texas Clean Air Act (the TCAA or the Act) at Gulf Chemical's Texas City tin smelting plant. At that time, the Texas City facility was equipped only with reverberatory furnaces, which were considered economically and environmentally obsolete.

Gulf applied to the Texas Air Control Board (the TACB or the Board) for a permit to build new smelting facilities at the Texas City plant, including a "Kaldo" furnace, designed to replace the out-dated reverberatory furnaces. The permit application specified that the Kaldo would be operated using the "oxide method" of volatilization and all data submitted were based on employing that method. Permit C-5094 was granted on February 28, 1977, enumerating the following requirements, among others: (1) Construction of the facilities had to be commenced within one year of the date of issuance or the permit would become invalid; (2) sampling, monitoring and testing of the emissions from the Kaldo and the facility were required; (3) both the Kaldo and the reverberatory furnaces had to be funnelled up the plant's 250-foot smokestack; (4) maximum opacity of the emissions from the 250-foot stack was limited to 20%; (5) the maximum sulfur dioxide emission rate from the Kaldo furnace was limited to 102 pounds per hour (lbs./hr.), and 175 parts per million (ppm) during any six-hour period or 300 lbs./hr. and 500 ppm during any two-hour period; (6) the maximum sulfur dioxide emission rate from the 250-foot stack was limited to 500 ppm during any six-hour period and 700 ppm during any two-hour period; (7) simultaneous operation of the Kaldo and the reverberatory furnaces was forbidden; and (8) operation of the reverberatory furnaces was forbidden except in the event the Kaldo became inoperable for a period of more than 24 hours.

On March 17, 1978, an agreed judgment was entered in the State's TCAA enforcement action. The judgment required Gulf to pay penalties of $62,500.00 to the State and $31,250.00 to Galveston County for violations of the Act. The judgment permanently enjoined Gulf Chemical from violating specific TACB rules and regulations limiting emissions rates. By injunction, it required Gulf to (1) construct and complete the Kaldo by March 1, 1979 within the specifications and limitations of Permit C-5094, (2) commence operation of the furnace within 90 days of completion, and (3) file an application for an operating permit within 60 days of the date that the Kaldo was first put into operation. The TACB was enjoined to consider the permit application and grant it within a reasonable time, if the furnace complied with Permit C-5094. The judgment further enjoined Gulf from violating other emissions limitations found in the TACB rules and regulations after the issuance of an operating permit.

Gulf Chemical completed the Kaldo furnace and, in October of 1978, commenced operations. During the first half of 1979, it became evident that the Kaldo would not function as expected. The furnace did not emit pollutants in excess of the TACB ceilings established by the rules and regulations and by the permit. However, it did not produce tin at the projected rates. Gulf calculated that, by using the oxide process (which was the basis of the permit application), the facility operated at a loss of $20,000.00 per day. The loses caused employee layoffs and threatened to force more layoffs and a shutdown of the entire plant. Gulf determined that the problem could be resolved by switching over to the "sulfide process," which required that pyrite, a sulfur compound, be injected into the Kaldo in the final stages of the smelting process.

Gulf expected to triple or quadruple its production rate with the new process. The process change did not require the addition of any equipment to the furnace; all necessary equipment was already in place. The oxide process required, "roasting" the pyrite out of the raw materials before smelting, causing sulfur dioxide emissions. The sulfide process did not require roasting. The emissions of both the roasting process and the Kaldo operation were routed up the same 250-foot stack. The sulfide process produced short-term peak emissions in excess of the special provisions of Permit C-5094. The evidence supports the conclusion that during any 24-hour period, total emissions would be substantially the same regardless of the process employed. The construction permit allowed 11,300 lbs./hr. of the sulfur dioxide per day. The sulfide process emissions rate was estimated to be 1,956 ppm during any two-hour period. The new particulate emissions were expected. There was evidence that the effect on the ambient air quality of Texas City would be, in a worst case scenario, to raise the sulfur dioxide levels from one-fifth to one-fourth of the State and Federal standards.

Gulf, therefore, had a series of meetings with the staff of both the TACB and the office of the Attorney General during the period beginning in December of 1979 and ending in early February of 1980 to discuss the proposed process change. Gulf was notified that the State would not agree to a modification of the original agreed judgment. On the same day, Gulf filed a motion to modify the court judgment. On February 29, 1980, the court entered a modified judgment.

The modified judgment allowed Gulf to begin using the sulfide process immediately. It required Gulf to commence construction of a "sulfur scrubber/recovery unit," which would significantly reduce sulfur dioxide emissions. The judgment (1) allowed Gulf to emit sulfur dioxide from its 250-foot stack at a rate of 3500 ppm during any two-hour period (the statewide standard established by the TACB rules and regulations), (2) prohibited Gulf from simultaneously operating the Kaldo and performing roasting operations, (3) required Gulf to apply to the TACB for a modified construction permit within two weeks of the date of judgment and (4) temporarily stayed special provisions 2, 13, 14 and 17 of Permit C-5094, containing the maximum sulfur dioxide emission rate limitations and monitoring and sampling requirements. The judgment was, by its own terms, to operate only until December 1, 1980. The judgment provided for an extension in the event that the TACB failed to act on the application for a modified permit by December 1, 1980.

The State appealed and filed notice of supersedeas. This court granted Gulf's motion for a temporary stay of the supersedeas to protect our jurisdiction. 595 S.W.2d 924. The State then applied to the Supreme Court for a writ of mandamus to set aside the stay, which was denied. So far as the record shows, the TACB has not acted on Gulf's application for a modified permit and Gulf has not installed the sulfur scrubber/recovery unit.

The State appeals from the modified judgment on the grounds that (1) the trial court had no jurisdiction to modify because exclusive jurisdiction to modify lay with the TACB, (2) the trial court erred in modifying the judgment because it balanced the equities of the case, contrary to case law and the provisions of the statute, (3) by allowing the use of the sulfide process, the court suspended a law of the state, thereby violating Article 1, § 28 of the state constitution and (4) by declaring unenforceable Special Provisions, 2, 13, 14, and 17 of Permit C-5094, the court usurped the legislative function, thereby violating Article II, § 1 of the state constitution.

The TCAA establishes the Board as the authority for protecting air quality by establishing pollution standards and emission limitations. Tex.Rev.Civ.Stat.Ann., art. 4477-5, § 1.05 (Vernon 1976). The Board acts as an agency of the State. Tex.Rev.Civ.Stat.Ann., art. 4477-5, § 2.01 (Vernon 1976). The TACB is directed to establish air quality standards and to control air quality "by all practical and economically feasible methods consistent with ... (its) powers and duties...." Tex.Rev.Civ.Stat.Ann., art. 4477-5, § 3.01 (Vernon 1976). To accomplish its objective, the Board is empowered to develop a comprehensive air quality control plan, inventory emissions, research, enter property, monitor emissions, make rules and regulations, enter orders, declare emergency conditions, conduct hearings, make fact-findings, conduct investigations, grant permits and variances, and, above all, enforce the Act and the Board's rules and regulations. Tex.Rev.Civ.Stat.Ann., art. 4477-5, §§ 3.02-3.29 (Vernon 1976 and Vernon Supp. 1980-81).

The enforcement provisions authorize the Board, through the State, to cause the institution of a civil suit to compel compliance with the Act either by seeking injunctions to halt past, present or threatened violations of the Act or by seeking civil penalties for such violations, or both. Tex.Rev.Civ.Stat.Ann.,...