Opinion
NO. 03-16-00270-CV
12-15-2016
AC Interests L.P., formerly American Coatings, L.P., Appellant v. Texas Commission on Environmental Quality, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT
NO. D-1-GN-15-000779, HONORABLE GISELA D. TRIANA, JUDGE PRESIDINGMEMORANDUM OPINION
AC Interests L.P., formerly American Coatings, L.P. ("AC Interests") filed an application for emission credits with the Texas Commission on Environmental Quality (the "Commission"). After reviewing the application, a deputy director for the Commission denied the application. At some point after receiving the denial, AC Interests sought to challenge the denial through various administrative means and ultimately filed a suit for judicial review. In response to the suit, the Commission filed a plea to the jurisdiction arguing that AC Interests' suit was not timely filed. After considering the arguments by the parties and convening a hearing on the plea, the district court granted the Commission's plea. In eight issues on appeal, AC Interests argues that its suit for judicial review was timely, that its due-process rights have been violated, and that its constitutional right to a jury trial has been violated. We will affirm the district court's order granting the Commission's plea to the jurisdiction.
BACKGROUND
The dispute in this case stems from the air-emission-credit program established by the Commission. See 30 Tex. Admin. Code §§ 101.300-.311 (2016) (Tex. Comm'n on Envtl. Quality). The purpose of the voluntary program "is to allow the owner or operator of a facility or mobile source to generate emission credits by reducing emissions beyond the level required by any applicable local, state, or federal requirement and to allow the owner or operator of a facility or mobile source to use these credits." Id. § 101.301 (2016) (Tex. Comm'n on Envtl. Quality, Purpose). "An emission credit . . . is a limited authorization to emit" pollutants identified by the Commission. Id. § 101.302(i) (2016) (Tex. Comm'n on Envtl. Quality, General Provisions). If an owner obtains credits, he is allowed to transfer any or all of the credits, including by trading the credits or selling them. Id. § 101.309(d) (2016) (Tex. Comm'n on Envtl. Quality, Emission Credit Banking and Trading). Emission credits may be used in various manners, including as "offsets for a new source." Id. § 101.306(a) (2016) (Tex. Comm'n on Envtl. Quality, Emission Credit Use).
Under the governing rules, AC Interests applied for emission-reduction credits. On November 19, 2014, the Deputy Director for the Office of Air of the Commission sent a letter to AC Interests denying the application. The letter specified that the action was being "taken under authority delegated by the executive director of the" Commission. On December 10, 2014, AC Interests filed a suit for judicial review challenging the denial of its application for credits. See Tex. Health & Safety Code § 382.032(a). After AC Interests filed its petition, the Commission filed a motion to dismiss, and a district court granted the motion on March 4, 2015. That decision was upheld by one of our sister courts of appeals on the ground that AC Interests failed to timely serve the Commission. See AC Interests L.P. v. Texas Comm'n on Envtl. Quality, No. 01-15-00378-CV, 2016 WL 636546, at *4 (Tex. App.—Houston [1st Dist.] Feb. 11, 2016, pet. filed) (mem. op.); see also Tex. Health & Safety Code § 382.032(c) (stating that "[s]ervice of citation on the commission must be accomplished within 30 days after the date on which the petition is filed").
In this appeal, AC Interests filed a reply brief challenging the district court's decision to grant the Commission's motion to dismiss. Essentially, AC Interests contends that the district court dismissed the suit under Rule of Civil Procedure 91a but urges that the requirements of that rule were not met. See Tex. R. Civ. P. 91a (allowing party to "move to dismiss a cause of action on the grounds that it has no basis in law or fact"). In presenting its claims, AC Interests does not urge in its reply brief that it is seeking to collaterally attack the district court's judgment and is instead simply urging that the district court's judgment was incorrect. See PNS Stores, Inc. v. Rivera, 379 S.W.3d 267, 272 (Tex. 2012) (setting out circumstances in which judgment may be collaterally attacked and noting that "[a] void judgment . . . can be collaterally attacked at any time"). However, as set out above, the propriety of that ruling by the district court is not before this Court in this appeal, and that decision by the district court has been upheld by one of our sister courts of appeals. See AC Interests L.P. v. Texas Comm'n on Envtl. Quality, No. 01-15-00378-CV, 2016 WL 636546, at *4 (Tex. App.—Houston [1st Dist.] Feb. 11, 2016, pet. filed) (mem. op.). Accordingly, we need not reach the arguments contained in AC Interests' reply brief. See Tex. R. App. P. 47.1 (stating that opinions need only address issues necessary to disposition of appeal).
After filing the suit for judicial review discussed above, AC Interests sent a letter on January 28, 2015, to the Executive Director for the Commission "requesting a reconsideration and reversal" of the Deputy Director's denial of the emission-credit application. Further, the letter stated that if the Executive Director did not respond within 30 days, AC interests "will presume that" the decision of the Deputy Director will not be reversed and that at that time, "all administrative remedies will have been exhausted." Following that letter, on March 2, 2015, AC Interests filed with the Chairman and Commissioner of the Commission an "Appeal, Motion to Overturn and Hearing Request on the Executive Director's Decision."
Shortly before filing its motion to overturn and hearing request with the Commissioner, AC Interests filed another suit for judicial review on February 26, 2015, and that suit is the subject of this appeal. In its petition, AC Interests acknowledged that it had previously filed a suit for judicial review of the Commission's decision to deny its application for credits, but AC Interests asserted that it filed that prior suit on the assumptions that the Deputy Director was able to act on behalf of the Commission and that the Deputy Director's letter was a final agency action that was subject to appeal. Further, AC Interests explained that it believed that both of those assumptions were incorrect because the Deputy Director's letter "cannot constitute final agency administrative action on the matter" and because not all of the "administrative remedies available within the" Commission had been exhausted when it filed the first suit.
In response, the Commission filed a plea to the jurisdiction asserting that AC Interests' suit for judicial review had not been filed within 30 days of the ruling on the credit application as set out by the governing statutes. See Tex. Health & Safety Code § 382.032(a)-(b). Further, although the Commission acknowledged the January 28, 2015 letter requesting reconsideration of the denial and the March 2, 2015 motion seeking to overturn and appeal the denial, the Commission contended that those filings may not be used to challenge a denial of an application for emission credits. Alternatively, the Commission asserted that they were not timely filed.
After considering the arguments by the parties and after convening a hearing on the Commission's plea, the district court granted the Commission's plea. AC Interests appeals the district court's ruling.
STANDARD OF REVIEW AND GOVERNING LAW
"Subject matter jurisdiction presents a question of law" that appellate courts "review de novo." City of Houston v. Rhule, 417 S.W.3d 440, 442 (Tex. 2013). Accordingly, appellate courts perform a de novo review of a trial court's ultimate ruling on a plea to the jurisdiction. Westbrook v. Penley, 231 S.W.3d 389, 394 (Tex. 2007); see Harris Cty. v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004) (explaining that "[a] plea to the jurisdiction is a dilatory plea that seeks dismissal of a case for lack of subject matter jurisdiction"). When performing this review, courts look to the plaintiff's petition to determine "whether the facts pled affirmatively demonstrate that jurisdiction exists." State v. Holland, 221 S.W.3d 639, 642 (Tex. 2007). "If the pleadings are insufficient to establish jurisdiction but do not affirmatively demonstrate an incurable defect, the plaintiff should be afforded the opportunity to replead." Id. at 643. However, if "the pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be granted without allowing the plaintiffs an opportunity to amend." Texas Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 227 (Tex. 2004). When, as here, "an action is grounded in statute, subject matter jurisdiction must be shown under the applicable statute." Arnold v. Price, 365 S.W.3d 455, 459 (Tex. App.—Fort Worth 2011, no pet.).
The central question to be decided in this case is whether AC Interests timely sought judicial review of a final agency determination. "'An appeal from an administrative agency is not a matter of right, it is set out by statute and must be strictly complied with in order to vest the district court with jurisdiction.'" Jones v. State Bd. of Educator Certification, 315 S.W.3d 237, 243 (Tex. App.—Austin 2010, pet. denied) (quoting Texas Alcoholic Beverage Comm'n v. Sfair, 786 S.W.2d 26, 27 (Tex. App.—San Antonio 1990, writ denied) (per curiam)). Both parties agree that the statute setting out the right to judicial review in this case is set out in the portion of the Health and Safety Code containing the Clean Air Act. See Tex. Health & Safety Code §§ 382.001-.510 (containing Clean Air Act); cf. City of Austin v. Texas Comm'n on Envtl. Quality, 303 S.W.3d 379, 382 n.4 (Tex. App.—Austin 2009, no pet.) (noting that case was not contested case and, therefore, that case was governed by provisions of the Water Code rather than provisions of Administrative Procedures Act); West v. Texas Comm'n on Envtl. Quality, 260 S.W.3d 256, 261(Tex. App.—Austin 2008, pet. denied) (explaining that Water Code "is not silent" regarding right to judicial review and that, therefore, provisions of Administrative Procedures Act regarding judicial review do not apply). Under section 382.032 of the Health and Safety Code, "[a] person affected by a ruling, order, decision, or other act of the commission or of the executive director, if an appeal to the commission is not provided, may appeal the action by filing a petition in a district court of Travis County," and "[t]he petition must be filed within 30 days after the date of the commission's or executive director's action" or within 30 days of "the effective date of the ruling, order, or decision." Tex. Health & Safety Code § 382.032(a)-(b). Moreover, depending on the language of the governing laws, "the fact that administrative review was sought [might] not foreclose judicial review ceasing to be available." See City of Austin, 303 S.W.3d at 384; Heat Energy Advanced Tech., Inc. v. West Dall. Coal. for Envtl. Justice, 962 S.W.2d 288, 290-93 (Tex. App.—Austin 1998, pet. denied) (recognizing that, depending on applicable statutes and rules, judicial-review timetable for challenging agency action can expire before administrative remedies have been exhausted).
In its petition, AC Interests also urged that the suit for judicial review was governed by provisions of the Water Code pertaining to determinations made by the Commission. See Tex. Water Code § 5.351 (providing that "[a] person affected by a ruling, order, decision, or other act of the commission may file a petition to review, set aside, modify, or suspend the act of the commission" and "must file his petition within 30 days after the effective date of the ruling, order, or decision"). Because both the Water Code and the Health and Safety Code require that a person file a suit for judicial review within 30 days of an agency determination, see Tex. Health & Safety Code § 382.032(a)-(b); Tex. Water Code § 5.351, and because the application at issue concerned credits for emissions in the air, we will assume for the sake of argument that this suit was filed under the provisions of the Clean Air Act in the Health and Safety Code.
DISCUSSION
Timeliness
In six issues on appeal, AC Interests contends that the district court erred by granting the plea. When presenting these issues, AC Interests generally asserts that it timely filed its suit for judicial review within 30 days of the denial becoming final. More specifically, AC Interests contends that the denial by the Deputy Director did not constitute a final agency determination and did not start the deadline for filing a suit for judicial review because the Deputy Director lacked the final decision-making authority regarding credit applications, because the denial notice was defective, because the Deputy Director cannot supplant the Executive Director's authority, and because any decision made by the Deputy Director is reviewable by the Executive Director and by the Commission. Moreover, AC Interests urges that the governing rules required it to seek further administrative review of the denial of its credit application and, accordingly, that the 30-day period for filing a suit for judicial review did not start to run until after AC Interests fully exhausted its administrative remedies. When making these claims, AC Interests presents several sets of interrelated arguments.
First, AC Interests asserts that the "Deputy Director lacked final decision-making authority" to deny its application for credits and that the Deputy Director's decision was reviewable by the Executive Director. AC Interests notes that the governing rules provide that an "applicant will be notified in writing if the executive director denies the emission credit application" and asserts that without a signature by the Executive Director, a denial letter is not effective. See 30 Tex. Admin. Code § 101.302(e)(3). Further, AC Interests contends that the Executive Director has the authority to review determinations made by deputy directors and that, therefore, the Deputy Director's letter could not have been the final determination on its application. When presenting these arguments, AC Interests acknowledges that the Executive Director has the authority to delegate authority to deputy directors and other staff members, but it insists that the Executive Director has not delegated the responsibility of denying emission-credit applications. Accordingly, AC Interests urges that the denial letter "was not a final order" and was, therefore, "appealable to the Executive Director." In light of these assertions, AC Interests insists that "the effective final date of the Deputy [Director]'s November 19, 2014 emission credit denial" was "30 days after the Executive Director failed to respond to AC Interests' January 28, 2015 letter asking for reconsideration of the Deputy Executive Director's November 19, 2014 decision." With that timeline serving as the basis for its assertions, AC Interests contends that its suit for judicial review was timely filed.
Subsection 101.302(e)(3) was amended after AC Interests' application was denied, and the amendment added additional language that is not relevant to any of the issues present in this appeal. Compare 30 Tex. Admin. Code § 101.302(e)(3) (2016) (Tex. Comm'n on Envtl. Quality, General Provisions), with 31 Tex. Reg. 3492 (2006), adopted 31 Tex. Reg. 8684 (2006). Accordingly, we will refer to the current version of the subsection in this appeal.
In its brief, AC Interests refers to West v. Texas Commission on Environmental Quality, 260 S.W.3d 256 (Tex. App.—Austin 2008, pet. denied), and asserts that in that case this Court determined that a decision does not become final unless the Executive Director signs the decision. Although we did conclude in that case that the effective date for the determination regarding a permit became effective "when signed by the executive director" and that the effective date started the 30-day period for seeking judicial review, id. at 260; see also 30 Tex. Admin. Code § 50.135 (2016) (Tex. Comm'n on Envtl. Quality, Effective Date of Executive Director Action) (stating that "permit or other approval is effective when signed by the executive director, unless otherwise specified in the permit"), that case did not present a situation in which the Executive Director delegated signatory authority for the determination to a deputy director.
As set out above, there is no dispute in this case regarding whether the Executive Director has the statutory authority to delegate various powers to deputy directors. In fact, the Executive Director has the statutory authority to "delegate to the executive director's staff any authority or duty assigned to the executive director unless the statute, rule, or order assigning or delegating the authority or duty specifies otherwise." Tex. Water Code § 5.222. There is no statutory provision prohibiting the Executive Director from delegating responsibility over application denials to the Deputy Director, and nothing in the rule pertaining to denials of emission-credit applications prohibits a delegation of that responsibility either. Although AC Interests correctly points out that the rule states that an applicant will be notified if the Executive Director denies an application, the rule does not state that the Executive Director must personally sign the denial for it to be effective. See 30 Tex. Admin Code § 101.302(e)(3). Furthermore, another provision of the Administrative Code explains that use of the phrase "executive director" in a rule refers to the "executive director of the commission, or any authorized individual designated to act for the executive director." Id. § 3.2 (2016) (Tex. Comm'n on Envtl. Quality, Definitions). Accordingly, we conclude that the Executive Director has the authority to delegate responsibility over application denials to the Deputy Director.
Having determined that the Executive Director has the ability to delegate, we must now consider whether he did in fact delegate the authority at issue. Prior to the denial at issue, the Executive Director sent a memorandum to several deputy directors, including the one at issue here, specifically delegating "the Executive Director's signatory authority for the permits, authorizations, and approvals" for the programs that the deputy directors were responsible for and that have not been "specifically excluded from delegation of signatory authority by the Executive Director." Moreover, as discussed earlier, the denial letter stated that the denial was "taken under authority delegated by the executive director of the" Commission. For these reasons, we conclude that the Executive Director did delegate to the Deputy Director the authority to deny emission applications.
In its brief, AC Interests contends that the memorandum from the Executive Director did not grant signatory authority of emission-credit-application denials. First, it notes that in the attachment to the memorandum that more specifically sets out the delegated authority for each division of the Commission, the Executive Director stated that deputy directors will have signature authority for matters that "are specifically subdelegated to lower management levels" and then urges that authority over emission-credit denials was not subdelegated to lower management. However, as set out above, the attachment also provided that deputy directors have signatory power for "[a]ll permits, authorizations, and approvals related to the program for which the Deputy Director is responsible that" have not been "specifically excluded from delegation of signatory authority by the Executive Director." In light of this broad language, the fact that responsibility for issuing denial letters has not been specifically subdelegated to management below the Deputy Director would not seem dispositive of whether the Deputy Director has signatory authority over emission-credit denials.
Alternatively, AC Interests contends that any authority given by the memorandum was limited to "approvals," which it asserts cannot include denials of applications for emission credits, and notes that the portion of the attachment pertaining to the Office of Air does not list any type of denials. Further, AC Interests contends that the omission makes sense because denials "should be subject to a higher level of scrutiny than a typical 'Approval.'" As support for this last argument, AC Interests notes that in the portion of the attachment discussing revocations, which AC Interests asserts are similar to denials, authorization over revocations was limited to revocations that were requested or consented to. Finally, AC Interests highlights that in the portion of the attachment pertaining to the Office of Waste and setting out what responsibilities may be subdelegated by that office's deputy director, the Executive Director listed "LowLevel Radioactive Waste Disposal Approvals or Denials" but made no similar mention of denials for the Office of Air. (Emphasis added).
Although neither the memo nor the portion of the attachment pertaining to the Office of Air uses the word "denials," they did specify that deputy directors will have authority over "permits, authorizations, and approvals related to the program for which" a particular deputy director oversees. In other words, the memo gave the deputy directors authority over the requests for permits, authorizations, or approvals that are made to their divisions. That language would seem broad enough to include denials of those types of requests. In fact, as pointed out by AC Interests, the attachment itself lists certain revocations and denials, which would not seem to qualify as "approvals" under AC Interests' construction, as items over which the deputy directors could subdelegate authority over. In addition, even though the attachment only lists consensual or requested revocations, as AC Interests points out, that limitation makes sense given that those entries were not listed in the general powers of each deputy director but in the portion of the attachment setting out the signatory responsibilities that each deputy director could delegate to individuals in his or her division, including section managers and team leaders. Accordingly, we do not agree with AC Interests' assertion that the inclusion of those types of revocations demonstrates that denials are necessarily more complex or require a higher level of scrutiny than approvals, and we can find nothing in the record that has been given to this Court that would otherwise support that assertion.
Finally, AC Interests contends that the delegation memorandum cannot support a determination that the Deputy Director was acting in place of the Executive Director when denying the application because the memorandum was not "subject to public notice and comment" and because the contents are not readily available to the general public or to practitioners. In making this claim, AC Interests does not refer to any supporting authority. Moreover, given that the Executive Director has been given the authority to delegate responsibilities to others in the Commission, it is not entirely clear why public notice and an opportunity to comment would be needed or why the internal document would need to be publicized to be effective. Further, as set out above, the denial letter itself specified that the responsibility for deciding whether to grant the application had been delegated to the Deputy Director by the Executive Director.
In its next set of arguments, AC Interests contends that even if the Executive Director did delegate his authority over these matters to the Deputy Director, the denial letter from the Deputy Director in this case could not have been the final agency determination because "it lacked sufficient procedural warnings to put AC Interests on notice that administrative remedies had been exhausted" and because the letter did not contain "a description of the steps required to appeal the denial."
Although AC Interests contends that a determination cannot be final unless it specifies the steps for challenging the determination, it did not refer to any statutes, rules, or case law supporting that proposition in this context. Cf. Hernandez v. Texas Dep't of Ins., 923 S.W.2d 192, 196 (Tex. App.—Austin 1996, no writ) (determining that agency's failure to provide notice that motion for rehearing filed under Administrative Procedures Act had been overruled by operation of law did not excuse applicant from timely complying "with statutory deadlines for seeking judicial review of the Commissioner's revocation order"). Moreover, as set out in more detail later, it appears that the governing statutes and rules contemplate that the appealable event occurred when the denial was made and require that a suit for judicial review be filed within 30 days of the denial, which AC Interests complied with in the prior suit. See Tex. Health & Safety Code § 382.032(a)-(b). In addition, the denial letter indicated that the determination was effectively made by the Executive Director by specifying, as set out above, that the denial had been made under authority delegated by the Executive Director to the Deputy Director. Further, as set out earlier, although the Administrative Code stated that a party will be informed if the Executive Director denies the application, 30 Tex. Admin. Code § 101.302(e)(3), the Executive Director has the authority to delegate responsibilities, including decision-making authority over applications, and did so.
Accordingly, AC Interests was provided with the written denial notice contemplated by the Administrative Code and was on notice of the need to challenge that determination if it so desired. Cf. Commercial Life Ins. Co. v. Texas State Bd. of Ins., 774 S.W.2d 650, 652 (Tex. 1989) (explaining that "duty of the agency to provide notice serves the critical function of informing the aggrieved party of the date on which the time period for filing the motion for rehearing begins to run" and that notice is designed "to ensure that a party's ability to seek judicial review of agency orders and decisions will not be compromised solely because of the agency's failure to give notice of the order").
In another set of arguments, AC Interests asserts that even if the Deputy Director had authority over the denial in question and if the denial letter was proper, AC Interests could not have properly sought judicial review of the denial without first exhausting its administrative remedies by seeking further administrative review of the decision. See Rhule, 417 S.W.3d at 442 (explaining that if party files suit before exhausting administrative remedies, court "must dismiss the case"); In re Southwestern Bell Tel. Co., L.P., 235 S.W.3d 619, 625 (Tex. 2007) (orig. proceeding) (stating that "[i]f an agency has exclusive jurisdiction to resolve a dispute, a party must first exhaust administrative remedies before a trial court has subject matter jurisdiction"). Moreover, AC Interests contends that it satisfied this obligation when it sent a letter to the Executive Director on January 28, 2015, challenging the denial by the Deputy Director. In light of that letter, AC Interests argues that there was no final determination on its application until 30 days later, which was February 27, 2015, after the Executive Director failed to take any action. Further, it asserts that it timely filed its suit for judicial review within 30 days of that alleged final determination.
The Administrative Code does have a provision authorizing applicants to "file . . . a motion to overturn the executive director's action on an application or water quality management plan (WQMP) update certification." 30 Tex. Admin. Code § 50.139(a) (2016) (Tex. Comm'n on Envtl. Quality, Motion to Overturn Executive Director's Decision). Further, the provision requires that the "motion to overturn . . . be filed no later than 23 days after the date the agency mails notice of the signed permit, approval, or other action of the executive director" and excuses the need for filing "a motion for rehearing . . . as a prerequisite for appeal" if the motion is denied by operation of law. Id. § 50.139(b), (g). In addition, the provision explains that "if a motion to overturn is not acted on by the commission within 45 days after the date the agency mails notice of the signed permit, approval, or other action of the executive director, the motion is denied" unless an extension is granted. Id. § 50.139(f)(1).
However, that provision specifies that "[a]n action by the executive director under this subchapter is not affected by a motion to overturn filed under this section unless expressly ordered by the commission." Id. § 50.139(d). Moreover, another rule specifies that the subchapter containing the motion-to-overturn provision does not apply to "actions of the executive director" regarding emission credits, id. § 50.131(c)(5) (2016) (Tex. Comm'n on Envtl. Quality, Purpose and Applicability) (specifying that subchapter does not apply to actions taken under chapter 101), and we have found no other rule authorizing the filing of a motion to overturn in these circumstances, cf. Texas Comm'n on Envtl. Quality v. Kelsoe, 286 S.W.3d 91, 95, 96 (Tex. App.—Austin 2009, pet. denied) (noting that nothing in relevant rules or statutes regarding "executive director's decision of administrative incompleteness" "makes [Commission]'s notice of its decision on motion to overturn a triggering event for seeking judicial review" and that rules at issue in case did "not allow for a motion to overturn the director's decision").
Even assuming that motions to overturn are authorized and that the letter that AC Interests sent qualifies as a motion to overturn, the letter was not timely because it was not sent within 23 days of the denial as required by the rule and was instead filed weeks later. See 30 Tex. Admin. Code § 50.139(b); see also Kelsoe, 286 S.W.3d at 97 (stating that motion to overturn filed outside 23-day deadline was defective and that petition for judicial review was untimely). In any event, even assuming that a timely and qualifying motion to overturn had been filed, that would likely not have excused failing to file a suit for judicial review within 30 days of the denial because motions to overturn do not, as discussed above, affect the decision by the Executive Director unless the Commission provides otherwise. See 30 Tex. Admin. Code § 50.139(d); see also City of Austin, 303 S.W.3d at 383-84 (explaining that filing motion to overturn did "not affect the effectiveness of the executive director's decision unless so ordered by the Commission" and that under section 5.351 of Water Code, petition for judicial review must "be filed within 30 days of the date of issuance of" decision issued by Executive Director under chapter 213 of Commission's rules "unless the Commission expressly stays the effective date of the decision"). Nothing in the provision pertaining to denials of emission-credit applications indicates that the effective date of the denial is anything other than the date on which the determination is made. Cf. City of Austin, 303 S.W.3d at 382-83 (concluding that although governing rules did "not define a decision's effective date, chapter 213 indicates that the executive director's approval is the relevant action governing the applicant's subsequent obligations and deadlines").
In its last set of arguments in these issues, AC Interests insists that the denial by the Deputy Director could not have been the final and appealable determination because the governing rules compel a conclusion that the Commission itself must "be issuing Emission Credits and Emission Credit denials" rather than the Executive Director or the Deputy Director and further asserts that because the Commission makes the ultimate determination, the rules allowing for requests for reconsideration and for contested-case hearings before the Commission also apply. In addition, AC Interests highlights that it filed a request for reconsideration and a request for a contested-case hearing on March 2, 2015, and urges that the requests were denied by operation of law on May 14, 2015, that the denial by operation of law constituted a final determination, and that AC Interests' amended petition seeking judicial review was timely filed within 30 days of the final determination.
When presenting these arguments, AC Interests refers to section 50.113 of title 30 of the Administrative Code, which generally specifies when the Commission may act on applications and other authorizations. See 30 Tex. Admin. Code § 50.113 (2016) (Tex. Comm'n on Envtl. Quality, Applicability and Action on Application); see also id. § 50.102(a) (2016) (Tex. Comm'n on Envtl. Quality, Applicability) (providing that subchapters E through G of chapter 50 "apply to any applications that are declared administratively complete on or after September 1, 1999," and that earlier applications are governed by subchapters A through C); id. § 50.117(a) (2016) (Tex. Comm'n on Envtl. Quality, Commission Actions) (listing actions that Commission may take including granting or denying application). In particular, that provision specifies that "[a]fter the deadline for filing a request for reconsideration or contested case hearing" has passed, "the commission may act on an application without holding a contested case hearing or acting on a request for reconsideration" if certain criteria are met, including no timely request for reconsideration or for a contested-case hearing having been filed. Id. § 50.113(c). In addition, the provision states that the Commission may "[w]ithout holding a contested case hearing . . . act on . . . other types of applications where a contested case hearing request has been filed but no opportunity for hearing is provided by law." Id. § 50.113(d)(9).
Next, AC Interests points to a provision in the same subchapter as the rules above that "delegate[s] authority to the executive director[,] . . . specif[ies] applications on which the executive director may take action on behalf of the commission[,]" and lists various permits and certificates to which the provision applies. Id. § 50.131(a)-(b). Moreover, AC Interests highlights that the provision expressly states, as discussed earlier, that the subchapter "does not apply to," among other things, "actions of the executive director under Chapter[] 101," see id. § 50.131(c)(5), and that chapter 101 includes the emission provisions at issue in this case, see id. §§ 101.330-.339. In addition, that provision explains that "[n]otwithstanding" the section discussed above listing various permits or applications that are not governed by the subchapter, "when the rules governing a particular type of application allow a motion for reconsideration, § 50.139(b)-(f) of this title (relating to Motion to Overturn Executive Director's Decision) applies." Id. § 50.131(d).
Finally, AC Interests points to the provision of the Administrative Code generally allowing a party to file a motion to overturn the Executive Director's "action on an application," explaining that a motion to overturn is treated the same as a motion for reconsideration, setting the deadline by which a motion to overturn must be filed, specifying how the motion will be disposed, stating that a motion for rehearing does not need to be filed "as a prerequisite for appeal" if the motion to overturn is denied by operation of law, and providing that the Commission's "decision may be subject to judicial review." See id. § 50.139.
In light of the provision instructing that the subchapter delegating authority to the Executive Director did not apply to, among other things, actions regarding emission credits, AC Interests insists that "a determination by the Executive Director" regarding emission credits is simply an "'advisory opinion'" and that the Commission would, therefore, have to "be the final authority for the issuance of any . . . emission credit applications" and "be issuing Emission Credits and Emission Credit denials" under sections 50.113 and 50.117 of the Administrative Code, which set out when and how the Commission may act on applications. See id. §§ 50.113, .117. Moreover, in light of the fact that section 50.113 incorporates the deadlines for filing "a request for reconsideration or contested case hearing under § 55.201" when explaining the time period in which the Commission may act on an application, see id. § 50.113(c), AC Interests contends that section 55.201 applies to emission-credit determinations. Section 55.201 authorizes the filing of a request for reconsideration or contested case hearing and states that the request "must be filed no later than 30 days after the chief clerk mails (or otherwise transmits) the executive director's decision and response to comments and provides instructions for requesting that the commission reconsider the executive director's decision or hold a contested case hearing." Id. § 55.201(a) (2016) (Tex. Comm'n on Envtl. Quality, Requests for Reconsideration or Contested Case Hearing).
In a related set of arguments, AC Interests refers to the portion of the rule stating that an applicant will be notified by the Executive Director if he denies the emission-credit application and highlights that the provision also specifies that "[t]he applicant may submit a revised application in accordance with the requirements of this division." See 30 Tex. Admin. Code § 101.302(e)(3). Based on the fact that the rule allows an applicant to reapply and does not contain any express deadline for reapplying or set a limit on the number of revised applications that may be filed, AC Interests urges that an applicant must file a motion to overturn in order to make the decision become final. See 30 Tex. Admin. Code § 50.139(b) (2016) (Tex. Comm'n on Envtl. Quality, Motion to Overturn Executive Director's Decision) (setting out when motion to overturn must be filed).
However, as set out above, the rules do not seem to authorize the filing of a motion to overturn in this context. Moreover, we believe that the rule specifying that the Executive Director will inform applicants when an application is denied and that the applicant may submit a revised application must also be read in conjunction with the statute requiring parties affected by a decision of the Executive Director to file a suit for judicial review within 30 days of the determination. See Tex. Health & Safety Code § 382.032(a)(b). Accordingly, assuming for the sake of argument that a revised application could extend the deadline for filing a suit for judicial review beyond the 30 days from the initial denial, it seems logical to assume that the revised application would have to be filed within 30 days of the initial denial in order to avoid losing the ability to seek review of the denial. In any event, AC Interests did not file this lawsuit within 30 days of the denial and does not assert that it filed a revised application after receiving the denial that serves as the basis for this suit.
We disagree with AC Interests' construction of the various rules discussed above and its assertion that the Commission itself must have become involved in the denial process before an applicant may seek judicial review of a credit-application denial. Although many of the rules relied on by AC Interests set out circumstances in which the Commission may act on certain types of applications, the rules also, as discussed above, specify situations in which the Executive Director is authorized to act on applications. Moreover, although AC Interests correctly points out that the rule generally listing the types of applications that the Executive Director may act on states that the rule does not apply to actions under chapter 101, including emission-credit applications, the rule also states that "[t]his subchapter does not affect the executive director's authority to act on an application where that authority is delegated elsewhere." 30 Tex. Admin. Code § 50.131(a). Of importance here, section 101.302 specifically empowers the Executive Director to deny an emission-credit application, and nothing in that provision indicates that the Executive Director's determination is anything other than a final determination invoking the 30-day deadline for seeking judicial review. See id. § 101.302(e)(3). Accordingly, we find AC Interests' reliance on the provisions setting out the circumstances in which the Commission may act on applications to be misplaced.
Further, we note that unlike the provisions pertaining to actions by the Commission that directly incorporate the deadlines for filing a motion for reconsideration, motion to overturn, or request for a contested-case hearing, see id. § 50.113(c), the provision regarding emission-credit-application denials does not similarly authorize those types of challenges, see id. § 101.302. This absence is especially noteworthy in light of the language in section 50.131 specifying that the rule relating to motions to overturn decisions by the Executive Director applies "when the rules governing a particular type of application allow a motion for reconsideration." See id. § 50.131(d); see also 30 Tex. Admin. Code § 55.201(i)(10) (stating that "there is no right to a contested case hearing" for "applications where a contested case hearing request has been filed, but no opportunity for hearing is provided by law"). Even assuming that those types of review were authorized and required, AC Interests did not timely seek those types of relief. See id. §§ 50.139(b) (requiring "motion to overturn [to] be filed no later than 23 days after the date the agency mails notice of the signed permit, approval, or other action of the executive director to the applicant"), 55.201(a), (g) (stating that "[a] request for reconsideration or contested case hearing must be filed no later than 30 days after the . . . executive director's decision" but allowing Commission to extend deadline).
We note that section 382.061 of the Clean Air Act specifies that "[a]n applicant or a person affected by a decision of the executive director may appeal to the commission any decision made by the executive director . . . under Sections 382.051-382.055 and 382.059." Tex. Health and Safety Code § 382.061(b). Neither party asserts that this statute applies to determinations regarding the types of emission-credit applications at issue in this case, and the focus of most of the statutory provisions for which the right to appeal is allowed seems to address permits for new construction or modifications to existing structures. See id. §§ 382.051-.055, .059. Although one of the statutes in the listed span mentions "emission reduction credits," those credits are for emission-reduction-construction projects and unlike the credits at issue in this case, "are not transferrable." See id. § 382.05193. In any event, even assuming section 382.061 authorized an appeal of the denial of an application for an emission credit, see id. § 382.061, that provision would have to be harmonized with the provision requiring a person affected by a determination by the Executive Director to file a suit for judicial review within 30 days of the Director's decision, see id. § 382.032(a)-(b). As discussed previously, AC Interests did not file this suit for judicial review until well past the 30-day deadline and similarly did not attempt to initiate a challenge to the denial through administrative channels until well past that deadline.
For all of these reasons, we must conclude that AC Interests' pleadings affirmatively negated jurisdiction because they established that the suit for judicial review was not timely filed and overrule AC Interests' first six issues on appeal. Cf. West, 260 S.W.3d at 263 (determining that trial court lacked jurisdiction over administrative appeal because it was filed more than 30 days after date of agency determination).
Due Process
In its seventh issue on appeal, AC Interests contends that due process "requires agency decision making to include the availability of contested case hearings to property based decisions such as emission credits." When presenting this argument, AC Interests insists that emission credits are property interests and are therefore subject to due-process protections. See U.S. Const. amend. XIV; Tex. Const. art. I, § 19; see also Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 538 (1985) (explaining that if people have property right, state cannot "deprive them of this property without due process"); Bexar Cty. Sheriff's Civil Serv. Comm'n v. Davis, 802 S.W.2d 659, 661 n.2 (Tex. 1990) (explaining that "individual entitlement" bestowed by rule is property right that is subject to due-process protections). Further, AC Interests asserts that it has established both "a prima facie case of eligibility" for the credits "pursuant to the statute and rules of the agency by providing whatever information [was] requested by the agency" and "a legitimate claim of entitlement deserving" "constitutional procedural Due Process protection." Accordingly, AC Interests contends that it was entitled to some form of a hearing before it could be deprived of its protected interest. See State v. Crank, 666 S.W.2d 91, 94 (Tex. 1984) (explaining "that the ultimate test of due process of law in an administrative hearing is the presence or absence of rudiments of fair play long known to our law"). Specifically, it urges that its "application for emission credits should be entitled to a contested case hearing." Cf. Goss v. Lopez, 419 U.S. 565, 581-84 (1975) (determining that school suspensions were invalid because no notice or informal hearing were provided); Smith v. HoustonChem. Servs., Inc., 872 S.W.2d 252, 278 (Tex. App.—Austin 1994, writ denied) (explaining that "[t]he procedural rights encompassed by due process of law are generally recognized to be as follows: notice of hearing; the opportunity to present argument and evidence and to rebut and test opposing evidence and argument by cross-examination or other appropriate means; appearance with counsel; and a decision by a neutral decision maker based on evidence introduced into the record of the hearing").
As an initial matter, we note that AC Interests' live petition contained no assertion that it had been denied due process because it had not been given the right to a contested-case hearing.See Tex. R. App. P. 33.1 (setting out requirements for preserving issue for appeal); see also In re L.M.I., 119 S.W.3d 707, 709, 710-11 (Tex. 2003) (holding that father whose parental rights were terminated waived due-process argument regarding inability to read his affidavit of relinquishment because he did not raise issue in trial court); Dreyer v. Greene, 871 S.W.2d 697, 698 (Tex. 1993) (explaining that party waived due-process challenge by failing to raise it in trial court); In re Expunction of R.A., 417 S.W.3d 569, 581 (Tex. App.—El Paso 2013, no pet.) (stating that "[e]ven constitutional errors like due process complaints are waived if not raised first in the trial court"). In addition, as set out above, AC Interests did not invoke the jurisdiction of the district court to consider challenges to the denial because it did not timely file a suit for judicial review, and this Court would similarly not have jurisdiction over the due-process challenge had it been made. See Dallas Cty. Appraisal Dist. v. Funds Recovery, Inc., 887 S.W.2d 465, 468 (Tex. App.—Dallas 1994, writ denied) (explaining that "[a]ppellate court jurisdiction of the merits of a case extends no further than that of the court from which the appeal is taken").
In its amended petition, AC Interests did assert that its due-process rights were violated because the denial was not adequately supported, was "in violation of statutory provisions," was "in excess of the Commission's statutory authority," and was "arbitrary and capricious." --------
For these reasons, we overrule AC Interests' seventh issue on appeal.
Right to Jury Trial
In its last issue on appeal, AC Interests argues that its "application for emission credits . . . should be entitled to a jury trial" under the Texas Constitution. See Tex. Const. art. I, § 15 (providing that "[t]he right of trial by jury shall remain inviolate. The Legislature shall pass such laws as may be needed to regulate the same, and to maintain its purity and efficiency"), art. V, § 10 (stating that "[i]n the trial of all causes in the District Courts, the plaintiff or defendant shall, upon application made in open court, have the right of trial by jury; but no jury shall be empaneled in any civil case unless demanded by a party to the case"). In presenting this argument, AC Interests acknowledges that the legislature may grant an administrative agency "the sole authority to make an initial determination in a dispute," see Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 221 (Tex. 2002), but it contends that it had the right to challenge that determination through a jury trial.
As an initial matter, we note that nothing in the record indicates that AC Interests attempted to invoke its right to a jury trial as provided by the Rules of Civil Procedure. See Tex. R. Civ. P. 216 (requiring party to file written request for jury trial). Accordingly, it is not entirely clear that the issue is properly before us. See In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 130 (Tex. 2004) (explaining that failure to comply with requirements of Rule 216 waives right to trial by jury). Moreover, the issue confronted by the district court in this case when ruling on the Commission's plea was whether the court had jurisdiction over AC Interests' suit for judicial review, which was filed more than 30 days after the application was denied, and was a question of law for the court to decide. Cf. Cameron v. Children's Hosp. Med. Ctr., 131 F.3d 1167, 1170 (6th Cir. 1997) (explaining that "[w]hether a district court has subject matter jurisdiction is a question for the court, not a jury, to decide, even if the determination requires making factual findings, unless the jurisdictional issue is inextricably bound to the merits of the case"). In addition, like with the previous issue, this Court would not have jurisdiction over this claim because AC Interests did not invoke the jurisdiction of the district court. See Funds Recovery, 887 S.W.2d at 468.
In any event, the supreme court has addressed similar arguments and determined that no constitutional deprivation of the right to a jury trial was present. See Barshop v. Medina Cty. Underground Water Conservation Dist., 925 S.W.2d 618, 636 (Tex. 1996). In that case, Barshop argued that the Edwards Aquifer Act violated the right-to-trial-by-jury provisions of the Texas Constitution "to the extent that the Act [did] not provide for court adjudication of permitting decisions or other matters decided by the" Edwards Aquifer Authority. Id. When explaining why "no right to jury trial under article I, section 15 of the Texas Constitution attaches to appeals from the permit adjudications under the Act," the court stated that the constitutional provision "provides a right to trial by jury for those actions, or analogous actions, which were tried by jury when the Texas Constitution was adopted in 1876" and that "there was no governmental scheme in 1876 to regulate natural resources such as the Edwards Aquifer." Id. Similarly, when explaining why "no right to jury trial attaches to appeals from administrative decisions" under section 10 of article V, the court explained that the "provision protects the right to have a jury resolve fact questions in all 'causes' brought in the district courts" and that "[a]ppeals from administrative decisions, however, are not 'causes' within the meaning of this provision." Id. For those same reasons, we must also conclude that neither constitutional provision has been implicated in this case.
For all of these reasons, we overrule AC Interests' final issue on appeal.
CONCLUSION
Having overruled all of AC Interests' issues on appeal, we affirm the district court's order granting the Commission's plea to the jurisdiction.
/s/_________
David Puryear, Justice Before Justices Puryear, Pemberton, and Field Affirmed Filed: December 15, 2016