### NUM BER 13-07- 0044 3-CV 

## COURT OF A PP EA LS T H I R T E E N T H D I S T R I C T O F T E X AS CORPUS CHRI ST I - 

## E D I N B U R G
TEXAS COM M IS SI ON ON ENV IRON M ENTA L QUA LITY, A pp ellan t,
v. GA LV EST ON BA

Y C ONS ERV

A TION A N D P R ES ER

VA T IO N ASS OC IA

T IO N , GA LVESTO N BA

Y FOUNDA

TION, A ND M A TA GOR DA

B A Y F OUN DA

TION , A pp ellees . On a p p ea l f ro m th e 34 5 D is tr ic t C o u rt th 

### of T rav is C ou nty , T exas . 

## O P I N I O N Be fo re C hie f J us tice Vald ez an d Ju stice s R od rigu ez an d Be na v ide s

Opin ion b y

C hie f J us tice Vald ez Appel lee s, Gal v est on Bay C onser v ati on and Pr eser

v ati on As soc iat ion , G alv est on Bay F oundati on, ( her ein after col lec ti v ely referred to as “ Gal v est on Bay ”) and Ma tag orda2

Bay Found ation , f iled pe rmit ap plication s for the a ppro priation of w ate r fo r purely
env ironmental pur poses w it h appel lan t, the Tex as Commi ss ion on E nv ironmental Qual it y (hereina f ter the “Comm ission”). The Com mission orde red the app lications d enie d for lack of jur is dic ti on. Appel lee s s oug ht j udi ci al re v iew before a tr ial co urt, w hic h ent er ed a jud g ment setti ng aside the deni al orders a nd remandi ng the appl ic ati ons for a cont est edcase h earing. Th e Com mission app eals f rom th e trial court’s judgme nt, a nd, bya single issue, c o n t e n d s thatthe trial court erred in rev ersing the Com mission ’s denia l orders becau se the C ommis si on di d nothav e the st atuto ry auth or it y

to g ran t wat e r per mits for pur ely env ironmental pur poses
. W e re v erse and render a di smi ss al of appell ees’ su itfor lac k o f jur is dic ti on. I. B A CKGRO UND On Nov ember 8, 2002, Ma tag orda Bay Foun dati on filed a per mit ap pli cat ion requesting an approp riation of w ate r in the Lavaca Riv er basin a nd th e Colorad o-La v aca and Lav aca Coa sta l basi ns for non- cons umpti v e ins tream use and fres hw ater i nflow s i nto the M atag orda Bay sy ste m. On Nov ember 12, Gal v est on Bay

fil ed a si mil ar

appl ic ati on for
non -consu mp tiv e instrea m use and f reshwater inf low s for the T rinity -San Ja cinto e stua ry and G alv est on Bay

. Each appel lee tend er ed th e appropr iat e appl ic ati on f e e , and both appel lee s c ontend that the a ppl ic ation s were admini strati v ely co mplet e by

the spr ing of 2003. W hil e the appel lee s’ appl ic ati ons w er e p e n d ing , So uthw est er n El ect ri c P ow er Compan y

fil ed a moti on to di smi ss the w ater per mit appl ic ati on of C addo La ke Ins ti tute
w it h the C ommis si on. In res ponse to the pow er company ’s m oti on, t he ex ecut iv e di re cto r of the C ommis si on recommended dis mis si ng or deny ing Caddo Lake’ s a ppl ic ati on bas ed3

on th e Commis si on’ s deci si on in the San M arcos R iv er F oundati on appl ic ati on. See S an Antoni o Riv er Aut h. v . Sa n M ar cos Riv er F ound. , N o . 13-06- 326- CV( Tex . Ap p.–C or pus Chr is ti Ju n
. _

_ 2 0 0 8 , n o p e t

. h

. )

. O n A u g u s t 5 , 2 0 0 3 , t h e e x e c u t i v e d i r e c t o r of the Com mission f iled a request to add app ellees’ ap plication s to th e Com mission ’s
cons ide ra ti on of the moti on to di smi ss the Cad do Lake Ins ti tute appl ic ati on. On Aug ust18, the C ommis si on i ss ued a noti ce of potenti al dis mis sal of appel lee s’ appl ic ati ons. On Dece mb er 1 9, 200 3, the Co mm ission signed two orders that d enie d ap pellee s’s app lications. In its orders, the Comm ission ma de th e followi ng dete rmina tions:

W her eas, ce rt ain Tex as W ater C ode s tatut es enact ed by the Tex as Leg is lat ur e reflectthi s s tate int er est[i n protec ti ng i n stream uses of Tex as sur face w ater bodi es] by

req uir ing co nsi derati on of i nst re am flow s a n d bay and estuar

y sy ste m maint enanc e in the g ra nti ng of sta te w ater r ig hts ( e.g ., Tex as W ater

C ode §§ 11.042( b) ; 11.046( b) ; 11.134( b) (D ); 11.147; 11 .1491; 16. 058 ; and 16.0 59); W here as, th e Com missio n h as includ ed p rov isions relative to these impor tant cons ide ra t i o n s i n v ar iou s reser v oir per mits i ss ued s inc e enac tment of t h e s e s t a t u t e s a n d i n n u me ro u s i n s t r e a m fl o w re q u i r e me n t s o n p e r mi ts is sued by

the Commi ss ion ; W her eas, the Tex as Leg is lat ur e, i n the 78 R eg ula r Sess ion , ena cte d th SB 1 6 3 9 w h i c h s t a t e s t h a t t h e w a t e rs i n t h e s t a t e a r e h e l d i n t r u s t t o the pub lic and the rig ht to use state w ate r ma y be approp riated only as ex pressly a u t h o ri ze d b y la w; W here as, SB 163 9 f urthe r states th at the le gisl atu re has no t expressly author iz ed g ra nti ng new w ater r ig hts ex cl usi v ely

for ins tream flow s d edi cat ed to en v ironm ent al nee ds or inf low s to the state ’s bay and estua ry sy stem s; W her eas, cu rrent [ Commi ss ion ] reg ula ti ons re g ardin g t h e defini ti on of ins tream us e and ins tream us es as li ste d benefic ial us es (3 0 TAC §§ 297.1( 23) and 297.43( a) (1 0) ) ar e i ncons is tent w it h and unsup por ted b y Tex as W ater

C ode C hapter

11 pr ior to an d after

i ts amendment b y

SB 1639 enact ed i n the 78 R eg ula r Leg is lat iv e Ses si on; th W her eas, wh ile t he C ommis si on has approv ed appl ic ati ons to ad d instrea m us e d e s igna tions to four spe cif ic w ate r r ights permits pre v iouslySect i on 1 1. 131( a) of t he wat er code pr ov i des: 1 T he co m m i s s i on sh al l m ak e a prel i m i na ry ex am i na t i on of t he ap pl i c ati on , an d i f i t ap pe ars t hat t her e i s n o unappr opr i at ed wat er i n t he so ur ce of supp l y or t hat t he p r oposed appr opr i at i on sh oul d not b e al l owed f or ot her r easons, t he co m m i ssi on m ay den y t he appl i cat i on. T EX
. W A T E R C OD E A NN
. § 1 1.13 1(a ) ( V ern on 20 00 ).
4 issued for othe r bene f icial purpose s, the Co mm ission ha s not he retofore is sued a new per mit for ins tream use onl y , as cont emplat ed by [t h ese] appl ci ati on[s ]. The orders d eni ed th e appl ic ati ons und e r secti on 11. 131 of the w ater co de. See T EX
. W A TE R C OD E A NN
. § 11.131 (V er non 2000)

. Appel lee s fil ed moti ons for rehear ing w it h the 1 Commi ss ion , butthe Commi ss ion di d notac t on the mot io n s. Ap p ell ees soug ht j udi ci al
re v iew i n a Trav is C ounty

D is tr ic t Cou rt by fili ng a joi nt peti ti on. See id . § 5.351 (V er non 2000)

. In t hei r joi nt pe ti ti on, a ppel lee s a ss erted t hat t he C ommis si on had jur is dic ti on ov er thei r appl ic ati on, see id

. § 5.013( a) (1 ) (V er non Supp. 2007) (p ro v idi ng that the C ommis si on has g eneral jur is dic ti on ov er w ater and w ater r ig hts i ncl udi ng the is suanc e of w ater r ig hts per mits ), and that the C ommis si on had sta tutor y auth or it y

to a p p ro p riat e w ater for benefic ial us es, w hic h ac cordin g t o a p p e l l e e s i n c l u d e s n o n - c onsumpt iv e i nst re am use s a nd freshw ater

inflow s i nto a n es tuar

y sy ste m. See id

. §§11.00 2( 4) , 11. 023( b) ( Ver non Su pp. 200 7). Appe llees argued th at th e Com missio n e rr e d in sum ma rily den y ing their appl ic ati ons becau se the Commiss ion i mprop er ly depr iv ed th em of a co ntes ted h ear ing and mi sc onst ru ed th e w ater co de’ s s tatut or

y framew or k b y

co ncl u d in g t hat i t c oul d not g ra nt pu re ly

env ironmental per mits

. The Co mmiss ion respon ded t o appel lee s’ peti ti on w it h a general de nial. Appel lee s mov ed for summar y j udg ment on three g ro unds. F irst, appel lee s a rg ued5

that the C ommis si on has j ur is dic tio n t o ent ertai n the ir appl ic ati ons becau se the
env ironmental pur poses thatthey propose d c oul d be defined a s a “benefic ial use” under the w ater

co de. See id . § 11.023( b)

. Appel lee s f urther arg ued that the C ommis si on had
a d m in istrativ e au tho rity to granttheir app lications b ecau se the Comm ission’s adminis trati v e r ule s a uthor iz ed s uch per mits

. See 30 T EX
. A D M IN
. C OD E § 297. 43( a) (1 0) (1 999) ( Tex . C omm’n o n Envtl . Q ual it y , W ater R ig hts , Su bst anti v e) ( prov idi ng thatst ate
w ate r may be a ppro priate d, diverted, o r stored for, am ong oth er purpo ses, instrea m use s,
w ate r q uality, aquatic and w ildlife hab itat, o r fresh w ate r inflo w s to bays and est uaries). The sec ond s ummary

j udg ment g ro und a dv anced by appel lee s w as that sec ti on 1 1

. 0 2 3 7 (a ) o f

t h e wa t e r c o d e , wh ic h wa s e n a c t e d b y S e n a t e B il l 1 6 3 9 , cr e a t e d o n ly a temporar

y morator ium on th e i ss uance of ins tream flow per mits

. See T EX
. W A TE R C ODE A NN . § 11.0237 (a ) (V er non Su pp. 2 007) ( prov idi ng thatthe Commi ss ion may not is sue a new permit for instream f low s ded icated to environme nt a l n e e d s or bay and estua ry inflo w s)

. Sect ion 11.0 237( a) ex pired on September 1, 2005. Id . § 11.0237 (c ). See Ac ts 2003, 78th Leg ., ch. 1242, § 2 (e x pired Sep. 1, 2005) (c ur re nt v ersi on atT EX
. W A TE R C ODE A NN
. § 11. 0237 ( Ver non Su pp. 2 007) ). Ap pel lee s, therefore, arg ued t h a t becaus e the morat or ium w as te mpora ry the leg is lat ur e env is ion ed th e g ra nti ng of per mits after the
mo ratorium ’s ex piration , and the Com mission w as ob lig ate d to ab ate app ellees’s appl ic ati ons unti l the morator ium had l apsed

. As a f ina l summar

y j udg ment g ro und, appel lee s a rg ued t hat t he C ommis si on fail ed to decl ar e their

appli cat ion s admini strati v ely complet e and that thi s o mis si on par tl y l ead t o the i mprop er

deni al of a contest ed- cas e hear ing

. In t hei r or ig ina l peti ti on, a ppel lee s6

ass erted t hat t hey

had filed co mplet e appl ic ati ons and tendered the appropr iat e fees, and the C ommis si on, t her efore, had a mini ste rial d u ty to de cl ar e the ir appl ic ati ons a d m in ist ra ti vely co m p le te an d pro ce e d to a co n te st e d -ca se he a rin g. The Co mmiss ion respon ded to appel lee s’ s summar y jud g ment moti on by

arg uin g that the s tatut or

y framew or k p re cl uded an appropr iat ion of w ater for pur ely

env ironmental pur poses
. The Co m m iss io n at ta ck e d ap p e lle e s’ f irs t s u m m a ry jud gm e n t gro u n d by ar gui ng that the h is tor

y of w ater appropr iat ion i n Tex as has emphasi z ed phy si cal us e of w ater and that appel lee s’ appl ic ati ons did not propose a phy si cal use. The C ommis si on al so arg ued tha t its environm ent al prote ction role was li mite d to a co nside ration o f h o w wa ter perm it appl ic a ti ons, i f granted, w oul d i mpact the e nv ironment. See T EX
. W A TE R C OD E A NN
. § 11. 147 (Vernon Supp . 200 7). In r e s p o n s e t o a p p e l l e e s ’ s e c o n d a n d t h i rd s u mm a r y j u d g me n t g ro u n d s , t he Commi ss ion arg ued t hat s ect ion 11.0 237( a) of the w ater co de precl uded itfrom g ra nti ng the per mits that appel lee s s oug ht. See id . § 11.0237 (a ). It als o asser ted that a co ntes ted hea ring bef ore the State Of f ice of Adm inistrative Hearings w ould have bee n f utile be cause itdi d notpos ses s s tatut or y auth or it y

to g ra nt t he per mits

. The Co mmiss ion al so soug ht s ummary j u d gm e n t and pray ed th at i ts deci si on to
summar il y

deny appel lee s a per mit w it hout a c ontes ted- cas e hear ing be af f ir med. On Nov ember

20, 2006, the t ri al cour

t g ra nted appel lee s’ moti on for summar y j udg ment, found that the Commi ss ion had jur is dic ti on to hear appel lee s’ per mit appl ic ati ons, and found that appel lee s h ad a ri g ht t o a c ontes ted- cas e hear ing

. It re v ersed the C ommis si on’ s d eni al orde rs and rema nde d the app lications b ack to th e Com mission for f urthe r proceed ings.T hi s case was t r ansf er r ed f r om t he T hi r d Cour t of Appeal s t o t he T hi r t eent h C our t of Appeal s und er 2 a d o c k e t e q u a l i za ti o n o rd e r is s u e d b y t h e S u p re m e C o u rt o f T e x a s
. See T EX
. G OV ’ T C OD E A NN
. § 73. 001 (V ern on 19 98 ).
7 This appeal ens ued. 2 II. D I S CUS S I ON In th e insta nt case , bot h partie s f iled cross-mo tions for sum ma ry judgmen t and did notdisp ute the relevant facts in question . Th is case w as ap prop riate for sum ma ry dis posi ti on bec ause the t ri al cour t w as pr esent ed w it h purely q uest ions of l aw
. See Cit y of G ar lan d v . D al las Mor ni ng News , 22 S. W .3d 351 , 356 (Tex. 2000 ). W hen a district court g ra nts one motio n and deni es the o ther , an appel lat e c our t s houl d det er mine all q uest ion s pr esent ed and re nder

the jud g ment t he di str ict c our t s houl d hav e rendered. Id

. By it s sol e i ss ue, t he C ommis si on arg ues that itdi d nothav e j ur is dic ti on to i ss ue
w ate r-use perm its for purely env ironm ent al purpo ses w hen it acted o n ap pellee s’ app lications b ecau se the state had institute d a tem pora ry mora torium on such perm its. See Ac ts 2003, 78th L e g ., ch. 1242, § 2 (e x pired Sep . 1, 2005) ( cur re nt v ersi on atT EX
. W A TE R C OD E A NN
. § 11. 023 7 (Verno n Sup p. 2007 )). T he morat orium o n p urely
env ironmental w ater per mits has si nce been made per manent b y se cti on 11. 0237 of the
w ater co de, w hic h prov ide s t hat: The commi ss ion may

not is sue a new

per mit for i nst re am flow s d edi cat ed to env ironmental needs or bay and est uar

y i nflow s. The commi ss ion may approv e an appl ic a ti on to amend a n ex is ti ng per mit or ce rt ific ate o f adj udi cat ion to chang e the use to or add a us e for ins tream flow s d edi cat ed to en v ironm ent al nee ds or bay and est uary i nf low s. T EX
. W A TE R C OD E A NN
. § 11. 0237( a) ( emphasi s a dded)

. W e are, t her efore, confro ntedI n r esponse t o t he per m anent m or at or i um on pur el y env i r onm ent al per m i t s, t he C om m i ssi on has 3 fil e d a m o ti o n re q u e s ti n g th a t w e d i s m i s s th i s a p p e a l a s m o o t.
8 w it h a moot ness i ss ue th at mus t be anal y z ed atthe outs et. 3 A c ase becomes m oot if a c ontrov ersy ce ases to ex is t betw een t he par ti es at an y sta g e of the leg al proceed ing s, inc lud ing the a ppeal

. Al ls tate Ins . C o. v

. Hall m an , 159 S.W .3d 640, 642 ( Tex . 200 5) ; Bd. of A dju stm ent o f Sa n Antoni o v . Wende , 92 S.W .3d 4 24, 427 ( Tex . 200 2) ; W

illiam s v. Lara , 52 S.W .3d 171 , 184 (Te x . 200 1). Under the moo tne ss doct ri ne, a co ntrov ersy must i nv olv e a d is pute of somethi ng mor e t h a n a h y pothet ic al or abst ra ct ch ar act er
. Secu rtec, Inc . v . C ounty of Gr egg , 1 0 6 S

. W

. 3 d 8 0 3 , 8 0 9 (T e x. Ap p .– T e xark a n a 2 0 0 3 , p e t. d e n ie d ) (ci ti n g Scur lock Per m ian C or p. v . Br azos Cou nty , 869 S.W .2d 4 78, 4 87 ( Tex . Ap p.–H oust on [1 st Di st. ] 199 3, w ri t den ied ))

. A c ase becomes moot w hen ( 1) there i s n o r e a l cont ro v ersy , or ( 2) w hen a par

ty se eks j udg ment w hic h,
w hen re n d e re d , ca n not h av e any pract ic al leg al eff ect

. Id . (c it in g Scho ll v. F irem en's & Po l ic em en ' s Ci v i l S er v . C om m 'n , 520 S. W .2d 4 70, 4 71 ( Tex . C iv . Ap p.–C or pus Chr is ti 1975, no w ri t) ). In sect ion 11 .02 37 o f

the water code, t he legislature used t he phra se “may n ot” in direct ing the Commi ss ion not to i ss ue new w ater per mits for i nst re am flow s d edi cat ed to
env ironmental needs o r b a y a n d es tuar y i nflow s. See T EX
. W A TE R C OD E A NN
. § 11.0237 (a ). Und er sec ti on 311.016 of t he Cod e Con str uct ion Act , the ter m “‘ mayno t’ impos es a prohi bit ion and is sy nony mous w it h ‘shal l not,’ ” “ unl ess the cont ext i n w hic h the
w ord or phrase appears n eces sar il y req uires a di ff er ent c onst ru cti on or unless a differ ent const ruction is ex pres s ly p ro v ided bystatu te.” See T EX
. G OV ’ T C OD E A NN . § 311.016 (V er non 200 5)

. The Commi ss ion , ther efore, canno t g ra nt ap pel lee s t he w ater per mits thatA l l p e n d i n g m o ti o n s a re h e re i n d e n i e d a s m o o t. 4
9 the y app lied for, regardless of the district cou rt’s actions in setting aside the Comm ission’s deni al orders a nd remandi ng th e appl ic ati ons back to the C ommis si on for further proceed ing s. See , e.g ., Iga l v. Brightstar Inf o. Tech . Group , Inc. , N o
. 0 4 -0 9 3 1 , 2 0 0 8 T e x. LEX IS 4 22, a t * 7 ( Tex . 200 8) ( prov idi ng thatthe leg is lat ur e establ is hes the jur is dic ti on of admini strati v e ag enci es)

. In esse nce, the trial court’s j udgm ent w ould have no legal ef fect giv en th e stat uto ry para me ters tha t the le gisl atu re h as ena cted . Appe llees’ challen ges to the Com mission ’s
a ctions are the re fore moot

. See In r e Gr uebel , 1 5 3 S

. W

. 3 d 6 8 6 , 6 9 0 ( Te x . A p p
. – Ty ler 2005, o rig. proceed ing ) (c oncl udi ng thata pe ti ti oner ’s appl ic ati on for w ri t of mandamus be c am e mo ot w he n an am en dm en t to th e c i ty ordi na nc e th at he w as c ha l l en g i ng b ec am e ef fective). T here fore, we con clude t hatt he trial co urt erred in reversing the Com mission ’s orde rs becau se the trial court’s jud gmen t w ould have no legal ef fect. T he Com mission ’s sol e i ss ue i s s ust ain ed. III . C ONCL US I ON T he jud gmen t of

the trial court is rev ersed , and we rende r a dismissal of app ellees’ dis tr ic t c our

t ac ti on for lac k o f jur is dic ti on. 4

_________ _________

______ RO GELI O VA LDE Z Chief Justice Opi nio n del iv er ed and filed thi s t he 31 day

of Jul y , 200 8. st