HARRIS COUNTY HOSPITAL DISTRICT,

Appellant,

v.

PUBLIC UTILITY COMMISSION OF TEXAS, 

Appellee.

BRIEF OF APPELLEE

Public Utility Commission of Texas

By its Attorneys:

KEN PAXTON

Attorney General of Texas

CHARLES E. ROY

First Assistant Attorney General

JAMES E. DAVIS

Deputy Attorney General for

Civil Litigation

PRISCILLA M. HUBENAK

Chief, Environmental Protection

Division

ELIZABETH R. B. STERLING

Assistant Attorney General

State Bar No. 19171100

elizabeth.sterling@texasattorneygeneral.gov

Environmental Protection

Division

P.O. Box 12548, MC-066

Austin, Texas 78711-2548

512.463.2012

512.457.4616 (fax)

October 26, 2015

No. 03-15-00386-CV

ACCEPTED

03-15-00386-CV

7537320

THIRD COURT OF APPEALS

AUSTIN, TEXAS

10/26/2015 1:23:41 PM

JEFFREY D. KYLE

CLERK

 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 10/26/2015 1:23:41 PM JEFFREY D. KYLE Clerk
i

Table of Contents

Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

Index of Authorities.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Glossary.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Statement of the Case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

Statement Regarding Oral Argument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

Issue Presented. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

On remand, did the trial court properly sign a judgment without

Section 15.003 fees?.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

Statement of Facts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Summary of the Argument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Argument. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

The trial court properly granted final judgment without conducting any

hearing on the District’s Section 15.003 request for fees.. . . . . . . . . . . . . . . 6

A. The District never requested a hearing until after the final

judgment was signed.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

B. This Court’s mandate did not require the trial court to

conduct any § 15.003 fees hearing.. . . . . . . . . . . . . . . . . . . . . . . 8

C. This Court’s opinion declined the District’s request for

Section 15.003 fees.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

1. The District failed to assign the fees issue as error in

its first appeal.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

2. The District misinterprets Footnote 6 in the Court’s

first opinion.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ii

3. Section 15.003 does not authorize payment of fees

to the District for attorneys and experts in this case... . . 15

a. The District’s proceeding at the Commission

does not fit within the terms of Section

15.003... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

b. The District cannot be awarded attorney’s fees

and costs because the Legislature has neither

created a regulation fund nor appropriated

money for such a fund and has not waived the

Commission’s immunity... . . . . . . . . . . . . . . . . . . . . 16

Prayer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Certificate of Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Certificate of Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

APPENDICES

Judgment of the Trial Court. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A 

Mandate from this Court in Docket No. 03-10-00647-CV. . . . . . . B 

Judgment of this Court in Docket No. 03-10-00647-CV.. . . . . . . . . C 
iii

Index of Authorities

Cases Pages

Fed. Sign v. Tex. S. Univ.,

951 S.W.2d 401 (Tex. 1997).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 

Ford Motor Co. v. Butnaru,

157 S.W.3d 142 (Tex. App.—Austin 2005, no pet.. . . . . . . . . . . . . . 14 

Harris Cnty. Hosp. Dist. v. Pub. Util. Comm’n,

2012 WL 2989228 (Tex. App.—Austin July 13, 2012, no pet.) 

(mem. op., not designated for publication).. . . . . . . . . . . . . v, 1, 3, 13 

Jay Petroleum, L.L.C. v. EOG Resources, Inc.,

332 S.W.3d 534 (Tex. App.—Houston [1st Dist.] 2009, pet. denied)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 10 

Montgomery v. Blue Cross & Blue Shield of Tex., Inc.,

923 S.W.2d 147 (Tex. App.—Austin 1996, writ denied).. . . . . . . . . 10 

State v. Anderson Courier Serv.,

222 S.W.3d 62 (Tex. App.—Austin 2005, pet. denied). . . . . . . 12, 13 

Sw. Galvanizing, Inc. v. Eagle Fabricators, Inc.,

447 S.W.3d 473 (Tex. App.—Houston [14th Dist.] 2014, no pet.)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 

Tex. Educ. Agency v. Maxwell,

937 S.W.2d 621 (Tex. App.—Eastland 1997, writ denied). . . . . . . . 12 

V-F Petroleum, Inc. v. A. K. Guthrie Operating Co.,

792 S.W.2d 508 (Tex. App.—Austin 1990, no writ). . . . . . . . . . . . . . 9 

Valadez v. Avitia,

238 S.W.3d 843 (Tex. App.—El Paso 2007, no pet.). . . . . . . . . 11, 13 

Whitmire v. Greenridge Place Apartments,

333 S.W.3d 255 (Tex. App.—Houston [1st Dist.] 2010, pet. dism’d)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 
iv

Index of Authorities (Cont’d)

Pages

Statutes

Tex. Gov’t Code

§ 2001.174(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 

§§ 2251.001-.055. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v, 1 

§§ 2260.001-.008.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 

Tex. Util. Code

§ 15.003.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v, 1, 16, 18 

§ 15.003(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 14, 15 

§ 39.903. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 

§ 39.903(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 

§ 39.903(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 

§ 39.903(d)-(l). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 

§ 56.021.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 

§§ 11.01-66.016.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v 

§§ 56.001-.301. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 

Other 

Tex. H.B. 1, 84th Leg., R.S. (2015). . . . . . . . . . . . . . . . . . . . . . . . . . . 18 
v

Glossary

ALJ Administrative Law Judge at the State Office

of Administrative Hearings

Commission Public Utility Commission of Texas

Court’s first opinion Harris Cnty. Hosp. Dist. v. Pub. Util.

Comm’n, No. 03-10-00647-CV, 2012 WL

2989228 (Tex. App.—Austin July 13, 2012, no

pet.) (mem. op. not designated for

publication).

District Harris County Hospital District

Docket 34332 Record Administrative Record of Docket, which may

be found among the items listed at

http://interchange.puc.state.tx.us/WebApp/I

nterchange/application/dbapps/filings/pgCo

ntrol.asp?TXT_UTILITY_TYPE=A&TXT_CN

TRL_NO=34332&TXT_ITEM_MATCH=1&T

XT_ITEM_NO=&TXT_N_UTILITY=&TXT_

N_FILE_PARTY=&TXT_DOC_TYPE=ALL&

TXT_D_FROM=&TXT_D_TO=&TXT_NEW

=true

Footnote 6 Harris Cnty. Hosp. Dist., 2012 WL 2989228

at *7 n.6.

Prompt Payment Act Tex. Gov’t Code §§ 2251.001–.055

Public Utility Regulatory Act Tex. Util. Code §§ 11.01–66.016

Section 15.003 Tex. Util. Code § 15.003.
vi

Statement of the Case

This appeal comes after remand to the trial court in an administrative

appeal of a complaint decided by the Public Utility Commission of Texas. 

The Commission agreed that this Court’s mandate requires the case to be

remanded to the Commission, but disagreed that the trial court was

required to grant the Harris County Hospital District fees for attorneys and

experts based on Section 15.003 of the Utilities Code. 

Statement Regarding Oral Argument

The Commission doubts that oral argument would be helpful to the

Court in this case and, thus, has not requested it. But the District requested

oral argument and, should the Court decide that it wants oral argument, the

Commission asks to participate.

Issue Presented

On remand, did the trial court properly sign a judgment

without Section 15.003 fees?
Tex. Pub. Util. Comm’n, Complaint of Harris County Hospital District 1

Against AT&T Texas, Docket No. 34332, available at

http://interchange.puc.state.tx.us/WebApp/Interchange/Documents/34332_1_551225.

PDF (May 23, 2007 ) (District’s Complaint) (“Complainant is not ‘exempt’ from late

fees, rather AT&T may only apply late fee as allowed by § 2251.”) This is part of the

administrative record in this case and subsequent citations will be to “Docket 34332

A.R.” After this Court issued its judgment and mandate, the Clerk of the Court asked the

Commission to pick up the administrative record. Anticipating that the matter would be

remanded to the Commission, the administrative record was returned to the agency. 

Thus, it is no longer with the court.

1

Statement of Facts

The Harris County Hospital District continues to seek fees for attorneys

and experts from the “regulation fund,” which the Legislature has never

created or funded in the 40 years since the language was included in the

Public Utility Regulatory Act. See Tex. Util. Code § 15.003.

This appeal concerns a complaint that the District filed with the Public

Utility Commission eight years ago about overbilling by Southwestern Bell

Telephone, LP d/b/a AT&T Texas (AT&T) going back to twenty years ago. 

Harris Cnty. Hosp. Dist. v. Pub. Util. Comm’n, No. 03-10-00647-CV, 2012

WL 2989228 at *1 (Tex. App.—Austin July 13, 2012, no pet.) (mem. op. not

designated for publication). The District complained that AT&T had

applied the terms of AT&T’s tariff to determine late charges rather than

applying the more generous terms of the Prompt Payment Act, Tex. Gov’t

Code §§ 2251.001-.055, to the District, a governmental entity.1
Docket 34332 A.R. (July 16, 2008) (Order Denying Appeal of Order No. 19) 2

available at

http://interchange.puc.state.tx.us/WebApp/Interchange/Documents/34332_162_5898

71.PDF.

Id. (“PURA § 58.152’s broad grant of pricing flexibility regarding late fees 3

cannot be read in harmony with the [Prompt Payment Act]’s precise methodology for

handling such fees.”).

2

The Commission agreed with the District that AT&T should have billed

the District using the terms of the Prompt Payment Act rather than the

late-payment provisions of its tariff. The Commission determined that the

2

Prompt Payment Act and the Public Utility Regulatory Act were in conflict,

but that the Prompt Payment Act controlled. Given the District’s delay in 3

bringing the case, however, the Commission awarded only one-half of the

overcollected amounts. The District appealed to a trial court in Travis

County, Texas. In that suit for judicial review, the District also asked to

recover its fees for attorneys and experts under Section 15.003 of the Texas

Utilities Code, a provision that has been in the Public Utility Regulatory Act

since it was first adopted in 1975, but which has never been implemented or

funded by the Legislature. The trial court affirmed the Commission’s order

and made no mention of the Section 15.003 request. 

On appeal to this Court, the District included a Section 15.003 request

for fees in the prayer of its appellant’s brief, but the brief contained no issue
Brief of the Appellant Harris County Hospital District at 43, Harris Cnty. 4

Hosp. Dist. v. Pub. Util. Comm’n, No. 03-10-00647-CV (Mar. 7, 2011).

Brief of the Appellee at 42-44, Harris Cnty. Hosp. Dist. v. Pub. Util. Comm’n,

5

No. 03-10-00647-CV (May 13, 2011).

Appellant Harris County Hospital District’s Reply to Brief of Appellee, Harris

6

Cnty. Hosp. Dist. v. Pub. Util. Comm’n, No. 03-10-00647-CV (Jun. 9, 2011).

3

nor any argument or authority supporting that request. Although the

4

District appeared to have waived any claim by its lack of an issue or

argument and authorities, in an abundance of caution, the Commission

included in its appellee’s brief several arguments against such a request.5

But the District’s reply brief included no response. Thus, neither of the

6

District’s briefs included any issue or argument and authorities to support a

Section 15.003 request for fees.

This Court’s opinion held that the Commission was arbitrary and

capricious to limit the refund to one-half of the overcharges. Harris Cnty.

Hosp. Dist., 2012 WL 2989228 at *8. The opinion addressed Section

15.003 only in its Footnote 6, stating: “To the extent that the District seeks

to have this Court order the Commission to adopt the ALJ’s proposal for

decision and to award it expert’s fees and attorney’s fees, we decline to do

so.” Id. at *7 n.6 (citations omitted).
The mandate states: 7

IT IS THEREFORE considered, adjudged and ordered that the judgment

of the trial court is reversed, and that the cause is remanded to the trial

court with instructions that the case be remanded to the Commission for

further proceedings consistent with this opinion. It is FURTHER ordered

that the appellee pay all costs relating to this appeal, both in this Court and

the court below; and that this decision be certified below for observance.

C.R. at 87.

Judgment Rendered July 13, 2012, Harris Cnty. Hosp. Dist. v. Pub. Util. 8

Comm’n, No. 03-10.00647-CV.

C.R. at 114. 9

Id. at 90. 10

Id. at 123. 11

4

The Court’s mandate reversed the trial court’s judgment, and remanded 7

the cause to the trial court “with instructions that the case be remanded to

the Commission for further proceedings consistent with this opinion.” 

Although the mandate orders the Commission to pay court costs, there is

no order about Section 15.003 fees for attorneys and experts. The

judgment of the Court contains the same language.8

After remand, the trial court took no action for two years. Then the

District filed two motions: 1) a motion to sever its claims for attorney and

expert fees and costs and to abate the severed claim; and 2) a motion to 9

remand overbilling claims to the Commission.

10

The Commission agreed with the District that the administrative appeal

should be remanded to the Commission, but disagreed about the form of

order the trial court should sign. The Commission maintained that the

11
C.R. at 149. 12

5

remand had to be a final judgment, not an interlocutory order. As to the

motion to sever, the Commission opposed the District’s motion to sever its

claim for attorney’s fees under Section 15.003 of the Utilities Code. In

addition to the Commission’s claims that the Section 15.003 claim was

extinguished when this Court declined to grant the request, the

Commission noted that, because Section 15.003 requires any fees to be

awarded “in the same action,” Tex. Util. Code § 15.003(a), the fee request

could not be severed.

The trial court denied the motion to sever and signed a final judgment

remanding the matter to the Commission. The District appeals that 12

judgment.

Summary of the Argument

For several independent reasons, the trial court properly signed a final

judgment remanding this case to the Commission without any hearing on

Section 15.003 fees. The District did not ask the trial court to set fees on

remand; instead, the District asked the trial court to sever and abate that

request. More importantly, this Court’s mandate in the prior appeal did

not authorize the trial court to consider Section 15.003 fees. Instead, the
C.R. at 114. 13

6

judgment and mandate ordered the trial court to remand the matter to the

Commission—exactly what the trial court did. 

Additionally, the District has no claim for Section 15.003 fees. That

statute purports to allow certain parties to recover fees “against the

regulation fund,” but in the 40 years since the Legislature enacted the

statute, the “regulation fund” has been neither created nor funded. 

Even if such a fund existed, the District’s claim would not fit within its

terms. The District was not alleging that AT&T’s rates were unreasonable,

but that, for a governmental entity like the District, the reasonable fees set

by the Commission were superceded by a different statute—the Prompt

Payment Act. 

Argument

The trial court properly granted final judgment without

conducting any hearing on the District’s Section 15.003 request

for fees.

A. The District never requested a hearing until after the final

judgment was signed.

After this Court remanded the matter to the trial court, the District filed

two motions, but neither of them requested a hearing on its Section 15.003

request for fees. Instead, the District asked the trial court to sever its 13
Id. at 90. 14

Id. at 123. 15

Id. at 148. 16

C.R. at 151. 17

7

request into a different cause while remanding the administrative appeal 14

to the Commission. The Commission agreed that the matter needed to be

remanded, but argued that the remand should be part of a final judgment

and that no severance should be granted. After a hearing on the District’s 15

two motions, the trial court signed a final judgment remanding the case to

the Commission and denying the District’s motion to sever.16

It was only after the trial court signed a final judgment that the District

asked the trial court to conduct a hearing on its Section 15.003 request for

fees, and then the request was conditioned on the trial court granting the

District’s motion for new trial.17

The District cannot complain that the trial court never conducted a

Section 15.003 hearing when the District failed to timely request such a

hearing.
C.R. at 87. 18

8

B. This Court’s mandate did not require the trial court to

conduct any § 15.003 fees hearing.

Section 15.003 fees were beyond the scope of this Court’s mandate in the

prior appeal; the trial court had no authority to consider the issue on

remand. 

This Court’s mandate authorized the trial court only to remand the

matter to the Commission for consideration in light of the Court’s opinion. 

The mandate states:

THIS CAUSE came on to be heard on the record of the court below,

and the same being considered, because it is the opinion of this Court

that there was error in the trial court’s judgment: IT IS

THEREFORE considered, adjudged and ordered that the judgment

of the trial court is reversed, and that the cause is remanded to the

trial court with instructions that the case be remanded to the

Commission for further proceedings consistent with this opinion. It is

FURTHER ordered that the appellee pay all costs relating to this

appeal, both in this Court and the court below; and that this decision

be certified below for observance.

Wherefore, we command you to observe the order of our Court of

Appeals in this behalf and in all things have the order duly

recognized, obeyed, and executed.18

The only matter referenced in this Court’s mandate is that the trial court

remand the case to the Commission “for further proceedings consistent

with this opinion.” There is no mention of any claim for fees. Thus,

conducting a hearing on Section 15.003 fees was beyond the trial court’s
9

authority because it was beyond the scope of the mandate. “[W]hen a case

is remanded to the district court with instructions, that court’s authority is

limited to trying only those issues specified in the appellate court

mandate.” V–F Petroleum, Inc. v. A. K. Guthrie Operating Co., 792 S.W.2d

508, 510 (Tex. App.—Austin 1990, no writ.). The trial court “has no

jurisdiction to review, interpret, or enforce [the appellate court’s] mandate;

it must observe and carry it out. Its orders carrying out the mandate are

ministerial.” Whitmire v. Greenridge Place Apartments, 333 S.W.3d 255,

261 (Tex. App.—Houston [1st Dist.] 2010, pet. dism’d)(citing Schliemann

v. Garcia, 685 S.W.2d 690, 692 (Tex. App.—San Antonio 1984, orig.

proceeding)). The trial court would have violated this Court’s mandate had

it taken up the issue of Section 15.003 fees.

Contrary to the District’s brief (District’s Appellant’s Br. at 10), this case

is not similar to the procedural circumstances in Jay Petroleum, L.L.C. v.

EOG Resources, Inc., 332 S.W.3d 534, 540 (Tex. App.—Houston [1st Dist.]

2009, pet. denied). That case turned on procedural rules concerning a

summary judgment—rules that do not apply to this administrative appeal.

An administrative appeal raises legal questions about the agency’s final

order. Ultimately, the agency must issue a new order when a remand is

required. But a summary judgment is different. Because it removes all or
10

part of a cause of action from a decision by the fact finder, reversing a

summary judgment may merely mean that the cause of action or part of it

must be decided by the fact finder—either the jury or the trial court itself. 

Cases where the appellate court can render judgment after reversing a

summary judgment are limited. As this Court explained, “[b]efore an

appellate court may reverse summary judgment for one party and render

judgment for the other party, all parties must have sought final judgment

relief in their cross-motions for summary judgment.” Montgomery v. Blue

Cross & Blue Shield of Tex., Inc., 923 S.W.2d 147, 152 (Tex. App.—Austin

1996, writ denied). 

Attorney’s fees were an issue on remand in Jay Petroleum because the

lack of a cross motion on all claims made one party’s causes of action live

on remand after the Houston Court of Appeals reversed summary

judgments. Jay Petroleum, 332 S.W.3d at 540 (“The mandate plainly

reversed the [defensive] summary judgment on the counterclaims, which

necessarily made those counterclaims live.”).

Because this case is not a summary judgment, no cause of action became

live on remand. All the trial court needed to do was to take the ministerial

action of signing a final judgment that remanded the case to the

Commission for further proceedings consistent with this Court’s opinion.
Brief of the Appellant Harris County Hospital District at 43, Harris Cnty. 19

Hosp. Dist. v. Pub. Util. Comm’n, No. 03-10-00647-CV (Mar. 7, 2011).

Id. at 44. 20

11

Another case cited by the District is even farther from the facts of this

case. The appellant in Southwest Galvanizing was awarded attorney’s fees

in its initial appeal. Sw. Galvanizing, Inc. v. Eagle Fabricators, Inc., 447

S.W.3d 473, 478 (Tex. App.—Houston [14th Dist.] 2014, no pet.). Thus, on

remand the trial court had no option but to award attorney’s fees. 

C. This Court’s opinion declined the District’s request for

Section 15.003 fees.

1. The District failed to assign the fees issue as error in its

first appeal.

Because the District neither listed nor briefed a request for Section

15.003 fees in its initial appeal, it waived those issues. See Valadez v.

Avitia, 238 S.W.3d 843, 844–45 (Tex. App.—El Paso 2007, no pet.)

(finding waiver of issues that were neither listed nor briefed).

Although the District included a request for Section 15.003 fees in the

prayer of its appellant’s brief in the first appeal, it failed to include an issue

or any briefing to support that prayer. But, because Section 15.003 was in 19

the District’s prayer, the Commission’s appellee’s brief included 20

arguments as to why the District was not entitled to recover Section 15.003

fees. Even in the face of the Commission’s briefing on the matter, the
Appellant Harris County Hospital District’s Reply to Brief of Appellee, Harris

21

Cnty. Hosp. Dist. v. Pub. Util. Comm’n, No. 03-10-00647-CV (Jun. 9, 2011).

12

District failed to address any of those arguments in its reply brief. Thus, 21

there was a total failure by the District to brief the issue.

This stands in contrast to the facts in Texas Education Agency v.

Maxwell, 937 S.W.2d 621, 623 (Tex. App.—Eastland 1997, writ denied).

There, the appellees preserved their request for attorney’s fees by a crosspoint. But here, the District failed to preserve any Section 15.003 issue in

its first appeal. 

A more analogous case is State v. Anderson Courier Service, 222

S.W.3d 62 (Tex. App.—Austin 2005, pet. denied), where this Court refused

to allow attorney’s fees on remand. Although Anderson Courier arose as a

declaratory judgment action attacking the constitutionality of a statute, the

lack of a fee issue on appeal is analogous to this case.

In Anderson Courier, the trial court initially held the statute

constitutional. But on appeal this Court held the statute unconstitutional

and remanded to the trial court. Anderson Courier, which had lost in the

trial court, did not address the question of attorney’s fees in its initial

appeal, but requested them on remand. When the remand decision was

appealed, this Court noted that although Anderson Courier had requested

attorney’s fees at the initial trial, because the issue was not raised on
C.R. 114. 22

C.R. at 90. 23

13

appeal, there was no reason for this Court to remand the attorneys fees

question to the trial court. Id. at 66. 

Although the Court is dealing with a different statute in this case, the

fact that the District did not support its prayer for Section 15.003 fees in

the first appeal with an issue and argument is reason enough for the Court

to have declined the request. See Valadez v. Avitia, 238 S.W.3d at 844–45

(finding waiver of issues that were neither listed nor briefed).

2. The District misinterprets Footnote 6 in the Court’s first

opinion.

Footnote 6 in the Court’s prior opinion does not support a holding that

the Section 15.003 fees issue was remanded to the trial court. Only part of

the footnote concerns Section 15.003 because the footnote addresses two

distinct requests the District made in its prior appeal: 1) that this Court

order the Commission to adopt the administrative law judge’s proposal for

decision without change; and 2) that the Court award fees for the 22

District’s attorneys and experts under Section 15.003. Regarding the

23

issue on appeal, the footnote states: “To the extent that the District seeks

to have this Court ... award it expert’s fees and attorney’s fees, we decline to

do so.” Harris Cnty. Hosp. Dist., 2012 WL 2989228 at *7 n.6. Although
14

the Court cited several authorities for this sentence, the first two citations

do not apply to Section 15.003. 

Instead, they concerned the District’s request that the Court order the

Commission to adopt the ALJ’s proposal for decision:

1. Texas Government Code § 2001.174(2), which states that the court “shall

reverse or remand the case for further proceedings if substantial rights

of the appellant have been prejudiced because the administrative

findings, inferences, conclusions, or decisions” violate any of six

requirements. 

2. Ford Motor Co. v. Butnaru, 157 S.W.3d 142, 149 (Tex. App.—Austin

2005, no pet.) cited for the proposition that: “In a suit for judicial

review of an agency action, the reviewing court is empowered to issue

only a general remand when it finds error that prejudices an appellant’s

substantial rights.” 

Both of these apply only to actions of the Commission. But as the District

admits, Utilities Code Section 15.003(b) directs the court, not the

Commission, to determine fees, and to award them against the “regulation

fund.” Tex. Util. Code § 15.003(a).

The only citation in the Court’s Footnote 6 that applies to Section 15.003

is that statute itself. Given that the District made no arguments about the
Docket 34332 A.R. (May 23, 2007) (Complaint of Harris County Hospital 24

District Against AY&T Texas) available at

http://interchange.puc.state.tx.us/WebApp/Interchange/Documents/34332_1_551225.

PDF.

15

applicability of Section 15.003 and that the Commission explained in its

brief why that statute did not apply, a citation to the statute supports the

conclusion that this Court was not remanding the case to the trial court for

a Section 15.003 fee decision.

But the most persuasive indication of this Court’s intent is the lack of a

remand of the Section 15.003 claims. Had the Court intended that Section

15.003 fees be addressed on remand, it would surely have said so in its

opinion, judgment, and mandate.

3. Section 15.003 does not authorize payment of fees to the

District for attorneys and experts in this case.

a. The District’s proceeding at the Commission does not

fit within the terms of Section 15.003.

The District’s case does not come within the plain language of any right

to recover fees under Section 15.003(a) of the Utilities Code. It applies to

“[a] party represented by counsel who alleges that existing rates are

excessive or that rates prescribed by the commission are excessive,” Tex.

Util. Code § 15.003(a), but nowhere in District’s the complaint did it assert

that AT&T’s existing rates were excessive or that they should be changed.24

In fact, by the District’s own admission, its complaint had nothing at all to
Id. at p. 4 of 10 (“Complainant is not subject to AT&T’s late fees under its 25

tariff because Texas law prescribes another late fee structure for all Political

Subdivisions.”). 

Docket 34332 A.R. (July 16, 2008) (Order Denying Appeal of Order No. 19) 26

available at

http://interchange.puc.state.tx.us/WebApp/Interchange/Documents/34332_162_5898

71.PDF.

16

do with AT&T’s tariffed rates. And, in granting the District’s complaint, 25

the Commission did not determine that AT&T’s rate schedules required

amendment or were otherwise unreasonable. The Commission simply

agreed with the District that the Prompt Payment Act prevailed over the

Public Utility Regulatory Act and limited amounts the District owed for late

payments. The plain language of Section 15.003(a) does not authorize

26

recovery of fees and costs in this case.

b. The District cannot be awarded attorney’s fees and

costs because the Legislature has neither created a

regulation fund nor appropriated money for such a 

fund and has not waived the Commission’s immunity.

Even had the District not waived any Section 15.003 right and the Court

not already decided against the District’s Section 15.003 issue, the District

still could not obtain the relief it requests because the Legislature has never

established a regulation fund. See Tex. Util. Code § 15.003 revisor’s note
The revisor’s note was added when the Public Utilities Regulatory Act was 27

codified as part of the Utilities Code. 97 Laws, 75 R.S., ch. 166, § 1, 1997 Tex. Gen. th

Laws 713–1018.

Tex. Util. Code § 39.903(b) (“The system benefit fund is financed by a 28

nonbypassable fee set by the commission in an amount not to exceed 65 cents per

megawatt hour. The system benefit fund fee is allocated to customers based on the

amount of kilowatt hours used.”).

Id. at § 39.903(d)–(l). 29

17

(stating “Although the regulation fund does not exist, the revised law

retains the reference to retain whatever meaning it may have.”). 

27

Section 15.003 of the Utilities Code mentions a “regulation fund,” but no

statute creates such a fund. This stands in stark contrast to other funds

associated with the Commission. For example, all of Subchapter 56 of the

Public Utility Regulatory Act is devoted to the universal service fund. Tex.

Util. Code §§ 56.001–.301. Section 56.021 establishes that fund. And the

system benefit fund is established by Utilities Code Section 39.903. It

describes the system benefit fund at length, including the statement that it

“is an account in the general revenue fund.” Tex. Util. Code § 39.903(a).

Section 39.903 also describes the source of the system benefit fund and 28

how it is to be administered and used. Clearly the Legislature knows how 29

to create a fund. But no such creation language exists for the “regulation

fund.”
18

In addition to the lack of legislation creating the fund, it has never been

funded by the Legislature. See Tex. H.B. 1, 84th Leg., R.S. (2015) (current

appropriations bill without any “regulation fund”); see also Tex. Util. Code

§ 15.003 revisor’s note (stating “Although the regulation fund does not

exist, the revised law retains the reference to retain whatever meaning it

may have.”). 

Because the regulation fund does not exist, and because the

Legislature has not appropriated any money for use in that fund, the

District cannot demonstrate the requisite consent by the State to be subject

to liability, and any claim is thus barred by sovereign immunity. See Fed.

Sign v. Tex. S. Univ., 951 S.W.2d 401, 414 (Tex. 1997), superseded by

statute on other grounds, Tex. Gov’t Code § 2260.001-.008 (J. Hecht

concurring) (recognizing that absence of legislative appropriation is fatal to

suit against the State, even where the Legislature may have waived

sovereign immunity from suit.)

Prayer

The Commission asks the Court to affirm the district court’s judgment. 

The Commission asks the Court for such other relief as it may be entitled.
19

Respectfully submitted,

KEN PAXTON

Attorney General of Texas

CHARLES E. ROY

First Assistant Attorney General

JAMES E. DAVIS

Deputy Attorney General for Civil Litigation

PRISCILLA M. HUBENAK

Division Chief

Environmental Protection Division

/s/ Elizabeth R. B. Sterling 

Elizabeth R. B. Sterling

Assistant Attorney General 

Texas State Bar No. 19171100

elizabeth.sterling@texasattorneygeneral.gov 

Environmental Protection Division

Office of the Attorney General

P.O. Box 12548, MC-066

Austin, Texas 78711-2548

512.463.2012

512.457.4616 (fax)

COUNSEL FOR PUBLIC UTILITY

COMMISSION OF TEXAS
20

Certificate of Compliance

I certify that the foregoing computer-generated document has 4,003

words, calculated using the computer program WordPerfect 12, pursuant to

Texas Rule of Appellate Procedure 9.4.

 /s/ Elizabeth R. B. Sterling 

Elizabeth R. B. Sterling
21

Certificate of Service

I hereby certify that on this the 26th day of October 2015, a true and

correct copy of the foregoing document was served on the following counsel

electronically, through an electronic filing service and by email:

 /s/ Elizabeth R. B. Sterling 

Elizabeth R. B. Sterling

Bruce S. Powers

Harris County Assistant County Attorney

1019 Congress, 15th Floor

Houston, Texas 77002

713.274.5144

713.755.8924 (fax)

bruce.powers@cao.hctx.net

ATTORNEYS FOR HARRIS COUNTY HOSPITAL DISTRICT

/s/ Elizabeth R. B. Sterling 

Elizabeth R. B. Sterling
APPENDIX A
Filed in The District Court 

of Travis County, Texas 

MAR 2 7 2015 €!;> 

At q·.sj A- M. 

CAUSE NO. D-1-GN-09-002116 Velva L. Price, District Clerk 

HARRIS COUNTY HOSPITAL 

DISTRICT, 

Plaintiff, 

v .. 

PUBLIC UTILI1Y COMMISSION 

OF TEXAS, 

Defendant. 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

§ 

IN THE DISTRICT COURT 

OF TRAVIS COUNTY, TEXAS 

25oth JUDICIAL DISTRICT 

FINAL .JUDGMENT 

On ,J anua1y 22, 2015, the Court considered two motions filed by the Harris 

County Hospital District (District): 1) Motion for Order Remanding Overbilling 

Claims lo Lhe Public Utility Commission of Texas and 2) Motion to Sever Claims 

for Attorney and Expert Fees and Costs and lo Abale the Severed Claims. All 

parties appeared through counsel. The Court, having considered the briefs, the 

pleadings, the argumenl of counsel, and the opinion, judgment, and mandate of 

the Court of Appeals for the Third District of Texas sitling in Austin, herehy 

denies the motion to Sever Claims for Attorney and Expert Fees and Costs and to 

Abate the Severed Claims. The Court further orders that the Commission's 

Docket 34332, Complaint of Harris County Hospital District Against Sw. Bell 

Telephone, LP d/b/a AT&T Texas, be remanded to the Commission for 

proceedings in accord \'\~th the opinion and judgment of the Court of Appeals for 

the Third District of Texas. 

Although this Court previously affirmed the Commission's Docket 34332 

final order, the Anstin Court of Appeals reversed that decision in Harris County 
Hospital District v. Public Utility Commission, 2012 WL 2989228 (Tex. 

App.-Austin 2012, no pet.) (mem. op., not designated for publication). 

The Court finds that, although the Court of Appeals reversed this Courfs 

judgment affirming the Commission's order, the Court of Appeals declined the 

District's claims under Texas Utilities Code§ 15.003 for attorneys and expert 

witnesses and other costs for the pa1ty's efforts before the Commission and the 

court. Therefore, the Court denies the District's request to sever that claim into a 

different lawsuit. 

IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED that the 

Hospital District's Motion to Sever Claims for Attorney and Expert Fees and Costs 

and to Abate the Severed Claims is denied. 

IT IS FURTHER THEREFORE ORDERED, ADJUDGED, AND DECREED 

that the Final Order of the Public Utility Commission in Docket 34332 is 

REVERSED and remanded to the Commission for further proceedings consistent 

with the opinion of the Austin Court of Appeals in this case. 

IT IS FURTHER ORDERED that, in accord with the Court of Appeals' 

mandate, the Public Utility Commission of Texas pay all costs relating to the 

appeal, both in the Court of Appeals and in this Court. All relief not specifically 

granted herein is denied. This judgment is final, disposes of all claims and all 

parties, and is appealable. 

2 
Eli eth R. B. Sterling 

Assistant Attorney General 

Attorneys for the Public Utility Commission of Texas 

Approved as to Form Only 

\~-R~~tS Thomas R. Bray 

Attorneys for Harris County Hospital District 

3 
APPENDIX B
MANDATE 

THE STATE OF TEXAS 

TO THE 250TH DISTRICT COURT OF TRAVIS COUNTY, GREETINGS: 

Trial Court Cause No. D-l-GN-09-002116 

Before our Court of Appeals for the Third District of Texas on July 13, 2012, the cause 

on appeal to revise or reverse your judgment between 

Harris County Hospital District 

No. 03-10-00647-CV v. 

The Public Utility Commission of Texas 

Was determined, and therein our Court of Appeals made its order in these words 

THIS CAUSE came on to be heard on the record of the court below, and the same being 

considered, because it is the opinion of this Court that there was error in the trial court's 

judgment: IT IS THEREFORE considered, adjudged and ordered that the judgment of the trial 

court is reversed, and that the cause is remanded to the trial court with instructions that the case 

be remanded to the Commission for further proceedings consistent with this opinion. It is 

FURTHER ordered that the appellee pay all costs relating to this appeal, both in this Court and 

the court below; and that this decision be certified below for observance. 

Wherefore, we command you to observe the order of our Court of Appeals in this behalf and in 

all things have the order duly recognized, obeyed, and executed. 

,. . 

; -{ : 

.· - ........ . -~ ! -'). 

< :'D J 

Witness the Honorable J. Woodfin Jones, Chief 

Justice of the Court of Appeals for the Third District 

of Texas, with the seal of the Court affixed in the City 

of Austin on Friday, September 28, 2012. 

JEFFREY D. KYLE, CLERK 

By:~~~~+-+-~~~~---~ 

Amy Strother 
BILL OF COSTS 

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN 

No. 03-10-00647-CV 

Harris County Hospital District 

v. 

The Public Utility Commission of Texas 

(No. D-1-GN-09-002116 IN 250TH DISTRICT COURT OF TRAVIS COUNTY) 

Type of Fee Charges Paid By 

SUPREME COURT CHAPTER 51 FEE $50.00 PAID MARKETING ON HOLD 

INDIGENT $25.00 PAID MARKETIN ON HOLD 

FILING $100.00 PAID MARKETING ON HOLD 

CLERK'S RECORD $529.00 UNKNOWN 

REPORTER'S RECORD $75.00 UNKNOWN 

SUPPLEMENTAL CLERK'S RECORD $0.00 UNKNOWN 

FILING $10.00 PAID THOMAS R BRAY 

FILING $10.00 PAID THOMAS R BRAY ATTORNEY AT LAW 

FILING $10.00 PAID CHARLES W MCDONALD 

FILING $10.00 PAID OAG, ELIZABETH STERLING 

REQUIRED TEXAS.GOV EFILING FEE $4.00 E-PAID OAG 

REQUIRED TEXAS.GOV EFILING FEE $4.00 E-PAID THOMAS R. BRAY 

REQUIRED TEXAS.GOV EFILING FEE $4.00 E-PAID THOMAS R. BRAY 

REQUIRED TEXAS.GOV EFILING FEE $4.00 E-PAID AG - ENVIRNMNT AL PROTEC & ADMIN 

REQUIRED TEXAS.GOV EFILING FEE $4.00 E-PAID BRAY & ASSOCIATES 

Balance of costs owing to the Third Court of Appeals, Austin, Texas: $0.00 

Court costs in this cause shall he paid as per the Judgment issued by this Court. 

I, JEFFREY D. KYLE, CLERK OF THE THIRD COURT OF APPEALS OF THE 

STATE OF TEXAS, do hereby certify that the above and foregoing is a true and correct copy of 

the cost bill of THE COURT OF APPEALS FOR THE THIRD DISTRICT OF TEXAS, 

showing the charges and payments, in the above numbered and styled cause, as the same appears 

of record in this office. 

"' · ...... . .. ' . I \. 

: -/ : 

IN TESTIMONY WHEREOF, witness my hand 

and the Seal of the COURT OF APPEALS for the 

Third District of Texas on September 28, 2012. 
APPENDIX C
TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN 

JUDGMENT RENDERED JULY 13, 2012 

NO. 03-10-00647-CV 

Harris County Hospital District, Appellant 

v. 

The Public Utility Commission of Texas, Appellee 

APPEAL FROM THE 250TH DISTRICT COURT OF TRAVIS COUNTY 

BEFORE JUSTICES PURYEAR, ROSE AND GOODWIN 

REVERSED AND REMANDED -- OPINION BY JUSTICE GOODWIN 

THIS CAUSE came on to be heard on the record of the court below, and the same being 

considered, because it is the opinion of this Court that there was error in the trial court's 

judgment: IT IS THEREFORE considered, adjudged and ordered that the judgment of the trial 

court is reversed, and that the cause is remanded to the trial court with instructions that the case 

be remanded to the Commission for further proceedings consistent with this opinion. It is 

FURTHER ordered that the appellee pay all costs relating to this appeal, both in this Court and 

the court below; and that this decision be certified below for observance.