Case Name: COALITION ADVOCATING A SAFE ENVIRONMENT, Appellant, v. TEXAS WATER COMMISSION, et al., Appellees
Court: Texas Courts of Appeals
Jurisdiction: Texas
Decision Date: 1990-11-14
Citations: 798 S.W.2d 639
Docket Number: No. 3-89-097-CV
Parties: COALITION ADVOCATING A SAFE ENVIRONMENT, Appellant, v. TEXAS WATER COMMISSION, et al., Appellees.
Judges: Before SHANNON, C.J., and GAMMAGE and JONES, JJ.
Reporter: South Western Reporter Second Series
Volume: 798
Pages: 639–646

Head Matter:
COALITION ADVOCATING A SAFE ENVIRONMENT, Appellant, v. TEXAS WATER COMMISSION, et al., Appellees.
No. 3-89-097-CV.
Court of Appeals of Texas, Austin.
Nov. 14, 1990.
Rehearing Overruled Dec. 12, 1990.
James B. Blackburn, Jr., Houston, for appellant.
Jim Mattox, Atty. Gen., Nancy E. Olinger, Asst. Atty. Gen., Austin, for Texas Water Com’n.
Charles L. Berry, Vinson & Elkins, Houston, for Chemical Waste Management, Inc.
Before SHANNON, C.J., and GAMMAGE and JONES, JJ.

Opinion:
GAMMAGE, Justice.
The Coalition Advocating A Safe Environment (Coalition) appeals from a district-court judgment affirming an order of the Texas Water Commission (Commission) permitting the owners of an existing solid waste management facility to construct and operate an incinerator at their facility. Coalition alleges the facility owners improperly communicated with a decision-maker during the permit process in violation of the Administrative Procedure and Texas Register Act, Tex.Rev.Civ.Stat.Ann. art. 6252-13a, § 17 (Supp.1990) (APTRA). We agree. We will reverse the district court's judgment and remand the cause to the Commission for reconsideration.
Chemical Waste Management, Inc. (Chemical) owns and operates a solid waste management facility near Port Arthur. Chemical applied to the Commission for authorization to construct and operate its proposed incinerator. Chemical also submitted the required tentative compliance plan. By taking these actions, Chemical acted in conformity with the Solid Waste Disposal Act, 1969 Tex.Gen.Laws, ch. 405, at 1320 [Tex.Rev.Civ.Stat. art. 4477-7, since amended and repealed, currently codified as Tex. Health & Safety Code Ann. § 361.001-345 (Pamph.1990).]
Chemical, Coalition and the Texas Air Control Board (TACB), among others, participated as advocates in a hearing before the Water Commission. Coalition, an alliance of several environmental groups, was the principal contestant at the hearing. After the hearing, the Commission authorized both the construction of the incinerator and issuance of the compliance plan Chemical had submitted.
Coalition raises various issues by its points of error. By points one and two, it contends that the Commission's order is vulnerable to attack because TACB's staff engineer engaged in ex parte conversations with Chemical's representatives during the course of the hearing. These conversations are the subject of Coalition's complaint that Chemical violated section 17 of APTRA. Coalition summarizes what transpired as follows:
During the course of the public adjudicatory hearing, the attorney for the appellant CASE [Coalition] became aware of the fact that the TACB staff engineer was meeting at night with representatives of the applicant Chemical Waste Management during the time period when the adjudicatory hearing was taking place. Although the TACB was a party to the hearing, much of the information of importance to the TACB decision-making process was not developed through on-the-record testimony and cross-examination. Instead, information was exchanged between the TACB and the applicant CWM [Chemical] outside of the public adjudicatory hearing process.
Specifically, a several hundred page volume titled "Supplemental Air Quality Information" was delivered to Mr. Ruben Velazquez, the TACB staff permit engineer, outside of the hearing process during the period of time when the public hearing was ongoing. This document was relied upon in subsequent testimony by Mr. Velazquez but was never entered into the record. Further, Mr. Velazquez testified that he received numerous other submissions in the form of memoranda from the applicant, CWM, after the hearing began. Consider the following testimony:
Q. (by Mr. Blackburn) How many submissions did you receive from the applicant after this hearing started? A. (by Mr. Velazquez) I haven't counted.
Q. Do you have them all with you. A. I think I do.
Q. Would you count them?
A. I will try. I counted somewhere between 12 and 15 submittals [sic].
Q. And are these (memoranda) in subjects directly associated with the information that is being discussed in this hearing?
A. Yes, they would all be associated with this permit.
One of the memoranda submitted from CWM's consultants to Mr. Velazquez was indiscreetly titled "The Information We Discussed Yesterday." Mr. Velazquez testified that he relied upon this supplemental information in forming his opinion regarding the proposed hazardous waste incinerator's compliance with the rules and regulations of the TACB. This opinion was subsequently delivered into the record of the hearing by Mr. Velazquez, testifying on behalf of the Texas Air Control Board.
(Citations omitted). This characterization of the nature of the communications is unrefuted by Chemical or the Commission.
The relevant portion of section 17 provides:
Unless required for the disposition of ex parte matters authorized by law, members or employees of an agency assigned to render a decision or to make findings of fact and conclusions of law in a contested case may not communicate, directly or indirectly, in connection with any issue of fact or law with any agency, person, party, or their representatives, except on notice and opportunity for all parties to participate.
(Emphasis added). Section 17 applies in the contested case setting to prohibit communication between the agency's decision-makers or fact-finders and others, unless all parties have been given notice and an opportunity to participate. County of Galveston v. Texas Dep't of Health, 724 S.W.2d 115, 121 (Tex.App.1987, writ ref'd n.r.e.). The novel question presented here is whether TACB did, in fact, have decision-making or fact-finding authority such that its employee engineer was prohibited from communicating with another party to the proceeding, Chemical.
Chemical and the Commission correctly point out that the prohibitions found in section 17 apply only to agency members or employees assigned to render decisions or make findings of fact and conclusions of law, and argue the TACB was not a decision-maker or fact-finder in this proceeding. They assert that, because TACB was only a party, communications between Chemical's representatives and TACB's engineer were communications between parties. Such communications are not prohibited by section 17. We disagree with regard to TACB's status.
The TACB occupies a unique position in the Texas agency arena, as can be seen from the statute that outlines the procedure for permit proceedings such as the present one. Although the Texas Water Commission has exclusive authority to grant hazardous waste facility permits, 1969 Tex.Gen.Laws, ch. 405, at 1320, as amended, 1987 Tex.Gen.Laws, ch. 279, § 3, at 1632 [Tex.Rev.Civ.Stat.Ann. art. 4477-7, § 4(e)(4)(A)(i), since repealed], subsection (ii) of the same statute provides for an enhanced status for the TACB:
It is the intent of the Legislature that to the extent possible in conformance with this subpart (A), the lead agency shall defer to the policies, rules, and interpretations of the Texas Air Control Board on the air quality impact of the proposed hazardous waste or solid waste management activities, and that the Texas Air Control Board remain the principal authority of the state in matters of air pollution control.
1987 Tex.Gen.Laws, ch. 279, § 4, at 1632 [Tex.Rev.Civ.Stat. art. 4477-7, § 4(e)(4)(A)(ii), since repealed] (Emphasis added). Consequently, we begin with the premise that the Water Commission will give great weight to the recommendations of TACB, deferring to that agency, if possible, when air quality issues are involved.
In addition to this required deference, subsection (ii) continues:
If no contested case hearing on the permit application is held by the lead agency, the recommendations or proposed permit provisions submitted by the Texas Air Control Board shall be incorporated into any permit issued by the lead agency. If a contested case hearing is held, all evidence and testimony of the state regarding air quality aspects of the application shall be developed and presented by the Texas Air Control Board. All parties, including the lead agency, shall have the right to cross-examine any testifying witnesses of the Texas Air Control Board. At the conclusion of the presentation of testimony, the hearings examiner shall afford the Texas Air Control Board at least thirty (SO) days in which to submit a set of proposed findings of fact and conclusions of law and, if applicable, proposed permit language, respecting the air quality aspects of the application which relate to the criteria established under (A)(i), which shall be accepted by the hearings examiner and the final decision-making body of the lead agency unless such body finds that the recommendations of the Texas Air Control Board are not supported by a preponderance of the evidence.
1969 Tex.Gen.Laws, ch. 405, at 1320, as amended, Tex.Gen.Laws, ch. 279, § 4, at 1632 [Tex.Rev.Civ.Stat. art. 4477-7, § 4(e)(4)(A)(ii), since repealed] (Emphasis added). Section 4(e)(4)(A)(ii) requires TACB, after a contested case hearing, to submit proposed findings of fact and conclusions of law to the Commission regarding the air quality aspects of the application. The Commission must adopt the TACB's findings, conclusions, and proposed permit language unless the Commission determines from an independent review of the evidence that the findings, conclusions, and/or permit language are unsupported by a preponderance of the evidence. In the absence of such a determination, TACB's findings must be adopted.
To date, Texas courts have addressed few other instances in which ex parte communications allegedly violated section 17. In County of Galveston v. Texas Department of Health, 724 S.W.2d 115 (Tex.App.1987, writ ref'd n.r.e.), an intervenor in a permit proceeding contended the applicant violated section 17 by communicating with employees of the agency from which it would ultimately have to obtain the permit. Although County of Galveston is factually distinguishable, it does assist us by delineating the proper policy concerns inherent in any assessment of whether an ex parte communication violates section 17. As this Court observed in that case,
It is easy to see that APTRA § 17 was designed to secure procedural due process of law in agency proceedings and assure the exclusiveness-of-the-record principle reflected in other provisions of APTRA....
County of Galveston, 724 S.W.2d at 123, n. 5.
The County of Galveston applicant engaged in some communications with agency employees before the permit hearing. The agency employees to whom communications were made were those responsible for ensuring that the applicant included all necessary information with its application. These employees did not later participate in the case. The remaining communications were post-hearing and were between an agency representative acting as a party— the Texas Water Commissioner, the assigned decision maker — and two non-participant agency employees — the agency's legal counsel and an associate commissioner. This Court concluded that neither group of the complained of communications violated APTRA § 17 because 1) the pre-hearing communications by the permit applicant were not made to agency employees "assigned to render a decision or to make findings of fact and conclusions of law," and 2) the post-hearing communications between the commissioner and his employees fell within the § 17 exception allowing ex parte communications made "for the purpose of utilizing the special skills or knowledge of the agency and its staff in evaluating the evidence." Id. at 121-22. In County of Galveston we did not address the issue of whether discussions between an applicant and an agency official who may be a fact-finder, made during the course of a hearing, constitutes an ex parte communication in violation of APTRA § 17.
In the present case, during the permit hearing, Chemical communicated directly with a TACB staff engineer. There is no question that this employee relied on the information supplied in forming his opinion as to Chemical's compliance with TACB rules and regulations. This appears to be communication between parties, which is not prohibited by section 17, until one considers that the TACB ultimately proposes findings of fact and conclusions of law which are potentially binding on the Commission.
Our examination of the rules of the TACB and the Water Commission convinces us that TACB employees who advocate a particular outcome at a hearing may very well be the same employees who propose findings of fact and conclusions of law for the Commission's action. Under these circumstances, we cannot say TACB is a mere party in the same sense that the applicant and the intervenor are parties. In view of the distinct roles of an ordinary party and TACB, we conclude that any communication between a party and TACB employees is prohibited when TACB's proposed findings and conclusions may bind the Commission to make a particular decision.
Nor is the present situation analogous to a civil trial in which the "winning party" would be permitted to draft the court's order. Parties other than TACB have no opportunity to draft proposed findings, conclusions, or permit language, although they may file exceptions to the proposals. This distinction, coupled with the Commission's statutorily required deference to TACB policies and the fact that TACB may make ultimate decisions in these matters, leads us to conclude that TACB has decision-making authority in permit proceedings such as this one before the Water Commission. We sustain Coalition's second point of error.
Because of our holding with respect to appellant's point of error two, we need not address the remaining points of error. We reverse the judgment of the district court and remand the cause for proceedings not inconsistent with this opinion.