Opinion ID: 895300
Heading Depth: 1
Heading Rank: 2

Heading: standard of review

Text: The parties disagree on the contours of the precise issue in dispute, which is a matter we initially address. The Commission contends this case fundamentally concerns the need for court deference to an agency's interpretation of what it argues is an ambiguous statute. If an agency's construction of an ambiguous statute it is charged with administering is reasonable, the Commission urges, it is improper for a court to overturn that interpretation. [5] Texas Citizens counters that the core issue is not an agency's interpretation of a statutory term or even the proper definition of public interest, but rather whether that phrase may include factors beyond the production of oil and gas, requiring the Commission to weigh all evidence offered in support of or against the public interest finding. We agree with the Commission that this case turns on a matter of statutory constructionspecifically, the definition of the term public interestand therefore the proper level of deference a court must grant the Commission's interpretation of that term. As Texas Citizens asserts, the Commission's order does not expressly define the term public interest. Rather, the orderby way of adopting the examiners' findings of fact and conclusions of lawstates that the well is in the public interest because of its positive effect on increased productivity from wells in the Barnett Shale field. But although the Commission's final order does not explicitly adopt the examiners' statements concerning Texas Citizens' traffic-safety evidence, the Commission has made clear, throughout these proceedings, that it does not view its public interest analysis as an open-ended inquiry including public-safety issues, but rather one limited to matters related to oil and gas production. The crux of the dispute, then, is whether the term public interest in section 27.051(b) of the Water Code is a broad, open-ended term, encompassing any conceivable subject potentially affecting the public, or a more narrow term that does not include a subsidiary issue like traffic safety but is limited to matters related to oil and gas production. The Utilities Code generally requires a court to review a decision of the Commission under a substantial evidence standard. See TEX. UTIL. CODE § 105.001(a) (Any party to a proceeding before the railroad commission is entitled to judicial review under the substantial evidence rule.). This standard requires a court to reverse or remand a case for further proceedings if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are, among other things, not reasonably supported by substantial evidence, or are characterized by abuse of discretion. TEX. GOV'T CODE § 2001.174(2). The gravamen of this dispute, however, is a governmental agency's construction of a statute it is charged with administering. The construction of a statute is a question of law we review de novo. First Am. Title Ins. Co. v. Combs, 258 S.W.3d 627, 631 (Tex.2008); F.F.P. Operating Partners, L.P. v. Duenez, 237 S.W.3d 680, 683 (Tex.2007). We have long held that an agency's interpretation of a statute it is charged with enforcing is entitled to serious consideration, so long as the construction is reasonable and does not conflict with the statute's language. We have stated this principle in differing ways, but our opinions consistently state that we should grant an administrative agency's interpretation of a statute it is charged with enforcing some deference. [6] Citing the Supreme Court's seminal case on judicial deference, the Commission argues that state law principles regarding judicial deference to an agency's interpretation of a statute it implements are closely aligned to federal-court precedent. See Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under the Chevron doctrine, a federal court embarks on a two-part test in determining whether to defer to an agency's construction of a statute. First, the court must consider whether Congress has directly spoken to the precise question at issue. Id. at 842, 104 S.Ct. 2778. If Congress's intent is clear and unambiguous under the language of the statute, that is the end of the inquiry. See id. at 842-43, 104 S.Ct. 2778. If the statute is silent or ambiguous, however, the court does not impose its own construction of the statute, but rather defers to the agency's interpretation so long as it is reasonable. See id. at 843, 104 S.Ct. 2778. The Chevron doctrine applies to a formal agency construction of a statute, as in an order following a formal adjudication or a regulation. See U.S. v. Mead Corp., 533 U.S. 218, 229-30, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001). Informal interpretations, such as advisory opinions, may merit some deference, as articulated in Skidmore v. Swift & Co., 323 U.S. 134, 139-40, 65 S.Ct. 161, 89 L.Ed. 124 (1944), but not the high deferential standard afforded in Chevron. See Mead, 533 U.S. at 234-35, 121 S.Ct. 2164; see generally Bradley Lipton, Accountability, Deference, and the Skidmore Doctrine, 119 YALE L.J. 2096 (2010). We have never expressly adopted the Chevron or Skidmore doctrines for our consideration of a state agency's construction of a statute, but we agree with the Commission that the analysis in which we engage is similar. In our serious consideration inquiry, we will generally uphold an agency's interpretation of a statute it is charged by the Legislature with enforcing, `so long as the construction is reasonable and does not contradict the plain language of the statute.' First Am. Title Ins. Co., 258 S.W.3d at 632 (quoting Tarrant Appraisal Dist. v. Moore, 845 S.W.2d 820, 823 (Tex.1993)). As we observed in Fiess, this deference is tempered by several considerations: It is true that courts give some deference to an agency regulation containing a reasonable interpretation of an ambiguous statute. But there are several qualifiers in that statement. First, it applies to formal opinions adopted after formal proceedings, not isolated comments during a hearing or opinions [in a court brief]. Second, the language at issue must be ambiguous; an agency's opinion cannot change plain language. Third, the agency's construction must be reasonable; alternative unreasonable constructions do not make a policy ambiguous. Fiess v. State Farm Lloyds, 202 S.W.3d 744, 747-48 (Tex.2006). Here, the examiners' opinion, and the Commission's final order, were formally adopted after an adjudication. Accordingly, we will review the Commission's interpretation of public interest and uphold it if it is reasonable and in accord with the plain language of the statute. See First Am. Title Ins. Co., 258 S.W.3d at 632. [7]