Court Opinion

ID: 2873648
Source: CourtListenerOpinion
Date Created: 2015-09-06 04:59:40.945733+00
Date Added: 2024-06-11T11:33:05.428997
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                             444444444444444444444444444
                              ON MOTION FOR REHEARING
                             444444444444444444444444444

                                     NO. 03-05-00097-CV

    Railroad Commission of Texas and Dos Republicas Resources Co., Inc., Appellants

                                                v.

Theodosia Coppock, Juanita Alvarado, Guadalupe Davila, and Kickapoo Traditional Tribe
                                 of Texas, Appellees

     FROM THE DISTRICT COURT OF TRAVIS COUNTY, 201ST JUDICIAL DISTRICT
         NO. GN401227, HONORABLE SCOTT H. JENKINS, JUDGE PRESIDING

                                         OPINION

               Our opinion and judgment issued on December 29, 2006, are withdrawn, and the

following opinion is substituted.

               Dos Republicas Resources Co., Inc. (“Dos Republicas”) asked the Railroad

Commission of Texas (the “Commission”) to extend its surface coal mining permit under the

provisions of the Texas Surface Coal Mining and Reclamation Act codified in the natural resources

code, but Theodosia Coppock, Juanita Alvarado, Guadalupe Davila, and Kickapoo Traditional Tribe

of Texas (the “appellees”) opposed the extension. Ultimately, the Commission granted the

extension, and the appellees appealed the Commission’s decision. The district court concluded that

the Commission’s basis for granting the extension, namely the lack of a market for Dos Republicas
to sell its coal, was not authorized under the natural resources code. See Tex. Nat. Res. Code Ann.

§ 134.072 (West 2001). Dos Republicas and the Commission appeal the district court’s judgment,

and we will reverse the court’s judgment.

                                        BACKGROUND

               In 1992, Dos Republicas applied to the Commission for a permit to allow it to engage

in coal mining on a 2700-acre tract in Eagle Pass, Texas, and the Commission approved the permit

in 1994. However, Dos Republicas did not request that the permit be issued at that time.

               For years, Dos Republicas attempted to enter into an agreement to sell its coal to the

Comision Federal de Electricidad (“CFE”), a state-owned electricity provider in Mexico that operates

two coal-fired plants near Eagle Pass. In 1999, CFE became concerned about the financial security

of the mining company that had been its coal supplier. As a result, it alerted Dos Republicas that,

in early 2000, it would be issuing a request for proposals asking companies to submit bids offering

to supply CFE with coal and asked Dos Republicas to issue a bid. To ensure that it would have a

supply when necessary, Dos Republicas asked the Commission to issue the permit it had previously

approved, and the Commission issued the permit in April 2000.

               Due to a number of political changes and pressure from various interested parties,

CFE never issued its request for proposals. Employees from mines in Mexico complained that

importing coal from Texas might eliminate their jobs. In addition, during this time, the governing

political party in Mexico changed, and the leaders of CFE were replaced.

               Dos Republicas continued its efforts to enter into an agreement with CFE, and, in

2001, CFE again indicated that it would issue a request for proposals. However, as had happened

                                                 2
previously, no request was ever issued. Instead, CFE entered into a long-term supply contract with

a Mexican mining company, Coahuila Industrial Minera (“Coahuila”).

                Prior to and after CFE entered into a contract with Coahuila, Dos Republicas

unsuccessfully attempted to find other market options for selling its coal. Even though Dos

Republicas asked the Commission to issue it a mining permit, it never began mining coal at the

Eagle Pass mine and, eventually, filed an application with the Commission seeking to terminate its

permit. Although Dos Republicas asked that its permit be terminated, the natural resources code also

contains an early termination provision mandating that a mining permit will expire within three years

of its issuance if the permit holder has not begun “surface coal mining” operations by that date. Tex.

Nat. Res. Code Ann. § 134.072(a);1 see also id. § 134.004(20) (West 2001) (definition of “surface

coal mining operations”). Dos Republicas filed its application to terminate its permit shortly before

the three-year termination date.

                Just before the three-year termination deadline passed, Coahuila contacted Dos

Republicas and indicated that it was interested in purchasing the Eagle Pass mining operation.

Consequently, Dos Republicas filed a request to withdraw its application to terminate the permit and

also filed a request to extend its permit beyond the three-year deadline. The natural resources code

       1
           Subsection 134.072(a) reads as follows:

       A permit terminates if the permit holder has not begun the surface coal mining
       operation covered by the permit on or before the third anniversary of the date on
       which the period for which the permit is issued begins.

Tex. Nat. Res. Code Ann. § 134.072(a) (West 2001).

                                                  3
allows the Commission to grant “reasonable extensions” if it is shown that the extensions are

necessary because of:

       (1) litigation that precludes the beginning of operations or threatens substantial
       economic loss to the permit holder; or

       (2) conditions beyond the control and without the fault or negligence of the permit
       holder.

Id. § 134.072(b).2

       2
        The administrative rule interpreting section 134.072 contains nearly identical language. It
provides:

       (b) Automatic termination shall occur as follows:

               (1) a permit shall terminate, if the permittee has not begun the surface
               coal mining and reclamation operation covered by the permit within
               3 years of the issuance of the permit;

               (2) the Commission may grant reasonable extensions of time for
               commencement of these operations, upon receipt of a written
               statement showing that such extensions of time are necessary, if:

                        (A) litigation precludes the commencement or
                        threatens substantial economic loss to the permittee;
                        or

                        (B) there are conditions beyond the control and
                        without the fault or negligence of the permittee

16 Tex. Admin. Code § 12.219(b) (2006). Because the rule is nearly identical to the statute, we will
limit our discussion to the statute.

                                                  4
               The Commission referred the matter to a hearings examiner. Coppock, a landowner

near the Eagle Pass property, opposed the extension.3 She claimed that, because the three-year

deadline had passed by the time of the hearing, the Commission had no authority to grant an

extension. Alternatively, she argued that the Commission should deny the extension because the

conditions allowing for an extension found in section 134.072 were not satisfied. Specifically, she

asserted that the absence of a market in which Dos Republicas could sell its coal could not

justify an extension.

               The hearing examiner concluded that the Commission had jurisdiction to consider

the request for an extension because the request for an extension was filed prior to the three-year

deadline. Further, she concluded that the Commission should grant the extension because Dos

Republicas’s failure to begin mining was due to the absence of a market for the coal and that the

market condition was “beyond the control and without the fault or negligence” of Dos Republicas.

The Commission adopted the examiner’s proposal for decision and granted the extension.

               The appellees appealed the Commission’s order to the district court. See Tex. Gov’t

Code Ann. § 2001.171 (West 2000) (person who has exhausted all administrative remedies and is

aggrieved by final agency decision is entitled to judicial review). In its judgment, the district court

concluded that the Commission had jurisdiction over the extension request because the Commission

has authority over a request as long as it is filed within three years of the permit’s issuance.

       3
         Coppock owns a cattle ranch near Dos Republicas’s proposed mine site. She opposed the
extension because she was concerned about how mining operations might affect the groundwater
under her ranch. The remaining appellees— Juanita Alvarado, Guadalupe Davila, and Kickapoo
Traditional Tribe of Texas—did not intervene until after the hearing examiner’s proposal for
decision was issued.

                                                  5
However, the court also concluded that “[s]ubsection 134.072(b) does not authorize the Commission

to grant an extension based upon the absence of a market or other economic, political, or social

conditions that are beyond the control of and without the fault or negligence of the permit holder.”

Dos Republicas and the Commission appeal the district court’s judgment.

                                   STANDARD OF REVIEW

               In addressing the issues raised in this appeal by the appellants and the appellees, we

must necessarily construe the relevant provisions of the natural resources code. Statutory

construction is a question of law, which we review de novo. State v. Shumake, 199 S.W.3d 279, 284

(Tex. 2006). In determining the meaning of a statute, our primary purpose is to determine the

legislature’s intent when enacting the statute, and we begin with the language used in the statute.

Id. Every word in a statute is presumed to have been used for a purpose and every word excluded

is presumed to have been excluded for a purpose. Laidlaw Waste Sys., Inc. v. City of Wilmer, 904
S.W.2d 656, 659 (Tex. 1995). Further, we look to the entire act and do not look at a single provision

isolated from the remainder of the act. Watts v. City of Houston, 126 S.W.3d 97, 100 (Tex.

App.—Houston [1st Dist.] 2003, no pet.); see also Tex. Gov’t Code Ann. § 311.021(2) (West 2005)

(presume that entire statute was meant to be effective). We should not adopt a construction of a

statute that will render the statute meaningless or lead to absurd results. See Watts, 126 S.W.3d at

100; see also Tex. Gov’t Code Ann. § 311.021(3) (West 2005) (in construing statutes, we presume

that just and reasonable result was intended). Finally, the construction of a statute by the

administrative agency charged with its enforcement is entitled to serious consideration so long as the

construction is reasonable and does not contradict the plain language of the statute. Tarrant

                                                  6
Appraisal Dist. v. Moore, 845 S.W.2d 820, 823 (Tex. 1993); Anderson-Clayton Bros. Funeral

Home, Inc. v. Strayhorn, 149 S.W.3d 166, 178 (Tex. App.—Austin 2004, pet. denied) (even if there

are other reasonable interpretations, we will accept agency’s construction of statute if it is consistent

with language and purpose of statute); see also Tex. Gov’t Code Ann. § 311.023(6) (West 2005) (in

construing statutes, courts may consider administrative construction of statute regardless of whether

statute is considered ambiguous). This is particularly true when the statute involves a complex

subject matter. Buddy Gregg Motor Homes v. Motor Vehicle Bd., 156 S.W.3d 91, 99 (Tex.

App.—Austin 2004, pet. denied). However, for nontechnical questions of law and other questions

not lying within an agency’s expertise, courts do not defer to an agency’s interpretation. Id.

                                            DISCUSSION

                On appeal, the Commission and Dos Republicas contend that the district court erred

when it reversed the Commission’s order granting Dos Republicas’s extension because the extension

was authorized by the natural resources code. In response, the appellees assert that the extension was

not authorized by statute and that the Commission did not have the authority to grant the extension

after the three-year deadline.

The Commission Possessed Authority to Address Dos Republicas’s Extension Request

                On appeal, the appellees assert that the Commission lacked the authority to grant the

permit extension because the three-year deadline specified in the statute had expired. Before we

address this issue, we note that there is some question about whether the appellees may make this

cross-claim without first filing a notice of appeal. The Commission and Dos Republicas contend

                                                   7
that the appellees may not bring this cross-claim on appeal because they failed to file a notice of

appeal. See Tex. R. App. P. 25.1 (party who seeks to alter trial court’s judgment must file notice of

appeal), 26.1 (specifying deadlines for filing notices of appeal). The appellees, on the other hand,

insist that this issue may be considered on appeal. Specifically, they assert that it was unnecessary

for them to file a notice of appeal because they are not seeking more favorable relief than that

granted by the district court. See First Gen. Realty Corp. v. Maryland Cas. Co., 981 S.W.2d 495,

503 (Tex. App.—Austin 1998, pet. denied) (because appellees’ arguments did not ask for relief

greater than that granted by trial court, appellees were not required to file notice of appeal). Rather,

they argue that they are simply seeking to affirm the final judgment of the district court and that they

raise this issue merely as an alternative ground for affirming the district court’s judgment. See

Helton v. Railroad Comm’n, 126 S.W.3d 111, 119-20 (Tex. App.—Houston [1st Dist.] 2003, pet.

denied) (noting distinction between cross-points that require separate notice of appeal and claims that

merely seek to raise alternate grounds opposing recovery by appealing party). In the interests of

justice, we will address their argument.

               The appellees insist that Dos Republicas’s permit terminated automatically on April

11, 2003, because Dos Republicas had not commenced surface mining and had not obtained an

extension by that date. In support of this assertion, the appellees contend that nothing in the natural

resources code provides that requesting an extension within the three-year deadline will toll the

termination deadline or allows for a conditional extension pending a final determination by the

Commission. In response, the Commission argues that it may grant an extension request after the

three-year deadline as long as the request was filed within the three-year cutoff.

                                                   8
               The Commission’s interpretation of the statute is consistent with the language of the

statute. Nothing in the natural resources code necessitates that the Commission rule on an extension

request before the three-year deadline passes in order for the extension to be effective. See Tex. Nat.

Res. Code Ann. § 134.072. The lack of a Commission deadline for issuing its decision is instructive

given that the code provides specific deadlines for agency action in other contexts. For example,

section 134.080 of the code mandates that the Commission issue a decision regarding a permit

revision filed by a permit holder within 90 days of receiving the application for revision. See id.

§ 134.080 (West 2001); see also Tex. Gov’t Code Ann. § 2001.146(c) (West 2000) (agency must

act on motion for rehearing within 45 days or motion is overruled by operation of law).

               Moreover, the code does not mandate that a permit holder file an extension request

within a given time prior to the termination date in order to allow the Commission to fully consider

the request. The lack of a specific deadline by which a permit holder must file a request is

noteworthy when looking at other code provisions. The section concerning permit renewals

explicitly provides a deadline by which an applicant must file a permit renewal application that is

prior to the permit expiration date. Specifically, section 134.078 provides as follows:

       Application for permit renewal must be made not later than the 120th day before the
       date the existing permit expires.

Tex. Nat. Res. Code Ann. § 134.078 (West 2001); see also 16 Tex. Admin. Code § 12.106(b)(2)

(2006) (requiring permit holder to file permit renewal 180 days before permit expires), (b)(3) (2006)

(requiring permit holder to file permit revision application 180 days before it expects to revise its

operations). The absence of a similarly worded deadline in the extension context supports the

                                                  9
Commission’s interpretation, which allows for the filing of an extension request up to the three-year

termination deadline. See Laidlaw Waste Sys., Inc., 904 S.W.2d at 659 (presume that every word

omitted was purposefully excluded).

               Furthermore, if the appellees’ interpretation of the statute were correct, applicants

would have the onerous task of estimating how far in advance they would need to file an extension

request in order to allow the Commission time to fully review the application and issue its decision

prior to the expiration of the three-year deadline. In addition, the appellees’ construction would

effectively eliminate extensions for events occurring between the time a permit holder should file

an extension request to ensure that a timely decision is issued and the three-year termination date.

Given that the possible reasons for requesting an extension might vary in complexity, the amount

of time necessary for full consideration of a request will vary, the extension may or may not be

opposed, hearings may or may not be scheduled on the proposed extension, and there is no statutory

deadline for the Commission releasing its decision, this interpretation would lead to unfair results.

For example, under the appellees’ interpretation, a permit holder who files for an extension just prior

to the termination deadline would receive an extension as long as the Commission issued the

extension by the three-year deadline, whereas a permit holder who files a request for an extension

well in advance of the deadline would not receive an extension if the Commission is unable to grant

the extension by the cut-off date.4 We cannot adopt an interpretation that would lead to such

arbitrary results. See Watts, 126 S.W.3d at 100.

       4
      In this case, almost a year passed between Dos Republicas’s filing for an extension and the
Commission’s decision granting the extension.

                                                  10
                This construction is also supported by the effect of the extension provisions. Cf. Tex.

Gov’t Code Ann. § 311.023(1) (West 2005) (in interpreting statute, courts may consider “object

sought to be attained”). Section 134.072 terminates a permit, regardless of the length of the permit’s

effective term, within three years of the permit’s issuance if the permit holder has not begun mining

operations. Tex. Nat. Res. Code Ann. § 134.072; see also id. § 134.071 (West 2001) (allowing

Commission to issue permits with terms of five years or more). Given that section 134.072 can

shorten the effective term of a mining permit by imposing a three-year deadline, the Commission’s

interpretation that a request for an extension is effective if filed within the three-year deadline seems

logical and equitable.

                For all the reasons previously given, we conclude that the Commission’s

interpretation of the statute is consistent with section 134.072 and further conclude that the

Commission had the authority to grant Dos Repulicas’s extension request even though the three-year

termination date had passed. Accordingly, we affirm that portion of the district court’s judgment.

The Statute Allows Extension Requests to be Granted for Market Reasons

                In their only issue on appeal, the Commission and Dos Republicas contend that the

district court erred by reversing the Commission’s order. Specifically, they argue that the absence

of a market for the coal present at the Eagle Pass mine was a condition outside of Dos Republicas’s

control that occurred “in the absence of any fault or negligence” on behalf of Dos Republicas and

that, therefore, the Commission was authorized by statute to grant the extension.5

        5
         Whether the Commission’s order was supported by substantial evidence is not at issue in
this case. For this reason, we focus solely on whether the Commission exceeded its statutory
authority by issuing the extension.

                                                   11
               The appellees, on the other hand, contend that the district court correctly concluded

that the Commission was not authorized to issue an extension to Dos Republicas. First, the appellees

argue that the language of subsection 134.072(b)(2), which is the subsection relevant in this appeal,

acts as a force majeure provision that prohibits an extension unless the permit holder has physically

been prevented from commencing operations due to “conditions beyond its control and without its

fault or negligence.” Further, the appellees contend that Dos Republicas was not actually prevented

from mining and, therefore, insist that Dos Republicas should not have been given an extension for

its conscious choice not to begin mining.

               We disagree with the appellees’ assertion. There is no requirement listed in 134.072

that a permit holder must be “physically” prevented from engaging in mining operations to obtain

an extension. Further, we have been unable to find any case applying the doctrine of force majeure

to the issuance of a permit by a state regulatory authority. The doctrine is designed to protect parties

to a contract and excuses a party’s nonperformance because of events outside the control of the

parties. See Black’s Law Dictionary 445 (abridged 6th ed. 1991); see also Perlman v. Pioneer Ltd.

P’ship, 918 F.2d 1244, 1248 n.5 (5th Cir. 1990) (force majeure describes particular type of event,

which may excuse performance under contract). The scope and applicability of the doctrine is

dependent upon the terms specified in a contract. See Zurich Am. Ins. Co. v. Hunt Petroleum (AEC),

Inc., 157 S.W.3d 462, 466 (Tex. App.—Houston [14th Dist.] 2004, no pet.); see also Perlman, 918
F.2d at 1248 n.5 (should look to language of contract to determine parties’ intent concerning whether

event complained of excuses performance); Sun Operating Ltd. P’ship v. Holt, 984 S.W.2d 277, 282-

83 (Tex. App.—Amarillo 1998, pet. denied) (much of historic meaning of phrase force majeure is

gone and, therefore, scope and application of doctrine is “utterly dependent upon the terms of the

                                                  12
contract in which it appears”); 30 Samuel Williston & Richard A. Lord, A Treatise on the Law of

Contracts § 77:31 (4th ed. 1990 & Supp. 2004) (specific language of clause indicates what events

will excuse performance and typical clause states that party’s performance is subject to “acts of God,

war, government regulation, terrorism, disaster, strikes . . . civil disorder, curtailment of

transportation facilities, or any other emergency beyond the parties control”).

               In addition, the cases the appellees refer to in support of their assertion that, under the

doctrine of force majeure, market conditions cannot justify a permit extension are distinguishable.

The appellees refer to Day v. Tenneco, Inc., 696 F. Supp. 233 (S. D. Miss. 1988); Huffines v. Swor

Sand & Gravel Co., Inc., 750 S.W.2d 38 (Tex. App.—Fort Worth 1988, no writ); and Valero

Transmission Co. v. Mitchell Energy Corp., 743 S.W.2d 658 (Tex. App.—Houston [1st Dist.] 1987,

no writ), for the proposition that unfavorable market conditions cannot justify a permit extension

under subsection (b)(2). Although the courts in these cases did conclude that poor market conditions

do not excuse a party’s obligation to perform under a contract, see Day, 696 F. Supp. at 236;

Huffines, 750 S.W.2d at 40; and Valero, 743 S.W.2d at 663, this case does not involve a contractual

dispute or a breach of contract claim. Furthermore, in two of the cases cited, Day and Valero, the

contracts at issue specifically contained a force majeure clause that the courts were required to

interpret: there is no comparable provision in this case.6

       6
         The appellees also assert that in Day v. Tenneco, Inc., the Mississippi court concluded that
market conditions cannot be used to excuse a party’s performance under a statute. 696 F. Supp. 233,
235-36 (S. D. Miss. 1988). The statute listed various events that would excuse a party’s
nonperformance under a contract and included a catch-all phrase for events “beyond the control of
such party.” See id. at 235-36 (citing former Miss. Code Ann. § 75-2-617 (1972)). However, as
discussed previously, this case does not involve a contract dispute, and Dos Republicas is not
attempting to avoid an obligation by invoking a statute excusing performance under a contract.

                                                  13
                Second, the appellees analogize the effect of Dos Republicas’s failure to begin mining

operations to the effect of a lessee’s failure to undertake physical efforts to drill under the terms of

an oil and gas lease. Specifically, they contend that, under an oil and gas lease, a lessee’s failure to

engage in physical activity on the leased property will terminate the lease at the end of the lease’s

primary term7 and will not allow for renewal, and they insist that a similar result should apply here.

See Smith & Weaver, Texas Law of Oil & Gas § 4.5 (2000) (“A lessee cannot safely rely upon

activities which do not involve actual physical activity on the land such as . . . applying . . . for a

drilling permit . . . .      [T]he reported cases speak in terms of actual physical contact

with the leased premises.”).

                However, the appellees have not referred us to cases holding that a permit holder’s

failure to engage in mining activities is equivalent to a lessee’s failure to drill under an oil and gas

lease, and we see no reason to adopt such a rule. The circumstances and expectations surrounding

the issuance of a permit are remarkably different than those present during the formation of an oil

and gas lease. Unlike a mining permit, an oil and gas lease involves two parties to an agreement,

not a single party and a regulatory agency. Because the issuance of a permit by the Commission does

not involve two parties entering into a contract for mutual economic benefit, the need for a

termination due to non-production is not as pressing because the Commission does not receive an

economic benefit from a mining company corresponding to the amount of coal mined. Cf. id. (if

lessee under oil and gas lease does not begin drilling, it is obligated to pay lessor delay rental).

       7
         A primary term is “a period of time at the end of which the [leasehold] estate granted will
terminate but which estate may be extended by some other provision, usually one for production.”
Fox v. Thoreson, 398 S.W.2d 88, 91 (Tex. 1966); see also Eastern Energy, Inc. v. SBY P’ship, 750
S.W.2d 5, 6 (Tex. App.—Houston [1st Dist.] 1988, no writ) (“primary term of the lease is the
maximum period of time for which the lessee can maintain lease rights without drilling”).

                                                  14
Further, the economic effects of a coal mining company’s actions are only one factor for the

Commission to consider when issuing, extending, or terminating a permit; as highlighted by the

appellees, the Commission is also charged with considering, among other things, the potential

environmental effects from coal mining and the effects on neighboring landowners. See Tex. Nat.

Res. Code Ann. § 134.003 (West 2001).

               Third, the appellees urge that, because Dos Republicas was aware that it did not have

a market established when it filed for a permit in 1994 and was aware of the social and political

instability present in Mexico when it asked for the permit to be issued, Dos Republicas assumed

those market risks knowing that it was obligated to begin mining operations within three years or

lose the permit. Accordingly, they contend that the permit should not be extended because the

potential market problems were foreseeable.

               We disagree with the appellees’ assertion that the fact that the event was foreseeable

bars invocation of the extension provision. There is no requirement in section 134.072 mandating

that conditions justifying a permit extension must have been unforeseeable to the permit holder. See

id. § 134.072. Moreover, many of the conditions that the appellees insist would justify a permit

extension will no doubt be foreseeable to a certain extent, including natural disasters and individuals

filing suit against the company.

               Fourth, the appellees note that subsection 134.072(b)(2) does not specifically

authorize an extension for economic reasons but note that subsection 134.072(b)(1) does allow for

extension due to economic concerns. Subsection 134.072(b)(1) allows the Commission to grant an

extension if the permit holder is involved in “litigation that precludes the beginning of operations

or threatens substantial economic loss.” Id. § 134.072(b)(1) (emphasis added). The appellees insist

                                                  15
that if potential economic loss was a factor to be considered under subsection (b)(2), the legislature

would have incorporated that language into the section. Cf. Laidlaw Waste Sys., Inc., 904 S.W.2d

at 659 (Tex. 1995) (when legislature employs term in one section of statute and excludes it from

another, term should not be implied into section it was excluded from).

                We cannot adopt the appellees’ construction of section 134.072. Although subsection

134.072(b)(2) does not specifically list “economic conditions” or “the lack of a market” as

permissible reasons justifying a permit extension, the subsection does not list any specific situation

justifying an extension.     Instead, the subsection uses very broad language authorizing the

Commission to grant an extension when it believes an extension is necessary due to “conditions

beyond the control and without the fault or negligence of the permit holder.” Tex. Nat. Res. Code

§ 134.072(b)(2); see also Webster’s Seventh New Collegiate Dictionary 235 (7th ed. 1973)

(“condition” means “a restricting or modifying factor”). On its face, this language is broad enough

to justify the Commission’s extension for market conditions that are not caused by the permit holder.

                Further, we disagree with the appellees’ contention that the inclusion of the phrase

“substantial economic loss” in subsection 134.072(b)(1) and its exclusion in subsection

134.072(b)(2) indicates the legislature’s intent that economic conditions, including the lack of a

viable coal market, cannot be used to justify a permit extension. See Tex. Nat. Res. Code Ann.

§ 134.072(b); see also Mid-Century Ins. Co. of Tex. v. Kidd, 997 S.W.2d 265, 274 (Tex. 1999)

(“doctrine of expressio unius est exclusio alterius is simply an aid . . . . [and] [a]s a rule of reason

and logic, it should not be mechanically applied to compel an unreasonable interpretation”). The

subsections apply in different contexts. Subsection (b)(1) applies only to situations where the permit

holder is involved in litigation that either precludes the beginning of mining or threatens economic

                                                  16
loss to the permit holder regardless of whether the litigation was initiated due to some fault of the

permit holder. Subsection (b)(2) applies when conditions, which are not caused by the permit holder,

are present and warrant an extension. Unlike subsection (b)(1), which is expressly limited to

instances where the permit holder is involved in some type of litigation, subsection (b)(2) applies

to a broader number of situations and provides no express limitation on its applicability except that

the permit holder cannot be the cause of the condition resulting in the failure to mine. Due to the

distinct situations in which these statutes apply, we believe that the legislature’s failure to include

the phrase “economic loss” in subsection (b)(2) is no indication that the lack of a market cannot be

used to justify an extension. The legislature specified that economic conditions are permissible

considerations when determining whether to grant an extension under the first part of subsection

134.072(b). We can discern no reason to exclude economic conditions as permissible factors for the

Commission to consider when determining whether to grant an extension under the more broadly

written second part of subsection 134.072(b).

               Finally, the appellees refer to federal case law and to the legislative history

accompanying the federal counterpart to the Texas Surface Coal Mining and Reclamation Act as

support for the proposition that market conditions cannot justify an extension. First, the appellees

refer to Shawnee Coal Co. v. Andrus, 661 F.2d 1083 (6th Cir. 1981). In Shawnee, the Office of

Surface Mining, Reclamation, and Enforcement (the “Office”) concluded that Shawnee was in

violation of the Act because it had stockpiles of coal products that released toxic runoff and ordered

Shawnee to comply with the Act and its accompanying regulations. The district court granted an

injunction in favor of Shawnee preventing enforcement of the Office’s orders, but the Sixth Circuit

reversed because Shawnee had not exhausted its administrative remedies prior to filing suit.

                                                  17
Shawnee Coal Co., 661 F.2d at 1092. During a subsequent administrative proceeding, Shawnee

argued that it was unable to comply with the Office’s orders because it could not sell the stockpiled

coal products due to a depressed market.                See Coalex Report 305 available at

http://www.osmre.gov/coalex/coalex305.htm (last modified Mar. 24, 1999). The administrative law

judge concluded that Shawnee had to either comply with the regulations in question or no longer

conduct operations. Id.

               The appellees’ reliance on this case is misplaced. Shawnee was ordered by the Office

to comply with an environmental regulation relating to surface coal mining and subsequently sought

injunctive relief from having to comply with the order. Dos Republicas has not failed to comply

with nor has it been ordered to comply with a regulation. Further, it is not seeking injunctive relief

from compliance with an environmental regulation. Rather, it is attempting to extend the termination

date of its mining permit, which is an action authorized by the natural resources code.

               Next, the appellees refer to the legislative history accompanying the Surface Mining

Control and Reclamation Act. Like the Texas statute, the federal statute also provides that a permit

will terminate within three years if no mining activity is undertaken but allows a permit to be

extended for reasons similar to those articulated in section 134.072. See 30 U.S.C.A. § 1256(c)

(West 1986); see also id. § 1253 (West 1986 & Supp. 2006) (states may obtain jurisdiction over

mining if states develop program capable of implementing Act). The Senate Committee’s 1977

analysis of the act recognized that permits may be issued and renewed without operations being

undertaken and specified that one of the reasons for the three-year deadline is to ensure “that no one

will be locked into outdated reclamation requirements” that were in effect when the permit was

issued. S. Rep. No. 95-128, at 74 (1977). Based on the federal legislative history’s emphasis on

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maintaining current environmental reclamation standards and the fact that the Texas reclamation

regulations in effect when Dos Republicas first obtained its permit are different from the regulations

in effect now, the appellees insist that Dos Republicas’s permit should not have been extended for

economic reasons. Cf. 30 U.S.C.A. § 1201(d) (expansion of coal mining requires establishment of

“appropriate standards to minimize damage to the environment”), (k) (West 1986) (Act is necessary

to “mitigate adverse environmental effects”).

               However, the fact that the federal statute was enacted with a focus on implementing

current environmental reclamation standards does not mandate a conclusion that a permit cannot be

extended for market reasons under the Texas statute. If anything, the focus on reclamation standards

indicates the need for agency expertise in determining what standards to enforce and whether a

permit should be extended. Furthermore, the administrative code authorizes the Commission to

review an existing permit and modify the permit’s provisions to ensure compliance with the Surface

Mining and Reclamation Act and the relevant administrative code provisions. See 16 Tex. Admin.

Code § 12.225 (2006). Therefore, the Commission can compel a permit holder to comply with more

recent reclamation requirements prior to the permit’s termination.

               Dos Republicas and the Commission’s assertion that the Commission may consider

market conditions when determining whether to grant an extension is also supported by the broad

authority the legislature bestowed upon the Commission. The natural resources code specifies that

the Commission has been granted exclusive jurisdiction over surface coal mining and reclamation

activities, has been charged with enforcing the relevant portions of the code, and has been given the

authority to issue rules pertaining to mining and reclamation activities that are consistent with the

code. See Tex. Nat. Res. Code Ann. §§ 134.011 (Commission given broad powers, including power

to adopt rules, issue and revoke permits, conduct hearings, issue orders requiring miners to take

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certain actions, and order cessation of mining activities), 134.012(a)(1) (Commission has exclusive

jurisdiction), 134.013 (West 2001) (Commission required to adopt rules relating to surface coal

mining and reclamation), 134.161-.181 (West 2001) (enforcement powers of Commission). It has

also been specifically charged with determining whether a permit extension should be granted.

Moreover, the two types of circumstances described by section 134.072 as justifying an extension

are broadly written. Accordingly, the Commission’s interpretation of section 134.072 is entitled to

judicial respect. See Hammack v. Public Util. Comm’n of Tex., 131 S.W.3d 713, 723 (Tex.

App.—Austin 2004, pet. denied); see also Moore, 845 S.W.2d at 823.

               Furthermore, the appellees’ arguments ignore the need for agency expertise in

determining whether a permit extension should be granted. See Hammack, 131 S.W.3d at 723

(legislature bestows powers upon agency with idea that its goals will be more effectively realized

by employing agency’s “specialized judgment, knowledge, and expertise”). The code specifies that

the Commission “may” grant an extension and further states that, in determining whether to grant

an extension, the Commission must consider whether the permit holder’s failure to mine is the result

of events beyond the control of the permit holder and must determine whether granting the extension

is “necessary.” See Tex. Nat. Res. Code Ann. § 134.072(b)(2); see also Tex. Gov’t Code Ann.

§ 311.016(1) (West 2005) (word “may” creates discretionary authority). If the Commission

determines that an extension is necessary, the agency must also determine a “reasonable” extension

time. Tex. Nat. Res. Code Ann. § 134.072(b). These determinations necessarily involve an

assessment of the circumstances surrounding the permit holder’s activities and knowledge of the

factual situations that might justify a permit extension. Cf. State v. Public Util. Comm’n, 883
S.W.2d 190, 195 n.6 (Tex. 1994) (determination of whether something should be considered capital

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or expense should be “left to the agency created to centralize expertise in this area and granted broad

authority concerning just such matters”). Accordingly, deference to the Commission’s expertise

regarding the conditions warranting an extension is appropriate.

               For all the reasons previously given, we conclude that the Commission’s

interpretation of section 134.072 as allowing for a permit extension due to unfavorable market

conditions “beyond the control and without the fault or negligence of the permit holder” is consistent

with the plain language of the statute. Accordingly, we conclude that the Commission did not

exceed its authority when it granted Dos Republicas’s extension request because of unfavorable

market conditions. Therefore, we sustain Dos Republicas and the Commission’s issue on appeal.

                                          CONCLUSION

               Having concluded that the Commission had the authority to issue Dos Republicas’s

extension and having sustained Dos Republicas and the Commission’s issue on appeal, we reverse

the judgment of the district court and remand the case for further proceedings consistent with this

opinion.

                                               David Puryear, Justice

Before Justices Patterson, Puryear and Smith*

Reversed and Remanded on Motion for Rehearing

Filed: February 1, 2007

* Bea Ann Smith, Justice (retired), Third Court of Appeals, sitting by assignment. See Tex. Gov't
Code Ann. § 74.003(b) (West 1998).

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