Court Opinion

ID: 2765667
Source: CourtListenerOpinion
Date Created: 2014-12-31 08:12:13.932507+00
Date Added: 2024-06-11T11:27:24.519646
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                               ON MOTION FOR REHEARING

                                       NO. 03-11-00102-CV

                                      Sierra Club, Appellant

                                                  v.

  Texas Commission on Environmental Quality and Waste Control Specialists, Appellees

     FROM THE DISTRICT COURT OF TRAVIS COUNTY, 201ST JUDICIAL DISTRICT
     NO. D-1-GN-08-003021, HONORABLE LORA J. LIVINGSTON, JUDGE PRESIDING

                                           OPINION

               We withdraw our opinion and judgment dated April 4, 2014, and substitute the

following opinion and judgment in their place. Appellant Sierra Club’s motion for rehearing

is denied.

               Sierra Club appeals from a judgment upholding the Texas Commission on

Environmental Quality’s (TCEQ) denial of Sierra Club’s request for a contested-case hearing in a

licensing matter before the agency. On appeal, Sierra Club argues that it was entitled to a contested-

case hearing because its request complied with TCEQ regulations and demonstrated that at least one

member of its organization has an affected justiciable interest in the agency’s proposed action.

Sierra Club also complains that the district court erred by “ignoring” Sierra Club’s newly discovered

evidence. We will affirm the district court’s judgment.
                                         BACKGROUND

               Appellee Waste Control Specialists (WCS) is a waste-control company specializing in

the treatment, storage, and disposal of radioactive, hazardous, and mixed waste. Since 1997, WCS

has held licenses to store, process, and manage certain types of radioactive materials at a 36-acre

waste-disposal facility in Andrews County, Texas. The disposal facility, which is situated on a

14,900-acre former ranch that extends into Lea County, New Mexico, is about 250 feet east of the

Texas–New Mexico state line, five miles east of Eunice, New Mexico, and thirty miles west of

Andrews, Texas.1

               In June 2004, WCS applied to the Texas Department of State Health Services

(TDSHS) for a license to construct a 16-acre landfill on its Andrews County property to dispose of

material it was holding under an existing license to collect, process, and store by-product material.2

The by-product material WCS seeks to dispose comes from a U.S. Department of Energy facility in

Fernald, Ohio that had produced high-purity uranium metal for U.S. defense programs since 1952.

The Fernald facility was closed in 1989 and designated a federal “Superfund” site under the federal

       1
          This facility has been and is the subject of numerous lawsuits. See, e.g., Texas Comm’n
on Envtl. Quality v. Sierra Club, No. 03-12-00335-CV (Tex. App.—Austin Dec. 30, 2014),
available at http://www.txcourts.gov//3rdcoa; Texas Comm’n on Envtl. Quality v. Sierra Club,
No. 03-12-00625-CV, 2014 WL 902513 (Tex. App.—Austin Mar. 7, 2014, pet. filed); Sierra Club
v. Andrews Cnty., 418 S.W.3d 711 (Tex. App.—El Paso 2013, pet. filed); In re Sierra Club, No. 03-
12-00712-CV, 2012 WL 6554812 (Tex. App.—Austin Dec. 14, 2012, orig. proceeding, mem. op.);
In re Sierra Club, 420 S.W.3d 153 (Tex. App.—El Paso Nov. 28, 2012, orig. proceeding);
In re Sierra Club, No. 08-12-00282-CV, 2012 WL 5949789 (Tex. App.—El Paso Nov. 28, 2012,
orig. proceeding, mem. op.).
       2
         “By-product material” is radioactive tailings or wastes produced in connection with
uranium or thorium ore processing. See Tex. Health & Safety Code § 401.003(3)(B) (defining “by-
product material”); 25 Tex. Admin. Code § 289.260 (2007) (TDSHS, Licensing of Uranium
Recovery and Byproduct Material Disposal Facilities).

                                                  2
Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA),

Pub. L. No. 96-510, 94 Stat. 2767 (codified as amended at 42 U.S.C. §§ 9601–9626).3 In compliance

with a cleanup plan established pursuant to CERCLA requirements, Fernald’s uranium by-product

waste—approximately 8,900 cubic yards of slurry—was stabilized with “flyash and Portland

cement,” and the resulting “concrete monoliths” were then sealed in large (6x6 feet), one-inch thick

cylindrical carbon-steel containers meeting federal regulations for shipping radioactive materials,

see 49 C.F.R. §§ 171.1–180.605 (Department of Transportation, Hazardous Materials Regulations),

and transported to WCS’s Andrews County facility on flatbed trailers. WCS’s landfill application

to TCEQ, which included plans for the design, construction, operation, and future closure of the by-

product disposal facility, proposed the construction of a 16-acre below-grade landfill that would

consist of six cells—each lined with clay, synthetic liners, leak-detection systems, and leachate-

collection systems—designed to hold the carbon-steel cylinders shipped from the Fernald site.

WCS’s proposed design for its facility included various other safeguards, including berms to divert

and collect rainwater, groundwater-monitoring systems, surface-water monitoring systems, and air-

quality monitoring systems.

               While TDSHS was conducting its technical review of WCS’s application, the

Legislature transferred regulatory responsibility for issuance of by-product disposal licenses to

TCEQ, which continued and subsequently completed the technical review of WCS’s application

under TDSHS regulations. See Tex. Health & Safety Code § 401.2625 (granting to TCEQ the “sole

       3
         CERCLA was “designed to promote the ‘timely cleanup of hazardous waste sites’ and to
ensure that the costs of such cleanup efforts were borne by those responsible for the contamination.”
Burlington N. & Santa Fe Ry. Co. v. United States, 556 U.S. 599, 602 (2009). A CERCLA
“Superfund site” is a place considered a national priority for environmental remediation because of
known or threatened releases of hazardous substances at that site. See 42 U.S.C. §§ 9601–9626.

                                                 3
and exclusive authority to grant, deny, renew, revoke, suspend, amend, or withdraw licenses for

source material recovery and processing or for storage, processing, or disposal of byproduct

material”); see also id. § 33(k)(1) (requiring TCEQ to complete ongoing reviews using TDSHS

regulations); 25 Tex. Admin. Code §§ 289.3–.301 (2007) (TDSHS, Radiation Control) (TDSHS

radiation-control regulations). After completing the technical review of WCS’s application in

accordance with statutory and regulatory requirements, including an environmental analysis, TCEQ

declared WCS’s application administratively complete and issued a draft license for public notice

in October 2007.

               Appellant Sierra Club, among others, timely submitted written comments to the

draft license that, generally stated, challenged WCS’s characterization of the site’s hydrology,

geology, sedimentology, and hydrogeology; raised concerns regarding what Sierra Club considered

to be a lack of site data and improper groundwater monitoring plans; and highlighted what it

considered to be the application’s deficient analysis of the impact of high winds that can occur

at the site. Sierra Club also requested a contested-case hearing on the merits of WCS’s application,

asserting that two of its members who lived in Eunice, New Mexico and relied on water wells in the

area would be affected by the issuance of the proposed license. Specifically, Sierra Club argued that

the proposed permit would harm Gardner, who lives and operates a feed store business four miles

from the proposed facility and owns a florist shop in downtown Eunice, in the following ways:

   • “Negative publicity surrounding the opening of the radioactive waste site” will keep people
from doing business with her;

    • “[a]ny dispersal of radioactive material from the site” or any traffic accident “involving toxic
or radioactive material” will potentially affect her business and health because she travels on a road
near the proposed facility;

                                                  4
    • any groundwater contamination from the facility will contaminate the alfalfa she grows for
her feed business and livestock because the water well she uses is “potentially hydrologically
connected to groundwater resources” in the vicinity of the proposed site;

    • the possibility that “waste from the recently permitted uranium enrichment plant” in
Gardner’s home state of New Mexico could be disposed of at the proposed WCS Texas site because
that waste might be by-product material—even though Sierra Club does not believe this would be
authorized under the proposed license—which would affect Gardner because that waste “could travel
near” Gardner’s home and businesses;

   • any off-site and on-site accidents that occur in connection with the railcar transportation of
by-product materials would affect Gardner because the railroad passes “right near an area that
Ms. Gardner often travels by”;

   • the hydrological formations underlying her home and businesses also underlie the proposed
waste facility; and

    • “[h]igh, single direction winds traveling westward from the site” could affect Gardner’s
property, livelihood, and health because those winds might disperse “radioactive materials and
surface water contaminated by radioactive waste.”

Sierra Club’s request asserted similar adverse effects from the proposed license regarding its other

member, Williams, including alleging that her home is near the railway line and road where traffic

is likely to be heavy, that wind dispersion of radioactive materials would reach her, that groundwater

contamination would affect her wells, and that she and her family have to travel on roads that pass

directly by the proposed site to reach shopping and medical facilities.

               Both TCEQ’s executive director and WCS recommended that Sierra Club’s hearing

request be denied. The Office of Public Interest Counsel4 recommended granting the hearing request

because it felt that Sierra Club had complied with the requirements for associational standing. After

a public hearing addressing these and other public comments and hearing requests, TCEQ’s

       4
         The Office of Public Interest Counsel “represent[s] the public interest as a party to matters
before [TCEQ].” Tex. Water Code § 5.271.

                                                  5
commissioners voted to deny Sierra Club’s request for a contested-case hearing and grant the

requested license to WCS—License R05807.

               After exhausting its administrative remedies, Sierra Club filed this suit for judicial

review in Travis County District Court, asking the district court to reverse and remand TCEQ’s

decision to deny Sierra Club’s hearing request and to grant the by-product license or, in the

alternative, to remand the matter to TCEQ for a contested-case hearing on Sierra Club’s hearing

request. During the district court proceedings, Sierra Club filed a motion for partial summary

judgment on the issue of whether TCEQ erred in denying Sierra Club’s request for a contested-case

hearing. Although neither TCEQ nor WCS filed cross-motions for summary judgment, they fully

briefed the issue, and the record indicates that the district court treated the subsequent summary-

judgment hearing as a full trial on the merits. Specifically, the district court denied Sierra Club’s

summary-judgment motion and ordered that Sierra Club take nothing on its claims related to

TCEQ’s denial of its hearing request. In response, Sierra Club filed a motion for reconsideration

and, while that motion was pending, filed a motion seeking to present new evidence it alleged to

have recently discovered—i.e., two internal TCEQ memos that were not part of the administrative

record—relating to its hearing request and the permit. In a final order, the district court denied

Sierra Club’s pending motions, reaffirmed its judgment against Sierra Club, and granted TCEQ’s

and WCS’s pending pleas to the jurisdiction and motions to dismiss. It is from this final order that

Sierra Club now appeals.

                                                 6
                                            ANALYSIS

                 On appeal, Sierra Club challenges (1) TCEQ’s decision to deny its contested-case

hearing request and (2) the district court’s refusal to consider Sierra Club’s newly discovered

evidence.

Did TCEQ err in denying Sierra Club’s hearing request?

                 Sierra Club argues that it was error for TCEQ to deny its request for a contested-

case hearing because Sierra Club’s request complied with the relevant statutory and regulatory

requirements for a contested-case hearing request and demonstrated that at least one of its

members has a justiciable interest affected by TCEQ’s proposed permit. See 30 Tex. Admin. Code

§§ 55.250–.256 (Requests for Contested Case Hearings).5 Such a facially conforming request,

Sierra Club argues, is not subject to any deeper inquiry, especially into any matters that might go to

the underlying merits of the license—e.g., the likely effects of the proposed license permit on the

requestor—because those merits issues are properly the subject of a contested-case hearing.

Relatedly, Sierra Club argues that TCEQ was required to hold a contested-case hearing on any fact

issues raised by Sierra Club’s hearing request—i.e., TCEQ does not have the authority to resolve

factual disputes on its own. We disagree.

        Contested-case hearing requests

                 The Texas Radiation Control Act (TRCA) governs the development, use, storage,

processing, and disposal of radioactive materials in Texas, including the by-product material at

        5
            All citations to Title 30 of the Texas Administrative Code are to rules promulgated by
TCEQ.

                                                  7
issue in this case. See Tex. Health & Safety Code §§ 401.001–.002 (TRCA’s policy and purposes);

see also id. §§ 401.261–.272 (TRCA provisions specific to by-product materials). TRCA gives

TCEQ the sole authority over licenses “for storage, processing, or disposal of by-product material.”

See id. § 401.2625. Under TRCA, TCEQ must hold a contested-case hearing on the merits of an

application for a by-product disposal license if a “person affected” requests such a hearing. See id.

§ 401.264(a). A “person affected” is “a person who demonstrates that the person has suffered

or will suffer actual injury or economic damage.” See id. § 401.003(15). Under TCEQ’s enabling

statute, Chapter 5 of the Texas Water Code, an “affected person” is “a person who has a personal

justiciable interest related to a legal right, duty, privilege, power, or economic interest affected by

the administrative hearing. An interest common to members of the general public does not qualify

as a personal justiciable interest.” Tex. Water Code § 5.115(a).6 The Water Code also directs

TCEQ to adopt rules specifying the factors that must be considered in determining affected-person

status. See Tex. Water Code § 5.115(a); 30 Tex. Admin. Code § 55.256 (Determination of Affected

Person). Thus, the critical or threshold question in contested-case hearing requests is whether the

       6
          Although these definitions differ, they can (and should) be read together to require
requestors to establish standing: “a concrete and particularized injury in fact, not common to the
general public, that is (1) actual or imminent; (2) fairly traceable to the issuance of the permit as
proposed; and (3) likely to be redressed by a favorable decision on its complaint.” Texas Comm’n
on Envtl. Quality v. City of Waco, 413 S.W.3d 409, 417 (Tex. 2013).

                                                  8
person requesting the hearing is an “affected person.”7 See Texas Comm’n on Envtl. Quality v. City

of Waco, 413 S.W.3d 409, 417 (Tex. 2013) (describing question as “threshold”).

               Whether a requestor is an “affected person” is principally controlled by the factors

created by TCEQ pursuant to statutory directive:

       (a)     For any application, an affected person is one who has a personal justiciable
               interest related to a legal right, duty, privilege, power, or economic interest
               affected by the application. An interest common to members of the general
               public does not qualify as a personal justiciable interest.

       ...

       (c)     All relevant factors shall be considered, including, but not limited to, the
               following:

               (1)     whether the interest claimed is one protected by the law under which
                       the application will be considered;
               (2)     distance restrictions or other limitations imposed by law on the
                       affected interest;
               (3)     whether a reasonable relationship exists between the interest claimed
                       and the activity regulated;
               (4)     likely impact of the regulated activity on the health, safety, and use of
                       property of the person;
               (5)     likely impact of the regulated activity on use of the impacted natural
                       resource by the person; and
               (6)     for governmental entities, their statutory authority over or interest in
                       the issues relevant to the application.

       7
           TCEQ rules also require that the request be in writing, identify the personal justiciable
interest affected by the application, including the requestor’s location and distance relative to the
proposed activity, and how and why the requestor will be affected by the activity in a manner not
common to members of the general public. See 30 Tex. Admin. Code § 55.251(c)(2) (Request for
Contested Case Hearing, Public Comment). Further, when a group files a hearing request, the rules
require the group to show that at least one of its members is an “affected person,” the interests the
organization seeks to protect are germane to the organization’s purpose, and the claim or relief
requested does not require the participation of the individual. See id. § 55.252 (Request by Group
or Association).

                                                  9
30 Tex. Admin. Code § 55.256. If, upon consideration of these factors at a Commission meeting,8

the TCEQ commissioners determine that the person seeking the contested-case hearing is an affected

person and otherwise meets the regulatory requirements regarding contested-case hearings, the

commissioners must grant the hearing request and refer the application to SOAH for a contested-case

hearing. See id. § 55.255(a)(3) (Commission Action on Hearing Request). Conversely, if the TCEQ

commissioners determine that the requestor is not an affected person or that the hearing request

does not otherwise meet the regulatory requirements, the commissioners may, as they did here, deny

the hearing request and act on the permit application without a contested-case hearing, see id.

§ 55.255(a)(1), or they may schedule additional public hearings before acting on the application,

see id. § 55.255(a)(2).

       Standard of Review

               Although the TRCA provides for judicial review of a TCEQ final decision under the

“substantial evidence” standard set forth in the Government Code, it does not specify the standard

for reviewing TCEQ’s determination of affected-person status. See Tex. Health & Safety Code

§ 401.341 (“A person who is affected by a final decision of the department and who has exhausted

all administrative remedies available in the appropriate agency is entitled to judicial review

under Chapter 2001, Government Code.”). However, in two recent decisions involving similar

issues—i.e., TCEQ denials of contested-case hearing requests in licensing matters where no standard

of review was specified by the underlying statute—the Texas Supreme Court reviewed TCEQ’s

       8
          Upon receiving a hearing request, TCEQ’s executive director must schedule the hearing
request for consideration at a commission meeting and allow the executive director, OPIC, and the
permit applicant to file responses to the hearing request, and the hearing requestor an opportunity
to reply. See id. § 55.254(c)(2), (e)–(f) (Hearing Request Processing).

                                                10
decisions to deny the hearing requests for an abuse of discretion. See City of Waco, 413 S.W.3d

at 411, 420, 424 (referring to discretion TCEQ enjoys in determining need for contested-case hearing

and holding that TCEQ did not abuse that discretion); see also Texas Comm’n on Envtl. Quality

v. Bosque River Coal., 413 S.W.3d 403, 404 (Tex. 2013) (describing its decision in City of Waco as

concluding that TCEQ “did not abuse its discretion in denying a contested case hearing to

an interested party, who claimed a right to such a hearing under the Texas Water Code”).9 TCEQ’s

discretion in this matter arises generally from TCEQ’s statutorily granted exclusive jurisdiction over

certain types of permits for regulated activities—here the exclusive jurisdiction to issue by-product

disposal licenses, see Tex. Health & Safety Code § 401.2625—and more specifically from its

authority to determine the need for a contested hearing on the merits of any license application under

its jurisdiction. See id. § 401.264 (requiring TCEQ to determine need for contested-case hearing,

including affected-person status); Tex. Water Code § 5.115(a) (directing TCEQ to adopt factors it

must consider in determining affected-person status); see also City of Waco, 413 S.W.3d at 420

       9
           Although Bosque and City of Waco were ultimately decided under statutory hearing
exceptions that are not applicable to by-product licensing cases, see Tex. Water Code § 26.028(d)
(regarding water-quality permits), they nevertheless inform our decision here. City of Waco
discusses with approval a prior opinion from this Court addressing a standard of review for TCEQ’s
disposition of a contested-case hearing request. See City of Waco, 413 S.W.3d at 423–24 (citing
Collins v. Texas Natural Res. Conservation Comm’n, 94 S.W.3d 876 (Tex. App.—Austin 2002,
no pet.)). Further, the contested-case hearing framework analyzed in the City of Waco and Bosque
is the framework applicable to all hearing requests under TCEQ’s licensing jurisdiction, including
provisions from Chapter 5 of the Water Code and TCEQ regulations in Chapter 55 of Title 30
of the Texas Administrative Code. See Texas Comm’n on Envtl. Quality v. Bosque River Coal.,
413 S.W.3d 403, 406–09 (Tex. 2013); City of Waco, 413 S.W.3d at 416–25. As such, and given
the lack of supreme court jurisprudence in this area, these two recent opinions firmly guide our
disposition of this appeal.

                                                 11
(noting “the discretion the statute confers on [TCEQ] in determining the need for a [contested-case]

hearing”).

                The Legislature has granted this discretion to TCEQ in part because of TCEQ’s

expected expertise in the subject matter of the licenses under its jurisdiction. See Gerst v. Nixon,

411 S.W.2d 350, 360 n.8 (Tex. 1966). But that expected expertise has value only if it is used as

the Legislature has directed. Id. Thus, an agency abuses its discretion in making a decision if it

“(1) fails to consider a factor the Legislature directs it to consider; (2) considers an irrelevant factor;

or (3) weighs only relevant factors that the Legislature directs it to consider but still reaches a

completely unreasonable result.” City of El Paso v. Public Util. Comm’n, 883 S.W.2d 179, 184

(Tex. 1994) (citing Gerst, 411 S.W.2d at 360 n.8); see also Downer v. Aquamarine Operators, Inc.,

701 S.W.2d 238, 241–42 (Tex. 1985) (the test for an abuse of discretion is whether “the trial court

acted without reference to any guiding rules and principles” or “whether the act was arbitrary

or unreasonable”).

                TCEQ’s discretion over contested-case hearing requests naturally includes its

“threshold” determination of whether the person seeking the hearing is an affected person. See

City of Waco, 413 S.W.3d at 410, 417. And in making that particular decision, TCEQ enjoys the

discretion to weigh and resolve matters that may go to the merits of the underlying application,

including the likely impact the regulated activity—here, underground disposal of by-product

material—will have on the health, safety, and use of property by the hearing requestor and on the use

of natural resources. See 30 Tex. Admin. Code § 55.256(c); City of Waco, 413 S.W.3d at 420

(noting overlap between affected-person factors and exemption found to be dispositive in that case).

TCEQ’s inquiry into these and the other factors may include reference to the permit application,

                                                    12
attached expert reports, the analysis and opinions of professionals on its staff, and any reports,

opinions, and data it has before it. See City of Waco, 413 S.W.3d at 420–21 (describing these

evidentiary items as relevant to inquiry and holding that there was evidence in record to support

TCEQ’s determination). And importantly, the existence of substantial evidence in the record

supporting TCEQ’s decision is a factor—often a dispositive factor—in determining whether

TCEQ abused its discretion. See id. at 424–25; see also Quixtar Inc. v. Signature Mgmt. Team, LLC,

315 S.W.3d 28, 35 (Tex. 2010) (per curiam) (holding that trial court’s forum-non-conveniens

dismissal “was not an abuse of discretion in light of the evidence before it”); Texas Health Facilities

Comm’n v. Charter Med.-Dallas, Inc., 665 S.W.2d 446, 454 (Tex. 1984) (noting that “the existence

of substantial evidence has been equated with fair and reasonable conduct on the part of the agency,”

while “agency decisions that are unsupported by substantial evidence have been deemed

arbitrary and capricious”). This is so regardless of whether TCEQ held an evidentiary hearing, as

long as the hearing requestor was afforded its regulatory rights to express his dissatisfaction with the

proposed license and the agency did not refuse to consider the evidence offered in support of that

dissatisfaction. See Bosque River, 413 S.W.3d at 408 (noting, in its determination of whether TCEQ

abused discretion in denying hearing request, that there was “no indication that [TCEQ] refused

to consider any evidence tendered to substantiate the[] asserted deficiencies” in requested permit);

City of Waco, 413 S.W.3d at 423–24 (reversing contrary holding in the underlying opinion while

citing with approval Collins v. Texas Natural Res. Conservation Comm’n, 94 S.W.3d 876, 884–85

(Tex. App.—Austin 2002, no pet.), that agency’s denial of hearing request was supported by

substantial evidence regardless of fact that evidentiary hearing was not held).

                                                  13
       TCEQ’s evaluation of Sierra Club’s hearing request

               Our review of the record indicates that TCEQ was within its discretion to determine

that Sierra Club’s members were not affected persons. The record indicates that, upon receipt of

Sierra Club’s hearing request, the Executive Director set the matter for consideration at a

TCEQ meeting, allowed responses, and allowed Sierra Club to file a reply to those responses. In

considering the request, TCEQ had before it, among other items, the Executive Director’s response,

the application, and an environmental analysis conducted by TCEQ staff and the Bureau of

Economic Geology at The University of Texas at Austin. Among many other things, there was

evidence in the record that:

   •       Gardner and Williams live more than three miles from the proposed facility and neither
           “work or spend any substantial time in or around the [proposed] facility”;

   •       the proposed license complies with Texas statutes and rules regarding migration of
           radioactive materials from floods, high winds, railway accidents, and traffic accidents;

   •       the application provides all required information on the characterization of the geology
           and hydrology of the proposed site to show that the proposed activities would not affect
           the area groundwater;

   •       Gardner’s and Williams’s concerns about general contamination in Eunice and traffic
           accidents are interests common to the members of the general public;

   •       computer modeling done by WCS and by TCEQ staff in reviewing WCS’s application
           “suggest[s] that there will be no detrimental radiological impact to a potential off-site
           resident at the property boundary—even less so for those residing in Eunice, New
           Mexico”;

   •       because TCEQ is not authorized to regulate or control traffic and the draft license does
           not authorize receipt of materials by rail, concerns about traffic or railway accidents
           could not be addressed in a contested-case hearing;

   •       a contested-case hearing could not address concerns regarding negative publicity because
           the activity is regulated to ensure the protection of the environment and health and safety,
           not manage publicity;

                                                 14
    •       Gardner and Williams live west of the proposed facility, and the groundwater flow is to
            the south/southwest;

    •       independent modeling by both WCS and TCEQ indicates that “the proposed facility
            would contain and isolate by-product wastes for at least 200 years under conservative
            assumptions”;

    •       prevailing winds in the area are southerly and shifting from the north in winter, while
            Gardner and Williams live to the west of the proposed facility;

    •       modeling indicates “no detrimental impact to a potential off-site resident at the property
            boundary”;

    •       the draft permit “prohibits disposal of bulk non-containerized by-product material to
            address, in part, the concerns about assessment of worst-case wind conditions”;

    •       the application includes appropriate characterizations of meteorological and climate
            conditions at the proposed site;

    •       the proposed design includes “a run-on control berm to direct water away from the
            operating disposal facility, final grading after closure to direct run-off away from the
            closed facility, and drainage controls within the disposal facility”;

    •       the draft license addresses weather events at the site to be protective of human health and
            the environment; and

    •       the main surface water drainage in the area is a “southward draining ephemeral stream
            about three miles west of the proposed facility and is situated between the facility” and
            Eunice.

                The above information supports a conclusion that WCS’s application for a by-product

disposal license met the statutory requirements for such a facility and, more importantly, that the

actual operation of the facility as licensed is not likely to adversely contaminate the groundwater,

surface water, air, or soils in the region with radioactive material, at least not in amounts that are

prohibited under the law. For that reason, it would have been reasonable, and thus within TCEQ’s

discretion, to conclude that Gardner and Williams are not affected persons because the licensed

activity will have minimal effect on their health, safety, use of property, and use of natural resources.

                                                   15
See 30 Tex. Admin. Code § 55.256(c)(4)–(5). Likewise, it would have been reasonable for TCEQ

to determine that Gardner’s and Williams’s stated concerns over possible traffic and railway

accidents involving by-product materials were not reasonably related to the disposal of byproduct

at the WCS site because TCEQ has no jurisdiction over the transportation of radioactive materials

and because the permit does not allow WCS to receive by-product material by rail. See id.

§ 55.256(c)(3). Relatedly, it would have been reasonable for TCEQ to determine that Gardner is

not an affected person given that her concern regarding the effects of possible negative publicity on

her business is not reasonably related to the WCS facility because the relevant regulations involve

public health, safety, and the environment—not publicity. See id. Finally we would note, as did the

Executive Director, that Gardner’s and Williams’s concerns about the licensed activity are shared

by the general public. See id. In sum, we cannot say that TCEQ abused its discretion in deciding

that neither Gardner nor Williams is a person who would be affected by the proposed permit under

the relevant factors. Accordingly, it was within TCEQ’s discretion to deny the hearing request, and

in fact, it would have been an abuse of TCEQ’s discretion to grant the hearing request upon such a

determination. See Tex. Health & Safety Code § 401.264 (requiring TCEQ to hold contested-case

hearing regarding by-product license if requested by person affected). We overrule Sierra Club’s

first issue on appeal.10

        10
          Although Sierra Club’s stated issue on appeal is whether it was entitled to a contested-
case hearing simply because it submitted a hearing request that met the applicable statutes and
regulations, our discussion above of City of Waco and Bosque makes it clear this cannot be the end
of our analysis. Accordingly and because this case was submitted before the supreme court issued
these decisions, we have addressed this as an appeal challenging the overall propriety of
TCEQ’s denial.

                                                 16
Sierra Club’s “new evidence”

               In its second issue, Sierra Club challenges the district court’s denial of its “Motion

for Remand to Consider Material New Evidence.” The new evidence offered by Sierra Club in this

motion consisted of two internal TCEQ memos written in 2007 by TCEQ staff members.11 Sierra

Club contends that these two memos reveal that the author of each memo opposed issuance of the

by-product disposal license to WCS because the author felt that WCS had failed to comply with

regulatory requirements. Sierra Club argues that this type of information is material to the WCS

license application and, as such, should have factored into TCEQ’s evaluation of its hearing request;

thus, Sierra Club maintains, the district court should have granted its request to remand the matter

to TCEQ. We disagree.

               Sierra Club based its motion for remand—and its challenge on appeal—on

section 2001.175(c) of the Administrative Procedure Act (APA), which allows the reviewing court

to remand to the underlying agency for evaluation of new evidence under certain circumstances:

       A party may apply to the court to present additional evidence. If the court is satisfied
       that the additional evidence is material and that there were good reasons for the
       failure to present it in the proceeding before the state agency, the court may order that
       the additional evidence be taken before the agency on conditions determined by the
       court. The agency may change its findings and decision by reason of the additional
       evidence and shall file the additional evidence and any changes, new findings, or
       decisions with the reviewing court.

Tex. Gov’t Code § 2001.175(c). But even if we assume without deciding that these two memos

are material and that Sierra Club had good reasons for its failure to present the evidence to

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           Sierra Club’s motion to the district court urged consideration of additional new evidence,
but it limits its appeal to the two memos addressed here.

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TCEQ, see id., section 2001.175 simply does not apply to the circumstance presented here.

Section 2001.175 is in Subchapter G of the APA, which is titled, “Contested Cases: Judicial

Review,” see id. §§ 2001.171–.178. By its own terms, Subchapter G applies only to judicial review

from contested-case hearings: “A person who has exhausted all administrative remedies available

within a state agency and who is aggrieved by a final decision in a contested case is entitled

to judicial review under this chapter.” Id. § 2001.171 (emphasis added). TCEQ’s evaluation of

Sierra Club’s hearing request and its decision to deny that hearing request is not a contested-case

hearing subject to the APA. See 30 Tex. Admin. Code § 55.255(a) (“The determination of the

validity of a hearing request is not, in itself, a contested case subject to the APA.”); City of Waco,
413 S.W.3d at 417. Accordingly, it was not error for the district court to refuse to remand the case

under APA section 2001.175(c).

               Even if section 2001.175 applied here, however, we would not agree that the

proffered evidence is material to TCEQ’s decision on the hearing request. See Tex. Gov’t Code

§ 2001.175(c) (requiring reviewing court be satisfied that new evidence is material). Additional

evidence is material under this provision if, among other considerations, its presentation to the

agency could have caused the agency to reach a contrary conclusion. See Texas Oil & Gas Corp.

v. Railroad Comm’n, 575 S.W.2d 348, 352 (Tex. Civ. App.—Austin 1978, no writ). As noted by

Sierra Club in its appellate brief here and in its motion for partial summary judgment to the

district court, the TCEQ commissioners were aware of dissent from some TCEQ staff: one of the

TCEQ commissioners expressed concern in the TCEQ meeting that agency staff members had

raised questions in the media about WCS’s application and about whether TCEQ was suppressing

full review of the application. Stated another way, even without the memos in front of them, the

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TCEQ commissioners were aware that some TCEQ staff disagreed with the Executive Director’s

recommendation to issue the license. Accordingly, we cannot say that having these two staff memos

in evidence would have caused the agency to reach a contrary conclusion. Finally, we also note that

Sierra Club’s motion offers no explanation for why it failed to present the evidence to TCEQ. See

Tex. Gov’t Code § 2001.175(c) (requiring “good reasons for the failure to present” evidence to

agency). Instead, Sierra Club simply asserted to the district court that it had “become aware of new,

material evidence” since the district court’s judgment. On that basis alone, and again assuming that

section 2001.175 would even apply here, the district court could have denied Sierra Club’s motion.

               We overrule Sierra Club’s second issue on appeal.

                                         CONCLUSION

               Having overruled both of Sierra Club’s issues on appeal, we affirm the district court’s

judgment.

                                              ________________________________________
                                              Jeff Rose, Justice

Before Justices Puryear, Rose, and Goodwin

Affirmed on Motion for Rehearing

Filed: December 30, 2014

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