Court Opinion

ID: 4066082
Source: CourtListenerOpinion
Date Created: 2016-09-29 22:23:39.103942+00
Date Added: 2024-06-11T14:32:28.553510
License: Public Domain

ACCEPTED
                                                                                   03-14-00340-CV
                                                                                           5210597
                                                                        THIRD COURT OF APPEALS
                                                                                   AUSTIN, TEXAS
                                                                              5/8/2015 12:32:17 PM
                                                                                 JEFFREY D. KYLE
                                                                                            CLERK
                             No. 03-14-00340-CV

               IN THE THIRD COURT OF APPEALS       FILED IN
                                             3rd COURT OF APPEALS
                        AUSTIN, TEXAS            AUSTIN, TEXAS
                                                         5/8/2015 12:32:17 PM
  APPELLANTS, CPS ENERGY, TIME WARNER CABLE     TEXAS
                                            JEFFREY  D. KYLE
  LLC, AND SOUTHWESTERN BELL TELEPHONE COMPANY   Clerk
     D/B/A AT&T// CROSS-APPELLANT, PUBLIC UTILITY
                  COMMISSION OF TEXAS

                                    V.

APPELLEE, PUBLIC UTILITY COMMISSION OF TEXAS// CROSS-
 APPELLEE, CPS ENERGY, TIME WARNER CABLE TEXAS LLC
  AND SOUTHWESTERN BELL TELEPHONE COMPANY D/B/A
                        AT&T

           On appeal from D-1-GN-13-001238 (Consolidated)
       in the 250th Judicial District Court, Travis County, Texas

    POST SUBMISSION BRIEF OF APPELLANT CPS ENERGY

CPS ENERGY                            HERRERA & BOYLE, PLLC

Gabriel Garcia                        Alfred R. Herrera
ggarcia@cpsenergy.com                 State Bar No. 09529600
Carolyn Shellman                      aherrera@herreraboylelaw.com
cshellman@cpsenergy.com
                                      816 Congress Avenue, Suite 1250
CPS Energy                            Austin, Texas 78701
145 Navarro                           (512) 474-1492 (Voice)
P.O. Box 1771                         (512) 474-2507 (Facsimile)
San Antonio, Texas 78296
(210) 353-5689 (Voice)
(210) 353-6832 (Facsimile)

                                May 8, 2015
                 IDENTITY OF PARTIES AND COUNSEL

      The following is a complete list of all parties to the trial court’s judgment,
and the names and addresses of all trial and appellate counsel:

  Counsel for Public Utility Commission Counsel for CPS Energy:
  of Texas:
                                          Alfred R. Herrera
  Douglas Fraser                          HERRERA & BOYLE, PLLC
  Megan Neal                              816 Congress Avenue, Suite 1250
  Office of the Attorney General          Austin, TX 78701
  P.O. Box 12548, Capitol Station         Phone: (512) 474-1492
  Austin, Texas 78711-02548               Fax: (512) 474-2507
  Phone: (512) 463-2012                   aherrera@herreraboylelaw.com
  Fax: (512) 457-4610
  douglas.fraser@texasattorneygeneral.gov
  megan.neal@texasattorneygeneral.gov

  Counsel for AT&T Texas:                     Counsel for CPS Energy:

  Paul A. Drummond                            Gabriel Garcia
  Natalie L. Hall                             Carolyn Shellman
  AT&T Legal Department                       CPS Energy
  1010 N. St. Mary’s, 14th Floor              145 Navarro
  San Antonio, Texas 78215                    P.O. Box 1771
  Phone: (210) 351-4830                       San Antonio, TX 78296
  Fax: (210) 886-2127                         Phone: (210) 353-5689
  paul.drummond@att.com                       Fax: (210) 353-6832
  natalie.hall@att.com                        ggarcia@cpsenergy.com
                                              cshellman@cpsenergy.com

No. 03-14-00340-CV
APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF                                i
  Counsel for AT&T Texas:             Counsel for AT&T Texas:

  Michael T. Sullivan                 J. David Tate
  Mayer Brown LLP                     Katherine C. Swaller
  71 S. Wacker Drive                  Thomas Ballo
  Chicago, IL 60606                   AT&T Legal Department
  Phone: (312) 782-0600               816 Congress Avenue, Suite 1100
  Fax: (312) 706-8689                 Austin, Texas 78701
  msullivan@mayerbrown.com            Phone: (512) 457-2304
                                      Fax: (512) 870-3420
                                      jon.david.tate@att.com
                                      katherine.swaller@att.com
                                      thomas.ballo@att.com

  Counsel for Time Warner Cable Texas Counsel for Time Warner Cable
  LLC:                                Texas LLC:

  Valerie P. Kirk                     J.D. Thomas
  Melissa Lorber                      J. Aaron George
  Enoch Kever PLLC                    Sheppard Mullin Richter &
  600 Congress Avenue, Suite 2800     Hampton LLP
  Austin, Texas 78701                 1300 I Street, N.W.
  Phone: (512) 615-1200               11th Floor East
  Fax: (512) 615-1198                 Washington DC 20005
  vkirk@enochkever.com                Phone: (202) 218-0000
  mlorber@enochkever.com              Fax: (202) w218-0020
                                      dthomas@sheppardmullin.com
                                      ageorge@sheppardmullin.com

No. 03-14-00340-CV
APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF                    ii
                                  TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL .................................................. i

TABLE OF CONTENTS............................................................................... iii

INDEX OF AUTHORITIES ......................................................................... iv

STATEMENT OF FACTS ..............................................................................1

SUMMARY OF ARGUMENT .......................................................................2

ARGUMENT ...................................................................................................3

   Findings of Fact 84-87 and Conclusions of Law 26 and 27 are
   Improper Advisory Opinions .......................................................................3

   The Uniform Declaratory Judgment Act does not Apply to this Case ........7

   Findings of Fact 84-87 and Conclusions of Law 26 and 27 Result in
   an Unconstitutional Delegation of Power ....................................................9

CONCLUSION ................................................................................................9

CERTIFICATE OF SERVICE ..................................................................... 11

CERTIFICATE OF COMPLIANCE............................................................ 12

No. 03-14-00340-CV
APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF                                                             iii
                               INDEX OF AUTHORITIES

Cases
Brinkley v. Texas Lottery Comm'n, 986 S.W.2d 767 (Tex. App.—
      Austin 1999, no pet.) ........................................................................ 4, 5

Central Power & Light Co. v. Public Util. Comm'n, 36 S.W.3d 547
      (Tex.App.-Austin 2000, pet. denied).................................................... 7
City of Waco v. Tex. Nat. Res. Conservation Comm'n, 83 S.W.3d 169
      (Tex. App.—Austin 2002, pet. denied) ............................................ 5, 8
Firemen's Ins. Co. v. Burch, 442 S.W.2d 331 (Tex. 1969) ............................ 8

Railroad Comm'n v. CenterPoint Energy Res. Corp., 03–13–00533–
      CV, 2014 WL 4058727, at *2-3 (Tex. App.—Austin, no pet.) ........... 5

Robinson v. Parker, 353 S.W.3d 753 (Tex. 2011) ..................................... 5, 7
Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440
     (Tex. 1993) ....................................................................................... 5, 8
Trinity Settlement Servs., LLC v. Texas State Secs. Bd., 417 S.W.3d
494 (Tex. App.—Austin 2013, pet. denied) ......................................... 5
TXU Electric v. Public Utility Commission, 51 S.W.3d 275
    (Tex. 2001) ........................................................................................... 5

Statutes and Rules
47 C.F.R. §1.1409(e) .......................................................................... 1, 3, 4, 6

TEX. CIV. PRAC. & REM. CODE §§ 37.001–.011 ............................................. 8

TEX. GOV'T CODE ANN. § 2001.174 ................................................................ 7

TEX. UTIL. CODE ANN. § 54.204 ................................................................. 3, 7

TEX. UTIL. CODE ANN. § 54.204(c)......................................................... 2, 4, 9
TEX. UTIL. CODE ANN. § 54.205 ..................................................................... 3
No. 03-14-00340-CV
APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF                                                              iv
                           STATEMENT OF FACTS

      The Court entertained oral argument in this case on April 22, 2015.

On April 20, 2015, the Public Utility Commission (“Commission”), through

its attorney, the Attorney General of Texas (“Attorney General”), filed a

letter in which the Commission asserted that the Court does not have

jurisdiction to decide whether the Commission’s ruling regarding the

applicability of amendments the Federal Communications Commission

(“FCC”) adopted with an effective date of June 8, 2011 was correct. As the

Attorney General’s Letter states, “[t]hose amendments [to 47 C.F.R.

1.1409(e)] became effective on June 8, 2011 — several months after the

time period for which the Commission determined the maximum allowable

pole-attachment rate.” 1

      Thus, the Commission’s Findings of Fact 84-87 and Conclusions of

Law 26 and 27 purported to address rights and facts which have not arisen

and thus the Commission adjudicated matters which are contingent,

uncertain, or rest in the future, thereby comprising an advisory opinion. As

stated in the Attorney General’s Letter, “we determined the Court does not

1
      See Letter from Megan Neal, Assistant Attorney General to Honorable Jeffrey D.
      Kyle, Clerk, Court of Appeals, Third District of Texas (April 20, 2015)
      (“Attorney General’s Letter”) (addressing CPS Energy’s Appellant’s Point of
      Error No. 2, Findings of Fact 84-87, and Conclusion of Law 27).
No. 03-14-00340-CV
APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF                                      1
have jurisdiction to decide one of the issues … [t]his Court and the Texas

Supreme Court have held that statements about the future are advisory 2 … .”

                      SUMMARY OF ARGUMENT

      CPS Energy agrees with the Attorney General that the Commission

issued an advisory opinion regarding the applicability of the June 8, 2011

amendments to the FCC’s rules.            As CPS Energy explained at oral

arguments, in this proceeding the Commission has consistently over-reached

in applying its limited authority to CPS Energy, a municipally owned utility

(“MOU”). This issue is yet another example of the Commission exceeding

its jurisdiction in reviewing the disputes in this case.

      CPS Energy respectfully urges the Court to reverse the Commission’s

Order on Rehearing with regard to Findings of Fact 84-87 and Conclusions

of Law 26 and 27 because those determinations are improper advisory

opinions.

      Should the Court conclude that the Commission’s decision regarding

the applicability of the FCC’s amended rules is not an advisory opinion,

nonetheless the Court should reverse the Commission’s ruling because the

2     The Attorney General’s Letter does not refer to Conclusion of Law 26, but that
      conclusion of law suffers from the same flaws as Conclusion of Law 27.

No. 03-14-00340-CV
APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF                                      2
Commission’s interpretation of Utilities Code § 54.204(c) would result in an

unconstitutional delegation of power to a federal agency. 3

                                ARGUMENT

Findings of Fact 84-87 and Conclusions of Law 26 and 27 are Improper
Advisory Opinions

      The Commission limited its review in this proceeding to the billing

years 2005 through 2010, which also matched the evidence in the record.

See Conclusion of Law 24 (“[t]he inputs set out in the findings of fact are

reasonable for use in the Maximum rate formula for test years 2004 through

2009 (billing years 2005 through 2010)”); Conclusion of Law 25 (“[t]he

maximum allowable pole-attachment rates set forth in the findings of fact for

test years 2004 through 2009 (billing years 2005 through 2010) comply with

PURA §§ 54.204 and 54.205”); Findings of Fact 42-83A (all limited to

billing years 2005 though 2010).

      However, the Commission then went outside the record before it and

unnecessarily concluded that the June 8, 2011 amendments to 47 C.F.R.

1.1409(e) applied prospectively to the parties. See Conclusions of Law 26

and 27 (Conclusion of Law 26:           “Changes in 47 U.S.C. § 224(e) are

3
      See Brief of Appellant, CPS Energy at 16-21 (September 5, 2014) (“CPS Brief”)
      (addressing delegation issue in Point of Error No. 2).

No. 03-14-00340-CV
APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF                                     3
incorporated into PURA § 54.204 without legislative action;” and

Conclusion of Law 27: “[t]he FCC’s June 8, 2011 amendment to 47 C.F.R.

1.1409(e) applies to CPS Energy under PURA § 54.204(c)”); Findings of

Fact 84-87 (describing the “Methodology Going Forward”). 4 Further, the

Commission made the sweeping conclusion that not only did the June 8,

2011 amendment affecting the Telecom Formula apply to the parties, but

that any future changes to FCC regulations that govern pole attachment rates

are incorporated into PURA § 54.204 without action by the Texas

Legislature.

        As conceded by the Attorney General’s Letter, these conclusions were

advisory only. See Attorney General’s Letter at 1 (“we determined the Court

does not have jurisdiction to decide one of the issues … [t]his Court and the

Texas Supreme Court have held that statements about the future are advisory

… .”)

        “The separation-of-powers doctrine prohibits courts from issuing

advisory opinions.” Brinkley v. Texas Lottery Comm'n, 986 S.W.2d 767,

770 (Tex. App.—Austin 1999, no pet.)          “The distinctive feature of an

advisory opinion is that it decides an abstract question of law without

4       The Commission in its Order on Rehearing made similar statements.   See,
        Commission’s Order on Rehearing at 6 and 22.

No. 03-14-00340-CV
APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF                                  4
binding the parties.” Brinkley, 986 S.W.2d at 767; citing Tex. Ass'n of Bus.

v. Tex. Air Control Bd., 852 S.W.2d 440, 444 (Tex. 1993). “The court will

not declare rights on facts which have not arisen or adjudicate matters which

are contingent, uncertain, or rest in the future.” Brinkley at 768. “An

opinion issued in a case that is not ripe would address only a hypothetical

injury rather than remedying actual or imminent harm.” City of Waco v.

Tex. Nat. Res. Conservation Comm'n, 83 S.W.3d 169, 175 (Tex. App.—

Austin 2002, pet. denied). “Ripeness ‘is a threshold issue that implicates

subject matter jurisdiction ... [and] emphasizes the need for a concrete injury

for a justiciable claim to be presented.’” Robinson v. Parker, 353 S.W.3d
753, 755 (Tex. 2011).

       A decision by a state agency that is advisory or unripe is similarly

invalid. See TXU Electric v. Public Utility Commission, 51 S.W.3d 275, 287

(Tex. 2001) (holding that the Commission’s prospective adjustment for

acquired debt was advisory and thus premature); R.R. Comm'n v.

CenterPoint Energy Res. Corp., 03–13–00533–CV, 2014 WL 4058727 at

*2-3 (Tex. App.—Austin, no pet.); citing Trinity Settlement Servs., LLC v.

Texas State Secs. Bd., 417 S.W.3d 494, 506 (Tex. App.—Austin 2013, pet.

denied) (“[i]n the administrative-law context, moreover, avoiding premature

litigation   over   administrative   determinations   prevents courts     from

No. 03-14-00340-CV
APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF                                 5
‘entangling themselves in abstract disagreements over administrative

policies …’”).

      In this case the parties provided evidence for the 2005-2010 billing

years and the Commission made findings based on that evidence. The

Commission’s analysis of the June 8, 2011 amendments to 47 C.F.R.

1.1409(e), which was incorporated into the case as a result of the Conclusion

of Law 26, had no bearing on the evidence before it. As the Attorney

General’s Letter concedes, “those amendments [to 47 C.F.R. 1.1409(e)]

became effective on June 8, 2011 — several months after the time period for

which the Commission determined the maximum allowable pole-attachment

rate.” The Commission’s Findings of Fact 84-87 and Conclusions of Law

26 and 27, therefore, “declare[d] rights on facts which have not arisen or

adjudicate[d] matters which are contingent, uncertain, or rest in the future,”

in violation of the Court’s ruling in Brinkley and similar cases. Brinkley,
986 S.W.2d at 768.

      CPS Energy respectfully urges the Court to adopt the Commission’s

concession that Findings of Fact 84-87 and Conclusions of Law 26 and 27

were advisory opinions. As CPS Energy discusses above, the Commission

made determinations of facts and law unripe for decision. The effect of such

findings is to remove the Commission’s subject matter jurisdiction to issue
No. 03-14-00340-CV
APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF                                6
those findings and conclusions.            See Robinson, 353 S.W.3d at 755

(“[r]ipeness ‘is a threshold issue that implicates subject matter

jurisdiction’…”). CPS Energy thus respectfully urges the Court to find that

the Commission’s determinations have no legal effect and to reverse the

Commission’s Order on Rehearing regarding Findings of Fact 84-87 and

Conclusions of Law 26 and 27.5

The Uniform Declaratory Judgment Act does not Apply to this Case

      At the oral argument, AT&T argued that the Commission’s findings

were not advisory opinions because the case was brought as a declaratory

judgment action. AT&T’s argument lacks merit for two reasons.

      First, CPS Energy did not file the case under the Uniform Declaratory

Judgment Act (“UDJA”). CPS Energy instead filed the case as a petition for

enforcement under Utilities Code § 54.204. Indeed, the style of the case is

“Petition of CPS Energy for Enforcement Against AT&T Texas and Time

Warner Cable Regarding Pole Attachments” and CPS Energy’s petition was

5
      It is appropriate for the Court to reverse the Commission’s decision in this case if
      the decision prejudices substantial rights of CPS Energy. TEX. GOV'T CODE ANN.
      § 2001.174 (West 2000); Central Power & Light Co. v. Public Util. Comm'n, 36
S.W.3d 547, 561-562 (Tex.App.—Austin 2000, pet. denied). In this case, Time
      Warner Cable Texas LLC (“Time Warner”) is seeking damages against CPS
      Energy in a related case in Bexar County District Court. If the Commission’s
      advisory opinion about the FCC’s June 8, 2011 amendments stands untouched,
      Time Warner will undoubtedly use that opinion to seek damages against CPS
      Energy in the Bexar County litigation. Therefore, CPS Energy’s substantial rights
      will be prejudiced and it is appropriate to reverse the Commission’s decision.

No. 03-14-00340-CV
APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF                                            7
titled “Petition and Request for Enforcement of CPS Energy.” Order on

Rehearing at 1.      Therefore, any case law interpreting the UDJA is

inapplicable to this case.    See, e.g., City of Waco, 83 S.W.3d at 177

(analyzing ripeness requirements for UDJA actions).

      Second, even if considered to be a declaratory judgment action, Texas

courts have consistently held that a declaratory judgment action does not

expand a tribunal’s subject matter jurisdiction. “[W]e have interpreted the

Uniform Declaratory Judgments Act, TEX. CIV. PRAC. & REM. CODE §§

37.001–.011, to be merely a procedural device for deciding cases already

within a court’s jurisdiction rather than a legislative enlargement of a court’s

power, permitting the rendition of advisory opinions.” Tex. Ass'n of Bus.,
852 S.W.2d at 444; see also Firemen's Ins. Co. v. Burch, 442 S.W.2d 331,

333 (Tex. 1969) (“the Legislature could not and has not by the passage of

the Uniform Declaratory Judgments Act, empowered the district courts to

render advisory opinions”).     Consequently, even had the parties filed a

declaratory judgment action, which they did not, the Commission would

have lacked subject matter jurisdiction to issue Findings of Fact 84-87 and

Conclusions of Law 26 and 27 since those determinations were advisory and

unripe.

No. 03-14-00340-CV
APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF                                  8
Findings of Fact 84-87 and Conclusions of Law 26 and 27 Result in an
Unconstitutional Delegation of Power

      If the Court concludes that the Commission’s decision regarding the

applicability of the FCC’s June 8 2011 amendments to its rules were not an

advisory opinion, then as CPS Energy explained in its Point of Error No. 2,

the Commission’s interpretation of Utilities Code § 54.204(c) results in an

unconstitutional delegation of power to a federal agency. See CPS Brief at

16-21.   CPS Energy respectfully refers the Court to its briefs for its

arguments on that issue. Id.

Conclusion

      The Commission exceeded its jurisdiction on several occasions and

Findings of Fact 84-87 and Conclusions of Law 26 and 27 are examples of

this overstepping of jurisdictional authority. See CPS Brief at 16-47 (Points

of Error Nos. 2-5). As the Attorney General recognized, the Commission

issued an advisory opinion about the applicability of the June 8, 2011

amendments to the FCC’s rules. The record only addressed billing years

2005-2010 and thus the dispute upon which the Commission issued its

opinion was unripe.            The Commission’s opinion was also an

unconstitutional delegation of power.

No. 03-14-00340-CV
APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF                               9
      For all of these reasons, CPS Energy respectfully urges the Court to

find that Findings of Fact 84-87 and Conclusions of Law 26 and 27 have no

legal effect and remand the case to the Commission with instructions to

issue an order consistent with the Court’s opinion.

                                           Respectfully submitted,

CPS Energy                             HERRERA & BOYLE, PLLC

Gabriel Garcia                         Alfred R. Herrera
ggarcia@cpsenergy.com                  State Bar No. 09529600
Carolyn Shellman                       aherrera@herreraboylelaw.com
cshellman@cpsenergy.com
                                       816 Congress Avenue, Suite 1250
CPS Energy                             Austin, Texas 78701
145 Navarro                            (512) 474-1492 (Voice)
P.O. Box 1771                          (512) 474-2507 (Facsimile)
San Antonio, Texas 78296
(210) 353-5689 (Voice)                 By: /s/ Alfred R. Herrera
(210) 353-6832 (Facsimile)                 Alfred R. Herrera

                   ATTORNEYS FOR CPS ENERGY

No. 03-14-00340-CV
APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF                             10
                    CERTIFICATE OF SERVICE

      I hereby certify that on this the 8th of May, 2015, a true and correct
copy of Appellant CPS Energy’s Post Submission Brief was served upon
all parties listed below by certified mail, return receipt requested, or hand
delivered.
                                            By:     /s/ Alfred R. Herrera
                                                  Alfred R. Herrera

Counsel for Public Utility Commission Counsel for CPS Energy:
of Texas:
                                        Alfred R. Herrera
Douglas Fraser                          HERRERA & BOYLE, PLLC
Megan Neal                              816 Congress Avenue, Suite 1250
Office of the Attorney General          Austin, TX 78701
P.O. Box 12548, Capitol Station         Phone: (512) 474-1492
Austin, Texas 78711-02548               Fax: (512) 474-2507
Phone: (512) 463-2012                   aherrera@herreraboylelaw.com
Fax: (512) 457-4610
douglas.fraser@texasattorneygeneral.gov
megan.neal@texasattorneygeneral.gov

Counsel for AT&T Texas:                   Counsel for CPS Energy:

Paul A. Drummond                          Carolyn Shellman
Natalie L. Hall                           Gabriel Garcia
AT&T Legal Department                     CPS Energy
1010 N. St. Mary’s, 14th Floor            145 Navarro
San Antonio, Texas 78215                  P.O. Box 1771
Phone: (210) 351-4830                     San Antonio, TX 78296
Fax: (210) 886-2127                       Phone: (210) 353-5689
paul.drummond@att.com                     Fax: (210) 353-6832
natalie.hall@att.com                      cshellman@cpsenergy.com
                                          ggarcia@cpsenergy.com

No. 03-14-00340-CV
APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF                                11
Counsel for AT&T Texas:                   Counsel for AT&T Texas:

Michael T. Sullivan                       J. David Tate
Mayer Brown LLP                           Katherine C. Swaller
71 S. Wacker Drive                        Thomas Ballo
Chicago, IL 60606                         AT&T Legal Department
Phone: (312) 782-0600                     816 Congress Avenue, Suite 1100
Fax: (312) 706-8689                       Austin, Texas 78701
msullivan@mayerbrown.com                  Phone: (512) 457-2304
                                          Fax: (512) 870-3420
                                          jon.david.tate@att.com
                                          katherine.swaller@att.com
                                          thomas.ballo@att.com

Counsel for Time Warner Cable Texas Counsel for Time Warner Cable
LLC:                                Texas LLC:

Valerie P. Kirk                           J.D. Thomas
Melissa Lorber                            J. Aaron George
Enoch Kever PLLC                          Sheppard Mullin Richter &
600 Congress Avenue, Suite 2800           Hampton LLP
Austin, Texas 78701                       1300 I Street, N.W.
Phone: (512) 615-1200                     11th Floor East
Fax: (512) 615-1198                       Washington DC 20005
vkirk@enochkever.com                      Phone: (202) 218-0000
mlorber@enochkever.com                    Fax: (202) w218-0020
                                          dthomas@sheppardmullin.com
                                          ageorge@sheppardmullin.com

                 CERTIFICATE OF COMPLIANCE

The Word document properties feature states there are 1,961 words in this
document.
                                         By: /s/Alfred R. Herrera
                                             Alfred R. Herrera

No. 03-14-00340-CV
APPELLANT CPS ENERGY’S POST SUBMISSION BRIEF                                12
         APPENDIX I:

Referenced Case Law and Statutes

(Excludes Items Provided with CPS Energy’s
              Previous Briefs)
                               No. 03-14-00340-CV

                                 APPENDIX I:

                      Referenced Case Law and Statutes

           (Excludes Items Provided with CPS Energy’s Previous Briefs)
Cases

1.      Brinkley v. Texas Lottery Comm'n, 986 S.W.2d 767 (Tex. App.—
        Austin 1999, no pet.)

2.      City of Waco v. Tex. Nat. Res. Conservation Comm'n, 83 S.W.3d 169
        (Tex. App.—Austin 2002, pet. denied)

3.      Firemen's Ins. Co. v. Burch, 442 S.W.2d 331 (Tex. 1969)

4.      Railroad Comm'n v. CenterPoint Energy Res. Corp., 03–13–00533–
        CV, 2014 WL 4058727, at *2-3 (Tex. App.—Austin, no pet.)

5.      Robinson v. Parker, 353 S.W.3d 753 (Tex. 2011)

6.      Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440
        (Tex. 1993)

7.      Trinity Settlement Servs., LLC v. Texas State Secs. Bd., 417 S.W.3d
494 (Tex. App.—Austin 2013, pet. denied)

8.      TXU Electric v. Public Utility Commission, 51 S.W.3d 275
        (Tex. 2001)

Statutes and Rules

9.      47 C.F.R. §1.1409(e)

10.     TEX. CIV. PRAC. & REM. CODE §§ 37.001–.011

11.     TEX. UTIL. CODE ANN. § 54.205
Brinkley v. Texas Lottery Com’n, 986 S.W.2d 764 (1999)

                                                                 obtain a declaratory judgment that certain machines,
                   986 S.W.2d 764                                denominated “eight-liners,” are not “gambling devices” as
               Court of Appeals of Texas,                        defined by the Texas Penal Code. See Tex. Penal Code
                        Austin.                                  Ann. § 47.01(B)(4) (West Supp.1998). He applied for an
                                                                 injunction against enforcement of any criminal or
    Shannon BRINKLEY, d/b/a Krane–Ko Vending,                    administrative penalties for operating “eight-liners,” and
                   Appellant,                                    in a civil-rights action prayed for compensatory damages.
                       v.                                        The trial court dismissed his causes of action for want of
      TEXAS LOTTERY COMMISSION, Appellee.                        jurisdiction. Brinkley appeals. We will affirm the
                                                                 judgment.
        No. 03–97–00252–CV | Feb. 4, 1999.

Owner of electronic machines similar to slot machines
filed action seeking, in part, declaratory judgment that his                      THE CONTROVERSY
machines were not gambling devices. The District Court,
Travis County, 250th Judicial District, John K. Dietz, J.P.,     The Bingo Enabling Act, administered and enforced by
dismissed his causes of action for want of jurisdiction.         the Texas Lottery Commission, provides as follows:
Owner appealed. The Court of Appeals, John Powers, J.
(Retired), held that: (1) cause of action seeking                            A game of chance other than bingo
declaratory judgment that machines were not gambling                         ... may not be conducted or allowed
devices sought improper advisory opinion; (2) trial court                    during an occasion when bingo is
lacked jurisdiction to grant requested injunctive relief in                  played.... This subsection does not
absence of allegations of probable injury; (3)                               prohibit the exhibition and play of
Commission’s advisory letters were not “rules” within                        an amusement machine that is not a
meaning of provision of Administrative Procedure Act                         gambling device as defined by
(APA) authorizing declaratory judgments to determine                         Section 47.01, Penal Code.
validity of rules; and (4) Commission was not subject to
suit under § 1983 or federal civil rights conspiracy statute.    Tex.Rev.Civ. Stat. Ann. art. 179d, § 11(k) (West
                                                                 Supp.1998). Section 47.01 of the Penal Code defines
Affirmed.                                                        “gambling device.”1

                                                                 1
Attorneys and Law Firms                                                 “Gambling       device”    means       any    electronic,
                                                                        electromechanical, or mechanical contrivance not
*766 Ira E. Tobolowsky, Tobolowsky & Burk, P.C.,                        excluded under Paragraph (B) that for a consideration
Dallas, for Appellant.                                                  affords the player an opportunity to obtain anything of
                                                                        value, the award of which is determined solely or
                                                                        partially by chance, even though accompanied by some
John Cornyn, Atty. Gen., Matthew L. Rienstra, Asst. Atty.
                                                                        skill, whether or not the prize is automatically paid by
Gen., Admistrative Law Division, Austin, for Appellee.                  the contrivance. The term:
Before Chief Justice ABOUSSIE, Justices B.A. SMITH                      ***
and POWERS.*                                                                    (B) does not include any electronic,
*
       Before John Powers, Senior Justice (retired), Third                      electromechanical, or mechanical contrivance
       Court of Appeals, sitting by assignment. See Tex. Gov’t                  designed, made, and adapted solely for bona
       Code Ann. § 74.003(b) (West 1998).                                       fide amusement purposes if the contrivance
                                                                                rewards the player exclusively with noncash
                                                                                merchandise prizes, toys, or novelties, or a
                                                                                representation of value redeemable for those
                                                                                items, that have a wholesale value available
Opinion                                                                         from a single play of the game or device of not
                                                                                more than 10 times the amount charged to play
JOHN POWERS, Justice (Retired).                                                 the game or device once or $5, whichever is
                                                                                less.
                                                                           Texas Penal Code Ann. § 47.01(4)(B) (West
Shannon Brinkley sued the Texas Lottery Commission to                      Supp.1998).

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                           1
Brinkley v. Texas Lottery Com’n, 986 S.W.2d 764 (1999)

                                                               formulated or adopted in compliance with the rulemaking
                                                               provisions of Texas Government Code sections
                                                               2001.021–.037;3
The Commission licenses and regulates some 2,500
bingo-parlors. Many licensees allow the operation of           3
“eight-liners” in their parlors. Eight-liners are electronic            See Tex. Gov’t Code Ann. §§ 2001.021–.037 (West
                                                                        1998).
machines (similar to “slot machines”) that dispense gift
certificates redeemable for prizes. The machines do not
all operate in the same manner; their operation and payout
can be configured in a variety of ways.                        (3) an application for injunction restraining the
                                                               Commission and “all others” from interfering with the
*767 The Commission received numerous complaints and           operation of Brinkley’s eight-liners in bingo parlors,
inquiries from licensees who were uncertain about              whether by raids, harassment, criminal prosecution,
whether the particular machines in their parlors were set      forfeiture and seizure of Brinkley’s eight-liners, or any
up to operate legally. In response, the Commission sent to     other way; and
its licensees letters setting forth criteria by which the
licensees might ascertain the legal status of machines in      (4) actions for injunctive relief and compensatory
their parlors. The letters included a warning that illegally   damages, under 42 United States Code sections 1983 and
operated machines exposed licensees to administrative          1985, for violation of Brinkley’s civil rights under color
and criminal penalties.2 The Commission noted in the           of state law.4
letters that application of the stated criteria would not
necessarily determine the legality of the machines and         4
                                                                        See 42 U.S.C. §§ 1983, 1985 (1994).
“the agency cannot guarantee that the use of the
eight-liners is necessarily legal.” The letters concluded:
“we hope this helps answer questions you may have in
regard to this issue.”                                         The Commission filed pleas to the jurisdiction,
                                                               contending the trial court lacked subject-matter
2
                                                               jurisdiction because (1) the actions were barred by the
       The Commission may impose administrative penalties      doctrine of sovereign immunity; (2) Brinkley lacked
       for violations of the Bingo Enabling Act.               standing to assert the actions alleged; (3) the trial court
       Law-enforcement authorities enforce the Texas Penal
                                                               lacked jurisdiction to determine legal relationships under
       Code.
                                                               a penal statute; and (4) there existed no justiciable
                                                               controversy. The trial court denied the plea of sovereign
                                                               immunity but sustained the pleas on the other grounds
Brinkley does not hold a Commission license to operate a       claimed and dismissed the actions. Brinkley contends the
bingo parlor. He owns several eight-liners that he             trial court possessed jurisdiction on the grounds discussed
formerly operated in a space he leases within a licensed       below.
bingo parlor. When Brinkley’s lessor received the
Commission’s letters, he refused to allow Brinkley to
continue the operation of his eight-liners in the bingo
parlor.
                                                                   UNIFORM DECLARATORY JUDGMENTS ACT
Brinkley pleaded against the Commission the following
                                                               [1] [2] [3] [4]
causes of action:                                                          The separation-of-powers doctrine prohibits
                                                               courts from issuing advisory opinions. Texas Ass’n of
(1) An action under the Uniform Declaratory Judgments          Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 444
Act for a judicial determination that eight-liners are not     (Tex.1993); Firemen’s Ins. Co. v. Burch, 442 S.W.2d 331,
gambling devices under section 47.01(4)(B) of the Texas        333 (Tex.1969); Morrow v. Corbin, 122 Tex. 553, 62
Penal Code, and that the Commission’s interpretation of        S.W.2d 641, 647 (1933). The distinctive feature of an
section 47.01 is unconstitutional;                             advisory opinion is that it decides an abstract question of
                                                               law without binding the parties. Alabama State Fed’n of
(2) an action for declaratory judgment under section           Labor v. McAdory, 325 U.S. 450, 461, 65 S. Ct. 1384, 89
2001.038 of the Texas Government Code that the                 L.Ed. 1725 (1945); Texas Ass’n of Bus., 852 S.W.2d at
Commission’s letters constitute “rules,” as defined by         444; Firemen’s Ins. Co., 442 S.W.2d at 333; California
section 2001.003(6) of the Administrative Procedure Act,       Prods. Inc. v. Puretex Lemon Juice, Inc., 160 Tex. 586,
and that the “rules” are invalid because they were not         334 S.W.2d 780, 783 (1960). An opinion is advisory
                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                    2
Brinkley v. Texas Lottery Com’n, 986 S.W.2d 764 (1999)

when the judgment sought would not constitute specific                          Air Control Bd., 852 S.W.2d 440, 444 (Tex.1993).
relief to a litigant or affect legal relations. Reuter v. *768
Cordes–Hendreks Coiffures, 422 S.W.2d 193, 196
(Tex.Civ.App.—Houston [14th Dist.] 1967, no writ).
“The court will not declare rights on facts which have not
arisen or adjudicate matters which are contingent,
uncertain, or rest in the future.” 26 C.J.S. Declaratory                                 INJUNCTIVE RELIEF
Judgments, § 28 (1956).
                                                                      [7] [8]
[5] [6]
                                                                            The trial court also lacked jurisdiction to grant the
      Brinkley alleged that he sustained “irreparable injury          injunctive relief requested.7 Injunctions may not issue
to vested property rights with no adequate remedy at law”             unless it is shown that the respondent will engage in or is
because his lessor, “as a result” of the Commission’s                 engaging in the activity to be enjoined. See State v.
letters, demanded that Brinkley remove his machines.                  Morales, 869 S.W.2d 941, 946–47 (Tex.1994). Brinkley
Elsewhere in his petition, Brinkley’s allegations are                 seeks to enjoin the Commission and “all others” from
susceptible of a construction that the letters prevent his            interfering with the operation of his eight-liners in bingo
operating his machines in other bingo parlors. We believe             parlors in any way, including the prohibition of raids,
Brinkley’s cause of action under the UDJA requires an                 harassment, criminal prosecution, and forfeiture and
advisory opinion. Brinkley and the Commission are the                 seizure of his machines. Brinkley alleged only that the
only parties to the lawsuit and Brinkley is not a licensee            Commission sent the advisory letters to about 2,500
subject to the Commission’s regulation.5 Brinkley                     licensees. He has not alleged that the Commission
necessarily speculates that a declaratory judgment,                   threatens to impose upon him (he is not a licensee)
holding that eight-liners are not gambling devices, may               administrative penalties nor that law enforcement
induce his lessor or other bingo-parlor licensees to allow            authorities (not parties here) threaten to prosecute him
him to operate his machines, however configured, in their             under the criminal law. He has not alleged that the
parlors. This is a contingency, an uncertainty, a                     Commission, unless restrained, will enforce against him
hypothesis upon which a court may not decide the legal                any sanction within its power to enforce. We decline to
issues raised in Brinkley’s petition. See Coalson v. City             hold as a matter of law that the Commission’s sending of
Council of Victoria, 610 S.W.2d 744, 747 (Tex.1980)                   the advisory letters to a large number of its licensees
(suit to declare invalid city charter-amendment initiative            constituted a showing of “probable injury” to Brinkley.
requires advisory opinion because voters might                        See id. at 946–47; Transport Co. v. Robertson Transports,
disapprove proposed amendment); Central Sur. & Ins.                   Inc., 152 Tex. 551, 261 S.W.2d 549, 552 (1953)
Corp. v. Anderson, 445 S.W.2d 514, 515 (Tex.1969) (suit               (requiring showing of “probable injury” if respondent not
for declaratory judgment that insurer liable to pay                   restrained). Absent allegations of fact showing a probable
judgment, in advance of judgment against tort defendant,              injury, a court is without jurisdiction to grant the
requires advisory opinion); see generally Texas Ass’n of              injunctive relief requested. See Morales, 869 S.W.2d at
Bus., 852 S.W.2d at 444.6                                             942, 946–47; see also *769 Texas Employment Comm’n
                                                                      v. Martinez, 545 S.W.2d 876, 877–78 (Tex.Civ.App.—El
5
          The Commission regulates amusement machines                 Paso 1976, no writ).
          pursuant to article 179d of the Texas Revised Civil
          Statutes (Bingo Enabling Act) which is concerned only       7
                                                                                Brinkley requested injunctive relief pursuant to section
          with those amusement machines located in bingo halls.
                                                                                65.011 of the Texas Civil Practice & Remedies Code
          See Tex.Rev.Civ. Stat. art. 179d (West 1998). Outside
                                                                                and section 16.29 of the Texas Business & Commerce
          of bingo halls, law enforcement personnel are charged                 Code (Injury to Business Reputation or Trade Name or
          with the enforcement of Texas Penal Code section                      Mark); Tex. Civ. Prac. & Rem.Code Ann. § 65.011
          47.01 which prohibits the use of “gambling devices.”
                                                                                (West 1997); Tex. Bus. & Com.Code Ann. § 16.29
          Tex. Penal Code § 47.01 (West 1994 & Supp.1998).
                                                                                (West Supp.1998).

6
          The Uniform Declaratory Judgments Act, found in the
          Texas Civil Practice & Remedies Code, is a procedural
          device for deciding cases already within a court’s
          jurisdiction; the statute does not enlarge a court’s                   ADMINISTRATIVE PROCEDURE
          jurisdiction so as to authorize the rendition of advisory             ACT—DECLARATORY JUDGMENT
          opinions. See Tex. Civ. Prac. & Rem.Code Ann. §§
          37.001–.011 (West 1997); Texas Ass’n of Bus. v. Texas       Section 2001.038 of the Administrative Procedure Act
                   © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                               3
Brinkley v. Texas Lottery Com’n, 986 S.W.2d 764 (1999)

(APA) creates a cause of action for declaratory judgment         promulgated through the notice-and-comment procedures
to determine the validity or applicability of an agency rule     of APA sections 2001.022–.037, or bind particular
when it “is alleged that the rule or its threatened              litigants by the Commission’s order adjudicating a
application interferes with or impairs, or threatens to          contested case conducted under the procedures set forth in
interfere with or impair, a legal right or privilege of the      APA sections 2001.051–.147. The same is true in general
plaintiff.” Tex. Gov’t Code Ann. § 2001.038 (West 1998).         of most constitutive statutes and enabling acts delegating
For purposes of section 2001.038 and all other sections in       power to administrative agencies.
Chapter 2001 of the Texas Government Code, the word
“rule”                                                           The legislature intends that administrative agencies
                                                                 exercise effectively the powers delegated to them. See
       (A) means a state agency statement of general             Sexton v. Mount Olivet Cemetery Ass’n, 720 S.W.2d 129,
       applicability that:                                       137 (Tex.App.—Austin 1986, writ ref’d n.r.e.). Agencies
                                                                 would be reduced to impotence, however, if bound to
       (i) implements, interprets, or prescribes law or          express their views as to “law,” “policy,” and procedural
       policy; or                                                “requirements” through contested-case decisions or
                                                                 formal rules exclusively; and they could not under such a
       (ii) describes the procedure or practice requirements     theory exercise powers explicitly delegated to them by the
       of a state agency;                                        legislature. How, under such a theory, could an agency
                                                                 practically express its views to an informal conference or
       (B) includes the amendment or repeal of a prior rule;
                                                                 advisory committee, or state its reasons for denying a
       and
                                                                 petition to adopt a rule, or file a brief in a court or agency
       (C) does not include a statement regarding only the       proceeding? See Tex. Gov’t Code Ann. §§ 2001.021,
       internal management or organization of a state            .031, .058 (West 1998).
       agency and not affecting private rights or
       procedures.                                               The foregoing are only examples derived from the APA
                                                                 itself. If every expression by the agency as to “law,”
Tex. Gov’t Code Ann. § 2001.003(6) (West 1998)                   “policy,” and procedural “requirements” requires the
(emphasis added).                                                promulgation of a formal rule, the agency could no longer
                                                                 exercise its “informed discretion” to choose adjudication
[9]
  Brinkley contends the trial court had jurisdiction of his      as a means of making law and policy, rather than
cause of action for declaratory judgment, under section          rulemaking, a choice we have repeatedly said an agency
2001.038 of the APA, because the Commission letters              has when it possesses both adjudicatory and rulemaking
amounted to a “rule” as defined in section 2001.003(6).          powers. See, e.g., Madden v. Texas Bd. of Chiropractic
We disagree.                                                     Exmr’s, 663 S.W.2d 622, 626 (Tex.App.—Austin 1984,
                                                                 writ ref’d n.r.e.); *770 State Bd. of Ins. v. Deffebach,
[10]
    “Not every statement by an administrative agency is a        631 S.W.2d 794, 799 (Tex.App.—Austin 1982, writ ref’d
rule for which the APA prescribes procedures for                 n.r.e.). If the agencies were so restricted, they would be
adoption and for judicial review.” Texas Educ. Agency v.         deprived, as a practical matter, of the power to adjudicate;
Leeper, 893 S.W.2d 432, 443 (Tex.1994). This                     an agency could make valid “law” or “policy” only
observation refers to the fact that administrative agencies      through the straight-jacket of rulemaking, even though the
routinely issue letters, guidelines, and reports, and            agency might be quite unable to do so for any number of
occasionally file briefs in court proceedings, any of which      reasons as noted in El Paso v. Public Util. Comm’n, 883
might contain statements that intrinsically implement,           S.W.2d 179, 188–89 (Tex.1994).8
interpret, or prescribe law, policy, or procedure or
practice requirements. Are all such statements therefore         8
                                                                        The legislature may, by statute, require an agency to
“rules” within the meaning of APA section 2001.003(6)                   make formal rules with regard to particular matters. See
and 2001.038? They are not for several reasons.                         Railroad Comm’n v. Shell Oil Co., 146 Tex. 286, 206
S.W.2d 235, 241 (1947). The agency would be bound,
It does not appear that the legislature has delegated to the            of course, to enact rules in compliance with the
                                                                        legislative mandate. It may also be that a constitutional
Commission a power to bind others by ukase—a naked
                                                                        provision requires, in particular circumstances, that the
proclamation contained, for example, in a letter, a set of              agency promulgate a formal rule before attempting to
guidelines, or a report, or by a statement in a brief filed in          bind private persons by the agency’s view of “law,”
a court proceeding. It appears instead that the                         “policy,” or procedural “requirements.” See, e.g.,
Commission may bind others generally only by a rule                     Madden v. Texas Bd. of Chiropractic Exmr’s, 663

                 © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                          4
Brinkley v. Texas Lottery Com’n, 986 S.W.2d 764 (1999)

       S.W.2d 622, 626–27 (Tex.App.—Austin 1984, writ           ed.1994).10
       ref’d n.r.e.). Such matters are not involved in the
       present controversy.                                     9
                                                                       The letters sent by the Commission in this instance
                                                                       were, on their face, simply advisory guidelines; they
                                                                       did not purport to express a final opinion on the legality
The very text of the APA rejects the theory that every                 of eight-liners of any particular kind. We have
                                                                       previously noted the valuable role such advisory
agency pronouncement regarding “law,” “policy,” and
                                                                       opinions serve in administration. See Texas Comm’n of
procedural “requirements” requires the promulgation of a               Licensing and Regulation v. Model Search America,
formal rule. That theory would destroy, for example, the               Inc., 953 S.W.2d 289 (Tex.App.—Austin 1997, no
distinction between “rules” and “policies” found in                    writ). As we stated in that opinion,
section 2001.058(b), (c), and (e); the word “policies” is                   [T]o permit suits for declaratory judgments upon
rendered meaningless because under that theory                              mere informal, advisory, administrative opinions
“policies” could only exist in the form of “rules.”                         might well discourage the practice of giving such
                                                                            opinions, with a net loss of far greater proportions
We need not belabor the point. The definition in section                    than any possible gain.
                                                                         Id. at 293 quoting, Helco Prods. Co. v. McNutt, 137
2001.003(6) is sufficiently flexible to allow agencies to                F.2d 681, 684 (D.C.Cir.1943). Considering the
perform their functions without unnecessary procedural                   number of bingo-parlor licensees and the variety of
obstacles; the definition expressly excludes from the                    ways in which eight-liners can be configured, the
definition of a “rule” any agency statements regarding                   practical value of the letters is obvious. Nothing in
only the internal management or organization of an                       the letters purports to foreclose an individual licensee
agency that do not affect private rights or procedures. See              from seeking, if he wishes, a formal opinion from the
Tex. Gov’t Code Ann. § 2001.003(6)(C) (West 1998).                       Commission regarding particular eight-liners. While
This statutory exclusion encompasses any agency                          private parties may voluntarily comply with such
statement regarding “law,” “policy,” or procedural                       guidelines, they are not legally bound to do so.
“requirements” made outside the rulemaking and
contested-case context; such statements have no legal
effect on private persons absent a statute that so provides     10
                                                                       The first Commission letter stated:
or some attempt by the agency to enforce its statement                      TO ALL BINGO LICENSEES:
against a private person, as in Madden where the agency                     The Texas Lottery Commission has received
attempted to enforce, in the course of adjudicating a                       complaints regarding the use of gambling devices
contested case, its policy of what constituted a “bona fide                 at locations where bingo is being conducted. The
reputable chiropractic” school. See Madden, 663 S.W.2d                      specific complaints concern the operation of
                                                                            devices popularly known as “Eight Liners.”
at 626–27. At that point, an affected person may
                                                                            The Texas Lottery Commission considers these
challenge, if he wishes, the validity or applicability of the               devices to be gambling devices as defined by
agency statement on whatever grounds may be applicable.                     Section 47.01(4) of the Texas Penal Code, as a
Until then, the agency’s pronouncements regarding “law,”                    result of the method of operation and payoff of
“policy,” and procedural “requirements” remain merely                       these devices.
informal views, effective only upon and within the                          Please be aware that Section (11(k)) of the Bingo
agency’s internal management and organization.9 See                         Enabling Act, Texas Revised Civil Statutes Article
Leeper, 893 S.W.2d at 443 (state board of education                         179d, provides the following: “A game of chance
resolution stating guidelines for school districts pending                  other than bingo may not be conducted or allowed
statutory revision); United Parcel Serv., Inc. v. Oregon                    during an occasion when bingo is played. This
                                                                            subsection does not prohibit the exhibition and
Transp. Comm’n, 27 Or.App. 147, 555 P.2d 778, 780                           play of an amusement machine that is not a
(1976) (commission statement consenting to city’s                           gambling device as defined by Section 47.01,
designation of truck route); Reynolds Sch. Dist. v. Oregon                  Penal Code.”
Sch. Employees, 58 Or.App. 609, 650 P.2d 119, 123                           Therefore, effective September 1, 1996, the
(1982) (agency statement made in adjudication of                            Commission will refer any incident of use by a
previous contested case); United States v. Fitch Oil Co.,                   licensee of the aforementioned device(s) in an
676 F.2d 673, 678 (Temp.Emer.Ct.App.U.S.1982)                               illegal manner which is detected after September
(statement of Secretary of Energy); Durnin v. Allentown                     1, 1996 to the appropriate law enforcement agency
Fed. Sav. and Loan Ass’n, 218 F. Supp. 716, 721                              for criminal prosecution and will initiate an
                                                                            appropriate administrative disciplinary action.
(E.D.Pa.1963) (letter from supervisory agent of Federal                     This notice is intended to make licensees aware of
Home Loan Bank Board); 1 Davis and Pierce,                                  the agency’s position and to afford an opportunity
Administrative *771 Law Treatise § 3.5 at 120 (3d                           to licensees for voluntary compliance.

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                           5
City of Waco v. Texas Natural Resource Conservation Com’n, 83 S.W.3d 169 (2002)

                                                              and PURYEAR.
                   83 S.W.3d 169
              Court of Appeals of Texas,
                       Austin.                                BEA ANN SMITH, Justice.

         CITY OF WACO, Appellant,
                     v.                                       This appeal concerns whether a dispute about the Texas
 TEXAS NATURAL RESOURCE CONSERVATION                          Natural Resource Conservation Commission’s (the
 COMMISSION; and Jeffrey A. Saitas, as Executive              TNRCC’s) permit-issuing process is ripe for judicial
            Director, Appellees.                              review by the district court. The Bosque River, a tributary
                                                              of the Brazos River, is located northwest of the city of
No. 03–01–00217–CV. | May 9, 2002. | As Modified              Waco. Segments 1226 and 1255 of the North Bosque
     on Overruling of RehearingJune 21, 2002.                 River have been listed as having impaired water quality
                                                              due to high levels of nutrients. See 30 Tex. Admin. Code
                                                              §§ 307.1–.10 (2001) (Tex. Natural Res. Conservation
City and dairy producers’ association filed action seeking    Comm’n, Tex. Surface Water Quality Standards). Near its
declaratory judgment that Texas Natural Resources             point of confluence with the Brazos River, the Bosque
Conservation Commission (TNRCC) order regulating              River forms Lake Waco, which provides the sole source
future permits for confined animal feeding operations         of drinking water for approximately 150,000 people in
(CAFOs) was invalid, TNRCC withdrew order and filed           and around Waco; the lake is also used extensively for
motion to dismiss action as moot and not ripe, and city       recreational activities. The water quality of Lake Waco,
amended petition to seek declaratory relief that TNRCC’s      which is a “sink” for any dissolved pollutants in the
interim policy of continuing to issue any permits violated    Bosque River, has been affected. Numerous dairy
state regulation. The 353rd Judicial District Court, Travis   operations are located northwest of Waco in Erath County
County, Paul Davis, J., dismissed actions. City appealed.     in the Bosque River watershed. The dairies must seek
The Court of Appeals, Bea Ann Smith, J., held that: (1)       confined animal feeding operation (CAFO) permits from
dispute had to be evaluated in terms of ripeness, not         the TNRCC because the agricultural waste from their
mootness; (2) question of whether federal regulation, as      operations, which becomes dissolved in runoff or is
adopted by state law, operated to prohibit TNRCC from         otherwise discharged, ultimately discharges into the river.
approving any new CAFO permits until TNRCC adopted
necessary pollution-reduction measures presented purely       [1]
                                                                 This dispute arose when the TNRCC promulgated an
legal inquiry, which would not benefit from development       order in February 2000 regulating future permits for
of additional facts in connection with specific permit        CAFOs. Both the City of Waco (the City) and the Texas
application; and (3) facts underlying dispute were            Association of Dairymen (the Dairymen) filed actions for
sufficiently developed to make dispute ripe for review;       declaratory judgments attacking the order. The TNRCC
and on rehearing, Smith, J., held that: (4) sovereign         responded by withdrawing the order and moving to
immunity did not bar city’s suit; and (5) city was not        dismiss both actions as moot and not ripe. The City
seeking advisory opinion, and thus suit was not               amended its petition to seek declaratory relief that the
hypothetical and presented real controversy that would be     TNRCC’s interim policy of continuing to issue any
resolved by declaratory relief sought.                        permits violates state regulations. The district court
                                                              dismissed the actions. Both the Dairymen and the City
Reversed and remanded.                                        appealed the dismissal of their suits for declaratory relief.
                                                              However, following oral argument, the Dairymen
                                                              voluntarily dismissed their appeal.1 The only remaining
Attorneys and Law Firms
                                                              issue before us is the ripeness of the City’s suit for
*172 Jackson B. Battle, Brown McCarroll L.L.P., Austin,       declaratory relief.2
for appellant.
                                                              1
                                                                     The TNRCC filed a motion to dismiss the Dairymen’s
Anthony C. Grigsby, Linda B. Secord, Assistant                       appeal on the ground that legislative action had mooted
Attorneys General, Natural Resources Division, Austin,               the association’s appeal. Because the Dairymen
for appellees.                                                       voluntarily dismissed their appeal, we overrule the
                                                                     TNRCC’s motion.
Before Chief Justice ABOUSSIE, Justices B.A. SMITH

               © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                       1
City of Waco v. Texas Natural Resource Conservation Com’n, 83 S.W.3d 169 (2002)

                                                                  water have caused excessive growth of algae and other
2
       The TNRCC’s motion to dismiss the Dairymen’s and           aquatic plants, which in turn potentially cause distaste and
       the City’s claims asserted mootness and ripeness           odor in drinking water and, under certain circumstances,
       grounds. After a hearing, the trial court granted the      contribute to the depletion of dissolved oxygen.
       motion. The order states that “[a]fter considering the
       motion, the responses, and the evidence filed in support   Under the federal Clean Water Act, a state is required to
       of the motion and responses, the court: GRANTS the         “identify those waters within its boundaries for which the
       motion and DISMISSES [the consolidated causes].” In        effluent limitations required by [the Act] are not stringent
       its brief, the TNRCC asserts that the City’s claims is
                                                                  enough to implement any water quality standard
       moot and not ripe. While the City’s original claims may
       have been rendered moot by the TNRCC’s action
                                                                  applicable to such waters.” 33 U.S.C. § 1313(d)(1)(A)
       revoking its order, it amended its petition to state a     (2001). In 1998, the TNRCC listed two segments of the
       different claim based on the TNRCC’s policy. We            Bosque River as “impaired under narrative water quality
       conclude therefore that the issue should be analyzed in    standards related to nutrients and aquatic plant growth.”
       terms of ripeness.                                         Once the TNRCC identified the water segments as
                                                                  impaired, it was required to develop a Total Maximum
                                                                  Daily Load (TMDL), which is a plan for assimilation of
Specifically, the City seeks a declaration that the TNRCC         the pollutants that are present in the water. See id. §
may not grant any additional *173 permits for CAFOs in            1313(d)(1)(C).3 The TNRCC describes a TMDL as
the Bosque River watershed until it complies with certain
                                                                  3
federal regulations that have been incorporated into state                 Under the Clean Water Act, the TNRCC is also
law. See 30 Tex. Admin. Code § 305.538 (1999) (Tex.                        required to develop a “continuing planning process” for
Natural Res. Conservation Comm’n, Prohibitions for                         reducing the pollution and bringing the water segments
TPDES Permits) (“no permit may be issued under the                         up to state water quality standards for nutrients and
conditions prohibited in 40 Code of Federal Regulations §                  pathogens. See 33 U.S.C. § 1313(e) (2001). This
                                                                           process must include, in part, plans for “effluent
122.4, as amended”). The City maintains that it seeks
                                                                           limitations and schedules of compliance at least as
resolution of a pure question of law: whether section                      stringent as those [required under provisions of the
122.4(i) operates to bar all new permits until the TNRCC                   Clean Water Act],” “the incorporation of all elements
has developed an implementation scheme to reduce                           of any applicable area-wide waste management plans,”
pollution in the two impaired segments of the Bosque                       total maximum daily loads for pollutants in accordance
River. The TNRCC contends that its compliance with the                     with subsection (d), and “adequate implementation,
regulations can only be determined in the context of a                     including schedules of compliance, for revised or new
permit application on the facts presented by a particular                  water quality standards.” Id.
application. Because we agree with the City that its
request for declaratory relief presents a determination of
law, we reverse the district court’s order of dismissal and
remand this cause for consideration on the merits.                    a quantitative plan that determines the amount of a
                                                                      particular pollutant that a water body can receive and
                                                                      still meet its applicable water quality standards. In
                                                                      other words, TMDLs are the best possible estimates of
                                                                      the assimilative capacity of the water body for a
    FACTUAL AND PROCEDURAL BACKGROUND                                 pollutant under *174 consideration. A TMDL is
                                                                      commonly expressed as a load, with units of mass per
During the 1980s, the dairy industry expanded greatly in              time period, but may be expressed in other ways also.
the North Bosque River watershed. Erath County became                 TMDLs must also estimate how much the pollutant
the leading county in the state for milk production. This             load needs to be reduced from current levels in order to
reflects a trend in the dairy industry away from small,               achieve water quality standards.
geographically scattered dairies toward large-scale,                  More than three years after the TNRCC identified the
clustered dairy operations. In early 2001, the TNRCC                  watershed as impaired, the TNRCC had still not
estimated that there were 41,000 milk cows concentrated               established a TMDL plan. Although the agency
along the Bosque River watershed. The waste produced                  “anticipated” in late 1999 that it would be able to
by these concentrated operations has impaired the water               submit a proposed TMDL to the Environmental
quality of the adjacent stretches of the North Bosque                 Protection Agency (EPA) by the spring of 2000, the
River. The TNRCC has identified the primary source of                 TNRCC did not complete a TMDL until early 2001.
the pollution to be phosphorus, which is a nutrient found             The TNRCC has now sent a TMDL to the EPA for
in animal waste. The large amounts of phosphorus in the
                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                            2
City of Waco v. Texas Natural Resource Conservation Com’n, 83 S.W.3d 169 (2002)

   approval; at the time the parties submitted their briefs
   in this cause, however, the TMDL had not been                   The Executive Director of the TNRCC testified that the
   approved by that agency.                                        agency will exercise its discretion to grant new permits as
The TMDL confirms that a major controllable source of              long as the additional discharge will not worsen the
the phosphorus in the water comes from the dairy farms             “environmental status quo” of the impaired river. The
concentrated in the watershed. It recommends that forty to         agency also points to a rule that it says embodies this
sixty percent reductions in phosphorus loadings in some            policy. See 30 Tex. Admin. Code § 321.33 (2001) *175
areas and fifty percent overall will be needed to reduce           (Tex. Natural Res. Conservation Comm’n, Confined
the potential for problematic algae growth. The City notes         Animal Feeding Operations, Applicability).5 The City
various problems with the proposed TMDL. The City                  argues that the TNRCC’s current discretionary policy is at
argues that its recommendations are based on now                   odds with state law which requires that a sufficient
outdated information; the number of permits currently              allocation be available for the water to receive the
pending with the TNRCC, if approved, would increase the            additional loading and still meet state water quality
number of authorized cows by 20,000, so the previously             standards. See id. § 305.538 (1999) (prohibiting permit
recommended levels of the TMDL will not achieve                    that would violate 40 C.F.R. § 122.4). The City sought a
attainment of water quality standards.4 In addition, the           declaration that
TMDL does not establish the amount of phosphorus
loadings, allocated among the dairies and other                    5
                                                                              The current    administrative   code   is   cited   for
dischargers, that could be tolerated without violating                        convenience.
water quality standards for pathogens and nutrients. Nor
does it implement compliance schedules for the dairies
and other dischargers to reduce the pathogens in the two
impaired water segments.                                               until the TNRCC promulgates legally binding
                                                                       regulations to implement TMDLs for nutrients and
4
       The TMDLs are based on data that was collected                  pathogens in the two Bosque Segments that contain
       during the mid–1990s. The TNRCC has noted similar               load allocations and other measures that will assure
       concerns with the reliability of the data. An interagency       compliance with the state water quality standards, no
       memo states that the TMDL’s “demonstration of                   permit may be issued to construct or operate a new
       feasibility is based in large part on computer model
                                                                       CAFO ... within the watershed.
       simulations that estimated the amount of dairy waste to
       be applied and otherwise disposed of based on the               The TNRCC argues that the City’s suit would not be
       number of dairy cows existing or permitted in the               ripe until the TNRCC issued a specific permit. The
       watershed. If the waste projection changes significantly        district court agreed with TNRCC and dismissed the
       due [to] increasing number of animals, the model                suit. The City now appeals from that judgment.
       numbers are less useful for supporting TMDL
       approval.”

                                                                                             DISCUSSION
Compounding these failures with respect to existing                [2] [3] [4] [5]
                                                                               Ripeness implicates subject-matter jurisdiction
dischargers, the City asserts that the TNRCC has
                                                                   and emphasizes the requirement of a concrete injury in
worsened the situation by approving new applications for
                                                                   order to present a justiciable claim. Waco Indep. Sch.
additional discharges of waste into the already polluted
                                                                   Dist. v. Gibson, 22 S.W.3d 849, 851 (Tex.2000);
river. With the exception of certain small operations, the
                                                                   Patterson v. Planned Parenthood, 971 S.W.2d 439, 442
dairies in the watershed are required to obtain CAFO
                                                                   (Tex.1998). Ripeness is concerned with when an action
permits from the TNRCC that allow them to discharge
                                                                   can be brought and seeks to conserve judicial time and
waste from their operations. The City asserts that since
                                                                   resources for real and current controversies rather than
declaring the segments impaired, the TNRCC has
                                                                   hypothetical or remote disputes. Gibson, 22 S.W.3d at
continued to grant permits for new and expanded uses
                                                                   851; Patterson, 971 S.W.2d at 442–43. Courts of this
under an evolving “interim policy.” Although this interim
                                                                   state may not issue advisory opinions. Patterson, 971
policy has taken slightly different forms in recent years,
                                                                   S.W.2d at 443; Texas Ass’n of Bus. v. Texas Air Control
the City asserts that every phase of the policy grants the
                                                                   Bd., 852 S.W.2d 440, 444 (Tex.1993). An opinion issued
agency the discretion to issue new permits, contrary to the
                                                                   in a case that is not ripe would address only a hypothetical
regulations prohibiting additional CAFOs until the
                                                                   injury rather than remedying actual or imminent harm.
TNRCC implements measures that will improve the water
                                                                   See Texas Ass’n of Bus., 852 S.W.2d at 444.
quality to meet state standards.

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                               3
City of Waco v. Texas Natural Resource Conservation Com’n, 83 S.W.3d 169 (2002)

[6] [7] [8]
        In determining whether a cause is ripe for judicial                   new discharger required by paragraph (i) of this
consideration, we look to see whether the facts have                          section if the Director determines that the Director
sufficiently developed to show that an injury has                             already has adequate information to evaluate the
occurred, or is likely to occur. Patterson, 971 S.W.2d at                     request. An explanation of the development of
442. A claimant is not required to show that the injury has                   limitations to meet the criteria of this paragraph
already occurred, provided the injury is imminent or                          (i)(2) is to be included in the fact sheet to the
sufficiently likely. Gibson, 22 S.W.3d at 852; Patterson,                     permit under § 124.56(b)(1) of this chapter.
971 S.W.2d at 442. Likewise, a person seeking a
declaratory judgment need not have incurred actual                        40 C.F.R. § 122.4(i) (2001) (Envtl. Prot. Agency, Nat’l
injury; a declaratory judgment action will lie if the facts               Pollutant Discharge Elimination Sys., Prohibitions)
show the presence of “ripening seeds of a controversy.”                   (emphasis added). The City interprets section 122.4(i)
Texas Dep’t of Banking v. Mount Olivet Cemetery Ass’n,                    to mean that “no discharge permit may be issued to a
27 S.W.3d 276, 282 (Tex.App.-Austin 2000, pet. denied)                    new CAFO within the impaired watershed until the
(quoting Texas Dep’t of Pub. Safety v. Moore, 985                         TNRCC promulgates regulations to implement TMDLs
S.W.2d 149, 153–54 (Tex.App.-Austin 1998, no pet.)).                      for phosphorous and pathogens in the two Bosque
                                                                          Segments that contain load allocations and compliance
[9]                                                                       schedules.”
   The City contends that its claim that section 122.4(i) of
the Code of Federal Regulations, which has been                        Under the TNRCC’s interpretation, section 122.4(i) does
incorporated into state law, prohibits the TNRCC from                  not obligate the agency to develop load allocations and
issuing permits for new6 CAFOs in the watershed until the              compliance schedules before it issues a new discharge
TNRCC develops compliance schedules and pollutant                      permit; rather, it merely limits the TNRCC’s ability to
load allocations is ripe. Section 122.4(i) reads:                      issue permits that would “cause or contribute to the
                                                                       violation of water quality standards.” Whether a new
6                                                                      permit will cause or contribute to the violation of water
              A CAFO that currently operates under a permit may
              also seek a permit for additional or expanded uses.      quality standards, the agency continues, depends on the
              Section 122.4(i) applies only to a permit for a new      specific conditions and terms of a given permit. The
              source or discharger. See 40 C.F.R. § 122.4(i) (2001).   TNRCC argues that the City’s claim does not present a
              Therefore, the City has stipulated that its appeal is    pure question of law because the agency’s compliance
              limited to permits for new CAFOs.                        with section 122.4(i) can only be determined in the
                                                                       context of an application for a permit. Thus, according to
                                                                       the TNRCC, the City’s claim is not ripe until the agency
                                                                       approves a permit, because only at that point can one
      No permit may be issued [t]o a new source or a new               determine whether the permit will cause or contribute to a
      discharger, if the discharge from its construction or            violation of water standards. The agency also emphasizes
      operation *176 will cause or contribute to the violation         that variations between state and federal law affect
      of water quality standards. The owner or operator of a           whether a particular permit violates section 122.4(i).
      new source or new discharger proposing to discharge
      into a water segment which does not meet applicable              The City responds that the particular conditions of any
      water quality standards or is not expected to meet those         permit are irrelevant because under the agency’s rules and
      standards even after the application of the effluent             policy, every new permit to discharge into impaired
      limitations required by sections 301(b)(1)(A) and                waters violates section 122.4(i). The City points to the
      301(b)(1)(B) of CWA, and for which the State or                  rules governing CAFOs,7 which specifically authorize
      interstate agency has performed a pollutants load                discharges in “chronic or catastrophic rainfall events.” See
      allocation for the pollutant to be discharged, must              30 Tex. Admin. Code §§ 321.31(b), .32(8), .34,
      demonstrate, before the close of the public comment              .39(f)(19)(E) (2001) (Tex. Natural Res. Conservation
      period, that:                                                    Comm’n, Concentrated Animal Feeding Operations).
                                                                       *177 The City also maintains that the TNRCC’s own
              (1) There are sufficient remaining pollutant load        evidence indicates that only about half of the waste
              allocations to allow for the discharge; and              produced by CAFOs is ever “collectible.” Even if all of
                                                                       the “collectible waste” is prevented from entering the
              (2) The existing dischargers into that segment are       watershed, other uncollectible waste is not. Therefore,
              subject to compliance schedules designed to bring        issuing an additional permit without pollutant load
              the segment into compliance with applicable water        allocations and compliance schedules will violate section
              quality standards. The Director may waive the            122.4(i), regardless of the conditions that are imposed.
              submission of information by the new source or           Furthermore, according to the City, differences between
                      © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                       4
City of Waco v. Texas Natural Resource Conservation Com’n, 83 S.W.3d 169 (2002)

state and federal law are not relevant to its declaratory         liberally construed. Tex. Civ. Prac. & Rem.Code Ann. §
judgment suit, which is premised solely on the basis of           37.002; Moore, 985 S.W.2d at 153.
state law. The City notes that section 122.4(i) has been
                                                                  [13]
incorporated into and become part of state law, and that              The TNRCC also questions the fitness of the issues for
its claim is based on the TNRCC’s failure to implement            decision, asserting that the City’s request will affect
standards to comply with state, not federal, water quality        additional parties who are not present to defend their
standards.                                                        interests. The City responds that it is questionable that any
                                                                  such additional parties would have adequate standing to
7
            These are the rules that currently govern the CAFO    participate in a challenge to an individual permit.
            permit process. See Tex. Water Code Ann. §            Furthermore, the TNRCC’s assertion does not go directly
            26.503(b)(1) (West Supp.2002) (stating that an        to the ripeness inquiry, which determines when an action
            individual permit must “provide for management and    may be brought, that is, “whether the facts have
            disposal of waste in accordance with Subchapter B,    developed sufficiently so that an injury has occurred or is
            Chapter 321, Title 30, Texas Administrative Code”).   likely to occur, rather than being contingent or remote.”
                                                                  See Patterson, 971 S.W.2d at 442. The facts have
                                                                  sufficiently developed as between the TNRCC and the
[10]
    We conclude that the question of whether section              City such that the dispute is not hypothetical. In addition,
122.4(i) operates to prohibit the TNRCC from approving            an interested *178 party may intervene in the proceedings
any new discharge permits until it adopts the necessary           on remand. See Tex.R. Civ. P. 60.
pollution-reduction measures presents a purely legal
inquiry. In determining ripeness, courts should examine           Moreover, the denial of judicial review will result in
(1) the fitness of the issues for judicial decision, and (2)      hardship to the City. Under the APA, a permit issued in a
the hardship occasioned to a party by the court’s denying         contested case is final, even while an appeal is pending.
judicial review. Office of Pub. Util. Counsel v. Public           See Tex. Gov’t Code Ann. § 2001.144. The effect of
Util. Comm’n, 843 S.W.2d 718, 724 (Tex.App.-Austin                forcing the City to wait until the TNRCC has granted
1992, writ denied). The City’s claim poses a purely legal         another permit means, in effect, that Lake Waco could
question-the interpretation of section 122.4(i)-which will        become more polluted with the additional discharge while
not benefit from the development of additional facts in           the parties litigate their dispute. Moreover, the City could
connection with a specific permit application. The                suffer multiple harms from multiple additional CAFOs,
TNRCC asserts that the issues are not fit for decision            and be forced to make this same legal argument in
because the City has failed to challenge a final agency           numerous appeals. Thus, the City’s claim satisfies both
action. Citing provisions in the Water Code and the               prongs of the ripeness inquiry.
Administrative Procedure Act (APA), the TNRCC
emphasizes that judicial review is limited to agency              Furthermore, the City’s claim is appropriately brought
rulings, orders, decisions, or other acts, or the validity or     pursuant to the Declaratory Judgment Act. Under that act,
applicability of a rule. See Tex. Water Code Ann. § 5.351         a claimant must show that (1) a justiciable controversy
(West 2000); Tex. Gov’t Code Ann. § 2001.038 (West                exists as to the rights and status of the parties; and (2) the
2000).                                                            controversy will be resolved by the declaration sought.
                                                                  Moore, 985 S.W.2d at 153. There is a justiciable
[11] [12]
        The City, however, has asserted a different basis         controversy between the parties regarding the effect of
for its lawsuit, specifically, sections 37.002–.004 of the        section 122.4(i) on the agency’s permitting process. The
Uniform Declaratory Judgments Act (UDJA). See Tex.                City asserts that the TNRCC has a duty to improve the
Civ. Prac. & Rem.Code Ann. §§ 37.002–.004 (West                   water quality of the impaired river segments without
1997). Under that Act, a claimant’s access to judicial            further delay, and that the agency has no discretion to
review is not limited to review of agency rules; instead,         issue new CAFO permits until it takes these affirmative
the Act provides a basis by which a claimant can obtain a         steps. The TNRCC responds that it has the discretion to
declaration of rights, status, or other legal relations under     grant additional permits that do not worsen the
a writing or a statute. See id. § 37.004. A suit under the        environmental status quo. A declaration regarding the
UDJA is not confined to cases in which the parties have a         effect of section 122.4(i) on the agency’s authority to
cause of action apart from the Act itself. Texas Dep’t of         issue new CAFO permits will resolve this controversy.
Pub. Safety v. Moore, 985 S.W.2d 149, 153                         Therefore, we hold that the trial court had jurisdiction to
(Tex.App.-Austin 1998, no pet.). The legislature intended         hear the City’s claim under the UDJA and that the issue is
the UDJA to be remedial, to settle and afford relief from         ripe for adjudication.8
uncertainty and insecurity with respect to rights, and to be

                    © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                      5
Firemen’s Ins. Co. of Newark, N. J. v. Burch, 442 S.W.2d 331 (1968)

                                                               has not been determined. On December 7, 1966, Jesse L.
                   442 S.W.2d 331                              and Dorothy Burch filed this suit in the form of a
               Supreme Court of Texas.                         declaratory judgment against Firemen’s Insurance
                                                               Company of Newark, New Jersey. The insurance
      FIREMEN’S INSURANCE COMPANY OF                           company filed a cross-action and the trial court entered a
        NEWARK, NEW JERSEY, Petitioner,                        declaratory judgment decreeing that:
                        v.                                               ‘(T)he defendant Firemen’s Insurance
        Jesse L. BURCH et ux., Respondents.                              Company of Newark, New Jersey, is
                                                                         obligated by virtue of its Policy No.
 No. B—914. | Oct. 9, 1968. | Rehearing Denied Oct.
30, 1968. | Second Rehearing Denied and Dissenting                       AFT 322361 to defend Larry J.
               Opinion Jan. 22, 1969.                                    Buttler in Cause No. 152,097 styled
                                                                         Dorothy M. Burch, et vir v. Sarah C.
                                                                         Buttler, et vir, in the 53rd Judicial
Suit for declaratory judgment to determine liability of                  District Court of Travis County,
insurer of automobile. The 53rd District Court, Travis                   Texas, and that since Larry J. Buttler
County, Jones, J., rendered judgment that insurer was                    is liable for the torts of his wife, Sarah
obligated to defend defendant husband of driver and since                C. Buttler, committed during their
husband was responsible for torts of wife was obligated to               marriage, the defendant, Firemen’s
pay any judgment rendered against him, and insurer                       Insurance Company of Newark, New
appealed. The Austin Court of Appeals, Third Supreme                     Jersey, is obligated by virtue of Policy
Judicial District, 426 S.W.2d 306, affirmed District Court               No. AFT 322361 to pay on behalf of
judgment and insurer brought error. The Supreme Court,                   Larry J. Buttler any judgment
Norvell, J., held that whether insurer had duty to defend                rendered against him in said Cause
defendant husband of driver was justiciable issue but that               No. 152,097 to the full extent of its
District Court had no power to render advisory opinion on                policy coverage, * * *.’
hypothetical question of whether insured was liable for
wife’s torts before it had been established that she was
liable to plaintiff.                                           The court also declared that the insurance company was
                                                               not obligated to defend Sarah C. Buttler1 and was ‘not
Affirmed in part and reversed in part.                         obligated to pay any judgment rendered against her’ in the
                                                               case of Burch v. Buttler. This declaratory judgment was
Smith, J., dissented on Motion for Rehearing.                  affirmed by the Court of Civil Appeals. 426 S.W.2d 306.
                                                               1
                                                                         Larry Buttler and Sarah Buttler have been divorced and
                                                                         at the time of the rendition of judgment in this cause,
Attorneys and Law Firms                                                  May 10, 1967, Sarah was the wife of Hilton Cromier.
                                                                         She will, however, be referred to herein as Sarah
*332 Small, Herring, Craig, Werkenthin & Shannon, C.                     Buttler.
C. Small, Jr., Charles Herring and Bob E. Shannon,
Austin, for petitioner.
                                                               [1]
                                                                   The question of the insurance company’s duty to
Garey, Colbert & Kidd, Joe Colbert, Austin, for
                                                               defend presented a justiciable issue. No complaint is
respondents.
                                                               made of the trial court’s disposition of this issue and that
Opinion                                                        portion of the trial court’s judgment relating thereto will
                                                               not be disturbed. However, that portion of the decree
NORVELL, Justice.                                              which attempts to declare the liability of the insurance
                                                               company upon any judgment *333 which may hereafter
                                                               be rendered in the case of Burch v. Buttler is purely
                                                               advisory in nature and beyond the power and jurisdiction
On December 1, 1965, Dorothy Burch was injured in a            of the district court to render. Accordingly, such portion
collision between the car in which she was riding and an       of the trial court’s judgment is vacated.
automobile driven by Sarah Buttler, the wife of Larry
                                                               [2] [3] [4]
Buttler. Dorothy Burch and her husband, Jesse L. Burch,                 This court has repeatedly held that under our
sued Sarah and Larry Buttler for damages and this action       Constitution, the judicial power does not embrace the
                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                          1
Firemen’s Ins. Co. of Newark, N. J. v. Burch, 442 S.W.2d 331 (1968)

giving of advisory opinions. Morrow v. Corbin, 122 tex.         Burch v. Buttler. At present, the question is
553, 62 S.W.2d 641 (1933); California Products, Inc. v.         hypothetical—‘If Mrs. Buttler be held liable to Mrs.
Puretex Lemon Juice, Inc., 160 Tex. 586, 334 S.W.2d 780         Burch for damages in tort, is Larry Buttler to be held
(1960); United Services Life Insurance Co. v. Delaney,          liable also although he did not aid or abet in the conduct
396 S.W.2d 855 (Tex.Sup.1965), and authorities therein          of his wife, which is alleged to be tortious.’ Should this
cited. Article 5, s 8 of the Texas Constitution, Vernon’s       question be answered, then the following ‘iffy’ question
Ann.St. does not empower the district courts to render          arises. If Larry Buttler be held liable for his wife’s tort,
such opinions and as jurisdiction is a matter of                should the liability of the petitioner insurance company be
constitutional delineation, the Legislature could not and       limited to the amount of his interest in the community
has not by the passage of the Uniform Declaratory               estate of the marriage subject to execution?
Judgments Act, empowered the district courts to render
advisory opinions. In 1960, this court again reiterated the
principle that the giving of such opinions is not a judicial    Of course, If Mrs. Burch should fail to establish her case
function, but that in governmental affairs, the duty to         against Mrs. Buttler, the questions raised by petitioner’s
render advisory opinions is vested in the executive branch      points would be purely academic and we would have had
of government and that in private business, the giving of       a considerable amount of judicial wheel spinning for
legal advice is the function of the legal profession.           nothing.
California Products, Inc. v. Puretex Lemon Juice, Inc.,
160 Tex. 586, 334 S.W.2d 780 (1960). Also in the                *334 We can well appreciate that the parties would prefer
Puretex case, this court cited and quoted from Ladner v.        a definite answer by this court to the questions posed by
Siegel, 294 Pa. 368, 144 A. 274 (1928), as correctly            petitioner’s points rather than to take an ‘educated guess’
laying down the proposition that the Declaratory                based upon a study of our prior decided cases and
Judgments Act gives the court no power to pass upon             authoritative materials as to what we would hold,—as, if
hypothetical or contingent situations, or determine             and when the questions are presented in justiciable form.
questions not then essential to the decision of an actual       However, the giving of advice as to proposed or possible
controversy, although such questions may in the future          settlements is not a judicial function. As a practical matter
require adjudication.                                           if for no other reason, this must be left to the profession.

                                                                In Lide v. Mears, 231 N.C. 111, 56 S.E.2d 404 (1949),
Puretex controls this case. The parties have posed a            cited with approval in the Puretex case, the North
problem which is hypothetical, ‘iffy’ and contingent.           Carolina Supreme Court said:
Firemen’s Insurance Company, as petitioner here,                          ‘There is much misunderstanding as
presents the following points of error:                                   to the object and scope of this
‘The Court of Civil Appeals erred in holding that Larry                   legislation (Uniform Declaratory
Buttler was legally obligated within the terms of the                     Judgment Act). Despite some notions
insurance policy here involved to pay damages                             to the contrary, it does not undertake
occasioned by the tort of his wife (Sarah Buttler) even                   to convert judicial tribunals into
though he in no way participated therein.’                                counsellors and impose upon them the
                                                                          duty of giving advisory opinions to
‘The Court of Civil Appeals erred in failing to hold that in              any parties who may come into court
any event Larry Buttler’s legal obligation for a tort of his              and ask for either academic
wife, not participated in nor aided or abetted by him,                    enlightenment or practical guidance
should be the amount of his interest in the community                     concerning their legal affairs. Town
estate of the marriage subject to execution and                           of Tryon v. Duke Power Co., 222
consequently petitioner’s liability under its policy would                N.C. 200, 22 S.E.2d 450; Allison v.
be limited to such amount.’                                               Sharp, 209 N.C. 477, 184 S.E. 27;
                                                                          Poore v. Poore, 201 N.C. 791, 161
[5]
     The contentions raised by these points present                       S.E. 532; Anderson on Declaratory
interesting questions of law as is demonstrated by the                    Judgments,      section    13.    This
opinion of the Court of Civil Appeals. The question posed                 observation may be stated in the
is whether or not under the facts of this case, Larry Buttler             vernacular in this wise: The Uniform
is liable for the torts of his wife, Sarah Buttler. But, no               Declaratory Judgment Act does not
court has yet decided whether Mrs. Buttler has committed                  license litigants to fish in judicial
a tort which would render her liable in damages to Mrs.                   ponds for legal advice.’
Burch. That is the issue involved in the untried cause of
                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                       2
Railroad Com’n of Texas v. CenterPoint Energy Resources..., Not Reported in...
2014 WL 4058727

                2014 WL 4058727
  Only the Westlaw citation is currently available.                          MEMORANDUM OPINION

  SEE TX R RAP RULE 47.2 FOR DESIGNATION
         AND SIGNING OF OPINIONS.                             MELISSA GOODWIN, Justice.

           MEMORANDUM OPINION                                 *1 The Texas Railroad Commission (the Commission)
            Court of Appeals of Texas,                        appeals the trial court’s reversal in part of its final orders
                     Austin.                                  in three annual review proceedings under cost-of-service
                                                              adjustment (COSA) tariffs involving essentially identical
    The RAILROAD COMMISSION OF TEXAS,                         issues. CenterPoint Energy Resources Corp. d/b/a
                    Appellant                                 CenterPoint Energy Entex and CenterPoint Energy Texas
                        v.                                    Gas (CenterPoint) and Texas Gas Service Company, a
  CENTERPOINT ENERGY RESOURCES CORP.                          Division of ONEOK, Inc. (Texas Gas) (the Utilities) sued
 d/b/a CenterPoint Energy Entex and CenterPoint               for judicial review of final orders issued by the
            Energy Texas Gas, Appellee.                       Commission denying the Utilities’ recovery of certain
   The Railroad Commission of Texas, Appellant                expenses for meals, lodging, and other items and ordering
                        v.                                    certain guidelines for recovery of similar expenses in
     Texas Gas Service Company, a Division of                 future COSA reviews. Because we conclude that the
              ONEOK, Inc., Appellee.                          Utilities’ claims are not ripe, we reverse the trial court’s
   The Railroad Commission of Texas, Appellant                judgment and dismiss the Utilities’ claims.
                        v.
    CenterPoint Energy Resources Corp. d/b/a
 CenterPoint Energy Entex and CenterPoint Energy
               Texas Gas, Appellee.
                                                               FACTUAL AND PROCEDURAL BACKGROUND
    Nos. 03–13–00533–CV, 03–13–00534–CV,
        03–13–00535–CV. | Aug. 14, 2014.                      In April 2010, the Utilities applied for cost-of-service
                                                              adjustments to their rates pursuant to annual reviews
                                                              authorized under their respective COSA tariffs for certain
From the District Court of Travis County, 98th Judicial       service areas. Rates for the affected customers were
District, No. D–1–GN–10–003981, Stephen Yelenosky,            initially determined in contested case hearings that
Judge Presiding.                                              resulted in the adoption of tariffs with COSA clauses. A
From the District Court of Travis County, 200th Judicial      COSA clause is a formula included in a utility’s tariff that
District, No. D–1–GN–10–003983, Stephen Yelenosky,            allows adjustments to customer charges without the
Judge Presiding.                                              necessity of a full-blown “Statement of Intent” rate case.
From the District Court of Travis County, 126th Judicial      See Texas Coast Utils. Coal. v. Railroad Comm’n, 423
District, No. D–1–GN–10–003982, Stephen Yelenosky,            S.W.3d 355, 357, 374 (Tex.2014) (upholding authority of
Judge Presiding.                                              Commission to adopt gas utility rate schedule providing
                                                              for automatic annual adjustments based on increases or
Attorneys and Law Firms                                       decreases in utility’s cost of service, i.e., COSA clause).
                                                              The terms of a COSA clause vary depending on what is
Douglas     Fraser,   Assistant   Attorney      General,      approved as part of the tariff in the rate case. The tariffs in
Environmental Protection Division, Kellie E. Billings,        these cases provide that the annual rate adjustment is to be
Assistant Attorney General, Environmental Protection &        determined by a calculation based on calendar year
Admin. Law Division, Austin, TX, for Appellant.               operating expenses, return investment, and certain taxes.
                                                              If the resulting change is positive, the amount charged
Dane McKaughan, Greenberg Traurig, LLP, Austin, TX,           goes up; if it is negative, the amount charged goes down.
for Appellee.                                                 The adjustment is capped at 5% of the customer charge
                                                              that was in effect at the end of the preceding calendar year
Before Justices PURYEAR, GOODWIN, and FIELD.
                                                              in CenterPoint’s tariffs and at the percentage change in
                                                              the Consumer Price Index for All Urban Consumers in
                                                              Texas Gas’s tariff. These were the first COSA filings

               © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                        1
Railroad Com’n of Texas v. CenterPoint Energy Resources..., Not Reported in...
2014 WL 4058727

made by the Utilities under their respective tariffs.             and reversed the final orders, finding that the Commission
                                                                  acted arbitrarily and capriciously by imposing a new
A COSA tariff annual review is a streamlined procedure            policy in the orders and that the policy was made through
that does not include a hearing; instead, the adjustment is       unlawful procedure and was not supported by substantial
determined following staff review of the evidence filed by        evidence. These appeals followed.
the utility. In each of the present cases, the Commission
questioned and ultimately disallowed certain expenses for
meals, travel, and other items for which the Utilities could
not produce itemized receipts.1 In its final orders, the
Commission made certain findings of fact and                                            DISCUSSION
conclusions of law concerning the disallowed expenses
and included two “ordering paragraphs” requiring the              In its first issue, the Commission argues that the Utilities’
Utilities to meet certain evidentiary criteria for recovery       claims are not ripe and they therefore seek an
of similar expenses in the future.2The two ordering               impermissible advisory opinion.3The Commission
paragraphs provided:                                              contends that the Utilities request a predetermination of a
                                                                  hypothetical matter that could arise in the future, which is
1
                                                                  not a matter fit for judicial consideration. The Utilities
        The removal of the disputed expenses did not result in    argue that the orders “expressly appl [y] ... to future
        any change to the Utilities’ proposed adjustments, and
                                                                  COSA proceedings,”“mandate the manner in which all
        the record reflects that the Utilities withdrew their
        requests for the questioned expenses.
                                                                  future rate adjustments filed pursuant to the applicable
                                                                  COSA tariff will be resolved,” and “fundamentally
                                                                  change the way in which COSA adjustments are
                                                                  calculated in future COSA proceedings.”They further
2
        In each case, calculation errors not relevant to this     contend that the orders place “obligations and burdens on
        appeal were corrected and a nunc pro tunc order issued.   [them] now, and that failure to abide by these new
                                                                  obligations and burdens could bar recovery in a future
                                                                  COSA proceeding.”Thus, the Utilities contend, they seek
                                                                  real relief and an opinion that will affect “all COSA cases
    *2 IT IS FURTHER ORDERED that [the Utilities]                 [they] will file in the future,” not an advisory opinion.
    shall not include any employee or contractor expenses
    from employee or contractor expense reports                   3
                                                                         The Commission also contends that the Utilities lack
    reimbursement in future COSA filings that cannot be                  standing because in their motions for rehearing, they
    supported by a detailed itemized receipt which shows                 did not challenge the Commission’s final decisions on
    the specific amounts and line item charges.                          rate adjustments and instead attacked only the
                                                                         underlying findings of fact and conclusions of law. This
      IT IS FURTHER ORDERED that [the Utilities]                         Court has held that to have standing to seek judicial
      shall identify and justify each meal expense that                  review, one must be aggrieved by the final order and
      exceeds $25.00 per person and any lodging expense                  not merely by an underlying finding or conclusion, see
      over $150.00 per person per night that [the Utilities]             GTE Sw. Inc. v. Public Util. Comm’n of Tex., 37
S.W.3d 546, 548 (Tex.App.-Austin 2001, no
      propose[ ] to include in future COSAs.                             pet.)(citing Champlin Exploration, Inc. v. Railroad
The Utilities filed motions for rehearing complaining that               Comm’n, 627 S.W.2d 250, 252 (Tex.App.-Austin 1982,
the findings of fact, conclusions of law, and ordering                   writ ref’d n.r.e.)). However, the Utilities’ motions for
paragraphs concerning the disallowed expenses were                       rehearing expressly challenged the ordering paragraphs
statements of new policy, not backed by any rule or                      as well as the findings and conclusions. We overrule
guideline, and were therefore made through unlawful                      the Commission’s first issue as to this argument.
procedure, arbitrary and capricious, and not supported by
substantial evidence. The Commission denied the motions
for rehearing, and the Utilities filed suits for judicial         “The courts of this state are not empowered to give
review asserting the same claims. See Tex. Util.Code §            advisory opinions[, and] [t]his prohibition extends to
105.001(a) (any party to proceeding before Commission             cases that are not yet ripe.”Patterson v. Planned
entitled to judicial review under substantial evidence            Parenthood of Hous. & Se. Tex., Inc., 971 S.W.2d 439,
rule). The Commission filed motions to dismiss based, in          443 (Tex.1998) (citations omitted). The ripeness doctrine
part, on its contention that the Utilities were requesting        “serves to avoid premature adjudication” and “focuses on
advisory opinions because their claims are not ripe. The          whether the case involves ‘uncertain or contingent future
trial court denied the Commission’s motions to dismiss            events that may not occur as anticipated, or indeed may
                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                           2
Railroad Com’n of Texas v. CenterPoint Energy Resources..., Not Reported in...
2014 WL 4058727

not occur at all.’ “ Perry v. Del Rio, 66 S.W.3d 239, 250     Exam’rs, 278 S.W.3d 17, 25 (Tex.App.-Austin 2008, pet.
(Tex.2001) (citations omitted). “A case is not ripe when      dism’d), with Beacon Nat’l Ins. Co. v. Montemayor, 86
its resolution depends on contingent or hypothetical facts,   S.W.3d 260, 267–68 (Tex.App.-Austin 2002, no pet.).
or upon events that have not yet come to pass.” Patterson,
971 S.W.2d at 443. “Ripeness is both a question of            The Utilities attempt to characterize their claims as ripe
timing, that is, when one may sue, a question of              by arguing that the language of the ordering paragraphs
discretion, or whether the court should hear the suit, and    will require them to meet evidentiary requirements in all
not whether it can hear the suit.” Atmos Energy Corp. v.      future annually required COSA filings and that the orders
Abbott, 127 S.W.3d 852, 858 (Tex.App.-Austin 2004, no         place “obligations and burdens” on them now. Tellingly,
pet.)(internal citations omitted) (citing Perry, 66 S.W.3d    however, the Utilities argue that their failure to meet these
at 249–50; Patterson, 971 S.W.2d at 442; City of Waco v.      obligations and burdens could bar recovery in a future
Texas Natural Res. Conserv. Comm’n, 83 S.W.3d 169,            COSA proceeding. This perceived threat as to future
177 (Tex.App.-Austin 2002, pet. denied)). “In the             COSA filings does not rise to the level of imminent or
administrative-law context, moreover, avoiding premature      likely injury so as to present a justiciable claim. See Mitz,
litigation over administrative determinations prevents 278 S.W.3d at 25 (contrasting actual initiation of
courts from ‘entangling themselves in abstract                administrative action suggesting imminent proceeding in
disagreements over administrative policies’ while             that case with mere perceived threat in Beacon Nat’l, 86
simultaneously allowing the agency to perform its             S.W.3d at 267–68). And while we may consider
functions unimpeded.” Trinity Settlement Servs., LLC v.       intervening events that occur after a decision in the lower
Texas State Secs. Bd., 417 S.W.3d 494, 506                    court, see Perry, 66 S.W.3d at 250, the Utilities have not
(Tex.App.-Austin 2013, pet. denied) (quoting Patterson,       presented any evidence that the Commission has taken
971 S.W.2d at 443). The determination of ripeness             any steps to impose the requirements on them since
depends on “(1) the fitness of the issues for judicial        issuing the final orders or that there is any existing or
decision; and (2) the hardship occasioned to the party by     continuing threat of liability or penalty. Cf. Mitz, 278
the court’s denying judicial review.” Atmos Energy, 127 S.W.3d at 25–26 (constitutional claim ripe for review
S.W.3d at 858 (citing Perry, 66 S.W.3d at 250 (citing         considering continuing threat of civil and criminal
Abbott Labs. v. Gardner, 387 U.S. 136, 149, 87 S.Ct.          liability against practitioners and direct effect act had on
1507, 18 L. Ed. 2d 681 (1967); City of Waco, 83 S.W.3d at       business enterprise); Patel v. Texas Dep’t of Licensing &
177)). Ripeness should be decided on the basis of all the     Regulation, No. 03–11–00057–CV, 2012 Tex.App.
information available to the court, and we may consider       LEXIS 6187, at *23,2012 WL 3055479 (Tex.App.-Austin
intervening events that occur after the decision in the       July 25, 2012, pet. granted) (constitutional claims ripe
lower court. Perry, 66 S.W.3d at 250; 13 Charles Alan         where appellants subject to continuing threat of civil and
Wright, Arthur R. Miller, & Edward H. Cooper, Federal         criminal liability, as well as administrative penalties and
Practice & Procedure § 3532.1, at 136–37 (2d ed.1984).        sanctions). Thus, the Utilities have not established that
                                                              enforcement is imminent or sufficiently likely, see Trinity
*3 We do not believe the Utilities have affirmatively         Settlement, 417 S.W.3d at 506; Atmos Energy, 127
established that the issues they presented were fit for       S.W.3d at 856; City of Waco, 83 S.W.3d at 175, and we
review and that the failure to address those issues would     conclude that the Utilities’ issues are not fit for judicial
constitute a hardship on the Utilities. See Perry, 66         review, see Perry, 66 S.W.3d at 250; Atmos Energy, 127
S.W.3d at 250; Atmos Energy, 127 S.W.3d at 858.               S.W.3d at 858.
Whether there may be an actual controversy between the
Utilities and the Commission is too uncertain and             *4 To prevail, the Utilities must show that they would
speculative to support the Utilities’ contention that their   suffer hardship if judicial review is withheld until
claims are ripe. Because the Utilities complain of future     enforcement of the requirements in the ordering
enforcement, they must show that enforcement is               paragraphs. See Perry, 66 S.W.3d at 250; Atmos Energy,
“imminent or sufficiently likely.” See Trinity Settlement, 127 S.W.3d at 858. Hardship is shown when the statute,
417 S.W.3d at 506; Rea v. State, 297 S.W.3d 379, 383          rule, or policy at issue “ ‘requires an immediate and
(Tex.App.-Austin 2009, no pet.)(to establish ripeness,        significant change in the plaintiffs’ conduct of their affairs
plaintiffs must demonstrate injury is imminent, direct, and   with serious penalties attached to noncompliance.’ “ Mitz,
immediate, not merely remote, conjectural, or 278 S.W.3d at 26 (quoting Abbott Labs. v. Gardner, 387
hypothetical); Atmos Energy, 127 S.W.3d at 856; City of       U.S. 136, 153, 87 S. Ct. 1507, 18 L. Ed. 2d 681 (1967)).
Waco, 83 S.W.3d at 175. A perceived threat of                 When the requirement at issue has a direct and immediate
enforcement does not create a justiciable controversy.        impact on the party’s business and places it in jeopardy of
Compare Mitz v. Texas State Bd. of Veterinary Med.            sanction or penalty, that is sufficient to show a hardship.

               © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                       3
Robinson v. Parker, 353 S.W.3d 753 (2011)
54 Tex. Sup. Ct. J. 1640

                    353 S.W.3d 753                              David A. Furlow, Thompson & Knight, L.L.P., Levi
                Supreme Court of Texas.                         James Benton, Benton Massey PLLC, Houston, TX, for
                                                                Amicus Curiae Francis M. Kubosh.
    Carroll G. ROBINSON, Bruce R. Hotze, and
            Jeffrey N. Daily, Petitioners,                      Opinion
                         v.
    Annise D. PARKER, Mayor; City of Houston;                   Justice GREEN delivered the opinion of the Court.
     Houston City Council, et al., Respondents.

  No. 08–0658. | Argued Nov. 18, 2009. | Decided                In this case, we are asked to decide (1) whether citizens
  Aug. 26, 2011. | Rehearing Denied Oct. 21, 2011.              who signed a petition proposing a local ballot initiative
                                                                have standing to assert their declaratory judgment claims
                                                                that the voter-approved initiative is valid and must be
                                                                enforced; and (2) the validity of the voter-approved
Synopsis                                                        initiative. Because the citizens’ claims are not ripe,
Background: Citizens, who were sponsors of                      however, we cannot reach those issues.
citizen-initiated referendum proposition, brought action
against city, mayor, and city council, seeking declaratory
judgment that the proposition was valid and must be
enforced. The 333rd District Court, Harris County, Joseph
J. Halbach, J., granted citizens motion for summary                                          I
judgment. Defendants appealed. The Houston Court of
Appeals, 260 S.W.3d 463, reversed, concluding that              Petitioners Carroll G. Robinson, Bruce R. Hotze, and
citizens lacked standing. Citizens filed petition for review.   Jeffrey N. Daily are citizens of Houston who participated
                                                                to varying degrees in efforts to place a proposition
                                                                regarding city revenues and spending on the ballot for
                                                                public referendum. Hotze and Daily organized the petition
[Holding:] The Supreme Court, Paul W. Green, J., held           drive and helped draft the final language of the proposal.
that citizens’ declaratory claims were not ripe.                All three Petitioners signed the petition, donated time and
                                                                money to campaigns promoting the passage of the
                                                                proposition, and voted in favor of it.
Judgments of Court of Appeals and District Court
vacated; case dismissed.                                        On November 2, 2004, Houston voters passed the
                                                                proposition, called Proposition 2, as well as Proposition 1,
                                                                which the Houston City Council had placed on the ballot
Attorneys and Law Firms                                         by its own act in response to Prop. 2.1 Prop. 1 garnered
                                                                more votes, with 280,596 favorable votes, or 64% of the
*753 William A. ‘Andy’ Taylor, Amanda Eileen Staine
                                                                total, as opposed to 242,697 favorable votes for Prop. 2,
Peterson, Andy Taylor & Associates, P.C., Houston, TX,
                                                                or 56% of the total. However, the City of Houston
for Carroll G. Robinson.
                                                                determined that, because Prop. 1 and Prop. 2 conflict,
Scott J. Atlas, Bill White for Texas, Patrick W. Mizell,        Prop. 2 was ineffective and unenforceable. The City based
Stacey Neumann Vu, Vinson & Elkins LLP, Stephen                 that determination both on what Petitioners refer to as
Douglas Pritchett Jr., David M. Gunn, Beck Redden &             Prop. 1’s “poison pill provision,”2 and on the
Secrest, L.L.P. Arturo G. Michel, City Attorney, City of        conflicting-ordinance provision in the Houston City
Houston Legal Dept., Patrick Zummo, Law Offices of              Charter. See Hous., Tex., Code Ordinances, City Charter
Patrick Zummo, John Berchmans Daily, Weil Gotshal &             art. IX, § 19 (2006) (“[A]t any election for the adoption of
Manges LLP, Houston, TX, *754 Melanie Plowman                   amendments if the provisions of two or more proposed
Sarwal, Weil Gothshal & Manges LLP, Austin, TX, for             amendments approved at said election are inconsistent the
Bill White.                                                     amendment receiving the highest number of votes shall
                                                                prevail.”). The mayor therefore *755 did not certify the
Jonathan Day, Andrews Kurth LLP, Warren W. Harris,              results of the passage of Prop. 2 to the secretary of state,
Bracewell & Giuliani, LLP, Houston, TX, for Amicus              and the city council did not enter an order in the city
Curiae Continental Airlines, Inc.                               records declaring that Prop. 2 had been adopted. See
Robinson v. Parker, 353 S.W.3d 753 (2011)
54 Tex. Sup. Ct. J. 1640

LOC. GOV’T CODEE §§ 9.005(b) (requiring city council              Code Ordinances, City Charter art. III, § 1; art. VI-a, § 7;
to pass an ordinance declaring the adoption of an                 art. IX, § 20 (2006). The trial court ultimately granted
initiative that receives a majority of the vote), 9.007           summary judgment in favor of Petitioners. The court of
(requiring mayor to certify results of an election that           appeals, however, ruled that Petitioners lacked standing to
passes a charter amendment to the secretary of state).            assert their claims, relying on our holding in Brown v.
                                                                  Todd, 53 S.W.3d 297, 305 (Tex.2001). 260 S.W.3d 463,
1
       Prop. 2 was described on the ballot as:                    470–72 (Tex.App.-Houston [14th Dist.] 2008, pet. filed).
           The City Charter of the City of Houston shall be       The court remanded the case to the trial court to allow
           amended to require voter approval before the City      Petitioners to amend their pleadings and establish
           may increase total revenues from all sources by        standing. Id. at 466.
           more than the combined rates of inflation and
           population, without requiring any limit of any         Robinson, Hotze, and Daily petition for review on two
           specific revenue source, including water and sewer     grounds.3 First, they assert that the court of appeals erred
           revenues, property taxes, sales taxes, fees paid by    when it determined that Petitioners lack standing. Second,
           utilities and developers, user fees, or any other
           sources of revenues.
                                                                  they ask us to consider the merits of their claim that Prop.
         Prop. 1 was described on the ballot as:                  2 should be enforced.
           The Charter of the City of Houston shall be
           amended to require voter approval before property      3
                                                                            The current Houston mayor has been substituted for her
           tax revenues may be increased in any future fiscal               predecessor. See TEX.R.APP. P. 7.2(a) (automatic
           year above a limit measured by the lesser of 4.5%                substitution when public officer is party in official
           or the cumulative combined rates of inflation and                capacity).
           population growth. Water and sewer rates would
           not increase more than the cumulative combined
           rates of inflation and population growth without
           prior voter approval. The Charter Amendment also
           requires minimum annual increases of 10% in the
           senior and disabled homestead property tax
           exemptions through the 2008 tax year.                                                  II
                                                                  [1] [2] [3] [4]
                                                                               Ripeness “is a threshold issue that implicates
                                                                  subject matter jurisdiction ... [and] emphasizes the need
2
       Prop. 1 provides:                                          for a concrete injury for a justiciable claim to be
           If another proposition for a Charter amendment         presented.” Patterson v. Planned Parenthood of Hous. &
           relating to limitations on increases in City           Se. Tex., 971 S.W.2d 439, 442 (Tex.1998). In evaluating
           revenues is approved at the same election at which
           this proposition is also approved, and if this
                                                                  ripeness, we consider “whether, at the time a lawsuit is
           proposition receives the higher number of              filed, the facts are sufficiently developed ‘so that an injury
           favorable votes, then this proposition shall prevail   has occurred or is likely to occur, rather than being
           and the other shall not become effective.              contingent or remote.’ ” Waco Indep. Sch. Dist. v. Gibson,
                                                                  22 S.W.3d 849, 851–52 (Tex.2000) (emphasis in original)
                                                                  (quoting Patterson, 971 S.W.2d at 442). Although a claim
Petitioners sought relief from the court of appeals, which        is not required to be ripe at the time of filing, if a party
granted their petition for writ of mandamus, holding that         cannot demonstrate a reasonable likelihood that the claim
the City had failed to perform the ministerial duties of          will soon ripen, the case must be dismissed. See Perry v.
certifying the results to the secretary of state and entering     Del Rio, 66 S.W.3d 239, 251 (Tex.2001).
an order declaring the charter amendments to have been            [5]
adopted. In re Robinson, 175 S.W.3d 824, 826–32                      The record is silent as to whether the City has, in fact,
(Tex.App.-Houston [1st Dist.] 2005, orig. proceeding).            failed to comply with the Prop. 2 spending caps. As the
On the same day that they petitioned for mandamus relief,         parties acknowledged at oral argument, the record in this
Petitioners filed the underlying suit seeking a declaratory       case indicates that then-mayor Bill White, in response to
judgment that Prop. 2 is effective and must be enforced.          Prop. 2’s inclusion in the City Charter, stated his intention
While that case was pending, the city council passed an           to comply with the caps Prop. 2 imposed. In an attempt to
ordinance recognizing that both Prop. 1 and Prop. 2 had           show noncompliance, Petitioners presented several
passed but also declaring that Prop. 1 had received the           documents with their post-submission brief. Petitioners
higher number of votes. As a result, both propositions            point to a May 2009 letter from then- *756 controller
became part of the Houston City Charter. See Hous., Tex.,         Annise Parker, who is now mayor of Houston, stating that
                                                                  the controller’s office is “no longer responsible for
                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                            2
Texas Ass’n of Business v. Texas Air Control Bd., 852 S.W.2d 440 (1993)

                                                               along with two Intervenors,1 filed counterclaims seeking a
                   852 S.W.2d 440                              declaration *442 that the same statutes and regulations
                Supreme Court of Texas.                        comport with those constitutional provisions.

 TEXAS ASSOCIATION OF BUSINESS, Appellant,                     1
                                                                      The League of Women Voters and the Lone Star
                    v.                                                Chapter of the Sierra Club intervened in the suit and
 TEXAS AIR CONTROL BOARD and Texas Water                              were aligned as defendants with the Texas Air Control
           Commission, Appellees.                                     Board and the Texas Water Commission. Justice
                                                                      Doggett contends that the standing of the Intervenors
No. C–9556. | March 3, 1993. | Rehearing Overruled                    should be addressed along with TAB’s. We disagree.
                  May 5, 1993.                                        Standing concerns a party’s faculty to invoke the
                                                                      court’s subject matter jurisdiction. Once it has been
                                                                      invoked by a plaintiff, a court’s subject matter
Business association sought declaratory judgment that                 jurisdiction is not affected by the status of defendants
statutes authorizing administrative agencies to assess fines          or intervenors aligned in interest with defendants.
for violation of environmental laws are unconstitutional.
The 250th District Court, Travis County, upheld statutes,
and direct appeal was taken. The Supreme Court, Cornyn,        Following a bench trial, the trial court denied the relief
J., held that: (1) statutes authorizing Air Control Board      sought by TAB, and as requested by the State and
and Water Commission to assess fines prior to judicial         Intervenors, declared that section 4.041 of the Texas
review violate open courts guarantee of Texas                  Clean Air Act, sections 26.136 and 27.1015 of the Texas
Constitution, but (2) statutes do not violate constitutional   Water Code, and section 8b of the Texas Solid Waste
right to jury trial.                                           Disposal Act, as well as the rules and regulations
                                                               promulgated under those statutes, are constitutional with
Affirmed in part and reversed in part.                         regard to the open courts and jury trial provisions. We
                                                               affirm the trial court’s judgment as it relates to TAB’s
Doggett, Gammage, and Spector,             JJ.,   concurred,   jury trial challenge and reverse its judgment as to TAB’s
dissented, and filed opinions.                                 open courts challenge.

                                                               An overview of the regulatory scheme enacted by the
Attorneys and Law Firms                                        legislature and these agencies is essential to an
                                                               understanding of this case. In 1967, the Texas Legislature
*441 R. Kinnan Golemon, James W. Checkley, Jr., Albert
                                                               enacted the Clean Air Act of Texas. Clean Air Act of
R. Axe, Jr., Scott R. Kidd and Douglas W. Alexander,
                                                               Texas, 60th Leg., R.S., ch. 727, 1967 Tex.Gen.Laws
Austin, for appellant.
                                                               1941. The Clean Air Act was designed to safeguard the
Douglas G. Caroom, Mary E. Kelly, Dan Morales, Nancy           state’s air resources without compromising the economic
N. Lynch, William D. Dugat, III and Amy R. Johnson,            development of the state. Id. at § 1. The Act created the
Austin, for appellees.                                         Texas Air Control Board and granted it the authority to
                                                               promulgate regulations to accomplish the Act’s goals. Id.
                                                               at § 4(A)(2)(a). In the event the Air Control Board
                                                               determined that a violation of its regulations had
                                                               occurred, it was authorized to enforce those regulations in
                        OPINION                                district court. Upon a judicial determination that a
                                                               violation of the Air Control Board’s regulations had
                                                               occurred, two cumulative remedies were available,
CORNYN, Justice.                                               injunctive relief to prohibit further violations and
                                                               assessment of a fine ranging from $50 to $1,000 for each
The Texas Association of Business (TAB), on behalf of          day the violations persisted. Id. at § 12(B).
its members, brought this declaratory judgment action
seeking a ruling that statutes empowering two state            In 1969, the Texas Legislature enacted the Solid Waste
administrative agencies to levy civil penalties for            Disposal Act. Solid Waste Disposal Act, 61st Leg., R.S.,
violations of their regulations conflict with the open         ch. 405, 1969 Tex.Gen.Laws 1320. The express purpose
courts and jury trial provisions of the Texas Constitution.    for this legislation was to protect public health and
The administrative agencies denied TAB’s claims, and           welfare by regulating the “collection, handling, storage,
                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                        1
Texas Ass’n of Business v. Texas Air Control Bd., 852 S.W.2d 440 (1993)

unconstitutional denial of a jury trial and violation of our       standing is unrelated to the separation of powers doctrine
constitution’s open courts provision.                              has since been disavowed). Under this doctrine,
                                                                   governmental authority vested in one department of
4
          “An appeal may be taken directly to the supreme court    government cannot be exercised by another department
          from an order of a trial court granting or denying an    unless expressly permitted by the constitution. Thus we
          interlocutory or permanent injunction on the ground of   have construed our separation of powers article to prohibit
          the constitutionality of a statute of this state.”       courts from issuing advisory opinions because such is the
          TEX.GOV’T CODE § 22.001(c).                              function of the executive rather than the judicial
                                                                   department.6 Firemen’s Ins. Co. v. Burch, 442 S.W.2d
331, 333 (Tex.1969); Morrow v. Corbin, 122 Tex. 553, 62
S.W.2d 641, 644 (Tex.1933). Accordingly, we have
                                                                   interpreted the Uniform Declaratory Judgments Act,
                                                                   TEX.CIV.PRAC. & REM.CODE §§ 37.001–.011, to be
                           I. Standing                             merely a procedural device for deciding cases already
                                                                   within a court’s jurisdiction rather than a legislative
Before we reach the merits of this case, we first consider         enlargement of a court’s power, permitting the rendition
the matter of the trial court’s jurisdiction, as well as our       of advisory opinions. Firemen’s Ins. Co., 442 S.W.2d at
own; specifically we determine whether TAB has                     333; United Serv. Life Ins. Co. v. Delaney, 396 S.W.2d
standing to challenge the statutes and regulations in              855, 863 (Tex.1965); California Prods., Inc. v. Puretex
question. Because TAB’s standing to bring this action is           Lemon Juice, Inc., 160 Tex. 586, 334 S.W.2d 780 (1960).
not readily apparent, and because our jurisdiction as well
as that of the trial court depends on this issue, we               6
                                                                             The analysis is the same under the federal constitution.
requested supplemental briefing on standing at the oral                      See e.g. Correspondence of the Justices, Letter from
argument of this case. In response, the parties insist that                  Chief Justice John Jay and the Associate Justices to
any question of standing has been waived in the trial court                  President George Washington, August 8, 1793 in
and cannot be raised by the court for the first time on                      Laurence H. Tribe, American Constitutional Law 73 n.
appeal. We disagree.                                                         3 (2nd ed. 1988).

[1]
   Subject matter jurisdiction is essential to the authority
of a court to decide a case. Standing is implicit in the           [4] [5]
                                                                         The distinctive feature of an advisory opinion is that
concept of subject matter jurisdiction. The standing               it decides an abstract question of law without binding the
requirement stems from two limitations on subject matter           parties. Alabama State Fed’n of Labor v. McAdory, 325
jurisdiction: the separation of powers doctrine and, in            U.S. 450, 461, 65 S. Ct. 1384, 1389, 89 L. Ed. 1725
Texas, the open courts provision. Subject matter                   (1945); Firemen’s Ins. Co., 442 S.W.2d at 333; Puretex
jurisdiction *444 is never presumed and cannot be                  Lemon Juice, Inc., 160 Tex. at 591, 334 S.W.2d at 783.
waived.5                                                           An opinion issued in a case brought by a party without
                                                                   standing is advisory because rather than remedying an
5
          Justice Doggett confuses subject matter jurisdiction     actual or imminent harm, the judgment addresses only a
          with personal jurisdiction. Only the latter can be       hypothetical injury. See Allen v. Wright, 468 U.S. 737,
          waived when uncontested. See TEX.R.CIV.P. 120a.          751, 104 S. Ct. 3315, 3324, 82 L. Ed. 2d 556 (1984). Texas
                                                                   courts, like federal courts, have no jurisdiction to render
                                                                   such opinions.
[2] [3]
     One limit on courts’ jurisdiction under both the state
                                                                   [6]
and federal constitutions is the separation of powers                 The separation of powers doctrine is not the only
doctrine. See TEX.CONST. art. II, § 1; Valley Forge                constitutional basis for standing. Under federal law,
Christian College v. Americans United for Separation of            standing is also an aspect of the Article III limitation of
Church and State, 454 U.S. 464, 471–74, 102 S. Ct. 752,             the judicial power to “cases” and “controversies.” Sierra
757–60, 70 L. Ed. 2d 700 (1982); Warth v. Seldin, 422 U.S.           Club v. Morton, 405 U.S. 727, 731, 92 S. Ct. 1361, 1364,
490, 498, 95 S. Ct. 2197, 2204, 45 L. Ed. 2d 343 (1975);              31 L. Ed. 2d 636 (1972). To comport with Article III, a
see also, Antonin Scalia, The Doctrine of Standing as an           federal court may hear a case only when the litigant has
Essential Element of the Separation of Powers, 18                  been threatened with or has sustained an injury. Valley
SUFFOLK U.L.Rev. 881, 889 n. 69 (1983) (noting that                Forge Christian College, 454 U.S. at 471, 102 S.Ct. at
the dicta of Flast v. Cohen, 392 U.S. 83, 100, 88 S. Ct. 758. Under the Texas Constitution, standing is implicit in
1942, 1952, 20 L. Ed. 2d 947 (1968), suggesting that                 the open courts provision, which contemplates access to

                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                             3
Texas Ass’n of Business v. Texas Air Control Bd., 852 S.W.2d 440 (1993)

the courts only for those litigants suffering an injury.                 objections to join a real party in interest or to a party’s
Specifically, the open courts provision provides:                        capacity to sue rather than to jurisdictional standing.
                                                                         See International Depository, Inc. v. State, 603 A.2d
            All courts shall be open, and every                          1119, 1122 (R.I.1992) (addressing real party in interest
            person for an injury done him, in                            objection); Princess Anne Hills Civ. League, Inc. v.
            his lands, goods, person or                                  Susan Constant Real Estate Trust, 243 Va. 53, 413
            reputation, shall have remedy by                             S.E.2d 599, 603 n. 1 (1992) (addressing real party in
                                                                         interest objection); Sanford v. Jackson Mall Shopping
            due course of law.                                           Ctr. Co., 516 So. 2d 227, 230 (Miss.1987) (addressing
                                                                         real party in interest objection); Jackson v. Nangle, 677
TEX. CONST. art. I, § 13 (emphasis added). Because                       P.2d 242, 250 n. 10 (Alaska 1984) (addressing real
standing is a constitutional prerequisite to maintaining a               party in interest objection); Poling v. Wisconsin
suit under both federal and Texas law, we look to the                    Physicians Serv., 120 Wis. 2d 603, 357 N.W.2d 293,
more extensive jurisprudential experience of the federal                 297–98 (App.1984) (addressing real party in interest
courts on this subject for any guidance it may yield.                    objection); Torrez v. State Farm Mut. Auto. Ins. Co.,
                                                                         130 Ariz. 223, 635 P.2d 511, 513 n. 2 (App.1981)
                                                                         (addressing real party in interest objection); Brown v.
Under federal law, a lack of standing deprives a court of
                                                                         Robinson, 354 So. 2d 272, 273 (Ala.1977); Cowart v.
subject matter jurisdiction because standing is an element               City of West Palm Beach, 255 So. 2d 673, 675
of such *445 jurisdiction. Carr v. Alta Verde Indus., 931                (Fla.1971) (addressing capacity objection).
F.2d 1055, 1061 (5th Cir.1991); Simmons v. Interstate
Commerce Comm’n, 900 F.2d 1023, 1026 (7th Cir.1990);
M.A.I.N. v. Commissioner, Maine Dept. of Human Serv.,             [7]
                                                                      Subject matter jurisdiction is an issue that may be
876 F.2d 1051, 1053 (1st Cir.1989); Haase v. Sessions,
                                                                  raised for the first time on appeal; it may not be waived
835 F.2d 902, 908 (D.C.Cir.1987); Page v. Schweiker,
                                                                  by the parties. Texas Employment Comm’n v.
786 F.2d 150, 153 (3d Cir.1986); see also Lujan v.
                                                                  International Union of Elec., Radio and Mach. Workers,
Defenders of Wildlife, 504 U.S. 555, 112 S. Ct. 2130, 119
                                                                  Local Union No. 782, 163 Tex. 135, 352 S.W.2d 252, 253
L. Ed. 2d 351 (1992); Heckler v. Mathews, 465 U.S. 728,
                                                                  (1961); RESTATEMENT (SECOND) OF JUDGMENTS
737, 104 S. Ct. 1387, 1394, 79 L. Ed. 2d 646 (1984);
                                                                  § 11, comment c (1982). This court recently reiterated
Warth, 422 U.S. at 511, 95 S.Ct. at 2211. Other states
                                                                  that axiom in Gorman v. Life Insurance Co., 811 S.W.2d
have followed this analysis in construing their own
                                                                  542, 547 (Tex.), cert. denied, 502 U.S. 824, 112 S. Ct. 88,
constitutions.7 See e.g., Prudential–Bache Sec., Inc. v.
                                                                  116 L. Ed. 2d 60 (1991). Because we conclude that
Commissioner of Revenue, 412 Mass. 243, 588 N.E.2d
                                                                  standing is a component of subject matter jurisdiction, it
639, 642 (1992); Bennett v. Board of Trustees for Univ. of
                                                                  cannot be waived and may be raised for the first time on
N. Colorado, 782 P.2d 1214, 1216 (Colo.App.1989), cert.
                                                                  appeal.8
denied, 797 P.2d 748 (Colo.1990); Pace Constr. Co. v.
Missouri Highway and Transp. Comm’n, 759 S.W.2d
8
272, 274 (Mo.App.1988); Terracor v. Utah Bd. of State                    Justice Doggett disagrees that standing is a component
Lands & Forestry, 716 P.2d 796, 798–99 (Utah 1986);                      of subject matter jurisdiction, yet he declines to explain
State by McClure v. Sports and Health Club, Inc., 370                    what role standing plays in our jurisprudence. From his
                                                                         harsh critique of the doctrine, it seems that he not only
N.W.2d 844, 850 (Minn.1985), appeal dism’d, 478 U.S.                     objects to the conclusion that standing cannot be
1015, 106 S. Ct. 3315, 92 L. Ed. 2d 730 (1986); Smith v.                    waived but also to the conclusion that standing is a
Allstate Ins. Co., 483 A.2d 344, 346 (Me.1984); Ardmare                  requirement to initiate a lawsuit.
Constr. Co. v. Freedman, 191 Conn. 497, 467 A.2d 674,
675 n. 4, 676–77 (1983); Horn v. County of Ventura, 24
Cal. 3d 605, 156 Cal. Rptr. 718, 726, 596 P.2d 1134, 1142           [8]
                                                                      If we were to conclude that standing is unreviewable on
(1979); Stewart v. Board of County Comm’rs of Big Horn
                                                                  appeal at least three undesirable consequences could
County, 175 Mont. 197, 573 P.2d 184, 186, 188 (1977);
                                                                  result. First and foremost, appellate courts would be
State ex rel. Albritton v. Moore, 238 La. 728, 116 So.2d
                                                                  impotent to prevent lower courts from exceeding their
502, 504 (1959).
                                                                  constitutional and statutory limits of authority. Second,
                                                                  appellate courts could not arrest collusive suits. Third, by
7
       Of the states listed by Justice Doggett, only Illinois,    operation of the doctrines of res judicata and collateral
       Iowa, Kentucky, New York, South Dakota, and perhaps        estoppel, judgments rendered in suits addressing only
       Ohio, Pennsylvania and Washington actually treat           hypothetical injuries could bar relitigation of issues by a
       jurisdictional standing as waivable. See 852 S.W.2d at
       469. The other state cases cited deal with the waiver of
                                                                  litigant who eventually suffers an actual injury. We
                                                                  therefore hold that standing, as a component of subject
                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                              4
Trinity Settlement Services, LLC v. Texas State Securities Bd., 417 S.W.3d 494 (2013)
Blue Sky L. Rep. P 75,042

                  417 S.W.3d 494                                  Attorneys and Law Firms
              Court of Appeals of Texas,
                       Austin.                                    *497 Hector De Leon, Benjamin S. De Leon, Thomas P.
       TRINITY SETTLEMENT SERVICES, LLC,                          Washburn, George B. Ward, De Leon & Washburn, P.C.,
                      Appellant                                   Austin, TX, for Appellant.
                          v.
      The TEXAS STATE SECURITIES BOARD and                        Lesli Gattis Ginn, Assistant Attorney General, Financial
        John Morgan, in his Official Capacity as                  Litigation, Tax, and Charitable Trusts Division, Austin,
       Commissioner of the Texas State Securities                 TX, for Appellee.
                 Board1, Appellees.
                                                                  Before Justices PURYEAR, PEMBERTON, and ROSE.
1        The notice of appeal and prior filings in the district
         court reference the TSSB’s former commissioner,
         Denise Voigt Crawford, who has since retired.
         Accordingly, the TSSB’s current commissioner,
         John Morgan, has been substituted. See
         Tex.R.App. P. 7.2(a).
                                                                                           OPINION

                                                                  DAVID PURYEAR, Judge.
    No. 03–10–00639–CV. | Aug. 1, 2013. | Rehearing
               Overruled Oct. 2, 2013.                            This is an appeal from a grant of a plea to the jurisdiction
                                                                  stemming from a dispute regarding the Texas State
                                                                  Securities Board’s regulation of the sale of viatical
                                                                  settlements. Appellant Trinity Settlement *498 Services,
Synopsis                                                          LLC (Trinity), an entity proposing to engage in the sale of
Background: Viatical settlement company sued Texas                viatical settlements, sued appellees the Texas State
State Securities Board (TSSB) to obtain declaratory               Securities Board (TSSB) and John Morgan, in his official
judgment that TSSB acted without statutory authority in           capacity as Commissioner of the TSSB, to obtain a
prior enforcement action against another viatical                 declaratory judgment (1) that the TSSB and Morgan acted
settlement company, and that certain investments plaintiff        without statutory authority in an enforcement action
proposed to sell were not “securities” as defined by Texas        against another viatical-settlement provider, Retirement
Securities Act (TSA). The 53rd Judicial District Court,           Value, LLC (RV) and (2) that certain investments Trinity
Travis County, Lora Livingston, J., granted TSSB’s plea           itself proposes to sell, denominated “specified
to the jurisdiction. Plaintiff appealed.                          percentages of participations in the proceeds of life
                                                                  insurance policies,” are not “securities” as defined by the
                                                                  Texas Securities Act (TSA). We affirm the trial court’s
Holdings: The Court of Appeals, David Puryear, J., held           order granting the plea to the jurisdiction, concluding
that:                                                             Trinity failed to invoke the jurisdiction of the trial court
                                                                  under either (1) the Administrative Procedure Act (APA)
[1]
   TSSB’s statements in prior action did not constitute           section 2001.038 because it failed to challenge a rule of
rule under Administrative Procedure Act (APA) subject to          the TSSB, as defined by the APA, or (2) the Uniform
challenge through declaratory judgment action;                    Declaratory Judgments Act (UDJA) because it failed to
                                                                  plead a justiciable controversy.
[2]
    in seeking declaration that TSSB acted without
statutory authority, plaintiff sought impermissible
advisory opinion; and
[3]                                                                                    BACKGROUND
  plaintiff’s requested declaration of its rights and status
was not ripe for review.
                                                                  A. Viatical Settlements
                                                                  A “viatical settlement” is a transaction in which an
Affirmed.                                                         insured sells the benefits of his or her life insurance policy
                                                                  to a third party in return for a lump-sum cash payment

                 © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                         1
Trinity Settlement Services, LLC v. Texas State Securities Bd., 417 S.W.3d 494 (2013)
Blue Sky L. Rep. P 75,042

its own rights and status under the TSA. The UDJA grants         perform its functions unimpeded. Id.
any litigant whose rights are affected by a statute the
                                                                 [28] [29]
opportunity to obtain a declaration of those rights under                In determining whether a cause is ripe for judicial
the statute. Tex. Civ. Prac. & Rem.Code § 37.004; see            consideration, we look to whether the facts have
also Texas Mun. Power Agency v. Public Util. Comm’n.,            sufficiently developed to show that an injury has
100 S.W.3d 510, 515 (Tex.App.-Austin 2003, pet denied).          occurred, or is likely to occur. City of Waco, 83 S.W.3d at
A declaratory-judgment action does not, however, give a          175. When a business—like Trinity—files a
court “jurisdiction to pass upon hypothetical or contingent      “pre-enforcement” suit seeking a declaration of its rights
situations, or to determine questions not then essential to      prior to an agency enforcement action, we have concluded
the decision of an actual controversy, although such             the controversy is ripe for review only if “an enforcement
actions may in the future require adjudication.” Bexar           action is imminent or sufficiently likely.” Atmos Energy
Metro. Water Dist. v. City of Bulverde, 234 S.W.3d 126,          Corp. v. Abbott, 127 S.W.3d 852, 856 (Tex.App.-Austin
130–31 (Tex.App.-Austin 2007, no pet.). After careful            2004, no pet.); see also Rea, 297 S.W.3d at 383 (“To
review of the record, we conclude any controversy                establish that a claim is ripe based on an injury that is
between the TSSB and Trinity at this time is based upon          likely to occur, the plaintiff must demonstrate that the
hypothetical facts that have not yet matured to a ripe           injury is imminent, direct, and immediate, and not merely
controversy sufficient to confer jurisdiction on the trial       remote, conjectural, or hypothetical.”). In this case, the
court. While the TSSB raises several challenges to the           pleadings and evidence indicate the TSSB has taken no
trial court’s jurisdiction, the ripeness issue is dispositive.   action against Trinity.3 Although the TSSB has brought an
See Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849, 851         enforcement action against other viatical settlement
(Tex.2000).                                                      providers, we cannot conclude that an enforcement action
                                                                 against Trinity is also imminent or sufficiently likely to
[25] [26] [27]
            Ripeness implicates subject-matter jurisdiction      occur at this time.
and asks whether—at the time a lawsuit is filed—the facts
have developed sufficiently so that an injury has occurred       3
                                                                             Trinity pleads the TSSB sent its manager, Michael
or is likely to occur, rather than being contingent or                       McDermott, correspondence in connection with the RV
remote. Rea v. State, 297 S.W.3d 379, 383                                    suit “alleging Mr. McDermott may have offered for
(Tex.App.-Austin 2009, no pet.). A case is not ripe when                     sale and/or sold investments on behalf of RV.”
its resolution depends on contingent or hypothetical facts,                  According to Trinity’s pleadings, the TSSB letter was
or upon events that have not yet come to pass. *506                          sent to Mr. McDermott because of his potential
Patterson v. Planned Parenthood of Houston, 971 S.W.2d                       connection with the RV suit and not because of any
439, 442 (Tex.1998). A justiciable controversy, however,                     action by Trinity or action by McDermott on Trinity’s
                                                                             behalf.
does not necessarily equate with a fully ripened cause of
action. Moore, 985 S.W.2d at 153–54. Rather, an action
for declaratory judgment will “lie when the fact situation
manifests the presence of ripening seeds of a                    Rather, whether the TSSB will bring an enforcement
controversy,” such that “the claims of several parties are       action against Trinity depends on many factual
present and indicative of threatened litigation in the           contingencies that have not yet come to pass and are not
immediate future which seems unavoidable, even though            before the court, including whether Trinity chooses to
the differences between the parties as to their legal rights     begin selling viatical settlements, how Trinity ultimately
have not reached the state of an actual controversy.” Id.;       structures its investments, the managerial efforts Trinity
see Save our Springs Alliance v. City of Austin, 149             exerts in such sales, what type of investors purchase the
S.W.3d 674, 683 (Tex.App.-Austin 2004, no pet.) The              viatical settlements, and whether the TSSB elects to bring
constitutional prohibition against issuing advisory              an enforcement action against Trinity based on these
opinions also has a pragmatic, prudential aspect that aims       future actions. Trinity’s claim does not pose a pure
to conserve “judicial time and resources for real and            question of law but instead asks the trial court to engage
current controversies, rather than abstract, hypothetical, or    in a fact-based determination based upon contingent,
remote disputes.” Patterson, 971 S.W.2d at 443 (quoting          hypothetical facts. See Beacon Nat’l. Ins. Co. v.
Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928                 Montemayor, 86 S.W.3d 260, 268 (Tex.App.-Austin
(Tex.1998)). In the administrative-law context, moreover,        2002, no pet.) (concluding appellant’s premature attempt
avoiding premature litigation over administrative                to arrest the administrative process before the agency had
determinations prevents courts from “entangling                  taken an adverse action against it was not ripe when claim
themselves in abstract disagreements over administrative         did not *507 present pure question of law but required the
policies” while simultaneously allowing the agency to            determination of several factual matters that had not
                                                                 sufficiently developed); see also Atmos, 127 S.W.3d at
                 © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                           7
TXU Elec. Co. v. Public Utility Com’n of Texas, 51 S.W.3d 275 (2001)
Util. L. Rep. P 26,789, 44 Tex. Sup. Ct. J. 854, 44 Tex. Sup. Ct. J. 1126

                                                                     Hearon & Moody, Austin, Robert A. Wooldridge, Robert
                    51 S.W.3d 275                                    M. Fillmore, Howard V. Fisher, Worsham Forsythe
                Supreme Court of Texas.                              Wooldridge, Dallas, for Appellant.

  TXU ELECTRIC COMPANY, et al., Appellants,                          *277 Thomas K. Anson, Sheinfeld Maley & Kay,
                      v.                                             Geoffrey M. Gay, Lloyd Gosselink Blevins Rochelle,
  PUBLIC UTILITY COMMISSION OF TEXAS, et                             Austin, Alan W. Harris, Dallas, Marianne Carroll, David
               al., Appellees.                                       B. Gross, Carroll & Gross, Andrew Kever, Bickerstaff
                                                                     Heath Smiley Pollan Kever & McDaniel, Mark C. Davis,
  No. 00–0936. | Argued Jan. 31, 2001. | Decided                     Brickfield Burchette & Ritts, James K. Rourke, Thomas
June 6, 2001. | Rehearing Overruled Aug. 30, 2001.                   Lane Brocato, Suzi Ray McClellan, Office of Public
                                                                     Utility Counsel, Steven Baron, Office of Attorney
                                                                     General of Texas, John Cornyn, Attorney General of the
Incumbent electric utility and intervenors appealed
                                                                     State of Texas, Jeffrey S. Boyd, Karen Watson Kornell,
decision by the Public Utility Commission (PUC) on
                                                                     Douglas Fraser, Bryan L. Baker, Office of the Attorney
financing for recovery of utility’s regulatory assets and
                                                                     General, Jonathan Day, Lino Mendiola, Mayor Day
stranded costs during deregulation to competitive market.
                                                                     Caldwell & Keeton, Diane Barlow–Sparkman, Mark W.
The 250th District Court, Travis County, reversed and
                                                                     Smith, J. Kay Trostle, Elizabeth H. Drews, James G.
remanded in part. Appeal was taken. The Supreme Court,
                                                                     Boyle, Law Office of Jim Boyle, Austin, for Appellee.
Owen, J., held that: (1) the PUC could employ a second
present value test to determine whether tangible and                 PER CURIAM.
quantifiable benefits to ratepayers were provided by
securitization through bonds secured by transition
charges; (2) the PUC was required to assume that, absent             In 1999, the Legislature amended the Public Utility
securitization, regulatory assets and stranded costs would           Regulatory Act (PURA) to usher in deregulation of retail
be recovered through competition transition charges in               electric utility rates in Texas.1 As part of that plan, the
less than forty years; (3) it was not required to use the            Legislature concluded that, subject to certain restrictions,
weighted average life of six years over which utility’s              an existing utility like TXU Electric Company may
transition bonds would be outstanding; (4) it lacked the             recover amounts that the PURA defines as “regulatory
discretion to consider utility’s regulatory assets on an             assets” by using securitization financing. Securitization is
asset-by-asset basis; (5) it may apply the rate design               accomplished through a financing order issued by the
methodology established in an utility’s last rate design             Commission that authorizes a utility to issue transition
case to the data in that rate case, rather than to more              bonds. The transition bonds are repaid or secured by
current data; and (6) in an opinion by Hecht, J., the PUC            transition charges to ratepayers in a utility’s service area.
was not required to reallocate overpayments or                       TXU requested the Commission to issue a financing order
underpayments of transition charges by any one class                 securitizing certain of its regulatory assets. The
among all customers.                                                 Commission authorized securitization of some but not all
                                                                     of those assets. A district court reversed the
Affirmed in part, reversed in part, and remanded.                    Commission’s order in part and remanded the case for
                                                                     further proceedings. TXU and others bring this direct
Owen, J., dissented in part and filed opinion joined by              appeal to our Court.2
Enoch and Baker, JJ.
                                                                     1
                                                                            Act of May 27, 1999, 76th Leg., R.S., ch. 405, 1999
                                                                            Tex. Gen. Laws 2543.

                                                                     2
                                                                            TEX. UTIL.CODE § 39.303(f) (providing that review
             *275 Opinion by Justice Owen                                   of financing orders under the PURA are to be directly
                                                                            appealed from the district court to this Court).

Attorneys and Law Firms

*276 Roy Q. Minton, Minton Burton Foster & Collins,                  We hold that: 1) in order to ensure that securitization
Robert J. Hearon, Jr., Mary A. Keeney, Graves Dougherty              provides tangible and quantifiable benefits to ratepayers
                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                            1
TXU Elec. Co. v. Public Utility Com’n of Texas, 51 S.W.3d 275 (2001)
Util. L. Rep. P 26,789, 44 Tex. Sup. Ct. J. 854, 44 Tex. Sup. Ct. J. 1126

                                                                     [5]
                                                                          Several parties to this appeal, including the
                                                                     Commission, contend that the district court erred when it
                                                                     held that the Commission’s Finding of Fact 113 and
                              V                                      references to that finding in Conclusion of Law 41 and
                                                                     Ordering Paragraph 37 were “advisory and superfluous to
Several parties who are also parties in Corpus Christi               the Order and therefore [have] no res judicata effect.”
raise many of the same issues in both cases.37 Our                   The finding of the Commission that is at issue concerned
decision in CP & L resolves each of these issues, and we             loss on reacquired debt.
will not lengthen this opinion by reiterating all the reasons
for our holdings. We instead briefly summarize each issue            TXU reacquired preferred stock and high-cost debt before
and our disposition.                                                 the maturity date of that debt by paying a premium. The
                                                                     loss TXU sustained in those transactions is included in the
37
       Those parties include the Office of Public Utility            definition of regulatory assets under the PURA, and the
       Counsel, Texas Industrial Consumers, and Nucor Steel,         Commission allowed TXU to include loss on reacquired
       who filed an amicus brief with this Court in Corpus           debt as part of the amount securitized in the financing
       Christi.                                                      order. This same loss on reacquired debt is also reflected
                                                                     as an increase in TXU’s cost of capital, and that in turn
                                                                     increases TXU’s rate of return. The Commission and
Certain of TXU’s customers assert that the Commission                others were concerned that TXU would enjoy a double
failed to follow section 39.253 in allocating transition             recovery of its losses. Responding to that concern, the
costs to the *287 non-firm industrial customer classes.              Commission concluded that loss on reacquired debt
They contend that the Commission erred in applying the               “should not be removed from [TXU’s] cost-of-capital
150 percent demand allocator required by section                     calculation for purposes of the annual report submitted
39.253(d)38 to all the transition costs rather than first            pursuant to PURA § 39.257,” but that instead an
subtracting the transition costs allocated to residential            adjustment should be made in future proceedings.41 In the
customers. We hold in this case, as we do in Corpus                  Financing Order, Finding of Fact 113, the Commission
Christi, that section 39.253 is ambiguous in this regard             said that:
and that the Commission’s construction is a reasonable
one and should be accorded deference.                                41
                                                                               Tex. Pub. Util. Comm’n, Application of TXU Electric
                                                                               Company for Financing Order to Securitize Regulatory
38                                                                             Assets and Other Qualified Costs, Docket No. 21527
       TEX. UTIL.CODE § 39.253(d) (requiring that
       “[n]on-firm industrial customers shall be allocated                     (May 2, 2000).
       stranded costs equal to 150 percent of the amount
       allocated to that class”).
                                                                           [A]n adjustment should be made in the true up
                                                                           proceeding under PURA § 39.262 to account for the
TIEC says that in determining how much of the transition                   effect of securitizing the loss on reacquired debt on
costs should be allocated to the industrial classes, the                   [TXU’s] cost of capital. This treatment is necessary to
Commission should have excluded load lost when                             comply with the Legislature’s mandate in PURA §
customers switched to sources of power that exempt them                    39.262(a) that a utility and its affiliates “may not be
from paying transition charges.39 Again, for the reasons                   permitted to overrecover stranded costs” by using any
we consider in Corpus Christi, we reject that argument.40                  of the methods provided in Chapter 39 [§ 39.262(a) ].
                                                                           In addition, any determinations regarding the effect of
39
       See id. § 39.262(k).                                                securitizing loss on reacquired debt on the calculation
                                                                           of stranded costs should not be made in this docket but
                                                                           should be made in [TXU’s] cost unbundling case under
                                                                           PURA § 39.201.42
40
51 S.W.3d at 259 – 261.                                       42
                                                                               Id. (footnote omitted).

                                                                     We agree with the district court that this was an advisory
                                                                     and premature finding. *288 Whether an adjustment is
                                                                     required in a true-up or other future proceeding should
                              VI

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                            10
§ 1.1409 Commission consideration of the complaint., 47 C.F.R. § 1.1409

  Code of Federal Regulations
    Title 47. Telecommunication
      Chapter I. Federal Communications Commission (Refs & Annos)
         Subchapter A. General
           Part 1. Practice and Procedure (Refs & Annos)
              Subpart J. Pole Attachment Complaint Procedures (Refs & Annos)

                                                       47 C.F.R. § 1.1409

                                   § 1.1409 Commission consideration of the complaint.

                                                    Effective: June 8, 2011
                                                             Currentness

(a) In its consideration of the complaint, response, and reply, the Commission may take notice of any information contained
in publicly available filings made by the parties and may accept, subject to rebuttal, studies that have been conducted. The
Commission may also request that one or more of the parties make additional filings or provide additional information.
Where one of the parties has failed to provide information required to be provided by these rules or requested by the
Commission, or where costs, values or amounts are disputed, the Commission may estimate such costs, values or amounts it
considers reasonable, or may decide adversely to a party who has failed to supply requested information which is readily
available to it, or both.

(b) The complainant shall have the burden of establishing a prima facie case that the rate, term, or condition is not just and
reasonable or that the denial of access violates 47 U.S.C. § 224(f). If, however, a utility argues that the proposed rate is lower
than its incremental costs, the utility has the burden of establishing that such rate is below the statutory minimum just and
reasonable rate. In a case involving a denial of access, the utility shall have the burden of proving that the denial was lawful,
once a prima facie case is established by the complainant.

(c) The Commission shall determine whether the rate, term or condition complained of is just and reasonable. For the
purposes of this paragraph, a rate is just and reasonable if it assures a utility the recovery of not less than the additional costs
of providing pole attachments, nor more than an amount determined by multiplying the percentage of the total usable space,
or the percentage of the total duct or conduit capacity, which is occupied by the pole attachment by the sum of the operating
expenses and actual capital costs of the utility attributable to the entire pole, duct, conduit, or right-of-way.

(d) The Commission shall deny the complaint if it determines that the complainant has not established a prima facie case, or
that the rate, term or condition is just and reasonable, or that the denial of access was lawful.

(e) When parties fail to resolve a dispute regarding charges for pole attachments and the Commission’s complaint procedures
under Section 1.1404 are invoked, the Commission will apply the following formulas for determining a maximum just and
reasonable rate:

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                              1
§ 1.1409 Commission consideration of the complaint., 47 C.F.R. § 1.1409

    (1) The following formula shall apply to attachments to poles by cable operators providing cable services. This formula
    shall also apply to attachments to poles by any telecommunications carrier (to the extent such carrier is not a party to a
    pole attachment agreement) or cable operator providing telecommunications services until February 8, 2001:

    (2) With respect to attachments to poles by any telecommunications carrier or cable operator providing
    telecommunications services, the maximum just and reasonable rate shall be the higher of the rate yielded by paragraphs
    (e)(2)(i) or (e)(2)(ii) of this section.

    (i) The following formula applies to the extent that it yields a rate higher than that yielded by the applicable formula in
    paragraph 1.1409(e)(2)(ii) of this section:

  Rate = Space Factor x Cost

  Where Cost

  in Urbanized Service Areas = 0.66 x (Net Cost of a Bare Pole x Carrying Charge Rate)

  in Non–Urbanized Service Areas = 0.44 x (Net Cost of a Bare Pole x Carrying Charge Rate).

    (ii) The following formula applies to the extent that it yields a rate higher than that yielded by the applicable formula in
    paragraph 1.1409(e)(2)(i) of this section:

               © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                           2
§ 1.1409 Commission consideration of the complaint., 47 C.F.R. § 1.1409

     (3) The following formula shall apply to attachments to conduit by cable operators and telecommunications carriers:

     simplified as:

     If no inner-duct is installed the fraction, “1 Duct divided by the No. of Inner–Ducts” is presumed to be ½.

(f) Paragraph (e)(2) of this section shall become effective February 8, 2001 (i.e., five years after the effective date of the
Telecommunications Act of 1996). Any increase in the rates for pole attachments that results from the adoption of such
regulations shall be phased in over a period of five years beginning on the effective date of such regulations in equal annual
increments. The five-year phase-in is to apply to rate increases only. Rate reductions are to be implemented immediately. The
determination of any rate increase shall be based on data currently available at the time of the calculation of the rate increase.

Credits

[52 FR 31770, Aug. 24, 1987; 61 FR 43025, Aug. 20, 1996; 61 FR 45619, Aug. 29, 1996; 63 FR 12025, March 12, 1998; 65
FR 31282, May 17, 2000; 66 FR 34580, June 29, 2001; 76 FR 26639, May 9, 2011]

SOURCE: 43 FR 36094, Aug. 15, 1978; 56 FR 57598, Nov. 13, 1991; 57 FR 187, Jan. 3, 1992; 58 FR 27473, May 10, 1993;
59 FR 22985, May 4, 1994; 61 FR 45618, Aug. 29, 1996; 61 FR 46561, Sept. 4, 1996; 61 FR 52899, Oct. 9, 1996; 62 FR
37422, July 11, 1997; 63 FR 67429, Dec. 7, 1998; 63 FR 71036, Dec. 23, 1998; 64 FR 63251, Nov. 19, 1999; 65 FR 10720,
Feb. 29, 2000; 65 FR 19684, April 12, 2000; 65 FR 31281, May 17, 2000; 69 FR 77938, Dec. 29, 2004; 71 FR 26251, May 4,
2006; 74 FR 39227, Aug. 6, 2009; 75 FR 9797, March 4, 2010; 76 FR 43203, July 20, 2011; 77 FR 71137, Nov. 29, 2012; 78
FR 10100, Feb. 13, 2013; 78 FR 15622, March 12, 2013; 78 FR 41321, July 10, 2013; 78 FR 50254, Aug. 16, 2013;
§ 1.1409 Commission consideration of the complaint., 47 C.F.R. § 1.1409

48528, Aug. 15, 2014; 80 FR 1268, Jan. 8, 2015, unless otherwise noted.

AUTHORITY: 15 U.S.C. 79, et seq.; 47 U.S.C. 151, 154(i), 154(j), 155, 157, 160, 201, 225, 227, 303, 309, 332, 1403, 1404,
1451, 1452, and 1455.

Notes of Decisions (23)

Current through April 30, 2015; 80 FR 24774.
End of Document                                                 © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                           4
§ 37.001. Definition, TX CIV PRAC & REM § 37.001

  Vernon’s Texas Statutes and Codes Annotated
    Civil Practice and Remedies Code (Refs & Annos)
      Title 2. Trial, Judgment, and Appeal
         Subtitle C. Judgments
           Chapter 37. Declaratory Judgments (Refs & Annos)

                                    V.T.C.A., Civil Practice & Remedies Code § 37.001

                                                     § 37.001. Definition

                                                          Currentness

In this chapter, “person” means an individual, partnership, joint-stock company, unincorporated association or society, or
municipal or other corporation of any character.

Credits

Acts 1985, 69th Leg., ch. 959, § 1, eff. Sept. 1, 1985.

Notes of Decisions (56)

V. T. C. A., Civil Practice & Remedies Code § 37.001, TX CIV PRAC & REM § 37.001
Current through the end of the 2013 Third Called Session of the 83rd Legislature
End of Document                                                     © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                               1
§ 37.002. Short Title, Construction, Interpretation, TX CIV PRAC & REM § 37.002

  Vernon’s Texas Statutes and Codes Annotated
    Civil Practice and Remedies Code (Refs & Annos)
      Title 2. Trial, Judgment, and Appeal
         Subtitle C. Judgments
           Chapter 37. Declaratory Judgments (Refs & Annos)

                                    V.T.C.A., Civil Practice & Remedies Code § 37.002

                                    § 37.002. Short Title, Construction, Interpretation

                                                            Currentness

(a) This chapter may be cited as the Uniform Declaratory Judgments Act.

(b) This chapter is remedial; its purpose is to settle and to afford relief from uncertainty and insecurity with respect to rights,
status, and other legal relations; and it is to be liberally construed and administered.

(c) This chapter shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those
states that enact it and to harmonize, as far as possible, with federal laws and regulations on the subject of declaratory
judgments and decrees.

Credits

Acts 1985, 69th Leg., ch. 959, § 1, eff. Sept. 1, 1985.

Notes of Decisions (238)

V. T. C. A., Civil Practice & Remedies Code § 37.002, TX CIV PRAC & REM § 37.002
Current through the end of the 2013 Third Called Session of the 83rd Legislature
End of Document                                                       © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                 1
§ 37.003. Power of Courts to Render Judgment; Form and Effect, TX CIV PRAC & REM...

  Vernon’s Texas Statutes and Codes Annotated
    Civil Practice and Remedies Code (Refs & Annos)
      Title 2. Trial, Judgment, and Appeal
         Subtitle C. Judgments
           Chapter 37. Declaratory Judgments (Refs & Annos)

                                    V.T.C.A., Civil Practice & Remedies Code § 37.003

                            § 37.003. Power of Courts to Render Judgment; Form and Effect

                                                            Currentness

(a) A court of record within its jurisdiction has power to declare rights, status, and other legal relations whether or not further
relief is or could be claimed. An action or proceeding is not open to objection on the ground that a declaratory judgment or
decree is prayed for.

(b) The declaration may be either affirmative or negative in form and effect, and the declaration has the force and effect of a
final judgment or decree.

(c) The enumerations in Sections 37.004 and 37.005 do not limit or restrict the exercise of the general powers conferred in
this section in any proceeding in which declaratory relief is sought and a judgment or decree will terminate the controversy or
remove an uncertainty.

Credits

Acts 1985, 69th Leg., ch. 959, § 1, eff. Sept. 1, 1985.

Notes of Decisions (284)

V. T. C. A., Civil Practice & Remedies Code § 37.003, TX CIV PRAC & REM § 37.003
Current through the end of the 2013 Third Called Session of the 83rd Legislature
End of Document                                                       © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                 1
§ 37.004. Subject Matter of Relief, TX CIV PRAC & REM § 37.004

  Vernon’s Texas Statutes and Codes Annotated
    Civil Practice and Remedies Code (Refs & Annos)
      Title 2. Trial, Judgment, and Appeal
         Subtitle C. Judgments
           Chapter 37. Declaratory Judgments (Refs & Annos)

                                    V.T.C.A., Civil Practice & Remedies Code § 37.004

                                              § 37.004. Subject Matter of Relief

                                                   Effective: June 15, 2007
                                                            Currentness

(a) A person interested under a deed, will, written contract, or other writings constituting a contract or whose rights, status, or
other legal relations are affected by a statute, municipal ordinance, contract, or franchise may have determined any question
of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of
rights, status, or other legal relations thereunder.

(b) A contract may be construed either before or after there has been a breach.

(c) Notwithstanding Section 22.001, Property Code, a person described by Subsection (a) may obtain a determination under
this chapter when the sole issue concerning title to real property is the determination of the proper boundary line between
adjoining properties.

Credits

Acts 1985, 69th Leg., ch. 959, § 1, eff. Sept. 1, 1985. Amended by Acts 2007, 80th Leg., ch. 305, § 1, eff. June 15, 2007.

Notes of Decisions (469)

V. T. C. A., Civil Practice & Remedies Code § 37.004, TX CIV PRAC & REM § 37.004
Current through the end of the 2013 Third Called Session of the 83rd Legislature
End of Document                                                       © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                 1
§ 37.005. Declarations Relating to Trust or Estate, TX CIV PRAC & REM § 37.005

  Vernon’s Texas Statutes and Codes Annotated
    Civil Practice and Remedies Code (Refs & Annos)
      Title 2. Trial, Judgment, and Appeal
         Subtitle C. Judgments
           Chapter 37. Declaratory Judgments (Refs & Annos)

                                     V.T.C.A., Civil Practice & Remedies Code § 37.005

                                     § 37.005. Declarations Relating to Trust or Estate

                                                              Currentness

A person interested as or through an executor or administrator, including an independent executor or administrator, a trustee,
guardian, other fiduciary, creditor, devisee, legatee, heir, next of kin, or cestui que trust in the administration of a trust or of
the estate of a decedent, an infant, mentally incapacitated person, or insolvent may have a declaration of rights or legal
relations in respect to the trust or estate:

  (1) to ascertain any class of creditors, devisees, legatees, heirs, next of kin, or others;

  (2) to direct the executors, administrators, or trustees to do or abstain from doing any particular act in their fiduciary
  capacity;

  (3) to determine any question arising in the administration of the trust or estate, including questions of construction of wills
  and other writings; or

  (4) to determine rights or legal relations of an independent executor or independent administrator regarding fiduciary fees
  and the settling of accounts.

Credits

Acts 1985, 69th Leg., ch. 959, § 1, eff. Sept. 1, 1985. Amended by Acts 1987, 70th Leg., ch. 167, § 3.08(a), eff. Sept. 1,
1987; Acts 1999, 76th Leg., ch. 855, § 10, eff. Sept. 1, 1999.

Notes of Decisions (50)

V. T. C. A., Civil Practice & Remedies Code § 37.005, TX CIV PRAC & REM § 37.005

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                              1
§ 37.005. Declarations Relating to Trust or Estate, TX CIV PRAC & REM § 37.005

Current through the end of the 2013 Third Called Session of the 83rd Legislature
End of Document                                                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                            2
§ 37.0055. Declarations Relating to Liability for Sales and..., TX CIV PRAC & REM...

  Vernon’s Texas Statutes and Codes Annotated
    Civil Practice and Remedies Code (Refs & Annos)
      Title 2. Trial, Judgment, and Appeal
         Subtitle C. Judgments
           Chapter 37. Declaratory Judgments (Refs & Annos)

                                     V.T.C.A., Civil Practice & Remedies Code § 37.0055

                 § 37.0055. Declarations Relating to Liability for Sales and Use Taxes of Another State

                                                  Effective: September 1, 2007
                                                               Currentness

(a) In this section, “state” includes any political subdivision of that state.

(b) A district court has original jurisdiction of a proceeding seeking a declaratory judgment that involves:

  (1) a party seeking declaratory relief that is a business that is:

     (A) organized under the laws of this state or is otherwise owned by a resident of this state; or

     (B) a retailer registered with the comptroller under Section 151.106, Tax Code; and

  (2) a responding party that:

     (A) is an official of another state; and

     (B) asserts a claim that the party seeking declaratory relief is required to collect sales or use taxes for that state based on
     conduct of the business that occurs in whole or in part within this state.

(c) A business described by Subsection (b)(1) is entitled to declaratory relief on the issue of whether the requirement of
another state that the business collect and remit sales or use taxes to that state constitutes an undue burden on interstate
commerce under Section 8, Article I, United States Constitution.

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                              1
§ 37.0055. Declarations Relating to Liability for Sales and..., TX CIV PRAC & REM...

(d) In determining whether to grant declaratory relief to a business under this section, a court shall consider:

  (1) the factual circumstances of the business’s operations that give rise to the demand by the other state; and

  (2) the decisions of other courts interpreting Section 8, Article I, United States Constitution.

Credits

Added by Acts 2007, 80th Leg., ch. 699, § 1, eff. Sept. 1, 2007.

V. T. C. A., Civil Practice & Remedies Code § 37.0055, TX CIV PRAC & REM § 37.0055
Current through the end of the 2013 Third Called Session of the 83rd Legislature
End of Document                                                      © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                2
§ 37.006. Parties, TX CIV PRAC & REM § 37.006

  Vernon’s Texas Statutes and Codes Annotated
    Civil Practice and Remedies Code (Refs & Annos)
      Title 2. Trial, Judgment, and Appeal
         Subtitle C. Judgments
           Chapter 37. Declaratory Judgments (Refs & Annos)

                                    V.T.C.A., Civil Practice & Remedies Code § 37.006

                                                          § 37.006. Parties

                                                              Currentness

(a) When declaratory relief is sought, all persons who have or claim any interest that would be affected by the declaration
must be made parties. A declaration does not prejudice the rights of a person not a party to the proceeding.

(b) In any proceeding that involves the validity of a municipal ordinance or franchise, the municipality must be made a party
and is entitled to be heard, and if the statute, ordinance, or franchise is alleged to be unconstitutional, the attorney general of
the state must also be served with a copy of the proceeding and is entitled to be heard.

Credits

Acts 1985, 69th Leg., ch. 959, § 1, eff. Sept. 1, 1985.

Notes of Decisions (188)

V. T. C. A., Civil Practice & Remedies Code § 37.006, TX CIV PRAC & REM § 37.006
Current through the end of the 2013 Third Called Session of the 83rd Legislature
End of Document                                                         © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                   1
§ 37.007. Jury Trial, TX CIV PRAC & REM § 37.007

  Vernon’s Texas Statutes and Codes Annotated
    Civil Practice and Remedies Code (Refs & Annos)
      Title 2. Trial, Judgment, and Appeal
         Subtitle C. Judgments
           Chapter 37. Declaratory Judgments (Refs & Annos)

                                    V.T.C.A., Civil Practice & Remedies Code § 37.007

                                                     § 37.007. Jury Trial

                                                           Currentness

If a proceeding under this chapter involves the determination of an issue of fact, the issue may be tried and determined in the
same manner as issues of fact are tried and determined in other civil actions in the court in which the proceeding is pending.

Credits

Acts 1985, 69th Leg., ch. 959, § 1, eff. Sept. 1, 1985.

Notes of Decisions (11)

V. T. C. A., Civil Practice & Remedies Code § 37.007, TX CIV PRAC & REM § 37.007
Current through the end of the 2013 Third Called Session of the 83rd Legislature
End of Document                                                      © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                1
§ 37.008. Court Refusal to Render, TX CIV PRAC & REM § 37.008

  Vernon’s Texas Statutes and Codes Annotated
    Civil Practice and Remedies Code (Refs & Annos)
      Title 2. Trial, Judgment, and Appeal
         Subtitle C. Judgments
           Chapter 37. Declaratory Judgments (Refs & Annos)

                                    V.T.C.A., Civil Practice & Remedies Code § 37.008

                                             § 37.008. Court Refusal to Render

                                                          Currentness

The court may refuse to render or enter a declaratory judgment or decree if the judgment or decree would not terminate the
uncertainty or controversy giving rise to the proceeding.

Credits

Acts 1985, 69th Leg., ch. 959, § 1, eff. Sept. 1, 1985.

Notes of Decisions (25)

V. T. C. A., Civil Practice & Remedies Code § 37.008, TX CIV PRAC & REM § 37.008
Current through the end of the 2013 Third Called Session of the 83rd Legislature
End of Document                                                     © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                               1
§ 37.009. Costs, TX CIV PRAC & REM § 37.009

  Vernon’s Texas Statutes and Codes Annotated
    Civil Practice and Remedies Code (Refs & Annos)
      Title 2. Trial, Judgment, and Appeal
         Subtitle C. Judgments
           Chapter 37. Declaratory Judgments (Refs & Annos)

                                    V.T.C.A., Civil Practice & Remedies Code § 37.009

                                                          § 37.009. Costs

                                                             Currentness

In any proceeding under this chapter, the court may award costs and reasonable and necessary attorney’s fees as are equitable
and just.

Credits

Acts 1985, 69th Leg., ch. 959, § 1, eff. Sept. 1, 1985.

Notes of Decisions (703)

V. T. C. A., Civil Practice & Remedies Code § 37.009, TX CIV PRAC & REM § 37.009
Current through the end of the 2013 Third Called Session of the 83rd Legislature
End of Document                                                        © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                  1
§ 37.010. Review, TX CIV PRAC & REM § 37.010

  Vernon’s Texas Statutes and Codes Annotated
    Civil Practice and Remedies Code (Refs & Annos)
      Title 2. Trial, Judgment, and Appeal
         Subtitle C. Judgments
           Chapter 37. Declaratory Judgments (Refs & Annos)

                                    V.T.C.A., Civil Practice & Remedies Code § 37.010

                                                          § 37.010. Review

                                                              Currentness

All orders, judgments, and decrees under this chapter may be reviewed as other orders, judgments, and decrees.

Credits

Acts 1985, 69th Leg., ch. 959, § 1, eff. Sept. 1, 1985.

Notes of Decisions (64)

V. T. C. A., Civil Practice & Remedies Code § 37.010, TX CIV PRAC & REM § 37.010
Current through the end of the 2013 Third Called Session of the 83rd Legislature
End of Document                                                         © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                   1
§ 37.011. Supplemental Relief, TX CIV PRAC & REM § 37.011

  Vernon’s Texas Statutes and Codes Annotated
    Civil Practice and Remedies Code (Refs & Annos)
      Title 2. Trial, Judgment, and Appeal
         Subtitle C. Judgments
           Chapter 37. Declaratory Judgments (Refs & Annos)

                                     V.T.C.A., Civil Practice & Remedies Code § 37.011

                                                § 37.011. Supplemental Relief

                                                           Currentness

Further relief based on a declaratory judgment or decree may be granted whenever necessary or proper. The application must
be by petition to a court having jurisdiction to grant the relief. If the application is deemed sufficient, the court shall, on
reasonable notice, require any adverse party whose rights have been adjudicated by the declaratory judgment or decree to
show cause why further relief should not be granted forthwith.

Credits

Acts 1985, 69th Leg., ch. 959, § 1, eff. Sept. 1, 1985.

Notes of Decisions (23)

V. T. C. A., Civil Practice & Remedies Code § 37.011, TX CIV PRAC & REM § 37.011
Current through the end of the 2013 Third Called Session of the 83rd Legislature
End of Document                                                      © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                1
§ 54.205. Municipality’s Right to Control Access, TX UTIL § 54.205

  Vernon’s Texas Statutes and Codes Annotated
    Utilities Code (Refs & Annos)
      Title 2. Public Utility Regulatory Act
         Subtitle C. Telecommunications Utilities
            Chapter 54. Certificates (Refs & Annos)
              Subchapter E. Municipalities

                                              V.T.C.A., Utilities Code § 54.205

                                     § 54.205. Municipality’s Right to Control Access

                                                           Currentness

This title does not restrict a municipality’s historical right to control and receive reasonable compensation for access to the
municipality’s public streets, alleys, or rights-of-way or to other public property.

Credits

Acts 1997, 75th Leg., ch. 166, § 1, eff. Sept. 1, 1997.

Editors’ Notes

                                                      REVISOR’S NOTE

                                                      2007 Main Volume

       Section 3.2555(f), V.A.C.S. Article 1446c-0, provides that the law does not “restrict or limit” certain municipal
       rights. The revised law omits the term “limit” because “limit” is included within the meaning of the term
       “restrict.”

Notes of Decisions (3)

V. T. C. A., Utilities Code § 54.205, TX UTIL § 54.205
Current through the end of the 2013 Third Called Session of the 83rd Legislature
End of Document                                                      © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                1