14th Court of Appeals holds waiver of immunity in TCEQ SOAH hearing need not be by express statutory language
Hyde v Harrison County, 14-18-00628-CV (Tex. App. – Houston [14th Dist.], July 30, 2020)
Harrison County (the “County”) owns and operates underground storage tanks at its road and bridge department and at its airport. A Texas Commission on Environmental Quality (the “Commission”) investigator determined the County violated the Texas Water Code by not providing a release detection for the pressurized piping. The Commission initiated an administrative enforcement action against the County. The Commission sought an administrative penalty of $5,626 against the County. At the contested case hearing at the State Office of Administrative Hearings (“SOAH”) the SOAH judge assessed an administrative penalty against the County. The County timely filed a petition in district court and argued the SOAH judge did not have jurisdiction over the County. The trial court agreed with the County and vacated the SOAH order. The Commission appealed.
The Court first held no express statutory waiver of immunity exists for the administrative proceedings or penalties in the Water Code. However, the court noted that there are limited circumstances where waiver need not be statutorily expressed. The Water Code requires such tanks comply with Commission requirements for pressurized piping release detection equipment. When a statutory context in which a statute defines “person” to include governmental entities, a statute imposes liability on a “person,” and construing the statute not to waive immunity would make part of the statutory scheme meaningless, the court may find a waiver. The court further noted that § 7.051 allows the Commission to lower a penalty if the owner contributes to supplemental projects, but notes non-governmental entities cannot use this option if the project is necessary to bring the owner into compliance. The Commission is also required to develop a policy to prevent “regulated entities” from avoiding compliance through the use of such supplemental projects. These provisions would be useless if governmental entities were not subject to regulation and penalties. The court concluded “…that applying the statutory definition of ‘person’ from Government Code section 311.005 to Water Code section 7.051 shows clear legislative intent to waive governmental immunity against assessment of an administrative penalty under section 7.051 because the context of section 7.051 affords no other reasonable construction.” As a result, the trial court erred in vacating the SOAH order.
If you would like to read this opinion click here. Panel consists of Chief Justice Frost, Justices Wise and Hassan. Opinion by Chief Justice Frost.