Expedited public securities law cannot be used to challenge TCEQ permit says Third Court of Appeals

Guadalupe-Blanco River Authority v. Texas Attorney General, et al, 03-14-00393-CV (Tex. App. Austin, February 26, 2015)

The Guadalupe-Blanco River Authority (“Authority”) filed a suit against numerous entities asserting the San Antonio Water System (“SAWS”) improperly filed an application with the Texas Commission on Environmental Quality (the “Commission”) that would significantly diminish the amount of water available for a major project by allowing SAWS to reuse effluent that it had previously used and discharged.  The Authority alleged that SAWS’ application “creates a cloud over” the revenue pledge made by the Authority to secure bonds to pay for its project because there will be less water available to sell to its customers. All of the defendants filed pleas to the jurisdiction asserting the claims are not ripe, the claims do not fall within the enabling Act, because the Commission has exclusive or primary jurisdiction over the controversy, and because the claims are barred by sovereign immunity. The trial court granted all pleas to the jurisdiction and the Authority appealed.

The Expedited Declaratory Judgment Act (the “Act”) contained within Tex. Gov’t Code §§ 1205.001-.152  was designed to provide a method of adjudicating the validity of public securities in an efficient and quick manner. The Authority argues the Act is the proper vehicle to challenge the permit since allowing the permit would mean the $100 million bond expenditure cannot result in the required total of needed water. However, the court held the Act’s expedited purpose,  which relates to only a limited set of topics, is to prevent “one disgruntled taxpayer” from stopping “the entire bond issue by simply filing suit”. The relief sought by the Authority was not concerned with whether the securities were properly authorized or whether the procedures for issuing the securities were followed. Instead the relief centers on trying to force SAWS to return water to the Guadalupe River for the benefit of the Authority. The relief cannot fairly be construed as bearing on the “legality and validity” of the bonds at issue. As a result the trial court was without jurisdiction to hear the case and properly granted the pleas.

If you would like to read this opinion click here. Panel: Justice Puryear, Justice Pemberton and Justice Field.  Memorandum Opinion by Justice Puryear. The docket page listing all attorneys for all parties can be found here.