Texas Supreme Court holds City’s air-quality ordinance preempted by Clear Air Act

BCCA APPEAL GROUP, INC. v. CITY OF HOUSTON, 13-0768 (Tex. April 29, 2016)

This is essentially a preemption case where the Court determined whether the Texas Clean Air Act and the Act’s enforcement mechanisms in the Texas Water Code preempts a Houston air-quality ordinance.  The Court held the City ordinance invalid.

The Texas Clear Air Act (“Act”) is found within Texas Health and Safety Code Chapter 382. In 1992, the City of Houston enacted an air-quality ordinance to regulate air pollution from facilities that were not already regulated under the Act. Initially, the City contracted and cooperated with the TCEQ to ensure that TCEQ-permitted emissions sources within the City’s borders complied with state law. The City’s contract with the TCEQ ended in 2005, as did its cooperative arrangement with the TCEQ, because the City desired to enforce the Act and TCEQ rules on its own “due to what it perceive[d] to be TCEQ’s lax enforcement efforts.” In 2007, the City amended the 1992 ordinance to establish its own air-quality regulatory-compliance program and adopted a fee schedule to fund the program. BCCA Appeal Group members operate integrated chemical manufacturing plants and refineries in the Houston area. Those plants are extensively regulated by the TCEQ pursuant to the Act. BCCA filed suit to declare the ordinance (and its amendments) invalid.  The trial court granted BCCA’s motion for summary judgment holding the ordinance void but the court of appeals reversed and rendered judgment for the City.  BCCA appealed.

The Court first noted the Ordinance has a severability clause, so any sections which are preempted do not affect the remainder. BCCA Appeal Group argues that the Ordinance is expressly preempted by §382.113(b) of the Act and are implicitly preempted by the comprehensive structure of the Act and its Water Code enforcement provisions.  The Court analyzed the comprehensive structure of the Act and went through all the enforcement variations possible under the Act including the TCEQ’s policy of first seeking voluntary compliance, seeking criminal penalties, civil penalties, and the authority to decline to enforce even after a violation is found. The statute mandates administrative and civil remedies whenever possible, and the TCEQ is charged with the discretion to make that determination before any criminal proceeding may move forward. The Act limits a City’s power to enact any ordinance only to those subjects which are consistent with the Act and limited the City’s ability to enforce air-quality standards criminally. The way the Ordinance is written, any enforcement of the Ordinance violations is also subject to enforcement under state law. However, Water Code §7.203 requires that a permit-holder’s alleged violation must be reported in writing to the TCEQ before referral to a prosecuting attorney for criminal prosecution. The statute grants the TCEQ forty-five days to determine whether a violation actually exists and whether administrative or civil remedies would be adequate which the Ordinance countermines. Further, prosecution under the Ordinance results in a “criminal conviction, which require[s] the prosecutor to prove a culpable mental state,” therefore escalating the violation to a “major violation” in the site’s compliance history even when the violation is not listed as “major” by the TCEQ. The Legislature expressed its clear intent to have the TCEQ determine the appropriate remedy in every case. Further, the City’s requirement that a facility must register to operate lawfully effectively moots the effect of a TCEQ permit that has been issued and allows a facility to operate lawfully.  Given the Act’s very specific limitation on a City’s ability to regulate only certain portions of air-quality control, this registration requirement is inconsistent with the Act. The Ordinance is therefore preempted.

Next the Court analyzed whether the language in the non-preempted sections (dealing with adopting TCEQ Rules) is unconstitutional simply because it references an automatic adoption of any TCEQ Rule future amendments. BCCA argues the auto-adoption language unconstitutionally delegates core lawmaking from the City Council to the TCEQ. However, a home-rule city’s power comes from the Texas Constitution. No statutory or constitutional provision limits the City’s power to incorporate TCEQ Rules. Therefore, when the City adopted the TCEQ rules as they currently exist and as they may be amended, the Ordinance complied with the Act’s mandate that any ordinance must not be inconsistent with the TCEQ’s rules and ensured that consistency be maintained on an ongoing basis.

The dissent argued the majority deviated from precedent noting it should attempt reasonable construction to allow two laws to co-exist without preemption. Chiding the majority for not specifying the language noting the Ordinance “provides only for criminal prosecution without TCEQ involvement..” Justice Boyd used statutory construction principles to conclude the Ordinance does incorporate TCEQ involvement prior to prosecution. However, the majority disagreed with that analysis.

If you would like to read this opinion click here. JUSTICE GREEN delivered the opinion of the Court, in which CHIEF JUSTICE HECHT,JUSTICE JOHNSON,JUSTICE WILLETT,JUSTICE GUZMAN,JUSTICE LEHRMANN,JUSTICE DEVINE, and JUSTICE BROWN joined, and in which Justice Boyd joined as to Parts III(B) and IV but his dissent in part is found here.  The docket page with attorney information is found here.