The Austin Court of Appeals has overturned a trial court order reversing the Texas Commission on Environmental Quality’s decision to grant a permit to a Milam County rock-crushing operation.
Texas Commission on Environmental Quality and Vulcan Construction Materials LLC v. Friends of Dry Comal Creek, Stop 3009 Vulcan Quarry, Jeffrey Reeh, Terry Olson, Mike Olson, and Comal Independent School District (No. 03-21-00204-CV) arose from a contested case hearing in which numerous groups and individuals challenged a permit granted to Vulcan to build a rock-crushing plant at a limestone quarry. The primary issue at the hearing involved the emission of silica. The ALJ recommended that TCEQ grant the permit, which the Commissioners did. Protestants appealed to Travis County district court. The trial court reversed the Commissioner’s order and remanded to the agency. This appeal followed.
In an opinion by former Austin Court of Appeals Chief Justice Woodie Jones, sitting by assignment, the court of appeals reversed and rendered in favor of TCEQ and Vulcan. Two conclusions of law in the ALJ’s proposal for decision, which the Commissioners adopted, were rejected by the trial court. The first, Conclusion of Law 12, found “no indication that emissions for the Plant will contravene the intent of the [Texas Clean Air Act], including the protection of the public’s health and physical property.” The second, Conclusion of Law 14, found that “Vulcan has made all demonstrations required under applicable statutes and regulations . . . to be issued an air quality permit with conditions as set out in the Draft Permit.” There was also a discovery dispute during the SOAH hearing in which the ALJ denied Protestants’ request for dozens of core samples Vulcan collected when determining whether to buy the property several years prior to the hearing. Vulcan asserted a trade secret privilege to protect that data. The trial court ruled that the ALJ had abused her discretion in denying the discovery request and, consequently, that Protestants were denied due process.
The court of appeals conducted a meticulous substantial evidence analysis in reaching its decision to uphold the permit. Regarding Conclusions of Law 12 and 14, the court found that TCEQ’s reliance on its internal modeling effects and review applicability (MERA) as it related to silica (a “minor” pollutant under the FCAA) was reasonable. The agency uses the MERA guidelines as a threshold analysis to determine whether and what further investigation and testing may be necessary to demonstrate compliance with the applicable Effects Screening Level (ESL). In this case, the MERA guidelines indicated that silica emissions from Vulcan’s plant would fall well below the de minimis level (SIL) and no further analysis by the agency or Vulcan was required. Protestants argued that MERA constituted an agency “rule” adopted without going through the formal rule-making process under the Administrative Procedures Act. The court rejected this argument on the basis that the MERA guidelines do not bind the agency, but are simply “nonbinding evaluative guidelines that take into consideration case-specific circumstances—which have been held not to be a rule” (citation omitted). By contrast, a rule “dictate[s] specified results without regard to individual circumstances.” The MERA guidelines thus constituted substantial evidence supporting the permit.
In addition to the MERA guidelines, Vulcan conducted its own health effects analysis, which made conservative, “worst-case” assumptions. This analysis took into consideration not only the likely emissions from the plant, but emissions from similar operations in the area, road emissions, and other ambient sources of silica. Based on this data, the agency determined that the predicted concentration of crystalline silica would have been below the ESL even if concentrations had been 135 times higher than Vulcan’s data indicated. This, too, constituted substantial evidence in support of the Commission’s finding that silica emissions from the plant would produce no danger to public health or property.
As noted above, Protestants attempted to get discovery of 38 core samples Vulcan had taken in the past in an effort to show that Vulcan’s data were not based on “representative site conditions.” They took their own core samples close to the western boundary of Vulcan’s property, which found a higher level of emissions (1% rather than 0.2%) than the three samples Vulcan used in its analysis. The court, however, disagreed that discovery of the additional core samples would necessarily have made in any difference or that they were relevant to the question of “representative site conditions.” The samples Vulcan used were from each part of the property. In addition, Vulcan used data from similarly situated TCEQ air monitoring stations (though there were none in Comal County), which indicated very little if any chance of a regulatorily significant increase in cumulative silica emissions in the area of the plant. The trial court’s ruling that the agency had made an “arbitrary and capricious” finding did not hold up under the substantial evidence standard.
Finally, the court ruled that the ALJ did not abuse her discretion by denying Protestants’ request for discovery of the additional core samples, and that withholding the samples from the Protestants did not violate due process guarantees. The court leaned heavily on the ALJ’s finding that Protestants had plenty of evidence to cast doubt on Vulcan’s analysis and did not need the additional samples, particularly when coupled with the MERA guidance and Vulcan’s analysis. The requested information was thus not “necessary or essential to the fair adjudication of the case,” and Protestants “failed to demonstrate ‘exactly how the lack of the information will impair the presentation of the case on the merits to the point that an unjust result is a real, rather than a merely possible, threat’” (citation omitted). And, as long as “the rudiments of fair play” are observed in an administrative hearing, it is extremely difficult to challenge the conduct of the hearing on due process grounds. The court reversed and rendered.
Judging by the opinions from the Austin Court of Appeals that have caught our eye, we are somewhat puzzled by some of the criticisms of its work. We’re talking here about the issues that matter most to TCJL members, such as whether they get their permits, and not the hot-button partisan issues. We have also seen that this court is perfectly capable of handling business disputes and does not have a history of rubber-stamping nuclear verdicts (which, in any event, we don’t usually see out of Travis or the other counties in the district). It does not seem that the court is overburdened, either, and the docket equalization process routinely sends administrative appeals to other appellate courts with no discernible difference in how they apply administrative law principles. At any rate, what we see is a hard-working court that takes its job seriously and pays attention to the law. That does not mean that we agree with every decision (the TDS landfill case property tax case, for instance), but the argument that this court is aggressively activist does not appear borne out by the facts.
