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Slay v. Texas Commission on Environmental Quality

At the center of this appeal is a September 2002 document, prepared by TCEQ's enforcement division, that sets forth an elaborate methodology for applying the statutory criteria to violations of the Texas Water Code (the penalty policy). The district court did not err in determining that the 2002 penalty policy was not a "rule" as defined in the APA but erred in purporting to exercise subject-matter jurisdiction over plaintiffs' §2001.038 claims. TCEQ's determination that the materials were waste is within the bounds of reasonableness. Given the supporting evidence, the inclusion of an explanation for each change, and the broad language of the penalty policy, TCEQ's amendments to the ALJ's conclusions cannot be considered arbitrary. The portion of the district court's judgment denying the state defendants' plea to the jurisdiction and holding that it has subject-matter jurisdiction over plaintiffs' APA §2001.038 claim is reversed. Plaintiffs' APA §2001.038 claim is dismissed for want of subject-matter jurisdiction. The district court's judgment is otherwise affirmed. Austin Court of Appeals, No. 03-10-00297-CV, 08-31-2011.

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OPINION

These cross-appeals present two principal sets of issues: (1) whether a Texas Commission on Environmental Quality (TCEQ) order imposing administrative penalties withstands judicial review under the standard in section 2001.174 of the Administrative Procedure Act (APA), see Tex. Gov’t Code Ann. § 2001.174 (West 2008), and (2) whether the district court possessed subject-matter jurisdiction over declaratory claims under section 2001.038 of the APA that were asserted alongside the claimants’ suit for judicial review, see id. § 2001.038 (West 2008).*fn1 We conclude that the district court lacked subject-matter jurisdiction over the claims under APA section 2001.038 and that there is no basis under APA section 2001.174 for reversing the agency’s order.

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