Panda Power Generation Infrastructure Fund, LLC, D/B/A/ Panda Power Funds v. Electric Reliability Council of Texas, Inc. ( 2022 )

Dissent and Opinion Filed February 24, 2022
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-18-00611-CV
PANDA POWER GENERATION INFRASTRUCTURE FUND, LLC, D/B/A/
PANDA POWER FUNDS; PANDA SHERMAN POWER HOLDINGS, LLC;
PANDA SHERMAN POWER INTERMEDIATE HOLDINGS I, LLC;
PANDA SHERMAN POWER INTERMEDIATE HOLDINGS II, LLC;
PANDA SHERMAN POWER, LLC; PANDA TEMPLE POWER
HOLDINGS, LLC; PANDA TEMPLE POWER INTERMEDIATE
HOLDINGS I, LLC; PANDA TEMPLE POWER INTERMEDIATE
HOLDINGS II, LLC; PANDA TEMPLE POWER, LLC; PANDA TEMPLE
POWER II HOLDINGS, LLC; PANDA TEMPLE POWER II
INTERMEDIATE HOLDINGS I, LLC; PANDA TEMPLE POWER II
INTERMEDIATE HOLDINGS II, LLC; PANDA TEMPLE POWER II,
LLC, Appellants
V.
ELECTRIC RELIABILITY COUNCIL OF TEXAS, INC., Appellee
On Appeal from the 15th Judicial District Court
Grayson County, Texas
Trial Court Cause No. CV-16-0401
DISSENTING OPINION FROM GRANT OF EN BANC
RECONSIDERATION
Before the Court sitting En Banc
Opinion by Justice Schenck
I do not believe the original panel decision in this dispute between appellants
(collectively referred to herein as “Panda”) and the Electric Reliability Council of
Texas, Inc. (“ERCOT”) is erroneous, much less “clearly” so, as to warrant
reconsideration by the Court sitting en banc. Accordingly, I disagree with the
majority’s decision to the contrary and believe the construction of law it advocates
poses, at a minimum, serious and unavoidable constitutional concerns in conferring
law-making authority on a private entity. This concern, in my view, can and should
be avoided by adhering to the original panel’s construction of the law in this case.
Accordingly, I respectfully dissent from this Court’s decision to consider this case
en banc and from the majority’s deviation from the original panel decision.
DISCUSSION
I. The Original Panel Opinion Is Not Clearly Erroneous, thus, the “Law
of the Case” Doctrine Controls
Panda’s appeal in this case implicates the law of the case doctrine because it
seeks to revisit a decision of this Court granting a petition for writ of mandamus and
directing the trial court to vacate its order denying ERCOT’s plea to the jurisdiction
based on sovereign immunity and dismiss the case for lack of jurisdiction. See Elec.
Reliability Council of Tex., Inc. v. Panda Power Generation Infrastructure Fund,
LLC, 552 S.W.3d 297, 301, 320 (Tex. App.—Dallas 2018), pet. dism’d w.o.j, 619
S.W.3d 628 (Tex. 2021). Under that doctrine, a court of appeals is ordinarily bound
by its initial decision in any subsequent appeal in the same case, which is the case
here. Briscoe v. Goodmark Corp., 102 S.W.3d 714, 716 (Tex. 2003). This doctrine
follows from the sound policy that when an issue is litigated and decided, that should
be the end of the matter. United States v. U. S. Smelting Ref. & Mining Co., 339
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U.S. 186, 198 (1950). A decision that is “clearly erroneous” and would work a
manifest injustice is an exception to the law of the case doctrine. Id.While there is little helpful development of the clearly erroneous standard in
Texas law, I find the Seventh Circuit’s decision in Parts and Electric Motors, Inc.
v. Sterling Electric, Inc., 866 F.2d 228, 233 (7th Cir. 1988), to be instructive on the
application of same. In that case, the court noted that “under the clearly erroneous
standard, we cannot meddle with a prior decision of this or a lower court simply
because we have doubts about its wisdom or think we would have reached a different
result.” Id. “To be clearly erroneous, a decision must strike us as more than just
maybe or probably wrong, it must . . . strike us as wrong with the force of a five-
week-old, unrefrigerated dead fish.” Id. To be clearly erroneous, then, the original
panel decision must be “dead wrong.” Id.Because I do not see any error in the original panel opinion, let alone “clear”
error, I would conclude this case does not present the exceptional circumstances that
justify departure from the law of the case doctrine. For this reason alone, I disagree
with the majority’s view and decision.
II. The Majority’s Conclusion ERCOT Is Not Entitled to Immunity
Raises Constitutional Concerns Regarding the Delegation of
Legislative Power
Moreover, and in addition, I have grave concerns with the majority’s
conclusion that ERCOT, a private entity acting at the behest of a state agency, is not
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entitled to immunity because, by necessity, it triggers the issue of a possible
unconstitutional delegation of rule-making authority.
The Texas Constitution vests all “legislative power in the Legislature.” See
TEX. CONST. art. III, § 1 (creating the legislative department); see also TEX. CONST.
art. II, § 1 (establishing separation of powers among the legislative, executive, and
judicial departments). The Texas Supreme Court has long recognized that “because
a legislative body would be hard pressed to contend with every detail involved in
carrying out applicable laws, delegation of some legislative power is both necessary
and proper.” Tex. Workers’ Comp. Comm’n v. Patient Advocates of Tex., 136
S.W.3d 643, 654 (Tex. 2004). “Thus, the Legislature may delegate legislative power
to local governments, administrative agencies, and even private entities under certain
conditions.” FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 873 (Tex.
2000). Any such delegation “must be exercised with a certain amount of caution.”
Patient Advocates, 136 S.W.3d at 654. Where the Legislature purports to delegate
its law-making authority to a private entity, the delegation will be “subject to more
stringent requirements and less judicial deference” than a public delegation, given
that it raises “more troubling constitutional issues.” FM Props., 22 S.W.3d at 874
(explaining the difficulties that arise when private delegates “are not elected by the
people, appointed by a public official or entity, or employed by the government”).
In 1999, the Texas Legislature enacted Chapter 39 of the Texas Public Utility
Regulatory Act (“PURA”) to restructure the electric utility industry in Texas. TEX.
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UTIL. CODE §§ 39.001–.916. Under PURA, the Public Utility Commission (“PUC”)
was required to certify an independent system operator (“ISO”) to, among other
things, “ensure the reliability and adequacy of the regional electrical network.” Id.
§ 39.151(a)–(c). In 2001, the PUC certified ERCOT as the ISO. While ERCOT was
not created by the Legislature, its certification arose out of—and operates within—
a legislative delegation of authority to the PUC. Id. § 39.151(c). Under the authority
of PURA section 39.151(d), the PUC chose to delegate its rule-making and
enforcement authority to ERCOT. Id. § 39.151(d). Thus, ERCOT makes binding
rules that have the positive force of a statute. Concluding that ERCOT’s function in
this capacity is a private one raises serious constitutional questions.
When there has been a private delegation of legislative authority, that
delegation must withstand constitutional muster. Eight factors are generally
considered in making the determination. See Tex. Boll Weevil Eradication Found.,
Inc. v. Lewellen, 952 S.W.2d 454, 472 (Tex. 1997).1 And in deciding whether to
1
Those factors include:
1. Are the private delegate’s actions subject to meaningful review by a state agency or
other branch of state government?
2. Are the persons affected by the private delegate’s actions adequately represented in the
decision-making process?
3. Is the private delegate’s power limited to making rules, or does the delegate also apply
the law to particular individuals?
4. Does the private delegate have a pecuniary or other personal interest that may conflict
with its public function?
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delegate rule-making or enforcement authority to another, governmental agencies
often seek the Attorney General’s guidance on the constitutionality of same. See,
e.g., TEX. ATTY. GEN. OP. No. KP-0133 (2017) (addressing whether proposed Upper
San Saba River Management Plan unlawfully delegates legislative power to private
entity and concluding, notwithstanding the preliminary status of the submitted plan,
some of the Boll Weevil factors weigh in favor of finding the plan is constitutional,
and some against); TEX. ATTY. GEN. OP. No. JC-0510 (2002) (addressing whether
Texas Department of Licensing and Regulation’s executive director may adopt, as
standards for installing, altering, operating, and inspecting elevators, escalators and
related equipment, safety codes adopted by American Society of Mechanical
Engineers, and concluding the director is prohibited from adopting standards that
differ from those that existed when safety codes were included in Health and Safety
Code section 754.014); TEX. ATTY. GEN. OP. No. JC-0012 (1999) (addressing
whether, pursuant to section 5B(a) of Texas Plumbing License Law, State Board of
5. Is the private delegate empowered to define criminal acts or impose criminal
sanctions?
6. Is the delegation narrow in duration, extent, and subject matter?
7. Does the private delegate possess special qualifications or training for the task
delegated to it?
8. Has the Legislature provided sufficient standards to guide the private delegate in its
work?
Id.–6–
Plumbing Examiners is authorized to adopt plumbing codes other than those that
existed at the time section 5B was adopted and concluding it is not).
As its name implies, the canon of constitutional avoidance thus further directs
us to prefer any reasonable construction of this statute that would avoid the potential
of our having to plow through the eight-factor field of constitutional inquiry that
might otherwise apply to this or future stages of this case. In re Bay Area Citizens
Against Lawsuit Abuse, 982 S.W.2d 371, 380 (Tex. 1998) (orig. proceeding). The
original panel’s construction of the law wisely avoided the potential for a
constitutional infirmity in delegation of authority; the en banc majority’s
construction does not. For that reason, as well, I would adhere to the original panel
decision.
III. Even Assuming ERCOT Lacks Immunity, the PUC Has Exclusive
Jurisdiction
Finally, I disagree with the majority’s view concerning the PUC’s jurisdiction
over the claims asserted in this case. Texas trial courts have general jurisdiction
except in those situations in which the Constitution or some other law confers
exclusive, appellate, or original jurisdiction on some other court, tribunal, or
administrative body. See TEX. CONST. art. V, § 8.
Recently our colleagues in San Antonio addressed the issue of whether the
legislature has granted the PUC exclusive jurisdiction to address asserted common-
law claims against ERCOT and concluded it has done so through PURA’s pervasive
regulatory scheme. See Elec. Reliability Council of Tex., Inc. v. CPS Energy, No.
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04-21-00242-CV, 2021 WL 5879183, at *10, 13 (Tex. App.—San Antonio Dec. 13,
2021, pet. filed). I agree with our colleagues’ analysis and would apply it to this
case even if I agreed with the majority that ERCOT lacks immunity.
In addition, I note that, in the current case, the PUC weighed in on the
agency’s position with respect to its jurisdiction. The PUC asserts that it has
exclusive original jurisdiction over Panda’s complaints about ERCOT because its
oversight of ERCOT’s performance includes the PUC mandated “Report on
Capacity, Demand, and Reserves” and ERCOT’s forecasts. While the agency’s
litigating position is not controlling, I would still give it due regard with respect to
the jurisdictional issue presented in this case. See Fiess v. State Farm Lloyds, 202
S.W.3d 744, 747 (Tex. 2006) (no deference to opinions in agency’s amicus brief).
Because I find it persuasive, I would follow it and conclude that the PUC is assigned
exclusive jurisdiction to entertain and remediate this dispute as it deems appropriate.
Following the analysis by our sister court of appeals, as well as giving due
regard to the PUC’s position in this case and finding it to be well taken, I would
conclude the trial court properly dismissed Panda’s claims against ERCOT because
the PUC has exclusive original jurisdiction over Panda’s complaints.
CONCLUSION
Because I would conclude that the original panel opinion was not clearly
erroneous, the majority’s decision undermines the constitutional-avoidance doctrine,
and the PUC has exclusive jurisdiction over Panda’s complaints, I dissent.
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180611f.p05 /David J. Schenck/
DAVID J. SCHENCK
JUSTICE
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