save-our-springs-alliance-inc-v-city-of-kyle-jack-goodman-craig-smith ( 2012 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-11-00686-CV
Save Our Springs Alliance, Inc., Appellant
v.
City of Kyle; Jack Goodman; Craig Smith; Mary Stone; Gary Franklin; and Bob Larson,
each in their Official Capacity as Directors of the Barton Springs-Edwards Aquifer
Conservation District and the Barton Springs-Edwards Aquifer Conservation District,
Appellees
FROM THE DISTRICT COURT OF HAYS COUNTY, 22ND JUDICIAL DISTRICT
NO. 10-1267, HONORABLE CHARLES R. RAMSAY, JUDGE PRESIDING
OPINION
Save Our Springs Alliance, Inc. (“the Alliance”) appeals a final judgment rendered
by the district court after the court had stricken the Alliance’s plea in intervention. In a single issue,
the Alliance contends that the court abused its discretion in granting the City’s motion to strike its
plea in intervention and therefore its judgment should be reversed and the cause remanded. We will
vacate the district court’s judgment and remand the cause.
FACTUAL AND PROCEDURAL BACKGROUND
The City of Kyle applied to the Barton Springs-Edwards Aquifer Conservation
District (“the District”) for an amendment to its production permit allowing it to pump additional
water from the Barton Springs Edwards Aquifer.1 The City sought to increase permitted pumpage
from 165,000,000 gallons per year to 350,000,000 gallons per year. The additional water was to be
available on an interruptible basis pursuant to a conditional permit allowing the District to curtail
the amount of water available during periods of drought. The Alliance filed a protest and requested
a hearing on the permit application. The District’s board commenced a contested-case hearing on
the permit application and formally admitted the City, the Alliance, and the District’s general
manager as parties to the proceeding. The District’s board then held a hearing on the merits of the
permit application, at the conclusion of which it issued an order partially approving the City’s permit
application, with the condition that the City be granted only 100,700,000 additional gallons per year
rather than the 185,000,000 additional gallons per year that it had requested. The District’s refusal
to grant the full amount of water requested was based on its interpretation of a rule requiring an
applicant to establish that it has available a certain amount of water from an “alternative water
supply” in order to qualify for a conditional permit.
The City filed a motion for rehearing with the District challenging the denial of the
permit for the full amount of water requested. The Alliance did not file a motion for rehearing.
After its motion for rehearing was denied, the City filed a suit for judicial review in Hays County
district court. See Tex. Water Code Ann. § 36.251 (West 2008) (person affected by or dissatisfied
with order made by conservation district may file suit against district or its directors to challenge
validity of order). The City also included a request for a declaration that the District could not deny
1
The District is a legislatively created groundwater conservation district subject to chapter
36 of the water code. See Tex. Water Code Ann. §§ 36.001-.419 (West 2008 & Supp. 2012).
2
a permit based on a misapplication of its existing rules that effectively changed the permitting
criteria. The District filed a general denial and asserted the affirmative defense of immunity from
the City’s request for declaratory relief. The Alliance subsequently filed a plea in intervention that
asserted a general denial of “every averment of law and fact” contained in the City’s petition. See
Tex. R. Civ. P. 60 (party may file pleading subject to being stricken by court for sufficient cause or
on motion of any party). The City filed a motion to strike the Alliance’s plea in intervention, which
the trial court granted. Thereafter, the City and the District filed cross-motions for summary
judgment. The trial court issued an order denying the District’s motion for summary judgment and
granting the City’s. The court’s judgment ordered the cause remanded to the District with
instructions to conduct a limited evidentiary hearing “on the sole question whether the City has
demonstrated that it meets the Alternative Water Supply requirement.” After the judgment was
signed, the City and the District filed a “Joint Motion to Approve Agreed Final Judgment” informing
the court that the City and the District had “reached settlement” and requesting that the court render
final judgment in the form attached to their motion. The court signed an “Agreed Final
Judgment” reciting that “entry of an agreed final judgment is appropriate” and, among other things,
ordering that:
• The City is granted 84,300,000 gallons of water to its Class B Conditional and
Transport Permits, to become effective as of the date of signature of this Agreed
Final Judgment.
• The City holds a Class B Conditional Permit in the amount of 185,000,000 gallons
of water per year and a Transport Permit in the cumulative amount of 350,000,000
gallons of water per year, to become effective as of the date of signature of this
Agreed Final Judgment.
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• The City has met the criteria in the District’s rules for the issuance of a Class B
Conditional Permit in the amount of 185,000,000 gallons of water, and has
specifically satisfied District Rules 2-1, 3-14(A)(16), and 301.24, related to the
District’s Alternative Water Supply requirements.
The judgment recited that the District’s board
has taken formal action to approve issuance of the permit amendments of 84,300,000
gallons of water, the District has issued and tendered to the Court a Class B
Conditional Permit in the total amount of 185,000,000 gallons of water per year and
a Transport Permit in the cumulative amount of 350,000,000 gallons of water per
year, and said permit has been delivered to the City contemporaneous with entry of
this Order.
The judgment further stated that “there will not be a remand back to the District in this cause” and
“the above-referenced cause is DISMISSED in its entirety, with prejudice to refiling same.” The
Alliance then perfected this appeal.
DISCUSSION
On appeal, the Alliance complains that the trial court erred by granting the City’s
motion to strike its plea in intervention and requests that this Court reverse the trial court’s order
granting the motion to strike its plea, set aside the order on summary judgment, and vacate the
Agreed Final Judgment. We need not consider whether the trial court abused its discretion in
striking the Alliance’s plea in intervention, however, because we will vacate the court’s judgment
for an unrelated reason: the court lacked jurisdiction to render the Agreed Final Judgment, and,
consequently, the judgment is void.
4
Although the Alliance does not argue on appeal that the court’s judgment is void, it
has long been held that courts of appeals may reverse the judgment of a trial court for an unassigned
error if the error is truly “fundamental.” See Ramsey v. Dunlop, 205 S.W.2d 979, 982-83 (Tex.
1947). “[W]hen the record affirmatively and conclusively shows that the court rendering the
judgment was without jurisdiction of the subject matter, the error will also be regarded
as fundamental.” McCauley v. Consol. Underwriters, Inc., 304 S.W.2d 265, 266 (Tex. 1957);
see also In re J.F.C., 96 S.W.3d 256, 290-92 (Tex. 2002) (O’Neill, J., dissenting) (discussing
fundamental-error doctrine). “With ‘jurisdictional-based’ fundamental-error review, an appellate
court may reverse the judgment of the court below for error—without conducting a review for
harm—even if the error is not preserved.” In re J.F.C., 96 S.W.3d at 291 (O’Neill, J., dissenting)
(citing Baker v. Hansen, 679 S.W.2d 480, 481 (Tex. 1984)). Because, as explained below, in the
present case the trial court lacked jurisdiction to render the Agreed Final Judgment, the error is
fundamental and we may consider the jurisdictional defect even though it was not raised by
the Alliance. McCauley, 304 S.W.2d at 266 (reaffirming survival of the fundamental-error
review doctrine).2
2
We also observe that an agency does not have the authority to modify its original order
once a suit for judicial review has been filed. See Tex. Gov’t Code Ann. § 2001.1775 (West 2008)
(“[A]n agency may not modify its findings or decision in a contested case after proceedings for
judicial review of the case have been instituted under Section 2001.176 and during the time that the
case is under judicial review.”); Granek v. Texas State Bd. of Med. Exam’rs, No. 03-07-00380-CV,
2008 WL 744707, at *4 (Tex. App.—Austin Mar. 19, 2008, pet. denied) (agency precluded by
section 2001.1775 from modifying its findings or decision in contested case after proceedings for
judicial review have begun, and agency could not have issued another final order even if it had
wanted to do so).
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A court’s subject-matter jurisdiction traditionally consists of a power, conferred by
constitutional or statutory authority, to decide the type of claim alleged in the plaintiff’s petition and
to award an authorized form of relief. See City of Celina v. Dynavest, 253 S.W.3d 399, 402 (Tex.
App.—Austin 2008, no pet.) (citing Sierra Club v. Texas Natural Res. Conservation Comm’n,
26 S.W.3d 684, 687 (Tex. App—Austin 2000), aff’d, 70 S.W.3d 809 (Tex. 2002)). A constitutional
delegation of general power to the district courts is found in article V, section 8 of the Texas
Constitution. See Tex. Const. art. V, § 8. A statutory grant of power to district courts is found in
section 24.008 of the government code. See Tex. Gov’t Code Ann. § 24.008 (West 2004) (assigning
to district courts power to hear and determine any cause cognizable by courts of law or equity and
to grant any relief that could be granted by either courts of law or equity). Apart from these general
grants of adjudicative power, a statute may grant the district courts, or one or more of them, special
statutory jurisdiction to hear, determine, and award relief in specific types of cases that are
themselves authorized by statute. Sierra Club, 26 S.W.3d at 688. Section 36.413 of the water code
provides that a party to a contested hearing may file suit against the conservation district under
section 36.251 to appeal a decision on a permit. See Tex. Water Code Ann. § 36.413 (West 2008).
Section 36.251 states:
A person, firm, corporation, or association of persons affected by and dissatisfied
with any provision or with any rule or order made by a district is entitled to file a suit
against the district or its directors to challenge the validity of the law, rule, or order.
The suit shall be filed in a court of competent jurisdiction in any county in which the
district or any part of the district is located. The suit may be only be filed after all
administrative appeals to the district are final.
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Id. § 36.251 (West 2008); see Texas Dep’t of Protective & Regulatory Servs. v. Mega Child
Care, Inc., 145 S.W.3d 170, 198 (Tex. 2004) (holding that judicial review provisions provide
limited waiver of sovereign immunity). The district court’s review on appeal is governed by the
substantial-evidence rule as defined by section 2001.174 of the government code. See Tex. Water
Code Ann. § 36.253.
Section 2001.174 applies when, as here, the law authorizes review of a decision in
a contested case under the substantial-evidence rule. See Tex. Gov’t Code Ann. § 2001.174 (West
2008). The statute empowers the reviewing court to award specified forms of relief in such suits.
Id. The power to award relief is an essential component of subject-matter jurisdiction and may be,
as here, restricted by a statute limiting the kinds of relief that can be rendered in certain kinds of
cases. See Sierra Club, 26 S.W.3d at 688 (citing Morrow v. Corbin, 62 S.W.2d 641, 645 (Tex.
1933)). Section 2001.174 permits the reviewing court to examine the agency record for error in
cases of substantial-evidence review, but if prejudicial error is found, the statute empowers the court
only to “reverse or remand the case” to the agency. See Tex. Gov’t Code Ann. § 2001.174(2). “This
is a direct restriction on the special statutory jurisdiction delegated to the court in the APA—the
court is not free generally to render the kind of relief it believes the agency should have awarded
based on the agency’s record.” Sierra Club, 26 S.W.3d at 688. Consequently, the authority of
district courts to fashion remedies is limited. Texas Dep’t of Transp. v. T. Brown Constructors, Inc.,
947 S.W.2d 655, 659 (Tex. App.—Austin 1997, pet. denied). This limitation arises from the
separation-of-powers provision of the Texas Constitution, see Tex. Const. art. II, § 1, which, in the
context of judicial review of administrative decisions, ensures that discretionary functions delegated
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to administrative agencies by the legislature are not usurped by the judicial branch. T. Brown
Constructors, 947 S.W.2d at 659.
In the present case, the Agreed Final Judgment purports to find facts (that the City
has met the criteria for issuance of a permit) and to render judgment granting a permit. Section
2001.174 does not empower courts to take such action, which goes beyond their limited authority
in a substantial-evidence review. Having concluded that there was error prejudicing substantial
rights of the City’s, the court’s only options were to reverse or remand the case for further
proceedings. See Tex. Gov’t Code Ann. § 2001.174. Accordingly, the district court’s Agreed Final
Judgment, which had the effect of rendering a specific judgment, contravened the direct restriction
on the special statutory jurisdiction delegated to the court in its substantial-evidence review.
Because the judgment violated the separation-of-powers doctrine of the Texas Constitution, it is void
and its rendition was fundamental error. See Sierra Club, 26 S.W.3d at 688; T. Brown Constructors,
947 S.W.2d at 660. Applying the fundamental-error review doctrine, we vacate the Agreed Final
Judgment and remand the cause to the district court.3
3
We note that the effect of vacating the Agreed Final Judgment is to revive the June 1, 2011,
summary-judgment order. In that order the trial court remanded the cause to the District, which it
was authorized to do pursuant to government code section 2001.174(2). However, the judgment also
instructed the District to “fully grant the City’s application without any permit conditions beyond
what were specified in Section 2 of the District Order” if the City “establishes to the District’s
satisfaction that it meets the Alternative Water Supply requirement.” As circumscribed by section
2001.174, the trial court is not authorized to usurp the District’s authority and discretion to issue
permits. See T. Brown Constructors, 947 S.W.2d at 660. On remand, we are confident that the trial
court will reconsider the form of its order on the cross-motions for summary judgment.
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CONCLUSION
The district court was without jurisdiction to render the Agreed Final Judgment. We
vacate that judgment and remand the cause to the district court for further proceedings consistent
with this opinion.
_____________________________________________
J. Woodfin Jones, Chief Justice
Before Chief Justice Jones, Justices Pemberton and Rose
Vacated and Remanded
Filed: August 30, 2012
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