Robert L. Collins v. Texas Natural Resource Conservation Commission and Cal-Maine Partnership, Ltd. ( 2002 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-02-00027-CV
Robert L. Collins , Appellant
v.
Texas Natural Resource Conservation Commission and Cal-Maine
Partnership, Ltd., Appellees
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT
NO. 99-13369, HONORABLE MARGARET A. COOPER, JUDGE PRESIDING
B&N Poultry1 applied to the TNRCC2 for a permit to change from a dry waste-
management system to an environmentally superior wet waste-management system utilizing compacted clay
lined lagoons. Robert Collins, an organic farmer who lives 1.3 miles away from the proposed lagoons,
1
B&N sold its operation to Cal Maine Partnership, which is the party to this suit. In this
opinion, we will refer to both B&N and its successor-in-interest, Cal-Maine, as B&N.
2
By statute effective September 1, 2001, the legislature changed the name of the Texas Natural
Resource Conservation Commission to the Texas Commission on Environmental Quality, to be effective
January 1, 2004. The statute granted the TNRCC authority to adopt a timetable for phasing in the change
of the agency=s name, so that until January 1, 2004, the agency may perform any act authorized by law
under either title. See Act of April 20, 2001, 77th Leg., R.S., ch. 965, ' 18.01, 2001 Tex. Gen. Laws
1985. On September 1, 2002, the agency began using its new name. In this opinion, we will refer to the
agency as the Commission.
sought a contested case hearing to oppose the application. After considering the pleadings and attached
evidence of Collins and the applicant, and allowing Collins to explain his opposition at two public meetings,
the Commission determined that Collins was unlikely to be affected by the proposed lagoons and denied his
hearing request. Collins sought judicial review of the Commission=s decision in a Travis County district
court. See Tex. Water Code Ann. '' 5.351, .354 (West 2000). Collins claimed among other things that
the Commission=s failure to grant him a contested case hearing is not supported by substantial evidence and
that he was denied due process of law. The district court affirmed the Commission=s order. We find
substantial evidence in the record to support the Commission=s decision to deny Collins=s hearing request
under the applicable law and regulations and hold that Collins was afforded due process.
BACKGROUND
B&N originally operated a poultry farm with a maximum capacity of approximately
500,000 hens on an 870-acre tract in Gonzales County. In May 1998, B&N applied for a permit to
expand its poultry operation by approximately two million hens and to replace its existing dry waste-
management system with a wet waste-management system utilizing non-discharge waste lagoons lined with
compacted clay. 3
3
The permit application originally encompassed both the expansion and the new waste-
management system. B&N eventually received Commission approval to build the expansion pursuant to an
exemption to permitting procedures for certain animal feeding operations. See 30 Tex. Admin. Code '
2
106.161 (2002). This appeal is therefore limited to Collins=s request for a contested case hearing on
B&N=s application to change waste-management systems.
3
Robert Collins operates a small organic farm on a 209-acre tract located approximately
590 feet from B&N=s land at its closest point. After seeing a notice of B&N=s permit application in a local
newspaper, Collins filed a written request for a contested case hearing, claiming that his land was adjacent
to B&N=s property and that his groundwater resources and air
quality, already adversely affected by B&N=s operations, would further deteriorate if the permit were
granted. The Commission notified Collins that it would consider his request at its May 1999 meeting.
Shortly thereafter, the Commission=s Public Interest Counsel and Executive Director filed
responses to Collins=s hearing request. Relying on Collins=s representations, each response stated that: (1)
Collins is an affected person; (2) his request is reasonable; and (3) his request should be granted. See 30
Tex. Admin. Code '' 55.27, .29, .31 (2002). B&N then filed a response challenging Collins=s assertion
that he would be affected by B&N=s proposed operation. B&N specifically disputed Collins=s claim that his
property is adjacent to B&N=s property and submitted a map indicating that another tract of land, the
APavlicek Property,@ is located between Collins=s land and B&N=s land.
A few weeks later, B&N filed a reply to the responses of the Public Interest Counsel and
the Executive Director. In this pleading, B&N again contended that Collins is not an affected person within
the meaning of section 55.29 of the administrative code. Particularly, B&N alleged that: (1) Collins=s home
is more than 1.3 miles away from the nearest permanent odor source at the proposed operation; (2) neither
Collins nor anyone else had previously complained about the existing operation; (3) the wind blows towards
Collins=s property only about four percent of the time; (4) area groundwater will be protected by the clay-
lined lagoons; and (5) general groundwater flow is not in the direction of Collins=s property. B&N also
4
challenged the reasonableness of Collins=s request for a hearing within the meaning of section 55.30 of the
administrative code because: (1) the proposed expansion could be constructed without any permit if B&N
continued to operate a dry litter system; and (2) the proposed wastewater-lagoon system is environmentally
superior to a dry litter system. The attached map indicated that Collins=s property was 590 feet removed
from B&N=s farm and that his residence was approximately 1.3 miles from B&N=s proposed site. B&N
also attached a wind data chart and the affidavit of a professional engineer stating that the proposed lagoons
would Alikely not result in degradation of the groundwater resources utilized by Mr. Robert Collins.@4 On
the same day, B&N filed a motion for continuance. The Commission granted B&N=s motion and carried
the matter over to its next scheduled meeting in June 1999.
A short time later, B&N applied for and received Commission approval to build the
proposed expansion continuing to utilize a dry waste-management system. See 30 Tex. Admin. Code '
106.161(2002).
Before the June meeting, B&N, Collins, the Public Interest Counsel, and the Executive
Director all filed additional pleadings. B&N bolstered its earlier claims that Collins was not an affected
4
The affiant engineer reviewed several sources of information in forming his opinions, including
technical portions of the permit application, water well reports and well logs from the vicinity, topographic
maps of the area, and Texas Water Development Board reports on groundwater resources in the area. He
detailed several features of the subsurface geology to support his ultimate conclusion that Collins=s
groundwater would not be affected by the lagoons.
5
person and that his request was not reasonable by attaching aerial photos showing the distance between
B&N=s operations and Collins=s property, along with the affidavit of another engineer stating that the
proposed non-discharge clay lined lagoon system would be superior to the existing dry waste system. The
Public Interest Counsel continued to support Collins=s request for a contested case hearing, but the
Executive Director changed his position and recommended that the hearing request be denied.
Collins appended to his additional pleadings photographs allegedly taken from Collins=s land
of the existing poultry operations and some new construction; affidavits of other nearby landowners stating
that they have experienced odors and insects coming from B&N=s operation; and a letter from an engineer
that questioned the wisdom of using compacted clay liners because such liners are difficult to install correctly
and are not as Astate of the art@ as geomembrane liners. The engineer=s letter also opined that insects and
odors would be better controlled if the lagoons were covered.
At the Commission=s June meeting, Collins was given the opportunity to explain his request.
Initially, he disputed the accuracy of the second map submitted by B&N.5 The Commission referred the
matter of the map=s accuracy to the State Office of Administrative Hearings (SOAH) for a hearing in front
of an administrative law judge (ALJ). Collins did not offer evidence at the SOAH hearing but did
thoroughly cross-examine the witnesses put on by B&N. After the hearing, the ALJ issued a proposal for
decision and findings of fact and conclusions of law indicating that B&N=s map was accurate. The
Commission then revisited Collins=s request at its August meeting, where Collins was again allowed to
explain his opposition to the wastewater-lagoon system. Based on the findings of the ALJ, the Office of
5
The second map submitted by B&N had a scale indicating distances.
6
Public Interest Counsel reversed itself and recommended that Collins=s request be denied. The
Commissioners adopted the ALJ=s findings of fact and conclusions of law, denied Collins=s hearing request,
and remanded B&N=s application to the Executive Director, who approved it. Collins filed a motion for
rehearing, which was overruled by operation of law, and then sought judicial review. See Tex. Water Code
Ann. '' 5.351, .354. The district court affirmed the Commission=s denial of Collins=s hearing request.
DISCUSSION
On appeal, Collins claims that: (1) the Commission=s failure to grant him a contested case
hearing is not supported by substantial evidence; (2) he was denied due process of law and therefore former
section 5.115 of the Texas Water Code, which authorized the Commission=s denial of his hearing request, is
unconstitutional as applied to him; and (3) the Commission erred in not providing findings of fact and
conclusions of law in its order denying Collins=s hearing request.
Substantial Evidence
In conducting a substantial evidence review, we determine whether the evidence as
a whole is such that reasonable minds could have reached the same conclusion as the agency in
the disputed action. Stratton v. Austin Indep. Sch. Dist., 8 S.W.3d 26, 30 (Tex. App.CAustin
1999, no pet.). We may not substitute our judgment for that of the agency and may only consider
the record on which the agency based its decision. Id. The issue for the reviewing court is not
whether the agency reached the correct conclusion, but rather whether there is some reasonable
basis in the record for its action. City of El Paso v. Public Util. Comm=n, 883 S.W.2d 179, 185
7
(Tex. 1994). The findings, inferences, conclusions, and decisions of an administrative agency are
presumed to be supported by substantial evidence, and the burden is on the contestant to prove
otherwise. Stratton, 8 S.W.3d at 30.
Before its amendment in 1999, section 5.115 of the Texas Water Code provided:
The commission is not required to hold a hearing if the commission determines that the basis
of the person=s request for a hearing as an affected person is not reasonable or is not
supported by competent evidence.
Act of May 28, 1995, 74th Leg., R.S., ch. 882, ' 1, 1995 Tex. Gen. Laws 4380, 4381 (Tex. Water Code
Ann. ' 5.115(a), since amended by Act of May 30, 1999, 76th Leg., R.S., ch. 1350, ' 1, 1999 Tex. Gen.
Laws 4570).
Title 30, Chapter 55, Subchapter B, of the Texas Administrative Code implements the
above quoted section of the Water Code:6
(a) The determination of the validity of a hearing request is not, in itself, a contested case
hearing subject to the APA. The Commission will evaluate the hearing request at the
scheduled commission meeting and may:
(1) determine that a hearing request does not meet the requirements of this
subchapter and act on the application.
....
(b) A request for a contested case hearing shall be granted if the request is:
6
Title 30, Chapter 55, Subchapter B applies only to permit applications declared administratively
complete before the effective date of the 1999 amendment to section 5.115 of the Water Code. See 30
Tex. Admin. Code ' 55.1(a), (b) (2002).
8
....
(2) made by an affected person if the request:
(A) is reasonable;
(B) is supported by competent evidence . . . .
30 Tex. Admin. Code ' 55.27. Subchapter B also sets forth substantive criteria for determination of who
qualifies as an Aaffected person@ and what constitutes a Areasonable request.@ See id. '' 55.29, .31. Each
of these two code sections requires the Commission to consider Aall relevant factors@ and includes a
nonexclusive list of such factors.
Collins claims that the Commission=s order is not supported by substantial evidence. We
disagree. In its order denying Collins=s hearing request, the Commission stated that Athe request for hearing
did not meet the requirements of Commission rules in Chapter 55, Subchapter B [of the administrative
code].@ We will affirm this determination if there is substantial evidence in the record of any permissible
ground set out in Subchapter B for denying Collins=s request, i.e., that: (1) Collins is not an affected person,
or (2) Collins=s hearing request was not reasonable, or (3) Collins=s hearing request was not supported by
competent evidence. See id. '' 55.27, .29, .30.
An affected person is one who has a personal justiciable interest related to a legal right, duty,
privilege, power, or economic interest affected by the application. Id. ' 55.29(a). An interest that is
common to members of the general public does not qualify as a personal justiciable interest. Id. However,
one does not need to show that she will ultimately prevail on the merits to qualify as an affected person. See
9
United Copper Indus., Inc. v. Grissom, 17 S.W.3d 797, 803 (Tex. App.CAustin 2000, pet. dism=d). The
factors that the Commission must consider in determining whether Collins is an affected person include:
$ distance restrictions or other limitations imposed by law on the affected interest;
$ whether a reasonable relationship exists between the interest claimed and the activity
regulated;
$ likely impact of the regulated activity on the health, safety, and use of property of the
person;
$ likely impact of the regulated activity on use of the impacted natural resource by the
person.
30 Tex. Admin. Code ' 55.29. Our review of the record indicates that the Commission was well within its
discretion to determine that Collins is not an affected person. The map that the ALJ found to be accurate
indicates that Collins=s property is not adjacent to B&N=s property and that his home is approximately 1.3
miles away from the proposed lagoons. Collins predicts that the lagoons will produce Anoxious odors.@ But
a concentrated animal feeding operation, such as B&N=s farm, qualifies for a standard air permitCissued
without the opportunity for a contested case hearingCif its permanent odor sources are at least half a mile
from occupied residences and business structures. 30 Tex. Admin. Code ' 321.46(1)(A).
Collins also predicts that his groundwater will be polluted and submitted an affidavit of an
engineer stating that clay liner systems are difficult to install and might fail. But the permit only authorizes a
correctly installed lagoon system. The type of failure that Collins fears would actually be a permit violation.
Moreover, the Commissioners had before them competent evidence that the environmentCincluding Collins=s
land, health, and safetyCwould be positively impacted by changing from the existing dry waste management
10
to the clay lined lagoon system. By the time the Commission issued its order denying Collins=s hearing
request, it had considered the detailed affidavits of two engineers indicating that the proposed clay lined
lagoon system is environmentally superior to a dry waste system and that, in any event, Collins=s groundwater
resources were very unlikely to be affected even by the failure of the lagoon system. We find substantial
evidence in the record indicating that Collins is not an affected person and therefore supporting the
Commission=s decision denying Collins=s hearing request.7
7
Collins argues that United Copper Industries v. Grissom, 17 S.W.3d 797, requires us to reach a
different result. We disagree. In that case, the Commission granted United Copper an air-quality permit
allowing it to operate copper melting furnaces within two miles of Grissoms=s home. United Copper, 17
S.W.3d at 799. Grissom requested a contested case hearing, claiming that the plant might affect his health
and the health of his two sons, all of whom suffered from serious asthmatic conditions. Id. at 800. United
Copper=s own data, submitted with its application, indicated that its operations would cause increased levels
of lead and copper in the air at Grissom=s home and the school attended by one of his sons. Id. at 800, 803.
AConsidering Grissom=s unique health concerns@ we held that the Commission erred in determining that
Grissom was not an affected person. Id. at 803.
In this case, however, the evidence before the Commission indicated that the lagoons would likely
reduce odor emissions. Moreover, the only adverse health concern that Collins raisesCgroundwater
contaminationCis based entirely on his prediction that the clay liners of the lagoons will fail and his
11
Due Process
In his second issue, Collins argues that he was denied due process. Due process claims
require a two-part analysis. We must first determine whether Collins has a liberty or property interest that is
entitled to pre-deprivation procedural protection. If so, we must then determine what process is due. See
University of Tex. Med. Sch. v. Than, 901 S.W.2d 926, 929 (Tex. 1995). While the environmental
damage and nuisance that Collins predicts would surely deprive him of his valuable property rights, we note
that the permit does not authorize such failures. See 30 Tex. Admin. Code ' 305.122(c) (Athe issuance of a
permit does not authorize any injury to persons or property or an invasion of any other property rights@). The
permit itself requires an operation subject to oversight so that it will not deprive Collins of any concrete liberty
or property interest. Mere speculation of failure in the face of conflicting evidence about the improved
operation of the site under the permit does not deprive Collins of protected liberty or property rights.
Even if Collins=s speculations were construed as property or liberty interests, he was
unquestionably afforded all the process he was due. What process is due is measured by a flexible standard
that depends on the practical requirements of the circumstances. See Than, 901 S.W.2d at 930 (citing
Matthews v. Eldridge, 424 U.S. 319 (1976)). The court must balance: (1) the government=s interest,
including the fiscal and administrative burdens of additional or substitute procedural requirements; (2) the
private interest that will be affected by the official action; and (3) the risk of an erroneous deprivation of such
interests by the actual procedures used. Id. No matter how weighty the private interest is, due process
unsupported assumption that the failure will be of such magnitude as to contaminate his groundwater.
12
never requires all the trial-like procedures of a statutory contested case hearing. See Texas Workers=
Comp. Comm=n v. Bridge City, 900 S.W.2d 411, 416 (Tex. App.CAustin 1995, writ denied).
We hold that Collins received all the process he was due. He filed several pleadings and
submitted evidence. He participated in two Commission meetings where he was allowed to explain his
opposition and respond to the contentions of B&N. When he disputed the accuracy of B&N=s map, the
issue was referred to SOAH for a limited contested case hearing on the issue. In short, he was afforded
ample opportunity for his concerns and request to be heard. He simply disagrees with the Commission=s
decision.
Findings and Conclusions
In his third issue, Collins argues that the Commission erred in not including findings of fact
and conclusions of law in its order denying him a contested case hearing. We note initially that the
Commission adopted the findings and conclusions of the ALJ about the accuracy of the map. We construe
Collins=s complaint to challenge the failure of the Commission to enter further findings of fact and conclusions
of law on the ultimate issues of whether Collins is an affected person and whether his request for a hearing is
reasonable and supported by competent evidence.
A motion for rehearing is a prerequisite to appeal a denial of a hearing request. See 30 Tex.
Admin. Code '' 55.27(g), 80.271 (2002). Its purpose is to inform the agency of the claimed error and
allow the agency the opportunity to correct the error or prepare to defend against it. Hill v. Board of Trs.
of the Ret. Sys., 40 S.W.3d 676, 678 (Tex. App.CAustin 2001, no pet.). We have specifically held that a
party to a contested case hearing must complain about a lack of findings of fact and conclusions of law in its
13
motion for rehearing in order to preserve that complaint for appeal. BFI Waste Sys., Inc. v. Martinez
Envtl. Group, No. 3-02-218-CV, slip op. at 11, 2002 Tex. App. Lexis 8216 (Tex. App.CAustin Nov. 21,
2002, no pet. h.). Under the regulations applicable to this case, the same procedures for filing a motion for
rehearing after a contested case hearing apply when a hearing request is denied. See 30 Tex. Admin. Code
'' 55.27(g), 80.271 (2002). Because Collins did not complain in his motion for rehearing about the
Commission=s failure to make findings and conclusions, we hold that this issue was not preserved for review.
But even had Collins preserved his complaint, he still could not prevail. The determination of
the validity of a hearing request is not, in itself, a contested case hearing subject to the Administrative
Procedure Act, 30 Tex. Admin. Code ' 55.27(a) (2002), and therefore section 2001.141(b) of the
government code requiring findings of facts and conclusions of law does not apply.
CONCLUSION
There is substantial evidence in the record supporting the Commission=s decision to deny
Collins=s request for a contested case hearing. Furthermore, Collins was afforded all the process he was
due; he failed to preserve his complaint about the lack of findings and conclusions, which were not required.
We therefore affirm the judgment of the trial court affirming the Commission=s order.
Bea Ann Smith, Justice
Before Justices Kidd, B. A. Smith and Patterson
14
Affirmed
Filed: December 31, 2002
Publish
15