Harris County and the State of Texas Acting by and Through the Texas Commission on Environmental Quality v. S.K. and Brothers, Inc., Trey Melcher and Yvonne Evie Melcher ( 2019 )

Reversed and Remanded and Memorandum Opinion filed November 5, 2019
In The
Fourteenth Court of Appeals
NO. 14-17-00984-CV
HARRIS COUNTY AND THE STATE OF TEXAS ACTING BY AND
THROUGH THE TEXAS COMMISSION ON ENVIRONMENTAL
QUALITY, Appellants and Cross-Appellees
V.
S.K. AND BROTHERS, INC., D/B/A RIVER OAKS CLEANERS; TREY
MELCHER AND YVONNE EVIE MELCHER, TRUSTEES OF THE EVIE
MELCHER NON-EXEMPT TRUST; MELCHER INVESTMENTS; AND
BILL E. LEWIS AND RICHARD L. KERR, JR., CO-TRUSTEES OF THE
LUCILE BIRMINGHAM MELCHER MANAGEMENT TRUST AND THE
LEROY MELCHER MARITAL DEDUCTION TRUST; AND FORMER
CO-TRUSTEES OF THE EVIE MELCHER NON-EXEMPT TRUST,
Appellees and Cross-Appellants
On Appeal from the 215th District Court
Harris County, Texas
Trial Court Cause No. 2011-52524
MEMORANDUM OPINION
Harris County and the State of Texas, acting by and through the Texas
Commission of Environmental Quality (TCEQ), challenge the trial court’s
dismissal of their lawsuit against appellees (1) S.K. and Brothers, Inc., d/b/a River
Oaks Cleaners; (2) Trey Melcher and Yvonne Evie Melcher, Trustees of the Evie
Melcher Non-Exempt Trust; (3) Melcher Investments; and (4) Bill E. Lewis and
Richard L. Kerr, Jr., Co-Trustees of the Lucile Birmingham Melcher Management
Trust and the Leroy Melcher Marital Deduction Trust, and former Co-Trustees of
the Evie Melcher Non-Exempt Trust (appellees (2), (3), and (4) are collectively the
Melcher Defendants) for lack of standing. S.K. and Brothers and the Melcher
Defendants, raise a cross-issue on appeal challenging the trial court’s order
assessing sanctions against them. Because we conclude Harris County and the
State have standing to pursue their environmental claims against S.K. and Brothers
and the Melcher Defendants, we reverse the trial court’s dismissal order and
remand the case to the trial court for further proceedings. Having reversed the trial
court’s dismissal order and remanded this case back to the trial court for further
proceedings, we need not address S.K. and Brothers and the Melcher Defendants’
cross-issue challenging the trial court’s now interlocutory sanctions order, which
the trial court may, in its discretion, reconsider on remand.
BACKGROUND
The Melcher Defendants own a shopping center located in Houston. S.K.
and Brothers has operated River Oaks Cleaners at the Melcher Defendants’
shopping center since 1989. It is undisputed that S.K. and Brothers has continually
used perchloroethylene (PCE) in its dry-cleaning operations since that date. The
State considers PCE an industrial hazardous waste and a municipal hazardous
waste.
2
Harris County filed suit against S.K. and Brothers and the Melcher
Defendants in 2011, alleging that the dry-cleaning business had caused
groundwater contamination with PCE, had failed to timely submit complete and
correct Annual Waste Summaries, and also that neither S.K. and Brothers nor the
Melcher Defendants have taken any actions to contain, control, or remediate the
contamination. See Tex. Water Code § 7.351(a) (authorizing a local government to
“institute a civil suit under Subchapter D in the same manner as the commission in
a district court by its own attorney for the injunctive relief or civil penalty, or both,
as authorized by this chapter against the person who committed, is committing, or
is threatening to commit the violation.”). Harris County also alleged that neither
S.K. and Brothers nor the Melcher Defendants have filed an application to the
TCEQ’s Dry Cleaner Remediation Program. See Tex. Health & Safety Code §§
374.001-.253. Harris County sought civil penalties and injunctive relief pursuant
to the Texas Water Code, the Texas Health and Safety Code, and various rules and
regulations enacted pursuant to those statutes. Harris County also joined TCEQ as
a necessary and indispensable party as required by the Water Code.
The case went to trial before a jury in 2013, but the trial court declared a
mistrial. The trial court then assessed sanctions, jointly and severally, against most
of the defendants and their trial counsel. 1 Following the mistrial, additional
discovery and environmental testing was performed during 2014 and 2015. S.K.
and Brothers and the Melcher Defendants then filed a plea to the jurisdiction and
motion to dismiss arguing that neither Harris County nor TCEQ have standing to
bring the claims alleged in this lawsuit because the Dry Cleaner Remediation
1
The trial court stated in its sanctions order that, “for purposes of this Order, the
‘Defendants’ refers to S.K. and Brothers, Inc. and Trey Melcher and Yvonne Evie Melcher,
Trustees of the Evie Melcher Non-Exempt Trust; Melcher Investments. The ‘Defendants’
Attorneys’ refers to Nathan Beedle and William F. Harmeyer.”
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Program provides the exclusive remedy for addressing environmental issues
related to retail dry cleaners. Following a hearing, the trial court granted the plea
and dismissed the case. The trial court vacated all orders previously signed in the
case, except the order assessing sanctions. Harris County and TCEQ filed this
appeal soon thereafter.
ANALYSIS
In a single issue on appeal, Harris County argues that the trial court erred
when it granted S.K. and Brothers and the Melcher Defendants’ plea to the
jurisdiction because the Water Code gives it standing to sue for alleged violations
of Texas environmental laws. TCEQ raises two issues on appeal. In its first issue,
TCEQ argues that the Dry Cleaner Remediation Program is not the exclusive
avenue for the State of Texas, or local governments, to pursue the clean-up of
contaminated retail dry-cleaner sites. In its second issue, TCEQ asserts that Harris
County has standing to bring a civil suit, and TCEQ has standing as an
indispensable party, when the suit is for violations of laws, and regulations
promulgated thereunder, found in section 7.351 of the Texas Water Code. We
address these issues together.
I. Standard of review and applicable law
Standing, a component of subject-matter jurisdiction, is a constitutional
prerequisite to maintaining suit. Tex. Ass’n. of Bus. v. Tex. Air Control Bd., 852
S.W.2d 440, 444–45 (Tex. 1993); Concerned Cmty. Involved Dev., Inc. v. City of
Houston, 209 S.W.3d 666, 670 (Tex. App.—Houston [14th Dist.] 2006, pet.
denied). A party’s standing to pursue and maintain a cause of action is a question
of law that we review de novo. In re H.S., 550 S.W.3d 151, 155 (Tex. 2018);
Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998). In statutory
standing cases, such as the present case, we apply statutory-interpretation
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principles to determine whether the plaintiff asserting the claim under review falls
within the category of parties upon whom standing has been conferred by the
Legislature. In re H.S., 550 S.W.3d at 155. Our task in construing statutes is to
effectuate the Legislature’s expressed intent, not to second-guess the policy
choices it made, or to weigh the effectiveness of their results. Ritchie v. Rupe, 443
S.W.3d 856, 866 (Tex. 2014). We focus on the words of the statute, which best
reveal legislative intent. Id. We presume that every word of a statute was used for
a purpose, and every omitted word was purposefully not chosen. Texas Law
Shield, LLP v. Crowley, 513 S.W.3d 582, 588 (Tex. App.—Houston [14th Dist.]
2016, pet. denied). In determining the plain meaning of a statute, we construe the
language according to the rules of grammar and common usage. Id. “As a general
principle, we eschew constructions of a statute that render any statutory language
meaningless or superfluous.” City of Dallas v. TCI West End, Inc., 463 S.W.3d 53,
57 (Tex. 2015).
When reviewing the question of standing, we take the allegations in the
plaintiff’s petition as true and construe them in favor of the plaintiff. In re H.S.,
550 S.W.3d at 155. In addition to the pleadings, we also consider relevant
evidence offered by the parties. Id.
II. The trial court erred when it granted the plea to the jurisdiction and
dismissed Harris County’s enforcement lawsuit.
Harris County filed suit against S.K. and Brothers and the Melcher
Defendants pursuant to section 7.351(a) of the Texas Water Code. This section
provides:
Subject to Section 7.3511, if it appears that a violation or threat of
violation of Chapter 16, 26, or 28 of this code, Chapter 361, 371, 372,
or 382, Health and Safety Code, a provision of Chapter 401, Health
and Safety Code, under the commission’s jurisdiction, or Chapter
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1903, Occupations Code, or a rule adopted or an order or a permit
issued under those chapters or provisions has occurred or is occurring
in the jurisdiction of a local government, the local government or, in
the case of a violation of Chapter 401, Health and Safety Code, a
person affected as defined in that chapter, may institute a civil suit
under Subchapter D [of Health and Safety Code sections 401.01-.119]
in the same manner as the commission in a district court by its own
attorney for the injunctive relief or civil penalty, or both, as authorized
by this chapter against the person who committed, is committing, or is
threatening to commit the violation.
Tex. Water Code § 7.351(a) (footnote omitted).
Harris County alleged, among other things, that S.K. and Brothers and the
Melcher Defendants were continually violating Chapter 26 of the Texas Water
Code and the Texas Administrative Code by discharging hazardous waste,
specifically PCE, into the State’s water. See Tex. Water Code § 26.121(a)(1)
(stating that no person may “discharge sewage, municipal waste, recreational
waste, agricultural waste, or industrial waste into or adjacent to any water in the
state”); 30 Tex. Admin. Code §§ 335.2, 335.4 (addressing permits and prohibiting
disposal of industrial solid waste or municipal hazardous waste into or adjacent to
waters in the state without obtaining specific authorization for such discharges
from TCEQ). In addition, Harris County alleged that S.K. and Brothers failed to
timely submit complete and correct Annual Waste Summaries as required by the
Texas Administrative Code. See 30 Tex. Admin. Code § 335.9 (requiring
generators of hazardous waste to make annual reports detailing handling of
hazardous waste). Finally, Harris County alleged that the Melcher Defendants, as
S.K. and Brothers’s landlord, were liable for violating this requirement because
they allowed S.K. and Brothers to continue occupying the property and to operate a
dry-cleaning business, despite provisions in the lease contractually obligating S.K.
and Brothers to comply with all laws, rules, and regulations of governmental
authorities. Harris County sought civil penalties and injunctive relief against S.K.
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and Brothers and the Melcher Defendants. See Tex. Water Code § 7.102 (detailing
civil penalties for continuing violations).
In their plea to the jurisdiction, S.K. and Brothers and the Melcher
Defendants 2 argued that Chapter 374 of the Texas Health and Safety Code
preempts Harris County’s claims because, in their view, Chapter 374 “exclusively
provides an administrative process to address environmental issues related to all
retail dry cleaners.” In support of this exclusive-jurisdiction contention, S.K. and
Brothers and the Melcher Defendants cite section 374.002 of the Dry Cleaner
Environmental Response statute. Section 374.002 provides “to the extent that this
chapter is inconsistent or in conflict with Chapter 361 or other general law, this
chapter prevails.” Tex. Health & Safety Code § 374.002. On appeal, they
reinforce their argument that section 374.002 bars the application of any other
environmental laws or rules to retail dry cleaners by pointing out the statutory
construction principle that specific statutes prevail over general statutes. As a
result of this more specific statute, S.K. and Brothers and the Melcher Defendants
assert that Harris County and TCEQ lack standing to pursue the lawsuit against
them for civil penalties and injunctive relief. We disagree.
We turn first to the statutory construction argument that a specific statute
always controls over a more general one. Far from being a universal rule of
statutory construction, this principle “applies only when the statutes at issue are
ambiguous or irreconcilable.” State ex rel. Best v. Harper, 562 S.W.3d 1, 10 (Tex.
2018) (citing Tex. Gov’t Code § 311.026(a)). The Supreme Court of Texas has
instructed that a court construes “statutes by first looking to the statutory language
for the Legislature’s intent, and only if we cannot discern legislative intent in the
2
While the Melcher Defendants initially filed the plea to the jurisdiction, S.K. and
Brothers joined in the plea about two weeks after it was filed.
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language of the statute itself do we resort to canons of construction or other aids
such as which statute is more specific.” Tex. Lottery Comm’n v. First State Bank
of DeQueen, 325 S.W.3d 628, 639 (Tex. 2010). Further, we are to construe
statutes so as to harmonize them with other relevant laws, if possible. In re
M.M.M., 428 S.W.3d 389, 395 (Tex. App.—Houston [14th Dist.] 2014, pet.
denied).
We conclude that section 374.002 of the Health and Safety Code is not
ambiguous. We therefore look to its plain language to resolve whether section
374.002 preempts all other environmental enforcement laws. We conclude that it
does not, because it expressly states that Chapter 374, the Dry Cleaner
Environmental Response statute, prevails over other law only to the extent Chapter
374 “is inconsistent or in conflict with” that other law. See Tex. Health & Safety
Code § 374.002; State ex rel. Best, 562 S.W.3d at 9 (“The TCPA’s dismissal
provisions complement, rather than contradict, the removal statute.”); Cash Am.
Intern., Inc. v. Bennett, 35 S.W.3d 12, 15 (Tex. 2000) (“An agency has exclusive
jurisdiction when the Legislature gives the agency alone the authority to make the
initial determination in a dispute.”); In re Volkswagen Clean Diesel Litigation, 557
S.W.3d 78, 85 (Tex. App.—Austin 2017, orig. proceeding) (“Had the Legislature
intended to limit [Clean Air Act] enforcement actions, it would have included
language to that effect in the provision as it did in other sections of Chapter 7.”);
Bexar Metro. Water Dist. v. City of Bulverde, 156 S.W.3d 79, 90 (Tex. App.—
Austin 2004, pet. denied) (stating that “courts are not deprived of their jurisdiction
unless a statute explicitly grants an administrative agency exclusive jurisdiction.”).
Additionally, when the Legislature seeks to make a remedy exclusive, it does so
expressly. See, e.g., Tex. Tax Code § 42.09 (procedures prescribed for
adjudication of grounds of protest for property taxes “are exclusive”); Tex. Bus.
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Orgs. Code § 153.256(d) (a charging order is the “exclusive” remedy by which a
judgment creditor of a partner may satisfy a judgment out of the judgment debtor’s
partnership interest); City of Richardson v. Responsible Dog Owners of Tex., 794
S.W.2d 17, 19 (Tex. 1990) (“Thus, the mere fact that the legislature has enacted a
law addressing a subject does not mean that the subject matter is completely
preempted.”) Twin Creeks Golf Grp. v. Sunset Ridge Owners Ass’n, 537 S.W.3d
535, 541 (Tex. App.—Austin 2017, no pet.) (declining to interpret Section 82.0675
of the Property Code to exempt condominium owners because if the Legislature
had intended to exempt them, “it could have done so expressly”); Rieves v. Buc-
ee’s Ltd., 532 S.W.3d 845, 854 (Tex. App.—Houston [14th Dist.] 2017, no pet.)
(“Section 15.52 of the Covenants Not to Compete Act provides that the criteria for
enforceability of a covenant in section 15.50 and the procedures and remedies for
enforcement in section 15.51 ‘are exclusive and preempt’ any other enforceability
criteria or ‘procedures and remedies in an action to enforce a covenant not to
compete under the common law or otherwise’”).
We therefore turn to whether S.K. and Brothers and the Melcher Defendants
have pointed out an irreconcilable conflict between another law and Chapter 374.
They initially assert that section 374.055 of the Health and Safety Code provides
such a conflict because it directs TCEQ to “administer this chapter in accordance
with this section” and further directs that it should “deal with contamination from
dry cleaning facilities by using money in the fund.” See Tex. Health & Safety
Code § 374.055(a), (b). Nothing in the language of this section, however,
addresses, much less limits, the authority of local governments such as Harris
County to pursue enforcement actions against retail dry cleaners outside the
framework of Chapter 374. See Dealers Elec. Supply Co. v. Scroggins Const. Co.,
Inc., 292 S.W.3d 650, 658 (Tex. 2009) (stating that conflicting statutory provisions
9
must be construed to give effect to both if at all possible); In re Volkswagen Clean
Diesel Litigation, 557 S.W.3d at 85 (“nothing in the text of the enforcement
provisions imposes a limitation on the filing of a local-government suit brought
after the State has filed suit or implies the existence of a time line.”). Next, S.K.
and Brothers and the Melcher Defendants cite to section 374.051, which directs the
TCEQ to establish the rules necessary to administer and enforce Chapter 374. See
Tex. Health & Safety Code § 374.051. Once again, nothing in the language of this
section limits the authority of local governments to pursue environmental
enforcement actions against dry cleaners. See Dealers Elec. Supply Co., 292
S.W.3d at 658; In re Volkswagen Clean Diesel Litigation, 557 S.W.3d at 85. They
then cite sections 374.151 and 374.152 which prohibit releases of dry-cleaning
solvents and require emergency action by the TCEQ if the release poses a threat to
human health or to the environment. See Tex. Health & Safety Code § 374.151,
.152. Again, nothing in the language of these sections limit the authority of local
governments to pursue enforcement actions against dry cleaners for non-
emergency releases. See Dealers Elec. Supply Co., 292 S.W.3d at 658; In re
Volkswagen Clean Diesel Litigation, 557 S.W.3d at 85. The same is true for the
remaining cited sections of Chapter 374. See Tex. Health & Safety Code §
374.153 (requiring TCEQ to take corrective action after release from dry-cleaning
facility); .202 (creating mechanism for TCEQ to hold owner responsible for costs
of corrective action taken to address release); .251 (providing for judicial review of
administrative orders by TCEQ). Finally, S.K. and Brothers and the Melcher
Defendants cite section 7.0525 of the Texas Water Code in support of their
argument. This section details the penalties the TCEQ may assess for violations of
section 374.252 of the Health and Safety Code. See Tex. Water Code § 7.0525.
Again, this section is limited to the penalties assessed for violations of section
374.252, and it does not limit the authority of local governments to pursue
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enforcement actions against dry cleaners. See Dealers Elec. Supply Co., 292
S.W.3d at 658; In re Volkswagen Clean Diesel Litigation, 557 S.W.3d at 85.
Because S.K. and Brothers and the Melcher Defendants have not pointed out
any conflict between Chapter 374 and the statutes and rules and regulations Harris
County relies on in its enforcement action, we conclude that Chapter 374 of the
Health and Safety Code does not preempt section 7.351 of the Texas Water Code,
which expressly authorizes local governments to file civil suits seeking civil
penalties and injunctive relief against those who are responsible for unauthorized
discharges of municipal and industrial waste into or adjacent to any water in the
state. This conclusion is reinforced by the language found in section 374.207
providing that the State and other persons—excluding local governments—may
not initiate suits for judicial and administrative actions to compel corrective action
or recover costs once a dry-cleaning site’s owners have been deemed eligible to
have corrective action costs paid by the fund. See Tex. Health & Safety Code §
374.207. To be eligible to have corrective action costs paid by the “Dry Cleaning
Facility Release Fund,” the dry-cleaning site owner must comply with the
requirements set forth in section 374.203, including applying for a ranking under
section 374.154, titled “Ranking of Contaminated Dry [-] Cleaning Sites.” This
provision does exempt some dry cleaners from some types of claims. 3 By
exempting only certain dry cleaners and certain claims, the Legislature expressed
its intent to not make the Dry Cleaner Remediation Program the exclusive remedy
in all circumstances. See Cont’l Cas. Ins. Co. v. Functional Restoration Assocs.,
19 S.W.3d 393, 401 (Tex. 2000) (“Our conclusion that section 401.021 does not
provide a right to judicial review for every APA hearing allowed by the Act is
supported by the fact that the Legislature expressly included a right to judicial
3
It is undisputed that S.K. and Brothers and the Melcher Defendants have not applied for
a ranking under section 374.154.
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review for certain APA hearings.”); Dallas Merch.’s & Concessionaire’s Ass’n v.
City of Dallas, 852 S.W.2d 489, 493 n.7 (Tex. 1993) (reasoning that inclusion of
one thing in a statute suggests exclusion of all others); see also In re M.N., 262
S.W.3d 799, 802 (Tex. 2008) (“We also presume the Legislature included each
word in the statute for a purpose, and that words not included were purposefully
omitted.”) (internal citations omitted).
Because Harris County had statutory authorization to file an enforcement
action against S.K. and Brothers and the Melcher Defendants, we hold that the trial
court erred when it granted the plea to the jurisdiction. See In re Sullivan, 157
S.W.3d 911, 915 (Tex. App.—Houston [14th Dist.] 2005) (orig. proceeding) (“In
statutory standing cases, such as this, the analysis is a straight statutory
construction of the relevant statute to determine upon whom the Legislature
conferred standing and whether the claimant in question falls in that category.”).
We sustain Harris County’s and TCEQ’s issues on appeal.
CONCLUSION
Having sustained Harris County’s and TCEQ’s issues on appeal, we reverse
the trial court’s order granting the plea to the jurisdiction and dismissing Harris
County’s and TCEQ’s causes of action. We remand the case to the trial court for
further proceedings. 4
4
Having reversed the dismissal order and remanded the case back to the trial court for
further proceedings, we need not address S.K. and Brothers and the Melcher Defendants cross-
issue challenging the trial court’s now interlocutory sanctions order, which the trial court may, in
its discretion, reconsider on remand. See Tex. R. App. P. 47.1; Nice v. Dodeka, L.L.C., No. 09-
10-00014-CV, 2010 WL 4514174, at *7 n.3 (Tex. App.—Beaumont Nov. 10, 2010, no pet.)
(mem. op.) (“Additionally, because we have reversed the trial court’s judgment, the trial court’s
decisions to deny Nice’s motions for summary judgment are interlocutory. Consequently, the
claims Nice has raised in his counterclaim are still before the trial court, unless these claims are
resolved prior to trial through dispositive motions.”).
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/s/ Jerry Zimmerer
Justice
Panel consists of Justices Wise, Zimmerer, and Spain.
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