Harris County Hospital District v. Public Utility Commission of Texas ( 2015 )

ACCEPTED
03-15-00386-CV
7820016
THIRD COURT OF APPEALS
AUSTIN, TEXAS
11/13/2015 12:42:31 PM
JEFFREY D. KYLE
CLERK
No. 03-15-00386-CV
FILED IN
IN THE COURT OF APPEALS 3rd COURT OF APPEALS
AUSTIN, TEXAS
FOR THE THIRD DISTRICT OF TEXAS
11/13/2015 12:42:31 PM
AT AUSTIN JEFFREY D. KYLE
Clerk
HARRIS COUNTY HOSPITAL DISTRICT,
Appellant
v.
PUBLIC UTILITY COMMISSION OF TEXAS,
Appellee
Appealed from the 250th District Court
of Travis County, Texas
Trial Court Cause No. D-1-GN-09-002116
APPELLANT’S REPLY BRIEF
VINCE RYAN
Harris County Attorney
BRUCE S. POWERS
Assistant County Attorney
State Bar No. 16215500
1019 Congress, 15th Floor
Houston, Texas 77002
(713) 274-5144 (telephone)
(713) 755-8924 (facsimile)
bruce.powers@cao.hctx.net
ATTORNEY FOR APPELLANT
TABLE OF CONTENTS
INDEX OF AUTHORITIES.................................................................................... iii
ARGUMENT ............................................................................................................. 1
PRAYER .................................................................................................................... 7
CERTIFICATE OF COMPLIANCE ......................................................................... 8
CERTIFICATE OF SERVICE .................................................................................. 8
ii
INDEX OF AUTHORITIES
CASES page
Barrow, Wade, Guthrie & Co. v. Stroud,
125 S.W.2d 365 (Tex. Civ. App.―Waco 1939, no writ) .......................................... 2
Castle v. Harris,
960 S.W.2d 140 (Tex. App.―Corpus Christi 1997, no pet.) .................................... 5
Jay Petroleum, L.L.C. v. EOG Resources, Inc.,
332 S.W.3d 534 (Tex. App.―Houston [1st Dist.] 2009, pet. denied) ...................... 4
Lopez v. Public Utility Comm’n of Texas,
816 S.W.2d 776 (Tex. App.―Austin 1991, writ denied) .......................................... 6
In re State,
159 S.W.3d 203 (Tex. App.―Austin 2005, orig. proceeding).................................. 3
State v. Anderson Courier Service,
222 S.W.3d 62 (Tex. App.―Austin 2005, pet. denied) ............................................ 3
Texas Education Agency v. Leeper,
893 S.W.2d 432 (Tex. 1994) ...................................................................................... 6
STATUTES
Tex. Gov’t Code Ann. § 311.021 ............................................................................... 5
Tex. Util. Code Ann. § 15.002 ................................................................................... 6
Tex. Util. Code Ann. § 15.003(a) .......................................................................... 3, 4
Tex. Util. Code Ann. § 15.003(b) .............................................................................. 3
SESSION LAWS
Tex. H.B. 1, sec. 16.04(b), 84th Leg., R.S. (2015) .................................................... 6
iii
No. 03-15-00386-CV
IN THE COURT OF APPEALS
FOR THE THIRD DISTRICT OF TEXAS
AT AUSTIN
HARRIS COUNTY HOSPITAL DISTRICT,
Appellant
v.
PUBLIC UTILITY COMMISSION OF TEXAS,
Appellee
Appealed from the 250th District Court
of Travis County, Texas
Trial Court Cause No. D-1-GN-09-002116
APPELLANT’S REPLY BRIEF
TO THE HONORABLE COURT OF APPEALS:
ARGUMENT
The Commission contends that the Hospital District never requested a
hearing on the District’s Section 15.003 request for fees until after the final
judgment was signed. Brief of Appellee, p. 6. It argues that the District cannot
complain that the trial court never conducted a Section 15.003 hearing “when the
District failed to timely request such a hearing.” Brief of Appellee, p. 7. However,
in the Hospital District’s Response to the Bench Brief of the Public Utility
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Commission of Texas the District explained why the court “should hear and award
HCHD’s the fees and costs under Section 15.003.” CR 145, 146. In doing so, the
District argued that its claims “have never been adjudicated, which is why this
court should hear them.” CR 146. Thus, the Hospital District did request to be
heard on its fee claims prior to the entry of the final judgment. In any event, a
failure to request a hearing, without more, does not preclude a party from seeking
relief if it is otherwise warranted. Compare Barrow, Wade, Guthrie & Co. v.
Stroud, 125 S.W.2d 365, 368 (Tex. Civ. App.―Waco 1939, no writ)(“The mere
fact that plaintiffs failed to request a trial of the case for a period of approximately
two years after it had been filed does not as a matter of law establish negligence on
their part.”).
The Commission also contends that the Hospital District “failed to assign the
fees issue as error in its first appeal” and “waived those issues”. Brief of Appellee,
p. 11. The Hospital District could not have assigned the fees issue as error in the
first appeal for two reasons. First, as the Commission correctly notes in its brief,
prior to the first appeal “[t]he trial court affirmed the Commission’s order and
made no mention of the Section 15.003 request.” Brief of Appellee, p. 2.
Therefore, the trial court had committed no error concerning the fees issue at that
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time, because it had not ruled on the fees issue at all.1 Second, the Hospital
District had not prevailed on the merits at that time. Only a party who “prevails in
a proceeding for review of a commission order or decision” is entitled to recover
fees. Tex. Util. Code Ann. § 15.003(a). It was only when this Court reversed the
trial court’s judgment at the conclusion of the first appeal that the Hospital District
became entitled to recover fees. Consequently, the Commission’s waiver
argument is without merit.
The Commission further contends that the Hospital District misinterprets
footnote 6 in the Court’s prior opinion in this case. In that regard the Commission
argues that the Court’s citation of Section 15.003 of the Utilities Code “supports
the conclusion that this Court was not remanding the case to the trial court for a
Section 15.003 fee decision.” Brief of Appellee, p. 15. The Hospital District
submits that, in view of the overall point made in footnote 6, it seems more likely
that the citation of Section 15.003 was a reminder that it is the trial court and not
the appellate court or the Commission which sets the amount of attorney’s fees in a
proceeding for judicial review. Tex. Util. Code Ann. § 15.003(b). The Court had
concluded that the Hospital District’s legal analysis was correct. This made the
1
This lack of ruling on the fees issue distinguishes this case from State v. Anderson Courier
Service, 222 S.W.3d 62 (Tex. App.―Austin 2005, pet. denied), cited by the Commission. Prior
to the first appeal in the Anderson Courier case, the district court “denied Anderson Courier’s
request for attorney’s fees.” In re State, 159 S.W.3d 203, 204 (Tex. App.―Austin 2005, orig.
proceeding). Since the district court had actually ruled on the fees issue in Anderson Courier, it
became necessary to make that ruling an issue on appeal to avoid waiver.
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Hospital District the prevailing party in this proceeding for judicial review, thereby
entitling it to recover reasonable fees for attorneys and expert witnesses and other
costs. Tex. Util. Code Ann. § 15.003(a). However, this Court did not have
jurisdiction to initiate such an award. The trial court was ordered to certify and
observe this Court’s decision. This was not mere “boilerplate”. The Hospital
District submits that it was a sufficient instruction to require the trial court to
consider the Hospital District’s claim for attorney’s fees and expert witness fees.
Compare Jay Petroleum, L.L.C. v. EOG Resources, Inc., 332 S.W.3d 534, 540
(Tex. App.―Houston [1st Dist.] 2009, pet. denied) discussed in the Hospital
District’s opening brief.
The Commission also argues that “[t]he District’s case does not come within
the plain language of any right to recover fees under Section 15.003(a) of the
Utilities Code.” Brief of Appellee, p. 15. In support of this argument the
Commission adroitly directs the Court’s attention away from the Hospital
District’s allegations in this proceeding for review and focuses on the Hospital
District’s complaint before the Commission. However, it is the allegations “in a
proceeding for review” which control. Tex. Util. Code Ann. § 15.003(a). In the
instant proceeding the Hospital District alleged the following:
26. Together, PURA Sections 53.002, and 53.003, and 53.004(a)
prohibit public utilities from charging, demanding or receiving
compensation from a person that is unjust, unreasonable, or other than
the compensation prescribed by applicable tariff. Order No. 19, Order
4
Denying Appeal of Order No. 19, Finding of Fact Nos. 5 and 10, and
Conclusion of Law No. 7 establish that the rate AT&T charged
HCHD throughout the period in question was unjust and unreasonable
and therefore improper and prohibited.
27. Consistent with PURA and Substantive Rule
§26.27(a)(3)(B)(i), under AT&T's GENERAL EXCHANGE TARIFF,
Section 23, Paragraph 6, Sheet 11, AT&T is specifically required to
refund overbillings "for the entire period of the overcharges". Under
the Filed Rate Doctrine as applied to this case, filed tariffs govern a
utility's relationship with its customers and have the force and effect
of law, until suspended or set aside. Regulated entities are prohibited
from charging rates for their services other than those properly filed
with the appropriate regulatory authority. Likewise, the doctrine
precludes the rate-setting body from altering filed and approved rates
retroactively. See Southwestern Bell Telephone Company v. Metro-
Link Telecom, Inc., 919 S.W.2d 687, 692 (Tex. App.―Houston [14th
Dist.] 1996, writ denied); see also PURA §11.003(16). Therefore,
AT&T, by its own tariff, is prohibited from refunding anything less
than the full amount of the overbillings for the "entire period of the
overcharges."
CR 10. The Hospital District submits that these allegations are clearly sufficient to
invoke the provisions of Section 15.003 of the Utilities Code.
Finally, the Commission argues that the Hospital District cannot be awarded
attorney’s fees, “because the Legislature has neither created a regulation fund nor
appropriated money for such a fund and has not waived the Commission’s
immunity.” Brief of Appellee, p. 16. In enacting Section 15.003 of the Utilities
Code, it is presumed that “the entire statute is intended to be effective” and “a just
and reasonable result is intended.” Tex. Gov’t Code Ann. § 311.021. See Castle v.
Harris, 960 S.W.2d 140, 143 (Tex. App.―Corpus Christi 1997, no pet.)
5
(“Pursuant to section 311.021, courts must presume that all parts of a statute were
meant to have some effect.”). Therefore, it cannot be presumed that Section
15.003 is simply meaningless and can be ignored. Moreover, House Bill 1, the
current appropriations bill passed by the Legislature in the last legislative session
and cited by the Commission in its brief, contains the following provision:
“State agencies appropriated funds by this Act may expend funds
appropriated elsewhere in this Act for the purposes of paying
settlements and judgments against the state for causes brought in a
federal court or a court in this state under specific statutory authority.”
Tex. H.B. 1, sec. 16.04(b), 84th Leg., R.S. (2015)(emphasis added). Thus,
although there are certain limitations on this legislative authorization, the absence
of a specific appropriation for the “regulation fund” does not automatically
preclude a recovery under the statute.
With regard to the question of immunity, this Court has held that the State
has consented to suits for judicial review of the Commission’s final orders. Lopez
v. Public Utility Comm’n of Texas, 816 S.W.2d 776, 782 (Tex. App.―Austin
1991, writ denied). See Tex. Util. Code Ann. § 15.002 (“The commission must be
a defendant in a proceeding for judicial review.”). By authorizing suits for judicial
review of the Commission’s orders and decisions and authorizing awards of
attorney’s fees and expert witness fees, the Texas Utilities Code necessarily waives
governmental immunity for such awards. Compare Texas Education Agency v.
Leeper, 893 S.W.2d 432, 446 (Tex. 1994)(“We conclude that by authorizing
6
declaratory judgment actions to construe the legislative enactments of
governmental entities and authorizing awards of attorney’s fees, the DJA
necessarily waives governmental immunity for such awards.”).
PRAYER
WHEREFORE, PREMISES CONSIDERED, Appellant Harris County
Hospital District respectfully prays that the portion of the trial court’s judgment
which denied the District’s claim for attorney’s fees and expert witness fees be
reversed and remanded with instructions that the trial court conduct a hearing to
determine the amount of reasonable attorney’s fees and expert witness fees which
should be awarded to the District.
Respectfully submitted,
VINCE RYAN
Harris County Attorney
/s/ Bruce S. Powers
Bruce S. Powers
Assistant County Attorney
State Bar No. 16215500
1019 Congress, 15th Floor
Houston, Texas 77002
(713) 274-5144 (telephone)
(713) 755-8924 (facsimile)
bruce.powers@cao.hctx.net
ATTORNEY FOR APPELLANT
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CERTIFICATE OF COMPLIANCE
The undersigned attorney certifies that this document complies with the
word-count limitations of Tex. R. App. P. 9.4. Relying on the word count of the
computer program used to prepare this document, it contains 1,533 words.
/s/ Bruce S. Powers
Bruce S. Powers
Assistant Harris County Attorney
CERTIFICATE OF SERVICE
I hereby certify that on this the 13th day of November, 2015, a true and
correct copy of the foregoing APPELLANT’S REPLY BRIEF was served
electronically upon Defendant Public Utility Commission of Texas’ counsel,
Elizabeth R. B. Sterling, Assistant Attorney General, Environmental Protection
Division, Office of the Attorney General, P.O. Box 12548, MC-066, Austin, Texas
78711-2548.
/s/ Bruce S. Powers
Bruce S. Powers
Assistant County Attorney
8