Texas Commission on Environmental Quality and Vulcan Construction Materials, LLC v. Friends of Dry Comal Creek, Stop 3009 Vulcan Quarry, Jeffrey Reeh, Terry Olson, Mike Olson, and Comal Independent School District ( 2022 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-21-00204-CV
Texas Commission on Environmental Quality
and Vulcan Construction Materials LLC, Appellants
v.
Friends of Dry Comal Creek, Stop 3009 Vulcan Quarry, Jeffrey Reeh,
Terry Olson, Mike Olson, and Comal Independent School District, Appellees
FROM THE 353RD DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-20-000941,
THE HONORABLE MAYA GUERRA GAMBLE, JUDGE PRESIDING
OPINION
The Texas Commission on Environmental Quality (TCEQ) granted Vulcan
Construction Materials LLC a permit to construct a rock-crushing plant in Comal County. Various
parties who had opposed Vulcan’s permit application before the agency, including Friends of Dry
Comal Creek (Friends), Jeffrey Reeh, and others (collectively, Protestants), filed separate suits for
judicial review of the Commissioners’ decision in Travis County District Court. Those suits were
later consolidated. The trial court reversed the bulk of the Commissioners’ decision and remanded
the case to the agency. Vulcan and the TCEQ perfected this appeal. We will reverse the trial
court’s judgment and render judgment affirming the Commissioners’ order.
Factual and Procedural Background
The TCEQ regulates air pollution from stationary sources pursuant to a delegation
of authority under the Federal Clean Air Act (FCAA). See 42 U.S.C. § 7410(a). The FCAA
requires the U.S. Environmental Protection Agency (EPA) to identify emissions that cause or
contribute to air pollution that may reasonably be anticipated to endanger public health or welfare.
The EPA sets primary and secondary National Ambient Air Quality Standards (NAAQS) for
certain pollutants, identified as “criteria pollutants.” See id. §§ 7408(a), 7409(a). NAAQS are
levels of air quality determined to protect the public health and welfare. The six criteria pollutants
for which the EPA has promulgated NAAQS include particulate matter (PM) with a diameter of
10 microns or less (PM10) and PM with a diameter of 2.5 microns or less (PM2.5). 1 To implement
these standards, each state is required to submit for EPA approval a state implementation plan.
See id. § 7407(a). Each plan must include a New Source Review (NSR) preconstruction permitting
scheme to control emissions from new or modified sources of air pollutants. See id.
§ 7410(a)(2)(C).
The FCAA’s and EPA’s applicable regulations provide extensive requirements for
the construction and modification of “major” sources of air pollution under NSR permitting
programs. See Luminant Generation Co., L.L.C. v. EPA, 675 F.3d 917, 922 (5th Cir. 2012). The
present case, however, involves regulation of a “minor” source of air pollution that does not meet
the major-source thresholds for total annual emissions. For minor sources, the FCAA simply
requires each state implementation plan to include an NSR permitting program that ensures the
NAAQS are attained and maintained in the state. Id.; 42 U.S.C. § 7410(a)(2)(C).
The TCEQ administers the requirements of the FCAA for Texas under an
EPA-approved state implementation plan that includes a minor-source NSR permitting scheme.
1 The “criteria pollutants” are sulfur dioxide, particulate matter, carbon monoxide, ozone,
oxides of nitrogen/nitrogen dioxide, and lead. 40 C.F.R. §§ 50.4-.17. The term “non-criteria
pollutants” encompasses all other air pollutants.
2
See 40 C.F.R. § 52.2270. Although the FCAA does not contain specific requirements for
evaluating minor sources, the TCEQ has adopted a six-step procedure for conducting a “full”
minor-source NAAQS analysis.
For criteria pollutants, the applicant must demonstrate that a proposed facility will
not cause or contribute to an exceedance of the NAAQS. This demonstration is usually made
through an air-quality analysis (AQA) supported by air-dispersion modeling. Air-dispersion
modeling is a computer-based simulation of how pollutants emitted from a facility will disperse in
the atmosphere. For numerous non-criteria pollutants, i.e., contaminants for which the EPA has
not established NAAQS, the TCEQ Toxicology Division has developed Effects Screening Levels
(ESLs). ESLs are not standards but rather are guidelines established to provide a high degree of
certainty of protectiveness of the public health and welfare. For non-criteria pollutants, the
applicant conducts a health-effects analysis in which the applicant’s modeling results are compared
against the ESL for the pollutant at issue. Among the non-criteria pollutants for which the TCEQ
has developed an ESL is crystalline silica, the contaminant at issue in this case. 2
A minor-source NAAQS analysis begins with air-dispersion modeling, which is
performed to calculate the off-site ground-level concentration (GLC) of pollutants that will be
emitted from a proposed facility. Modeling consists of a mathematical simulation of how
pollutants from emission sources will disperse in the atmosphere and what the off-site GLCs of
those pollutants will be at different distances and directions. This modeling is then used in an
AQA, which is used to compare the anticipated maximum ground-level concentrations (GLCmax)
2 Although it is a form of PM, which is a criteria pollutant, crystalline silica itself is a
non-criteria pollutant because the EPA has not established an NAAQS specifically for crystalline
silica. Nor is crystalline silica included on the EPA’s list of 187 hazardous air pollutants.
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of pollutants to the NAAQS (for a criteria pollutant) or to the TCEQ’s applicable ESL (for a
non-criteria pollutant).
While the EPA does not require the use of a preliminary impact analysis in
minor-source NSR permits, TCEQ uses this analysis for both major- and minor-source permits.
Initially, the GLCmax of each pollutant is compared to its Significant Impact Level (SIL). The SILs
are set by the EPA as minimum thresholds. When the GLCmax of a criteria pollutant is below its
SIL level, the EPA expects that emissions of the pollutant will be de minimis and not degrade air
quality. Phrased differently, any GLCmax of a criteria pollutant that is below its SIL is deemed of
such minimal impact that it could not cause or contribute to a violation of its NAAQS. Thus, when
an applicant shows that the GLCmax for a criteria pollutant is below the applicable SIL, the NAAQS
demonstration is usually complete for that pollutant, such that the remaining steps of the full
minor-source NAAQS analysis need not be conducted. If, however, the GLCmax for a criteria
pollutant exceeds its SIL, the applicant must conduct the additional steps of a full
NAAQS analysis.
A full minor-source NAAQS analysis requires modeling the maximum allowable
emissions from all on-property facilities and nearby off-property sources to determine the GLCmax.
The applicant must then add a representative background concentration of pollutants to the GLCmax
to account for emissions from facilities and other sources that are not explicitly modeled. This
calculation produces a total maximum off-site GLC, which is then compared to the applicable
NAAQS. To obtain authorization under an NSR permit, the applicant’s full minor-source NAAQS
analysis must demonstrate that the total maximum off-site GLC for each pollutant is less than the
applicable NAAQS.
4
The process is similar for non-criteria pollutants. When the GLCmax of a
non-criteria pollutant is below the applicable SIL level, the expected emissions are de minimis and
the demonstration is usually complete for that pollutant. If the GLCmax for a non-criteria pollutant
exceeds the SIL, however, the applicant must conduct a health-effects analysis in which the
applicant’s modeling results are compared to the ESL for that pollutant.
The TCEQ does not require a health-effects review for emissions of crystalline
silica from rock crushers. The agency has learned from experience and data from throughout the
United States that limestone rock-crushing facilities typically emit insignificant amounts of
crystalline silica in the 10 micron or smaller range. Accordingly, modeling emissions of PM and
comparing them to the NAAQS—or modeling emissions of crystalline silica and comparing them
to the applicable ESL—is considered by the TCEQ a sufficient level of review.
The Texas Clean Air Act (TCAA) requires that a permit be obtained by anyone
planning to construct a facility that may emit air contaminants:
(a) Before work is begun on the construction of a new facility or a modification of
an existing facility that may emit air contaminants, the person planning the
construction or modification must obtain a permit or permit amendment from
the commission.
Tex. Health & Safety Code § 382.0518(a). The Act provides that a permit will be granted if two
requirements are met:
(b) The commission shall grant within a reasonable time a permit or permit
amendment to construct or modify a facility if, from the information available
to the commission, including information presented at any hearing held under
Section 382.056(k), the commission finds:
(1) the proposed facility for which a permit, permit amendment, or a special
permit is sought will use at least the best available control technology
[BACT], considering the technical practicability and economic
reasonableness of reducing or eliminating the emissions resulting from the
facility; and
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(2) no indication that the emissions from the facility will contravene the intent
of this chapter, including protection of the public’s health and physical
property.
Id. § 382.0518(b). The statutory requirements are general, leaving much discretion to the TCEQ.
The agency’s relevant administrative rules likewise contain few detailed requirements:
(a) In order to be granted a permit, amendment, or special permit amendment, the
application must include:
....
(2) information which demonstrates that emissions from the facility . . . meet
all of the following.
(A) Protection of public health and welfare.
(i) The emissions from the proposed facility will comply with all rules
and regulations of the commission and with the intent of the Texas
Clean Air Act (TCAA), including protection of the health and
property of the public.
30 Tex. Admin. Code § 116.111(a)(2)(A)(i) (2020) (Tex. Comm’n on Env’l Quality,
Gen. Application).
Vulcan applied for a permit to construct a rock-crushing plant at a limestone quarry
in Comal County. 3 The application was opposed by numerous groups and individuals, including
Friends, Reeh, and others. The TCEQ granted the hearing requests filed by the Protestants and
forwarded 19 issues to the State Office of Administrative Hearings (SOAH) for resolution in a
contested case hearing. Issue “O” was “Whether emissions of silica from the proposed plant will
negatively impact human health and welfare.” 4 After the hearing, the administrative law judges
(ALJs) submitted to the Commissioners a proposal for decision recommending that the permit be
3 A rock crusher breaks larger rocks down into cobblestones, gravel, or other
smaller pieces.
4 Silica, also called silicon dioxide, can appear in three different forms: crystalline silica,
cryptocrystalline silica, and amorphous silica. All three have the same chemical makeup, but
crystalline silica has a different molecular structure. Although Issue O refers generally to “silica,”
all parties focus their arguments on crystalline silica.
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granted. The Commissioners accepted this recommendation, granted the permit, and adopted the
findings of fact and conclusions of law set forth in the PFD.
The Commissioners’ order granting the application determined in Conclusions of
Law 11 and 12 that Vulcan had satisfied the two requirements from Texas Health and Safety Code
sections 382.0518(b)(1) and (b)(2) quoted above:
11. Consistent with Texas Health and Safety Code § 382.0518 and 30 Texas
Administrative Code § l16.11l(a)(2)(C), the Plant will use BACT, with
consideration given to the technical practicability and economic reasonableness of
reducing or eliminating emissions from the facilities.
12. Consistent with Texas Health and Safety Code § 382.0518 and 30 Texas
Administrative Code § 116.11l(a)(2)(A), there is no indication that emissions from
the Plant will contravene the intent of the TCAA, including the protection of the
public’s health and physical property.
In Conclusion of Law 14, the Commissioners determined that Vulcan had satisfied the
requirements of 30 Texas Administrative Code section 116.111:
14. Vulcan has made all demonstrations required under applicable statutes
and regulations, including 30 Texas Administrative Code § 116.111 regarding air
permit applications, to be issued an air quality permit with conditions as set out in
the Draft Permit.
During the course of the SOAH proceeding, a discovery dispute arose regarding
Vulcan’s health-effects analysis of crystalline silica. The three cores Vulcan used for its sample
of aggregate material in its analyses were part of 41 borings taken in an unrelated 2016 subsurface
investigation of the proposed site. Vulcan presented evidence that it conducted the earlier
investigation to determine whether to purchase the property and how much to pay for it. The
investigation provided information on the quantity and quality of limestone available for
processing at the site. Friends served written discovery on Vulcan requesting documents relating
to the 2016 investigation and any evaluation of aggregate materials to be processed at the Plant.
7
Vulcan objected to producing documents from its earlier investigation, asserting a trade-secret
privilege. Friends filed motions to compel and for continuance, both of which were denied by the
presiding ALJ. The presiding ALJ also ruled that the Protestants could not cross-examine Vulcan’s
experts on the subject.
Following issuance of the Commissioners’ order, Friends and Reeh submitted
motions for rehearing to the agency, which were overruled. They subsequently filed separate suits
for judicial review in Travis County District Court, which were later consolidated. In its Final
Judgment, the trial court reversed most of the Commissioners’ order and remanded the case to the
agency. Specifically, the court reversed Conclusions of Law 12 and 14 on several grounds, ruled
that the presiding ALJ abused her discretion in allowing Vulcan to withhold information from its
2016 subsurface investigation, and ruled that the Protestants were denied due process by (1)
allowing Vulcan to withhold information about the 2016 investigation, (2) denying discovery and
cross-examination as to the information, and (3) failing to require Vulcan to input emissions from
quarries and roads into its health-effects analysis. 5
5The trial court’s Final Judgment did, however, expressly affirm the Commissioners’
Conclusion of Law 11 regarding the proposed Plant’s use of Best Available Control Technology:
TCEQ’s Best Available Control Technology (“BACT”) reviews for Vulcan’s
Application met the standards of Texas Health and Safety Code § 382.0518 and 30
Texas Administrative Code § l16.11l(a)(2)(C), were properly conducted, supported
by substantial evidence, and not arbitrary, capricious, or unlawful.
TCEQ rules define “Best Available Control Technology” as follows:
Best available control technology (BACT)—An air pollution control method for a
new or modified facility that through experience and research, has proven to be
operational, obtainable, and capable of reducing or eliminating emissions from the
facility, and is considered technically practical and economically reasonable for
the facility.
8
The TCEQ and Vulcan perfected this appeal.
Standard of Review
The statutory standard for judicial review of a Commission order is whether its
decision was “invalid, arbitrary, or unreasonable.” Tex. Health & Safety Code § 382.032(e). This
Court has held that “[t]he ‘invalid, arbitrary, or unreasonable’ standard incorporates the entire
scope of review allowed by the ‘substantial evidence’ standard codified in the Administrative
Procedure Act.” TJFA, L.P. v. Texas Comm’n on Envtl. Quality, 632 S.W.3d 660, 666 (Tex.
App.—Austin 2021, pet. filed).
The scope of judicial review of agency decisions under the substantial-evidence
rule is set forth in the Administrative Procedure Act (APA) as follows:
If the law authorizes review of a decision in a contested case under the substantial
evidence rule or if the law does not define the scope of judicial review, a court may
not substitute its judgment for the judgment of the state agency on the weight of the
evidence on questions committed to agency discretion but:
(1) may affirm the agency decision in whole or in part; and
(2) shall reverse or remand the case for further proceedings if substantial rights
of the appellant have been prejudiced because the administrative findings,
inferences, conclusions, or decisions are:
(A) in violation of a constitutional or statutory provision;
(B) in excess of the agency’s statutory authority;
(C) made through unlawful procedure;
(D) affected by other error of law;
(E) not reasonably supported by substantial evidence considering the reliable
and probative evidence in the record as a whole; or
(F) arbitrary or capricious or characterized by abuse of discretion or clearly
unwarranted exercise of discretion.
Tex. Gov’t Code § 2001.174. The standards for a substantial-evidence review are well established:
Under the substantial evidence rule we review the evidence as a whole to determine
if it is such that reasonable minds could have reached the same conclusion as the
agency in the disputed action. We may not substitute our judgment for that of the
30 Tex. Admin. Code § 116.10(1) (2020) (Tex. Comm’n on Env’l Quality, Gen. Definitions).
9
agency and may only consider the record on which the agency based its decision.
The issue before us is not whether the agency reached the correct conclusion but
whether there is some basis in the record for its action. Although substantial
evidence is more than a mere scintilla, the evidence in the record may actually
preponderate against the agency’s decision and nonetheless amount to substantial
evidence. We presume that the agency’s findings, inferences, conclusions, and
decisions are supported by substantial evidence, and the burden to prove otherwise
is on the appellant. Finally, the agency’s decision should be reversed only if the
party challenging the decision demonstrates that the absence of substantial evidence
has prejudiced the party’s substantial rights.
Citizens Against Landfill Location v. Texas Comm’n on Envtl. Quality, 169 S.W.3d 258, 264 (Tex.
App.—Austin 2005, pet. denied) (citations omitted); see also North E. Indep. Sch. Dist. v. Riou,
598 S.W.3d 243, 251 (Tex. 2020) (“Review under the substantial-evidence rule is highly
deferential—the issue is not whether the agency’s decision is correct, but whether the record
demonstrates a reasonable basis for it.”). “The question whether an agency’s determination meets
[the substantial-evidence] standard is one of law.” Texas Comm’n on Envtl. Quality v. Maverick
Cnty., 642 S.W.3d 537, 547 (Tex. 2022) (quoting Montgomery Indep. Sch. Dist. v. Davis,
34 S.W.3d 559, 566 (Tex. 2000)).
There are also narrow circumstances in which an agency decision can be reversed
as “arbitrary and capricious” even though it is supported by substantial evidence. See Tex. Gov’t
Code § 2001.174(2)(F); Texas Health Facilities Comm’n v. Charter Med.-Dall., Inc., 665 S.W.2d
446, 454 (Tex. 1984) (“In enacting the APTRA, it is clear that the legislature intended to
distinguish between agency action that is not supported by substantial evidence and agency action
that is arbitrary and capricious.”). This Court has held, however, that “the finding of an act, which
is supported by substantial evidence, to be arbitrary and capricious must be based on a violation
of due process or some other unfair or unreasonable conduct that shocks the conscience.” Santulli
v. Texas Bd. of L. Exam’rs, No. 03-06-00392-CV, 2009 WL 961568, at *4 n.5 (Tex. App.—Austin
10
Apr. 10, 2009, pet. denied) (mem. op.) (quoting Texas State Bd. of Dental Exam’rs v. Silagi,
766 S.W.2d 280, 285 (Tex. App.—El Paso 1989, writ denied)).
Discussion
I. Whether the trial court erred in reversing Conclusion of Law 12.
As stated above, the Commissioners’ Conclusion of Law 12 recited that “there is
no indication that emissions from the Plant will contravene the intent of the TCAA, including the
protection of the public’s health and physical property.” To support this conclusion, the
Commissioners’ order included several findings of fact regarding the potential emission of
crystalline silica:
44. The maximum offsite concentrations of crystalline silica from Vulcan’s
modeling are well below the crystalline silica Effects Screening Level.
45. The Plant’s crystalline silica emissions will not negatively impact human health
and welfare, or contravene the intent of the Texas Clean Air Act (TCAA).
46. The Plant’s crystalline silica emissions would not negatively impact human
health and welfare, or contravene the intent of the TCAA, even if the crystalline
silica percentage used to calculate the Plant’s crystalline silica emissions was 135
times higher.
In reversing Conclusion of Law 12, the trial court found in Paragraph 1 of its Final
Judgment that the following errors existed in that conclusion of law:
(i) TCEQ’s determination that the Plant’s crystalline silica emissions will not
negatively affect human health or welfare is not supported by substantial evidence;
(ii) Vulcan’s silica emissions calculations are not based on representative site
conditions, and TCEQ’s determination that Vulcan’s silica emissions calculations
are representative of those to be expected from the site is not supported by
substantial evidence; and (iii) TCEQ’s rejection of Reeh Plaintiffs’ assertions
regarding ways the Permit allegedly is not sufficiently protective of public health
or property is arbitrary and capricious and not supported by substantial evidence.
We will review these grounds in the order recited in the Final Judgment.
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(i) Whether the TCEQ’s determination that the Plant’s crystalline silica emissions will
not negatively affect human health or welfare is supported by substantial evidence.
Regarding Subparagraph 1(i) of the trial court’s Final Judgment, as quoted above,
the TCEQ and Vulcan argue that the Commissioners’ finding on crystalline silica emissions is
adequately supported by (1) the “MERA guidance” and, independently, (2) Vulcan’s voluntary
health-effects analysis.
(a) MERA guidance.
MERA is an acronym for Modeling and Effects Review Applicability. The MERA
guidance is a document created by the TCEQ’s Air Permits Division to assist its staff in evaluating
applications for projects that are subject to air-quality-impacts analyses. It states in part: “This
document provides permit reviewers and air dispersion modeling staff with a process to evaluate
and determine air quality impacts analysis requirements for case-by-case permit reviews for new
and/or modified facilities.” In reviewing an AQA, TCEQ staff members use the MERA guidance
to assist in determining the appropriate analysis necessary to demonstrate compliance with the
applicable ESLs. TCEQ staff use the MERA guidance, in part, to assess preliminary impact
determinations as to certain types of pollutants. If a preliminary analysis shows that the likely
impact falls below a designated de minimis level—the SIL—and if a more extensive analysis is
not found to be appropriate for other reasons, the MERA guidance indicates that no further analysis
by the applicant or TCEQ staff is needed for that contaminant.
In the present case, Vulcan’s preliminary impact analysis showed that the likely
impact of crystalline silica from Vulcan’s proposed plant would be below the TCEQ’s SIL level
and far below the applicable ESL. Under the MERA guidance, the TCEQ staff did not require
Vulcan to conduct any further health-effects analysis as to that pollutant. This policy was based
12
in part on the TCEQ’s prior experience with rock-crushing facilities, which had shown that such
facilities produce negligible emissions of crystalline silica.
As a threshold matter, Friends contends that the MERA guidance document
constitutes an administrative “rule,” asserting that it is an agency statement of general applicability
that implements, interprets, or prescribes law or policy or describes the procedure or practice
requirements of a state agency. Friends argues that because the MERA guidance is a rule, and
because it was not adopted through formal notice-and-comment rulemaking procedures, it is
invalid. The Protestants are correct that “[w]hen an agency promulgates a rule without complying
with the proper rule-making procedures, the rule is invalid.” El Paso Hosp. Dist. v. Texas Health
& Hum. Servs. Comm’n, 247 S.W.3d 709, 715 (Tex. 2008); accord Texas State Bd. of Pharmacy
v. Witcher, 447 S.W.3d 520, 527 (Tex. App.—Austin 2014, pet. denied); see also Tex. Gov’t Code
§ 2001.035(a) (“A rule is voidable unless a state agency adopts it in substantial compliance with
Sections 2001.0225 through 2001.034.”). 6 The issue here is whether the MERA guidance
constitutes an administrative rule.
Under the APA, the term “rule” is defined as follows:
“Rule”:
(A) means a state agency statement of general applicability that:
(i) implements, interprets, or prescribes law or policy; or
(ii) describes the procedure or practice requirements of a state agency;
(B) includes the amendment or repeal of a prior rule; and
(C) does not include a statement regarding only the internal management or
organization of a state agency and not affecting private rights or procedures.
Tex. Gov’t Code § 2001.003(6).
6 In response to Friends’ invalid-rule argument, the TCEQ argues that Friends did not
preserve this alleged error, either in its motion for rehearing before the Commission or in its
petition in district court. Because this issue does not affect our ultimate decision, we will assume
without deciding that Friends preserved the alleged error.
13
Under the APA’s definition, an agency statement does not have to be formally
designated a “rule” in order to meet the statutory definition and thus trigger the necessity for
adoption by notice-and-comment rulemaking procedures. See, e.g., Teladoc, Inc. v. Texas Med.
Bd., 453 S.W.3d 606, 614–15 (Tex. App.—Austin 2014, pet. denied). On the other hand, not every
statement by an administrative agency constitutes a rule under the statutory definition. See Texas
Educ. Agency v. Leeper, 893 S.W.2d 432, 443 (Tex. 1994); Combs v. City of Webster, 311 S.W.3d
85, 100 (Tex. App.—Austin 2009, pet. denied). Administrative agencies often issue letters,
guidance, and reports that contain statements that may appear to implement, interpret, or prescribe
agency policy and practice but are not rules that must be formally promulgated. See Brinkley
v. Texas Lottery Comm’n, 986 S.W.2d 764, 769 (Tex. App.—Austin 1999, no pet.); see also
Trinity Settlement Servs., LLC v. Texas State Secs. Bd., 417 S.W.3d 494, 502 (Tex. App.—Austin
2013, pet. denied).
The APA “defines ‘rule’ in a way that will exclude a considerable range of
unofficial, individually directed, tentative or other non-proscriptive agency or staff issuances
concerning law or policy.” Teladoc, 453 S.W.3d at 621–22. In analyzing whether a particular
agency statement constitutes a rule, “we consider the intent of the agency, the prescriptive nature
of the guidelines, and the context in which the agency statement was made.” Combs
v. Entertainment Publ’ns, Inc., 292 S.W.3d 712, 722 (Tex. App.—Austin 2009, no pet.). Of
particular significance in Leeper, for example, was that “[t]he [agency’s] guidelines were only
recommended, not prescriptive.” Leeper, 893 S.W.2d at 443. This Court, too, has recognized that
statements that are not prescriptive fall outside the APA’s definition of “rule.” See Slay v. Texas
Comm’n on Envtl. Quality, 351 S.W.3d 532, 546 (Tex. App.—Austin 2011, pet. denied) (“[T]he
core concept is that the agency statement must in itself have a binding effect on private parties.”).
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Applying the reasoning from Slay, this Court has stated that “a distinction exists between
nonbinding evaluative guidelines that take into consideration case-specific circumstances—which
have been held not to be a rule—and policies that dictate specified results without regard to
individual circumstances, which have been held to be a rule.” Witcher, 447 S.W.3d at 529.
This Court’s opinion in Slay is particularly helpful in analyzing the present case.
There, the legislature had directed the TCEQ to consider a variety of factors in determining what
penalties to assess after finding hazardous-waste violations. The TCEQ’s enforcement division
had created a document, styled “Penalty Policy of the TCEQ,” that set forth a methodology
explaining how TCEQ staff were to evaluate violations for the purpose of recommending
administrative penalties to the Commission. The Penalty Policy stated:
This policy includes a description of how violations are evaluated in terms of harm
and severity and how any proposed penalties are determined. It includes a
discussion of what adjustments may be made to the base penalty amount after the
review of case-specific information and information concerning the respondent.
Slay, 351 S.W.3d at 538. Although the administrative record in Slay contained evidence that
TCEQ staff were required to follow the Penalty Policy’s methodology in determining penalty
recommendations, we held it significant that the record also contained evidence that use of the
methodology was not mandatory for members of the Commission: “[W]hat ultimately matters is
that the district court also had evidence to the effect that the TCEQ commissioners were not bound
to follow the Penalty Policy’s methodology when exercising their legislatively conferred discretion
to impose penalties.” Id. at 546 (emphasis in original).
The discretionary nature of the Penalty Policy in Slay was emphasized in a related
TCEQ rule:
The executive director may use enforcement guidelines that are neither rules nor
precedents, but rather announce the manner in which the agency expects to exercise
15
its discretion in future proceedings. These guidelines do not establish rules which
the public is required to obey or with which it is to avoid conflict.
Id. at 547. Because the Penalty Policy lacked the required prescriptive element, we held that it did
not constitute a “rule” within the meaning of the APA. Id. at 548; see Witcher, 447 S.W.3d at 533
(“Although the guidelines considered in Slay were intended to achieve a level of consistency when
similar circumstances were present, they did not require a specific result in all cases.”); cf.
Entertainment Publ’ns, 292 S.W.3d at 721 (agency statement held to be rule where “letters [sent
by the Comptroller] communicated the Comptroller’s intention to apply section 151.024 in all
cases involving brochure fundraising firms . . . .” (emphasis added)).
In the present case, the relevant MERA guidance document, like the Penalty Policy
in Slay, states explicitly that its recommended procedures are not mandatory:
While this document provides a general process and defines minimum criteria for
agency staff’s consideration of air quality impacts analysis requirements, this
document is not regulatory and does not limit the permit reviewer’s ability to
require the applicant to provide additional information. . . . Permit reviewers and
air dispersion modeling staff may deviate from this guidance with approval from
their supervisors or from the Air Permits Division (APD) director.
Thus, similar to the Slay Penalty Policy, a fair reading of the MERA guidance is that it announces
the manner in which the TCEQ expects, but is not required, to exercise its discretion in
future proceedings.
Simply calling an agency statement a “guideline” or “guidance” does not, of course,
automatically prevent it from falling within the APA’s definition of a rule. See, e.g., John Gannon,
Inc. v. Texas Dep’t of Transp., No. 03-18-00696-CV, 2020 WL 6018646, at *7 (Tex. App.—Austin
Oct. 9, 2020, pet. denied) (mem. op.). By its own terms, however, the MERA guidance document
here does not have the necessary “binding effect” on the TCEQ, its staff, or the public. The TCEQ
16
retains discretion to deviate from the MERA guidance procedures when deemed appropriate. 7
Accordingly, we conclude that the MERA guidance does not constitute a “rule” that would be
invalid unless adopted through the statutory notice-and-comment rulemaking process.
Thus, the MERA guidance, which obviated the need for Vulcan to conduct a full
health-effects analysis or minor-source NAAQS analysis regarding the expected emission of
crystalline silica from the proposed Plant, itself provides substantial evidence in support of the
relevant findings of fact that supported the Commissioners’ Conclusion of Law 12. In addition,
however, as discussed below, Vulcan voluntarily conducted its own full-scale health-effects
analysis of expected crystalline silica emissions from the site, which further supports Conclusion
of Law 12.
(b) Substantial evidence independent of the MERA guidance.
Separate and apart from the MERA guidance, Vulcan voluntarily conducted its own
health-effects analysis of crystalline silica emissions from the proposed Plant. In that analysis,
Vulcan used accepted “computerized air dispersion modeling” techniques to establish an estimate
of crystalline silica emissions. An expert toxicologist retained by Vulcan, Lucy Fraiser, testified
about the methodology and results of this analysis:
[Vulcan’s] Health and Welfare Effects Analysis for crystalline silica involved:
1) maximum crystalline silica emissions rates estimated as a component of the
modeled project-related hourly and annual PM10 emissions using analytical results
indicating that 0.2% of project-related PM10 emissions is crystalline silica . . . ;
2) modeled road emissions; and 3) comparing the modeled GLCrnax of crystalline
silica to the hourly and annual TCEQ ESLs for crystalline silica.
7 The existence of this discretion distinguishes the present case from Sierra Club v. EPA,
705 F.3d 458, 463–64 (D.C. Cir. 2013), in which the D.C. Circuit disapproved the use of an SIL
when the agency lacked such discretion.
17
The results of Vulcan’s health-effects analysis predicted concentrations of
crystalline silica far below the applicable short-term and long-term ESLs. As reflected by Finding
of Fact 46, the Commission found that the predicted concentration of crystalline silica would have
been below the ESL for that pollutant even if the concentrations had been 135 times higher than
that shown by Vulcan’s AQA.
Based on both the MERA guidance and Vulcan’s voluntary health-effects analysis,
we conclude that the Commissioners’ determination in Finding of Fact 45—that “[t]he Plant’s
crystalline silica emissions will not negatively impact human health and welfare, or contravene the
intent of the Texas Clean Air Act”—is supported by substantial evidence. Accordingly, the trial
court erred in reversing Conclusion of Law 12 on that basis.
(ii) Whether Vulcan’s silica emissions calculations are based on representative site
conditions, and whether substantial evidence supports the TCEQ’s determination
that Vulcan’s silica emissions calculations are representative of those to be expected
from the site.
The trial court also reversed Conclusion of Law 12 on the ground that Vulcan’s
analysis and calculations of crystalline silica concentrations were not based on “representative site
conditions.” As explained above, Vulcan had drilled and taken 41 core samples in 2016 but used
only three of those in its application to the TCEQ. The Protestants argued, and the trial court
agreed, that the three samples Vulcan used in its application did not provide “reliable and accurate
data” in determining expected emissions from the facility. We disagree.
Vulcan’s expert geologist, Dr. Lori Eversull, testified that the company had, in
deciding whether to buy the property, earlier obtained the 41 cores to determine the quantity and
quality of the aggregate material at different depths and locations at the site and to ensure the
aggregate material would meet the required specifications for construction aggregate. The three
18
cores used in the TCEQ application, from among the 41 cores drilled in 2016, were chosen from
the north, central, and southern parts of the property. Dr. Eversull testified that in her opinion the
three cores were “representative of the Edwards [Formation] that we will mine as a whole” and
that the samples were “collected in a manner that caused it to be a representative sample of the
aggregate material that will be processed in the proposed plant.”
Doubting the accuracy and representativeness of Vulcan’s three core samples, the
Protestants obtained their own core sample close to the western boundary of the Vulcan property.
Their analysis of that sample showed the crystalline silica content to be at a level of 1.0% of PM10
emissions, in contrast to 0.2% as shown by the analysis of Vulcan’s samples. From this they argue
that Vulcan’s numbers are inaccurate, that a determination of the impact on human health and
welfare of silica emissions from the proposed plant can be made only if all information is known
and accurate, and that “[t]here is no way to confirm the accuracy of Vulcan’s emissions
calculations or their impacts to human health or property without the withheld data.”
We have little doubt that the data from Vulcan’s 38 unused core samples would be
of interest to the Protestants. Indeed, it is not impossible that they could have shown a higher
crystalline silica content than the three core samples Vulcan used in its application. But this is not
directly relevant to the question of whether Vulcan’s silica emissions calculations are “based on
representative site conditions.” More importantly, the possibility that data from the other core
samples from Vulcan’s 2016 investigation could show higher silica content levels is only
speculation. All that is known for sure from the administrative record is that (1) the crystalline
silica content of the core samples obtained by the Protestants, though higher than that of Vulcan’s
three samples, was still far below the ESL for crystalline silica, and (2) there is direct evidence
that the three samples used by Vulcan were representative of the Plant site. The chances that
19
knowing the content of the 38 unused core samples would elevate the overall crystalline silica
content to a level higher than the ESL for that pollutant appear to be remote. We conclude,
therefore, that the Commissioners’ ruling that the three core samples used by Vulcan were based
on representative site conditions is supported by substantial evidence. Accordingly, the trial court
erred in reversing Conclusion of Law 12 on that basis.
(iii) Whether TCEQ’s rejection of Reeh Plaintiffs’ assertions regarding ways the Permit
allegedly is not protective of public health or property is arbitrary and capricious and
not supported by substantial evidence.
Finally, the trial court reversed Conclusion of Law 12 on the ground that the
Commission erred in rejecting “Reeh Plaintiffs’ assertions regarding ways the Permit allegedly is
not sufficiently protective of public health or property.” Because the court’s Final Judgment does
not specify the “assertions” to which it refers, it is difficult to know precisely how to evaluate this
finding of error. In his Appellee’s Brief in this Court, Reeh argues that the following should have
been considered: (1) enclosure of crushing and screening equipment, use of a fabric filter
baghouse, and enclosures for stockpiles; (2) fence-line monitoring of air emissions along Vulcan’s
property line; and (3) excessive hours of operation. We assume these are the assertions to which
the trial court’s Final Judgment refers.
Our conclusions discussed above—that substantial evidence supports the
Commissioners’ determination that the proposed plant’s crystalline silica emissions will not
negatively affect human health or welfare and that the administrative record contains substantial
evidence that Vulcan’s crystalline silica emissions calculations were based on representative site
conditions—largely render the issues in this section of the trial court’s Final Judgment academic.
Indeed, the essence of Reeh’s argument in this regard, as stated in his Appellee’s Brief, is that
“additional permit controls would . . . make the Permit more protective of air quality, human health
20
and property.” (Emphasis added.) But whether additional permit controls might have created an
even higher level of protection of human health and property was not a material issue. Rather, the
central issue for the Commission was whether the public’s health and property would be
sufficiently protected to meet the requirements of the FCAA and the TCAA. Nonetheless, we will
briefly discuss these issues raised in the Reeh Appellee’s Brief.
(a) Enclosure of crushing and screening equipment, use of a fabric filter baghouse,
and enclosures for stockpiles.
In his Appellee’s Brief, Reeh complains that additional controls such as enclosure
of crushing and screening equipment, use of a fabric filter baghouse, and enclosures for stockpiles
could have given a higher level of protection from crystalline silica emissions. These matters,
however, fall within the category of “best available control technology.” As noted above, the trial
court’s Final Judgment ruled that Vulcan had used and conducted proper BACT reviews, and
Protestants did not challenge or appeal that portion of the judgment. Accordingly, they may not
complain about the ruling. See Tex. R. App. P. 25.1(c) (“A party who seeks to alter the trial court’s
judgment or other appealable order must file a notice of appeal.”).
(b) Fence-line air emissions monitoring along Vulcan’s property line.
Reeh’s Appellee’s Brief also mentions that fence-line monitoring would “provide
additional important protections.” The administrative record, however, contains contrary
evidence. One of Vulcan’s engineers testified that not only is there no requirement in the TCAA
or TCEQ rules that a permit applicant conduct ambient fence-line monitoring for PM10 and PM2.5,
but also there is no suggestion in any written TCEQ guidance that such fence-line monitoring
should be required. Nor was he aware of any precedent for fence-line monitoring. Because of the
distance of the proposed Plant from the boundary of the Vulcan property, and because Vulcan’s
21
AQA demonstrated that crystalline silica emissions from the proposed Plant would not adversely
affect public health, welfare, and property, the engineer testified that “I see no need for the Draft
Permit to require that Vulcan conduct ambient fenceline monitoring for PM10 and PM2.5.”
(c) Excessive hours of operation.
Finally, Reeh’s Appellee’s Brief argues that the proposed plant’s operating hours
“provide a substantial amount of time that Vulcan’s facility will be impacting surrounding
landowners, schools, livestock, and businesses.” One of Vulcan’s expert witnesses testified,
however, that the proposed Plant would not adversely affect human health or welfare “even if it
was to operate 24 hours a day and 365 days a year.” Indeed, Vulcan’s AQA was based on an
assumption that the plant would operate continuously.
Based on the foregoing, we conclude that the trial court erred in ruling that
“TCEQ’s rejection of Reeh Plaintiffs’ assertions regarding ways the Permit allegedly is not
sufficiently protective of public health or property is arbitrary and capricious and not supported by
substantial evidence.”
Accordingly, the trial court erred in reversing Conclusion of Law 12 for the reasons
stated in Paragraph 1 of the Final Judgment.
II. Whether the trial court erred in reversing Conclusion of Law 14.
As stated above, the Commissioners’ Conclusion of Law 14 recited that “Vulcan
has made all demonstrations required under applicable statutes and regulations, including 30 Texas
Administrative Code § 116.111 regarding air permit applications, to be issued an air quality permit
22
with conditions as set out in the Draft Permit.” 8 To support this conclusion, the Commissioners’
order included several findings of fact:
Issue A: Whether the proposed plant will negatively affect human health,
including sensitive subgroups, and physical property
22. The maximum offsite concentrations from AQA are all below applicable
National Ambient Air Quality Standards (NAAQS) and Commission Effects
Screening Levels (ESLs).
23. Vulcan’s AQA demonstrates that the maximum allowable emissions from the
Plant will not negatively affect human health or welfare, including sensitive
subgroups, or physical property.
Issue C: Whether cumulative impacts of existing sources were properly
considered
25. Each of Vulcan’s full Minor NAAQS analyses analyzed any cumulative
impacts of the emissions from nearby emissions sources by inputting the emissions
from the Martin Marietta Materials rock crusher into the modeling, and other
off-site emissions sources by adding a representative background concentration of
8 Rule 116.111 provides as follows in pertinent part:
(a) In order to be granted a permit, amendment, or special permit amendment, the
application must include:
....
(2) information which demonstrates that emissions from the facility, including
any associated dockside vessel emissions, meet all of the following.
(A) Protection of public health and welfare.
(i) The emissions from the proposed facility will comply with all rules
and regulations of the commission and with the intent of the Texas
Clean Air Act (TCAA), including protection of the health and
property of the public.
....
(C) Best available control technology (BACT) must be evaluated for and
applied to all facilities subject to the TCAA. . . .
....
(J) Air dispersion modeling. Computerized air dispersion modeling may be
required by the executive director to determine air quality impacts from
a proposed new facility or source modification. . . .
30 Tex. Admin. Code § 116.111(a).
23
the criteria pollutant to its modeled maximum off-site ground level concentration
(GLCmax).
26. Vulcan’s AQA properly considered any cumulative impacts of emissions from
nearby operations, plus other offsite emissions sources.
Issue Q: Whether the permit application, and associated air dispersion
modeling, included and properly evaluated all applicable emissions
....
49. Vulcan’s AQA and modeling properly evaluated the identified emissions
sources and types of emissions associated with the Plant.
Issue L: Whether the background concentrations used in the air dispersion
modeling are representative of the proposed location of the plant
40. Vulcan identified ambient air monitors in counties with higher total emissions
and higher populations than Comal County, and for each pollutant for which more
than one monitor was identified, Vulcan chose as the background concentration the
highest concentration from any of those monitors.
41. The background concentrations used in Vulcan’s AQA are conservatively
representative of ambient concentrations of pollutants at the Plant location.
Issue R: Whether site specific monitoring data should have been used in the
air dispersion modeling conducted for this application
50. The use of site-specific monitoring data was not required in Vulcan’s AQA
because no site-specific ambient air monitoring data was available.
In reversing the Commissioners’ order, the trial court ruled in Paragraph 2 of its
Final Judgment that the following errors existed in Conclusion of Law 14:
i) TCEQ’s determination that Vulcan’s air dispersion modeling adequately
accounts for or addresses cumulative impacts; ii) TCEQ’s determination that quarry
and road emissions were adequately considered; and iii) TCEQ’s determination that
Vulcan’s choice of the relevant background concentrations used in its voluntary
Full Minor National Ambient Air Quality Standard (“NAAQS”) Analyses were
appropriate, is arbitrary and capricious, and not supported by substantial evidence.
The Protestants’ witnesses offered evidence that called into question Vulcan’s
methods, analysis, and conclusions. They raised valid concerns that the ALJs were obliged to hear
and consider in preparing their PFD. As discussed below, however, Vulcan presented testimony
24
from numerous witnesses that was directly refutative of the Protestants’ evidence, thus rendering
that evidence insufficient to overcome the substantial-evidence presumption.
(i) Whether substantial evidence supports the Commissioners’ determination that
Vulcan’s air-dispersion modeling adequately accounted for cumulative impacts.
In Paragraph 2 of the Final Judgment, the trial court first reversed
Conclusion of Law 14 on the ground that Vulcan’s air-dispersion modeling did not adequately
account for the “cumulative impacts” of other pollutant sources. As discussed above, however,
based on the MERA guidance, the GLCmax for crystalline silica was below the SIL for that
pollutant. Again, the SIL of air contaminant concentration is that de minimis value defined by the
EPA as a concentration below which the air quality is not anticipated to degrade due to emissions.
When a modeled impact is deemed insignificant using the SIL as a threshold for significance, it is
generally not necessary to incorporate background levels or emissions from other sources in the
modeling. As stated earlier, the TCEQ’s experience, as well as nationwide data, show that rock
crushers do not add more than a de minimis amount of crystalline silica to the ambient
environment. Thus, based on the TCEQ’s experience, whatever crystalline silica levels existed
before the Vulcan Plant’s operation would not be increased by any meaningful degree by emissions
of that pollutant from the operation of the facility. Accordingly, it was not necessary for Vulcan
to take a specific measurement of the cumulative impact of emissions from other sources. Any
shortcomings in Vulcan’s air-dispersion modeling therefore could not have prejudiced the
Protestants’ substantial rights.
Nonetheless, a review of Vulcan’s full minor-source NAAQS analysis, from which
it was determined that crystalline silica levels from all off-site sources were well below the
NAAQS and ESL for that pollutant, reveals substantial evidence to support its conclusion.
25
Vulcan’s and the TCEQ’s expert witnesses testified in detail about Vulcan’s analyses, including
specific testimony about how they accounted for the cumulative impacts of emissions from
other sources.
Vulcan first obtained from TCEQ a list of facilities permitted for air emissions
within a 10-kilometer radial distance from the center of its proposed Plant. Only a Martin Marietta
rock-crushing plant satisfied those criteria. The expert witness who conducted the analysis for
Vulcan, David Knollhoff, testified that he “input the maximum allowable emissions of each of
those emissions sources located within 10-kilometer radial distance from the center of the proposed
plant.” He went on to testify that Vulcan’s analysis
constituted a cumulative impacts analysis because it considered the cumulative
impacts of the emissions of nearby operations, other offsite emissions sources, and
the emissions of the proposed plant. More specifically, each full Minor NAAQS
Analysis considered the emissions of nearby operations and the emissions of the
proposed plant by inputting into the modeling the maximum allowable emissions
of each pollutant and averaging time from the nearby operations and the proposed
plant to determine the predicted GLCmax for that criteria pollutant and averaging
time. And, each full Minor NAAQS Analysis considered the emissions of that
pollutant and averaging time from other off-site emissions sources by adding to the
GLCmax for that criteria pollutant and averaging time a background concentration
for that criteria pollutant and averaging time that is at least representative.
He testified that emissions from “quarry row,” an area in which several large quarries are located,
and about which one of the Protestants’ witnesses expressed concern, was more than 10 kilometers
from the Vulcan Plant site and would have “no cumulative impact with the PM10 and PM2.5
emissions from other emissions sources located more than 10 km from the proposed plant.”
In addition, TCEQ expert witness Rachel Melton testified that
[a] minor NSR full NAAQS analysis requires an evaluation of all on-property
facilities, nearby off-property facilities, and representative monitored background
concentrations, which are added to the modeled concentration to account for
sources not explicitly modeled. . . . .
26
The full NAAQS analysis [conducted by Vulcan] demonstrated that the proposed
emissions are not expected to cause or contribute to an exceedance of the NAAQS.
She concluded by testifying that in her opinion the air-dispersion modeling conducted by Vulcan
adequately considered the cumulative impacts of nearby sources.
Another TCEQ expert witness, Dr. Jong-Song Lee, testified that ESLs, which are
set to protect against acute and chronic adverse health effects to humans, animals, vegetation, and
nuisance conditions, take into account the cumulative effects in areas in which there are multiple
facilities of a similar type: “[T]he method for deriving the ESLs addresses both cumulative and
aggregate exposures.” There is, he explained, “a lot of conservatism in the ESL and layers of
conservative assumptions are made in the worst-case modeling analysis itself.”
Still other of Vulcan’s and the TCEQ’s witnesses specifically disputed concerns
expressed by the Protestants’ expert witnesses in their pre-filed testimony.
We conclude that substantial evidence supports the Commissioners’ determination
that Vulcan’s air-dispersion modeling adequately accounted for cumulative impacts of pollutants
from other sources. The trial court erred in reversing Conclusion of Law 14 on that basis.
(ii) Whether substantial evidence supports the Commissioners’ determination that
quarry and road emissions were adequately considered.
Paragraph 2 of the trial court’s Final Judgment also reversed Conclusion of Law 14
on the ground that “TCEQ’s determination that quarry and road emissions were adequately
considered” was not supported by substantial evidence. It is true that Vulcan’s full minor-source
NAAQS analysis did not explicitly include potential emissions from all on- and off-site roads and
quarries. This alone, however, does not invalidate Conclusion of Law 14.
First, we note again that because the modeling in Vulcan’s preliminary-impact
analysis showed that crystalline silica levels were below the applicable SIL, it was not necessary
27
for Vulcan to conduct a full minor-source NAAQS analysis or health-effects analysis at all, much
less one that took a measurement of other specific sources of emissions. Any shortcomings in
Vulcan’s full air-dispersion modeling and AQA therefore could not have prejudiced the
Protestants’ substantial rights.
Second, as stated above, under the TCAA and TCEQ rules an entity is only required
to apply for and obtain an air permit for new or modified emissions sources that constitute
“facilities.” See Tex. Health & Safety Code § 382.0518(a). Moreover, the statute commands that
the Commission “shall” grant the requested permit if it finds no indication that emissions “from
the facility” will contravene the goal of protecting the public’s health and physical property. Id.
The definition of “facility” in the TCAA and TCEQ rules, however, expressly excludes roads and
quarries. See id. § 382.003(6) (“A mine, quarry, well test, or road is not considered to be a
facility.”); 30 Tex. Admin. Code § 116.10(4) (“A mine, quarry, well test, or road is not a facility.”).
Additionally, the permit that the Commission granted to Vulcan contained a
number of special conditions, the purpose of which was to minimize emissions from the quarrying
operations and roads on the Vulcan property.
Finally, any emissions from roads and quarries were accounted for through the
measurement, using TCEQ stationary monitors, of the cumulative effects of off-site sources and
representative background concentrations. As TCEQ witness Melton testified, “A representative
background concentration accounts for any sources not explicitly modeled such as roads, natural
sources, or other off-property sources.” Vulcan’s full minor-source NAAQS analysis utilized data
from two of the TCEQ’s representative monitors. Accordingly, its analysis did include and
consider, albeit indirectly, road and quarry emissions. So long as the TCEQ gives reasonable
28
consideration to such matters, as it did here, courts must leave the question of what constitutes
“adequate” consideration to the agency’s informed discretion.
We conclude that the TCEQ’s determination that quarry and road emissions were
adequately considered is supported by substantial evidence. The trial court erred in reversing
Conclusion of Law 14 on that basis.
(iii) Whether substantial evidence supports the Commissioners’ determination that
Vulcan’s choice of the relevant background concentrations used in Vulcan’s “full
minor NAAQS analyses” were appropriate.
Paragraph 2 of the trial court’s Final Judgment also reversed Conclusion of Law 14
on the ground that “TCEQ’s determination that Vulcan’s choice of the relevant background
concentrations used in its voluntary Full Minor National Ambient Air Quality Standard
(‘NAAQS’) Analyses were appropriate was not supported by substantial evidence.” The phrase
“choice of the relevant background concentrations” in the Final Judgment refers to Vulcan’s
selection of the TCEQ stationary monitors that it used to determine the background concentrations
of particulate matter in the area of the proposed Plant. Friends and Reeh argue, and the trial court
agreed, that Vulcan selected monitors that were not representative of air quality at the Plant site.
As Vulcan witness Knollhoff explained, “The background concentration of a
pollutant is caused by emissions of that pollutant from existing emissions sources in the area,
including industrial emissions sources (such as existing rock crushing plants), mobile emissions
sources (such as on-road and off-road vehicles), and natural emissions sources.” TCEQ witness
Melton explained that stationary monitors are used to account for emission sources that are not
explicitly modeled. When cost and logistical constraints prohibit the establishment of site-specific
monitors, which is usually the case, “representative monitors” may be used. The TCEQ maintains
a network of stationary monitors for this purpose. Ms. Melton testified that
29
[t]he existing air monitoring network is the result of a strategic balance of matching
federal monitoring requirements with state and local needs. Consistent with federal
air monitoring requirements, the TCEQ evaluates the placement of air quality
monitors within the air monitoring network using trends in population, reported
emissions inventory data, and existing air monitoring data for a given area.
Ms. Melton also testified that an applicant must demonstrate that the monitors it
has chosen to use are representative of the site of the proposed facility:
[I]f there are no existing monitoring data for the county or adjacent county where
the project is located, justifying the representativeness of a monitor may include,
among other things, comparing county emissions, county population, categories of
source emissions for each county, and a quantitative assessment of emissions
surrounding the location of the monitor compared to the project site.
In the present case, there were no TCEQ stationary monitors in Comal County. As
a result, Vulcan was required to select representative monitors from outside that county to try to
estimate the background concentrations of particulate matter at its proposed Plant site. For the
measurement of PM10 and PM2.5, it chose two monitors located in Bexar County, one referred to
as the “Selma Monitor,” which was used to measure PM10, and the other referred to as the
“Heritage Middle School Monitor,” which was used to measure PM2.5.
Mr. Knollhoff testified that for each pollutant he “evaluated the monitors for that
pollutant that are located in other counties to determine which of those monitors might have
produced representative background concentration data for that pollutant.” He stated that he
conducted his evaluation of the monitors “in a manner that was consistent with the guidance in
Appendix D of TCEQ’s Air Quality Modeling Guidelines” and that in his opinion “the background
concentrations that I used in the full Minor NAAQS Analyses I conducted for the pollutants and
averaging times that will be emitted from the proposed plant are at least representative of the
location of the proposed plant.”
30
In Vulcan’s AQA report, Mr. Knollhoff further explained:
[The] 24-hr PM10 monitored background concentration [at the Selma Monitor] is
expected to be conservatively higher than is representative of the 24-hr PM10
background concentration expected for the area around the proposed crushing plant
because there are much more PM10 emissions in the area around this monitor than
there are in the area around the proposed crushing plant.
....
[The] monitored background concentrations [at the Heritage Middle School
Monitor] are expected to be conservatively higher than what are representative of
the background concentrations for 24-hr PM2.5 and annual PM2.5 for the area around
the proposed crushing plant because there are much more PM2.5 emissions in the
area around this monitor than in the area around the proposed crushing plant.
The AQA report also stated that “as an extra measure of conservatism, the highest concentration
measured at any of the monitors for each pollutant and NAAQS averaging time . . . was used in
the Minor NAAQS Analysis for that pollutant and NAAQS averaging time.”
Ms. Melton also testified regarding Vulcan’s justifications for selecting these two
monitors for measurement of PM background concentrations:
Vulcan provided a county-wide emissions comparison, a county-wide population
comparison, a land use comparison, and a quantitative assessment of emissions
surrounding the location of the monitors selected compared to the project site. This
assessment included pointing out industry types that were nearby the monitors,
which included coal fired power plants, cement plants, and steel plants. It also
included consideration of the major roads near the selected monitors.
She testified that based on her review, “the monitors selected by Vulcan [were] representative of
the area where the proposed plant will be located.”
We conclude that the TCEQ’s determination that Vulcan’s choice of relevant
background concentrations used in its voluntary full minor-source NAAQS analyses were
appropriate is supported by substantial evidence. The trial court erred in reversing Conclusion of
Law 14 on that basis.
31
The three bases on which the trial court reversed Conclusion of Law 14, discussed
above, present instances of conflicting testimony. But it is the province of the agency, like that of
a jury, to decide between conflicting evidence:
The trial court may not set aside an administrative order merely because testimony
was conflicting or disputed or because it did not compel the result reached by the
agency. Resolution of factual conflicts and ambiguities is the province of the
administrative body and it is the aim of the substantial evidence rule to protect that
function. The reviewing court is concerned only with the reasonableness of the
administrative order, not its correctness.
Firemen’s & Policemen’s Civ. Serv. Comm’n v. Brinkmeyer, 662 S.W.2d 953, 956 (Tex. 1984);
accord Scally v. Texas State Bd. of Med. Exam’rs, 351 S.W.3d 434, 452 (Tex. App.—Austin 2011,
pet. denied) (“Resolving factual conflicts and ambiguities is the agency’s function, and the purpose
of substantial-evidence review is to protect that function.”).
In the present case, the ALJs—and the Commission—chose to credit certain
relevant evidence presented by Vulcan and the TCEQ above that presented by the Protestants.
That was the agency’s province, and neither we nor the trial court may second-guess its decision.
We hold that the findings of fact that underlie Conclusion of Law 14 were supported by substantial
evidence. Nor do we see anything about this aspect of the Commissioners’ decision that is so
unfair or unreasonable as to shock our conscience; accordingly, the Commissioners’ order does
not transgress the narrow arbitrary-and-capricious standard. The trial court erred in reversing
Conclusion of Law 14 on these bases.
III. Whether the presiding ALJ abused her discretion by ruling that Vulcan could maintain
documents from its 2016 subsurface investigation on the Plant site confidential under
the trade-secret privilege.
As explained above, the three core samples Vulcan used as representative samples
in analyzing the potential crystalline silica emission from the proposed Plant came from a larger
32
group of cores that it had taken in its 2016 investigation in determining whether to purchase the
property and how much to pay for it. The Protestants’ discovery request—and subsequent cross-
examination attempts—to obtain documents and information about the other cores that Vulcan had
not used in its application were denied on the basis of Vulcan’s asserted trade-secret privilege.
In Paragraph 4 of its Final Judgment, the trial court ruled that the ALJ “abused her
discretion by ruling that Vulcan could maintain information from its 2016 subsurface investigation
at the property where the Plant will be located as confidential under the trade secret privilege.” 9
In this appeal, the TCEQ and Vulcan argue that the ALJ’s trade-secret ruling was within her
discretion and, in any event, did not prejudice the Protestants’ substantial rights.
The test for identifying an abuse of discretion is “whether the court acted without
reference to any guiding rules and principles.” Industrial Specialists, LLC v. Blanchard Ref. Co.,
652 S.W.3d 11, 16 (Tex. 2022) (quoting Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238,
241–42 (Tex. 1985)). The same standard applies to rulings of an ALJ. Cotropia v. Texas Med.
Bd., No. 03-18-00232-CV, 2018 WL 4087408, at *4 (Tex. App.—Austin Aug. 28, 2018, pet.
denied) (mem. op.).
In addition, this Court has held that “[i]n order to show harm and obtain a reversal
on the grounds that the Commission wrongly excluded evidence requires a showing that the
evidence is controlling on a material issue, not merely cumulative.” Office of Pub. Util. Couns.
v. Public Util. Comm’n, 185 S.W.3d 555, 576 (Tex. App.—Austin 2006, pet. denied).
In general, a trade secret is “any formula, pattern, device or compilation of
information which is used in one’s business and presents an opportunity to obtain an advantage
9 Paragraph 3 of the Final Judgment affirmed the Commissioners’ BACT determination.
33
over competitors who do not know or use it.” In re Bass, 113 S.W.3d 735, 739 (Tex. 2003) (orig.
proceeding) (quoting Computer Assocs. Int’l v. Altai, 918 S.W.2d 453, 455 (Tex. 1994)). The
Texas Rules of Evidence provide that “[a] person has a privilege to refuse to disclose and to prevent
other persons from disclosing a trade secret owned by the person, unless the court finds that
nondisclosure will tend to conceal fraud or otherwise work injustice.” Tex. R. Evid. 507(a).
The Texas Supreme Court has established a specific process for evaluating an
asserted trade-secret privilege: “[W]hen trade secret privilege is asserted as the basis for resisting
production, the trial court must determine [(1)] whether the requested production constitutes a
trade secret; [(2)] if so, the court must require the party seeking production to show reasonable
necessity for the requested materials.” In re Union Pac. R.R., 294 S.W.3d 589, 592 (Tex. 2009)
(orig. proceeding) (quoting In re Bass, 113 S.W.3d at 738).
The first question in the supreme court’s test is whether a trade secret exists. That
determination requires weighing six factors:
To determine whether a trade secret exists, we weigh the six factors set forth in the
Restatement of Torts in the context of the surrounding circumstances: (1) the extent
to which the information is known outside of the business; (2) the extent to which
it is known by employees and others involved in the business; (3) the extent of
measures taken to guard the secrecy of the information; (4) the value of the
information to the business and to its competitors; (5) the amount of effort or money
expended in developing the information; (6) the ease or difficulty with which the
information could be properly acquired or duplicated by others.
Id.
In the present case, Vulcan bore the burden of demonstrating that the requested
information constituted a trade secret. In response to the Protestants’ motion to compel, Vulcan
submitted an affidavit from the Environmental Manager for Vulcan’s Southwest Division in which
the affiant tracked and discussed each of the six factors listed above. In a well-reasoned order, the
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presiding ALJ applied the supreme court’s test and concluded that Vulcan had established that the
requested information constituted a trade secret: “Vulcan treats its subsurface data as a protected
trade secret, and expended a significant amount of money to develop it.” We conclude that this
part of the ALJ’s ruling applied appropriate “guiding rules and principles” and therefore was not
an abuse of discretion.
The second part of the supreme court’s test involves determining whether the
requesting party has shown a “reasonable necessity” for the requested materials. This burden rests
on the requesting party:
Once trade secret status has been established, the burden shifts to [the requesting
party] to establish that the information is “necessary or essential to the fair
adjudication of the case, weighing the requesting party’s need for the information
against the potential of harm to the resisting party from disclosure.” [In re]
Bridgestone/Firestone, [Inc.], 106 S.W.3d at 732. We have not “state[d]
conclusively what would or would not be considered necessary for a fair
adjudication, indicating instead that the application of the test would depend on the
circumstances presented.” Id. “[T]he degree to which information is necessary in
a case depends on the nature of the information and the context of the case.” Id.
But, “the test cannot be satisfied merely by general assertions of unfairness;”
instead, “a party ... must demonstrate with specificity exactly how the lack of the
information will impair the presentation of the case on the merits to the point that
an unjust result is a real, rather than a merely possible, threat.” Id. at 732–33.
Id.
In the portion of her order addressing this question, the presiding ALJ concluded
from the parties’ prefiled testimony that the Protestants could adequately cast doubt on Vulcan’s
crystalline silica analysis and calculations without the necessity of the trade-secret information.
Accordingly, she ruled that nondisclosure would not work an injustice under the circumstances of
this case.
The Protestants desired the requested documents to see if they could use them to
attack the accuracy of the conclusions from Vulcan’s air-dispersion modeling. As set forth above,
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however, the MERA guidance itself provides substantial evidence in support of the relevant
findings of fact that supported the Commissioners’ conclusion that “there is no indication that
emissions from the Plant will contravene the intent of the TCAA, including the protection of the
public’s health and physical property.” Moreover, again as stated earlier, the possibility that the
requested trade-secret documents might show crystalline silica emissions from the plant to be
higher than the ESL for that contaminant is speculative and appears to be extremely remote.
Finally, the Protestants’ witnesses did a creditable job casting doubt on Vulcan’s calculations even
without the requested trade-secret information. As a result, we agree with the presiding ALJ that
the Protestants could adequately challenge Vulcan’s methodology and calculations without the
requested information. We conclude that the Protestants have failed to establish that the requested
information was “necessary or essential to the fair adjudication of the case” and have failed to
demonstrate “exactly how the lack of the information will impair the presentation of the case on
the merits to the point that an unjust result is a real, rather than a merely possible, threat.” Id.
We therefore hold that the presiding ALJ’s ruling denying disclosure of the
requested trade-secret documents was not an abuse of discretion and did not prejudice the
Protestants’ substantial rights; the trial court erred in ruling to the contrary.
IV. Whether various rulings by the presiding ALJ denied the Protestants’ due
process rights.
The discovery dispute regarding the core samples Vulcan took in 2016 has been
outlined above. In Paragraph 5 of its Final Judgment, the trial court ruled that the Protestants’ due
process rights were infringed by the presiding ALJ’s denial of Protestants’ motion to compel
production of the requested information, as well as other rulings:
Plaintiffs were denied due process such that their substantial rights were prejudiced
by: (1) the Administrative Law Judge’s ruling that Vulcan could maintain
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information from its 2016 subsurface investigation at the property where the Plant
will be located as confidential under the trade secret privilege; (2) the
Administrative Law Judge’s denial of Plaintiffs’ discovery and cross-examination
of the “privileged” information; and (3) TCEQ’s not requiring Vulcan to input
emissions from quarries and roads into its modeling for the AQAs for 24-hour
PM10, 24-hour PM2.5, and Annual PM2.5.
Due process protections extend to proceedings conducted before an administrative
agency. See City of Corpus Christi v. Public Util. Comm’n of Tex., 51 S.W.3d 231, 262 (Tex.
2001) (“This Court has held that in administrative proceedings, due process requires that parties
be accorded a full and fair hearing on disputed fact issues. At a minimum, it requires that the
‘rudiments of fair play’ be observed.” (citations omitted)); see also Cadena Comercial USA Corp.
v. Texas Alcoholic Beverage Comm’n, 518 S.W.3d 318, 334 (Tex. 2017) (“In administrative
proceedings, the ‘rudiments of fair play’ must be observed.”). However, “due process does not
require that administrative proceedings have the full procedural framework of a civil trial.” City
of Corpus Christi, 51 S.W.3d at 262.
(i) Whether allowing Vulcan to maintain its trade-secret information confidential
denied the Protestants’ due process rights.
The trial court ruled that allowing Vulcan to maintain the confidentiality of its
trade-secret documents and information constituted a denial of the Protestants’ due process rights.
Having concluded above that the presiding ALJ’s denial of the Protestants’ motion to compel
production of the requested trade-secret information was not an abuse of discretion, it follows that
that ruling did not constitute a denial of due process. See Nath v. Texas Children’s Hosp.,
446 S.W.3d 355, 361 (Tex. 2014) (“A sanctions award that fails to comply with due process
constitutes an abuse of discretion because a trial court has no discretion in determining what the
law is or applying the law to the facts.”); Nucor Steel-Texas v. Public Util. Comm’n, 363 S.W.3d
37871, 889 (Tex. App.—Austin 2012, no pet.) (“Having found no abuse of discretion in any of the
rulings that Nucor argued were erroneous, we cannot conclude that the Commission’s evidentiary
rulings deprived Nucor of the right to a fair hearing or violated Nucor’s constitutional rights to due
process and equal protection.”).
We hold that the rudiments of fair play were observed in the SOAH proceeding.
(ii) Whether denial of attempted cross-examination by the Protestants regarding
Vulcan’s trade-secret information denied the Protestants’ due process rights.
The trial court ruled that prohibiting the Protestants from cross-examining
witnesses about Vulcan’s trade-secret information also denied the Protestants their due process
rights. Having held that the information requested by the Protestants constituted Vulcan’s trade
secret and that the Protestants failed to establish that such information was “necessary or essential
to the fair adjudication of the case,” it follows that the presiding ALJ’s denial of cross-examination
relating to that same information did not deny the Protestants their due process rights. In this
regard, again, the rudiments of fair play were observed in the SOAH proceeding.
(iii) Whether the TCEQ’s failure to require Vulcan to input emissions from quarries and
roads into its AQA modeling denied Protestants’ due process rights.
The trial court ruled that the TCEQ’s failure to require Vulcan to input emissions
from quarries and roads into its AQA modeling constituted a denial of the Protestants’ due process
rights. As discussed above, any potential emissions from quarries and roads were rendered
irrelevant by the MERA guidance and, in any event, were adequately accounted for by the
measurement of PM10 and PM2.5 taken by stationary representative monitors. The TCEQ’s failure
to require Vulcan to specifically include emissions from quarries and roads into its AQA modeling
therefore did not prevent the Protestants from receiving a full and fair hearing.
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Because the rudiments of fair play were observed in the three matters set forth in
Paragraph 5 of the Final Judgment, the trial court erred in ruling that the Protestants were denied
due process.
Conclusion
Having concluded that the trial court erred in reversing the Commissioners’
November 21, 2019 order granting Vulcan’s permit application, we reverse the trial court’s
judgment and affirm the Commissioners’ order.
__________________________________________
J. Woodfin Jones, Justice
Before Chief Justice Byrne, Justices Kelly and Jones*
Reversed and Rendered
Filed: September 29, 2022
*
Before J. Woodfin Jones, Chief Justice (Retired), Third Court of Appeals, sitting by assignment.
See Tex. Gov’t Code § 74.003(b).
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