Builder Recovery Services LLC v. the Town of Westlake, Texas ( 2021 )

In the
Court of Appeals
Second Appellate District of Texas
at Fort Worth
___________________________
No. 02-20-00051-CV
___________________________
BUILDER RECOVERY SERVICES LLC, Appellant/Appellee
V.
THE TOWN OF WESTLAKE, TEXAS, Appellee/Appellant
On Appeal from the 236th District Court
Tarrant County, Texas
Trial Court No. 236-304811-18
Before Bassel, Womack, and Wallach, JJ.
Memorandum Opinion by Justice Bassel
MEMORANDUM OPINION
I. Introduction
Builder Recovery Services LLC (BRS) brought a declaratory-judgment action
challenging the Town of Westlake’s (the Town or Westlake) power (1) to pass an
ordinance requiring BRS to obtain a license from the Town in order for BRS to
conduct its temporary construction waste disposal business and (2) to impose a
license fee of 15% on BRS’s gross revenue. Both BRS and the Town have filed
appeals. In four issues, BRS argues that (1) the Town lacks the statutory authority to
require a license or to impose a license fee on commercial solid waste operators who
are the subject of the ordinance, (2) any right the Town has to require a license or to
impose a fee is preempted by another Texas statute, (3) the license fee is an invalid
occupation tax, and (4) the trial court erred in the amount of attorney’s fees that it
awarded BRS. In its appeal, the Town raises two points challenging (1) the trial
court’s declaration that the license fee is invalid and (2) the trial court’s award of
attorney’s fees to BRS.
We resolve these issues as follows:
1. The Town has statutory powers that carry with them the right to license
commercial solid waste operators, and another statute dealing with the
franchise of waste disposal operators does not deprive the Town of the
power to license those operators.
2
2. The Town’s act of licensing a commercial solid waste operator does not fall
within the ambit of a Texas statute that restricts the use of containers, and
that statute does not preempt the Town’s ability to require a license or to
impose a license fee.
3. The Town repealed the 15% license fee that BRS challenged, and this action
moots BRS’s challenge to the fee’s validity as BRS’s challenge is predicated
on the amount of the fee.
4. Our disposition of the various issues raised by the parties requires that we
reverse and remand the issue of attorney’s fees to the trial court.
II. Factual and Procedural Background
The trial court conducted a bench trial. The witnesses who testified were the
managing member of BRS and the town manager of Westlake. The following facts
were developed during the trial.
BRS contracts with homebuilders in Westlake to remove the temporary
construction waste that the builders generate. The builder places the waste generated
by the construction process into a “container” in the form of a dumpster that BRS
provides. The dumpster is towed to the site by a rig that has a skid or a trailer behind
a large pickup truck. The rig—which is composed of the truck, trailer, and
dumpster—weighs approximately 20,000 pounds when fully loaded.
BRS uses the public roads of Westlake to conduct its business though many of
the roads within the Town are private because they are located within private
3
developments. BRS makes as many as ten visits to each building site while a home is
under construction. When a dumpster is full, BRS places it on the trailer, covers it
with a tarp, and removes it from the building site. The waste is hauled from the
building site to a disposal facility in another city.
In conducting its business, BRS follows “best practices” by ensuring that the
waste is not spilled or blown out of the dumpster while being hauled. According to
BRS, the Town has never raised a complaint about how BRS has hauled waste, nor
has the Town ever accused BRS of illegal dumping. The Town’s witness
acknowledged that he was not aware of waste being blown from a BRS dumpster.
BRS also maintains insurance and conforms to the requirements of the Texas
Commission on Environmental Quality and the Occupational Safety and Health
Administration.
BRS offers a different type of service than Westlake’s franchised waste hauler,
Republic Services. Republic is obligated to pick up all residential trash in the Town,
as well as provide free solid waste services and recycling. BRS described its services as
being superior to those offered by Republic because its services are tailored to the
needs of homebuilders.
BRS is not the only provider of temporary construction waste services in
Westlake. The Town also provides temporary construction waste services through
Republic. At the time of trial, the Town also licensed other third-party vendors to
provide that service.
4
The process that led to the Town’s licensing third-party temporary
construction waste disposal vendors apparently began when BRS raised an issue with
the Town’s staff regarding whether Republic could be the sole hauler of temporary
construction waste. Westlake’s city council heard the complaints of BRS and other
companies that offered temporary construction waste services and the builders that
needed those services. The Town’s staff began exploring whether companies other
than Republic could provide temporary construction waste services. The city council
delegated the Town’s staff to meet with the builders to discuss amendments to the
Town’s ordinances in order to address the issue.
BRS claimed that the Town’s staff had indicated that if BRS would withdraw its
objection to a licensing scheme, the Town would implement a license fee for BRS of
3% of its gross revenue that was generated by hauling temporary construction waste
in Westlake. The Town acknowledged that it had offered BRS a 3% fee to encourage
it to participate in the licensure program. BRS objected to the Town’s offering it
special treatment and challenged the Town’s authority to base a license fee on a
percentage of gross revenue.
The Town eventually passed Ordinance No. 851 that amended Chapter 74 of
Westlake’s ordinances dealing with solid waste. See Westlake, Tex., Code of
Ordinances ch. 74, art. III, §§ 74-41–74-50 (2002),
https://library.municode.com/tx/westlake/codes/code_of_ordinances?nodeId=CO
5
OR_CH74SOWA_ARTIIICOSOWALIWAREMAOP.1 The ordinance requires that
“[c]ommercial solid waste operators collecting, transporting, or disposing of
commercial solid waste or temporary construction and demolition waste” obtain a
license from the Town. Id. § 74-44(a). The ordinance created a license-application
process, instituted a solid waste license fee of 15% of the operator’s gross revenue
generated from the collection of waste within Westlake, and required the operator to
provide monthly reports of its gross revenue to the Town. See id. §§ 74-45, 74-
46(l)(4), 74-47(a).
The ordinance not only contained the license fee but also regulated several
aspects of how the companies that obtained a commercial solid waste operator license
were to conduct their business and to provide information to the Town. See generally
id. § 74-46. The various other features of the ordinance included the following:
• “[I]t shall be the mandatory duty of any person owning or having control
over any property where construction requiring a building permit is
taking place and where the construction is being performed in relation to
a residential structure . . . , prior to the start of construction, to place
upon the property a dumpster, provided by the [T]own’s franchised or
licensed waste collector” and to place various items of waste in it. Id.
§ 74-5(a).
1
The electronic version of the Town’s ordinances states that it was last updated
April 3, 2019.
6
• The dumpster should be placed in a location where it is screened from
public view and “removed from the building site immediately upon the
completion of construction.” Id.
• Licensees are to label their vehicles and containers with the license
number issued by the Town, to maintain their vehicles and containers, to
prevent spills or leaks, to clean up spills or leaks, and to maintain
insurance. See id. § 74-46(a), (c), (d), (e), (g).
• Licensees are required to maintain their Town licenses, maintain certain
records, permit the Town to examine their records, and to submit
reports detailing the amount of waste collected, where it was disposed
of, and the amount disposed of; the revenue generated; and the names of
customers and the services provided to them. See id. § 74-46 (i), (j), (k),
(l).
BRS complained that the ordinance “restrict[ed] the use of [its] containers by
requiring a license and . . . a 15 percent gross revenue fee for tax to the Town and [by]
submitting reports to the Town in a format [the Town] dictate[s].” BRS argued that
the ordinance violated Texas statutes because it restricts the use of BRS’s containers
and that the ordinance violates other aspects of Texas law. The Town’s witness
acknowledged that the ordinance did regulate “containers.”
7
BRS’s primary complaint about the license fee revolved around the failure to tie
the amount of the license fee to the amount of license-associated administrative
expenses incurred by the Town. BRS’s witness testified that when the fee was initially
proposed, he had asked the Town’s staff on several occasions about the basis for
establishing the amount of the fee and was told there was none.
The Town offered its view that the fee covered
[t]he administrati[on] and oversight of the solid waste services[,] . . .
much like the oversight for Republic Services. It would include
investigation on any issue regarding damage to City streets, damage to
any public or other private properties, any issues with blowing debris,
[and] discarded debris as a result of transportation of containers through
the Town. It would also include investigation to identify the status of
containers, the status of the licenses.
The fee generated by the franchise and license fees did not make the Town whole
when compared to the cost to administer and enforce the standards.
But the Town acknowledged that the expenses of its administrative oversight
were indeterminate. It had conducted no on-site investigations of BRS’s activities.
There was no administrative cost other than accepting payments by check. The Town
had conducted no “quantificational reports” about the impact of different trucks on
road maintenance. The Town had never prepared an estimate of the costs to
administer the license either before or after the passage of Ordinance No. 851. The
Town had never quantified its cost regarding whether the license fee should be 15%
or not. The registration fee for other contractors was $250, and the Town’s witness
was not aware of how long it took to process other licenses in comparison to a
8
commercial solid waste operator license, but he acknowledged that it took
approximately ten minutes to process a commercial solid waste operator license.
When BRS refused to obtain a license, the Town sent notification that BRS had
failed to comply with the ordinance and eventually cited BRS for a violation of the
ordinance. In response, BRS sued the Town, challenging the ordinance and seeking
declarations that the ordinance was invalid and that the license fee constituted an
unconstitutional occupation tax and also seeking a temporary injunction to prevent
the Town from enforcing the ordinance.2 BRS also sought to recover its attorney’s
fees.
The trial court conducted a hearing on the injunction request. The trial court,
however, did not issue a temporary injunction because the parties entered into a Rule
11 agreement that permitted BRS to continue to operate in the Town and to escrow
the license fees that accrued during the course of the litigation and that provided that
“[a]ll Escrow Funds will be disbursed to the prevailing party upon final resolution of
the lawsuit, which includes a final determination of any appeals.”
At the close of the testimony, the trial court announced that it was making only
one finding, which was
that the 15 percent license fee . . . for the collection of temporary solid
waste from construction sites is unlawful and invalid under Section
361.0961 of the Texas Health and Safety Code, and I’m referring to the
BRS carried these requests for relief, other than the request for a temporary
2
injunction, into an amended petition that it filed later in the litigation.
9
15 percent license fee under the Town of Westlake, Texas, Code of
Ordinances, Section 74-44, et seq.
In the trial court’s view, the Town could do what it needed to do “at a far less
onerous fee.” The trial court then recessed the matter to see if the parties could work
something out.
The trial court later conducted a hearing on BRS’s attorney’s fees claim. At
that hearing, the Town informed the trial court that it had amended its solid waste
ordinance. The Town entered the amended ordinance into evidence; the new
ordinance reduced the license fee for a commercial solid waste operator “to three
percent (3%) of the operator’s gross revenue[] from the collection, hauling, or
transporting of commercial and industrial solid waste collected within the [T]own.”
Westlake, Tex., Ordinance 901 (Dec. 2, 2019) (amending § 74-47(a)). The remainder
of the original ordinance challenged by BRS was left unchanged other than to clarify
the purpose of the ordinance.
BRS offered evidence that it had incurred attorney’s fees of $85,233. The trial
court determined that it would award BRS only ten percent of its requested fees and
summarized its reasoning as follows:
Hauling trash or materials or garbage or whatever we want to call it is
different than electricians driving around or plumbers driving around or
so forth, it seems to the [c]ourt. The likelihood that things will be left in
the streets and roadways, whether they blow off or so forth, is real,
certainly more so than other types of contractors.
The [c]ourt found earlier that the [Town] had the right to regulate
these[] but felt that the fee was unreasonable. Given the fact that a
10
percentage of revenue is progressive, it affects the small haulers
differently than the large haulers, and I think that . . . is fair and I think
the amount of 3 percent is fair.
The [c]ourt recognizes that [BRS] had to bring this action to get
this changed. The [c]ourt does not dispute that [$]82,000 -- or $85,233
were [fees] reasonably and necessarily incurred by [BRS].
. . . [T]he [c]ourt commends the [Town] of Westlake for passing
that Ordinance 901[.] [T]he [c]ourt’s going to award $8,523 as attorney’s
fees to [BRS], but feels that other than that, the [Town] was the
prevailing party.
The trial court subsequently signed a final judgment that contains the following
declarations:
Count 1
Regarding the claims in Count 1 of [BRS’s] First Amended
Petition, the [c]ourt rules as follows:
1. As to [BRS’s] request for declaratory judgment that “the Town
has no authority under Section 364.034, Tex. Health & Safety Code, or
other statute or Texas constitution to require a private operator to obtain
a franchise, license, or pay fees to provide temporary solid waste
collection services to a construction site within the Town’s limits and
any such requirement is invalid,” the [c]ourt RENDERS judgment in
favor of Westlake[] and hereby orders that [BRS] take nothing as to that
claim.
2. As to [BRS’s] request for declaratory judgment that “Section
74-4, et seq., is invalid under Section 364.034, Tex. Health & Safety
Code, to the extent the Town restricts the collection of temporary solid
waste from construction sites to the Town’s franchisees and licensees,”
the [c]ourt RENDERS judgment in favor of Westlake[] and hereby
orders that [BRS] take nothing as to that claim.
3. As to [BRS’s] request for declaratory judgment that “Section
74-4, et seq., is preempted by and invalid under Section 361.0961, Tex.
11
Health & Safety Code[,]” the [c]ourt RENDERS judgment in favor of
Westlake[] and hereby orders that [BRS] take nothing as to that claim.
4. As to [BRS’s] request for declaratory judgment that “the 15%
license fee under Section 74-44, et seq., is unlawful and invalid under
Section 361.0961(a)(3), Tex. Health & Safety Code,” the [c]ourt
RENDERS judgment in favor of [BRS] and hereby declares that a 15%
license fee as set forth by Ordinance No. 851 is unreasonable[,] null[,]
and void. On this sole count[,] [BRS] is awarded reasonable attorney’s
fees pursuant to Section 37.[009,] Tex. Civ. Prac. & Rem. Code[,] in the
sum of $8,523[,] which the [c]ourt finds reasonable and necessary and
just and equitable. [BRS] shall have post-judgment interest on such
amount at the maximum allowable rate of interest.
Count 2
Regarding the claim in Count 2 of [BRS’s] First Amended
Petition, as to [BRS’s] request for declaratory judgment that “Section 74-
44, et seq., of Ordinance [N]o. 851 establishing the 15% license fee, is an
unconstitutional occupation tax and is invalid,” the [c]ourt RENDERS
judgment in favor of Westlake[] and thereby orders that [BRS] take
nothing as to that claim.
Though findings of fact and conclusions of law were requested, the trial court
did not enter any findings. BRS subsequently filed a notice of appeal.
III. Standard of Review
We review declaratory judgments under the same standards as other judgments
and decrees. Waldrop v. Waldrop, 552 S.W.3d 396, 401 (Tex. App.—Fort Worth 2018,
no pet.) (en banc op. on reh’g); see Tex. Civ. Prac. & Rem. Code Ann. § 37.010. The
procedure that the trial court uses to make its declarations determines the standard of
review that we apply on appeal. Waldrop, 552 S.W.3d at 401.
12
Here, the trial court conducted a bench trial. Though requested to do so, the
trial court did not enter findings of fact and conclusions of law, and neither party
challenges that failure. Thus, we review the trial court’s judgment as follows:
When the trial court does not enter findings of fact and conclusions of
law, “all fact findings necessary to support the trial court’s judgment and
supported by the evidence are implied.” Cadle Co. v. Parks, 228 S.W.3d
915, 916 (Tex. App.—Dallas 2007, no pet.) (citing Worford v. Stamper, 801
S.W.2d 108, 109 (Tex. 1990)). However, because the record before us
includes a reporter’s record, these implied findings are not conclusive
and may be challenged on sufficiency grounds. Id. “The judgment must
be affirmed if it can be upheld on any legal theory that finds support in
the evidence.” Id. “It is not necessary for the trial court to articulate the
correct legal reason for its judgment.” Id. (citing I & JC Corp. v. Helen of
Troy L.P., 164 S.W.3d 877, 884 (Tex. App.—El Paso 2005, pet. denied)).
Rourk v. Cameron Appraisal Dist., 305 S.W.3d 231, 234–35 (Tex. App.—Corpus
Christi–Edinburg 2009, pet. denied). Also, several of the trial court’s declarations turn
on a question of statutory construction, and thus, we apply a de novo standard of
review. Johnson v. Simmons, 597 S.W.3d 538, 540 (Tex. App.—Fort Worth 2020, no
pet.).
When we are tasked to determine whether a municipal ordinance conforms to a
legislative act, we have the two-pronged task of interpreting the legislative act and
then determining whether the ordinance conforms to it:
Our goal in interpreting any statute is to “ascertain and give effect to the
Legislature’s intent as expressed by the language of the statute.” City of
Rockwall v. Hughes, 246 S.W.3d 621, 625 (Tex. 2008). To determine that
intent, we look first to the “plain and common meaning of the statute’s
words.” State [ex rel. State Dept. of Highways & Pub. Transp.] v. Gonzalez, 82
S.W.3d 322, 327 (Tex. 2002). We examine statutes as a whole to
contextually give meaning to every provision. Id. “Municipal ordinances
13
 must conform to the limitations imposed by the superior statutes, and
only where the ordinance is consistent with them, and each of them, will
it be enforced.” Bolton v. Sparks, 362 S.W.2d 946, 950 (Tex. 1962); see also
Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex. 1998) (“[I]n reviewing an
ordinance, the court is to consider all the circumstances and [to]
determine as a matter of law whether the legislation is invalidated by a
relevant statute or constitutional provision.”).
City of Lorena v. BMTP Holdings, L.P., 409 S.W.3d 634, 641 (Tex. 2013).
IV. Analysis
A. How we generally determine the extent of the statutory authority
exercised by the Town
The parties agree that Westlake is a general-law municipality. 3 Westlake’s
classification as a general-law municipality is pivotal because the classification of a
municipality under Texas law implicates how such a municipality must establish its
power to act. As a starting point, “[m]unicipalities are creatures of law that are
‘created as political subdivisions of the state . . . for the exercise of such powers as are
conferred upon them. . . . They represent no sovereignty distinct from the state and
possess only such powers and privileges as have been expressly or impliedly conferred
upon them.’” Town of Lakewood Vill. v. Bizios, 493 S.W.3d 527, 530 (Tex. 2016)
(quoting Payne v. Massey, 196 S.W.2d 493, 495 (Tex. 1946)). The “nature and source of
a municipality’s power” are tied to the municipality’s classification under Texas law as
either a home-rule, a general-law, or a special-law municipality. Id. at 531.
Various pleadings in our record and other cases describe Westlake as a Type A
3
general-law municipality, and we assume that it is. See, e.g., In re Town of Westlake, 211
B.R. 860, 862 (Bankr. N.D. Tex. 1997) (mem. op.); Huntress v. McGrath, 946 S.W.2d
480, 481 (Tex. App.—Fort Worth 1997, orig. proceeding).
14
The distinction between home-rule and general-law municipalities turns on the
source of their powers and whether, in the case of home-rule municipalities, they are
subject only to limitations placed on those powers by the Legislature, or in the case of
a general-law municipalities, they can act only if the legislature has expressly conferred
a power on them. Id. As the Texas Supreme Court explained,
Home-rule municipalities “derive their powers from the Texas
Constitution” and “possess ‘the full power of self government and look
to the Legislature not for grants of power, but only for limitations on
their power.’” In re Sanchez, 81 S.W.3d 794, 796 (Tex. 2002) [(orig.
proceeding)] (quoting Dall. Merchant’s & Concessionaire’s Ass’n v. City of
Dallas, 852 S.W.2d 489, 490–91 (Tex. 1993)). Statutory limitations on
home-rule municipal authority are ineffective unless they appear with
“unmistakable clarity,” and even when they do, a municipality’s
ordinance is only “unenforceable to the extent it conflicts with [a] state
statute.” Id. Therefore, home-rule municipalities inherently possess the
authority to adopt and enforce building codes, absent an express
limitation on this authority. Unlike home-rule municipalities, general-law
municipalities, such as the Town, “are political subdivisions created by
the State and, as such, possess [only] those powers and privileges that
the State expressly confers upon them.” Tex. Dep’t of Transp. v. City of
Sunset Valley, 146 S.W.3d 637, 645 (Tex. 2004).
Id.
The more restrictive nature of a general-law municipality’s authority tightens
the standard we apply in determining whether a power may be implied from power
expressly granted to the municipality. As the Texas Supreme Court further explained,
[G]eneral-law municipalities have “only such implied powers as are
reasonably necessary to make effective the powers expressly granted.
That is to say, such as are indispensable to the declared objects of the
[municipalities] and the accomplishment of the purposes of [their]
creation.” Tri-City Fresh Water Supply Dist. No. 2 of Harris Cty. v. Mann, . . .
142 S.W.2d 945, 947 ([Tex.] 1940) (emphasis added); see also Foster v. City
15
of Waco, . . . 255 S.W. 1104, 1106 ([Tex.] 1923) (“A municipal power will
be implied only when without its exercise the expressed duty or authority
would be rendered nugatory.”). Thus, we strictly construe general-law
municipal authority[,] and “[a]ny fair, reasonable, substantial doubt
concerning the existence of power is resolved by the courts against the
[municipality], and the power is denied.” Foster, 255 S.W. at 1106.
Id. at 536.
B. Why we overrule BRS’s first issue
1. Westlake has the power to license commercial solid waste
operators.
As noted above, the trial court declared that BRS take nothing on its request
for a declaration that
the Town has no authority under Section 364.034, Tex. Health & Safety
Code, or other statute or Texas constitution to require a private operator
to obtain a franchise, license, or pay fees to provide temporary solid
waste collection services to a construction site within the Town’s limits[,]
and any such requirement is invalid[.]
In its first issue, BRS challenges whether “a general[-]law town has requisite statutory
authority to require a residential construction waste hauler to obtain a license and pay
a license fee.” BRS’s challenge takes two forms: first, the Town has no statutory
power to license; and second, the power to license in one statute is restricted by a
more specific Texas statute, which is Section 364.034 of the Health and Safety Code.
The initial question we address is whether the Town is given the statutory
power to license the commercial solid waste operators conducting business in the
Town. We hold that it does. The Town is empowered to adopt rules for regulating
16
solid waste collection, and that power carries with it the power to license those
conducting waste disposal activities in the Town.
Westlake bases its power to require a license on a statute that gives it broad
authority to regulate solid waste. The statute relied on by Westlake is categorical in its
wording: “A governing body may adopt rules for regulating solid waste collection,
handling, transportation, storage, processing, and disposal.” See Tex. Health & Safety
Code Ann. § 363.111(a).4 Westlake augments its argument that Section 363.111 gives
it broad authority to regulate solid waste by citing to Section 363.113 of the Health
and Safety Code that provides that “each municipality shall review the provision of
solid waste management services in its jurisdiction and shall assure that those services
are provided to all persons in its jurisdiction by a public agency or private person.”
See id. § 363.113.
BRS does not parse the language of the sections of the Health and Safety Code
that the Town relies on for its power to license. Instead, BRS argues that the cited
provisions do not vest the Town with licensing authority, and under the narrow
standard of implied authority derived from Bizios that we quoted above, the power to
license cannot be implied. We disagree. The Town has been delegated broad powers
to police and regulate all aspects of the stream of solid waste; the power to regulate
4
BRS makes no argument that the Town’s actions are in violation of the
limitation contained in Subsection (b) of Section 363.111 that provides, “The rules
may not authorize any activity, method of operation, or procedure prohibited by
Chapter 361 (Solid Waste Disposal Act) or by rules or regulations of the commission
or other state or federal agencies.” See Tex. Health & Safety Code Ann. § 363.111(b).
17
contained in Section 363.111 carries the power to license, and at the least, the power
can be implied from the powers expressly given the Town.
As a beginning point, waste disposal is an area that municipalities traditionally
have broad powers to regulate; indeed, one of the cases heavily relied on by BRS
noted a general-law municipality’s ability to regulate waste disposal. See Grothues v. City
of Helotes, 928 S.W.2d 725, 728 (Tex. App.—San Antonio 1996, no writ) (op. on
reh’g). Grothues described this power when it determined that a municipality could
impose a criminal sanction for the failure to use a city-franchised garbage service
though the relevant statute stated that the only “aid to enforcement” of the failure was
the suspension of service:
We do not believe [that] the [L]egislature intended this “aid to
enforcement” to be the only means to accomplish this goal. To reach
such a conclusion, we would have to ignore other grants of authority the
[L]egislature has provided to general-law municipalities to safeguard the
health and safety of its citizens. See Tex[.] Health & Safety Code Ann.
§ 122.005 . . . ; Tex[.] Power & Light Co. v. City of Garland, 431 S.W.2d 511,
517 (Tex. 1968) (city’s police powers extend to reasonable protection of
public health and safety). The [L]egislature and the courts have long
recognized the importance of garbage disposal to the enhancement of
health and safety. The enforcement of a comprehensive garbage
collection plan such as the City has adopted is clearly within the police
power granted to all municipalities. Tex. Loc[.] Gov’t Code Ann.
§ 54.001 . . . ; cf. City of Breckenridge v. McMullen, 258 S.W. 1099, 1101 (Tex.
[] App.—Fort Worth 1923, no writ) (a home-rule city) (upholding
ordinance which assessed $100 per day penalty against one who hauled
garbage within the city without a license). Moreover, we recognize that
“[p]olice power is not static or unchanging. As the affairs of the people
and government change and progress, so the police power changes and
progresses to meet the needs.” City of Breckenridge v. Cozart, 478 S.W.2d
162, 165 (Tex. App.—Eastland 1972, writ ref’d n.r.e.).
18
Id. at 729 (footnote omitted).
Embedded in the quote from Grothues is a reference to the specific power given
by the Local Government Code to all municipalities that they may “enforce each rule,
ordinance, or police regulation of the municipality and may punish a violation of a
rule, ordinance, or police regulation.” See Tex. Loc. Gov’t Code Ann. § 54.001. 5
Grothues also cites a power that Westlake has as a Type A general-law municipality:
“(a) The governing body of a Type A general-law municipality may take any action
necessary or expedient to promote health or suppress disease, including actions to[]
. . . (3) abate any nuisance that is or may become injurious to the public health.” See
Tex. Health & Safety Code Ann. § 122.005(a)(3). Further, as a Type A general-law
municipality, Westlake “may adopt an ordinance, act, law, or regulation, not
inconsistent with state law, that is necessary for the government, interest, welfare, or
good order of the municipality as a body politic.” See Tex. Loc. Gov’t Code Ann.
§ 51.012.
Thus, Westlake is given the specific power in Section 363.111 to regulate the
various aspects of the stream of solid waste and is given broad powers outlined in the
preceding paragraph to protect its citizens through the exercise of its police powers.
A license is an inherent part of this regulatory power because it is one means for a
governmental agency to regulate activities that the Town is empowered to regulate
5
The term “municipality” as used in Section 54.001 encompasses general-law
municipalities, home-rule municipalities, and special-law municipalities. See Tex. Loc.
Gov’t Code Ann. § 1.005(3).
19
under Section 363.111 and pursuant to the police powers that protect the health and
safety of its citizens; the San Antonio Court of Appeals described the function of a
license as follows:
Historically governments have granted licenses, charters[,] and permits
of various types as aids in regulating the activities of its citizens and
others who conduct endeavors within the jurisdiction. The right of the
government to so regulate is part of its police powers to secure the
health, protection, and well[-]being of its citizens. The license, permit, or
charter is the authorization of the government to conduct certain
businesses or professions or otherwise engage in particular activities.
The license or permit is a means of the government to assure that certain
criteria are met by the one who wishes to conduct those activities. The
criteria vary with the nature of the activity and the goals of the regulating
government.
Ex parte Mata, 925 S.W.2d 292, 294 (Tex. App.—Corpus Christi–Edinburg 1996, no
pet.); see also Johnson v. City of Austin, 674 S.W.2d 894, 897 (Tex. App.—Austin 1984, no
writ) (“A ‘license’ has the purpose of regulation under the police power.”).
Further, though speaking to the powers of a home-rule municipality, in a case
cited by Grothues, this court many years ago quoted a number of authorities and
explained why the power to regulate the removal of waste carries with it a power to
license those conducting that activity:
The removal of garbage comes under the powers of a municipality, and
it is within the police power of a city to pass ordinances and make
regulations governing the same. In 2 Beach on Public Corporations,
§ 995, it is said:
“A by-law of a city prohibiting any person not duly licensed
by its authorities from removing the house dirt and offal
from the city is not in restraint of trade, but reasonable and
valid, on the ground that, in the interest of public health, a
20
city is justified in providing for some general system for
removing offensive substances from the streets by persons
engaged by the city, and responsible for the work at such
times as they are directed to attend to it.”
. . . Dillon on Municipal Corporations, § 369, is as follows:
“Our municipal corporations are usually invested with
power to preserve the health and safety of the inhabitants.
This is, indeed, one of the purposes of local government,
and reasonable by-laws in relation thereto have always been
sustained in England as within the incidental authority of
corporations to ordain. It will be useful to illustrate the
subject by reference to some of the adjudged cases. An
ordinance of a city prohibiting, under a penalty, any person
not duly licensed therefor by the city authorities from
removing or carrying through any of the streets of the city
any house dirt, refuse, offal, or filth[] is not improperly in
restraint of trade[] and is reasonable and valid. Such a by-
law is not in the nature of a monopoly[] but is founded on
a wise regard for the public health. It was conceded that
the city could regulate the number and kind of horses and
carts to be employed by strangers or unlicensed persons,
but practically it was considered that the main object of the
city could be better accomplished by employing men over
whom they have entire control, night and day, who are at
hand, and able, from habit, to do the work in the best way
and at the proper time.”
McMullen, 258 S.W. at 1101.
Also, as commentators on municipal authority note, the power to regulate
carries the power to license. See 9 Eugene McQuillin, The Law of Municipal Corporations
§ 26:34 (3d ed.) (“Municipal power to regulate businesses, occupations and activities
embraces or implies the power to license as a mode of regulation and to impose a
license fee or tax sufficient in amount to cover the cost of the regulation.”); see also
21
Ex parte Wade, 146 S.W. 179, 182 (Tex. Crim. App. 1912) (“It is a generally received
doctrine that the power granted to a municipality to regulate or to prohibit includes
the power to license as a means to those ends.”).
And as precedent supporting a conclusion that it has the power to license,
Westlake cites us to Flores v. State, which Westlake argues recognized that the power to
regulate carries the power to license. 33 S.W.3d 907, 915–16 (Tex. App.—Houston
[14th Dist.] 2000, pet. ref’d) (op. on reh’g). The appellant in Flores appealed her
conviction for violating an ordinance requiring entertainers employed at sexually
oriented businesses to obtain a permit from the City of Houston. Id. at 913. One of
appellant’s arguments was that the enabling legislation giving the city the power to
regulate sexually oriented businesses did not grant the authority to require an
entertainer to obtain a license or permit. Id. at 916. Flores noted that the Legislature
had found that allowing the unrestricted operation of sexually oriented businesses was
detrimental to public health, safety, and welfare and authorized cities to regulate those
businesses. Id. The specific statutory authority given permitted a city to determine
the location of such businesses and to require an operator of the business to obtain a
license. Id. The statutes placed no limitation on a city’s ability to regulate the
business’s employees. Id. Thus, Flores held that “[r]egulation of conduct may include
the requirement that an employee acting as an entertainer in a sexually oriented
enterprise hold a permit issued by the municipality.” Id. Though not as explicit as the
22
sources cited in the preceding paragraph, we agree with Westlake that Flores supports
the proposition that the power to regulate generally carries the power to license.
Here, the Town is given a specifically delegated authority to adopt “rules”
regulating the processing of solid waste. See Tex. Health & Safety Code Ann.
§ 363.111(a). One of the tools in the Town’s toolbox of regulation is the ability to
license.
The authorities that we have cited above also support a conclusion that the
power to regulate at the least should be implied because it is reasonably necessary to
carry out the power to regulate. BRS challenges this conclusion by arguing that to
imply the power to license from the power to regulate violates the limitations on
implied powers articulated in Bizios, 493 S.W.3d at 535–37. We would disagree with
BRS even if we were to conclude that we must imply the power to license from
Westlake’s express power to regulate. Again, the Texas Supreme Court in Bizios held
that the only implied powers that existed were those reasonably necessary, i.e.,
indispensable, to make effective the powers expressly given. Id. at 536. Bizios
involved the question of whether a municipality could impose building codes on
structures built in its extraterritorial jurisdiction (ETJ) when its statutory authority
granted it only the power to regulate plats and subdivisions in that jurisdiction. Id.
The Texas Supreme Court held that the power to regulate building codes was not
reasonably necessary or indispensable to the discreet power to regulate plats and
subdivisions. Id. We conclude that Bizios is inapposite. Our question is not one of
23
conflict between the exercise of two powers but whether the explicit power to
regulate generally implies the power to license. Based on the authority cited above, it
does.
Nor do we accept BRS’s argument that implying the Town’s authority to issue
a license is contrary to our holding in Town of Annetta South v. Seadrift Development, L.P.,
446 S.W.3d 823, 832 (Tex. App.—Fort Worth 2014, pets. denied). Annetta South
involved a question of whether an ordinance controlling lot size in a municipality’s
ETJ violated a Local Government Code provision prohibiting a municipality from
regulating the number of residential units that could be built on an acre of land in that
jurisdiction. Id. at 828–30. We concluded that the ordinance “was intended to be
exactly the type of regulation prohibited by [the Local Government Code]—an
implicit extension of the Town’s zoning-density ordinances into its ETJ under the
guise of cleverly drafted rules governing plats and subdivision of land.” Id. at 830.
Annetta South’s holding is also inapposite to our holding. As with Bizios, that question
does not involve the juxtaposition of an ordinance with a statute that shows that the
ordinance is prohibited.
As a backup to its statutory argument, BRS turns to an argument that it is a
good corporate citizen that follows the best practices in the conduct of its business
and that there is thus no need for the ordinance. As a practical matter, BRS’s vigilant
conduct does not mean that all commercial solid waste operators will be so vigilant.
24
And more specifically to the question at issue, whether it is reasonable to require
licenses from those following best practices is not a matter that we can second-guess.6
We cannot second-guess because it is BRS’s burden to establish that the
ordinance is invalid, and BRS does not carry that burden by claiming that minds might
differ regarding whether the Town’s exercise of its powers is reasonable. Instead,
BRS must conclusively show that no condition warranted the ordinance’s passage.
The Waco Court of Appeals summarized BRS’s burden and the prohibition on courts
second-guessing a municipality’s reasonable decisions as follows:
A municipal ordinance is presumed to be valid, and the burden of
showing its invalidity rests on the party attacking it. See Safe Water Found.
of Tex. v. City of Houston, 661 S.W.2d 190, 192 (Tex. App.—Houston [1st
Dist.] 1983, writ ref’d n.r.e.); City of Waxahachie v. Watkins, . . . 275
6
BRS also argues that Westlake does not have power to license because the
specific instances when a general-law municipality has been given the right to license
does not include waste processors. BRS’s whole argument is as follows:
The Legislature has expressly granted general[-]law towns the express
authority to require licenses for certain occupations in Chapter 251, Tex.
Loc. Gov’t Code. These occupations include taxicabs (§ 215.004)[;]
messengers (§ 215.030)[;] peddlers and pawnbrokers (§ 215.031)[;] and
theatres, circuses[,] and other shows (§ 215.032). Temporary
construction waste hauling is not a listed occupation. Westlake’s city
council is only authorized to grant licenses and require fees for these
specific occupations. § 215.033, Tex. Loc. Gov’t Code. Chapter 251
does not authorize Westlake to require BRS to obtain a license in order
to operate as a private business within [the] Town[’s] boundaries.
Based on the discussion set out above, we conclude that the power to license comes
with the power to create rules regulating solid waste. BRS cites us to no authority
holding or statute providing that the fact that the Legislature has given a general-law
municipality the explicit power to regulate certain businesses abrogates the power to
license that comes with the power to regulate.
25
S.W.2d 477, 480 ([Tex.] 1955) (“Since it is an exercise of the legislative
power of the City’s Council, the ordinance must be presumed to be
valid.”); see also Esp[r]onceda v. City of San Antonio, No. 04-02-00561-CV,
. . . 2003 WL 21203878[, at *1] (Tex. App.—San Antonio May 22, 2003,
pet. denied) (mem. op. [on reh’g]). If reasonable minds may differ as to
whether a particular ordinance has a substantial relationship to the public
health, safety, morals, or general welfare, no clear abuse of discretion is
shown[,] and the ordinance must stand as a valid exercise of the City’s
police power. Quick, 7 S.W.3d at 117. When suit is filed attacking an
ordinance passed under a municipality’s police powers, “the party
attacking the ordinance bears an ‘extraordinary burden’ to show ‘that no
conclusive or even controversial or issuable fact or condition existed’
[that] would authorize the municipality’s passage of the ordinance.” City
of Brookside Vill. v. Comeau, 633 S.W.2d 790, 792–93 (Tex. 1982) (citing
Thompson v. City of Palestine, 510 S.W.2d 579, 581 (Tex. 1974)).
Patterson v. City of Bellmead, No. 10-12-00357-CV, 2013 WL 1188929, at *6 (Tex.
App.—Waco Mar. 21, 2013, pet. denied) (mem. op.). The argument—that BRS
follows the best practice in the conduct of its business—does not meet the burden of
establishing that no condition could exist that warranted the passage of the Town’s
solid waste ordinance.
BRS also argues that the Town cannot require a license to simply use the
Town’s streets because, unlike a franchise, BRS has the legal right to use the Town’s
streets. See City of Garland v. Tex. Power & Light Co., 295 S.W.2d 925, 927–31 (Tex.
App.—Dallas 1956, no writ) (discussing franchise of city streets that was given to an
electric utility). The most that this argument gains for BRS is that the Town may have
had an invalid reason for passing the ordinance. But if the Town is empowered to
license commercial solid waste operators, as we hold that it is, that argument gains
BRS nothing. It does not carry BRS’s “‘extraordinary burden’ to show ‘that no
26
conclusive or even controversial or issuable fact or condition existed’ which would
authorize the municipality’s passage of the ordinance.” See Patterson, 2013 WL
1188929, at *6.
We have charted why we reject BRS’s argument that the Town lacks the ability
to license commercial solid waste operators. The power to license is part and parcel
of the ability to create rules regulating the solid waste process. BRS’s argument—that
the power cannot be implied—is unsupported by the authority it cites. Finally, none
of BRS’s challenges—that are based on its view of whether a license should be
required of it—constitute a viable challenge to the Town’s decision to require a
license.
2. Section 364.034 of the Health and Safety Code is not in conflict
with the power to regulate that was given to the Town in Section
363.111.
In support of its first issue, BRS next argues that the authority of Section
363.111 conflicts with another statutory provision found in the Health and Safety
Code—Section 364.034. Compare Tex. Health & Safety Code Ann. § 363.111 with id.
§ 364.034. Because Section 364.034 is the more specific provision, BRS argues that it
limits any power found in Section 363.111. BRS’s argument creates a false
equivalence between the two provisions. Section 363.034 deals with the franchise of
private waste disposal services or a town’s contract with them; it does not prevent a
municipality from licensing operators who provide that service.
27
We refuse to be taken down the trail that BRS charts for us in its argument that
Section 364.034 deprives Westlake of the ability to license commercial solid waste
operators. Fundamentally, we reject BRS’s argument because it is an attempt to meld
the concepts of franchises governed by Section 363.034 with the privilege to regulate
an activity by a license that is provided in Section 363.111. The distinction between
the two concepts was explained by the Austin Court of Appeals as follows:
A “franchise” resulting from a contract made through an exercise of the
City’s legislative or ordinance-making power is fundamentally different
from a “privilege” granted by the City under its power to regulate the
use of its streets[.] A “franchise” may grant a “privilege,” but a
“privilege” is not necessarily a “franchise.” The word “privilege” is also
used, for example, to signify the special right that may be enjoyed only
under authority of a license, that is, a right not possessed by persons
generally. A “license” has the purpose of regulation under the police
power.
Johnson, 674 S.W.2d at 897 (citations omitted).
We next outline the structure of Section 364.034 to demonstrate that the
statute is not dealing with a license that governs the matters covered by the Town’s
ordinance in this matter but instead deals with the franchising of waste services, the
ability to force citizens to use those services, and the exceptions to this franchising
power:
• Section 364.034 begins by providing that a public agency may offer solid
waste disposal service, require the use of the service by persons within
the territory that it is offered, charge a fee for the service, and “establish
28
the service as a utility separate from other utilities in its territory.” Tex.
Health & Safety Code Ann. § 364.034(a).
• A person may opt out of using the service under certain circumstances,
including if “the person is a private entity that contracts to provide
temporary solid waste disposal services to a construction site or project
by furnishing a roll-off container used to transport construction waste or
demolition debris to a facility for disposal or recycling.” Id. § 364.034(a–
1)(2).
• The fee for the service may be collected by a county, a private or public
entity contracted to provide the service, or an entity contracted to collect
the fee. Id. § 364.034(b).
• If a person does not pay the required fee, the service may be suspended.
Id. § 364.034(d).
• The statute “does not apply to a person who provides the public or
private entity, public agency, or county with written documentation that
the person is receiving solid waste disposal services from another entity.”
Id. § 364.034(e). The subsection continues,
“Except as provided by Subsection (f), the governing body of a
municipality may provide that a franchise it grants or a contract it enters
into for solid waste collection and transportation services under this subchapter
or under other law supersedes inside of the municipality’s
boundaries any other franchise granted or contract entered into
under this subchapter.”
29
Id. (emphasis added).
• “[A] political subdivision, including a county or a municipality, may not
restrict the right of an entity to contract with a licensed waste hauler for
the collection and removal of domestic septage or of grease trap waste,
grit trap waste, lint trap waste, or sand trap waste.” Id. § 364.034(f)
(emphasis added).
• A person is exempt from having the service provided by the agency if
“on the date the requirement is adopted, [the person] is receiving under
a contract in effect on that date solid waste disposal services at a level
that is the same as or higher than the level of services that otherwise
would be required.” Id. § 364.034(g).
• “This section does not apply to a private entity that contracts to provide
temporary solid waste disposal services to a construction project.” Id.
§ 364.034(h).
By its terms, Section 364.034 deals with a separate matter than the licensing of
those who handle waste. Id. § 364.034. Further, in Subsection (e), the statute speaks
to what it is dealing with as “a franchise it grants or a contract it enters into for solid
waste collection and transportation services under this subchapter,” not licensing. Id.
§ 364.034(e). Also, the argument—that Section 364.034 must be intended to be the
source of the Town’s power to license—is belied by the provision in Subsection (f)
30
forestalling a restriction on “the right of an entity to contract with a licensed waste
hauler for the collection and removal of domestic septage or of grease trap waste, grit
trap waste, lint trap waste, or sand trap waste.” See id. § 364.034(f) (emphasis added).
This language demonstrates that a waste hauler may be licensed but that Section
364.034 does not have any provision dealing with the licensing process. See generally id.
§ 364.034. The conclusion to be drawn is that the licensing power must be found
elsewhere. The provisions of Section 364.034 do not support BRS’s argument that
Section 364.034 is intended to prevent a municipality from licensing operators that
provide waste services.
In its effort to convince us that Section 364.034 restricts the ability to license,
BRS’s brief also charts how Section 364.034 has been amended over an almost thirty-
year period and places special emphasis on Grothues that we have cited previously. 928
S.W.2d at 726–31. But Grothues dealt with matters that are not in controversy in this
appeal; its holding dealt with the ability of a municipality to franchise waste disposal
and to enforce that franchise against those who did not want to use the franchised
service. Id. at 727–30. Grothues plotted the evolution of Section 364.034 and noted
that it had originally held in an opinion that was subsequently withdrawn that Helotes
“lacked authority to enter into the contract with Garbage Gobbler to exclusively
collect and dispose of solid waste within the city limits of Helotes because the franchise
exceed[ed] the City’s statutory authority as a general-law municipality.” Id. at 727
(emphasis added). Grothues then noted that while the matter was pending on
31
rehearing, “the [L]egislature [had] amended the County Solid Waste Control Act to
provide a general-law municipality with the authority to contract with a private
contractor for the collection and disposal of garbage and other solid waste.” Id.
Grothues and the statutory changes that it addressed are not the same matters that are
addressed in the Town’s ordinance.
BRS also cites us to the House Research Organization bill analysis that speaks
to why the Solid Waste Disposal Act required the amendment discussed in Grothues.
That analysis does not support BRS’s contention that the legislative amendment
discussed in Grothues was intended to address the ability of a municipality to license
commercial waste operators to ensure that they conformed to minimum standards of
safety and health; instead, it reinforces that the amendment dealt with a municipality’s
ability to franchise its waste disposal services:
[SUPPORTERS SAY:] The bill would allow many general[-]law cities to
continue what they are already doing: contracting for waste disposal services.
It would prevent lawsuits such as the recent case involving the City of
Helotes from recurring in other cities.
Helotes was sued by a local resident who refused to pay a garbage
collection fee because the resident maintained [that] the city did not have
the authority to contract with a private company nor the authority to
fine a resident for failing to pay the private company the garbage
collection fee. [In Grothues,] [the] San Antonio Court of Appeals ruled that
general[-]law municipalities, which derive their authority from statute rather than a
home-rule charter, are not authorized to contract with other public agencies or with a
private contractor for garbage collection without explicit statutory authority.
In the last 10 years, landfills have decreased from over 900 in
1986 to approximately 225 in 1995. Most cities, counties[,] and regional
governments have closed their landfills and are contracting with private
32
solid waste companies. Without this bill, hundreds of contracts by
general[-]law cities could be declared void. General[-]law municipalities
will have no choice but to dispose of their garbage illegally or [to] spend
millions of dollars to open and maintain landfills.
House Research Org., Bill Analysis, Tex. S.B. 1371, 74th Leg., R.S. (1995) (emphases
added), https://lrl.texas.gov/scanned/hroBillAnalyses/74-0/SB1371.pdf (last visited
Dec. 28, 2020).
Nor do other cases cited by the parties suggest that Section 364.034 limited the
power a town has under Section 363.111 to license a commercial solid waste operator
for health and safety concerns. BRS cites Adams v. City of Weslaco, No. 13-06-00697-
CV, 2009 WL 1089442 (Tex. App.—Corpus Christi–Edinburg Apr. 23, 2009, no pet.)
(mem. op.). Adams dealt with the attempt by a city to grant a franchise for the
collection of grease and grit. Id. at *1. The case examined then-existing Subsection
(e) of Section 364.034 to determine how that subsection impacted the city’s franchise
power and held that
the tension between the constitutional prohibition against monopolies
and the police powers of a city to regulate garbage collection are
alleviated by our interpretation of [Sub]section (e). We read the two
sentences together to allow an opt-out and still allow enforcement of a duly
authorized franchise, which by the very statutory limitation of its
legislative grant, may not disallow an opt-out.
Id. at *8 (emphasis added in bold). The quoted holding does not address licensing
regulations of the type at issue before us.
The same is true of another case cited by the parties, Republic Waste Servs. of
Tex., Ltd. v. Tex. Disposal Sys., Inc., 848 F.3d 342 (5th Cir. 2016). Republic Waste dealt
33
with the question of whether Section 364.034 restricted a home-rule city’s ability to
enter into an exclusive contract for solid waste disposal services. Id. at 343. Republic
Waste concluded that the statute did not restrict a city’s home-rule authority to enter
into an exclusive contract for solid waste disposal services at a construction project.
Id. at 347. We cannot see the broad principle that BRS would apparently have us
draw from this case—that “[t]he thrust of the discussion in [Republic Waste] is that a
general[-]law town which lacks inherent authority like San [Angelo] would be
prohibited from regulating waste haulers like BRS.” [Emphasis added.]
Republic Waste also, at least tangentially, addresses BRS’s argument that
Subsection (h) of Section 364.034 excludes the Town from regulating BRS. As set
forth above, Subsection (h) provides, “This section does not apply to a private entity
that contracts to provide temporary solid waste disposal services to a construction
project.” Tex. Health & Safety Code Ann. § 364.034(h). Republic Waste describes the
function of this subsection as limiting the scope of the authority conferred by
Subsection (a) of the statute. 848 F.3d at 346. Again, it is an unsupportable inference
that being freed from the authority to grant a franchise can be translated into a
restriction on any power to license commercial solid waste operators to ensure that
they conduct their business safely.
At the end of the day, BRS’s argument funnels down to the contention that
because Section 364.034 of the Health and Safety Code is a more specific statute that
deals with the same ground as the regulatory power for waste disposal given a general-
34
law municipality in Section 363.111, under Section 311.026 of the Government Code,
Section 364.034 should trump Section 363.111. But the standard created by the
section of the Government Code invoked by BRS belies the conflict. Section 311.026
of the Government Code provides as follows:
(a) If a general provision conflicts with a special or local provision, the
provisions shall be construed, if possible, so that effect is given to both.
(b) If the conflict between the general provision and the special or local
provision is irreconcilable, the special or local provision prevails as an
exception to the general provision, unless the general provision is the
later enactment and the manifest intent is that the general provision
prevail.
Tex. Gov’t Code Ann. § 311.026. This section counsels us to make an effort to
reconcile the allegedly conflicting sections and to allow the special section to prevail
only if the conflict is irreconcilable. See id. Here, we can achieve reconciliation
between the two sections. Section 364.034 deals with the power of a municipality to
franchise or to contract with persons to provide waste services. See Tex. Health &
Safety Code Ann. § 364.034. But that power or lack of power is not irreconcilable
with the distinct power in Section 363.111 to regulate those operators by license to
ensure that they conduct their business safely and so as not to become a nuisance. See
id. § 363.111.
Because the Town has the power to license commercial solid waste operators
and because Section 364.034 is not in conflict with Section 363.111 that gives the
Town the power to regulate, we overrule BRS’s first issue.
35
C. Why we reject BRS’s second issue and sustain the Town’s first
point that Section 361.0961 of the Health and Safety Code does not
preempt the Town’s ability to license commercial solid waste
operators
In its second issue, BRS turns to another argument aimed at thwarting the
Town’s powers to regulate solid waste under Section 363.111. See id. In this
argument, BRS contends that Section 361.0961 of the Health and Safety Code
preempts the regulatory authority delegated in Section 363.111 and that the trial court
erred when it entered a declaration rendering judgment to the contrary. See id.
§§ 361.0961, 363.111. We conclude that the trial court’s declaration is correct. But
this holding also requires that we sustain the Town’s first point that challenges the
trial court’s declaration that the license fee charged by the Town violates Section
361.0961(a)(3) though, as we explain below, we conclude that the challenge to the
amount of the fee is moot. We conclude that requiring commercial solid waste
operators to be licensed does not fall within the ambit of Section 361.0961 and that
the statute does not have the unmistakable clarity needed for us to conclude that it
preempts the Town’s power to license those operators.
Section 361.0961 of the Health and Safety Code provides as follows:
(a) A local government or other political subdivision may not adopt an
ordinance, rule, or regulation to:
(1) prohibit or restrict, for solid waste management purposes, the
sale or use of a container or package in a manner not authorized
by state law;
36
(2) prohibit or restrict the processing of solid waste by a solid
waste facility, except for a solid waste facility owned by the local
government, permitted by the commission for that purpose in a
manner not authorized by state law; or
(3) assess a fee or deposit on the sale or use of a container or
package.
(b) This section does not prevent a local government or other political
subdivision from complying with federal or state law or regulation. A
local government or other political subdivision may take any action
otherwise prohibited by this section in order to comply with federal
requirements or to avoid federal or state penalties or fines.
(c) This section does not limit the authority of a local government to
enact zoning ordinances.
Id. § 361.0961.
BRS fashions two preemption arguments from Section 361.0961. First, BRS
relies on Subsection (a)(1) to argue that the Town’s ordinance restricts the sale or use
of a container—the dumpsters into which temporary construction waste is placed—in
a manner not authorized by state law. Second, BRS argues that the license fee
imposed by the Town’s ordinance violates Subsection (a)(3) because it assesses a fee
or a deposit for the sale or use of a container.
BRS supports its arguments by citing the Texas Supreme Court’s recent
opinion in City of Laredo v. Laredo Merchants Ass’n, which held that Section 361.0961
preempted the City of Laredo’s attempt to prohibit businesses from providing single-
use plastic or paper checkout bags. 550 S.W.3d 586, 590 (Tex. 2018). We look first to
City of Laredo for guidance on the preemption principles that we should apply.
37
The question that underlies any preemption determination is not whether the
Legislature can preempt a local regulation like Ordinance No. 851 but whether it has.
Id. at 593. The overarching principle that guides this determination is whether the
intent to impose a limitation on the municipality’s powers appears with “unmistakable
clarity.” Id. To decide if the State is acting with this level of clarity, the Texas
Supreme Court provided the following signposts to follow:
The mere “entry of the [S]tate into a field of legislation . . . does not
automatically preempt that field from city regulation[.”] Rather, “local
regulation, ancillary to and in harmony with the general scope and
purpose of the state enactment, is acceptable.” Absent an express
limitation, if the general law and local regulation can coexist peacefully
without stepping on each other’s toes, both will be given effect or the
latter will be invalid only to the extent of any inconsistency.
Id. (footnotes omitted). In the Texas Supreme Court’s view, Section 361.0961 clearly
expressed the Legislature’s intent to preempt certain acts of a municipality by its
language prohibiting a municipality from adopting an ordinance contrary to the
strictures of the section. Id. Thus, the question became whether the ordinance at
issue fell within the “ambit” of the statute. Id. at 593–94. In deciding whether the
ordinance fell within the “ambit” of the section’s prohibitions, the Texas Supreme
Court looked to the usual sources that guide statutory interpretation—the statutory
text and the plain meaning of its words. Id. at 594.
Here, neither party challenges whether the Town’s ordinance falls within
certain of Section 361.0961(a)’s ambits by involving solid waste management purposes
or the use of a “container.” See Tex. Health & Safety Code Ann. § 361.0961(a)
38
(stating that an ordinance may not be adopted that “prohibit[s] or restrict[s], for solid
waste management purposes, the sale or use of a container or package in a manner
not authorized by state law”). Instead, the parties’ first disagreement is whether the
ordinance prohibits or restricts the use of a container in a manner not authorized by
state law.
City of Laredo interpreted Section 361.0961(a)(1)’s language dealing with whether
a restriction was in a “manner not authorized by state law” and described Laredo’s
efforts to find authorization for its ordinance in a host of general state laws. 550
S.W.3d at 597. Those laws were not the express authority that Laredo needed to meet
Section 361.0961(a)(1)’s requirement that a prohibition or restriction be in a manner
authorized by state law. The opinion interpreted the “manner” language of the statute
in the following way:
But the [Texas Solid Waste Disposal] Act preempts local regulation “in a
manner not authorized by state law[.”] The question is not whether a
municipality has the power to regulate. Home-rule cities already have
the power of self-governance unless restricted by state law. If
“authorized by law” in the preemption provision referred only to the
power municipalities already have, the restriction would have no effect.
But the preemption provision applies to local regulation when the manner
is not authorized by state law. Manner is how something can be done,
not merely if it can be. A manner must be stated by, and not merely
implied from, a grant of authority. The clear, stated intent of the Act is
to control the manner of regulating the sale or use of containers or
packages for solid waste management purposes. To conclude otherwise
would render the statute meaningless.
By rescinding local control that would otherwise exist, the Act
forbids home-rule cities from regulating that subject matter. By
authorizing regulation only when municipalities are told how to
39
permissibly regulate, the Act requires an express authorization. These
circumstances are functionally analogous to how general-law
municipalities operate under the law. General-law municipalities lack the
power of self-government and must look to the Legislature for express
grants of power. So too must a home-rule city whose self-governance
has been legislatively abrogated.
Id. at 598 (footnotes omitted).
Here, by Section 363.111, the Legislature specifically empowered the Town to
adopt “rules for regulating” almost every aspect of the handling of solid waste in
addition to the other statutes that we have enumerated that give the Town the ability
to enforce its police powers. See Tex. Health & Safety Code Ann. § 363.111.
Licensing is one of the integral means given to a governmental entity to regulate those
performing an activity that is subject to regulation. Thus, we conclude that licensing
is an express grant of power contained in Section 363.111. See id. We acknowledge
that the language we quoted from City of Laredo says that the manner of regulation
cannot be implied, but Section 363.111 provides that a municipality “may adopt rules
for regulating” solid waste. See id. We do not read the Texas Supreme Court’s
reference to mean that a power is not express unless every means to regulate an
activity is enumerated in the statute and prohibits a municipality from exercising a
common means of accomplishing regulation, such as licensing.
Nor do we construe the section’s words—“prohibit or restrict, for solid waste
management purposes, the sale or use of a container or package”—to be so broad as
to embrace the licensing of a commercial solid waste operator. See id. BRS is not
40
selling a container. The ordinance does not prohibit BRS from using a container in its
business. To the contrary, it does exactly the opposite; it permits BRS to operate a
business using a container. See id. Thus, the question is whether the ambit of the
statute reaches the licensing of a commercial solid waste operator because it restricts
the use of a container.
We must construe the word “use” in a way that it is not strained and looks to
the context in which it was used. See Hyde v. Harrison Cty., 607 S.W.3d 106, 112 (Tex.
App.—Houston [14th Dist.] 2020, pet. filed) (“We must not engage in forced or
strained construction; instead, we must yield to the plain sense of the words the
Legislature chose.”). Also, we must interpret the words of a statute in context.7
Subsection (a)(1) of Section 361.0961 does not specify who may use a
container. If the word “use” is so broad that it includes a business that provides a
7
As the Texas Supreme Court has previously noted, a word with such a broad
definition as “use” should be placed in context:
Language cannot be interpreted apart from context. The meaning of a
word that appears ambiguous when viewed in isolation may become
clear when the word is analyzed in light of the terms that surround it.
The word “use” poses some interpretational difficulties as well because
of the different meanings attributable to it. “Use” and the “use of a
license” therefore[] draw their meanings from context, so we look not
only to the words themselves but [also] to the statute in its entirety to
determine the Legislature’s intent. It is a fundamental principle of
statutory construction and indeed of language itself that words’
meanings cannot be determined in isolation but must be drawn from the
context in which they are used.
TGS–NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 441 (Tex. 2011) (footnotes
omitted).
41
dumpster as part of its services, then every entity involved in the stream of processing
solid waste would be embraced by “use” because it is difficult to envision a waste
disposal business that would not use a container to hold the waste. The consequence
of such an interpretation would be that any time a company could conceive of a
situation in which an ordinance might have an impact on the company’s use of a trash
container, the company could argue that Subsection (a)(1) requires a showing of
explicit statutory authority permitting the restriction. As we have noted, the Town
has both a traditional police power to regulate waste collection and the statutory
authorization permitting the adoption of “rules for regulating solid waste collection,
handling, transportation, storage, [and] processing.” See Tex. Health & Safety Code
Ann. § 363.111(a). To stretch the word “use” to the point that it abrogates these
powers because the requirement of a license may impose a tangential restriction on
the use of a container by a business that provides dumpsters is both strained and
unreasonable. Further, nothing in the context supports such a strained interpretation.
Also, though the parties do not challenge that a dumpster is a container, City of
Laredo suggests that is too broad a reading of the term. See 550 S.W.3d at 597. The
opinion discusses one of Laredo’s arguments in which it apparently claimed that a
single-use plastic or paper checkout bag was not a container because it was not a solid
waste receptacle. Id. The opinion rejected this argument for the following reason:
The alternative limitation the City proposes—receptacles used to hold or
transport solid waste—fares no better. The Act does use “container” in
that sense but does not restrict the word to that meaning. The word
42
“package” does not appear elsewhere in the Act, but “packaging” does,
and its use is consistent with the ordinary understanding of the term, not
as a solid waste receptacle. The phrase “container or package” suggests
analogous meanings, contrary to the City’s argument.
Id. (footnote omitted). A dumpster is not the type of container that is analogous to a
package. We glean from the Texas Supreme Court’s discussion that the use of the
word “container” does not go so far as to encompass a dumpster, and this reinforces
our conclusion that the ambit of Subsection (a)(1) reaches to the licensing of a
business that provides dumpsters.
Next, to adopt a meaning of Subsection (a)(1) going so far as to encompass
police-power regulation of commercial solid waste operators is out of context with
the section of the Health and Safety Code preceding Section 361.0961. Section
361.096(a) provides, “Except as specifically provided by this chapter, this subchapter
does not limit the powers and duties of a local government or other political
subdivision of the [S]tate as conferred by this or other law.” Tex. Health & Safety
Code Ann. § 361.096(a). For the reasons that we have outlined, Section 361.0961
does not specifically provide limitations on the powers that we conclude that the
Town holds to license commercial solid waste operators.
Finally, even BRS does not argue that the Town lacks the power to license
because that act in and of itself restricts the use of a container. Instead, BRS’s
argument harkens back to reliance on the contention that the ordinance conflicts with
Section 364.034:
43
In this case, Westlake as a general[-]law town is authorized to provide or
regulate private (as opposed to public) solid waste collection only in
§ 364.034, Tex. Health & Safety Code; Grothues. The Texas Legislature
has expressly exempted from [that] section a company like BRS “that
contracts to provide temporary solid waste disposal services to a
construction project.” § 364.034(h), Tex. Health & Safety Code. As a
result, Westlake is attempting in Ordinance No. 851 to “restrict, for solid
waste management purposes, the sale or use of a container or package in
a manner not authorized by state law” in violation of § 361.0961, Tex.
Health & Safety Code. The [L]egislature has expressly addressed
operations like BRS’s by excluding them from statutory coverage, thus
ensuring that Westlake’s restrictions on BRS’s restrictions are “not
authorized by state law.”
We have already rejected BRS’s argument that Section 364.034 is a specific statute that
controls and overrides the powers of Section 363.111. Thus, we reject BRS’s
secondary argument that hinges on the same principle to argue that the ordinance acts
in a manner contrary to state law because it violates Section 364.034.
Further, in a preemption analysis, the various ways that Section 361.0961(a)(1)
is vague on the question of whether the requirement of a license falls within its ambit
also prompts the conclusion that the subsection does not preempt the ability of the
Town to license a waste processor with unmistakable clarity. Only by embracing the
unreasonably strained definition of “use” that we have already rejected could we reach
that conclusion.
We also reject BRS’s contention that a prohibition against the adoption of an
ordinance that “assess[es] a fee or deposit on the sale or use of a container or
package” encompasses the charging of a fee to obtain a license for commercial solid
waste operators. In essence, BRS would have us construe this language to mean that
44
because a commercial waste processor uses a container, any license fee is prohibited
by Subsection (a)(3). If we assume, as we do, that a municipality can license waste
processors, to adopt the construction advocated by BRS would mean that the
Legislature intended to prohibit a municipality from being able to charge any fee when
it licenses waste processors because the operator’s business uses a container. Again,
we will not adopt such a strained construction.
The question again devolves to whether a license fee is the assessment of a fee
for the “use” of a container. And again, that prompts the question regarding the use
of the container by whom. Two businesses “use” the dumpster as part of the service
that BRS provides. The first is a homebuilder that contracts with BRS. The Town
imposes no fee on that business. The second business is BRS when it hauls away the
waste from the construction site. BRS argues that Subsection (a)(3) must apply to it
because “BRS would not be in business in Westlake but for the use of its containers”
and that the licensing fee found in the Town’s ordinance requires “BRS to pay a
significant revenue percentage fee in order to use its containers within the Town
limits.”
The upshot of BRS’s argument is that a license fee on any business that uses a
container is the assessment of “a fee or deposit on the sale or use of a container or
package.” See id. § 361.0961(a)(3). That view argues for an interpretation of the
statute that every tangential governmental administrative cost imposed on a company
offering a container as part of its business falls within the ambit of the statute’s
45
language and that such a fee is prohibited by the statute. In turn, that would mean
that the company benefiting from the ability to operate its business within a
municipality would force the taxpayers to bear any administrative cost associated with
the license because we must read Subsection (a)(3) to mean that an administrative cost
is a fee for the use of a container. Such an interpretation would require so slavish a
devotion to the literal definition of “use” to require a strained interpretation. It would
also require us to adopt that interpretation when nothing in the context of the statute
indicates that “use” should be given so broad a reach, and that interpretation is
antithetical to the powers given a municipality to regulate those operating a waste
disposal business. And for the reason we stated above, we question whether a
dumpster is appropriately considered a container as that term is used in Subsection
(a)(3). See id.
As discussed above, Subsection (a)(3) does not speak with the specificity for us
to conclude that it “limit[s] the powers and duties of a local government or other
political subdivision of the state as conferred by this or other law.” Compare id., with id.
§ 361.096. And Subsection (a)(3) does not have the unmistakable clarity for us to
conclude that it preempts the powers of a town to license commercial solid waste
operators.
Thus, we overrule BRS’s second issue, and we sustain the Town’s first point.
46
D. Why we conclude that BRS’s third issue—challenging the validity
of the amount of the 15% license fee—is now moot
We have addressed the questions that result from the Town’s ordinances as
they exist presently, such as whether the Town may require a license and whether it is
deprived of that power by other provisions of Texas law. Now, we turn to whether
we should review the remaining question involving the ordinance—the validity of the
amount of the 15% license fee that was in controversy during the trial of this matter.8
The record shows that the Town has replaced the original fee of 15% of gross
revenue originally imposed with a fee of 3% of gross revenue. Westlake, Tex.,
Ordinance 901. As explained below, an issue challenging the validity of an ordinance
becomes moot when a municipality substantially alters that ordinance and the
exceptions to the mootness doctrine are not applicable. We conclude that on the
issue of the amount of the license fee, the Town’s ordinance has been substantially
altered, and neither the possibility of repetition of the imposition of the license fee in
the amount challenged nor the collateral consequences of the imposition of the 15%
license fee avoid mootness.
We may not decide an issue that is moot because such a decision is advisory,
and the rendition of an advisory decision violates the doctrine of separation of
powers. Trulock v. City of Duncanville, 277 S.W.3d 920, 923–24 (Tex. App.—Dallas
In its third issue, BRS challenges the trial court’s determination that the fee
8
was not an unconstitutional occupation tax.
47
2009, no pet.). Mootness implicates the standing of a party, and if the controversy
becomes moot at any stage of the proceeding, standing may be lost. Id. at 924.9
The general principles that we apply in testing an issue’s mootness are whether
“(1) there are no live controversies between the parties[,] and (2) any decision
rendered by the appellate court would be an advisory opinion.” Id. To apply the
doctrine of mootness to a legislative enactment, there must be a significant change to
the enactment. Id.; Long Term Care Pharm. All. v. Tex. Health & Human Servs. Comm’n,
249 S.W.3d 471, 478–79 (Tex. App.—Eastland 2007, no pet.) (discussing and quoting
Ne. Fla. Chapter of the Associated Gen. Contractors of Am. v. City of Jacksonville, Fla., 508
U.S. 656, 113 S. Ct. 2297 (1993)).
There are two exceptions to the doctrine of mootness: “(1) the issue is ‘capable
of repetition, yet evading review[,’] and (2) the collateral consequences doctrine.”
Trulock, 277 S.W.3d at 924. The capable-of-repetition-yet-evading-review exception is
rarely used and is usually raised as a challenge to unconstitutional acts. PNC Bank,
N.A. v. RPCG-GP I, LLC, No. 05-19-00411-CV, 2020 WL 1486846, at *1 (Tex.
App.—Dallas Mar. 27, 2020, no pet.) (mem. op.) (citing and quoting Tex. A & M
Univ.–Kingsville v. Yarbrough, 347 S.W.3d 289, 290 (Tex. 2011)). That exception is
limited to situations where the following circumstances are simultaneously present:
(1) the challenged action was in its duration too short to be fully litigated
prior to its cessation or expiration, or the party cannot obtain review
Mootness raises a question of subject-matter jurisdiction, which we review
9
de novo. See Trulock, 277 S.W.3d at 923.
48
before the issue becomes moot; and (2) there is a reasonable expectation
that the same complaining party would be subjected to the same action
again.
Id. “The mere physical or theoretical possibility that the same party may be subjected
to the same action again is not sufficient to satisfy” the exception’s requirement that
there be a reasonable expectation of repetition. Trulock, 277 S.W.3d at 924–25. “The
‘collateral consequences’ exception has been applied when prejudicial events have
occurred “whose effects continued to stigmatize helpless or hated individuals long
after the unconstitutional judgment had ceased to operate.” PNC Bank, 2020 WL
1486846, at *1 (citing In re Sierra Club, 420 S.W.3d 153, 158 (Tex. App.—El Paso
2012, orig. proceeding)).
Here, both parties attack the trial court’s declarations that involve the original
15% license fee. BRS’s attack is that the license fee is a disguised, prohibited
occupation tax and that it has the characteristics of such a tax because its primary
purpose is to raise revenue and not for the purpose of regulation. BRS also argues
that the Town failed to establish a nexus between its cost to administer the license and
the amount of the 15% fee. The distinction cited by BRS is the correct test for
distinguishing between a license fee and an occupation tax.10
10
The cases highlighting the distinction were summarized by the Fifth Circuit in
a case applying Texas law:
To determine whether a fee is in reality an occupation tax, Texas courts
consider “whether the primary purpose of the exaction, when the statute
or ordinance is considered as a whole, is for regulation or for raising
49
The Town’s rejoinder is that the fee must be presumed valid and that whether
the fee is valid is a fact question that turns on the issue of reasonableness. A fee may
be valid if it covers the cost of regulation or bears some reasonable relationship to the
legitimate object of the licensing ordinance.11 As the Town argues, “BRS did not
meet its heavy burden to establish the unreasonableness of the license fee adopted” in
the ordinance. Also, the Town contends that the fee should be upheld because of the
revenue.” City of Houston [v. Harris Cty. Outdoor Advert. Ass’n,] 879 S.W.2d
[322,] 326 [(Tex. App.—Houston 1994, writ denied)]. “Revenue,” as
used by Texas courts, “means the amount of money [that] is excessive
and more than reasonably necessary to cover the cost of regulation.”
Producers Ass’n of San Antonio v. City of San Antonio, 326 S.W.2d 222, 224
(Tex. [] App.—San Antonio 1959, writ ref’d n.r.e.); see also Tex. Boll Weevil
Eradication Found., Inc. v. Lewellen, 952 S.W.2d 454, 461 (Tex. 1997) (“The
critical issue is whether the assessment is intended to raise revenue in
excess of that reasonably needed for regulation.”). Whether a fee is
reasonably necessary to cover the cost of regulation is a question of fact.
[Harris Cty. Outdoor Advert. Ass’n], 879 S.W.2d at 326.
El Paso Apartment Ass’n v. City of El Paso, 415 F. App’x 574, 581 (5th Cir. 2011).
11
As we have previously explained,
The “critical issue” in determining the assessment’s primary purpose is
“whether the assessment is intended to raise revenue in excess of that
reasonably needed for regulation.” . . . Lewellen, 952 S.W.2d [at] 461[.]
“To be reasonable, a license fee cannot be excessive nor more than
reasonably necessary to cover the cost of granting the license and of
exercising proper police regulation, or it must bear some reasonable
relationship to the legitimate object of the licensing ordinance.” Harris
Cty. Outdoor Advert. Ass’n, 879 S.W.2d at 326–27.
City of Bedford v. Apartment Ass’n of Tarrant Cty., Inc., No. 02-16-00356-CV, 2017 WL
3429143, at *4 (Tex. App.—Fort Worth Aug. 10, 2017, pet. denied) (mem. op.).
50
deference due a legislative body’s determination of the need or legitimacy of a
particular ordinance.
We outline these arguments to show how much they depend on the issue of
whether the amount of the 15% fee was properly calculated to match the needs of the
Town. Because that specific fee no longer exists, we cannot advise the parties about
the propriety of how to calculate a nonexistent fee. Such an opinion would constitute
an advisory opinion, which we are prohibited from rendering. Thus, we conclude that
the issues about the 15% fee’s validity are moot because we are asked to advise about
the propriety of a fee that no longer exists and to test the reasonableness of the now-
imposed fee in the vacuum of having no record by which we may determine its
propriety.
But BRS argues that we should press ahead in our review because live issues
remain for us to review. BRS asserts that
the new ordinance does not resolve the controversy between the parties.
BRS’[s] position is that any license fee imposed on a particular occupant
based on a percentage of the business’[s] revenue is an unconstitutional
tax. The new ordinance still assesses the revenue percentage fee in order
for BRS to use its container.
In essence, BRS’s argument is that the Town cannot make any showing that the 3%
fee in the new ordinance is reasonable because it is based on a percentage of revenue.
To analyze that argument, we would have to prejudge an issue that has not been
litigated. At this point, we have no idea how the Town went about determining the
propriety of a 3% fee. As BRS itself acknowledges, “No discovery or trial testimony
51
was obtained regarding the 3% fee amount.” Also, we are not prejudging the issue,
but we note that a license fee calculated on the basis of gross revenue is not per se
invalid. See McQuillin, The Law of Municipal Corporations § 26:47 (“The amount of
license taxes or fees may be based on the amount of business done or sales made,
measured by gross sales, gross receipts, or gross income.” (footnotes omitted)). One
Texas case has permitted a license fee based on a percentage of revenue. See Reed v.
City of Waco, 223 S.W.2d 247, 254–55 (Tex. App.—Waco 1949, writ ref’d). Further,
though BRS contends that a license fee cannot be based on a percentage of revenue, it
cites no case to establish that proposition. Thus, the state of the law is not such that
we can say with certainty that the Town could never justify a licensing fee based on a
percentage of revenues, and we lack a record to test whether the Town’s decision to
impose such a fee was valid.
BRS also argues that it has escrowed $7,000 in fees pursuant to the Rule 11
agreement that addressed how it would operate during the pendency of the lawsuit
with the Town and that the agreement provides that “all escrow funds ‘shall be
disbursed to the prevailing party upon final resolution of the lawsuit, which includes a
final determination of any appeals.’” BRS argues that the escrow of the license fee
means that the controversy involving the validity of the 15% fee is still at issue. To
support its argument, BRS cites our opinion in City of Bedford, 2017 WL 3429143, at
*3. As we read City of Bedford, the controversy was not mooted after repeal of an
ordinance because the City had already collected a number of challenged fees. City of
52
Bedford cited Lowenberg v. City of Dallas for its holding that “render[ed] judgment for
[the] plaintiffs in [a] declaratory-judgment tax-refund suit and explain[ed] that [the]
city ‘cannot extract millions in unlawful fees and fines, decide the whole thing was a
mistake, keep the money, and insist the whole matter is moot’ and that ‘[f]or those
who paid, the controversy remains real.’” Id. at *6 (citing and quoting Lowenberg v. City
of Dallas, 261 S.W.3d 54, 57–58 (Tex. 2008)). We conclude that the situation in this
case is not parallel to City of Bedford or Lowenberg. The repeal of Ordinance No. 851’s
effect on the terms of the Rule 11 agreement is an issue involving that agreement.
The mechanism of the Rule 11 agreement puts this case in a different posture than
the Town’s having collected the fee and then trying to avoid the issue of the fee’s
validity by amending the ordinance. The question of how the parties litigate who is
the prevailing party differs from the mooted question of whether the now-repealed
15% license fee is valid. See, e.g., Epps v. Fowler, 351 S.W.3d 862, 864–66 (Tex. 2011)
(analyzing use of term “prevailing party” in earnest-money contract).
With respect to the exceptions to the mootness doctrine, we conclude that
based on the Town’s action of repealing the 15% license fee, there is not a reasonable
likelihood that it will impose a fee in that amount in the future. We also conclude that
BRS will suffer no lasting stigma as a collateral effect of the repealed fee.
Accordingly, we overrule BRS’s third issue as moot.
53
E. Why we remand the issue of attorney’s fees to the trial court
Both BRS and the Town attack the trial court’s award of attorney’s fees. 12 BRS
argues that if we reverse any of the trial court’s determinations about the validity of
the ordinance or whether the license fee is an occupation tax, we should remand the
issue of attorney’s fees. The Town argues that the trial court erred by deciding that
the 15% license fee was “unreasonable pursuant to Health and Safety Code Section
391.0961” and predicating an award of attorney’s fees based on that decision. We do
not reach the propriety of the 15% license fee because we conclude that question is
moot. Thus, we conclude that the trial court should be able to reassess its award of
attorney’s fees in the light of our ruling, and we remand the issue of attorney’s fees to
the trial court. See Tex. Cent. R.R. & Infrastructure, Inc. v. Miles, No. 13-19-00297-CV,
2020 WL 2213962, at *3–4 (Tex. App.—Corpus Christi–Edinburg May 7, 2020, pet.
filed) (mem. op.) (remanding matter to trial court to redetermine equitable and just fee
award under Texas Civil Practice and Remedies Code Section 37.009 in light of
appellate court’s decision). Accordingly, without regard to the merits, we sustain
BRS’s fourth issue and the Town’s second point.
V. Conclusion
We resolve this appeal as follows. Having overruled BRS’s first and second
issues, we affirm the portion of the trial court’s judgment that includes the following
declarations:
12
BRS does so in its fourth issue, and the Town does so in its second point.
54
1. As to [BRS’s] request for declaratory judgment that “the Town has no
authority under Section 364.034, Tex. Health & Safety Code, or other
statute or Texas constitution to require a private operator to obtain a
franchise, license, or pay fees to provide temporary solid waste collection
services to a construction site within the Town’s limits and any such
requirement is invalid,” the [c]ourt RENDERS judgment in favor of
Westlake[] and hereby orders that [BRS] take nothing as to that claim.
2. As to [BRS’s] request for declaratory judgment that “Section
74-4, et seq., is invalid under Section 364.034, Tex. Health & Safety
Code, to the extent the Town restricts the collection of temporary solid
waste from construction sites to the Town’s franchisees and licensees,”
the [c]ourt RENDERS judgment in favor of Westlake[] and hereby
orders that [BRS] take nothing as to that claim.
3. As to [BRS’s] request for declaratory judgment that “Section
74-4, et seq., is preempted by and invalid under Section 361.0961, Tex.
Health & Safety Code[,]” the [c]ourt RENDERS judgment in favor of
Westlake[] and hereby orders that [BRS] take nothing as to that claim.
With respect to BRS’s third issue, we held that the appeal of the following
declaration is moot:
Count 2
Regarding the claim in Count 2 of [BRS’s] First Amended
Petition, as to [BRS’s] request for declaratory judgment that “Section 74-
44, et seq., of Ordinance [N]o. 851 establishing the 15% license fee, is an
unconstitutional occupation tax and is invalid,” the [c]ourt RENDERS
judgment in favor of Westlake[] and thereby orders that [BRS] take
nothing as to that claim.
Accordingly, we dismiss as moot the portion of BRS’s appeal challenging that
declaration, vacate the declaration, and dismiss BRS’s claims challenging the 15%
license fee as an unconstitutional occupation tax.
55
Having sustained the Town’s first point, we reverse the portion of the
judgment containing the following declaration to the extent that it declares a license
fee is unlawful and invalid under Section 361.0961(a)(3) of the Texas Health and
Safety Code, and we render judgment that BRS take nothing as to that claim:
4. As to [BRS’s] request for declaratory judgment that “the 15% license
fee under Section 74-44, et seq., is unlawful and invalid under Section
361.0961(a)(3), Tex. Health & Safety Code,” the [c]ourt RENDERS
judgment in favor of [BRS] and hereby declares that a 15% license fee as
set forth by Ordinance No. 851 is unreasonable[,] null[,] and void.
To the extent that this declaration determines the 15% license fee is invalid on a basis
other than it constitutes a violation of Section 361.0961(a)(3), we determine that
BRS’s appeal of that portion of the declaration is moot, vacate the trial court’s
declaration invaliding the 15% license fee to the extent it does so for reasons other
than it is invalid under Section 361.0961(a)(3), and dismiss BRS’s claims challenging
the 15% license fee as an unconstitutional occupation tax.
Having sustained, without regard to the merits, BRS’s fourth issue and the
Town’s second point that were predicated on the attorney’s fees that were awarded
based on the preceding declaration, we reverse and remand the issue of attorney’s fees
to the trial court.
/s/ Dabney Bassel
Dabney Bassel
Justice
Delivered: January 7, 2021
56