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HARRIS COUNTY, TEXAS, Plaintiff
ENVIRONMENTAL QUALITY,
HARRIS COUNTY, TEXAS
INTERNATIONAL PAPER COMPANY,
McGINNES INDUSTRIAL MAINTENANCE
CORPORATION, WASTE MANAGEMENT,
INC., AND WASTE MANAGEMENT OF
MIMC’S COMBINED REPLY TO HARRIS COUNTY’S AND TCEQ’S RESPONSES
FOR SUMMARY JUDGMENT
Harris County and the Texas Commission on
Environmental Equality (“TCEQ”) scarcely mention, much less attempt to engage, the Fifth
vil Practice and Remedies Code
eliminates suits for civil penalties when no actual damages are recovered. See Forte v. Wal-
Mart Stores, Inc.
and the TCEQ’s arguments are red herrings because they rely on factual differences, like the
private-party suit in that case or the particulars of the Texas Optometry Act, that are immaterial
policy reasons for exempting penalty
suits from Chapter 41, were actually raised in and implicitly rejected. Still others flatly
Forte’s holding, by claiming that Chapter 41 does not apply to civil-penalty suits.
None of these arguments withstands scrutiny.
opinion is faithful to the plain language of Chapter 41, which requires a
plaintiff to establish its actual damages as a predicate to recovering damages sought as a
penalty, like the penalties sought here. And because the County has not pursued compensatory
forecloses this suit. Any contrary policy concerns or supposed indicia of the
Legislature’s intent must give way to the Legislature’s chosen language that makes Chapter 41
control over the environmental statutes in this case. RAC
§ 41.002(c) (Chapter 41 “prevail[s] over all other laws to the extent of any conflict”). This
Court should grant Defendant McGinnes Industrial Maintenance Corporation’s motion for
summary judgment based on Chapter 41 and
I. ARGUMENT
The Fifth Circuit’s Rejection Of Penalties-Only Suits In Forte v. Wal-Mart Stores,
Allows No Exception For Suits By Governmental Entities Or Under Other
The TCEQ and the County try in vain to cabin ’s reasoning by drawing
meaningless factual distinctions between the identity of the plaintiff or the underlying penalty
statute. TCEQ at 3-5. None of these facts had any bearing on the Fifth Circuit’s reasoning or
its categorical conclusion that Chapter 41 bars suits for penalties in the absence of actual
damages. In fact, the court was well aware that some penalties-only suits would be brought by
governmental entities, like in this case. The court was also fully cognizant of the argument that
penalties sought to protect the public interest should not be foreclosed by Chapter 41. Yet the
court’s rejection of those grounds squarely bars the
penalties-only suit here.
’s interpretation of Chapter 41 permits no exception for penalty suits
by governmental entities. That is why neither the County nor the TCEQ can point to a single
-2-
passage in the opinion suggesting that its holding is limited to penalties suits by private
parties. HC’s Response at 5-6; TCEQ’s Response at 3-6. To the contrary, the Fifth Circuit
knew that some suits for penalties under the Texas Optometry Act would be brought by the
State. That’s because the penalty provision analyzed in authorizes “[t]he attorney
general or board [of optometry]” to institute an action for “a civil penalty not to exceed $1,000
for each day of a violation plus court costs and reasonable attorney’s fees.” T ODE
§ 351.603(b) (emphasis added); see also Forte, 2014 WL 3970792, at *3, 5-6 (citing and
quoting this provision). It is only by way of another provision that the Act extended the State’s
right to sue for penalties to private parties. § 351.605. Yet the Fifth
Circuit targeted the language in the provision authorizing governmental suits for penalties when
the court concluded that “Chapter 41 eliminates the civil penalties in this case.”
2014 WL 3970792, at *5-6. To suggest that ’s reasoning must be “stretched” to apply it to
governmental suits blinks reality. See
Unable to escape the Fifth Circuit’s reasoning, the County mischaracterizes the
to claim both sides agreed that Chapter 41 does not extend to governmental
HC’s Response at 6-7. What really happened is that the plaintiffs cited a brief
filed by the attorney general’s office in Norra v. Harris County
WL 564061 (Tex. App.—Houston [14th Dist.] Mar. 4, 2008, no pet.), and argued that the
attorney general’s policy reasons against applying Chapter 41 to governmental penalties suits
also extend to suits by private parties. Exhibit D to the County’s Response, at 42-43.
Without commenting on the merits of that position, Wal-Mart responded by pointing to other
portions of the attorney general’s brief noting that exemplary damages within the scope of
Chapter 41 include benefits paid to a private party, like the plaintiffs’ recovery in
-3-
Exhibit E to the County’s Response, at 18. Far from agreeing with the attorney general’s
position, Wal-Mart took no position on Chapter 41’s application to penalty suits by
governmental entities.
What the briefing in actually shows is that the Fifth Circuit knew about the
attorney general’s position, including the State’s argument that public policy concerns should
preclude applying Chapter 41 to governmental actions to enforce environmental and other
Exhibit D to the County’s Response, at 42 (quoting the attorney general’s brief in
). Despite the plaintiffs’ arguments that “there is no way to divorce” their suit for
penalties from an analogous suit by the State, Exhibit D to the County’s Response, at 42-43,
y—that Chapter 41 forecloses recovery. With
that holding, the Fifth Circuit thus rejected the same policy-based arguments against Chapter 41
that the County and the TCEQ have advanced here. HC’s Response at 12-15; TCEQ’s
Second, the TCEQ’s focus on specifics features of the Texas Optometry Act is
misplaced. TCEQ’s Response at 3-5. Those differences between the statute in
the Texas Water Code are immaterial because they played no part in the
reasoning. Only two aspects of the Texas Optometry Act were relevant in the Act’s
characterization of the award as a “civil penalty,” which falls within Chapter 41’s definition of
“exemplary damages”; and (2) the Act’s failure to include any “indication that civil penalties
and exemplary damages are mutually exclusive.” , 2014 WL 3970792, at *5-6. These
For much the same reasons, the County’s
general’s office in a different case while one of Defendants’ experts worked there, is beside the
point. HC’s Response at 9-10. Essentially the same argument was advanced by the plaintiffs in
,yet the Fifth Circuit disregarded it. Whatever views were advanced by an expert on a
pure question of law, and in an unrelated case, have no relevance to how the question was
-4-
critical features are found in the Texas Water Code, which likewise denotes the recovery as a
“civil penalty” without distinguishing between that penalty and exemplary damages covered by
Chapter 41. ODE ’s analysis thus impels the same
Third, the County’s and the TCEQ’s position that civil penalties are not
exemplary damages covered by Chapter 41 is exactly what Forte rejected. HC’s Response
at 10-11; TCEQ’s Response at 6-9. The Fifth Circuit pointed out that Chapter 41’s definition of
“exemplary damages” expressly refers to “‘damages awarded as a penalty or by way of
punishment but not for compensatory purposes.’” , 2014 WL 3970792, at *6 (quoting
RAC ODE . § 41.001(5)) (emphasis in original). By defining
“exemplary damages” in this way, the legislature made clear that “[p]enalties and damages are
not mutually exclusive under Chapter 41.” at *5 n.1. As a result, civil penalties under
the Texas Optometry Act (and likewise, the Texas Water Code) are subject to Chapter 41.
Finally, the County’s and TCEQ’s attempts to downplay as non-binding
only underscore the importance of the decision. TCEQ at 2-3, HC’s Response at 7-9,
15-16. Contrasted with , where a Texas court expressly declined to resolve the issue,
2008 WL 564061, at *2 n.3, the court took on this issue “of first impression,” 2014 WL
3970792, at *1, and undeniably issued the first appellate decision that resolved Chapter 41’s
application to penalties-only suits. As the only decision on the issue, powerfully and
persuasively calls for dismissal of this case.
-5-
Neither Policy-Based Nor Legislative-Intent Arguments Can Avoid
Interpretation Of Chapter 41’s Plain Language.
As noted above, the court rejected policy-based considerations when it
held that Chapter 41 “eliminates” the recovery of civil penalties when no actual damages are
proved. And in any event, the policy arguments that the County and the TCEQ advance have
no traction here. Whatever the result may be for other statutes, the County and the TCEQ are
wrong to say that would make the environmental laws unenforceable in every instance
merely because the Texas Water Code itself does not create a cause of action for recovering
actual damages. The Texas Water Code expressly preserves the right to pursue actual damages
under other law. ATER . §§ 7.004, 7.005. But the County has not pursued
such theories here, perhaps because itknows that such damages are preempted on the facts of
this case now that remediation wo een performed.
Regardless, what the County and the TCEQ decry as an inability to pursue actual
damages under the Texas Water Code in addition to civil penalties is at best a gap in Texas law.
That sort of gap falls woefully short of creating an absurd result that
language in Chapter 41 giving it primacy over the Texas Water Code. RAC
ODE . § 41.002(c) (stating that Chapter 41 “prevail[s] over all other laws to the
extent of any conflict”); see also Combs v. Health Care Servs. Corp., 401 S.W.3d 623, 630
The County’s and TCEQ’s foray into legislative intent provides no basis for
HC’s Response at 12-15; TCEQ’s Response at 10-11. The
TCEQ, in particular, subverts principles of stat aiming the Legislature’s
intent behind Chapter 41 should control. See TCEQ’s Response at 10-11. Under
settled law, however, it is the “Legislature’s chosen language”—not its subjective purpose—
-6-
that provides the starting (and typically the ending) point for stat
Health Gulf Coast v. Aetna, Inc., 397 S.W.3d 651, 653 (Tex. 2013), because “the truest
manifestation of what lawmakers intended is what they enacted,” Combs v. Roark Amusement
& Vending, LP., 422 S.W.3d 632, 635 (Tex. 2013); see also Kia Motors Corp. v. Ruiz
432 S.W.3d 865, 869 (Tex. 2014) (“‘The plain language of a statute is the surest guide to the
Prairie View A&M , 381 S.W.3d 500, 507 (Tex.
2012)). When, as here, “a statute’s words are unambiguous and yield but one interpretation, the
judge’s inquiry is at an end.” , 422 S.W.3d at 635 (internal quotation marks omitted).
And if the County and the TCEQ complain that the technical requirements of Chapter 41 should
not foreclose this suit, it is the Legislature that “should reshuffle the equities”—not the courts.
Roccaforte v. Jefferson Cnty., 341 S.W.3d 919, 928 (Tex. 2011). Under
this suit should be dismissed.
For all the foregoing reasons, this Court should grant MIMC’s Traditional Motion for
Summary Judgment, dismiss all of the County’s claims, and enter a take-nothing judgment in
Dated: September 23, 2014 Respectfully Submitted,
WINSTON
/s/ Paula W. Hinton
Paula W. Hinton
Email: PHinton@winston.com
Melanie Gray
Email: MGGray@winston.com
Jennifer M. Nelsen
Email: JNelsen@winston.com
-7-
Renee T. Wilkerson
Email: RWilkerson@winston.com
William N. (“Bill”) Collins
Email: WCollins@winston.com
Facsimile: (713) 651-2700
WINSTEAD
/s/ Albert R. Axe
Peter Nolan
Email: pnolan@winstead.com
Email: aaxe@winstead.com
Facsimile: (512) 370-2850
Bruce R. Wilkin
Email: bwilkin@winstead.com
Facsimile: (713) 650-2400
MCGINNES INDUSTRIAL MAINTENANCE
-8-
CERTIFICATE OF SERVICE
I hereby certify that on this 23 day of September, 2014, a true and correct copy of the
foregoing instrument was forwarded to all known counsel of record by operation of the Court’s
electronic filing system.
/s/ Jennifer M. Nelsen
Jennifer M. Nelsen
-9-
Preview
HARRIS COUNTY, TEXAS, Plaintiff ENVIRONMENTAL QUALITY, HARRIS COUNTY, TEXAS INTERNATIONAL PAPER COMPANY, McGINNES INDUSTRIAL MAINTENANCE CORPORATION, WASTE MANAGEMENT, INC., AND WASTE MANAGEMENT OF MIMC’S COMBINED REPLY TO HARRIS COUNTY’S AND TCEQ’S RESPONSES FOR SUMMARY JUDGMENT Harris County and the Texas Commission on Environmental Equality (“TCEQ”) scarcely mention, much less attempt to engage, the Fifth vil Practice and Remedies Code eliminates suits for civil penalties when no actual damages are recovered. See Forte v. Wal- Mart Stores, Inc. and the TCEQ’s arguments are red herrings because they rely on factual differences, like the private-party suit in that case or the particulars of the Texas Optometry Act, that are immaterial policy reasons for exempting penalty suits from Chapter 41, were actually raised in and implicitly rejected. Still others flatly Forte’s holding, by claiming that Chapter 41 does not apply to civil-penalty suits. None of these arguments withstands scrutiny. opinion is faithful to the plain language of Chapter 41, which requires a plaintiff to establish its actual damages as a predicate to recovering damages sought as a penalty, like the penalties sought here. And because the County has not pursued compensatory forecloses this suit. Any contrary policy concerns or supposed indicia of the Legislature’s intent must give way to the Legislature’s chosen language that makes Chapter 41 control over the environmental statutes in this case. RAC § 41.002(c) (Chapter 41 “prevail[s] over all other laws to the extent of any conflict”). This Court should grant Defendant McGinnes Industrial Maintenance Corporation’s motion for summary judgment based on Chapter 41 and I. ARGUMENT The Fifth Circuit’s Rejection Of Penalties-Only Suits In Forte v. Wal-Mart Stores, Allows No Exception For Suits By Governmental Entities Or Under Other The TCEQ and the County try in vain to cabin ’s reasoning by drawing meaningless factual distinctions between the identity of the plaintiff or the underlying penalty statute. TCEQ at 3-5. None of these facts had any bearing on the Fifth Circuit’s reasoning or its categorical conclusion that Chapter 41 bars suits for penalties in the absence of actual damages. In fact, the court was well aware that some penalties-only suits would be brought by governmental entities, like in this case. The court was also fully cognizant of the argument that penalties sought to protect the public interest should not be foreclosed by Chapter 41. Yet the court’s rejection of those grounds squarely bars the penalties-only suit here. ’s interpretation of Chapter 41 permits no exception for penalty suits by governmental entities. That is why neither the County nor the TCEQ can point to a single -2- passage in the opinion suggesting that its holding is limited to penalties suits by private parties. HC’s Response at 5-6; TCEQ’s Response at 3-6. To the contrary, the Fifth Circuit knew that some suits for penalties under the Texas Optometry Act would be brought by the State. That’s because the penalty provision analyzed in authorizes “[t]he attorney general or board [of optometry]” to institute an action for “a civil penalty not to exceed $1,000 for each day of a violation plus court costs and reasonable attorney’s fees.” T ODE § 351.603(b) (emphasis added); see also Forte, 2014 WL 3970792, at *3, 5-6 (citing and quoting this provision). It is only by way of another provision that the Act extended the State’s right to sue for penalties to private parties. § 351.605. Yet the Fifth Circuit targeted the language in the provision authorizing governmental suits for penalties when the court concluded that “Chapter 41 eliminates the civil penalties in this case.” 2014 WL 3970792, at *5-6. To suggest that ’s reasoning must be “stretched” to apply it to governmental suits blinks reality. See Unable to escape the Fifth Circuit’s reasoning, the County mischaracterizes the to claim both sides agreed that Chapter 41 does not extend to governmental HC’s Response at 6-7. What really happened is that the plaintiffs cited a brief filed by the attorney general’s office in Norra v. Harris County WL 564061 (Tex. App.—Houston [14th Dist.] Mar. 4, 2008, no pet.), and argued that the attorney general’s policy reasons against applying Chapter 41 to governmental penalties suits also extend to suits by private parties. Exhibit D to the County’s Response, at 42-43. Without commenting on the merits of that position, Wal-Mart responded by pointing to other portions of the attorney general’s brief noting that exemplary damages within the scope of Chapter 41 include benefits paid to a private party, like the plaintiffs’ recovery in -3- Exhibit E to the County’s Response, at 18. Far from agreeing with the attorney general’s position, Wal-Mart took no position on Chapter 41’s application to penalty suits by governmental entities. What the briefing in actually shows is that the Fifth Circuit knew about the attorney general’s position, including the State’s argument that public policy concerns should preclude applying Chapter 41 to governmental actions to enforce environmental and other Exhibit D to the County’s Response, at 42 (quoting the attorney general’s brief in ). Despite the plaintiffs’ arguments that “there is no way to divorce” their suit for penalties from an analogous suit by the State, Exhibit D to the County’s Response, at 42-43, y—that Chapter 41 forecloses recovery. With that holding, the Fifth Circuit thus rejected the same policy-based arguments against Chapter 41 that the County and the TCEQ have advanced here. HC’s Response at 12-15; TCEQ’s Second, the TCEQ’s focus on specifics features of the Texas Optometry Act is misplaced. TCEQ’s Response at 3-5. Those differences between the statute in the Texas Water Code are immaterial because they played no part in the reasoning. Only two aspects of the Texas Optometry Act were relevant in the Act’s characterization of the award as a “civil penalty,” which falls within Chapter 41’s definition of “exemplary damages”; and (2) the Act’s failure to include any “indication that civil penalties and exemplary damages are mutually exclusive.” , 2014 WL 3970792, at *5-6. These For much the same reasons, the County’s general’s office in a different case while one of Defendants’ experts worked there, is beside the point. HC’s Response at 9-10. Essentially the same argument was advanced by the plaintiffs in ,yet the Fifth Circuit disregarded it. Whatever views were advanced by an expert on a pure question of law, and in an unrelated case, have no relevance to how the question was -4- critical features are found in the Texas Water Code, which likewise denotes the recovery as a “civil penalty” without distinguishing between that penalty and exemplary damages covered by Chapter 41. ODE ’s analysis thus impels the same Third, the County’s and the TCEQ’s position that civil penalties are not exemplary damages covered by Chapter 41 is exactly what Forte rejected. HC’s Response at 10-11; TCEQ’s Response at 6-9. The Fifth Circuit pointed out that Chapter 41’s definition of “exemplary damages” expressly refers to “‘damages awarded as a penalty or by way of punishment but not for compensatory purposes.’” , 2014 WL 3970792, at *6 (quoting RAC ODE . § 41.001(5)) (emphasis in original). By defining “exemplary damages” in this way, the legislature made clear that “[p]enalties and damages are not mutually exclusive under Chapter 41.” at *5 n.1. As a result, civil penalties under the Texas Optometry Act (and likewise, the Texas Water Code) are subject to Chapter 41. Finally, the County’s and TCEQ’s attempts to downplay as non-binding only underscore the importance of the decision. TCEQ at 2-3, HC’s Response at 7-9, 15-16. Contrasted with , where a Texas court expressly declined to resolve the issue, 2008 WL 564061, at *2 n.3, the court took on this issue “of first impression,” 2014 WL 3970792, at *1, and undeniably issued the first appellate decision that resolved Chapter 41’s application to penalties-only suits. As the only decision on the issue, powerfully and persuasively calls for dismissal of this case. -5- Neither Policy-Based Nor Legislative-Intent Arguments Can Avoid Interpretation Of Chapter 41’s Plain Language. As noted above, the court rejected policy-based considerations when it held that Chapter 41 “eliminates” the recovery of civil penalties when no actual damages are proved. And in any event, the policy arguments that the County and the TCEQ advance have no traction here. Whatever the result may be for other statutes, the County and the TCEQ are wrong to say that would make the environmental laws unenforceable in every instance merely because the Texas Water Code itself does not create a cause of action for recovering actual damages. The Texas Water Code expressly preserves the right to pursue actual damages under other law. ATER . §§ 7.004, 7.005. But the County has not pursued such theories here, perhaps because itknows that such damages are preempted on the facts of this case now that remediation wo een performed. Regardless, what the County and the TCEQ decry as an inability to pursue actual damages under the Texas Water Code in addition to civil penalties is at best a gap in Texas law. That sort of gap falls woefully short of creating an absurd result that language in Chapter 41 giving it primacy over the Texas Water Code. RAC ODE . § 41.002(c) (stating that Chapter 41 “prevail[s] over all other laws to the extent of any conflict”); see also Combs v. Health Care Servs. Corp., 401 S.W.3d 623, 630 The County’s and TCEQ’s foray into legislative intent provides no basis for HC’s Response at 12-15; TCEQ’s Response at 10-11. The TCEQ, in particular, subverts principles of stat aiming the Legislature’s intent behind Chapter 41 should control. See TCEQ’s Response at 10-11. Under settled law, however, it is the “Legislature’s chosen language”—not its subjective purpose— -6- that provides the starting (and typically the ending) point for stat Health Gulf Coast v. Aetna, Inc., 397 S.W.3d 651, 653 (Tex. 2013), because “the truest manifestation of what lawmakers intended is what they enacted,” Combs v. Roark Amusement & Vending, LP., 422 S.W.3d 632, 635 (Tex. 2013); see also Kia Motors Corp. v. Ruiz 432 S.W.3d 865, 869 (Tex. 2014) (“‘The plain language of a statute is the surest guide to the Prairie View A&M , 381 S.W.3d 500, 507 (Tex. 2012)). When, as here, “a statute’s words are unambiguous and yield but one interpretation, the judge’s inquiry is at an end.” , 422 S.W.3d at 635 (internal quotation marks omitted). And if the County and the TCEQ complain that the technical requirements of Chapter 41 should not foreclose this suit, it is the Legislature that “should reshuffle the equities”—not the courts. Roccaforte v. Jefferson Cnty., 341 S.W.3d 919, 928 (Tex. 2011). Under this suit should be dismissed. For all the foregoing reasons, this Court should grant MIMC’s Traditional Motion for Summary Judgment, dismiss all of the County’s claims, and enter a take-nothing judgment in Dated: September 23, 2014 Respectfully Submitted, WINSTON /s/ Paula W. Hinton Paula W. Hinton Email: PHinton@winston.com Melanie Gray Email: MGGray@winston.com Jennifer M. Nelsen Email: JNelsen@winston.com -7- Renee T. Wilkerson Email: RWilkerson@winston.com William N. (“Bill”) Collins Email: WCollins@winston.com Facsimile: (713) 651-2700 WINSTEAD /s/ Albert R. Axe Peter Nolan Email: pnolan@winstead.com Email: aaxe@winstead.com Facsimile: (512) 370-2850 Bruce R. Wilkin Email: bwilkin@winstead.com Facsimile: (713) 650-2400 MCGINNES INDUSTRIAL MAINTENANCE -8- CERTIFICATE OF SERVICE I hereby certify that on this 23 day of September, 2014, a true and correct copy of the foregoing instrument was forwarded to all known counsel of record by operation of the Court’s electronic filing system. /s/ Jennifer M. Nelsen Jennifer M. Nelsen -9-