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CAUSE NO. 2011 76724
HARRIS COUNTY, TEXAS, Plaintiff, IN THE DISTRICT COURT OF
THE STATE OF TEXAS, acting by and
through the TEXAS COMMISSION ON
ENVIRONMENTAL QUALITY, a necessary
and indispensable party HARRIS COUNTY, T E X A S
INTERNATIONAL PAPER COMPANY,
McGINNES INDUSTRIAL MAINTENANCE
CORPORATION, WASTE MANAGEMENT,
INC. and WASTE MANAGEMENT OF
TH
TEXAS, INC., Defendants. JUDICIAL DISTRICT
MIMC’S REPLY IN SUPPORT OF ITS
TRADITIONAL MOTION FOR FINAL SUMMARY JUDGME
(SPILL ACT CONDITIONS PRECEDENT AND STATUTORY EXEMPTIONS
FOR ACTS OF GOVERNMENT, THIRD PARTY NEGLIGENCE,
AND ACTS OF GOD)
McGinnes Industrial Maintenance Corporation (“MIMC”) files this reply in further
support of its motion for summary judgment seeking dismissal of Harris County’s Spill Act
claims for failure to comply with statutory conditions precedent and for dismissal of any
allegations based on releases resulting from acts of government, third party negligence, or acts of
God, because such claims are expressly barred by the Texas Water Code.
ARGUMENT
The County Admits that it Cannot Recover Penalty Under the Spill Act and,
Simultaneously, the Solid Waste Disposal Act for the Period From 1985 to 1997 and,
Therefore at a Minimum, MIMC’s Motion for Summary Judgment for this Period
Should be Granted.
Harris County (“County”) a eges that MIMC violated the Texas Oil and
Hazardous Substances Spill evention and Control Act (speci cally, Texas Water Code
apter 26, Subchapter § 26.266, which the County refers to as the Texas Spill Ac ); and
the Texas Solid Waste Disposal Act (beginning with a Texas Water Quality Board Order in
1975, Order No. 75-1125-1, sec. 1.04 and changes in the regulations through adoption of and
including 30 Texas Admin. Code § 335.4 (hereafter, the “Texas Solid Waste Disposal
Act”)). As explained in MIMC’s motion, these claims fail as a matter of law because the
County has not complied with required conditions precedent prior to filing suit under the Texas
Spill Act, and because the County bears the burden of proving that the statutory exemptions do not
apply.
2. After almost three years of litigation, in its Response to MIMC’s motion
pertaining to the Spill Act, the County finally admits that from 1985 to 1997 there was a
statutory prohibition against assessing penalties under the Texas Spill Act “which are also
violations of any permit, rule, or order applicable to hazardous waste under the Solid Waste
Disposal Act (Article 4477-7, Vernon’s Texas Civil Statutes).”1 Response at 26. Despite this
necessary concession and characteristic of its over-reaching in this case, the County still attempts
to keep its theories for recovery of civil penalties alive for this twelve year period on the mistaken
belief that it can ignore the express prohibition in the Spill Act that precludes the County’s
assessment of penalty under the Spill Act for an act that is allegedly a violation of the Solid Waste
Disposal Act.
3. While it cites inapplicable case law and Texas Rule of Civil Procedure 48 for the
proposition that itcan submit multiple theories of recovery to the jury, the County makes no
attempt to explain how its factual allegations, which the County seeks to apply to the general
prohibitions in the Solid Waste Disposal Act and the Spill Act, could ever be distinguished as
violations of one but not the other law. Id.
1
Acts 1985, 69th Leg., R.S., ch. 930, HB 2068, § 6, sec. 26.268(a)
2
4. Furthermore, the County’s baseless attempt to limit the sweeping statutory
prohibition, which exists in statute today, against using the Spill Act and the Solid Waste
Disposal Act together is equally flawed. Response at 25. Even if the statute was ambiguous –
which it is not – and it was appropriate – which it is not - to seek guidance from the legislative
history as to the proper interpretation of the unambiguous words: “Notwithstanding any other
provision of this subchapter [which includes the Spill Act violation alleged by the County], the
state or the commission shall utilize any and all procedures relating to releases or threatened
releases of solid wastes contained in Chapter 361, Health and Safety Code prior to utilizing the
provisions of this subchapter with respect to such releases or threatened releases,”2 the
County’s snippet from a House Study Group Analysis3 is incomplete and does not reflect the
intent of the Legislature or even the import of that report.
5. In fact, the very next sentence of the House Study Group Analysis, which the
County did not quote for the Court, is: “Penalties assessed under the Solid Waste Disposal Act
for hazardous waste violations would also preempt penalties under the spill-prevention act.”4
Thus, the County’s own and sole reference to the legislative history behind § 26.267(c) supports
MIMC’s position that the County is prohibited from simultaneously pursuing penalties under the
Spill Act before it exhausts “any and all procedures relating to releases or threatened releases of
solid wastes” under the Solid Waste Disposal Act, which includes the assessment of penalties.
B. The Prohibition in Water Code § 26.267(c) Against Using the Spill Act Prior to
using “Any and All Procedures” Under the Solid Waste Disposal Act Acts as
2
TEX. WATER CODE § 26.267(c) (emphasis added).
3
See Ex. 28 to the Response (House Study Group Analysis).
4
Id. at p. 2.
3
Condition Precedent, Which the County Implicitly Admits It Has Not Satisfied in
this Case.
6. The County’s Response does not argue or even allege that it has satisfied the
statutory requirement found in § 26.267(c) that the County, or anyone else, has “utilize[d] any
and all procedures relating to releases or threatened releases of solid wastes contained in [the
Solid Waste Disposal Act] prior to utilizing the provisions” of the Spill Act. As noted above, the
statutory provision is not ambiguous. In fact, it could not be more clear. The phrase is not
qualified and certainly does not say “any and all procedures related to cleanup.” The County
does not appear to dispute that the assessment of civil penalties is a “procedure” under both the
Solid Waste Disposal Act but, inexplicably, reads words into the statute that do not appear.
Simply, the County’s effort to simultaneously seek penalties for alleged discharges of solid waste
from the San Jacinto site is not supported, in fact it is prohibited, by the unambiguous and
unlimited statutory requirement that any and all procedures available under the Solid Waste
Disposal Act be exhausted before the County can proceed under the Spill Act.
7. Therefore, for all of the reasons discussed above, during the oral hearing on this
motion and the arguments set forth in the original brief, the present tense prohibition against use
of the Spill Act until after the Solid Waste Disposal Act is fully utilized acts as a condition
precedent and precludes Harris County’s Spill Act penalty assessment for the entire period
alleged by the County. The Court should grant MIMC’s Motion for Summary Judgment on this
issue as to all claims made by the County under the Spill Act.
C. The Burden of Proof Falls to the County to Prove that MIMC is not Exempt from
Liability for Alleged Violations of the Spill Act
4
8. The County acknowledges in its Response that the Spill Act includes other
statutory exemptions5 from liability under the Spill Act for any discharges “resulting from”
acts of government, third party negligence, and acts of God, TEX. WATER CODE § 26.267(a),
but seeks to place the burden on MIMC to prove the exemptions apply. However, the “long line
of cases” cited by the County that purportedly place the burden on MIMC to prove that the
exemptions apply do not interpret § 26.267(a) and refer to “exceptions,” as opposed to
“exemptions,” which has a different meaning.
9. The statutory provision at issue states that “no person shall be held liable under
this [Spill Act] for any spill or discharge resulting from an [exemption]” and, as admitted by the
County, there is no reported opinion that addresses whether the accuser or the accused bears the
burden of proof on these issues. Therefore, the issue is one of first impression and the basic
tenets of statutory construction and interpretation apply. Notably, the phrasing of § 26.267(a)
above, which also includes a reference to “act of God,” stands in stark contrast to the “Act of
God” defense set forth in Water Code § 7.251, which begins “[i]f a person can establish…” It is
expected that the Legislature chose the phrase “no person shall be held liable” over “[i]f a person
can establish…” to communicate a different meaning and associated burden of proof. In short, if
the Legislature intended to create an affirmative defense where the accused bore the burden, it
knew how to do so, as it did in § 7.251. Obviously, the Legislature intended something different
in § 26.267(a). In re Allen, 366 S.W.3d 696, 706 (Tex. 2012) (“Language in a statute is
presumed to have been selected and used with care, and every word or phrase in a statute is
presumed to have been intentionally used with a meaning and a purpose.”).
5
Notably, the prohibition against utilizing the Spill Act until after all remedies are pursued under
the Solid Waste Disposal Act is found in the same § 26.267, entitled “Exemptions,” as the
exemptions discussed in this section.
5
10. Furthermore, if § 26.267(a) means nothing more than what was already provided
as an affirmative defense in § 7.251, as argued by the County, then the portion of the Spill Act
related to acts of God is redundant and surplusage. Clearly, it violates one of the most
fundamental principles of statutory interpretation to conclude that the Legislature intended a
redundant or duplicative provision, especially when it demonstrated that it knew how to place the
burden of proof on a responding party as it did in § 7.251. Brown v. State, 56 S.W.3d 915, 919
(Tex. App.—Houston [14th Dist.] 2001, no pet.) (A “rule of statutory interpretation is to
construe the statute, if at all possible, so as to give effect to all of its parts, so that no part is to be
construed as void or redundant.”)
11. In sum, the Legislature chose to exempt persons from liability under the Spill Act,
not create, or recreate, defenses to alleged violations. The County bears the burden of disproving
the applicability of the exemptions, which are equally in its ability to disprove as they are in
MIMC’s ability to prove. Because the County has not established through summary-judgment
evidence that the exemptions to the Spill Act claims do not apply, the County’s Spill Act claims
should be dismissed.
II. PRAYER
MIMC respectfully requests that the Court grant its Motion for Summary Judgment and
dismiss the County’s claims under the Spill Act.
Respectfully submitted,
WINSTEAD PC
By: /s/ Albert R. Axe
Albert R. Axe
State Bar No. 01457400
Peter Nolan
State Bar No. 15062600
Bruce Wilkin
State Bar No. 24053549
6
401 Congress Avenue, Suite 2100
Austin, Texas 78701
Telephone: 512-370-2806
Telecopy: 512-370-2850
Email: aaxe@winstead.com
pnolan@winstead.com
bwilkin@winstead.com
ATTORNEYS FOR MCGINNES INDUSTRIAL
MAINTENANCE CORPORATION
7
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing pleading has been forwarded
to all counsel of record in this cause pursuant to the Texas Rules of Civil Procedure, on
September 5, 2014.
Debra Tsuchiyama Baker Dale L. Trimble
Earnest W. Wotring The Trimble Firm, PLLC
Connelly • Baker • Wotring LLP 209 Simonton
700 JPMorgan Chase Tower Conroe, Texas 77301
600 Travis Street
Houston, Texas 77002 Glenn A. Ballard, Jr.
Christopher L. Dodson
Rock W. A. Owens K. Knox “Lighthorse” Nunnally
Office of Harris County Attorney Bracewell & Giuliani LLP
1019 Congress, Room 157 711 Louisiana, Suite 2300
Houston, TX 77002 Houston, Texas 77002
J. Marcus “Marc” Hill Winstol D. Carter, Jr.
Hill & Hill PC Craig Stanfield
1770 St. James, Suite 115 Morgan, Lewis & Bockius LLP
Houston, Texas 77056 1000 Louisiana Street, Suite 4000
Houston, Texas 77002
Tammy Tran
The Tammy Tran Law Firm Yardena R. Zwang-Weissman
2915 Fannin Morgan, Lewis & Bockius LLP
Houston, Texas 77002 300 S. Grand Avenue, 22nd Floor
Los Angeles, California 90071-3132
Michael W. Perrin
Michael W. Perrin, PLLC Paula W. Hinton
2323 South Shepherd 14th Floor Winston & Strawn LLP
Houston, Texas 77019 1111 Louisiana, 25th Floor
Houston, Texas 77002
/s/ Albert R. Axe
Albert R. Axe
#4678856.1
8
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CAUSE NO. 2011 76724 HARRIS COUNTY, TEXAS, Plaintiff, IN THE DISTRICT COURT OF THE STATE OF TEXAS, acting by and through the TEXAS COMMISSION ON ENVIRONMENTAL QUALITY, a necessary and indispensable party HARRIS COUNTY, T E X A S INTERNATIONAL PAPER COMPANY, McGINNES INDUSTRIAL MAINTENANCE CORPORATION, WASTE MANAGEMENT, INC. and WASTE MANAGEMENT OF TH TEXAS, INC., Defendants. JUDICIAL DISTRICT MIMC’S REPLY IN SUPPORT OF ITS TRADITIONAL MOTION FOR FINAL SUMMARY JUDGME (SPILL ACT CONDITIONS PRECEDENT AND STATUTORY EXEMPTIONS FOR ACTS OF GOVERNMENT, THIRD PARTY NEGLIGENCE, AND ACTS OF GOD) McGinnes Industrial Maintenance Corporation (“MIMC”) files this reply in further support of its motion for summary judgment seeking dismissal of Harris County’s Spill Act claims for failure to comply with statutory conditions precedent and for dismissal of any allegations based on releases resulting from acts of government, third party negligence, or acts of God, because such claims are expressly barred by the Texas Water Code. ARGUMENT The County Admits that it Cannot Recover Penalty Under the Spill Act and, Simultaneously, the Solid Waste Disposal Act for the Period From 1985 to 1997 and, Therefore at a Minimum, MIMC’s Motion for Summary Judgment for this Period Should be Granted. Harris County (“County”) a eges that MIMC violated the Texas Oil and Hazardous Substances Spill evention and Control Act (speci cally, Texas Water Code apter 26, Subchapter § 26.266, which the County refers to as the Texas Spill Ac ); and the Texas Solid Waste Disposal Act (beginning with a Texas Water Quality Board Order in 1975, Order No. 75-1125-1, sec. 1.04 and changes in the regulations through adoption of and including 30 Texas Admin. Code § 335.4 (hereafter, the “Texas Solid Waste Disposal Act”)). As explained in MIMC’s motion, these claims fail as a matter of law because the County has not complied with required conditions precedent prior to filing suit under the Texas Spill Act, and because the County bears the burden of proving that the statutory exemptions do not apply. 2. After almost three years of litigation, in its Response to MIMC’s motion pertaining to the Spill Act, the County finally admits that from 1985 to 1997 there was a statutory prohibition against assessing penalties under the Texas Spill Act “which are also violations of any permit, rule, or order applicable to hazardous waste under the Solid Waste Disposal Act (Article 4477-7, Vernon’s Texas Civil Statutes).”1 Response at 26. Despite this necessary concession and characteristic of its over-reaching in this case, the County still attempts to keep its theories for recovery of civil penalties alive for this twelve year period on the mistaken belief that it can ignore the express prohibition in the Spill Act that precludes the County’s assessment of penalty under the Spill Act for an act that is allegedly a violation of the Solid Waste Disposal Act. 3. While it cites inapplicable case law and Texas Rule of Civil Procedure 48 for the proposition that itcan submit multiple theories of recovery to the jury, the County makes no attempt to explain how its factual allegations, which the County seeks to apply to the general prohibitions in the Solid Waste Disposal Act and the Spill Act, could ever be distinguished as violations of one but not the other law. Id. 1 Acts 1985, 69th Leg., R.S., ch. 930, HB 2068, § 6, sec. 26.268(a) 2 4. Furthermore, the County’s baseless attempt to limit the sweeping statutory prohibition, which exists in statute today, against using the Spill Act and the Solid Waste Disposal Act together is equally flawed. Response at 25. Even if the statute was ambiguous – which it is not – and it was appropriate – which it is not - to seek guidance from the legislative history as to the proper interpretation of the unambiguous words: “Notwithstanding any other provision of this subchapter [which includes the Spill Act violation alleged by the County], the state or the commission shall utilize any and all procedures relating to releases or threatened releases of solid wastes contained in Chapter 361, Health and Safety Code prior to utilizing the provisions of this subchapter with respect to such releases or threatened releases,”2 the County’s snippet from a House Study Group Analysis3 is incomplete and does not reflect the intent of the Legislature or even the import of that report. 5. In fact, the very next sentence of the House Study Group Analysis, which the County did not quote for the Court, is: “Penalties assessed under the Solid Waste Disposal Act for hazardous waste violations would also preempt penalties under the spill-prevention act.”4 Thus, the County’s own and sole reference to the legislative history behind § 26.267(c) supports MIMC’s position that the County is prohibited from simultaneously pursuing penalties under the Spill Act before it exhausts “any and all procedures relating to releases or threatened releases of solid wastes” under the Solid Waste Disposal Act, which includes the assessment of penalties. B. The Prohibition in Water Code § 26.267(c) Against Using the Spill Act Prior to using “Any and All Procedures” Under the Solid Waste Disposal Act Acts as 2 TEX. WATER CODE § 26.267(c) (emphasis added). 3 See Ex. 28 to the Response (House Study Group Analysis). 4 Id. at p. 2. 3 Condition Precedent, Which the County Implicitly Admits It Has Not Satisfied in this Case. 6. The County’s Response does not argue or even allege that it has satisfied the statutory requirement found in § 26.267(c) that the County, or anyone else, has “utilize[d] any and all procedures relating to releases or threatened releases of solid wastes contained in [the Solid Waste Disposal Act] prior to utilizing the provisions” of the Spill Act. As noted above, the statutory provision is not ambiguous. In fact, it could not be more clear. The phrase is not qualified and certainly does not say “any and all procedures related to cleanup.” The County does not appear to dispute that the assessment of civil penalties is a “procedure” under both the Solid Waste Disposal Act but, inexplicably, reads words into the statute that do not appear. Simply, the County’s effort to simultaneously seek penalties for alleged discharges of solid waste from the San Jacinto site is not supported, in fact it is prohibited, by the unambiguous and unlimited statutory requirement that any and all procedures available under the Solid Waste Disposal Act be exhausted before the County can proceed under the Spill Act. 7. Therefore, for all of the reasons discussed above, during the oral hearing on this motion and the arguments set forth in the original brief, the present tense prohibition against use of the Spill Act until after the Solid Waste Disposal Act is fully utilized acts as a condition precedent and precludes Harris County’s Spill Act penalty assessment for the entire period alleged by the County. The Court should grant MIMC’s Motion for Summary Judgment on this issue as to all claims made by the County under the Spill Act. C. The Burden of Proof Falls to the County to Prove that MIMC is not Exempt from Liability for Alleged Violations of the Spill Act 4 8. The County acknowledges in its Response that the Spill Act includes other statutory exemptions5 from liability under the Spill Act for any discharges “resulting from” acts of government, third party negligence, and acts of God, TEX. WATER CODE § 26.267(a), but seeks to place the burden on MIMC to prove the exemptions apply. However, the “long line of cases” cited by the County that purportedly place the burden on MIMC to prove that the exemptions apply do not interpret § 26.267(a) and refer to “exceptions,” as opposed to “exemptions,” which has a different meaning. 9. The statutory provision at issue states that “no person shall be held liable under this [Spill Act] for any spill or discharge resulting from an [exemption]” and, as admitted by the County, there is no reported opinion that addresses whether the accuser or the accused bears the burden of proof on these issues. Therefore, the issue is one of first impression and the basic tenets of statutory construction and interpretation apply. Notably, the phrasing of § 26.267(a) above, which also includes a reference to “act of God,” stands in stark contrast to the “Act of God” defense set forth in Water Code § 7.251, which begins “[i]f a person can establish…” It is expected that the Legislature chose the phrase “no person shall be held liable” over “[i]f a person can establish…” to communicate a different meaning and associated burden of proof. In short, if the Legislature intended to create an affirmative defense where the accused bore the burden, it knew how to do so, as it did in § 7.251. Obviously, the Legislature intended something different in § 26.267(a). In re Allen, 366 S.W.3d 696, 706 (Tex. 2012) (“Language in a statute is presumed to have been selected and used with care, and every word or phrase in a statute is presumed to have been intentionally used with a meaning and a purpose.”). 5 Notably, the prohibition against utilizing the Spill Act until after all remedies are pursued under the Solid Waste Disposal Act is found in the same § 26.267, entitled “Exemptions,” as the exemptions discussed in this section. 5 10. Furthermore, if § 26.267(a) means nothing more than what was already provided as an affirmative defense in § 7.251, as argued by the County, then the portion of the Spill Act related to acts of God is redundant and surplusage. Clearly, it violates one of the most fundamental principles of statutory interpretation to conclude that the Legislature intended a redundant or duplicative provision, especially when it demonstrated that it knew how to place the burden of proof on a responding party as it did in § 7.251. Brown v. State, 56 S.W.3d 915, 919 (Tex. App.—Houston [14th Dist.] 2001, no pet.) (A “rule of statutory interpretation is to construe the statute, if at all possible, so as to give effect to all of its parts, so that no part is to be construed as void or redundant.”) 11. In sum, the Legislature chose to exempt persons from liability under the Spill Act, not create, or recreate, defenses to alleged violations. The County bears the burden of disproving the applicability of the exemptions, which are equally in its ability to disprove as they are in MIMC’s ability to prove. Because the County has not established through summary-judgment evidence that the exemptions to the Spill Act claims do not apply, the County’s Spill Act claims should be dismissed. II. PRAYER MIMC respectfully requests that the Court grant its Motion for Summary Judgment and dismiss the County’s claims under the Spill Act. Respectfully submitted, WINSTEAD PC By: /s/ Albert R. Axe Albert R. Axe State Bar No. 01457400 Peter Nolan State Bar No. 15062600 Bruce Wilkin State Bar No. 24053549 6 401 Congress Avenue, Suite 2100 Austin, Texas 78701 Telephone: 512-370-2806 Telecopy: 512-370-2850 Email: aaxe@winstead.com pnolan@winstead.com bwilkin@winstead.com ATTORNEYS FOR MCGINNES INDUSTRIAL MAINTENANCE CORPORATION 7 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing pleading has been forwarded to all counsel of record in this cause pursuant to the Texas Rules of Civil Procedure, on September 5, 2014. Debra Tsuchiyama Baker Dale L. Trimble Earnest W. Wotring The Trimble Firm, PLLC Connelly • Baker • Wotring LLP 209 Simonton 700 JPMorgan Chase Tower Conroe, Texas 77301 600 Travis Street Houston, Texas 77002 Glenn A. Ballard, Jr. Christopher L. Dodson Rock W. A. Owens K. Knox “Lighthorse” Nunnally Office of Harris County Attorney Bracewell & Giuliani LLP 1019 Congress, Room 157 711 Louisiana, Suite 2300 Houston, TX 77002 Houston, Texas 77002 J. Marcus “Marc” Hill Winstol D. Carter, Jr. Hill & Hill PC Craig Stanfield 1770 St. James, Suite 115 Morgan, Lewis & Bockius LLP Houston, Texas 77056 1000 Louisiana Street, Suite 4000 Houston, Texas 77002 Tammy Tran The Tammy Tran Law Firm Yardena R. Zwang-Weissman 2915 Fannin Morgan, Lewis & Bockius LLP Houston, Texas 77002 300 S. Grand Avenue, 22nd Floor Los Angeles, California 90071-3132 Michael W. Perrin Michael W. Perrin, PLLC Paula W. Hinton 2323 South Shepherd 14th Floor Winston & Strawn LLP Houston, Texas 77019 1111 Louisiana, 25th Floor Houston, Texas 77002 /s/ Albert R. Axe Albert R. Axe #4678856.1 8