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Baxter Oil Service, Ltd. v. Texas Commission on Environmental Quality

Court of Appeals of Texas, Third District, Austin

July 31, 2017

Baxter Oil Service, Ltd., Appellant
v.
Texas Commission on Environmental Quality, Appellee

         FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT NO. D-1-GN-10-000772, HONORABLE AMY CLARK MEACHUM, JUDGE PRESIDING

          Before Chief Justice Rose, Justices Pemberton and Bourland.

          MEMORANDUM OPINION

          Cindy Olson Bourland, Justice

         This appeal arises out of an administrative order issued by appellee Texas Commission on Environmental Quality related to cleanup of the Voda Petroleum State Superfund Site ("Voda Order") under the Solid Waste Disposal Act. See generally Tex. Health & Safety Code §§ 361.001-.966 (also "SWDA" or "Act"). Appellant Baxter Oil Service, Ltd. challenges the trial court's order granting the Commission's plea to the jurisdiction seeking to dismiss Baxter's summary-judgment motion. The Commission's plea to the jurisdiction urged that the Voda Order is final and unappealable as to Baxter because Baxter did not timely seek judicial review of the Order, and thus, Baxter's summary-judgment motion is an impermissible collateral attack on the Order. On appeal, Baxter asserts that the Voda Order does not comport with due process because it did not provide adequate notice to Baxter of its appellate remedies, rendering it a void order subject to collateral attack. We will affirm the trial court's order granting the plea to the jurisdiction because we conclude that the Order does not violate due process.

         BACKGROUND

         This Court has previously examined the Voda Order and the standard of review applicable to it in a prior opinion. See Texas Comm'n on Envtl. Quality v. Exxon Mobil Corp., 504 S.W.3d 532, 543-46 (Tex. App.-Austin 2016, no pet.) (holding that SWDA does not preclude Commission from issuing administrative orders under both Section 361.188 and Section 361.272 of Act and that preponderance-of-the-evidence standard of review found in Section 361.322(g) applies to orders issued under those sections).[1] That opinion contains a detailed explanation of the statutory framework and the factual and procedural background of the proceedings related to the Voda Order. See id. at 535-38. We will not reiterate them here, except as necessary to explain the different issues raised by Baxter in this appeal.

          Baxter's business is transporting and brokering fuel for customers who burn fuel for energy recovery, resell fuel, or sell blended fuel products. In the 1980s, Baxter sold petroleum products to the Voda Petroleum Company, but Baxter asserts that those products were intended for resale, not waste disposal. The Commission first investigated the Voda Site in the mid-1990s and referred the site to the federal Environmental Protection Agency, which conducted a removal action in 1996. The EPA sought to recover its removal costs from various potentially responsible parties, including Baxter. Although Baxter denied liability, it settled with the EPA for $10, 000 in 2000.

         In 1999, the EPA referred the Voda Site to the State of Texas for any further remedial action required under state authority. In November 2000, the Commission's predecessor agency proposed the Voda Site for listing on the state Superfund registry. It notified parties whom the agency believed had shipped materials to the Voda Site, including Baxter, of the proposed listing and of their potential responsibility for investigation and remediation of the Site. The agency also provided them with notice that they could make a good-faith offer to conduct a remedial investigation and feasibility study. Although several parties submitted written comments and objections, complaining that no empirical data supported listing the Voda Site on the state Superfund registry, no good-faith offer to conduct the investigation was received. Consequently, the Commission conducted the remedial investigation and feasibility study and proposed a remedial action at a public meeting providing the opportunity for comment.

         In September 2008, the Commission notified Baxter and the other potentially responsible parties of the upcoming public meeting to discuss the proposed remedial action and of the parties' statutory right to respond with a good-faith offer to fund or perform the remedial action. In its notice letter, the Commission explained:

If a Good Faith Offer is not received within the specified time period, the [Commission] will proceed with an Administrative Order and may complete the remedial action utilizing state funds pursuant to the Solid Waste Disposal Act. In such case, the [Commission] will seek to recover all of its costs, including oversight costs, as set out in Section 361.197 of the Solid Waste Disposal Act.

(Emphases added.) No good-faith offer was received and accepted by the Commission, so no agreed order was issued. At a subsequent public meeting, the Commission considered what it described on the meeting agenda as "a Final Administrative Order (Final Order) pursuant to Texas Health and Safety Code Sections 361.188 and 361.272 for the Voda Petroleum, Inc. State Superfund Site."[2]

         Although some potentially responsible parties were allowed to address the Commissioners at that meeting, they were not allowed to present evidence to the Commission and they were informed that "the law governing this case does not provide for an adjudicatory hearing at this time." The Act contemplates that Superfund orders may be issued without holding any adjudicative hearing both in Subchapter F, which outlines the process for issuing an administrative order under Section 361.188, see Tex. Health & Safety Code §§ 361.184(e), .187(c), and in Section 361.274, which explicitly states that "[a]n administrative order under Section 361.272 does not require prior notice or an adjudicative hearing before the commission, " id. § 361.274. The Commission issued the Voda Order, titled "An Administrative Order, " on February 12, 2010, under the authority established in Sections 361.188 and 361.272 of the Act. See id. §§ 361.188 (titled "Final Administrative Order"), .272 (titled "Administrative Orders Concerning Imminent and Substantial Endangerment"). Following a motion for rehearing, the Voda Order became final by operation of law on April 8, 2010.

         The Order names Baxter as one of the approximately 350 potentially responsible parties for the Voda Site. One of the Order's conclusions of law states that the potentially responsible parties are "responsible parties" under the Act. See id. §§ 361.188(a)(3), (4), (6), (7) (establishing that Commission may order persons responsible for release or threatened release of hazardous substances to perform remedial action at hazardous-waste facility determined to pose imminent and substantial endangerment to public health and safety or to environment), .272 (providing that Commission may issue administrative order to person responsible for solid waste if it appears there is actual or threatened release of solid waste that presents imminent and substantial endangerment to public health and safety or to environment). The Order also mandates that the responsible parties must reimburse the Commission for past investigative costs and for costs incurred in implementing and overseeing the clean-up work and imposes upon them the obligation to undertake the remedial design, remedial action, and post-construction activity.

         Copies of the Order were sent to the named parties, including Baxter, via certified mail return receipt requested on February 19, 2010. The return receipt for Baxter was signed on February 26, 2010. The first petition for judicial review filed by a responsible party seeking to appeal the Order was filed on March 12, 2010. See id. ยง 361.322(a) (establishing that those persons subject to an administrative order "may appeal the order by filing a petition" for judicial review). Other parties subsequently sued and all the cases were consolidated into the case ...


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