SCOTX: Missed 30-Day Service Deadline Does Not Mandate Dismissal of Challenge to TCEQ Action

Last week, the Supreme Court of Texas ruled that serving citation on the Texas Commission on Environmental Quality (TCEQ) outside a 30-day deadline set forth in the Texas Clean Air Act (TCAA) did not require dismissal of the plaintiff’s lawsuit. The court’s ruling may provide some relief for plaintiffs who do not strictly comply with the TCAA’s service requirements. However, the remedy for non-compliance with other TCEQ statutes’ service deadlines may be less forgiving, and practitioners should endeavor to meet all service requirements as a best practice when challenging TCEQ decisions.

In AC Interests, L.P. v. TCEQ, the plaintiff coatings manufacturer sought judicial review of TCEQ’s refusal to certify its application for Emission Reduction Credits. The plaintiff filed its petition in district court in Travis County and hand delivered a copy to TCEQ two days later. Pursuant to Texas Health & Safety Code § 382.032(c), “[s]ervice of citation on the commission must be accomplished within 30 days after the date on which the petition is filed.” However, the plaintiff did not formally serve TCEQ until 58 days after filing the petition.

TCEQ moved to dismiss the petition because the plaintiff failed to meet the statutory filing deadline. The district court granted the dismissal, and that dismissal was affirmed on appeal. The plaintiff petitioned the Supreme Court of Texas for review.

On review, the Supreme Court held that, despite the statute’s use of the word “must,” the 30-day deadline was merely directory, not mandatory, and dismissal of the petition was not required. Specifically, the court reasoned that unlike a “jurisdictional requirement, where failure to comply results in dismissal,” the service deadline provision “does not state a consequence and, importantly, no consequence is logically necessary.” The court suggested that where plaintiffs fail to comply with the requirement, abatement may be an appropriate remedy.

Justice Boyd, writing for the minority, countered that court’s ruling “improperly renders the service-of-citation deadline completely meaningless.” The dissent argued that the statute’s use of the word “must” created a condition precedent to appealing TCEQ’s ruling. Justice Boyd concluded that the service of citation is effectively as jurisdictional as the filing of the petition and dismissal was the appropriate remedy.

The court’s struggles to discern when statutory deadlines are merely directory or are mandatory and require dismissal are not new. As noted by the dissent, “[t]his Court has struggled for decades—without much meaningful success—to identify a clear standard for determining whether a statutory requirement is ‘mandatory’ or ‘directory’.”

Whether a court will find any specific service deadline under an environmental statute mandatory or directory will turn on the construction of that statute. For example, the Third Court of Appeals has held that failure to comply with a similar 30-day service deadline under the Solid Waste Disposal Act (“SWDA”) requires dismissal. Specifically, in TJFA, L.P. v. TCEQ, the appellate court reasoned that non-compliance with the SWDA service deadline should be treated the same as failure to comply with the filing deadline because the Legislature placed both deadlines in the same subsection of the statute.

The Supreme Court’s opinion in AC Interests did not explicitly hold that TJFA was wrongly decided, but the majority distinguished and appeared to call into question the Third Court’s reasoning. This may suggest that the holding in TJFA could be reconsidered if the SWDA service deadline issue arises again.

As a best practice, parties challenging agency action under the TCAA or any other TCEQ statute should be mindful to comply with all filing and service deadlines. Where petitioners fail to comply with the TCAA’s 30-day service requirement, however, formal service beyond the deadline may not be fatal to their lawsuits.

Beveridge & Diamond’s Air and Climate Change practice group helps private and municipal clients navigate all aspects of compliance with Clean Air Act regulations for criteria pollutants, hazardous air pollutants, greenhouse gases, and permitting processes. For more information, please contact the authors.