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An important opinion about agency deference in Texas [Mar. 11, 2011]

By Don Cruse

Railroad Commission of Texas and Pioneer Exploration, Ltd. v. Texas Citizens for a Safe Future and Clean Water and James G. Popp, No. 08-0497 DDB.

A statute charged the Railroad Commission with evaluating whether the “public interest” supported granting permits for injection drilling in the Barnett Shale. A citizens group argued, among other things, that the drilling would cause problems because of large and unsafe drilling trucks being sent down their local roads. The Commission granted the permits without considering these effects, focusing instead on how the permits would affect the energy market and the water supply.

The core question on appeal was about the scope of the phrase “public interest” in the statute — did it encompass all factors that might bear on whether issuance of the permits was a good idea, or was it limited to just considering other factors mentioned in the statute (such as the energy market and the water supply)?

Today, the Texas Supreme Court sided with the Commission — and did so in a way that will be of great interest to those who litigate against government agencies.

Having concluded that this statutory phrase was ambiguous, the six Justices in the majority opinion (written by Justice Guzman) chose to defer to the agency’s own interpretation rather than looking for other aids to statutory construction.¹

The Court reiterated that Texas has not adopted the federal model for agency deference but instead follows its own test:

We have long held that an agency’s interpretation of a statute it is charged with enforcing is entitled to “serious consideration,” so long as the construction is reasonable and does not conflict with the statute’s language. We have stated this principle in differing ways, but our opinions consistently state that we should grant an administrative agency’s interpretation of a statute it is charged with enforcing some deference.

In short, the Court will defer to an agency’s interpretation of a genuinely ambiguous statute “so long as the construction is reasonable and does not contradict the plain language of the statute.”

Applying that test, the Court concluded that the Commission’s reading of “public interest” was reasonable.

Three Justices, speaking through Chief Justice Jefferson, concurred only in the judgment. They would have concluded that the statute was actually unambiguous on this point — that no matter what the Commission thought of the question, the Legislature had spoken clearly enough to limit the scope of this inquiry just to the factors set out in the statute.

But the result of today’s decision is that the scope of the term “public interest” was in large part left up to the agency, and that the agency’s decision on that is accorded deference until the Legislature says otherwise.

1. In some ways, this case echoes the reasoning of last week’s In re Smith decision, which relied primarily on a Texas AG opinion to guide construction of an ambiguous statute.

Full post as published by Supreme Court of Texas Blog on March 11, 2011 (boomark / email).