Texas Supreme Court Ruled on March 23 that Coating Manufacturer Should Proceed with Its Appeal of TCEQ Emission Credits Decision

The Texas Supreme Court ruled on March 23 that coating manufacturer AC Interests LP should be allowed to proceed with its appeal TCEQ decision, saying that the law left the consequences of delay ambiguous. The majority found that, since the TCAA did not spell out how to interpret the time limit for providing notice, the proper interpretation is the time limits are directory and not mandatory. That is, the suit should not be dismissed even if notice was served late.

AC Interests, which was formerly American Coatings LP, initially filed an action in state court in December 2014 after the TCEQ denied its application for certification of the emission credits. AC Interests argued it deserved the credits because it had complied with TCEQ standards and earned them by “emitting fewer toxins into the … air.”

The company filed the appeal of the agency’s decision within the time frame and hand-delivered a copy of the appeal to the TCEQ two days later. However, it didn’t serve official notice to the agency until 58 days after filing, the decision said. The trial court then threw out the case based on the delay, a decision that was upheld on appeal. 

The Texas Supreme Court disagreed. Both the majority and the dissent acknowledged that there are no solid criteria for determining whether a statutory provision was directory or mandatory. The majority concluded that, since the legislature had not spelled out a consequence for missing its deadline, the deadline should be directory. The majority added, even if mandatory, that did not necessarily mean that the consequence should be the outright dismissal of the suit.

AC Interests is represented by C. William Smalling III of The Law Office of C. William Smalling PC. The case is AC Interests LP v. TCEQ, case number 16-0260, in the Supreme Court of Texas.