Defending Lawsuits Brought Under Section 7.351 of the Texas Water Code

Are you being sued unfairly by a law firm on behalf of a city or county government for violation of a Texas environmental law? We think these abusive lawsuits are out of control, and we are proud to represent the defendants in these cases. Outside law firms are making huge sums of money for taking these cases and innocent business owners and individuals are the unfortunate victims.

A Bit of Background on the Problem

Nearly fifty years ago, Texas lawmakers gave local governments the ability to bring suit in the “same manner” as the Texas Commission on Environmental Quality (“TCEQ”) in district courts for injunctive relief and civil penalties for violations of Texas environmental laws. That authority is now located in Section 7.351 of the Texas Water Code, which has recently spawned a cottage industry of environmental litigation in Texas.

Most of the recent litigation has been handled by outside law firms on a contingency basis. Based upon information and belief, a handful of Texas law firms have recently filed over 100 of these lawsuits on behalf of several other cities and counties throughout the state. These firms have been able to squeeze—and effectively extort—hundreds of thousands of dollars from innocent people, which has only perpetuated these abusive lawsuits.

A Tainted Prosecution by Outside Counsel

Unfortunately, use of contingency counsel by governmental entities is part of a growing trend around the country, in which governmental entities delegate their enforcement powers to private attorneys. In nearly every case, the private attorneys are to be paid on a contingency-fee basis. In other words, they are paid only if they win; and if they do win, they are paid more and more for each additional dollar they recover. The problem with these arrangements is simple: they entrust the duty of impartially administering justice to attorneys with an overwhelming incentive to “win” the case—even if it is entirely bereft of merit.

As a result of these pressures, the neutral forum assured to defendants by basic principles of due process is incurably tainted. Given the personal interests of counsel, defendants have no hope of persuading them to abandon a meritless case or to settle for any reasonable amount. The result is guaranteed litigation and, if the government prevails, highly inflated penalties, placing additional burdens on court dockets and harming American businesses.

Such actions should send a chilling message to any business that has ever conducted operations in these communities, as it will apparently engage private contingency counsel to enforce any alleged environmental violation against them, no matter how long ago the alleged violation occurred and no matter how remote the business was involved in the activity that led to the alleged violation to the maximum extent permitted by law.

The U.S. Chamber of Commerce and the American Tort Reform Association have filed numerous amicus briefs in these matters across this country arguing that the engagement of contingency counsel violates a person’s due process rights, and that the governmental unit’s nominal control over the contingency-fee counsel does not cure the taint of a financially interested civil prosecutor. They also claim that in other states that have engaged in the practice of entering contingency-fee contracts, government-hired private attorneys are often political donors, friends, or colleagues of the hiring governmental official, creating the appearance of impropriety, and sometimes worse. Such practices damage the public’s confidence in government. Moreover, these government-endorsed lawsuits have led to financially motivated litigation and ill-conceived attempts to expand tort law under the cloak of state authority.

Recent Amendments Seek to Curb Abusive Lawsuits

These abusive practices have led to several recent amendments to the statute. For instance, Section 7.359 was recently added which requires the trier of fact to consider various factors described by Section 7.053 when determining the amount of a civil penalty to be assessed. Please be aware that local governments and the State of Texas frequently argue that these factors do not apply to lawsuits filed before September 1, 2015, and that, therefore, there is no guidance for the court or jury when assessing penalties against defendants.

Also added was Section 7.360, which states that a suit that is brought by a local government must be brought no later than the fifth anniversary of the date the person committed the violation, notifies the commission in writing of the violation, or receives a notice of enforcement from the commission with respect to the alleged violation.

Finally, Section 7.107 was also added, stating that a civil penalty recovered in a suit brought by a local government shall be divided as follows: the first $4.3 million of the amount recovered shall be divided equally between the state and the local government that brought the suit. Any amount recovered in excess of $4.3 million shall be awarded to the state of Texas.

Are There Strategies in Defending These Claims?

Goldman Law, PC, has represented several defendants who have been targeted in these abusive lawsuits. Through those cases we have developed key strategies which have fundamentally changed the discussion and led to favorable resolutions for our clients.

Do you have questions? You can get our FREE ebook, Environmental Litigation: What Every Attorney and Environmental Professional Needs to Know, just by providing your name and email address.  We promise your information won’t be shared with third persons. And if you’d like to speak with me about your case, I welcome your phone call at 972-850-8490. I look forward to speaking with you.