Texas Attorney Blog

Texas rural water utilities and the attorneys representing Texas rural water companies are often faced with the challenge of making sense of the sometimes tangled layers of Texas statutes, Texas court decisions and the administrative rules of the Texas agency that regulates water utilities, the Texas Commission on Environmental Quality. As I indicated in a blog last week entitled "Texas Rural Water Utilities Faced With New Law: "Paint It Black!!", House Bill 1717, effective June 15, 2007 (and now codified as Texas Health and Safety Code Section 341.0357), requires that a utility that provides fire hydrants paint black any "non functioning" hydrant. A hydrant is non functioning if "the device pumps less than 250 gallons of water per minute". Because the statute does not specify over what period of time this standard must be met, it will almost certainly be interpreted by a Texas court to mean "at all times". Many rural water companies simply cannot meet this standard 24/7, 365 days a year.

A recent article by Michael Gresham in The Kaufman Herald illustrates that the controversy over this recent law is continuing. Rural water utilities are continuing to paint their hydrants black. Firefighters continue to disparage this practice on the basis that "this is not what the law intended". As I have said before, water companies usually don't get sued for acting contrary to what a law intended, but they regularly get sued if they do not follow what a law says. Instead of criticizing what the rural water companies are doing because they have no choice, hopefully the fire fighters will direct their concerns to the Texas Legislature!

One of the challenges of serving as an attorney for rural water utilities in Texas is helping my clients navigate the increasing regulatory burden on Texas rural water utilities, an issue specifically addressed in a prior blog entitled Challenges Ahead for Texas Rural Water Companies in Texas. A recent law enacted by the Texas Legislature appears to add confusion to that burden.

House Bill 1717, effective on June 15, 2007 (and now codified as Texas Health and Safety Code Section 341.0357), requires that a utility that provides fire hydrants paint black any "non functioning" hydrant. "Non functioning" is defined by the law to mean any hydrant that cannot pump at least 250 gallons of water per minute, presumably at all times. Most rural water utilities I represent do not install fire hydrants, because they simply do not have the capacity to serve their customers and produce water for firefighting as well. Those rural water utilities that do install hydrants cannot always deliver 250 gallons per minute 100% of the time.

A recent article by Ron Maloney with the Seguin Gazette-Enterprise illustrates the confusion this new law can cause. The Green Valley Special Utility District, a water district that serves 25,000 customers in Guadalupe, Comal and Bexar Counties in Texas, painted all their fire hydrants black. The water district's general manager is quoted in Mr. Maloney's article as saying: "It’s different in a rural district from the type of system in a municipality and a lot of things can affect flow rate. I have the flow now. But I might not have it in an hour, and we can’t guarantee it.”

This action has apparently angered fire departments and the emergency management coordinators of the involved counties. If I had represented the water district, I might have advised them to cover hydrants with a black tarp while the water district and the Texas Rural Water Association worked with state legislators to get an emergency bill passed to clarify the law, rather than go to the expense of painting. But tarps cost money too, the new law says you can only use tarps temporarily, and Green Valley SUD was painting the hydrants so as to leave them available for fire fighter use. The law, as currently worded, is quite clear that if the water district cannot supply 250 gallons per minute to the hydrant at all times, the hydrant must be painted black. If the water district did not paint these hydrants black, and a fire truck hooked up to the hydrant at a time when peak demand by the water district's paying customers or a broken line caused the hydrant to deliver less than 250 gallons per minute, then you can bet that the water district will be sued by a homeowner whose house burned down. That kind of suit can result in higher insurance premiums for the water district, which translates into higher water bills for the water district's customers. The best course of action for the rural water districts effected by this new law may be to remove all fire hydrants altogether, thus depriving the communities involved of helpful fire-fighting resources.

This new law is an example of the Texas legislature acting without thinking. Perhaps they were trying to address a hydrant that simply is not capable of producing 250 gallons per minute? This law needs to be amended promptly to take the rural water companies' situations into account!

As a Texas attorney representing both builders and construction companies in Texas on one hand, and Texas consumers of construction services on the other, I have had occasion to litigate a number of cases in which construction defects were the central issue in the case. I learned long ago (because I had some great mentors when I was a new lawyer), that when I represented a Plaintiff in a suit to recover damages for a construction defect, the claim should be characterized as both a breach of contract as well as breach of warranty. It always seemed redundant to me, but a recent case illustrates that it may not be. Consider the case of Medical City Dallas Ltd. v. Carlisle Corporation, decided recently by the Dallas Court of Appeals and subsequently heard by the Texas Supreme Court.

Medical City purchased a membrane type roofing system from Carlisle Corporation. Within a short time, the roof began to leak. Initially, Carlisle performed repairs. When the repairs appeared not to cure the leaks, Medical City obtained the advice of a roofing expert, who examined the membrane and determined that it was failing. Medical City requested that the roof be replaced, and when Carlisle failed to respond, this litigation ensued.

The opinion of the Dallas Court of Appeals held that a breach of warranty was different than a breach of contract, and in particular, a breach of warranty did not support an award of attorneys fees to the damaged party, even though the Texas Civil Practices and Remedies Code Section 38.001 clearly allows the injured party in a breach of contract case to recover attorneys fees. Since Medical City's pleadings contained only a claim for breach a warranty, the Dallas Court of Appeals held that it could not recover attorneys fees, only its damages.

The Texas Supreme Court opinion reversed this decision, and concluded that since a written warranty is a type of written contract, Texas Civil Practices and Remedies Code Section 38.001(8) supports an award of attorneys fees for breach of a written warranty.

I think this was a good decision. If you asked a non-lawyer what they they thought the difference between a written warranty and a written contract was, you would get a lot of blanks looks. Common sense tells us that they should be the same, and attorneys fees should be awarded if either is violated and causes damages.

In the course of representing rural water companies in Texas, I am always on the lookout for new resources and educational materials to help me expand my understanding of the challenges that water companies, and especially rural water companies in Texas, face each day. The American Water Works Association has just published a new book that looks like a fascinating addition to the library of any lawyer representing water companies. It's called "The Business of Water", and it's edited by Steve Maxwell, Managing Director of TechKNOWLEDGEy Strategic Group in Boulder, Colorado.

The advance press on this book indicates that it deals with some of the paradoxes that water companies face. For example, water is essential to life and thus incredibly valuable, yet drinking water costs us a fraction of a cent out of our tap. Another paradox is that many of us purchase bottled water that costs thousands of times as much as tap water, yet almost everyone screams if our monthly water bill goes up. Finally, the book notes that water companies must sell water in order to stay in business, yet are often in the position of asking their customers to conserve and use less water!

The book deals with water costs, strategic planning for water companies, government regulation and many other timely topics. I have ordered my copy and will report back to you after I have read it. It certainly appears to be a valuable addition to any water lawyer's library. The price is $45.00 for AWWA members and $68.00 for nonmembers.