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This Letter identifies several issues with the Public Utility Commission in handling consumer

cases involving sub-metered and non-sub metered Allocated Water and Sewer and electric
service.
Specifically, the enforcement provision and remedies afforded by statue under TWC Subchapter
M 13.50, where the commission has dismissed tenant cases citing, lack of statutory authority to
grant civil penalties, attorney fees and other cost.
Before delving into the issue at hand I would like to make four points to keep in mind when
reading this analysis.
First. Much of tenants/consumers filing informal and formal complaints against their Landlords
before the Public Utility Commission of Texas are represented Pro Se; the majority having
limited knowledge of whats entailed in a contested case before SOAH, and no prior experience
in litigation.
Second. Landlords and Property owners of Multi-family complex in the State, through the Texas
Apartment Association (TAA) wheel substantial power to pass Legislation in their favor.
Tenants, on the other hand, are substantially under represented when it comes to passing
Legislation, thus, tenants rights and protections in the State of Texas have been slowly eroded.
Third: Tenants and Attorneys are having a difficult time navigating Subchapter 13.505 and
which track to run their race; the Administrative Track or the Judicial Track. Without the
Enforcement provision of Subchapter M 13.505, no attorney would endeavor to represent a
Complainant in a contested case without an award of Attorney fees.
Fourth: Administrative law allows civil penalties and attorneys fees when authorized by an
agencys enabling statute, clearly here TWC Subchapter M 13.505 authorizes civil penalties and
attorney fees. The Equal Protection Clause is part of the Fourteenth Amendment to the United States
Constitution. The clause, which took effect in 1868, provides that no State shall deny to any person within
its jurisdiction "the equal protection of the laws

Fifth: In 100% of cases involving sub-metered and allocated water and electric, involve landlord
and tenant and a written contract.
SRC-WBW, MAS S.B. 567 83(R) Page 38 of 40 SECTION 81. Amends Section 13.505, Water
Code, as follows: Sec. 13.505. ENFORCEMENT. Authorizes the tenant, in addition to the
enforcement provisions contained in Subchapter K (Violations and Enforcement), if an
apartment house owner, condominium manager, manufactured home rental community owner, or
other multiple use facility owner violates a rule of PUC, rather than TCEQ, regarding sub

metering of utility service consumed exclusively within the tenant's dwelling unit or multiple use
facility unit or nonsubmitter master metered utility costs, to recover three times the amount of
any overcharge, a civil penalty equal to one month's rent, reasonable attorney's fees, and court
costs from the owner or condominium manager. Makes a nonsubstantive change.
Texas Water Code Subchapter M. Sec. 13.505. ENFORCEMENT. In addition to the enforcement
provisions contained in Subchapter K, if an apartment house owner, condominium manager,
manufactured home rental community owner, or other multiple use facility owner violates a rule
of the utility commission regarding sub metering of utility service consumed exclusively within
the tenant's dwelling unit or multiple use facility unit or nonsubmetered master metered utility
costs, the tenant may recover three times the amount of any overcharge, a civil penalty equal to
one month's rent, reasonable attorney's fees, and court costs from the owner or condominium
manager. However, an owner of an apartment house, manufactured home rental community, or
other multiple use facility or condominium manager is not liable for a civil penalty if the owner
or condominium manager proves the violation was a good faith, mistake.
Under the old scheme Section 184.071(a) of the Texas Utilities Code states that the penalty for
violation of the Commission's sub metering rule is a payment to the tenants of. 1. three times the
amount of any overcharge; 2. a civil penalty equal to one month's rent; 3. reasonable attorney's
fees; and 4. court costs

Although Subchapter M 13.505 falls under the PUC jurisdiction, the PUC has taken the
position in numerous contested cases Subchapter M 13.505 is an exclusive judicial remedy and
PUC nor SOAH has authority to grant three times overcharge, civil penalties and attorney fees.
In a number of Dockets where tenants have filed complaints against Owners/Landlords for
violating PUC rules, the Commission has dismissed such cases citing failure to grant requested
relief under Subchapter M 13.505. Such dismissals have occurred in contested cases where the
PUC has determined a violation has in fact occurred. The statue does not express or imply
judicial courts have primary or exclusive jurisdiction. As the language of the statue is clearly
written the PUC has primary jurisdiction but not exclusive jurisdiction.
While administrative agencies lack inherent constitutional power to affect the rights of
Texas citizens, the PUCT continued denial of enforcement authority for subchapter M 13.505

substantially effects the rights of tenants/consumers in contested cases. At the point a contested
case involving Sub metered and non-submetered master metered utilities is referred to the Utility
Division of SOAH and final decision is made by the ALJ, the consumers Private Right of
Action for civil penalties and attorney fees is derailed. Once a final decision becomes an order,
the consumer can no longer file suit in civil court for three times the overcharge, civil penalties,
court cost or attorney fees. Res judicata and Collateral estoppel apply. Any such suit for civil
penalties in court would be immediately met with the landlords request for dismissal citing
Collateral estoppel.
The Texas Legislature gives administrative agencies the ability to act in instances once
controlled by the common law. Unless expressly specified otherwise, by the legislature in the
statue, the common-law cause of action exist under Subchapter M 13.505 for a claim brought
before the agency within its purview. A common-law claim can only be made available in an
administrative hearing with legislative action. Here it is clear the common-law claim is made available
under Subchapter M. 13.505, thus it must be applied to cases before the agency. The Public Utility

Commission is granted significant authority under the Legislature and Subchapter K to enforce
the statues adopted. Subchapter M 13.505 states in part " In addition to Subchapter K" thus
providing enforcement authority for tenants where owners have violated agency rules. Contested
case means a proceeding, in which the legal rights, duties, or privileges of a party are to be
determined by a state agency after an opportunity for adjudicative hearing. For apparent reasons
an administrative agency should initially decide an issue when: (1) an agency is typically staffed
with experts trained in handling the complex problems in the agency's purview; and'(2) great
benefit is derived from an agency's uniformly interpreting its laws, rules, and regulations,
whereas courts and juries may reach different results under similar fact situations. Determining
whether the civil courts has exclusive jurisdiction as the PUC claim, requires examination and
construction of the relevant statutory scheme. Here, there is no express legislative indication of
exclusive jurisdiction for remedies under Subchapter M 13.505. The intent of the Legislature is
to make enforcement available to both the Commission and civil courts. It is important to note; a
State agency cannot adopt statues in which they have no express or implied authority to enforce.
Administrative agencies have the powers conferred on them by clear and express statutory
language or implied powers that are reasonably necessary to carry out the Legislature's intent.
The PUC cannot adopt Subchapter M 13.505 and then abdicate or relinquish all enforcement
authority to civil courts, unless the statue express or imply civil courts have exclusive
jurisdiction and in this case, no such language exists.

The PUC has been delegated with specific powers that, in addition to its rate-making
power, include licensing and enforcement powers over utility providers, has expressed and
implied enforcement powers over apartment owners who allocate or sub-meter water and electric
to tenants. With both the expressed and implied enforcement authority under Subchapter K and
Subchapter M 13.505 the Commission can carry out its duties. The legislature's intent to grant
sole authority to civil courts for enforcement would not be sensible. If tenants limited the
dispute to Justice of the Peace Courts or civil court, the PUC would have no knowledge a
violation is occurring or occurred and no manner of oversight. Moreover, it would not be
sensible to require a tenant to engage in a year -long contested case to determine if a violation
occurred, afterwards, file suit in court and engage in another legal proceeding for civil penalties
and three times an overcharge.
The judicially-created primary jurisdiction doctrine operates to allocate power between
courts and agencies when both have authority to make initial determinations in a dispute.
Collateral estoppel prohibits the tenant from filing in judicial court against the same landlord for
penalties, once the contested hearing has concluded and a final judgement made. For this reason
and the reasons stated above the primary jurisdiction doctrine allow both the Utility division of
SOAH and civil courts to adjudicate the dispute equally. Although, SOAH is not a court, it has
adopted the Rules of Civil Procedure. As such, legal procedures set by statute and court practice,
including notice of rights, must be followed for each individual so that no prejudicial or unequal
treatment will result. Where a contested case hearing fails to provide the private right of action
under Subchapter M 13.505, i.e. failing to provide penalties and court cost and attorney fees as
established by Subchapter M 13.505, would be prejudicial and unequal treatment. Due process of
law is a fundamental, constitutional guarantee that all legal proceedings will be fair and protect
the rights of consumers whether through civil suit or a contested hearing. Both the rights and the
outcome of such legal proceedings should be equal under the Law.
The PUC claim Subchapter M 13.505 is strictly a judicial remedy, relegates all
enforcement authority to civil courts. As such, the PUC would have no way of knowing an
owner has violated a Commission rule and courts have no authority to impose an administrative
penalty or oversight to correct any violations which have occurred. Subchapter M 13.505
encourages tenants to report and file complaints against owners violating Commission rules. If
redress is not an outcome of filing a complaint and participating in a year long contested case
hearing, the entire process becomes an exercise in futility for the tenant.

A contested case

hearing involves discovery, motions, pleadings, witness and substantial time and cost. If the
PUC lack enforcement authority of Subchapter M 13.5050 the entire process is pointless. The
burden of proof in a contested case falls on the Complainant, no prudent person, would put
themselves through a costly year- long legal proceeding to prove a landlord violated a PUC rule
if there is no reparation. The consumer becomes a pawn for the PUC doing the PUCs bidding
and dirty work with no compensation at the end. Once the consumer meet the burden of proof,
yes, the owner violated PUC rules, the PUC can now refer the case to enforcement, where
administrative penalties and other penalties are assessed. The consumer however, walks away
from the process empty handed. This process can only be characterized as involuntary servitude
and unconstitutional. In the above scenario, the consumer works for the PUC with no protection
of rights or compensation.

This is the very meaning of slavery and a violation of consumer

rights on many levels.


What must be determined in this situation is the Enforcement authority of the PUC and if
the PUC in failing to educate, protect and enforce Subchapter M is consistent with Legislature
intent. Given the recent cases dismissed citing failure to grant relief requested suggest an
Opinion from the Attorney General is appropriate to ensure consumer rights are properly
protected. Emphasis upon the desirability of implying private rights of action to provide
remedies thought to effectuate the purposes of a given statute ... what must ultimately be
determined is whether Legislature intended to make available the private remedy asserted in
Subchapter M 13.505 in contested cases before the Public Utility Commission of Texas.
A problem only arises when the Legislature fails to vests the PUC with the authority to
determine issues of law and fact arising, but the legislature does not make available the commonlaw causes of action pertaining to those same issues of law and fact. Here it appears the
Legislature has made available to the PUC the express and implied authority to make available
the common-law cause of action, however, the PUC has chosen not to engage, thus effecting the
rights of tenants in contested cases.

During the 83rd legislature session the oversight of sub metered and non-submeterd
allocated water and sewer and electric was transferred from the TCEQ to the PUC. In 100% of
cases involving sub-metered and allocated water and electric, involve landlord and tenant and a
lease contracts. Under the Texas Property Code, all disputes involving Landlords and tenants are
restricted to judicial court, thus removing the PUC from a dispute which involves utilities as
addressed under Texas Property Code 92.301 and 92.302. It would make sense to move the rules and
statues applicable to sub metered and non-sub metered allocated water and sewer and electric to the Texas
Property code since all such disputes involve landlord and tenant and a lease contract. The PUC has removed
itself from such disputes by dismissing cases where relief is sought under TWC Subchapter M
13.505 for owners that violate PUC rules. The appropriate manner to accomplish this is through
repealing Subchapter M 13.505 or in the alternative, moving the enforcement provision under
Subchapter M to the Texas Property Code, Title 8, Chapter 92
Nearly 111 million residents in Texas live in multi-family properties, where sub-metered
and allocated water waste water and electric PUC rules are applicable. While most Owners
adhere to, and comply with, rules established by the PUC for sub-metered and allocated water,
there are an increasing number of owners which have taken advantage of tenants due to the PUC
self-enactment lack of enforcement authority. If the PUC refuse to grant civil penalties and
attorney fees in contested cases, consumers have no incentive to file legitimate complaints and
owners are allowed continued unlawful conduct. Because class actions are increasingly difficult
in the State and civil courts lack injunction and enforcement powers, Owners have been given
the red light to trample on tenant rights, engage in unlawful practices and profit from tenant
utility service fees.
In the current economic environment, theres a surplus supply of apartment rentals. In
many areas, both commercial and residential builders, have created a surplus, driving down
rental market rates. Due to the surplus of rentals, Landlords will inevitable make up the revenue
by charging extra fees, inflating utility cost, and engaging in other unlawful schemes to generate
revenue and ROI for investors. When it comes to utility charges most tenants are ignorant of
their rights, being under-represented as a consumer class in Texas government only add to the
problem. A number of renters are African American, Latino and Foreign Born. Many of which
have limited access to legal representation or the sophistication to interpret the rules and statues
which govern their rental community. Such consumer refer to the PUC to resolve the utility
disputes. Rent, utilities, and insurance represent their largest expenses. When landlords engage in
unlawful billing practices, charges and other fees, tenants have limited recourse. No attorney

would dare take on a contested case for unlawful utilities charges before SOAH without being
awarded attorney fees at the conclusion of the process.

Subchapter M 13.505 Enforcement

provisions provides sufficient incentives to legal counsel to represent tenants in contested cases.
The PUCs reluctance to enforce Subchpaterr M 13.505 is unacceptable.

Examples of economic disparities between the Administrative Track and the Judicial Track
Lets take for example Tenant A, Tenant B and Tenant C. All tenants pay $1000 per month in
rent and a flat $30 water and sewer utility charge. The landlord decides since hes passing the
water cost to tenants in the form of a flat rate, he does not need to Register with the PUC and
does not need to include a Water and Waste Water Addendum or send a monthly billing statement
to tenants. In this scenario, the following PUC violations exist:

Landlord Violated 16 TAC 24.122(a) In failing to register with the Commission

Landlord Violated 16 TAC 24.123 (a) in failing to include the required information in
the rental agreement and 24.123 (b) in failing to include a copy of the rules relating to
sub-meter or allocated water and waste water in Lease

Landlord Violation 16 TAC 24.124 (e) in failing to calculate charges using a formula
prescribed by the commission

Landlord Violation of 16 TAC 24.125 in failing to provide a monthly billing statement


to tenants

All three tenants write a letter to the Landlord identifying the violations. Landlord for Tenant A
and B never respond to the letter. Landlord for Tenant C responds and assures the Tenant they
follow all PUC rules and they enjoy having him as a tenant. As an appreciation for being a great
tenant, they offer tenant C, $200 off his rent in exchange for signing a document agreeing not to
pursue a complaint with the PUC. Tenant C takes the money and never pursues the issue. Tenant
A and B reads Subchapter M 13.505 and recognize theyre entitled to civil penalties and attorney
fees for the landlord violations. Tenant A file a complaint with the PUC. Tenant B goes to small
claims court.

Tenant A.
Tenant A takes the Administrative track. He must first file an informal complaint. The informal
process takes 30 days and the PUC decides yes a violation has occurred. After receiving a copy
of the complaint from the PUC, the Landlord finds an excuse to evict Tenant A. Tenant A moves
out in the 10th month of his Lease. Tenant A must now file a formal complaint. Over the next 90
days, the PUC issues an order for the Landlord to reply, landlord denies all allegations, next the
Commission staff makes a referral to SOAH and it becomes a contest case. A preliminary
hearing is scheduled, then discovery. Tenant A is now approaching 6 8 months into the
process.

The hearing occurs ten months into the complaint. The hearing is over and all

prehearing briefs are submitted by month 11. The ALJ takes another 60 days to issue a PFD.
Tenant A is now more than a year into the process. The ALJ determines, Tenant A met the
burden of proof and yes the landlord violated the Rules. The ALJ and Staff in the PDF notifies
the Landlord to pay the $300 which equates to $30 per month for the 10 months Tenant A lived at
the complex. Another month or two pass before the Order is final. After another 30 days, Tenant
A finally receives a check for $300. Fifteen months from the date he filed his formal complaint
the process is concluded. The PUC refers the case to the enforcement division, where the PUC
order the Landlord to pay an administrative penalty to the PUC of $1000 per violation for a total
of $5000. The Landlord complies with the order to pay $5000 and begins the process of
complying with the Commission rules. In this scenario Tenant A did the right thing in filing a
complaint and bringing the violations to the attention of the correct agency, the PUC. This
protects future tenants and provides the necessary oversight needed to ensure compliance.
However, after 15 months of briefs, motions, filings, mailing cost, copy cost (10 15 copies per
filing), Tenant A represented Pro Se has spent more than $800 dollars in mailings, paper,
printing, envelopes and more. In return for his investment in the complaint process, with
expenses of $800 - $300 received, hes negative $500, plus time.
Tenant A learns that another tenant received $5000 in small claims court and decides to file the
same complaint in court. He files a Petition for the same violations and fact of law as in the
hearing. The Landlord files a motion for dismissal on the grounds of Collateral Estoppel. The
judge agrees this matter has already been adjudicated before SOAH and dismiss the case. To
determine when a claim could have been litigated, the Texas Supreme Court adopted a
transactional approach so that [a] subsequent suit will be barred if it arises out of the same
subject matter of a hearing. In this case, it is clear that the liability arises out of the same issues,
yet again Tenant A comes up empty.

Tenant B.
Tenant B takes the judicial track and files a Petition in small claims court; the Landlord denies all
allegations. Within 45 days, both parties plead their case before the Judge. The Judge is unclear
if flat rate water utilities are unlawful because the PUC rules and statue does not address this
issue. Within two weeks, the Judge issues her decision; the Landlord violated the PUC rules and
judgement in the amount of $1000 for each violation for a total of $5000, plus court cost. Judge
rules the $30 flat rate is permissible, therefore does not provide for the three times overcharge.
Tenant B, within 90 days walks away with $5,125. The landlord does not appeal the decision,
but continues to violate PUC rules without oversight.

The examples, although simplified depicts the disparity between the PUC complaint process and
the judicial process, making a case for an overhaul of the complaint process for tenants and
provides argument for granting civil penalties, attorney cost and three times any overcharge.
The Equal Protection Clause is part of the Fourteenth Amendment to the United States
Constitution. The clause, which took effect in 1868, provides that no state shall deny to any
person within its jurisdiction "the equal protection of the laws". Its sensible, equitable and the
right thing to do to ensure equal treatment, rights of tenants are protected in both contested
hearings and judicial courts. As noted in the trial decision of case B, court judges often lack the
expertise needed in interpreting and ruling on Agency statues and rules. Flat rate utilities are
inherently unlawful, because theyre preferential for some tenants, particularly those that use
substantial water resources, and does not encourage water conservation.
Caselaw Igal v. Brightstar Information Technology
Where the Commission has conducted a hearing and dismissed a case citing failure to grant relief under
Subchapter M13.505, the consumer has chosen unfavorable venue and is baud from seeking relief in
judicial court. In some instances the judge can overlook this if the tenant can add a breach of contract or
other claim to the suit. The Igal v Brightstar serves as case applicable to selecting the Administrative
track versus Judicial track. Mr. Igal had two alternate and distinct claims, or tracks, available to
him.4 He chose the administrative track. 5 However, when he arrived at the race, he was told his
registration was untimely.6 When he then attempted to take his horse to the track across the road to run

the judicial course, he was told that he would not be permitted to run his horse on that track eitheran
incorrect attempt to enter the administrative race was enough to guarantee that he would never get to run
his 3horse and see if he had a champion

RECENT PUC DOCKETS


The PUC erroneous interpretation of its rules and statues is ever present in Docket 45306, the
staffs actions and interpretations of the rules were grossly inaccurate and unconscionable. In
this case, Springhill charged a flat rate utility of $30, did not register with the Commission to
allocate water and failed to provide monthly invoices. The Commission Staff Statement of
Position, quoted from page 4 paragraph 1 flat rate billing is not a patently illegal
practice if Spring Hill was only recovering an amount less than or equal to its utility
cost". The Staff further states, V. Motion to Dismiss, "Spring Hill would only be
required to provide Mr. Parker with specific calculation information if it billed Mr.
Parker for water based on a sub metered or allocated basis, however since Mr. Parker's
lease provided for a $30 monthly flat fee for water the rules Mr. Parker sites do not apply". Such
statements are irresponsible and faulty reasoning. Irresponsible, because this
information is made available to the public and tramples on the very consumer
rights the Commission is entrusted to protect. While Mr. Parker and other consumer
contested cases have been dismissed for similar faulty interpretations of rules,
Administrative hearings are design to ensure consumers in contested cases are
afforded due process. In construing Texas statutes, one must "ascertain and give
effect to the Legislature's intent as expressed by the language of the statute." Flat
rate water utility charges for reasons stated above are inherently inequitable,
unreasonable, unjust and a blow to water conservation. The intent of Springhill in
Docket 45306, as well as Docket 45435 was to allocate a portion of the water waste

water cost to tenants. As such, they are required to file a Registration with the
Commission and adopt a formula under TAC 24.124 (e). Commission Staff
statement "Spring Hill would only be required to provide Mr. Parker with specific
calculation information if it billed Mr. Parker for water based on a sub-metered or
allocated basis" is ridiculous. Because Springhill as well as Kingwood has one
Master bill the only method to bill tenants is based on the Master bill. This is called
"allocated or sub-metered billing. TAC 24.121 (c) (14) "Utility Service - For purposes
of this subchapter, utility service includes only drinking water and waste water". If
the flat rate was based on something other than drinking water i.e. lake on the
property, this was not expressed in the Lease Agreement nor conveyed to the
Commission. Moreover, because intent exist to allocate the master bill to tenants 16
TAC 24.122 (a) is applicable "An owner who intends to bill tenants for sub metered
or allocated utility service or who changes the method used to bill tenants for utility
service shall register i with the commission in a form prescribed by the
commission". and 16 TAC 24.124 "an owner using an allocation formula other than
those approved in subsection (e) of this section shall immediately provide notice as
required under 16 TAC 24.123 (c) of this title relating to Rental Agreement and
either: *t (1) Adopt one of the methods under PUC rules (2) install submeters or
cease billing. Because the water utilities to the owner are passed on to the tenants,
the water is therefore "allocated or sub-metered". If the owner allocates the master
bill to tenants TAC 16 24.124. In this case Mr. Parker, did not misinterpret the violations,

the PUC Staff erroneously dismissed his case. In this Case under subchapter M 13.505 the tenant
would be entitled to civil penalties for atleast four violations. This Docket was dismissed
improperly and the tenants rights, privilege and due process derailed.

In another case where violations clearly have occurred, Docket 45646 the Complainant
eventually withdrew the complaint but not before the Staff and ALJ took the position Subchapter

M 13.505 relief is not within their authority. More importantly, the Commission staff ruled to
dismiss the complaint in its entirety, while the ALJ decided only the overcharge should be
addressed and dismissed any relief available under TWC Subchapter M 13.505.
In his complaint, Mr. Rivera states that based on the alleged violations, he "is entitled to recover
three times the amount of any overcharge during the period of his lease. He is also seeking the
civil penalty of one months rent and reasonable attorney's fees and court costs from FM Park
management."11Mr. Rivera requested no other relief. The ALJ agrees with FM Park and Staff that
Mr. Rivera's requests in his complaint are beyond the Commissions authority to grant. Clearly,
Texas Water Code 13.505 refers to a judicial Proceeding and civil penalties and does not grant
to the Commission the authority to award monetary damages, attorney's fees, one month's rent, or
court costs in an administrative hearing. However, Mr. Rivera did mention an "overcharge" in
his complaint, and one of the issues the Commission referred to SOAH was what should be the
amount of a refund if FM Park overcharged Mr. Rivera for water service.

Docket 41987, The Commission and ALJ state THE COMMISSION MAY NOT AWARD ENHANCED
PENALTIES UNDER TEXAS UTILITIES CODE 184.071 As a state administrative agency,
the PUC has those powers that the Legislature expressly confers upon it.16 In order to determine
what powers the legislature conferred on the Commission, look to the pertinent statutes.17
Because the legislature expressly laid out the circumstances in which the Commission may award
treble damages and attorneys' fees in sub metering cases, those are the only circumstances in
which the Commission may award those enhanced penalties. If the Commission were to award
enhanced penalties under Texas Utilities Code 184.071, the Commission would be exercising a
power not granted to it by the Legislature. Texas law prohibits agencies from exercising what is
effectively a new power, or a power contradictory to the statute, based merely on a claim that the
power is expedient for administrative purposes.

Docket 46054, Complainant dismissed her case, however its apparent


from the Docket, violations did occur: the landlord settled with
Complainant.