Ash Grove Sues the City of Plano
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IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TEXAS SHERMAN DIVISION ASH GROVE TEXAS, L.P., Plaintiff, v. CITY OF PLANO Defendant. § § § § § § § § §
Civil Action No. _______________
PLAINTIFF’S ORIGINAL COMPLAINT Plaintiff Ash Grove Texas, L.P. (“Ash Grove”) files this Original Complaint against Defendant the City of Plano (“Defendant”) as follows: I. INTRODUCTION 1. On April 28, 2008, Defendant adopted a cement-purchasing resolution that
purportedly had as its primary objective the promotion of “cleaner air.” Although Defendant’s stated objective in adopting this resolution was laudable, the resolution has done little, if anything, to actually improve air quality. Instead, what the resolution has accomplished is to unfairly stifle competition in the cement industry and jeopardize jobs and economic growth in what are already extremely challenging economic times. Moreover, in passing and
implementing the resolution at issue herein, Defendant has blindly trampled upon Ash Grove’s constitutional and statutory rights. 2. Specifically, the resolution violates Ash Grove’s constitutional rights as it (i) is
void for vagueness; (ii) amounts to a regulatory taking; (iii) is arbitrary and capricious; and (iv) violates the equal protection clause. Accordingly, Ash Grove seeks a declaration from this Court
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that the resolution is improper and invalid, any purchases made pursuant to the resolution are invalid, and any attempt by the Defendant to use its purchasing power to regulate air quality is improper and invalid. Ash Grove also seeks an injunction preventing the Defendant from enforcing the resolution, which, upon information and belief, Defendant has begun to do. Finally, Ash Grove seeks relief under 42 U.S.C. § 1983 because the Defendant, acting under the color of law, has deprived Ash Grove of its constitutional rights. II. PARTIES, JURISDICTION, AND VENUE 3. Plaintiff Ash Grove Texas, L.P. is a Texas limited partnership, with its principal
place of business in Midlothian, Ellis County, Texas. 4. Defendant the City of Plano is a municipal corporation located in Collin County,
Texas, organized and existing under the law of the State of Texas. Pursuant to TEX. CIV. PRAC. & REM. CODE ANN. § 17.024(b), the City of Plano may be served with process by serving a copy of the summons and of the complaint on its mayor, clerk, secretary, or treasurer at Plano City Hall, 1520 Avenue K, Plano, Texas 75074. 5. This Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C.
§§ 1331, 1343, and 1367. 6. Venue is proper in this District pursuant to 28 U.S.C. § 1391 because the
Defendant resides in this District and is located in this State, and a substantial part of the events or omissions giving rise to the claims occurred in this District. III. FACTUAL BACKGROUND A. Ash Grove and Its Commitment to the Environment. 7. Ash Grove is a cement manufacturer with an approximately $200 million plant
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located in Midlothian, Texas (the “Plant”). Ash Grove employs approximately 124 people at the Plant. There are two other cement manufacturers with plants in Midlothian (an ideal geographic location because of the substantial limestone supply), and all cement is manufactured in Midlothian (and in fact the world) using either wet process kilns or dry process kilns.1 Ash Grove manufactures cement at the Plant using three wet process kilns. For many years, Ash Grove has supplied cement from its Plant to customers who, in turn, supply contractors competing in the bid process for contracts with the Defendant. 8. Ash Grove takes its responsibility to the environment seriously. In addition to
complying with extensive regulations regarding emissions, Ash Grove has voluntarily reduced its nitrogen oxide (“NOx”) emissions from the Plant and continues to seek out new and innovative ways reduce its effect on the environment and increase its environmental sustainability. 9. For example, Ash Grove reduced its NOx emissions by 46% between 2006 and
2008. Of the three cement manufacturing plants located in the Midlothian area, Ash Grove’s Plant has the lowest total NOx emissions, representing less than approximately 25% of total NOx emissions from the three plants. In fact, during the summer of 20082 the Plant operated at an average NOx emissions level that was lower than the emissions levels of ten of the thirteen dry
A cement kiln is a huge, cylindrical, rotating steel tube where raw materials (often limestone, shale, and sand) are heated to make cement “clinker” (which looks like golf-ball sized rocks). After the clinker exits the kiln, it is ground into fine dust – cement. See also 30 TEX. ADMIN. CODE § 117.260(1) (“Clinker-The Product of a Portland cement kiln from which finished cement is manufactured by milling and grinding.”). The “wet kiln” and “dry kiln” terminology distinguishes the two processes for introducing raw materials into a cement kiln. In the wet process, the raw materials are introduced into the kiln in a wet “slurry” consistency. In the dry process, the raw materials are introduced into a kiln in a relatively dry form. See also 30 TEX. ADMIN. CODE § 117.260(3)-(4) (defining wet and dry kilns). The cement clinker that leaves the kiln is the same regardless of whether a wet or dry process is used. The TCEQ has accepted Ash Grove’s audited 2008 NOx emissions data without requiring further review, subsequent verification, or modification.
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kilns operating in the State of Texas.3 Not surprisingly then, the Plant has among the lowest NOx emissions of wet kilns and dry kilns used to manufacture cement. 10. Additionally, Ash Grove pioneered the use of selective non-catalytic reduction
(“SNCR”) technology to reduce NOx emissions; Ash Grove was the first company to use the SNCR technology in the United States. In fact, at the time Ash Grove installed SNCR on the first of its three kilns, there was only one other wet kiln in the world employing this emissions control technology. After a testing period on one kiln, Ash Grove completed installation of SNCR on all three of its kilns in February 2008 even though regulations did not require that Ash Grove do so. Others have taken note of Ash Grove’s success: since installing SNCR on its three local kilns, a number of companies from around the world have visited the Plant to study Ash Grove’s pollution-reducing technology. 11. As a result of Ash Grove’s continuous environmentally-conscious efforts, data
submitted to the Texas Commission on Environmental Quality (“TCEQ”), the body tasked with air regulation in Texas, shows that Ash Grove reduced its annual NOx emissions by 43% from 1996 to 2006. In keeping with its pattern of environmentally-conscious behavior, Ash Grove submitted a draft enforceable agreement to the TCEQ in January 2008 offering to permanently reduce Ash Grove’s NOx emissions during the ozone season to a level 20% (or 1 ton per day) less than the TCEQ emission limits currently in effect. 12. Ash Grove has been recognized for its dedication to the environment. On October
24, 2008, the North Texas Clean Air Coalition recognized Ash Grove as the recipient of its Working for Cleaner Air Employer of the Year award. The group announced that Ash Grove received the top 2008 award for North Texas companies with fewer than 500 employees. Ash
Comparison figures based on the most recent publically available (2007) data published by the TCEQ for all other kilns.
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Grove is the first cement manufacturer recognized in the five-year history of the North Texas Clean Air Coalition program. B. The Texas Commission on Environmental Quality Has Adopted a Comprehensive Regulatory Framework Applicable to Ash Grove. 13. The federal Clean Air Act charges the Environmental Protection Agency with
establishing National Ambient Air Quality Standards (“NAAQS”) to ensure public health and to designate areas as either in attainment or nonattainment with the NAAQS, or as unclassifiable.4 States are primarily responsible for ensuring attainment and maintenance of the NAAQS once established by the EPA, and each state is required to submit a State Implementation Plan (“SIP”) to the EPA that provides for attainment and maintenance of the NAAQS for those areas of nonattainment.5 Nine counties in the DFW region – Collin, Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, and Tarrant (the “DFW Nonattainment Area”) – are designated nonattainment for the eight-hour ozone NAAQS. The TCEQ is the Texas agency that, among other things, develops SIPs to manage non-attainment areas like the DFW Nonattainment Area. It also administers a variety of permit programs required under the federal Clean Air Act through both the issuance of permits and the adoption of state and area-wide rules. 14. On May 23, 2007, the TCEQ revised the SIP for the Control of Ozone Air Pollution in
the DFW Region and adopted revisions to Chapter 117 of the Texas Administrative Code. Among other things, the revisions changed the manner in which each cement kiln operator in Ellis County must calculate a NOx “source cap” to be in place during the yearly ozone season beginning in March 2009. These new rules provide that each cement kiln operator will have to
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Any area of the country where the air is measured to exceed the federal air standard for any one air pollutant will be designated “nonattainment” for that pollutant.
SIPs are formal agreements between the EPA and each state, including the State of Texas, to accomplish specific goals and objectives, including adoption and implementation of federal rules and requirements.
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maintain its NOx emissions at or below its NOx emissions cap on a 30-day rolling average during the ozone season. As the TCEQ has stated, this “source cap” is calculated “based on a pound per ton of clinker emission factor for each type of kiln and the average annual production rate for the kilns for calendar years 2003, 2004, and 2005, plus one standard deviation of total production at an account.” 15. According to the TCEQ, this source cap approach “provides flexibility to account
for the inherent variability in NOx emissions from cement kiln operations.” The SIP, through the source caps, regulates total NOx emissions; it does not set emission rate limits for each kiln. TCEQ enacted a formula for calculating the source cap for each cement plant as the method to regulate the maximum total NOx emissions for each facility. As a part of the formula used to determine the source caps, the TCEQ employed factors pertaining to emissions: a 1.7 factor for dry kilns and a 3.4 factor for wet kilns.6 Importantly, the TCEQ describes the 1.7 and 3.4 figures as “NOx emission factors,” not as emission limits. Thus, the TCEQ has not established an emission limit of 1.7 pounds of NOx per ton of clinker for dry kilns or of 3.4 pounds of NOx per ton of clinker for wet kilns. For example, under the source cap formula, a dry kiln operator could operate its kilns at NOx emissions levels well above 1.7 pounds per ton of clinker, but the operator would not violate the ozone season source cap if it reduced its production volume of clinker over the rolling thirty day period. The TCEQ rules limit total tons of emissions from each cement plant facility in Ellis County, not emissions per ton of product. This allows the TCEQ to ensure that the total tons of NOx emitted by a facility during the entire ozone season
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The “source cap” is calculated “based on a pound per ton of clinker emission factor for each type of kiln and the average annual production rate for the kilns for calendar years 2003, 2004, and 2005, plus one standard deviation of total production at an account.” See 32 TEX. REG. 3311, 2007 WL 1673797, at *3210.
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would stay at a level below the source cap if the facility built new kilns or increased production from existing kilns. 16. In addition to the source cap and other requirements imposed under the Texas
Administrative Code, the TCEQ also issues permits to individual facilities. Ash Grove’s permit allows the plant to emit 725 pounds of NOx per hour and 3,176 tons of NOx per year from each of the three kilns at the Plant. In 2007, 2008, and in 2009 to date, the Ash Grove Plant has operated well below the maximum emission limits set forth by the TCEQ. 17. Although the TCEQ regulates cement kilns emissions very stringently, cement
kilns are not the most significant contributors to NOx in the DFW Region.7 Even if all NOx emissions from all cement kilns in Midlothian were eliminated, the NOx emissions from other sources would still cause the DFW Region to be far from attainment with the NAAQS. C. The City of Plano Passes an Unconstitutional and Illegal Resolution that Favors Dry Kiln Cement and Imposes Emissions Standards Upon Ash Grove Beyond Those Required by the TCEQ. 18. This conflict has its roots in an October 2006 resolution adopted by the North
Central Texas Council of Governments’ North Texas Clean Air Steering Committee8 stating: [t]hat local governments and special districts within the region’s ozone nonattainment area be strongly encouraged to include criterion in their bidding policies that rewards or give [sic] special consideration to cement from the companies operating kilns with the lowest NOx emission levels.
Anthropogenic NOx and volatile organic compound (“VOC”) emissions fall into four categories: point source, on-road mobile sources, non-road mobile sources, and area sources, with the largest source of NOx emissions in the DFW area coming from on-road mobile sources. The Plant falls into the point source category. According to the TCEQ, mobile sources are the largest NOx contributors in the DFW area, contributing approximately 75% of the NOx emissions in the area. By 2007, point source NOx emissions decreased by 44% from the previous fourteen years. In the DFW area, point sources contribute to 12-15% of NOx emissions, and cement kilns are responsible for approximately 43% of point source emissions. Thus, cement kilns emit approximately 5-6% of the NOx in the DFW area. The North Central Texas Council of Governments is a voice to consider nonattainment issues, but it has no power to make or enforce environmental regulations on its own. It may, however, make recommendations.
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The NCTCOG Resolution made no reference to dry or wet kiln cement, yet soon thereafter, municipalities in the North Texas area began adopting resolutions essentially excluding wet kiln cement from consideration for projects. 19. In the wake of the aforementioned resolution, and following in the footsteps of the
cities of Dallas, Arlington, and Ft. Worth, on April 28, 2008, the City of Plano considered Resolution No. 2008-4-40(R) (the “Plano Resolution”) which requires base bids for concrete for all City of Plano jobs to use “dry kiln cement” and gives preference to cement produced from kilns with emissions rates of 1.7 pounds of NOx or less per ton of cement clinker produced. The Plano Resolution provides that: the City Manager or his designee is hereby authorized, where allowed by law, to provide for the purchase of dry kiln cement as the base bid, with an alternative bid for the purchase of cement from an unspecified source and to give preferential bid evaluation of all cement produced by kilns with emission rates of 1.7 pounds of nitrogen oxide (NOx) per ton of clinker or less in City of Plano bid packages. Preference may only be given if the cost for the goods or services would not exceed 105% of the goods or services provided by a vendor who does not meet the standards. Despite Ash Grove’s request at the meeting that Defendant consider an alternate proposal that would result in emissions reductions by all kilns in Midlothian and would comply with the TCEQ requirements, the Plano City Council voted unanimously to adopt the Plano Resolution. The resolution adopted by Defendant was considered and discussed by the City Council for only ten (10) minutes before it was passed. In that short time, the City Council acknowledged they were not at the forefront of NOx restrictions, but were merely “following behind [the] two big cities in the area.”9 20.
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The Plano Resolution expressly requires that any bid submitted to the City of
All quotes from the Plano City Council meeting are derived from the audio/video recording of the April 28, 2008 meeting available at : http://planotx.swagit.com/play/04282008-45/4/ (last visited July 6, 2009). It is Ash Grove’s understanding that there is no official public written transcript of the meeting.
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Plano for construction work using concrete include a dry kiln cement base bid. The bidder may then, at its discretion, include an alternate bid that does not specify a cement source, and a second alternate bid from a source kiln with an emission rate of 1.7 pounds of NOx or less per ton of cement clinker produced. Per the resolution, should a second alternate bid be made, it will be afforded a preference over the base bid and an alternate bid. 21. By its own admission, the Plano City Council did little if any of its own due Indeed, it would appear that
diligence in considering and adopting the Plano Resolution.
Defendant simply adopted the Plano Resolution because similar resolutions had been adopted by Dallas and Ft. Worth. However, as is true of those resolutions, the Plano Resolution violates both state and federal law. 22. Texas competitive bidding statutes protect the public and suppliers like Ash
Grove by, among other things, limiting the Defendant’s discretion in requesting and accepting proposals and bids for projects. The competitive bidding statutes require that the Defendant evaluate only the competence of the bidder and the quality and price of the bidder’s product or service; non-functional product characteristics are not to be considered. The Texas Supreme Court has made clear that the Defendant may not use its purchasing power to enact social policy. Yet this is precisely what the Defendant seeks to do by way of the Plano Resolution. 23. Texas law also prohibits the Defendant from giving a preference to one bid over
another for air quality purposes unless the preference given is based upon existing state or federal air quality standards. As discussed above, the Texas legislature requires the TCEQ to regulate Texas air quality, and the TCEQ has implemented extensive regulatory schemes specifically for cement kilns. In contravention of the TCEQ’s authority, as well as the policies behind TCEQ regulations, the Plano Resolution purports to regulate NOx emissions from the cement plants in
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Midlothian, including Ash Grove’s Plant.10 The TCEQ regulations preempt the resolution, and the resolution is therefore void. 24. Despite these statutory limitations, the Defendant passed a resolution which
specifies the use of only cement manufactured by a dry kiln process, and/or which gives a preference to cement kilns that meet an emission standard arbitrarily devised by the Defendant. D. Ash Grove Is Losing Business as A Result of the Plano Resolution. 25. Upon information and belief, Defendant has begun actively incorporating the
Plano Resolution into the bid process for projects that require concrete and requires all concrete suppliers to execute a certification that the cement is from a dry kiln. The Plano Resolution effectively eliminates Ash Grove’s cement from the competitive bidding process for all jobs for the City of Plano and from all jobs using concrete suppliers who supply concrete for City of Plano jobs. Ash Grove sells most of its cement to ready-mixed concrete suppliers who in turn supply ready-mixed concrete to contractors (such as those bidding for Defendant’s projects). 26. One such ready-mixed concrete supplier has been one of Ash Grove’s long-
standing good customers. Given that there is no quality difference in cement from a dry versus wet kiln, this particular customer purchased cement from Ash Grove and other cement manufacturers without regard to the process by which the cement was manufactured. As is typical, the customer would store that cement in silos that might contain cement from a number of different manufacturers. The customer has a small, fixed number of silos in which to store cement. As a direct result of Defendant’s actions, the customer has informed Ash Grove that it can no longer purchase as much cement from Ash Grove as it would in the absence of the Plano Resolution. In order to sell cement to contractors and certify to Defendant that it was produced
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NOx contributes to ozone formation. Ozone is a naturally occurring compound whose complex formation process is partially dependent upon factors outside human control, particularly meteorology.
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from a dry kiln, the customer would be required to segregate cement produced by the wet process versus the dry process. Due to limited silo capacity, the customer cannot afford to do this and, as a result, it has decreased its cement purchases from Ash Grove. Ash Grove believes it is only a matter of time before other customers follow suit. 27. Moreover, despite the fact that the Plano Resolution theoretically only applies to
suppliers for the City of Plano, the enforcement of the Plano Resolution is affecting all jobs in the surrounding area. Upon information and belief, certain concrete suppliers, eager to avoid the draconian removal and replacement penalties imposed by Defendant, now require that all cement meet the Plano Resolution’s arbitrary standards, despite the fact that only a fraction of the concrete is used in City of Plano jobs. In effect, the Plano Resolution is denying Ash Grove the ability to sell cement to concrete suppliers for jobs in Frisco, McKinney, and other surrounding areas, because such suppliers want to avoid running the risk that Ash Grove’s perfectly acceptable cement is not mixed with other cement. Obviously, this has, and will continue to, negatively impact Ash Grove, its Plant, and its employees. 28. Additionally, the practical effect of the adoption of the resolution, among other
things, is to reduce competition between the three local cement manufacturers. Only Texas Industries, Inc. (“TXI”) and Holcim (US) Inc. (“Holcim”) operate dry process kilns in Midlothian. In essence, the Plano Resolution eliminates Ash Grove from the bid process by requiring the base bid contain dry kiln cement, and then further provides a preference based upon an emission rate which is not part of any applicable state or federal environmental standard.
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IV. CLAIMS CLAIM 1: 29. REQUEST FOR DECLARATORY JUDGMENT Pursuant to 28 U.S.C. §§ 2201 and 2202, an actual and substantial controversy
exists between Ash Grove and the Defendant that is within the Court’s jurisdiction. For the reasons that follow, Ash Grove seeks declarations from this Court that (i) the Plano Resolution is unlawful, void, and of no valid legal force or effect; (ii) any purchases made pursuant to the Plano Resolution are unlawful, void, and of no legal effect; (iii) any consideration of the cement source or manufacturing process as a criteria for selecting cement or cement products is unlawful, void, and of no legal force or effect; and (iv) the TCEQ has exclusive authority to set air quality emission standards and regulations for cement kilns. A. The Plano Resolution Violates the Texas Competitive Bidding Statutes. 30. Competition always has been the keystone of government contracting.
Competition requirements do not allow specifications that are unrelated to the quality or quantity of the goods or services or that otherwise restrict competition. If a specification includes a nonfunctional characteristic (not a functional characteristic of the product), it is in violation of the competitive bidding statute and is void. A governmental body may not adopt policies or issue solicitations that restrict competition unless such policies or solicitations have a definite and objective relationship to matters of quality or performance or are adopted pursuant to clear legislative authority. 31. There is no difference in the quality or performance of cement manufactured by
wet versus dry process kilns, or of the competence of manufacturers and vendors of such cement. The Plano Resolution is based entirely on a desire to improve air quality and not on a desire to purchase better cement. The Plano Resolution contains an arbitrary requirement that dry kiln PLAINTIFF’S ORIGINAL COMPLAINT PAGE 12
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cement be used by requiring all base bids to include “dry kiln cement” and includes a preference in a second alternate bid for cement from kilns with emission rates of 1.7 pounds of NOx per ton of clinker or less. Thus, the Plano Resolution impermissibly restricts competition. 32. The Plano Resolution makes no attempt (nor could it) to distinguish the type,
quality, competence, performance, or function of cement from wet versus dry kilns. Rather, the bid requirement is purely a non-functional specification that has the direct result of eliminating Ash Grove’s cement from being considered in the bid process and used in the Defendant’s projects. Therefore, the Plano Resolution, purchases made pursuant to the Plano Resolution, and consideration of the cement source or manufacturing process in making purchasing decisions are void, invalid, and of no legal force or effect because they unlawfully violate the Texas competitive bidding statutes. B. The Plano Resolution Violates Texas’s Preferential Purchasing Statute. 33. The Plano Resolution purports to authorize the specification of “preferential
purchasing for bids from a cement kiln with emission rates of 1.7 pounds of NOx per ton of clinker or less.” 34. Texas law permits municipalities to make preferential purchases relating to air
quality only in limited circumstances. The Defendants may: (1) give preference to goods or services of a vendor that demonstrates that the vendor meets or exceeds any state or federal environmental standards, including voluntary standards, relating to air quality; or (2) require that a vendor demonstrate that the vendor meets or exceeds any state or federal environmental standards, including voluntary standards, relating to air quality. TEX. LOC. GOV’T CODE ANN. § 271.907(c) (emphasis added). Under the maxim of expression unis est exclusion alterius, the express provision of this one circumstance in which a preference
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may be given to a vendor relating to air quality excludes any other circumstance in which a preference may be given. See Harris County v. Crooker, 248 S.W. 652, 655 (Tex. 1923). 35. Importantly, the Texas preference statute allows the Defendant to give a
preference to a vendor that demonstrates that the vendor meets or exceeds any state or federal environmental standards. The statute, therefore, requires and presumes that any preference be based on an existing state or federal emissions standard. There is currently no state or federal standard limiting any type of cement kiln to an emission rate of 1.7 pounds of NOx per ton of clinker. In Texas, as discussed above, the TCEQ has set forth a variety of alternative emission standards for Ellis County cement kilns, including the source cap formula. Ash Grove’s
Midlothian kilns operate at or below the applicable source cap. Yet, Ash Grove is ineligible for a preference per the Plano Resolution. The Plano Resolution violates the Texas preference statute, and is void, invalid, and of no legal force or effect. C. The Plano Resolution Is Preempted by State Regulations. 36. By way of the Plano Resolution, the Defendant is attempting to regulate
indirectly what it may not regulate directly. The Plano Resolution is an impermissible attempt to regulate in an area already preempted by the TCEQ and in a manner inconsistent with the TCEQ’s regulations and orders. 37. Under the Texas Clean Air Act the TCEQ is granted the power and authority to
establish the level of quality to be maintained in the State’s air and to control the quality of the State’s air. The TCEQ has promulgated numerous and detailed regulations for the control of NOx in the air. These regulations require Ash Grove to install, calibrate, maintain, and operate emissions monitoring systems to monitor kiln exhausts. Further, Ash Grove is subject to various notification, recordkeeping, and reporting requirements. As an alternative to complying with these emissions specifications requirements, Ash Grove may elect a source cap option. Thus, PLAINTIFF’S ORIGINAL COMPLAINT PAGE 14
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Ash Grove is subject to strict regulation by the State of Texas regarding its NOx emissions. 38. The acknowledged purpose of the resolutions upon which the Plano Resolution is
predicated is to force only wet kilns that wish to be considered in the bid process to comply with arbitrary emissions standards that are not a part of and are inconsistent with the regulatory scheme promulgated and enforced by the State of Texas through the TCEQ. The Plano
Resolution seeks to impose standards that are inconsistent with Texas law and regulations currently in place. These arbitrary standards also conflict with the yet-to-be-effective laws and regulations that will take effect in 2010. They also conflict with the policy rationale enunciated by the TCEQ itself.11 39. The Defendant’s goal is antithetical to—and indeed undermines—the TCEQ’s
policy of equitable, feasible, and achievable reductions from all kilns. It is also inconsistent with the TCEQ regulations to the extent that it purports to establish a year-round emission limit of 1.7 pounds of NOx per ton of clinker, while the TCEQ (i) has different regulations that apply during the ozone season and outside the ozone season; and (ii) applies its 1.7 emission factor (not a limit) for dry kilns only during the ozone season. 40. The Texas Clean Air Act also prohibits the Defendant’s attempts to regulate
around the TCEQ because the TCEQ has promulgated a detailed regulatory scheme as well as
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The TCEQ itself recently stated “The commission disagrees with the commenter’s suggestion of different emission rate limits for different kiln types. There are significant differences in the pound per ton of clinker NOx emission rates from the same type kilns in Ellis County. These differences complicate establishing a technically feasible and equitable emission specification for each type of kiln in Ellis County. For example, an emission specification based on a 35% reduction from the best performing wet kilns in Ellis County could result in the owner or operator of wet kilns at another site being forced to either shut down the wet kilns or install advanced and potentially unproven controls. Alternatively, if the emission specification is based on units with the higher emission rate, cleaner kilns would already be achieving this rate and would not be required to make reductions. While the commission acknowledges that the cleaner cement kilns should be recognized under the rule, achievable reductions must be obtained from all the cement kilns in Ellis County . . . . [T]here are significant differences between the two types of cement kilns in Ellis County. Prescribing a single emission factor, either on a ton per day or pound per ton of clinker basis, would not be equitable and could make compliance with the rule infeasible for owners or operators of certain kilns. The commission does not intend to force owners or operators to shut down kilns to comply with the rule.” See 32 TEX. REG. 3313 (emphasis added).
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permitted NOx emissions on a facility-by-facility basis. Under the act, municipalities may enact and enforce measures for the control and abatement of air pollution. However, the Texas Clean Air Act specifies that those measures must “be consistent with this chapter and the commission’s rules and orders and may not make unlawful a condition or act approved or authorized under this chapter or the commission’s rules or orders.” The Plano Resolution was proposed and passed in a manner that is inconsistent with the TCEQ’s process for crafting rules and orders, as well as the rules and orders already in place. And, the Plano Resolution improperly punishes Ash Grove for maintaining emissions levels that the TCEQ explicitly approved and authorized after an extensive and exhaustive analysis, an emission level below ten of the thirteen dry kilns operating in the State of Texas. D. The Plano Resolution Is Arbitrary and Capricious. 41. The Resolution was adopted in an arbitrary and capricious manner, without
consideration of important available data.12 That a kiln is wet or dry does not categorically determine whether that kiln will emit more or less NOx. Even if the Defendant was permitted to invade the TCEQ’s authority, limiting base bids to cement from dry kilns bears no relation to the purported goal of limiting NOx emissions. As the TCEQ has recognized, there is wide variance in emissions between kilns of the same type at the same site. Further, the cement kilns account for such a small proportion of NOx emissions in the DFW Region that even eliminating all emissions from the kilns would not bring the DFW Region into attainment with the NAAQS. In light of the data readily available to the Defendant regarding emission rates from cement kilns and their refusal to consider such data, it is apparent that the Defendant specified a particular
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The Plano Resolution was presented and voted on in approximately ten minutes. No data was presented or reviewed at the meeting. One councilmember made the conclusory statement that dry kilns were superior to wet kilns as far as emissions were concerned and that wet kilns would never be held to the same standard as dry kilns justifying the Resolution. No evidence or supporting material was provided. The resolution vote occurred shortly thereafter.
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type of manufacturing process (dry kilns) to shut down another type of manufacturing process (wet kilns). 42. In addition to drastically limiting competition, the Plano Resolution may have the
effect of increasing NOx emissions. For example, Ash Grove will begin importing dry kiln cement to the DFW area from dry kilns out of state. It is likely that these kilns operate on average at an emissions level greater than the wet kilns at Ash Grove’s Plant in Midlothian, Texas during ozone season, and transportation of the cement will emit additional NOx. Nevertheless, this imported dry cement will be eligible for inclusion in base bids under the Plano Resolution. 43. Also as discussed above, the “1.7 pounds of NOx per ton of clinker” standard the
Defendant purports to use for giving a preference is not an existing state or federal standard. It is unclear exactly how the Defendant (barring just a copy from the Dallas and Fort Worth Resolutions) arrived at the 1.7 number. The only place the number “1.7” appears is as a factor applicable to dry kilns in the ozone season source cap formula set forth in the TCEQ’s rules that became effective in March 2009. It is not an emissions limit for any type of cement kiln. However, the way the Defendant is using the number 1.7 bears no relation to the way that number is used by the TCEQ. Thus, the 1.7 number itself is arbitrary and capricious and has no rational relation to any state or federal standard. The Plano Resolution is also arbitrary and capricious in the manner in which it is enforced, including because there is no way for the Defendant to verify that cement was indeed manufactured by a dry kiln process or by a process emitting 1.7 tons of NOx per ton of clinker or less. E. The Plano Resolution Is Unconstitutionally Vague. 44. The Plano Resolution violates Ash Grove’s rights guaranteed by the Fourteenth
Amendment to the United States Constitution because it is void for vagueness. The Plano PLAINTIFF’S ORIGINAL COMPLAINT PAGE 17
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Resolution is inherently without standards and necessarily forces persons of common intelligence to guess at its meaning and differ as to its application. Due to the uncertainty of its terms the Plano Resolution can only be enforceable through the arbitrary discretion of the Defendant’s employee(s) and not through more appropriate and meaningful objective standards. 45. The Plano Resolution raises a myriad of serious questions, all unanswered. Who
will verify whether the cement comes from wet or dry kilns, and how? How frequently will NOx output be measured? Who will measure emissions? If an excluded manufacturer lowers its emissions, when does it become eligible to be included again in bids for the Defendant’s contracts? Is a manufacturer bound by a once-yearly report of emissions, even if it subsequently reduces its emissions? Does the Plano Resolution apply to purchases of concrete products or just to purchases of raw cement? If two bidders both include cement from kilns operating below the arbitrary threshold of 1.7 pounds of NOx per clinker ton, how will the City of Plano decide between the two? If cement is produced from a wet kiln with lower emissions than a dry kiln, will wet kiln cement remain excluded from inclusion in base bids? The City of Dallas and the City of Fort Worth, the “two big cities in the area” whose resolutions the City of Plano copied from, raised many of these questions, yet left them wholly unanswered. F. The Plano Resolution Is an Unconstitutional Regulatory Taking. 46. The Plano Resolution also violates Ash Grove’s rights guaranteed by the
Fourteenth Amendment to the United States Constitution because it results in a regulatory taking of Ash Grove’s property interests. 47. The Plano Resolution unreasonably interferes with Ash Grove’s rights to use and
enjoy its business and the Plant. The negative economic impact on Ash Grove caused by the Plano Resolution significantly interferes with the investment-backed expectations of Ash Grove in its Plant. Ash Grove has steadily made substantial investments in technology to reduce its PLAINTIFF’S ORIGINAL COMPLAINT PAGE 18
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annual NOx emissions by 43% over the last ten years, and it meets the technology option standard and exceeds the TCEQ 30% reduction option standards. In addition, Ash Grove voluntarily reduced NOx emissions from 2006 ozone season levels another 35% to comply with the next phase of TCEQ regulations one year earlier than required. Further, the amount of NOx emissions from Ash Grove’s Plant is slight compared to the overall NOx emissions in the region, while the public importance of maintaining a fair competitive bidding process is significant. Under these circumstances, and the fact that the TCEQ actively and comprehensively regulates the Plant, it was not reasonably foreseeable that the Defendant would attempt to further regulate the Plant using arbitrary standards that conflict with those imposed by the TCEQ and/or exclude Ash Grove’s cement from base bids for Defendant’s projects. 48. parties. The Plano Resolution improperly shifts a public burden to a small class of private
The Plano Resolution improperly and specifically targets only wet kiln cement
manufacturers, regardless of NOx emission rates. Even though Ash Grove operates a wet kiln with NOx emission rates below all lawfully imposed standards, and below ten of the thirteen dry kilns in Texas, its cement is still not eligible to be included in the base bid process or for a preference. The Defendant’s elimination of a segment of Ash Grove’s business and the use and enjoyment of its Plant amounts to improper regulatory takings. G. The Plano Resolution Violates the Equal Protection Clause. 49. The Plano Resolution violates the Equal Protection rights guaranteed to Ash
Grove by the Fourteenth Amendment to the United States Constitution because it distinguishes between wet kilns and dry kilns as the basis for excluding wet kiln cement from base bids for Defendant’s contracts. This classification has no rational relation to any legitimate governmental purpose, and it is not grounded in fact. It does not matter whether Ash Grove emits less NOx or is more energy efficient than dry kiln manufacturers; it does not matter whether Ash Grove PLAINTIFF’S ORIGINAL COMPLAINT PAGE 19
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increases its efficiency or its pollution controls. Ash Grove operates wet kilns, and for the City of Plano that is the end of the story. 50. This categorical stance has been rejected by the TCEQ itself. Recently, the
TCEQ stated that “[t]he commission disagrees with [a] commenter’s suggestion of different emission rate limits for different kiln types. There are significant differences in the pound per ton of clinker NOx emission rates from the same type kilns in Ellis County. These differences complicate establishing technically feasible and equitable emission specification for each type of kiln in Ellis County.” 32 TEX. REG. 3313 (discussing a production-rate based source cap to become effective in 2009). 51. The Plano Resolution is directed at preventing wet kiln cement from being
included in base bids for Defendant’s contracts, which denies Ash Grove the equal protection guaranteed to it by the Constitution of the United States. CLAIM 2: 52. 42 U.S.C. § 1983 CLAIM Ash Grove seeks to be compensated for the Plano Resolution’s consequences.
Based upon the above constitutional violations, Ash Grove asserts a claim against the City of Plano under 42 U.S.C. § 1983, which provides in part: Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress . . . . See 42 U.S.C. § 1983. Corporations are persons whose rights are protected by 42 U.S.C. § 1983. See Safeguard Mut. Ins. Co. v. Miller, 472 F.2d 732, 733 (3rd Cir. 1973). 53. The Defendant, acting under color of state law, has violated Ash Grove’s
constitutional rights. Ash Grove seeks monetary, declaratory, and injunctive relief under 42
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U.S.C. § 1983, as well as attorneys’ fees and costs. Although not named herein as defendants, Ash Grove does not waive or intend to waive any claims it has against individual councilmembers and/or agents of Defendant under Section 1983. See Hafer v. Melo, 502 U.S. 21, 25 (1991) (government officials may be individually liable under section 1983). CLAIM 3: 54. APPLICATION FOR PERMANENT INJUNCTIVE RELIEF Ash Grove respectfully requests that the Court, upon a final trial on the merits of
this lawsuit, enter a permanent injunction permanently enjoining the Defendant, its agents, representatives, and employees, and all persons acting in concert with it, from (i) enforcing the Plano Resolution, (ii) making purchases based, in whole or in part, on the Plano Resolution; (iii) making purchasing decisions based on the cement source or manufacturing process; (iv) requiring that cement used in bids be manufactured by a wet kiln or dry kiln process; and (v) utilizing or awarding a preference to bids from cement kilns with emission rates of 1.7 pounds of NOx per ton of clinker or less, or any other emission rate that is not a federal or state emission limit. V. REQUEST FOR RELIEF WHEREFORE, Ash Grove respectfully requests the following relief: a. b. c. That Defendant be cited to appear and answer herein; That, upon a final trial, Ash Grove receive a judgment against the Defendant for the declaratory relief requested herein; That, upon a final trial, Ash Grove receive monetary, declaratory, and injunctive relief under 42 U.S.C. § 1983, and attorneys fees under 42 U.S.C. § 1988, against the Defendant as requested herein; That, upon a final trial, a permanent injunction be entered against Defendant as requested herein; That costs and attorneys’ fees be awarded against Defendant; PAGE 21
d. e.
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f. g.
That Ash Grove receive pre-judgment and post-judgment interest as allowed by law, at the highest rate allowed by law; and That Ash Grove receive such other and further relief, whether at law or in equity, whether special or general, to which it may show itself to be justly entitled.
Respectfully submitted
/s/ K. Todd Phillips K. Todd Phillips Texas State Bar No. 24002767 WICK PHILLIPS LLP 2100 Ross Avenue, Suite 950 Dallas, Texas 75201 (214) 692-6200 (214) 692-6255 facsimile ATTORNEYS FOR PLAINTIFF ASH GROVE TEXAS, L.P.
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IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TEXAS SHERMAN DIVISION ASH GROVE TEXAS, L.P., Plaintiff, v. CITY OF PLANO Defendant. § § § § § § § § §
Civil Action No. _______________
PLAINTIFF’S ORIGINAL COMPLAINT Plaintiff Ash Grove Texas, L.P. (“Ash Grove”) files this Original Complaint against Defendant the City of Plano (“Defendant”) as follows: I. INTRODUCTION 1. On April 28, 2008, Defendant adopted a cement-purchasing resolution that
purportedly had as its primary objective the promotion of “cleaner air.” Although Defendant’s stated objective in adopting this resolution was laudable, the resolution has done little, if anything, to actually improve air quality. Instead, what the resolution has accomplished is to unfairly stifle competition in the cement industry and jeopardize jobs and economic growth in what are already extremely challenging economic times. Moreover, in passing and
implementing the resolution at issue herein, Defendant has blindly trampled upon Ash Grove’s constitutional and statutory rights. 2. Specifically, the resolution violates Ash Grove’s constitutional rights as it (i) is
void for vagueness; (ii) amounts to a regulatory taking; (iii) is arbitrary and capricious; and (iv) violates the equal protection clause. Accordingly, Ash Grove seeks a declaration from this Court
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that the resolution is improper and invalid, any purchases made pursuant to the resolution are invalid, and any attempt by the Defendant to use its purchasing power to regulate air quality is improper and invalid. Ash Grove also seeks an injunction preventing the Defendant from enforcing the resolution, which, upon information and belief, Defendant has begun to do. Finally, Ash Grove seeks relief under 42 U.S.C. § 1983 because the Defendant, acting under the color of law, has deprived Ash Grove of its constitutional rights. II. PARTIES, JURISDICTION, AND VENUE 3. Plaintiff Ash Grove Texas, L.P. is a Texas limited partnership, with its principal
place of business in Midlothian, Ellis County, Texas. 4. Defendant the City of Plano is a municipal corporation located in Collin County,
Texas, organized and existing under the law of the State of Texas. Pursuant to TEX. CIV. PRAC. & REM. CODE ANN. § 17.024(b), the City of Plano may be served with process by serving a copy of the summons and of the complaint on its mayor, clerk, secretary, or treasurer at Plano City Hall, 1520 Avenue K, Plano, Texas 75074. 5. This Court has subject matter jurisdiction over this matter pursuant to 28 U.S.C.
§§ 1331, 1343, and 1367. 6. Venue is proper in this District pursuant to 28 U.S.C. § 1391 because the
Defendant resides in this District and is located in this State, and a substantial part of the events or omissions giving rise to the claims occurred in this District. III. FACTUAL BACKGROUND A. Ash Grove and Its Commitment to the Environment. 7. Ash Grove is a cement manufacturer with an approximately $200 million plant
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located in Midlothian, Texas (the “Plant”). Ash Grove employs approximately 124 people at the Plant. There are two other cement manufacturers with plants in Midlothian (an ideal geographic location because of the substantial limestone supply), and all cement is manufactured in Midlothian (and in fact the world) using either wet process kilns or dry process kilns.1 Ash Grove manufactures cement at the Plant using three wet process kilns. For many years, Ash Grove has supplied cement from its Plant to customers who, in turn, supply contractors competing in the bid process for contracts with the Defendant. 8. Ash Grove takes its responsibility to the environment seriously. In addition to
complying with extensive regulations regarding emissions, Ash Grove has voluntarily reduced its nitrogen oxide (“NOx”) emissions from the Plant and continues to seek out new and innovative ways reduce its effect on the environment and increase its environmental sustainability. 9. For example, Ash Grove reduced its NOx emissions by 46% between 2006 and
2008. Of the three cement manufacturing plants located in the Midlothian area, Ash Grove’s Plant has the lowest total NOx emissions, representing less than approximately 25% of total NOx emissions from the three plants. In fact, during the summer of 20082 the Plant operated at an average NOx emissions level that was lower than the emissions levels of ten of the thirteen dry
A cement kiln is a huge, cylindrical, rotating steel tube where raw materials (often limestone, shale, and sand) are heated to make cement “clinker” (which looks like golf-ball sized rocks). After the clinker exits the kiln, it is ground into fine dust – cement. See also 30 TEX. ADMIN. CODE § 117.260(1) (“Clinker-The Product of a Portland cement kiln from which finished cement is manufactured by milling and grinding.”). The “wet kiln” and “dry kiln” terminology distinguishes the two processes for introducing raw materials into a cement kiln. In the wet process, the raw materials are introduced into the kiln in a wet “slurry” consistency. In the dry process, the raw materials are introduced into a kiln in a relatively dry form. See also 30 TEX. ADMIN. CODE § 117.260(3)-(4) (defining wet and dry kilns). The cement clinker that leaves the kiln is the same regardless of whether a wet or dry process is used. The TCEQ has accepted Ash Grove’s audited 2008 NOx emissions data without requiring further review, subsequent verification, or modification.
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kilns operating in the State of Texas.3 Not surprisingly then, the Plant has among the lowest NOx emissions of wet kilns and dry kilns used to manufacture cement. 10. Additionally, Ash Grove pioneered the use of selective non-catalytic reduction
(“SNCR”) technology to reduce NOx emissions; Ash Grove was the first company to use the SNCR technology in the United States. In fact, at the time Ash Grove installed SNCR on the first of its three kilns, there was only one other wet kiln in the world employing this emissions control technology. After a testing period on one kiln, Ash Grove completed installation of SNCR on all three of its kilns in February 2008 even though regulations did not require that Ash Grove do so. Others have taken note of Ash Grove’s success: since installing SNCR on its three local kilns, a number of companies from around the world have visited the Plant to study Ash Grove’s pollution-reducing technology. 11. As a result of Ash Grove’s continuous environmentally-conscious efforts, data
submitted to the Texas Commission on Environmental Quality (“TCEQ”), the body tasked with air regulation in Texas, shows that Ash Grove reduced its annual NOx emissions by 43% from 1996 to 2006. In keeping with its pattern of environmentally-conscious behavior, Ash Grove submitted a draft enforceable agreement to the TCEQ in January 2008 offering to permanently reduce Ash Grove’s NOx emissions during the ozone season to a level 20% (or 1 ton per day) less than the TCEQ emission limits currently in effect. 12. Ash Grove has been recognized for its dedication to the environment. On October
24, 2008, the North Texas Clean Air Coalition recognized Ash Grove as the recipient of its Working for Cleaner Air Employer of the Year award. The group announced that Ash Grove received the top 2008 award for North Texas companies with fewer than 500 employees. Ash
Comparison figures based on the most recent publically available (2007) data published by the TCEQ for all other kilns.
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Grove is the first cement manufacturer recognized in the five-year history of the North Texas Clean Air Coalition program. B. The Texas Commission on Environmental Quality Has Adopted a Comprehensive Regulatory Framework Applicable to Ash Grove. 13. The federal Clean Air Act charges the Environmental Protection Agency with
establishing National Ambient Air Quality Standards (“NAAQS”) to ensure public health and to designate areas as either in attainment or nonattainment with the NAAQS, or as unclassifiable.4 States are primarily responsible for ensuring attainment and maintenance of the NAAQS once established by the EPA, and each state is required to submit a State Implementation Plan (“SIP”) to the EPA that provides for attainment and maintenance of the NAAQS for those areas of nonattainment.5 Nine counties in the DFW region – Collin, Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, and Tarrant (the “DFW Nonattainment Area”) – are designated nonattainment for the eight-hour ozone NAAQS. The TCEQ is the Texas agency that, among other things, develops SIPs to manage non-attainment areas like the DFW Nonattainment Area. It also administers a variety of permit programs required under the federal Clean Air Act through both the issuance of permits and the adoption of state and area-wide rules. 14. On May 23, 2007, the TCEQ revised the SIP for the Control of Ozone Air Pollution in
the DFW Region and adopted revisions to Chapter 117 of the Texas Administrative Code. Among other things, the revisions changed the manner in which each cement kiln operator in Ellis County must calculate a NOx “source cap” to be in place during the yearly ozone season beginning in March 2009. These new rules provide that each cement kiln operator will have to
4
Any area of the country where the air is measured to exceed the federal air standard for any one air pollutant will be designated “nonattainment” for that pollutant.
SIPs are formal agreements between the EPA and each state, including the State of Texas, to accomplish specific goals and objectives, including adoption and implementation of federal rules and requirements.
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maintain its NOx emissions at or below its NOx emissions cap on a 30-day rolling average during the ozone season. As the TCEQ has stated, this “source cap” is calculated “based on a pound per ton of clinker emission factor for each type of kiln and the average annual production rate for the kilns for calendar years 2003, 2004, and 2005, plus one standard deviation of total production at an account.” 15. According to the TCEQ, this source cap approach “provides flexibility to account
for the inherent variability in NOx emissions from cement kiln operations.” The SIP, through the source caps, regulates total NOx emissions; it does not set emission rate limits for each kiln. TCEQ enacted a formula for calculating the source cap for each cement plant as the method to regulate the maximum total NOx emissions for each facility. As a part of the formula used to determine the source caps, the TCEQ employed factors pertaining to emissions: a 1.7 factor for dry kilns and a 3.4 factor for wet kilns.6 Importantly, the TCEQ describes the 1.7 and 3.4 figures as “NOx emission factors,” not as emission limits. Thus, the TCEQ has not established an emission limit of 1.7 pounds of NOx per ton of clinker for dry kilns or of 3.4 pounds of NOx per ton of clinker for wet kilns. For example, under the source cap formula, a dry kiln operator could operate its kilns at NOx emissions levels well above 1.7 pounds per ton of clinker, but the operator would not violate the ozone season source cap if it reduced its production volume of clinker over the rolling thirty day period. The TCEQ rules limit total tons of emissions from each cement plant facility in Ellis County, not emissions per ton of product. This allows the TCEQ to ensure that the total tons of NOx emitted by a facility during the entire ozone season
6
The “source cap” is calculated “based on a pound per ton of clinker emission factor for each type of kiln and the average annual production rate for the kilns for calendar years 2003, 2004, and 2005, plus one standard deviation of total production at an account.” See 32 TEX. REG. 3311, 2007 WL 1673797, at *3210.
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would stay at a level below the source cap if the facility built new kilns or increased production from existing kilns. 16. In addition to the source cap and other requirements imposed under the Texas
Administrative Code, the TCEQ also issues permits to individual facilities. Ash Grove’s permit allows the plant to emit 725 pounds of NOx per hour and 3,176 tons of NOx per year from each of the three kilns at the Plant. In 2007, 2008, and in 2009 to date, the Ash Grove Plant has operated well below the maximum emission limits set forth by the TCEQ. 17. Although the TCEQ regulates cement kilns emissions very stringently, cement
kilns are not the most significant contributors to NOx in the DFW Region.7 Even if all NOx emissions from all cement kilns in Midlothian were eliminated, the NOx emissions from other sources would still cause the DFW Region to be far from attainment with the NAAQS. C. The City of Plano Passes an Unconstitutional and Illegal Resolution that Favors Dry Kiln Cement and Imposes Emissions Standards Upon Ash Grove Beyond Those Required by the TCEQ. 18. This conflict has its roots in an October 2006 resolution adopted by the North
Central Texas Council of Governments’ North Texas Clean Air Steering Committee8 stating: [t]hat local governments and special districts within the region’s ozone nonattainment area be strongly encouraged to include criterion in their bidding policies that rewards or give [sic] special consideration to cement from the companies operating kilns with the lowest NOx emission levels.
Anthropogenic NOx and volatile organic compound (“VOC”) emissions fall into four categories: point source, on-road mobile sources, non-road mobile sources, and area sources, with the largest source of NOx emissions in the DFW area coming from on-road mobile sources. The Plant falls into the point source category. According to the TCEQ, mobile sources are the largest NOx contributors in the DFW area, contributing approximately 75% of the NOx emissions in the area. By 2007, point source NOx emissions decreased by 44% from the previous fourteen years. In the DFW area, point sources contribute to 12-15% of NOx emissions, and cement kilns are responsible for approximately 43% of point source emissions. Thus, cement kilns emit approximately 5-6% of the NOx in the DFW area. The North Central Texas Council of Governments is a voice to consider nonattainment issues, but it has no power to make or enforce environmental regulations on its own. It may, however, make recommendations.
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The NCTCOG Resolution made no reference to dry or wet kiln cement, yet soon thereafter, municipalities in the North Texas area began adopting resolutions essentially excluding wet kiln cement from consideration for projects. 19. In the wake of the aforementioned resolution, and following in the footsteps of the
cities of Dallas, Arlington, and Ft. Worth, on April 28, 2008, the City of Plano considered Resolution No. 2008-4-40(R) (the “Plano Resolution”) which requires base bids for concrete for all City of Plano jobs to use “dry kiln cement” and gives preference to cement produced from kilns with emissions rates of 1.7 pounds of NOx or less per ton of cement clinker produced. The Plano Resolution provides that: the City Manager or his designee is hereby authorized, where allowed by law, to provide for the purchase of dry kiln cement as the base bid, with an alternative bid for the purchase of cement from an unspecified source and to give preferential bid evaluation of all cement produced by kilns with emission rates of 1.7 pounds of nitrogen oxide (NOx) per ton of clinker or less in City of Plano bid packages. Preference may only be given if the cost for the goods or services would not exceed 105% of the goods or services provided by a vendor who does not meet the standards. Despite Ash Grove’s request at the meeting that Defendant consider an alternate proposal that would result in emissions reductions by all kilns in Midlothian and would comply with the TCEQ requirements, the Plano City Council voted unanimously to adopt the Plano Resolution. The resolution adopted by Defendant was considered and discussed by the City Council for only ten (10) minutes before it was passed. In that short time, the City Council acknowledged they were not at the forefront of NOx restrictions, but were merely “following behind [the] two big cities in the area.”9 20.
9
The Plano Resolution expressly requires that any bid submitted to the City of
All quotes from the Plano City Council meeting are derived from the audio/video recording of the April 28, 2008 meeting available at : http://planotx.swagit.com/play/04282008-45/4/ (last visited July 6, 2009). It is Ash Grove’s understanding that there is no official public written transcript of the meeting.
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Plano for construction work using concrete include a dry kiln cement base bid. The bidder may then, at its discretion, include an alternate bid that does not specify a cement source, and a second alternate bid from a source kiln with an emission rate of 1.7 pounds of NOx or less per ton of cement clinker produced. Per the resolution, should a second alternate bid be made, it will be afforded a preference over the base bid and an alternate bid. 21. By its own admission, the Plano City Council did little if any of its own due Indeed, it would appear that
diligence in considering and adopting the Plano Resolution.
Defendant simply adopted the Plano Resolution because similar resolutions had been adopted by Dallas and Ft. Worth. However, as is true of those resolutions, the Plano Resolution violates both state and federal law. 22. Texas competitive bidding statutes protect the public and suppliers like Ash
Grove by, among other things, limiting the Defendant’s discretion in requesting and accepting proposals and bids for projects. The competitive bidding statutes require that the Defendant evaluate only the competence of the bidder and the quality and price of the bidder’s product or service; non-functional product characteristics are not to be considered. The Texas Supreme Court has made clear that the Defendant may not use its purchasing power to enact social policy. Yet this is precisely what the Defendant seeks to do by way of the Plano Resolution. 23. Texas law also prohibits the Defendant from giving a preference to one bid over
another for air quality purposes unless the preference given is based upon existing state or federal air quality standards. As discussed above, the Texas legislature requires the TCEQ to regulate Texas air quality, and the TCEQ has implemented extensive regulatory schemes specifically for cement kilns. In contravention of the TCEQ’s authority, as well as the policies behind TCEQ regulations, the Plano Resolution purports to regulate NOx emissions from the cement plants in
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Midlothian, including Ash Grove’s Plant.10 The TCEQ regulations preempt the resolution, and the resolution is therefore void. 24. Despite these statutory limitations, the Defendant passed a resolution which
specifies the use of only cement manufactured by a dry kiln process, and/or which gives a preference to cement kilns that meet an emission standard arbitrarily devised by the Defendant. D. Ash Grove Is Losing Business as A Result of the Plano Resolution. 25. Upon information and belief, Defendant has begun actively incorporating the
Plano Resolution into the bid process for projects that require concrete and requires all concrete suppliers to execute a certification that the cement is from a dry kiln. The Plano Resolution effectively eliminates Ash Grove’s cement from the competitive bidding process for all jobs for the City of Plano and from all jobs using concrete suppliers who supply concrete for City of Plano jobs. Ash Grove sells most of its cement to ready-mixed concrete suppliers who in turn supply ready-mixed concrete to contractors (such as those bidding for Defendant’s projects). 26. One such ready-mixed concrete supplier has been one of Ash Grove’s long-
standing good customers. Given that there is no quality difference in cement from a dry versus wet kiln, this particular customer purchased cement from Ash Grove and other cement manufacturers without regard to the process by which the cement was manufactured. As is typical, the customer would store that cement in silos that might contain cement from a number of different manufacturers. The customer has a small, fixed number of silos in which to store cement. As a direct result of Defendant’s actions, the customer has informed Ash Grove that it can no longer purchase as much cement from Ash Grove as it would in the absence of the Plano Resolution. In order to sell cement to contractors and certify to Defendant that it was produced
10
NOx contributes to ozone formation. Ozone is a naturally occurring compound whose complex formation process is partially dependent upon factors outside human control, particularly meteorology.
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from a dry kiln, the customer would be required to segregate cement produced by the wet process versus the dry process. Due to limited silo capacity, the customer cannot afford to do this and, as a result, it has decreased its cement purchases from Ash Grove. Ash Grove believes it is only a matter of time before other customers follow suit. 27. Moreover, despite the fact that the Plano Resolution theoretically only applies to
suppliers for the City of Plano, the enforcement of the Plano Resolution is affecting all jobs in the surrounding area. Upon information and belief, certain concrete suppliers, eager to avoid the draconian removal and replacement penalties imposed by Defendant, now require that all cement meet the Plano Resolution’s arbitrary standards, despite the fact that only a fraction of the concrete is used in City of Plano jobs. In effect, the Plano Resolution is denying Ash Grove the ability to sell cement to concrete suppliers for jobs in Frisco, McKinney, and other surrounding areas, because such suppliers want to avoid running the risk that Ash Grove’s perfectly acceptable cement is not mixed with other cement. Obviously, this has, and will continue to, negatively impact Ash Grove, its Plant, and its employees. 28. Additionally, the practical effect of the adoption of the resolution, among other
things, is to reduce competition between the three local cement manufacturers. Only Texas Industries, Inc. (“TXI”) and Holcim (US) Inc. (“Holcim”) operate dry process kilns in Midlothian. In essence, the Plano Resolution eliminates Ash Grove from the bid process by requiring the base bid contain dry kiln cement, and then further provides a preference based upon an emission rate which is not part of any applicable state or federal environmental standard.
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IV. CLAIMS CLAIM 1: 29. REQUEST FOR DECLARATORY JUDGMENT Pursuant to 28 U.S.C. §§ 2201 and 2202, an actual and substantial controversy
exists between Ash Grove and the Defendant that is within the Court’s jurisdiction. For the reasons that follow, Ash Grove seeks declarations from this Court that (i) the Plano Resolution is unlawful, void, and of no valid legal force or effect; (ii) any purchases made pursuant to the Plano Resolution are unlawful, void, and of no legal effect; (iii) any consideration of the cement source or manufacturing process as a criteria for selecting cement or cement products is unlawful, void, and of no legal force or effect; and (iv) the TCEQ has exclusive authority to set air quality emission standards and regulations for cement kilns. A. The Plano Resolution Violates the Texas Competitive Bidding Statutes. 30. Competition always has been the keystone of government contracting.
Competition requirements do not allow specifications that are unrelated to the quality or quantity of the goods or services or that otherwise restrict competition. If a specification includes a nonfunctional characteristic (not a functional characteristic of the product), it is in violation of the competitive bidding statute and is void. A governmental body may not adopt policies or issue solicitations that restrict competition unless such policies or solicitations have a definite and objective relationship to matters of quality or performance or are adopted pursuant to clear legislative authority. 31. There is no difference in the quality or performance of cement manufactured by
wet versus dry process kilns, or of the competence of manufacturers and vendors of such cement. The Plano Resolution is based entirely on a desire to improve air quality and not on a desire to purchase better cement. The Plano Resolution contains an arbitrary requirement that dry kiln PLAINTIFF’S ORIGINAL COMPLAINT PAGE 12
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cement be used by requiring all base bids to include “dry kiln cement” and includes a preference in a second alternate bid for cement from kilns with emission rates of 1.7 pounds of NOx per ton of clinker or less. Thus, the Plano Resolution impermissibly restricts competition. 32. The Plano Resolution makes no attempt (nor could it) to distinguish the type,
quality, competence, performance, or function of cement from wet versus dry kilns. Rather, the bid requirement is purely a non-functional specification that has the direct result of eliminating Ash Grove’s cement from being considered in the bid process and used in the Defendant’s projects. Therefore, the Plano Resolution, purchases made pursuant to the Plano Resolution, and consideration of the cement source or manufacturing process in making purchasing decisions are void, invalid, and of no legal force or effect because they unlawfully violate the Texas competitive bidding statutes. B. The Plano Resolution Violates Texas’s Preferential Purchasing Statute. 33. The Plano Resolution purports to authorize the specification of “preferential
purchasing for bids from a cement kiln with emission rates of 1.7 pounds of NOx per ton of clinker or less.” 34. Texas law permits municipalities to make preferential purchases relating to air
quality only in limited circumstances. The Defendants may: (1) give preference to goods or services of a vendor that demonstrates that the vendor meets or exceeds any state or federal environmental standards, including voluntary standards, relating to air quality; or (2) require that a vendor demonstrate that the vendor meets or exceeds any state or federal environmental standards, including voluntary standards, relating to air quality. TEX. LOC. GOV’T CODE ANN. § 271.907(c) (emphasis added). Under the maxim of expression unis est exclusion alterius, the express provision of this one circumstance in which a preference
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may be given to a vendor relating to air quality excludes any other circumstance in which a preference may be given. See Harris County v. Crooker, 248 S.W. 652, 655 (Tex. 1923). 35. Importantly, the Texas preference statute allows the Defendant to give a
preference to a vendor that demonstrates that the vendor meets or exceeds any state or federal environmental standards. The statute, therefore, requires and presumes that any preference be based on an existing state or federal emissions standard. There is currently no state or federal standard limiting any type of cement kiln to an emission rate of 1.7 pounds of NOx per ton of clinker. In Texas, as discussed above, the TCEQ has set forth a variety of alternative emission standards for Ellis County cement kilns, including the source cap formula. Ash Grove’s
Midlothian kilns operate at or below the applicable source cap. Yet, Ash Grove is ineligible for a preference per the Plano Resolution. The Plano Resolution violates the Texas preference statute, and is void, invalid, and of no legal force or effect. C. The Plano Resolution Is Preempted by State Regulations. 36. By way of the Plano Resolution, the Defendant is attempting to regulate
indirectly what it may not regulate directly. The Plano Resolution is an impermissible attempt to regulate in an area already preempted by the TCEQ and in a manner inconsistent with the TCEQ’s regulations and orders. 37. Under the Texas Clean Air Act the TCEQ is granted the power and authority to
establish the level of quality to be maintained in the State’s air and to control the quality of the State’s air. The TCEQ has promulgated numerous and detailed regulations for the control of NOx in the air. These regulations require Ash Grove to install, calibrate, maintain, and operate emissions monitoring systems to monitor kiln exhausts. Further, Ash Grove is subject to various notification, recordkeeping, and reporting requirements. As an alternative to complying with these emissions specifications requirements, Ash Grove may elect a source cap option. Thus, PLAINTIFF’S ORIGINAL COMPLAINT PAGE 14
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Ash Grove is subject to strict regulation by the State of Texas regarding its NOx emissions. 38. The acknowledged purpose of the resolutions upon which the Plano Resolution is
predicated is to force only wet kilns that wish to be considered in the bid process to comply with arbitrary emissions standards that are not a part of and are inconsistent with the regulatory scheme promulgated and enforced by the State of Texas through the TCEQ. The Plano
Resolution seeks to impose standards that are inconsistent with Texas law and regulations currently in place. These arbitrary standards also conflict with the yet-to-be-effective laws and regulations that will take effect in 2010. They also conflict with the policy rationale enunciated by the TCEQ itself.11 39. The Defendant’s goal is antithetical to—and indeed undermines—the TCEQ’s
policy of equitable, feasible, and achievable reductions from all kilns. It is also inconsistent with the TCEQ regulations to the extent that it purports to establish a year-round emission limit of 1.7 pounds of NOx per ton of clinker, while the TCEQ (i) has different regulations that apply during the ozone season and outside the ozone season; and (ii) applies its 1.7 emission factor (not a limit) for dry kilns only during the ozone season. 40. The Texas Clean Air Act also prohibits the Defendant’s attempts to regulate
around the TCEQ because the TCEQ has promulgated a detailed regulatory scheme as well as
11
The TCEQ itself recently stated “The commission disagrees with the commenter’s suggestion of different emission rate limits for different kiln types. There are significant differences in the pound per ton of clinker NOx emission rates from the same type kilns in Ellis County. These differences complicate establishing a technically feasible and equitable emission specification for each type of kiln in Ellis County. For example, an emission specification based on a 35% reduction from the best performing wet kilns in Ellis County could result in the owner or operator of wet kilns at another site being forced to either shut down the wet kilns or install advanced and potentially unproven controls. Alternatively, if the emission specification is based on units with the higher emission rate, cleaner kilns would already be achieving this rate and would not be required to make reductions. While the commission acknowledges that the cleaner cement kilns should be recognized under the rule, achievable reductions must be obtained from all the cement kilns in Ellis County . . . . [T]here are significant differences between the two types of cement kilns in Ellis County. Prescribing a single emission factor, either on a ton per day or pound per ton of clinker basis, would not be equitable and could make compliance with the rule infeasible for owners or operators of certain kilns. The commission does not intend to force owners or operators to shut down kilns to comply with the rule.” See 32 TEX. REG. 3313 (emphasis added).
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permitted NOx emissions on a facility-by-facility basis. Under the act, municipalities may enact and enforce measures for the control and abatement of air pollution. However, the Texas Clean Air Act specifies that those measures must “be consistent with this chapter and the commission’s rules and orders and may not make unlawful a condition or act approved or authorized under this chapter or the commission’s rules or orders.” The Plano Resolution was proposed and passed in a manner that is inconsistent with the TCEQ’s process for crafting rules and orders, as well as the rules and orders already in place. And, the Plano Resolution improperly punishes Ash Grove for maintaining emissions levels that the TCEQ explicitly approved and authorized after an extensive and exhaustive analysis, an emission level below ten of the thirteen dry kilns operating in the State of Texas. D. The Plano Resolution Is Arbitrary and Capricious. 41. The Resolution was adopted in an arbitrary and capricious manner, without
consideration of important available data.12 That a kiln is wet or dry does not categorically determine whether that kiln will emit more or less NOx. Even if the Defendant was permitted to invade the TCEQ’s authority, limiting base bids to cement from dry kilns bears no relation to the purported goal of limiting NOx emissions. As the TCEQ has recognized, there is wide variance in emissions between kilns of the same type at the same site. Further, the cement kilns account for such a small proportion of NOx emissions in the DFW Region that even eliminating all emissions from the kilns would not bring the DFW Region into attainment with the NAAQS. In light of the data readily available to the Defendant regarding emission rates from cement kilns and their refusal to consider such data, it is apparent that the Defendant specified a particular
12
The Plano Resolution was presented and voted on in approximately ten minutes. No data was presented or reviewed at the meeting. One councilmember made the conclusory statement that dry kilns were superior to wet kilns as far as emissions were concerned and that wet kilns would never be held to the same standard as dry kilns justifying the Resolution. No evidence or supporting material was provided. The resolution vote occurred shortly thereafter.
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type of manufacturing process (dry kilns) to shut down another type of manufacturing process (wet kilns). 42. In addition to drastically limiting competition, the Plano Resolution may have the
effect of increasing NOx emissions. For example, Ash Grove will begin importing dry kiln cement to the DFW area from dry kilns out of state. It is likely that these kilns operate on average at an emissions level greater than the wet kilns at Ash Grove’s Plant in Midlothian, Texas during ozone season, and transportation of the cement will emit additional NOx. Nevertheless, this imported dry cement will be eligible for inclusion in base bids under the Plano Resolution. 43. Also as discussed above, the “1.7 pounds of NOx per ton of clinker” standard the
Defendant purports to use for giving a preference is not an existing state or federal standard. It is unclear exactly how the Defendant (barring just a copy from the Dallas and Fort Worth Resolutions) arrived at the 1.7 number. The only place the number “1.7” appears is as a factor applicable to dry kilns in the ozone season source cap formula set forth in the TCEQ’s rules that became effective in March 2009. It is not an emissions limit for any type of cement kiln. However, the way the Defendant is using the number 1.7 bears no relation to the way that number is used by the TCEQ. Thus, the 1.7 number itself is arbitrary and capricious and has no rational relation to any state or federal standard. The Plano Resolution is also arbitrary and capricious in the manner in which it is enforced, including because there is no way for the Defendant to verify that cement was indeed manufactured by a dry kiln process or by a process emitting 1.7 tons of NOx per ton of clinker or less. E. The Plano Resolution Is Unconstitutionally Vague. 44. The Plano Resolution violates Ash Grove’s rights guaranteed by the Fourteenth
Amendment to the United States Constitution because it is void for vagueness. The Plano PLAINTIFF’S ORIGINAL COMPLAINT PAGE 17
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Resolution is inherently without standards and necessarily forces persons of common intelligence to guess at its meaning and differ as to its application. Due to the uncertainty of its terms the Plano Resolution can only be enforceable through the arbitrary discretion of the Defendant’s employee(s) and not through more appropriate and meaningful objective standards. 45. The Plano Resolution raises a myriad of serious questions, all unanswered. Who
will verify whether the cement comes from wet or dry kilns, and how? How frequently will NOx output be measured? Who will measure emissions? If an excluded manufacturer lowers its emissions, when does it become eligible to be included again in bids for the Defendant’s contracts? Is a manufacturer bound by a once-yearly report of emissions, even if it subsequently reduces its emissions? Does the Plano Resolution apply to purchases of concrete products or just to purchases of raw cement? If two bidders both include cement from kilns operating below the arbitrary threshold of 1.7 pounds of NOx per clinker ton, how will the City of Plano decide between the two? If cement is produced from a wet kiln with lower emissions than a dry kiln, will wet kiln cement remain excluded from inclusion in base bids? The City of Dallas and the City of Fort Worth, the “two big cities in the area” whose resolutions the City of Plano copied from, raised many of these questions, yet left them wholly unanswered. F. The Plano Resolution Is an Unconstitutional Regulatory Taking. 46. The Plano Resolution also violates Ash Grove’s rights guaranteed by the
Fourteenth Amendment to the United States Constitution because it results in a regulatory taking of Ash Grove’s property interests. 47. The Plano Resolution unreasonably interferes with Ash Grove’s rights to use and
enjoy its business and the Plant. The negative economic impact on Ash Grove caused by the Plano Resolution significantly interferes with the investment-backed expectations of Ash Grove in its Plant. Ash Grove has steadily made substantial investments in technology to reduce its PLAINTIFF’S ORIGINAL COMPLAINT PAGE 18
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annual NOx emissions by 43% over the last ten years, and it meets the technology option standard and exceeds the TCEQ 30% reduction option standards. In addition, Ash Grove voluntarily reduced NOx emissions from 2006 ozone season levels another 35% to comply with the next phase of TCEQ regulations one year earlier than required. Further, the amount of NOx emissions from Ash Grove’s Plant is slight compared to the overall NOx emissions in the region, while the public importance of maintaining a fair competitive bidding process is significant. Under these circumstances, and the fact that the TCEQ actively and comprehensively regulates the Plant, it was not reasonably foreseeable that the Defendant would attempt to further regulate the Plant using arbitrary standards that conflict with those imposed by the TCEQ and/or exclude Ash Grove’s cement from base bids for Defendant’s projects. 48. parties. The Plano Resolution improperly shifts a public burden to a small class of private
The Plano Resolution improperly and specifically targets only wet kiln cement
manufacturers, regardless of NOx emission rates. Even though Ash Grove operates a wet kiln with NOx emission rates below all lawfully imposed standards, and below ten of the thirteen dry kilns in Texas, its cement is still not eligible to be included in the base bid process or for a preference. The Defendant’s elimination of a segment of Ash Grove’s business and the use and enjoyment of its Plant amounts to improper regulatory takings. G. The Plano Resolution Violates the Equal Protection Clause. 49. The Plano Resolution violates the Equal Protection rights guaranteed to Ash
Grove by the Fourteenth Amendment to the United States Constitution because it distinguishes between wet kilns and dry kilns as the basis for excluding wet kiln cement from base bids for Defendant’s contracts. This classification has no rational relation to any legitimate governmental purpose, and it is not grounded in fact. It does not matter whether Ash Grove emits less NOx or is more energy efficient than dry kiln manufacturers; it does not matter whether Ash Grove PLAINTIFF’S ORIGINAL COMPLAINT PAGE 19
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increases its efficiency or its pollution controls. Ash Grove operates wet kilns, and for the City of Plano that is the end of the story. 50. This categorical stance has been rejected by the TCEQ itself. Recently, the
TCEQ stated that “[t]he commission disagrees with [a] commenter’s suggestion of different emission rate limits for different kiln types. There are significant differences in the pound per ton of clinker NOx emission rates from the same type kilns in Ellis County. These differences complicate establishing technically feasible and equitable emission specification for each type of kiln in Ellis County.” 32 TEX. REG. 3313 (discussing a production-rate based source cap to become effective in 2009). 51. The Plano Resolution is directed at preventing wet kiln cement from being
included in base bids for Defendant’s contracts, which denies Ash Grove the equal protection guaranteed to it by the Constitution of the United States. CLAIM 2: 52. 42 U.S.C. § 1983 CLAIM Ash Grove seeks to be compensated for the Plano Resolution’s consequences.
Based upon the above constitutional violations, Ash Grove asserts a claim against the City of Plano under 42 U.S.C. § 1983, which provides in part: Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress . . . . See 42 U.S.C. § 1983. Corporations are persons whose rights are protected by 42 U.S.C. § 1983. See Safeguard Mut. Ins. Co. v. Miller, 472 F.2d 732, 733 (3rd Cir. 1973). 53. The Defendant, acting under color of state law, has violated Ash Grove’s
constitutional rights. Ash Grove seeks monetary, declaratory, and injunctive relief under 42
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U.S.C. § 1983, as well as attorneys’ fees and costs. Although not named herein as defendants, Ash Grove does not waive or intend to waive any claims it has against individual councilmembers and/or agents of Defendant under Section 1983. See Hafer v. Melo, 502 U.S. 21, 25 (1991) (government officials may be individually liable under section 1983). CLAIM 3: 54. APPLICATION FOR PERMANENT INJUNCTIVE RELIEF Ash Grove respectfully requests that the Court, upon a final trial on the merits of
this lawsuit, enter a permanent injunction permanently enjoining the Defendant, its agents, representatives, and employees, and all persons acting in concert with it, from (i) enforcing the Plano Resolution, (ii) making purchases based, in whole or in part, on the Plano Resolution; (iii) making purchasing decisions based on the cement source or manufacturing process; (iv) requiring that cement used in bids be manufactured by a wet kiln or dry kiln process; and (v) utilizing or awarding a preference to bids from cement kilns with emission rates of 1.7 pounds of NOx per ton of clinker or less, or any other emission rate that is not a federal or state emission limit. V. REQUEST FOR RELIEF WHEREFORE, Ash Grove respectfully requests the following relief: a. b. c. That Defendant be cited to appear and answer herein; That, upon a final trial, Ash Grove receive a judgment against the Defendant for the declaratory relief requested herein; That, upon a final trial, Ash Grove receive monetary, declaratory, and injunctive relief under 42 U.S.C. § 1983, and attorneys fees under 42 U.S.C. § 1988, against the Defendant as requested herein; That, upon a final trial, a permanent injunction be entered against Defendant as requested herein; That costs and attorneys’ fees be awarded against Defendant; PAGE 21
d. e.
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f. g.
That Ash Grove receive pre-judgment and post-judgment interest as allowed by law, at the highest rate allowed by law; and That Ash Grove receive such other and further relief, whether at law or in equity, whether special or general, to which it may show itself to be justly entitled.
Respectfully submitted
/s/ K. Todd Phillips K. Todd Phillips Texas State Bar No. 24002767 WICK PHILLIPS LLP 2100 Ross Avenue, Suite 950 Dallas, Texas 75201 (214) 692-6200 (214) 692-6255 facsimile ATTORNEYS FOR PLAINTIFF ASH GROVE TEXAS, L.P.
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