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Case 4:09-cv-03620

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

CES ENVIRONMENTAL SERVICES INC., Plaintiff,

v.

CITY OF HOUSTON, et al., Defendants.

Case No. 4:09-cv-3620 Jury Demanded

MOTION FOR A PRELIMINARY INJUNCTION

K.A.D. Camara Texas Bar No. 24062646 Southern District Bar No. 870498 camara@camarasibley.com Attorney-in-Charge for the Plaintiff

Kent Radford Texas Bar No. 24027640 radford@camarasibley.com Camara & Sibley LLP 2339 University Boulevard Houston, Texas 77005

713-893-7973

713-893-1131 (fax) Attorneys for the Plaintiff

Case 4:09-cv-03620

 

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Contents

1 Nature and stage of the proceeding

 

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2 Standard for a preliminary injunction

 

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3 Summary of the argument

 

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4 CES will prevail on the merits

 

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4.1 The City denied CES due process of law in enacting and enforcing Endorse-

 

ment TTO .

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4.1.1 CES had a constitutionally protected property interest in its right to

 

discharge wastewater under Permit No. 9558 .

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4.1.2 The City denied CES procedural due process .

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4.1.3 The City denied CES substantive due process

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4.2 The City’s odor ordinance is void for vagueness

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4.2.1 The ordinance prohibits and makes punishable the release of “offensive odors” that become “a source of discomfort,” but nowhere defines these

 

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4.2.2 The City enforces its odor ordinance in a standardless manner, refuses to identify the standards that its investigators apply, and refuses to

 

explain how alleged violators can come into compliance

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4.2.3 Because the City’s ordinance, as written and as enforced, does not

 

make clear what conduct is proscribed, it is void for vagueness and its

enforcement, a denial of due process .

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5 The other requirements for a preliminary injunction are satisfied.

 

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6 CES requests a preliminary-injunction hearing as soon as possible and an expedited schedule for trial on the merits

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Authorities

Cases

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Bakery Salvage Corp. v. City of Buffalo, 175 A.D.2d 608 (N.Y. App. 1991)

15

Barry v. Barchi, 443 U.S. 55 (1979)

6

Beaver v. Borough of Johnsonburg, 410 F. Supp. 556 (W.D. Pa. 1976)

16

Bell v. Burson, 402 U.S. 535 (1971)

6

Bello v. Walker, 840 F.2d 1124 (3d Cir. 1988)

10

Blackburn v. City of Marshall, 42 F.3d 925 (5th Cir. 1995)

4

Blanche Road Corp. v. Bensalem Township, 57 F.2d 253 (3d Cir. 1995)

9

Board of Governors of the Federal Reserve System v. DLG Financial Corp., 29 F.3d 993 (5th Cir. 1994)

8

Board of Pardons v. Allen, 482 U.S. 369 (1987)

5

Borough of Verona v. Shalit, 222 A.2d 145 (N.J. App.

1966)

16

Chavers v. Morrow, No. 09-20006, 2009 WL 4609841 (5th Cir. 2009)

4, 5

City of Festus v. Werner 656 S.W.2d 286 (Mo. App. 1983)

16

Clark v. Pritchard, 812 F.2d 991 (5th Cir. 1987)

1

Condosta v. Vermont Electric Corp., 400 F. Supp. 358 (D. Vt. 1975)

6

Craft v. Memphis Light, Gas & Water Div., 534 F.2d 684 (6th Cir. 1976)

6

Davis v. City of Worthington, No. C-2-00-65, 2001 WL 175262 (S.D. Ohio)

16

Donnelly v. City of Eureka, 399 F. Supp. 64 (D. Kan. 1975)

6

Duke v. North Texas State University, 469 F.2d 829 (5th Cir. 1972)

7

Fuentes v. Shevin, 407 U.S. 67 (1972)

7

Goldberg v. Kelly, 397 U.S. 254 (1970)

7

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Great Salt Lake Minerals & Chemicals Corp. v. Marsh, 596 F. Supp. 548 (D. Utah 1984)

17

Hampton Co. Nat’l Surety, LLC v. Tunica County, Mississippi, 543 F.3d 221 (5th Cir. 2008)

3

Hattell v. Public Service Co. of Colorado, 350 F. Supp. 240 (D. Colo. 1972)

6

Kentucky Dep’t of Corrections v. Thompson, 490 U.S. 454 (1989)

4

Koger v. Guarino, 412 F. Supp. 1375 (E.D. Pa. 1976)

6

Limuel v. Southern Union Gas Co., 378 F. Supp. 443 (S.D.N.Y. 1972)

6

Lineback v. Chauffeurs, Teamsters, and Helpers Local Union No. 414, 513 F. Supp. 2d 988 (N.D. Ind. 2007)

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Mathews v. Eldridge, 424 U.S. 319 (1976)

7

Memphis Light, Gas & Water Div. v. Craft, 436 U.S. 1 (1978)

7

Monell v. Dep’t of Social Services, 436 U.S. 658 (1978)

3

New American Library of World Literature v. Allen, 114 F. Supp. 823 (6th Cir. 1953)

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Nichols v. Board of County Comm’rs, 506 F.3d 962 (10th Cir. 2007)

4

Olim v. Wakinekona, 461 U.S. 238 (1983)

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Palmer v. Columbia Gas of Ohio, Inc., 479 F.3d 153 (6th Cir. 1973)

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Register.com, Inc. v. Verio, Inc., 126 F. Supp. 2d 238 (S.D.N.Y. 2000)

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ReMed Recovery Care Centers v. Township of Willistown, 26 F. Supp. 2d 676 (E.D. Pa. 1999)

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Ridgely v. Federal Emergency Management Agency, 512 F.3d 727 (5th Cir.

4, 5

2008)

Salt Pond Associates v. U.S. Army Corps of Engineers, 815 F. Supp. 766, 784–85 (D. Del. 1993)

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Simi Investment Co. v. Harris County, 236 F.3d 240 (5th Cir. 2000)

8, 9

Stanford v. Gas Service Co., 346 F. Supp. 717 (D. Kan. 1972)

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State of Washington ex rel. Seattle Title Trust Co. v. Roberge, 378 U.S. 116

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(1928)

Stevens Creek Quarry, Inc. v. Santa Clara County Planning Comm’n, 2000 WL 521512 (9th Cir. 2000)

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Town of Castle Rock v. Gonzales, 545 U.S. 748 (2005)

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Valdez v. Applegate, 616 F.2d 570 (10th Cir. 1980)

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Victoria W. v. Larpenter, 369 F.3d 475 (5th Cir. 2004)

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Women’s Medical Center of Northwest Houston v. Bell, 248 F.3d 411 (5th Cir.

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2001)

Woodwind Estates, Ltd. v. Gretkowski, 205 F.3d 118 (3d Cir. 2000)

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Statutes

Dallas Code of Ordinances §5A-7

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Houston Code of Ordinances §10-451

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Houston Code of Ordinances §10-452

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Houston Code of Ordinances §10-453

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Houston Code of Ordinances §47-189(b)

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Houston Code of Ordinances §47-190(a)

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Houston Code of Ordinances §47–208

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Exhibits

Exhibit A: December 18 wastewater termination letter

Exhibit B: Hand transcription of emails from the District Attorney’s files

Exhibit C: TCEQ Odor Complaint Investigation Procedures

Exhibit D: Emails from former CES customers showing irreparable injury

Exhibit E: Email from CES employees

Exhibit F: Excerpts from video transcripts

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1 Nature and stage of the proceeding

This is a challenge to the City’s attempts to shut down a CES waste-treatment facility in Houston. CES claims that the City is denying CES procedural and substantive due process in its attempts to terminate CES’s wastewater service and that the City’s odor ordinance is void for vagueness. CES now seeks a preliminary injunction enjoining the city from (1) terminating CES’s wastewater service or otherwise attempting to enforce Endorsement TTO, (2) enforcing its odor ordinance against CES, and (3) taking any other regulatory action against CES without leave of this Court. On November 6, 2009, in response to the City’s termination of CES’s wastewater service on October 30, CES filed its original complaint and sought a TRO requiring the City to restore wastewater service immediately. On November 10, at the TRO hearing, the City agreed to do so. On December 17, CES filed a first amended complaint, the City filed an “objection” to that complaint, and CES filed a response. On December 23, CES filed a motion to strike some of the City’s affirmative defenses. On December 28, the City answered CES’s first amended complaint. No discovery has taken place.

2 Standard for a preliminary injunction

The issue before this Court is whether to issue a preliminary injunction. A preliminary injunction will issue “where (1) there is a substantial likelihood that the movant will pre- vail on the merits; (2) there is a substantial threat that irreparable harm will result if the injunction is not granted; (3) the threatened injury outweighs the threatened harm to the defendant; and (4) the granting of the preliminary injunction will not disserve the public interest.” Clark v. Pritchard, 812 F.2d 991, 993 (5th Cir. 1987). CES also requests that this Court hold a two-day evidentiary hearing at which CES can present evidence in support of its request for a preliminary injunction and that this hearing

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be combined with an expedited jury trial on the merits, as Rule 65(a)(2) permits.

3 Summary of the argument

The City is attempting to terminate CES’s wastewater service using Endorsement TTO, an endorsement that the City added to CES’s Permit No. 9558 in January 2009 after that permit had already issued. No notice or hearing preceded or has yet taken place at which CES could argue against the imposition of Endorsement TTO. And Endorsement TTO does not qualify as an amendment that the City may make unilaterally under its wastewater ordinances. Thus, the imposition of Endorsement TTO, which restricted CES’s constitutionally protected property interest in its right to wastewater service under Permit No. 9558, without any notice or hearing denied CES procedural due process. And, because Endorsement TTO was never properly imposed, the City’s decision to terminate wastewater service for failure to comply with that endorsement has no basis whatever in law and therefore violates substantive due process. The City has repeatedly issued CES notices of violation of its odor ordinance, which prohibits “offensive odors” that become or are likely to become “a source of discomfort.” Code of Ordinances §10-451. On video, investigators from the City’s Air Bureau testify that they use “the nose” as their test for odor violations. These investigators acknowledge the existence of objective alternatives like the detailed FIDO procedures used by the Texas Commission on Environmental Quality or devices like the Barnaby-Cheney Scentometer or Nasal Ranger used by the City of Dallas, but refuse to use these objective alternatives in enforcing the odor ordinance against CES. The investigators also refuse to walk CES’s property or make any other attempt to locate the source of any supposedly offensive odor so that the odor can be abated. And, when asked directly what CES can do to comply, the investigators reply that they are only investigators and cannot answer that question. This ordinance is void for vagueness because it states no objective criteria for what constitutes

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an offensive or discomforting odor and, as it is enforced, there is no way for CES to know whether any particular conduct is in violation. This establishes a likelihood of success on the merits. There is irreparable harm on the wastewater issues because CES cannot operate without wastewater service, and the shutdown of a business has been held to be irreparable. There is irreparable harm on the odor issues because former customers have already stated that they had to cut off business with CES because of the City’s repeated odor investigations, and this kind of business interruption has been held to be irreparable. The harm to CES outweighs the harm to the City because the City can simply refuse to renew CES’s permit when it comes up for renewal in December 2010. Barring a negotiated resolution, CES will have to relocate outside Houston by then. And the public interest would not be disserved by an injunction because, as CES’s experts will testify, nothing that the City is attempting to regulate endangers the environment or the public. Accordingly, a preliminary injunction should issue.

4 CES will prevail on the merits

The elements of a §1983 claim are “(1) a deprivation of a right secured by federal law (2) that occurred under color of state law and (3) was caused by a state actor.” Victoria W. v. Larpenter, 369 F.3d 475, 482 (5th Cir. 2004). Cities are liable under §1983 for adopting, implementing, or executing ordinances or official decisions that have an unconstitutional effect. See Monell v. Dep’t of Social Services, 436 U.S. 658, 690 (1978). Cities are also liable for the official acts of their executive decisionmakers. Hampton Co. Nat’l Surety, LLC v. Tunica County, Mississippi, 543 F.3d 221, 226–27 (5th Cir. 2008). Because CES’s complaints concern the City’s official actions in imposing Endorsement TTO, deciding to terminate CES’s wastewater service for noncompliance with Endorsement TTO, and enacting and enforcing the odor ordinance, the City is a proper §1983 defendant.

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4.1 The City denied CES due process of law in enacting and en- forcing Endorsement TTO

4.1.1 CES had a constitutionally protected property interest in its right to discharge wastewater under Permit No. 9558

The City deprived CES of property without due process of law in January 2009, when it

added Endorsement TTO to Permit No. 9558, and on December 1 and 18, when it told CES

that it would enforce Endorsement TTO by terminating CES’s wastewater service again. See

Ex. A; First Amended Complaint at 71, Ex. Y; Original Complaint, Ex. D at 12:18–12:19.

“To prevail on either a procedural or substantive due process claim under 42 U.S.C. §1983,

a plaintiff must first establish that a defendant’s actions deprived plaintiff of a protectible

property interest.” See Nichols v. Board of County Comm’rs, 506 F.3d 962 (10th Cir. 2007).

A government creates a constitutionally protected property interest when it grants a

permit that it does not have discretion to revoke. See Chavers v. Morrow, No. 09-20006,

2009 WL 4609841 at *3 (5th Cir. 2009) (“To determine whether statutes or regulations

create a protected property interest, we must ask whether they place substantive limitations

on official discretion.”). The Supreme Court and the Fifth Circuit have applied this rule

repeatedly. 1 It is the law in all other circuits as well. See, e.g., Woodwind Estates, Ltd.

v. Gretkowski, 205 F.3d 118, 123 (3d Cir. 2000) (“[T]he holder of a land use permit has

a property interest if a state law or regulation limits the issuing authority’s discretion to

restrict or revoke the permit by requiring that the permit issue as a matter of right upon

1 See, e.g., Town of Castle Rock v. Gonzales, 545 U.S. 748, 756 (2005) (“To have a property interest in

a benefit, a person must

such as state law.”); Kentucky Dep’t of Corrections v. Thompson, 490 U.S. 454, 462 (1989) (“the most common manner in which a State creates a liberty interest is by establishing ‘substantive predicates’ to govern official decision-making and, further, by mandating the outcome to be reached upon a finding that the relevant criteria have been met”); Olim v. Wakinekona, 461 U.S. 238, 249 (1983) (no protected interest where “regulations place no substantive limitations on official discretion”); Ridgely v. Federal Emergency Management Agency, 512 F.3d 727, 735–36 (5th Cir. 2008) (“statutes and regulations [must] limit official discretion” to create a constitutionally protected property interest); Blackburn v. City of Marshall, 42 F.3d 925, 936–37 (5th Cir. 1995) (constitutionally protected property interests stem from claims of entitlement under state statutes or local ordinances).

from an independent source

have a legitimate claim of entitlement to it

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compliance with terms and conditions prescribed by the statute or ordinance.”). The City’s ordinances provide that a permit, once issued, cannot be revoked except for

a violation of “city ordinances pertaining to sewage disposal into the city sewers” or “a requirement of [the] permit.” Code of Ordinances §47–190(a). Because Endorsement TTO

is neither in the ordinances themselves nor a requirement of Permit No. 9558 as that permit

was issued, the City cannot terminate wastewater service unless it is able to amend Permit No. 9558 to add Endorsement TTO. But the City has no discretion in deciding whether it may do that, because §47–189(b) states the specific and exclusive factual conditions under which the City may amend permits that have already been issued. 2 Accordingly, CES has a constitutionally protected property interest in its rights under unmodified Permit No. 9558. The cases in which courts have held that a permit right was not constitutionally pro- tected because the Government had discretion whether to grant or revoke the permit all involved statutory schemes that conferred far more discretion on the Government than do the wastewater ordinances. 3 The kind of discretion that defeats the existence of a con- stitutionally protected property interest is not merely that discretion that inheres in any standard that requires expertise to apply. Rather, what is meant by discretion is what an official posesses “when he or she is simply not bound by standards set by the authority in question.” Board of Pardons v. Allen, 482 U.S. 369, 375–76 (1987). Because the standards that apply to permit modifications are specified in §47-189(b) and are not left to be set by the City in its executive discretion, CES enjoys a constitutionally protected property interest in its permit rights.

2 See Code of Ordinances §47–189(b) (“The department may modify the conditions of any permit from time to time, as necessary to prevent interference or a pass through of the sewer system, contamination of sewer sludge or violation by the city of laws or regulations enacted by the state or federal government.”). 3 In Chavers, for example, a towing company had no property interest in remaining on a tow-rotation list created by ordinance because the ordinance specified only who was “qualified to be on” or “eligible to be placed on” the towing list and did not specify any “exclusive means for removing a tow company from the list.” 2009 WL 4609841 at *3–*4. In Ridgely, the plaintiffs had no property interest in receiving FEMA aid because the statutes and regulations provided only that “[t]he President may” and “FEMA may” provide aid, not that they must provide aid. 512 F.2d at 736.

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The Supreme Court addressed a similar situation in Barry v. Barchi. Because a New

York horse trainer’s license could be revoked only under certain specified circumstances,

the racing authority lacked discretion and the licenseholder had a constitutionally protected

property interest. As the Court put it:

“Under New York law, a license may not be revoked or suspended at the discretion of the racing authorities. Rather, suspension may ensue only upon proof of certain contingencies. Notably, when a horse is found to have been drugged, the license of the horse’s trainer may be suspended or revoked if he did the drugging, if he knew or should have known that the horse had been drugged, or if he negligently failed to prevent it. Accordingly, state law has engendered a clear expectation of continued enjoyment of a license absent proof of culpable conduct by the trainer. Barchi, therefore, has asserted a legitimate ‘claim of entitlement that he may invoke at a hearing.’ ” Barry v. Barchi, 443 U.S. 55, 64 n.11

(1979).

Just as in Barry, the City lacks discretion in this case because it can modify or revoke a

permit only for the reasons stated in the ordinances. 4

Moreover, whatever may be the law for permits in general, the courts have time and again

held that there is a protected interest in continuation of utility service once the Government

has begun to provide that service. 5

4.1.2 The City denied CES procedural due process

The City denied CES procedural due process by imposing Endorsement TTO without a

hearing. See First Amended Complaint at ¶¶71–77 (describing events leading to imposition

4 See also Bell v. Burson, 402 U.S. 535, 539 (1971) (“Once licenses are issued, as in petitioner’s case, their continued possession may become essential in the pursuit of a livelihood. Suspension of issued licenses thus involves state action that adjudicates important interests of the licensees. In such cases the licenses are not to be taken away without that procedural due process required by the Fourteenth Amendment.”). CES’s wastewater permit is essential to its business — and to the occupations of all the employees who work at the Griggs Road facility, from chemists, to delivery drivers, to engineers. 5 See, e.g., Koger v. Guarino, 412 F. Supp. 1375, 1386 (E.D. Pa. 1976), aff ’d 549 F.2d 795 (3d Cir. 1977); Craft v. Memphis Light, Gas & Water Div., 534 F.2d 684, 687 (6th Cir. 1976); Palmer v. Columbia Gas of Ohio, Inc., 479 F.3d 153, 156 (6th Cir. 1973); Condosta v. Vermont Electric Corp., 400 F. Supp. 358, 365

(D. Vt. 1975); Donnelly v. City of Eureka, 399 F. Supp. 64, 67 (D. Kan. 1975); Limuel v. Southern Union

Gas Co., 378 F. Supp. 443, 447 (S.D.N.Y. 1972); Hattell v. Public Service Co. of Colorado, 350 F. Supp. 240

(D. Colo. 1972); Stanford v. Gas Service Co., 346 F. Supp. 717, 719 (D. Kan. 1972).

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of Endorsement TTO). CES had no opportunity to challenge the inclusion of acetone, 2- butanone, and a variety of other chemicals on the TTO list. The only process that preceded the imposition of endorsement TTO was an exchange of emails and one in-person meeting between CES and the City. There was no hearing. The one meeting was not transcribed. There was no opportunity for CES to present expert witnesses or other evidence. There was no opportunity for CES to test the City’s evidence by cross examination. And there was no law-trained judge or even an apparently neutral arbiter and no opportunity to present arguments of counsel. 6 In sum, there was no process at all: the City unilaterally imposed Endorsement TTO on CES. The Supreme Court has held that due process requires a pretermination hearing for a termation of utility services. See Memphis Light, Gas & Water Div. v. Craft, 436 U.S. 1, 18 (1978). Although Memphis Light involved consumer utilities, the safety problem is only magnified in the context of essential utilities to an industrial wastewater treatment plant like CES’s. Even outside the utility context, a predeprivation hearing is one of the most fundamental due-process rights. 7 There is room for argument about what kind of hearing is constitutionally required. See Mathews v. Eldridge, 424 U.S. 319, 334–35 (1976) (mandating consideration of the affected private interest, the risk of error, and the Government’s interest in avoiding the burden of additional procedures). But a hearing of some kind was necessary. The administrative hearings that the City proposes to hold with respect to its December 1 and December 18 notices of termination do not suffice. First, these hearings are hearings to review the terminations of service, see Code of Ordinances §47–208 (describing hearings); Original Complaint, Ex. D at 27:12–28:9 (city attorney stating that “the scope of this hearing

6 See Duke v. North Texas State University, 469 F.2d 829, 832 (5th Cir. 1972) (describing “tribunal that has an apparent impartiality toward the charges” as one of “certain minimal procedural guarantees”) (citing Ferguson v. Thomas, 430 F.2d 852, 856 (5th Cir. 1970); Pickering v. Board of Education, 391 U.S. 563, 578 n.2 (1968)). 7 See, e.g., Fuentes v. Shevin, 407 U.S. 67, 80–82 (1972) (seminal case); Goldberg v. Kelly, 397 U.S. 254, 264–65 (1970); Mathews v. Eldridge, 424 U.S. 319, 333–35 (1976) (collecting cases).

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is the termination of service”), not the original imposition of Endorsement TTO. Second, a predeprivation hearing is required under Memphis Light for terminations of utility service. Third, even if a postdeprivation hearing could suffice, such a hearing must be reasonably prompt. 8 An eleven-month delay between the imposition of Endorsement TTO and any hearing that the City might have renders that hearing not reasonably prompt. And fourth, as this Court saw in CES’s application for a TRO, the City’s hearings are themselves lacking in due process. 9 Because the City imposed Endorsement TTO without any hearing at all, CES is likely to succeed on its §1983 claim for denial of procedural due process.

4.1.3 The City denied CES substantive due process

Substantive due process is denied when “government arbitrarily abuses its power to deprive individuals of constitutionally protected rights.” Simi Investment Co. v. Harris County, 236 F.3d 240, 249 (5th Cir. 2000). Judicial review is particularly appropriate here because of

the type of blatant governmental

interference with property rights” that is before this Court. Id. In Simi, Harris County literally invented a park — the County claimed that a park was present where none existed — in order to block a developer on Fannin Street. See id. at 251 (“The dispositive quesiton in this case is whether or not there ever was a park. The

“the length and degree of governmental abuse and

8 See, e.g., Board of Governors of the Federal Reserve System v. DLG Financial Corp., 29 F.3d 993, 1003 (5th Cir. 1994) (“Even when a predeprivation hearing is not required, a sufficiently prompt postdeprivation hearing still must be held.”) (citing FDIC v. Mallen, 486 U.S. 230, 241 (1988)); Tower v. Leslie–Brown, 326 F.3d 290, 299 (1st Cir. 2003) (collecting cases on promptness; describing case in which 72-day delay rendered postdeprivation hearing not prompt). 9 See Original Complaint, Ex. D (transcript of administrative hearing). The hearing was deficient in that the City failed to disclose the basis for its termination of wastewater service; the City failed to disclose its witnesses or other evidence; the City refused to allow CES to call and cross-examine City emploees with relevant information, including CES’s accusers; the City barred CES from raising constitutional defenses, instead telling CES to go to federal court; the City appointed a hearing officer who was not neutral because he was employed by the same department of the City as the City officers who were responsible for the termination of service; and the City attorneys advising the hearing officer conferred with those presenting the City’s case and with the hearing officer ex parte during the hearing.

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district court found that the County had never established a park. We agree.”). The Fifth

Circuit held that “the County acted arbitrarily in inventing a park and, thus, acted without

a rational basis in depriving Simi of a constitutionally protected interest. Id. Here, just as

in Simi, the City seeks to terminate CES’s wastewater service for failure to comply with a

requirement, Endorsement TTO, that does not exist because it was never properly enacted.

See, e.g., State of Washington ex rel. Seattle Title Trust Co. v. Roberge, 378 U.S. 116,

122–23 (1928) (reliance on legally ineffective ordinance rendered restriction “arbitrary and

repugnant to the due process clause”). 10

There is also evidence that the City is targetting CES in bad faith. The latest flurry

of termination notices came only after CES asserted its constitutional rights in this Court.

The Third Circuit has considered situations like this:

“This case is similar to Bello and Blanche Road. Woodwind presented the fol- lowing evidence at trial: (1) the defendants had no legitimate basis under the ordinance for demanding information about the socioeconomic background and income-levels of prospective tenants as a condition of subdivision approval; (2) the defendants denied approval for the plan by adopting significant portions of a letter drafted by the private attorney for the citizens group which vigorously opposed the development for improper reasons; and (3) the defendants inten- tionally blocked or delayed the issuance of the permit for subdivision approval because they were aware that by doing so the developer would be unable to meet the building deadline for financing the project.” Woodwind Estates, Ltd. v. Gretkoski, 205 F.3d 118, 125 (3d Cir. 2000).

The Third Circuit held that these three items — (1) “no legitimate basis,” (2) cooperation

with private litigants, and (3) knowledge that the malefaction will put an end to the victim

— if proven, would constitute a violation of substantive due process. 11

10 Cf. Stevens Creek Quarry, Inc. v. Santa Clara County Planning Comm’n, 2000 WL 521512 at *1 (9th

Cir. 2000) (rejecting substantive due process claim because the plaintiff “never attempted to show that its operations under the modified use permit would no longer be economically feasible”). 11 The Third Circuit has considered a set of similar cases. That court has held, for example, that local- government officials who “deliberately and improperly interfered with the process by which the Township

did so for reasons

issued permits, in order to block or to delay the issuance of plaintiff’s permits, and

unrelated to the merits of the application for the permits” violated substantive due process and could be

sued under §1983. Blanche Road Corp. v. Bensalem Township, 57 F.2d 253, 267–68 (3d Cir. 1995); see also

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The three Woodwind factors are present here. On the first factor, the City had no legitimate basis for its first termination of wastewater service. Its own witness testified, under cross examination, that there was no “imminent danger” to City employees or the public, and the City’s own hearing officer eventually concluded likewise. Now, the City seeks to terminate service based on an endorsement that was never validly enacted. On the second factor, there is already evidence that the City is actively assisting other litigants in their civil actions against CES. 12 And on the third factor, the City knows the ruinous effects that terminating CES’s wastewater service would have, since it is obvious that CES cannot do business without that service. The City has displayed a willingness to shut CES down without regard to the legal requirements imposed by the City’s own ordinances and the United States Constitution. Although it is a rare case in which a Government acts in such contempt of the law that its actions are, in substance, violations of due process, this is such a case. And it is such cases that most call for the active intervention of an independent judiciary to prevent the arbitrary destruction of private parties by government run amok. “The judicial office has no higher function to serve than the restraint of official arbitrariness. Arbitrary power inspired

Bello v. Walker, 840 F.2d 1124, 1129 (3d Cir. 1988) (sending case to jury where there was evidence “that

interfered with the process by which the municipality issued building permits,

and that they did so for partisan political or personal reasons unrelated to the merits of the application for the permits.”). 12 In the files of the Harris County District Attorney’s Office, for example, we found an email from Stephen

Dicker (stephen.dicker@cityofhouston.net) to Roger Haseman of the DA’s office and Gary Porter of the EPA in which Mr. Dicker states that “the City of Houston has forced the State Attorney General’s Office and TCEQ into some civil action against the two CES facilities.” Ex. B at 1 (hand transcription of this email by Rebecca Haack, an analyst in our office). The DA’s files also contain an email from Assistant City Attorney James Cargas (james.cargas@cityofhouston.net) to a former CES employee who claimed to have damaging evidence against CES, in which Mr. Cargas lists every lawyer representing a plaintiff against CES and that lawyer’s contact information. See Ex. B at 2–3. Similarly, when CES sent an attorney to defend a small-claims case, the presiding Justice of the Peace informed CES’s attorney that she thought CES should know that her courtroom had been made available to the plaintiffs in a nuisance class action against CES pending in state district court as a meeting room — a class action in which plaintiffs’ counsel is former city attorney Ben Hall. While it is too early to draw definite conclusions about improper collusion or the need to join additional individual defendants, there is certainly sufficient evidence to justify discovery into what exactly the relationship is between the City, its lawyers, and the numerous other ongoing cases against CES.

certain council members

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by good motives, no less than that animated by evil intent, is an attack upon the supremacy

of the law.” New American Library of World Literature v. Allen, 114 F. Supp. 823, 834 (6th

Cir. 1953).

4.2 The City’s odor ordinance is void for vagueness

The City has issued CES hundreds of notices of violation under the odor section of its

nuisance ordinance.

4.2.1 The ordinance prohibits and makes punishable the release of “offensive odors” that become “a source of discomfort,” but nowhere defines these terms

The odor ordinance appears in Chapter 10, Article XI of the Code of Ordinances. Section 10-

451 declares the release of “offensive odors” that “become a source of discomfort to persons

living or passing in the vicinity” to be a public nuisance.

“(b) The following specific acts, conditions, and things are declared to con- stitute public nuisances and are hereby prohibited and made unlawful:

the escape of any gases, dusts, fumes, mists, and sprays to

such an extent that the same, or any one of them, shall become, or be likely to become, hazardous to health or a source of discomfort to persons living or passing in the vicinity, or that the same shall by reason of offensive odors become a source of discomfort to persons living or passing in the vicinity thereof.” Code of Ordinances §10-451.

“(1)

Section 10-452 requires “the neighborhood protection official” to issue so-called notices

of violation to the owner of any property from which such an odor is escaping.

“Whenever the existence of any nuisance defined in this article, on any lots or parcels of real estate situated within the city, shall come to the knowledge of the neighborhood protection official, it shall be his duty to forthwith cause a written notice identifying such property to be issued to the person owning the same.” Code of Ordinances §10-452.

Section 10-453 explains that a notice of violation requires the owner to abate the nuisance

described in the violation — in the case of odor nuisances, to stop releasing the offensive

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odor. If the owner does not abate the nuisance, the City may do so at the owner’s expense.

“(a) In the event of the failure, refusal, or neglect of the owner or occupant of any premises or property to timely cause such nuisance to be removed or abated in the manner and within the time provided in the notice given pursuant to section 10-452 of this Code, the neighborhood protection official shall cause the weeds, brush, rubbish, or other insanitary matter or condition constituting a nuisance to be promptly abated in a reasonable and prudent manner at the expense of the city. The neighborhood protection official shall carefully compile the cost of such work done and improvements made in abating such nuisance, and shall charge the same against the owner of the premises.” Code of Ordinances §10-453.

The City Attorney may sue to collect fines between $50 and $2,000 per violation for any

violation, whether or not that violation has been abated. Moreover, an odor that persists

for multiple days triggers one violation per day.

“[W]henever in this section an act is made or declared to be unlawful, the first violation by any person of any such provision shall be punishable by a fine of not less than $50.00 nor more than $1,000.00; the secon violation by the same person of any such provision shall be punishable by a fine of not less than $100.00 nor

more than $1,500.00; and the third and any subsequent violation by the same person of any such provision shall be punishable by a fine of not less than $200.00

nor more than

Each day any violation of this section continues

shall constitute a separate offense.” Code of Ordinances §10-451(d).

The ordinances never define offensive odor or source of discomfort. There are no quanti-

tative or even defined qualitative standards beyond “offensive” and “discomfort” that CES

can use to identify violations or potential violations and abate them. As the ordinance reads,

a person (including a City inspector) can simply walk by CES’s Griggs Road facility, sniff

sniff, claim discomfort, and there is an odor nuisance. In fact, this is just how many of the

City inspectors do it.

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4.2.2 The City enforces its odor ordinance in a standardless manner, refuses to identify the standards that its investigators apply, and refuses to explain how alleged violators can come into compliance

It is possible to measure odors objectively. The Texas Commission on Environmental Quality

has a published set of odor investigation procedures that constrain investigators’ discretion

in declaring an odor to be a nuisance. See Ex. C. This 17-page guide requires investigators

to collect information designed to support (or allow the alleged violator to challenge) any

finding that a nuisance exists. 13 If the TCEQ investigator finds an odor after following these

procedures, then he is required to document the odor on a “FIDO Chart.” See Ex. C at 4–

14. 14 The FIDO Chart substantially constrains investigators’ discretion in determining when

an odor constitutes a nuisance because it requires investigators to quantify their observations

and follow a rational procedure stated in advance for determining whether those observations

constitute a nuisance. 15

The City of Dallas has a different way of making its odor ordinance objective: it uses a

Barnaby–Cheney Scentometer to eliminate the subjective impressions of investigators and

complainants altogether. 16 Kentucky and the Missouri Department of National Resources

13 For example, the guide requires investigators to collect (1) the names and addresses of complainants; (2) the location where each complainant experienced the odor; (3) date, time, frequency, and duration for all odors; (4) the nature of any adverse effects on or interference with the normal use of complainants’ health, property, animals, or vegetation; and (5) the alleged source of the odor. 14 The FIDO Chart is a grid with duration and frequency on the two axes and an odor level in each cell. For a given duration and frequency of odor, the FIDO chart identifies the odor level (ranging from “very light” to “very strong”) that constitutes a nuisance. 15 One collateral problem with the City’s odor ordinance and the Air Bureau’s enforcement of that ordinance is that the vague wording of the ordinance and the Air Bureau’s lack of enforcement standards allow neighbors to file completely unverifiable (and, in CES’s view, baseless) odor complaints. See First Amended Complaint, Ex. W. Complaints filed by CES’s neighbors are now the basis of a series of nuisance class actions pending against CES in Harris County civil district court. The TCEQ, by contrast, requires complaints to be verified by an investigator who follows the procedures described above or requires complainants to fill out an “odor log” on which they must record the same kinds of details. See Ex. C at 3–4 (“This log can be used to validate or invalidate complaints in conjunction with the other evidence of the case. It should not be used as the sole basis for issuance of a notice of violation.”), 15 (odor log); see also id. at 4 (“Caution should be taken, however, to ensure that this information-gathering procedure not be construed as ‘soliciting’ additional complaints.”). 16 See Dallas Ordinances §5A-7 (“A stationary source may not emit beyond its property line an odor, the strength of which equals or exceeds two odor units, as measured by the director on a Barnaby–Cheney

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have also adopted the Barnaby–Cheney Scentometer. And there are other devices, like the Nasal Ranger, available to measure odor objectively. 17 The City uses none of these. CES began videotaping the Air Bureau’s visits to document the City’s refusal to iden- tify or apply objective standards for identifying odor nuisances. Three of these videos are Exhibits T, U, and V to the first amended complaint. Partial transcripts are attached as Exhibit F to this brief. Exhibit T shows a discussion between an Air Bureau investigator, her “technical expert,” and Matthew Bowman, the president of CES. The technical expert, before he is cut off by the Air Bureau investigator, explains to Mr. Bowman that the Air Bureau simply uses “the nose smelling” to check for “a general sense of odor.” Ex. F. “Nose smelling, honest to God, is the best medium to detect, I think.” Id. Asked whether the City has any kind of scale to measure odors, Mr. Badar replied, “do they have a scale to go by — I don’t think they have.” Id. Finally, when asked about the Nasal Ranger that the City of Dallas uses, the investigator says that they know about these devices but do not use them. First Amended Complaint, Ex. T. In the second video attached to the amended complaint (Ex. U), the investigator arrives with a police officer who then states that he doesn’t want to be involved, doesn’t know why the investigators always call the police, and leaves. The investigator then refuses to walk the property and refuses to make any attempt to identify what on the property is causing the odor that the investigator claims to smell. See Ex. F. By contrast, the TCEQ guide also requires investigators to “[a]ttempt to locate the source(s) of the odor” and “[i]f a source is identified, attempt to locate the specific cause of the odor (i.e., the specific compound, equipment, or process emitting the odor, and the reason(s), such as a plant upset).” Ex. C at 3. These two visits are typical. The Air Bureau makes no attempt to give objective content

Scentometer or equivalent odor-testing device.”). 17 http://www.nasalranger.com/

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to the vague terms of the odor ordinance. And the notices of violation that the Air Bureau

issues require CES to abate odors that the Air Bureau refuses even to attempt to identify

by walking the property. On this view of the law, if an investigator decides that his nose

is offended — or if the City simply decides that a plant needs to be shut down — there is

no way for CES to challenge the City’s evidence since that evidence is entirely subjective.

This creates a situation in which CES cannot know what conduct the odor ordinance makes

unlawful — the very situation that the void-for-vagueness doctrine proscribes.

4.2.3 Because the City’s ordinance, as written and as enforced, does not make clear what conduct is proscribed, it is void for vagueness and its enforce- ment, a denial of due process

The odor ordinance is unconstitutional because it turns on subjective impressions (the nose

test) rather than objective alternatives (like the detailed procedures of the TCEQ or the

scientific devices of the City of Dallas). See Women’s Medical Center of Northwest Houston

v. Bell, 248 F.3d 411, 421–22 (5th Cir. 2001) (“We agree with the district court that each

of these three regulations is unconstitutionally vague on its face because it impermissibly

subjects physicians to sanctions based not on their own objective behavior, but on the

subjective viewpoints of others.”).

Courts around the country have held that odor ordinances like the City’s are uncon-

stitutional. A New York ordinance made punishable “offensive or noxious odors.” Bakery

Salvage Corp. v. City of Buffalo, 175 A.D.2d 608, 608 (N.Y. App. 1991). The New York

court held that “[t]he ordinance’s imprecise definition of noxious or offensive odors would

permit the termination of a business because of the presence of any odor which annoys any

person who owns property in the ‘impact area’ since its application could rest upon the ‘mal-

ice or animosity of a cantankerous neighbor.’ ” Id. at 610. The court held that “noxious and

offensive” was a standard so vague that it effectively gives no standards to the law applier

in making “the ultimate determination

whether the ordinance has been violated.” Id.

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An odor ordinance in Missouri applied to “disagreeable or unwholesome smells, odors, or

gaseous vapors.” See City of Festus v. Werner 656 S.W.2d 286, 287 (Mo. App. 1983). A

Missouri court struck the ordinance down as unconstitutionally void because “disagreeable”

was so vague as not to constitute a proper legal standard. The court wrote:

“ ‘Disagreeable’ is not defined, nor is any quantum of such odor established as necessary for violation. The ordinance does not provide who shall make the determination of ’disagreeable,’ nor provide any standard for making such a de- Violation of the ordinance depends on the vagaries of human response to smells and language of the ordinance provides no guide to police,

prosecutors, judges, or jurors as to the standards to be applied in determining

whether a violation has

Section 9 of the ordinance is too vague to

be enforceable or constitutional.” Werner, 656 S.W.2d at 287.

See also Borough of Verona v. Shalit, 222 A.2d 145, 147–48 (N.J. App. 1966) (“Defendant

here could not determine from the ordinance how much smoke was prohibited, or how he

would have to correct his burning procedure. The ordinance permits the court to decide

arbitrarily.”); cf. Davis v. City of Worthington, No. C-2-00-65, 2001 WL 175262 at *3 (S.D.

Ohio) (finding weed ordinance not unconstitutionally vague because it specified height at

which plant could be considered weed and thereby made enforcement objective) (collecting

similar cases).

A Pennsylvania ordinance prohibited “the production or emission of dust, smoke, refuse

matter, odor, gas fumes, noise, vibration, or similar substances” that are “noxious or injuri-

ous to the community.” Beaver v. Borough of Johnsonburg, 410 F. Supp. 556, 558 (W.D. Pa.

1976). The court held that “noxious or injurious” was an unconstitutionally vague standard

because the ordinance did not lay out any objective criteria by which someone subject to it

could know whether or not particular conduct was a violation. The court wrote:

“[T]he very terms of Sec. 201, ‘Prohibited Uses’ and Sec. 1300(3) ‘Uses Prohib- ited,’ contain no standards to determine when the emission of smoke, dust, noise or vibrations become ‘noxious or injurious’ so as to be prohibited. Penntech could never know when it is in violation of the ordinance because there is no means of

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determining that under the language of the ordinance.” Beaver, 410 F. Supp. at

559–60.

Like the ordinances in these cases, the City’s odor ordinance, as written and as enforced by

the Air Bureau, does not contain objective standards that would allow CES to determine

whether or not it is in compliance — and this, despite the availability of such objective

standards as those used by the TCEQ and the City of Dallas.

5 The other requirements for a preliminary injunction are satisfied.

An injunction is necessary to prevent irreparable harm. Shutting off wastewater service

would shut down CES’s Griggs Road facility, end CES operations entirely, and require CES

to disband its specialized workforce. See, e.g., Ex. E (emails from employees). This is

irreparable injury. 18 CES’s customers state in emails that they have been forced to cut off

business with CES because of the City’s odor investigations. See Ex. D (emails and letters

from former CES customers ZaCh System Corporation, Sochem, KMTEX, South Coast

Terminals, PPG Industries, Sierra Chemical Corp., and Phoenix Pollution Control). The

odor ordinance is thus also causing irreparable injury. Continued enforcement of the odor

18 See, e.g., Valdez v. Applegate, 616 F.2d 570, 572 (10th Cir. 1980) (reversing and finding irreparable harm where government action “would force some permittees out of business”); Lineback v. Chauffeurs, Teamsters, and Helpers Local Union No. 414, 513 F. Supp. 2d 988, 998 (N.D. Ind. 2007) (“Continuing this conduct could cause further shutdowns, loss of goodwill, permanent loss of customers and business, and layoffs. This is sufficient to show irreparable injury allowing the issuance of an injunction.”); Register.com, Inc. v. Verio, Inc., 126 F. Supp. 2d 238, 252 (S.D.N.Y. 2000) (“A potential harm which cannot be addressed by a legal or equitable remedy following a trial, such as the loss of customers that might result from a system shutdown or slowed response times complained of here constitutes an irreparable injury. A showing that a plaintiff may suffer a substantial loss of business if relief is not granted meets the standards for interim relief.”) (citing Doran v. Salem Inn, Inc., 422 U.S. 922, 932 (1975)); ReMed Recovery Care Centers v. Township of Willistown, 26 F. Supp. 2d 676, 688 (E.D. Pa. 1999) (business shutdown was irreparable injury); Salt Pond Associates v. U.S. Army Corps of Engineers, 815 F. Supp. 766, 784–85, 784 n.50 (D. Del. 1993) (government action that would destroy business enterprise presents case of irreparable harm) (collecting cases); Great Salt Lake Minerals & Chemicals Corp. v. Marsh, 596 F. Supp. 548, 557 (D. Utah 1984) (“The requirement that the movants will suffer irreparable injury unless the injunction issues has been satisfactorily established. It appears both GSL and Colman run a substantial risk of being put out of business as a result of the breach. A person forced out of business may be considered irreparably harmed thereby.”).

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ordinance will continue to cause irreparable harm like this. The harm to CES of denying an injunction outweighs the harm to the City of issuing the injunction. At worst for the City, the City must wait until December 2010, when it can refuse to renew CES’s discharge permit. And the public interest would not be disserved by an injunction because nothing the City is trying to regulate poses any risk of harm to the environment or the public. CES engaged experts from Exponent, 19 an engineering and scientific consulting firm, to prepare an outside opinion regarding the City’s initial termination of wastewater service. CES will present this report and a follow-on report at the preliminary-injunction hearing. CES’s experts incidentally include one of the original authors of the EPA’s TTO standard, on which the City’s Endorsement TTO is based.

6 CES requests a preliminary-injunction hearing as soon as possible and an expedited schedule for trial on the merits

CES respectfully requests an evidentiary preliminary-injunction hearing as soon as possible. Because of the page limits for motions in this Court and because CES’s experts have not yet completed their work, CES has had to omit much of the evidence that it plans to present at the hearing. CES anticipates that a complete evidentiary presentation would take two trial days. CES requests that this Court enjoin the City from (1) terminating CES’s wastewater service or otherwise enforcing Endorsement TTO; (2) enforcing its odor ordinance against CES; and (3) taking any other regulatory action against CES without first obtaining leave of this Court. CES further suggests that this Court might find it efficient to combine the preliminary- injunction hearing with trial on the merits, as permitted by Rule 65(a)(2). If so, CES requests that this Court impanel a jury to hear the evidence presented during the preliminary-

19 http://www.exponent.com/

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injunction hearing so that this evidence need not be repeated at trial. The parties can then complete any necessary discovery on an expedited basis (one to two months) and the jury can reconvene to hear the rest of the evidence and issue its verdict. Obviously, the possibility of an approach like this would depend on this Court’s trial schedule, so CES presents it as a suggestion only, but one that might lead to an expedited global resolution.

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DATED: December 30, 2009

Respectfully submitted,

/s/ K.A.D. Camara

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K.A.D. Camara Texas Bar No. 24062646 Southern District Bar No. 870498 camara@camarasibley.com Attorney-in-Charge for the Plaintiff

Kent Radford Texas Bar No. 24027640 radford@camarasibley.com Camara & Sibley LLP 2339 University Boulevard Houston, Texas 77005

713-893-7973

713-893-1131 (fax) Attorneys for the Plaintiff

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Certificate of Service

I hereby certify that I served this document on counsel of record as listed on the Court’s CM/ECF system by CM/ECF on December 30, 2009.

/s/ K.A.D. Camara

K.A.D. Camara

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