The firm won a victory for our client, Valero Energy Corp., in a unanimous, pro-taxpayer Texas Supreme Court opinion, authored by Chief Justice Nathan Hecht. The case involves a challenge under the Texas Constitution and Texas Tax Code to unequal property tax appraisals for Valero’s refinery in Galveston County for 2011. The Texas Supreme Court ruled in favor of our client, petitioner Valero Refining-Texas, L.P., and against respondent Galveston Central Appraisal District (GCAD) on all issues before the Court, including whether or not a taxpayer may challenge the appraisals of individual property accounts, or must instead challenge every account making up an entire complex industrial site. The Texas Supreme Court agreed with our argument that a taxpayer may challenge individual accounts. Read the opinion.
Valero had protested some, but not all, of the property accounts at its Texas City refinery for the 2011 tax year. It then sought judicial review as to three of the accounts. At trial, Valero’s experts opined that the three remaining accounts were unequally appraised compared with similar property at the two other refineries in Galveston County. The jury agreed, reducing the appraised value of Valero’s property from nearly $527 million to about $337 million.
GCAD appealed, arguing that Valero’s choice to limit its challenge to only three accounts, rather than all accounts at the entire refinery, deprived the district court of jurisdiction. Alternatively, GCAD argued, there was insufficient evidence to support the jury verdict because Valero’s experts did not explain why they excluded certain property from their valuations. Houston’s Fourteenth Court of Appeals rejected GCAD’s jurisdictional argument but accepted the evidentiary sufficiency argument and reversed and remanded for a new trial.
Yetter Coleman filed a petition for review in the Texas Supreme Court, arguing as a matter of law, that Valero was entitled to limit its “equal and uniform” challenge to three specific property accounts used by GCAD itself and that those accounts could be valued without including other property at the refinery that was not contained in those accounts. GCAD filed a cross-petition, in which it renewed its jurisdictional argument.
The Texas Supreme Court called for briefing on the merits, granted the petitions, and held oral argument in late 2016. Yetter Coleman’s appellate head, Reagan Simpson, and David Hugin of Ramirez Hugin PLLC argued on behalf of Valero. In its unanimous opinion, issued on February 24, 2017, the Court held that there is no jurisdictional bar to challenging individual accounts. If the district separates property into different accounts, a taxpayer can appeal those accounts separately. And it is proper as a matter of law to value each account separately. In fact, to prevent such separate appeals and valuations would be unconstitutional.
The Supreme Court remanded for the Fourteenth Court to address some remaining factual sufficiency challenges that GCAD had raised in its appeal because those issues cannot be addressed by the Supreme Court under the Texas Constitution.
Yetter Coleman attorneys Chris Ward and April Farris worked on the briefing in the Fourteenth Court of Appeals and the Texas Supreme Court. The case is Valero Refining-Texas, L.P. v. Galveston Central Appraisal District, No. 15-0492, in the Supreme Court of Texas.