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In a case that could have a substantial impact on the rights of Texas mineral right and landowners, the Supreme Court of Texas recently heard the oral arguments in the case of Atmos Energy Corporation et al v. Town of DISH, et al. The case involves the residents of DISH, Texas– named after the cable television provider–who are seeking are damages for nuisance and injuries. The town claims that the oil pipeline company’s operation of gathering and compression facilities near the town has resulted in adverse health effects to its residents. This case is of particular importance because it calls into question whether a company operating legally and within government regulation can still be liable for damages for trespass and nuisance .

Background

The dispute between the Town of DISH and various pipeline companies began in 2005 when pipeline companies began constructing a compressor outside the town.  Initially, the residents of DISH complained of odors and excessive noise, and in 2008 the town issuedfiled a complaint with the Texas Commission On Environmental Quality (TCEQ). However, after investigations in 2009 and 2010, the TCEQ concluded that the facilities would not cause the effects the residents of DISH complained about.

When a crime occurs on someone else’s property, who is liable for the harm caused by that crime? Of course, the person who committed the act of crime should be held accountable, but does a property owner have any sort of obligation to a crime victim? Does a property owner have a duty to protect third parties from falling victim to crimes committed on their property?

Man Victimized By Crime In The Parking Lot of An Apartment Complex

The Texas Supreme Court recently weighed in on this issue in UDR Texas Properties LP et al. v. Alan Petrie. In this case, Petrie was waiting for a coworker at The Gallery apartment complex, which is owned by UDR Texas Properties. Petrie was attending a party at the apartment complex, but needed to be let into the gated facility and so was in the process of calling someone to give him access.  The visitor parking area was not gated. While he was on the phone, a vehicle pulled up behind Petrie’s vehicle and blocked him in. Two men exited the vehicle and pointed a rifle at Petrie, telling him to get out of the car and to give up his wallet and keys. When Petrie did not get to the ground fast enough for his assailants, the gunman shot Petrie.

With so many new oil and gas pipelines being constructed presently in Texas, the Texas Supreme Court’s timing for additional guidance on when a pipeline company is a common carrier in the case of Denbury Green Pipeline-Texas L.L.C. v. Texas Rice Land Partners Ltd, et al. could not be more appropriate. A second opinion in that case focuses on when a pipeline company can be considered a “common carrier”, a status that grants the company the right to exercise eminent domain powers.

The Denbury Pipeline case has been making its way through the Texas court system for a number of years and this is not the first time that some aspect of the case has been heard by the Texas Supreme Court. In 2012, in Texas Rice Land Partners Ltd, et al v. Denbury Green Pipeline-Texas L.L.C.,  the Texas Supreme Court articulated a standard based on the Texas Natural Resources Code to determine when a pipeline company can have common carrier status. The standard or test is referred to as the Texas Rice I test. At the time, the Texas Supreme Court did not apply the test to the facts of the case, but instead reversed and remanded the case to the trial court for proceedings consistent with the common-carrier test it established, thus “affording Denbury Green the opportunity to produce reasonable proof of a future customer, thus demonstrating that [the pipeline] will indeed transport to or for the public for hire and is not limited in [its] use to the wells, stations, plants, and refineries of the owner.”

Test Under Texas Rice I

The Texas A&M School of Law, in Fort Worth, Texas will be hosting the Eighth Energy Law Symposium on March 23 and 24, 2017.

The energy industry in the United States and globally is facing multiple transitions and fluctuation. The downturn in the oil market ha​s caused numerous bankruptcies; OPEC recently agreed to reduce production; the US is now a net exporter of gas and refined petroleum products; energy from renewable sources in the US now surpasses ​16 percent of total generation; and the Trump presidency promises to create new opportunities and challenges for the industry.

In assessing these factors and projecting where the global energy regime might go, Texas A&M University will host the 2017 Energy Law Symposium on “The Future of Energy”. The symposium, scheduled for March 23–24, 2017, will convene industry experts, academic commentators and public officials to discuss a wide range of issues bearing on anticipated needs, policy challenges and proposed reforms in the U.S. and global energy markets. Panel, debate and keynote sessions will address legislative and regulatory priorities, power generation, allocation wells, transboundary resource management, environmental considerations, bankruptcy and much more. Please join us as we explore “The Future of Energy”. Registration is $50 or $150  if you want CLE credit (12.75 CLE credit hours pending approval).

There has been an ongoing debate about whether hydraulic fracturing activities for producing oil and gas have an impact on drinking water supplies near and around the fracing site. Recently, the United States Environmental Protection Agency’s (EPA) Science Advisory Board (SAB) raised a number of questions concerning the EPA’s June 2015 draft report on the potential impacts of hydraulic fracing on drinking water supplies.

The SAB prepared a 180-page peer-review report that you can read here addressing the EPA’s 2015 draft report. The SAB found a number of aspects of the EPA’s draft report to be critically deficient. Below is an overview of some of the the SAB’s report’s findings. In particular, the SAB noted that:

• The EPA’s conclusions drawn about the widespread and systemic impacts that fracing has on the quality of drinking water resources were not quantitatively supported and lacked evidence.

As the Texas Supreme Court noted recently, it is the responsibility of mineral owners to review their deeds carefully to ensure that the rights and reservations in the deed are what they intend and that there are no mistakes. Specifically, in Cosgrove v. Cade, the Court held that “Plainly obvious and material omissions in an unambiguous deed charge the parties to the deed with irrebuttable notice (of any errors) for statute of limitations purposes”. As a result, the “discovery rule” does not apply to a suit to reform the deed according to both Texas common law and the Texas recording statute.

In 2006, the Cades sold two acres of land to Barbara Cosgrove. The real estate contract provided for the reservation of all of the mineral rights to the Cades. However, the deed conveyed the land in fee simple, meaning all the land and rights incidental to ownership of the land, including mineral rights, were conveyed to the buyer. At closing of the transaction, the parties signed a document in which they agreed to correct or adjust any errors or omissions in any documents.

In 2010 the Cades realized that the deed conveyed their mineral rights to Ms. Cosgrove. The Cades filed a lawsuit to reform the deed and for breach of contract.