Liability For Surface Damages

20 March 2003 Past Event

29th Annual Earnest E. Smith Oil, Gas & Mineral Law Institute

I. INTRODUCTION

This paper provides a general overview of Texas law as applied to cases seeking recovery for surface damages related to oil and gas activities. The multi-volume treatise on Oil & Gas Law authored by Williams & Meyers begins its chapter on Operator Conduct as follows:

Year after year there have been considerable litigation concerning the liability of an oil and gas operator for injury to surface,structures, grass, crops, water, supply, livestock, and growing timber as a result of the conduct of exploration, development,production, and transportation operations.

OIL & GAS LAW, Williams & Meyers §217 (Matthew Bender & Co. 2002). While this statement is certainly true and applies to the dockets of Texas courts, it fails to contemplate the diversity of combinations and permutations that potentially arise in a lawsuit alleging surface damages1 as a result of oilfield activities. Usual plaintiffs include surface rights owners and adjoining landowners and can number from one to more than one hundred. Likely defendants range from mineral rights owners and their operators to various subcontractors and consultants involved in the exploration or development process. Depending on the nature of the defendant and the activity conducted, plaintiffs may choose from a variety of legal theories under which to seek relief. Of course, among the oilfield entities that might be sued, indemnification and other risk-shifting provisions and principles often come into play once suit is commenced. In many instances, these agreements and circumstances require the involvement of various insurers. Adding to the
complexities of parties and relationships, the issues involved are not easily explained. Thus, a variety of expert witnesses invariably are required to address issues such as standard of care, industry custom, causation and, of course, damages.

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