Commentary: Court cases suggest Texas is heading to a subsurface lease market

06 June 2014 Publication

FuelFix.com

With a subsurface trespass case pending before the Texas Supreme Court and a recent $3 million nuisance verdict that has been called the nation’s “first fracking trial,” the industry may be wondering whether Texas is headed toward a subsurface lease market. At least that’s what FPL Farming v. Environmental Processing Systems and Parr v. Aruba Petroleum seem to suggest.

The Supreme Court has already once considered FPL Farming, when it rejected the operator’s argument that a valid injection permit immunizes a wastewater injector from trespass liability. After a jury found no trespass upon remand, the Beaumont Court of Appeals held — for the first time ever — that neighboring landowners have valid a claim for trespass.

Now that the Supreme Court stands poised to finally rule on the trespass issue, the Texas Association of Oil & Gas and Association of Energy Services Companies of Texas argue that transactional costs to the entire industry will rise dramatically if a jury can hear trespass claims without regard to a plaintiff’s injury. Given the high cost of trespass litigation, AESC argues that it could become cheaper just to pay neighboring landowners for subsurface leases to keep them from suing — a modern take on what the industry has traditionally called a holdout.

Read More.

 

Insights

Bad Holiday Season News! Estimates of an increase of Cyberattacks 20%!
13 December 2019
Internet, IT & e-Discovery Blog
Driving the Future of Automotive Technology
12 December 2019
Manufacturing Industry Advisor
Massachusetts Governor Proposes Facility Fee Ban
12 December 2019
Health Care Law Today
American Rule Prevails; PTO May Not Collect In-House Attorneys' Fees as "Expenses"
12 December 2019
IP Litigation Current
ACCC 46th Annual Meeting & Cancer Center Business Summit
04-05 March 2020
Washington, D.C.
Foley/Deloitte Compliance and Privacy Officer Roundtable
27 February 2020
Boston, MA
Let’s Talk Compliance
24 January 2020
Orlando, FL
New England Alliance Annual Meeting
15-17 January 2020
Woodstock, VT