Articles Posted in Supreme Court of Texas

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Respondent, who owned a ranch, sued Petitioner, which produced natural gas on the ranch, for underpayment of royalties and underproduction of its lease. The parties resolved their dispute with two agreements that contained an arbitration provision. Respondent later sued Petitioner for environmental contamination and improper disposal of hazardous materials on the ranch. Before arbitration commenced, Respondent asked the Railroad Commission (RRC) to investigate contamination of the ranch by Petitioner. Meanwhile, an arbitration panel awarded Respondent $15 million for actual damages and $500,000 for exemplary damages. At issue on appeal was whether the RRC had exclusive or primary jurisdiction over Respondent’s claims, precluding the arbitration, and whether the arbitration award should be vacated for the evident partiality of a neutral arbitrator or because the arbitrators exceeded their powers. The Supreme Court answered in the negative, holding (1) because Respondent’s claims were inherently judicial, the doctrine of primary jurisdiction did not apply, and vacatur was not warranted for failure to abate the arbitration hearing; and (2) the arbitrators did not exceed their authority. View "Forest Oil Corp. v. El Rucio Land & Cattle Co." on Justia Law

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Coyote Lake Ranch, about 40 square miles, in the Texas Panhandle, is used for agriculture, raising cattle, and hunting. It is primarily grass-covered sand dunes, with some is irrigated cropland. Water comes from the Ogallala Aquifer, the principal source of water for the Texas High Plains, including the City of Lubbock, about 90 miles southeast of the Ranch. In 1953, during “‘one of the most devastating droughts in 600 years,’” the Ranch deeded its groundwater to the city, reserving water for domestic use, ranching operations, oil and gas production, and agricultural irrigation, by one or two wells in each of 16 specified areas. In 2012, the city announced plans to increase water-extraction efforts on the Ranch, drilling as many as 20 test wells in the middle of the Ranch, followed by 60 wells across the Ranch. The Ranch objected that the proposed drilling would increase erosion and injure the surface unnecessarily. The court of appeal dissolved a temporary injunction entered in favor of the Ranch. The Supreme Court of Texas remanded, agreeing that an injunction “so broad as to enjoin a defendant from activities which are a lawful and proper exercise of his rights” was an abuse of discretion. The court cited the accommodation doctrine as applicable to a interests in groundwater: a lessee has an implied right to use the land as necessary for production and removal of the resource, with due regard for the landowner’s rights. View "Coyote Lake Ranch, LLC v. City of Lubbock" on Justia Law

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At issue in this case was amendments to a Houston air-quality ordinance (the Ordinance). BCCA Appeal Group filed suit seeking a declaratory judgment that Ordinance was invalid and unenforceable under the Texas Clean Air Act, the Water Code, and the Texas Constitution. The trial court granted summary judgment for BCCA, concluding that the Ordinance violated the Texas Constitution and was preempted by the Act, and enjoined the City from enforcing the Ordinance. The court of appeals reversed, concluding that the Ordinance was consistent with the Act and the Water Code and did not violate the nondelegation doctrine of the Texas Constitution by incorporating Texas Commission on Environmental Quality (TCEQ) rules in such a way as to include future amendments. The Supreme Court reversed in part and affirmed in part, holding (1) the Ordinance’s enforcement provisions and registration requirement are preempted and therefore unenforceable; but (2) the Ordinance’s incorporation of TCEQ rules does not violate the nondelegation doctrine of the Texas Constitution. View "BCCA Appeal Group, Inc. v. City of Houston" on Justia Law