Articles Posted in Environmental Law

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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

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McGinnes Industrial Waste Corporation dumped pulp and paper mill waste sludge into disposal pits near the San Jacinto River in Pasadena, Texas (the site). After environmental contamination was discovered at the site, the Environmental Protection Agency (EPA) instituted superfund cleanup proceedings under the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). During the period that McGinnes was dumping waste at the Site, it was covered by standard-form commercial general liability (CGL) insurance policies issued by Phoenix Insurance Company and Travelers Indemnity Company (together, the Insurers). McGinnes requested a defense in the EPA proceedings from the Insurers. The Insurers refused, determining that the proceedings were not a “suit” under the policy. McGinnes sued the insurers in federal court seeking a declaration that the policies obligated them to defend the EPA’s CERCLA proceedings. The district court granted the Insurers’ motion for partial summary judgment on the duty-to-defend issue. The U.S. Court of Appeals for the Fifth Circuit certified a question regarding the issue to the Texas Supreme Court. The Supreme Court answered that “suit” in the CGL policies at issue must also include CERCLA enforcement proceedings by the EPA. View "McGinnes Indus. Maint. Corp. v. Phoenix Ins. Co." on Justia Law

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Steven Lipsky, concerned that an oil and gas operator close to his property (“Range”), had some responsibility for contaminating his ground water, complained about the gas in his well to the Environmental Protection Agency (EPA), the Texas Railroad Commission, and the media. Alisa Rich, an environmental consultant, confirmed the presence of gases in the well. The Railroad Commission concluded that Range’s operations were not the source of the contamination. Lipsky and his wife, Shyla, sued Range, alleging negligence. Range counterclaimed against the Lipskys and filed a third-party claim against Rich, alleging defamation, among other claims. The trial court dismissed the Lipskys’ claims as an improper collateral attack on the Commission’s determination and declined to dismiss Range’s claims against the Lipskys and Rich. The court of appeals granted mandamus relief in part, concluding that the Texas Citizens Participation Act (TCPA) required the dismissal of Range’s claims against Shyla and Rich but did not require dismissal of Range’s claims against Lipsky. Both Range and Lipsky sought mandamus relief in the Supreme Court. The Court denied relief, holding (1) the trial court properly considered circumstantial evidence when considering Lipskys’ motion to dismiss under the TCPA; and (2) the court of appeals did not err in its disposition of the proceedings below. View "In re Lipsky" on Justia Law

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A landowner sued its neighbor, the operator of an adjacent wastewater disposal facility, alleging that wastewater had migrated into the deep subsurface of its land, possibility contaminating the groundwater beneath it. The jury returned a verdict in favor of the wastewater disposal facility. After a series of appeals, the court of appeals reversed the jury’s verdict. The Supreme Court reversed the judgment of the court of appeals and reinstated the trial court’s judgment that the wastewater disposal facility take nothing, holding (1) the jury instruction properly included lack of consent as an element of a trespass cause of action that a plaintiff must prove; (2) the trial court properly denied the landowner’s motion for directed verdict on the issue of consent; and (3) there is no need to address the remaining question of whether deep subsurface wastewater migration is actionable as a common law trespass in Texas. View "Envtl. Processing Sys., LC v. FPL Farming Ltd." on Justia Law

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The question presented to the Supreme Court in this case was whether Texas recognizes a legal right to stigma damages, which represent damage to the reputation of realty. Plaintiff, a ranch owner, sued Defendant, the owner of a metal processing facility, for nuisance, trespass and damages after the Commission found that Defendant had committed an unauthorized discharge of industrial hazardous waste that had affected Plaintiff’s property. As to damages, Plaintiff sought only a loss of the fair market value of the ranch and relied on an expert witness who testified that, in her opinion, the ranch had suffered a loss of market value due to stigma resulting from fear, risk, and negative public perceptions. A jury found that Defendant was negligent and that negligence caused the property to lose $349,312 of its market value. The trial court entered judgment on the verdict, and the court of appeals affirmed. The Supreme Court reversed, holding that even if Texas law permits recovery of stigma damages, Plaintiff’s evidence was legally insufficient to prove them. View "Houston Unlimited, Inc. Metal Processing v. Mel Acres Ranch" on Justia Law

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A mineral lessee operated two wells on two contiguous tracts of land. When one of the wells stopped producing, the lessee pooled parts of the two mineral leases. Landowners subsequently bought a tract of land that included the road the lessee used to access the producing well. The road was across the surface of the lease without production. After traffic on the road increased, the landowners filed suit against the lessee, claiming that the lessee had no legal right to use the surface of their tract of land to produce minerals from the operating well. The trial court determined that the lessee did not have the right to use the road to access the producing lease and granted declaratory and injunctive relief. The Supreme Court reversed, holding (1) once pooling occurred, the pooled parts of the two contiguous tracts no longer maintained separate identities insofar as where production from the pooled interests was located; and (2) therefore, the lessee had the right to use the road to access the pooled part of the tract of land containing the producing well. View "Key Operating & Equip., Inc. v. Hegar" on Justia Law

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This proceeding arose from an application to amend an existing water-quality permit filed by the owner and operator of a dairy farm located in the North Bosque River watershed. The City of Waco and Bosque River Coalition opposed the proposed permit. After the executive director of the Texas Commission on Environmental Quality determined that the application and draft permit met the requirements of applicable law, the Coalition asked to intervene as a party in a contested case hearing. The Commission denied the request, finding that the Commission lacked standing, and issued the permit. The district court affirmed, but the court of appeals reversed, finding that the Coalition was an "affected person" as defined by the Texas Water Code and thus was entitled to a contested case hearing. The Supreme Court reversed, holding that, pursuant to Texas Commission on Environmental Quality v. City of Waco, the companion to this case, the Coalition's status as an affected person was not determinative of the right to a contested case hearing because the Water Code expressly exempted the proposed amendment from contested case procedures. View "Tex. Comm'n on Envtl. Quality v. Bosque River Coalition" on Justia Law

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The Texas Commission on Environmental Quality (Commission) granted an amendment to a dairy concentrated animal feeding operation's water-quality permit. A downstream city (City) sought to intervene in the permit process and obtain a contested case hearing, claiming that the dairy's operations under the amended permit would adversely affect the quality of the municipal water supply. By rule, an affected person may request a contested case hearing when authorized by law. The Commission granted the amended permit without a contested case hearing. The City appealed, claiming it was an "affected person" entitled to a contested case hearing. The district court affirmed, but the court of appeals reversed, concluding that the City was an affected person entitled to a hearing. The Supreme Court reversed and rendered judgment for the Commission, holding (1) a person affected by a proposed water-quality permit has the right to request a hearing, but the Commission has discretion to deny the request under certain circumstances; and (2) sufficient evidence supported the Commission's determination that the proposed amended permit did not foreclose Commission discretion to consider the amended application at a regular meeting rather than after a contested case hearing. View "Tex. Comm'n on Envtl. Quality v. City of Waco" on Justia Law