This article is the second in a series of five posts.
Hydraulic fracturing activities continue to rise, and are at the center of much debate and litigation focusing on the potential health risks associated with the process. But an emerging issue with fracturing activities, and one that only the Texas courts has addressed with any significance, is whether hydraulic fracturing activities can, or should, lead to actionable subsurface trespass claims.
The Texas Supreme Court has decided a handful of cases dealing with subsurface trespass claims over the years, but only one of those cases, Coastal Oil v. Garza, 268 S.W.3d 1 (Tex. 2006), presents subsurface trespass as it relates specifically to hydraulic fracturing.
However, the Texas Supreme Court’s opinions in the other subsurface trespass cases provide valuable insight to the competing interests involved in the issue, and help to inform the Garza decision.
In 2006, the Texas Supreme Court decided Garza, in which the plaintiff leased the mineral rights in his land to Coastal Oil and Gas Corp. (Coastal).
Coastal owned the mineral estate in an adjacent tract, and engaged in hydraulic fracturing on both tracts. The plaintiff filed a suit in trespass, claiming that Coastal’s fracturing activities invaded the reservoir below his tract and caused substantial drainage of gas.
However, the Texas Supreme Court avoided directly ruling on the issue of whether hydraulic fracturing activities could result in an actionable subsurface trespass claim.
Instead, the Court declined to decide that “broader issue” and stated that an actionable trespass claim requires an injury, and that the plaintiff’s only injury—the drainage of gas from his subsurface—was precluded by the rule of capture.
According to the Court, the rule of capture only gave the plaintiff the right to capture the gas beneath his tract, as opposed to ownership of the gas itself. With no actual damages, there could be no trespass.
The concurring Garza opinion, authored by Justice Willett, went a step further, arguing that instead of it being no “actionable trespass” as the majority found, it was no trespass at all, and plaintiffs could instead bring such suits in negligence.
Willett “would end definitively any lingering flirtation of Texas law with equating hydraulic fracturing with trespass,” and “say categorically that a claim for ‘trespass-by-frac’ is nonexistent in either drainage or nondrainage cases.” Garza, 268 S.W.3d at 29.
Throughout his opinion, Willett cited the importance of oil and gas to economy and industry of Texas.
The Garza dissent took the position that, until the issue of whether the hydraulic fracturing activities amounted to a subsurface trespass was decided, Coastal’s fracturing into the plaintiff’s tract must be considered an illegal trespass. And, as Coastal conceded, the rule of capture only applies to gas obtained legally; thus, the rule of capture should not preclude the plaintiff’s trespass claim.
This article will be continued Monday.
Prepared by Fulbright Fracking Blog Contributing Editor and energy partner Barclay Nicholson and Fulbright energy attorney Brian Albrecht.