Energy Law

Texas Supreme Court decides Garza case

The Texas Supreme Court this morning issued its long-awaited decision in Coastal Oil & Gas Corp. v. Garza Energy Trust, holding that the rule of capture bars recovery for damages for subsurface trespass caused by hydraulic fracturing. A concurring opinion and an opinion concurring in part and dissenting in part were also filed. Copies of the opinions are available at: http://www.supreme.courts.state.tx.us/historical/082908.asp

 The Court also held

 1. Mineral lessors with a reversionary interest have standing to bring an action for subsurface trespass causing actual injury;

2. The measure of damages for breach of the implied covenant to protect against drainage is the value of the mineral lost because of the lessee’s failure to act with reasonable prudence, and there was no evidence of such in this case;

3. Some evidence supported the jury’s finding of breach of the implied covenant to develop;

4. Some evidence supported the jury’s finding of bad faith pooling;

5. Admission into evidence of a memorandum containing a racial slur was reversible error; and

6. The trial court did not abuse its discretion in refusing to abate this case for two related cases.

 Liskow attorney Everard A. Marseglia, Jr., submitted a brief as amicus curiae on behalf of the Texas Oil & Gas Association. A copy of the TxOGA brief is available at this link.
 

Full post as published by The Energy Law Blog on August 30, 2008 (boomark / email).