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State Supreme Court Rules Against Texas Town Over Barnett Midstream Emissions

The Supreme Court of Texas has reversed a court of appeals' judgment, finding that the town of DISH, TX, and its residents waited too long to file their lawsuit against several midstream energy companies, and reinstated a trial court's previous take-nothing judgment.

DISH and 18 of its residents filed their lawsuits in 2011, claiming that noise and pollution from nearby natural gas compression and related facilities had eroded property values and hindered economic development in the town of about 200 residents, which is named after a satellite television service provider.

Defendants in the cases included Atmos Energy Corp., Enbridge Gathering (North Texas) LP, Energy Transfer Fuel LP, Enterprise Texas Pipeline LLC and Texas Midstream Gas Services LLC [Town of DISH et al v. Atmos Energy Corp. et al, No. 15-0613].

The energy companies own four natural gas compressor stations and a metering station just outside of DISH. Residents began complaining about the noise and odor emanating from the facilities as early as 2006, but they did not sue until 2011, according to the court's opinion, which was filed May 19.

The plaintiffs alleged trespass and nuisance injuries. The DISH complaint asserted that the town was losing revenue of at least $15,000 per year because of erosion to property values and the tax base. The eight families alleged that they had each had suffered a loss of market value of land of at least $75,000 per household.

"We hold that the two-year statute of limitations bars their claims," Justice Jeffrey V. Brown wrote in the court's decision.

Plaintiffs will recover no monetary or injunctive relief through the take-nothing judgment.

The trial court had granted a series of summary-judgment motions brought by the energy companies on various grounds, including limitations. The court of appeals reversed the trial court on limitations, holding that the energy companies had failed to prove as a matter of law that the residents' claims accrued before Feb. 28, 2009, which would have met the two-year statute of limitations, and finding that the companies "failed to address the synergistic effect their individual activities might have had on the overall condition being addressed by [the residents'] claims."

In a separate case also decided this month, the Supreme Court of Texas affirmed a district court decision, which had been affirmed by an appeals court, dismissing Lightning Oil Co.'s assertion that Anadarko E&P Onshore LLC could not drill through a mineral estate it did not own to reach minerals on adjacent land without permission from the leaseholder [Lightning Oil Company v. Anadarko E&P Onshore LLC, No 15-0910].

Anadarko wellbores would start vertically, then "kick-off" horizontally, passing through portions of Lightning’s mineral-bearing formations on their way to third-party owned acreage in Dimmit and LaSalle counties. Briscoe Ranch Inc. owned the land in question; Lightning was lessee of the underlying minerals.

The appeals court concluded that "the surface estate owner controls the earth beneath the surface estate" and "absent the grant of a right to control the subterranean structures in which the oil and gas molecules are held," the mineral estate owner does not control the subsurface mass and is only entitled to "a fair chance to recover the oil and gas" from its mineral estate. The state’s high court affirmed that conclusion.

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