Gas Well Operator’s Injunction Against Texas Town is Dissolved

Originally published by Charles Sartain.

In Town of Flower Mound v. Eagle Ridge Operating LLC, an operator’s injunction against enforcement of a local ordinance was dissolved. EagleRidge operates gas wells in the Flower Mound. A Town ordinance prohibits work on gas wells (other than drilling) at times other than between 7 a.m. and 7 a.m. Monday through Friday and certain times on Saturday.

 

EagleRidge tried to avoid enforcement of the ordinance by:

• requesting a variance,

• appealing the Town staff’s determination that the ordinance applied to collection of produced water, 

• appealing the Town staff’s determination that Texas Transportation Code Chapter 621 did not prevent the Town from restricting wastewater hauling, and

• Seeking a determination from the Town that the ordinance was preempted by Natural Resources Code §81.0523 (think Denton fracking ban).

 All of the requests were denied by the Town and its agencies.  EagleRidge sued and the trial court enjoined the Town from enforcing ordinances that have the intent or effect of restricting hours in which EagleRidge and its contractors could haul produced water.

Upon further review … 

The court of appeals dissolved the inunction, holding the trial court had no subject matter jurisdiction over the dispute because the ordinance is penal in nature. (A violation is considered “unlawful” and is punishable by fine.)

 The wrong the ordinance protects against involves the violation of public rights and duties that affect the whole community, considered as a community (rather than infringements of private civil rights belonging to individuals, considered as individuals). In support, the court cited the stated premise of the ordinance: “ … natural gas drilling and production operations involve or otherwise impact the town’s environment, infrastructure[,] and related public health, welfare[,] and safety matters[.]”

  

The reversal was also for reasons that trial lawyers are used to seeing:

• Allegations of injury to an interest in real property must have proof. Evidence of increased disposal costs because of enforcement did not show irreparable harm to EagleRidge’s mineral interests and therefore there was no irreparable harm to Eagle’s vested property right in its minerals.

• The claimed injury was speculative. The possibility of “hefty” fines was not supported by evidence that the imposition of the fines would be so great so as to destroy the business before it could test the ordinance’s constitutionality in a criminal proceeding.

• The future economic loss from a potential shutdown of the wells because of the ordinance was speculative, as was the evidence supporting when the well would become uneconomic because of increased hauling costs. The assertions were not supported by facts.

• Eagle Ridge’s contention that restriction of water hauling to night hours would drive removal costs so high as to make the well economically unable to continue production was in essence a claim for regulatory taking. But there was no evidence of the value of the mineral interests in place or any loss of value.

• There was no evidence that the losses associated with interruption of its business could not be measured by a certain pecuniary standard.

• Under the Civil Practice and Remedies Code, where real property is involved a party is not required to prove an inadequate remedy at law as a precondition to an injunction. However the Supreme Court has interpreted that provision to require both irreparable injury and an inadequate legal remedy. There was no irreparable harm.

• EagleRidge’s several arguments relating to Local Government Code Section 211.006 were denied. The statute does not address injunctive relief.

Your musical interlude

Swamp pop with a twang and an angelic voice. Because it just sort of trails off, here is the original to compare.

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