Texas Oil and Gas Attorney Blog
In a case that could have a substantial impact on the rights of Texas mineral right and landowners, the Supreme Court of Texas recently heard the oral arguments in the case of Atmos Energy Corporation et al v. Town of DISH, et al. The case involves the residents of DISH, Texas– named after the cable television provider–who are seeking are damages for nuisance and injuries. The town claims that the oil pipeline company’s operation of gathering and compression facilities near the town has resulted in adverse health effects to its residents. This case is of particular importance because it calls into question whether a company operating legally and within government regulation can still be liable for damages for trespass and nuisance .
Background
The dispute between the Town of DISH and various pipeline companies began in 2005 when pipeline companies began constructing a compressor outside the town. Initially, the residents of DISH complained of odors and excessive noise, and in 2008 the town issuedfiled a complaint with the Texas Commission On Environmental Quality (TCEQ). However, after investigations in 2009 and 2010, the TCEQ concluded that the facilities would not cause the effects the residents of DISH complained about.
Next, the residents began to complain of potential health risks associated with pipeline operations in such close proximity. Therefore, the Texas Department of State Health Services tested the town’s tap water and performed medical examinations on 28 residents of DISH and did not find any exposure to harmful chemicals. However, the residents of DISH contracted experts at Wolf Eagle Environmental to perform similar tests. Following their investigation, Wolf Eagle concluded that the residents of DISH had been exposed to emissions of ethylbenzene, xylene, benzene, and toluene.
The residents of DISH then sued Atmos seeking damages for trespassing and nuisance. Additionally, the Town of Dish filed suit for damages resulting from loss in property value due to the facilities. Initially, the residents’ claims were dismissed by the trial court; however, the Texas Court of Appeals in Amarillo ruled in favor of the residents and held that they were entitled to a trial.
The Arguments
The Defendants argued against the allegations of nuisance by claiming that it is impossible to be liable for a nuisance if nothing was deposited on the Plaintiff’s properties. However, the Court of Appeals disagreed, noting that airborne chemical particles can be considered actionable trespass. They also claimed that their activities were conducted within the scope of government regulations; therefore, their actions could not constitute a nuisance or trespass. They argued that if the court imposed liability for actions committed lawfully, then they would essentially be allowing judicial regulation of activities that were sanctioned by regulation and statute. Finally, the pipelines argued that the Plaintiff’s claims were barred by the two-year statute of limitations because the residents failed to file suit within two years of being aware of their claims.
The Court of Appeals determined that the fact that the residents of DISH were not looking to prohibit the pipeline’s conduct or alter emission regulations, but were only seeking damages caused by the conduct, and so any decision by a court did not constitute judicial regulation. Ultimately, the Court of Appeals ruled that the Defendants had failed to carry their burden of showing that the claims were barred by the statute of limitations. After trial, juries awarded damages on the claims that the pipeline operation constituted a nuisance, and the case has been appealed to the Supreme Court of Texas. Oral argument was set for March 1, 2017.
As most of you know, a lot of natural gas is produced in Texas. Compressors and other surface facilities ancillary to these gas wells are found throughout Texas. Whatever the Texas Supreme Court decides, the effects of their decision will have repercussions throughout the state.