Texas Supreme Court Reverses Two Court of Appeals Decisions Involving Environmental Issues


On February 24, the Texas Supreme Court released several decisions, including two rulings involving aspects of environmental law. The cases are ExxonMobil Corporation v. Lazy R Ranch, et al., and ExxonMobil Pipeline Company, et al., v. Coleman.

In the first case, he Court reversed, in part, and affirmed, in part, the decision of the Court of Appeals for the Eighth Judicial District (sitting in El Paso) that had itself reversed the trial court’s decision to grant ExxonMobil’s motion for summary judgment in an oil and gas soil and groundwater contamination case. The lawsuit was filed against ExxonMobil Corporation by the owners of the Lazy R Ranch, which encompasses nearly 20,000 acres in West Texas. For nearly 60 years, ExxonMobil conducted oil and gas drilling and production operations on the Lazy R Ranch and, after it sold its operations in 2008, an environmental manager engaged by the ranch reported that ExxonMobil left behind four areas on the ranch (totaling 1.2 acres) where hydrocarbon contamination exceeded limits established by state law.

A lawsuit was filed in October 2009 seeking $6.3 million in damages as the cost of remediation of the land. However, under Texas nuisance law those claims could not be sustained, and the lawsuit was amended to seek injunctive relief to abate or remediate the contamination, whatever the cost. Exxon moved for summary judgment on a number of grounds, including an argument that the claims were barred by a two-year statute of limitation. The motion was granted by the trial court which did not specify it reasons for doing so. The Court of Appeals reversed and remanded, holding, in part, that ExxonMobil’s motion premised on the statute of limitations could not be granted as a matter of law until a number of factual issues were decided.

Carefully scrutinizing the evidence provided to the trial court, the Texas Supreme Court agreed that two of the four sites were subject to the statute of limitations. The Court also rejected the plaintiff’s argument that the “discovery rule,” which plays a large role in the operation of the statute, should not apply to delay the commencement of the limitations period because the conditions on the ground were objectively verifiable. With respect the other sites, the Court decided that the issue of injunctive relief was not properly before the trial court, and the remaining issues must be remanded to the trail court for disposition.

In the second case, the Court reversed the decision of the Court of Appeals for the Fifth Judicial District (sitting in Dallas) involving an employment dispute. Plaintiff Coleman was terminated following an internal investigation into his performance of his duties. An internal email exchange between other pipeline employees surfaced, indicating that Coleman failed to gauge a storage tank that was used to contain noxious and flammable fluids, release of which could result in adverse safety and environmental consequences. Coleman sued for defamation, and the defendants, including ExxonMobil Pipeline Company, invoked the Texas Citizens Participation Act (TCPA) to dismiss the lawsuit.

The trial court denied the motion to dismiss, and this decision was affirmed by the Court of Appeals. The trial court and Court of Appeals were of the opinion that the TCPA does not apply to both public and private communications, but the Texas Supreme Court held that the law can apply to both forms of communication. In addition, it found that, since the concern of ExxonMobil Pipeline Company and its employees involved environmental and safety issues, theses clearly were matters of public concern which also motivate the application of the TCPA. Under the TCPA, once the defendant in such a lawsuit raises the issue of the applicability of the TCPA, then the burden shifts to the plaintiff. The case was remanded to the Court of Appeals to sort these issues out.