Exxon Corp. v. Emerald Oil & Gas Co., LC
331 S.W.3d 419
| Tex. | 2010Background
- Emerald sued Exxon for damages to mineral interests in the O'Connor Field, alleging improper plugging, sabotage, and waste; royalty owners intervened with similar claims.
- Exxon had previously abandoned the field by 1991 after failed royalty renegotiations, creating a dispute over liability for pre-existing damages.
- Section 85.321 of the Texas Natural Resources Code provides a private damages action for owners of property interests damaged by violations of conservation laws or Railroad Commission rules.
- Court held the statute creates a private cause of action but does not extend to subsequent lessees; standing depends on ownership at time of injury.
- Emerald, a subsequent lessee, owned no interest when alleged damages occurred, so it lacked standing under §85.321; the case was reversed, Emerald take nothing.
- This decision aligns with common-law accrual of real-property injuries to the owner at the time of the injury and rejects extending liability to later holders.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §85.321 create a private action for damages? | Emerald contends §85.321 authorizes damages against violators. | Exxon argues no private action extends to this context. | Yes, §85.321 creates a private action. |
| Can Emerald sue as a subsequent lessee under §85.321? | Emerald argues the statute covers subsequent holders. | Exxon contends standing requires ownership at time of injury. | No; standing limited to owners at time of injury; subsequent lessees cannot sue. |
| Does negligence per se claim fail for lack of standing? | Emerald's negligent-per-se claim relies on §85.321 standing. | Exxon argues no standing to bring such claims as a subsequent lessee. | Yes, it fails for lack of standing. |
Key Cases Cited
- HECI Exploration Co. v. Neel, 982 S.W.2d 881 (Tex. 1998) (private action allowed under §85.321 context; no implied covenant required)
- Magnolia Petroleum Co. v. Blankenship, 85 F.2d 553 (5th Cir. 1936) (初 understanding of private action and proration context; Magnolia did not foreclose private actions under §85.321)
- Turnbow v. Lamb, 95 F.2d 29 (5th Cir.1938) (private action for damages under predecessor statute recognized by Fifth Circuit)
- Sun Oil Co. v. Martin, 330 F.2d 5 (5th Cir.1964) (private action for damages under predecessor statute)