Shell Oil Co. v. Ross
356 S.W.3d 924
| Tex. | 2011Background
- Shell underpaid royalties under the Reuss Lease, using an arbitrary price for Lease Wells and a weighted-average for Unit Wells.
- Public pooling/unitization split royalty with the State; Rosses received one-sixteenth royalty while Shell paid others differently.
- Ross family administrator Ralph Ross and son Ralph Lee Ross litigated in 2002 for breach, unjust enrichment, and fraud based on alleged concealment.
- Jury found Shell fraudulently concealed underpayments; dates of discoverability: 2002 for Lease Wells, 2006 for Unit Wells.
- Court of Appeals affirmed; Supreme Court reverses, renders for Shell, holding limitations barred.
- Readily accessible public information (El Paso Permian Basin Index and GLO records) would have disclosed underpayments; discovery rule does not save claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does fraudulent concealment toll apply? | Rosses claim concealment tolled limitations. | Shell contends concealment tolling does not apply when information was public and discoverable. | Fraudulent concealment tolling does not apply. |
| Does the discovery rule extend limitations here? | Discovery rule delays accrual due to inherently undiscoverable injury. | Injury is not inherently undiscoverable; due diligence could have discovered underpayments. | Discovery rule does not extend limitations; claims barred. |
Key Cases Cited
- BP Am. Prod. Co. v. Marshall, 342 S.W.3d 59 (Tex. 2011) (fraudulent concealment tolls only to discovery or reasonable diligence thereof)
- Shah v. Moss, 67 S.W.3d 836 (Tex. 2001) (fraudulent concealment tolling considerations)
- Kerlin v. Sauceda, 263 S.W.3d 920 (Tex. 2008) (public record inquiry can reveal royalty claims)
- Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194 (Tex. 2011) (royalty discovery and due diligence considerations)
- Wagner & Brown, Ltd. v. Harwood, 58 S.W.3d 732 (Tex. 2001) (diligence required when fees or royalties could reveal harm)
- S.V. v. R.V., 933 S.W.2d 1 (Tex. 1996) (injury inherently undiscoverable requires discovery rule)
- Via Net v. TIG Ins. Co., 211 S.W.3d 310 (Tex. 2006) (categorical assessment of intrinsic discoverability for discovery rule)
- Computer Assocs. Int’l, Inc. v. Altai, Inc., 918 S.W.2d 455 (Tex. 1994) (two doctrines to extend limitations)