On September 2, 2022, the Texas Supreme Court granted DGC client Petro Canyon Energy, LLC’s petition for review in a $54,500,000 dispute over the construction and application of a settlement-and-release provision in an acreage-swap agreement between oil-and-gas companies. The case will be argued to the Texas Supreme Court on November 30, 2022.

The primary issue is whether a comprehensive settlement-and-release provision—which states that each party releases the other, the other’s affiliates, and their “predecessors” from all liability related in any way to the conveyed oil-and-gas property—applied to a suit later brought against Petro Canyon’s predecessor in interest, title, rights, and liabilities. The trial court answered that question “yes.” But the Dallas Court of Appeals reversed, holding that releases of liability are “forfeitures” under Texas law and therefore their application must be rejected if there is any plausible way to construe them as not applying to a particular factual circumstance. The court of appeals ultimately held that the word “predecessor” in the release of liability must mean “corporate predecessor” only—even though Petro Canyon doesn’t have a formal corporate predecessor.

DGC shareholder Ryan Clinton was hired to prepare Petro Canyon’s appellate briefing at the Texas Supreme Court. The Court has granted Petro Canyon’s petition for review and set the case for oral argument in November.

Additional Resources:
Petro Canyon’s Brief on the Merits
Petro Canyon’s Reply Brief on the Merits
Dallas Court of Appeals Opinion

On March 11, 2022, the Texas Supreme Court sided with DGC client Energen Resources Corp. in a dispute over an accident during the drilling of a water well on an oil-and-gas lease. In the case, Energen Resources Corp. v. Wallace, No. 20-0451, a water well contractor and its employee sued oil-and-gas lessee Energen after suffering injuries in the accident. Appellate attorney Ryan Clinton wrote Energen’s briefing and presented oral argument at the Texas Supreme Court.

In the trial court, Energen moved to dismiss the plaintiff’s suit based on Chapter 95 of the Texas Civil Practice and Remedies Code. Chapter 95 limits liability for Texas commercial property owners sued for injuries arising from conditions or uses of improvements that the contractors were hired to construct or repair. The plaintiffs argued that Chapter 95 didn’t apply. Energen argued that Chapter 95 applied because, according to the plaintiffs’ own pleadings, the accident arose from a condition of the water well—the presence of natural gas. The Texas Supreme Court agreed with Energen and rendered judgment that the plaintiffs take nothing on their claims.

Additional Information:
Texas Supreme Court opinion
Energen Brief on the Merits
Energen Reply Brief on the Merits

On February 18, 2022, the Texas Supreme Court denied the petition for review filed in Posse Energy, Ltd. v. Parsley Energy, LP, No. 21-0754. The Court’s decision to deny the petition for review lets stand DGC client Parsley Energy’s court of appeals victory in a dispute of ownership of working-interest rights in Upton County, Texas.

In this highly complicated dispute over oil-and-gas rights, plaintiff Posse Energy asserted that it—rather than Parsley and co-defendant Pacer Energy—owned the deep-depth working interest at issue. The case involved interpretations of multiple mineral deeds and complex contracts. Ultimately, the El Paso Court of Appeals determined that Parsley and Pacer owned the disputed working interests.

Additional Information:
Court of Appeals opinion
Parsley Energy’s Appellee’s Brief
Pacer & Parsley’s Joint Response to Petition for Review

On December 14, 2018, the Texas Supreme Court declined to review a Davis, Gerald, & Cremer client victory in a dispute over the meaning of a covenant-to-release clause in an oil-and-gas lease. The Court’s decision leaves intact the El Paso Court of Appeals’s holding that Apache Deepwater, LLC did not lose previously developed acreage long after the expiration of the primary term. See Apache Deepwater, LLC v. Double Eagle Dev., LLC, 557 S.W.3d 650 (Tex. App.—El Paso 2017, pet. denied).

The key issue presented in the case was whether the disputed clause was triggered once—at the expiration of the primary term—or over and over again anytime production ceased on a well in the lease’s secondary term (a theory sometimes called “rolling termination”). DGC argued on behalf of Apache that the clause’s language, read in harmony with the lease’s habendum and drilling-operations clauses, could mean only one thing: the covenant-to-release clause was triggered just once.

The court of appeals agreed with Apache. And after requesting full briefing on the merits, the Texas Supreme Court denied Double Eagle’s petition for review.

RESOURCES:

Court of Appeals opinion
Apache Deepwater’s Brief on the Merits

On March 22, 2018, the highly respected and influential Texas Oil and Gas Association filed amicus briefs supporting Davis, Gerald & Cremer's clients in two high-profile Texas appeals currently pending before the Texas Supreme Court.

The two cases are Endeavor Energy Resources, L.P. v. Discovery Operating, Inc., No. 15-0155, and XOG Operating, LLC v. Chesapeake Exploration Ltd. Partnership, No. 15-0935.  Both cases involve a dispute over the number of acres retained by the lessee or transferee after the expiration of an oil-and-gas contract's primary term.  The contracts in each case define retained acreage differently, but the Petitioners in both cases have argued that the two contracts should be construed to lead to the same conclusion.

Respondents Discovery Operating and Chesapeake Exploration, both represented by Ryan Clinton of Davis, Gerald & Cremer, assert that the court of appeals's judgments in each case correctly determine the number of acres retained under the particular language of each contract. 

The Texas Oil and Gas Association agrees.  In a brief to the Court, TXOGA wrote:

TXOGA urges the Court to carefully consider the technical drafting associated with each of the retained acreage clauses involved in these two cases.  Retained acreage clauses that refer to Railroad Commission rules potentially are confusing, and the industry relies on careful interpretation of these clauses to avoid unnecessary risk in development areas that may be subject to retained acreage clauses.

TXOGA believes that the courts of appeal in each case correctly interpreted the retained acreage clause in each lease.  Although the courts reach different results for what may seem to be similar clauses, TXOGA notes that the wording in each clause is different.  Accordingly, TXOGA encourages the Court to affirm the decisions of the courts of appeals in these matters.

To reach TXOGA's amicus brief in full, click here.
 

On January 9, 2018, Ryan Clinton presented oral argument to the Texas Supreme Court in the case of XOG Operating, LLC v. Chesapeake Exploration Ltd. P’ship, Cause No. 15-0935.

The case involves a term assignment in which XOG assigned its leasehold rights to Chesapeake for a particular term.  After the initial term expired, the contract provided that Chesapeake had the right to retain all lands in a “proration unit,” which was defined in the contract as either 320 acres in size (for wells placed into fields not governed by special field rules) or the acreage “prescribed” by Railroad Commission field rules (for wells placed into fields governed by special field rules).  Five wells were drilled into a field prescribing 320-acre proration units, and one well was drilled into a field not governed by special field rules.

At oral argument, Ryan Clinton argued on behalf of Chesapeake Exploration, arguing that each of Chesapeake’s six wells retained 320 acres—-far more than enough to retain all of the acreage transferred to Chesapeake in the term assignment.  The parties now await a decision from the Texas Supreme Court.

Chesapeake’s Brief on the Merits
Ryan Clinton’s Oral Argument on Behalf of Chesapeake 

In Occidental Chemical Corporation v. Jenkins, a chemical-plant employee who was severely injured at work sued Occidental, which had owned the chemical plant many years prior to the accident but not at the time of the accident.  The plaintiff sued Occidental on the theory that even though Occidental was no longer the owner of the plant (and thus not liable on a premises-liability theory), Occidental remained forever liable for its "negligent design" of improvements at the chemical plant made during the time it owned the plant.  A panel of the First Court of Appeals in Houston agreed with the plaintiffs' theory, reversed the trial court's take-nothing judgment, and directed the trial court to enter judgment for the plaintiff. 

Occidental appealed to the Texas Supreme Court on two theories:  (1) that previous owners of real property in Texas do not remain forever liable for conditions on the premises; and (2) that the plaintiff's suit was barred by Texas's statute of repose.  The Texas Supreme Court granted Occidental's petition and, in a precedent-setting tort-law decision, held that a previous owner of real property is not liable for its "negligence" in creating conditions on property it no longer owns.   Occidental Chem. Corp. v. Jenkins, 478 S.W.3d 640 (Tex. 2016).

Occidental's Petition for Review
Texas Supreme Court Opinion

Please note: Ryan Clinton wrote the briefing on behalf of Occidental in the court of appeals and at the petition-for-review stage, but changed law firms (and did not thereafter participate in the case) after the petition-for-review stage.

 

In Tenaska Energy, Inc. v. Ponderosa Pine Energy, LLC, the trial court vacated a $125 million arbitration award in a dispute over the sale of a power plant.  After the court of appeals reinstated the arbitration award, Tenaska appealed to the Supreme Court of Texas.  Tenaska argued that the award should be vacated due to the evident partiality of the arbitrator, who failed to disclose the full scope of his contacts with opposing counsel and their law firm.  The Texas Supreme Court agreed, vacated the $125 million arbitration award, and remanded for a new arbitration.  Tenaska Energy, Inc. v. Ponderosa Pine Energy, LLC, 437 S.W.3d 518 (Tex. 2014).

Tenaska's Brief on the Merits
Supreme Court of Texas Opinion

In State v. Lueck, a governmental employee was terminated after a vendor charged the State hundreds of thousands of dollars for disputed work.  The employee then sued the State, claiming that an e-mail he previously wrote to his supervisor protected his conduct under the Texas Whistleblower Act.  The State, represented by Ryan Clinton, appealed to the Texas Supreme Court, arguing that the substantive elements of the Whistleblower Act limited the jurisdiction of Texas courts, and that the plaintiff’s claim fell outside the Act’s waiver of immunity from suit and liability.   After briefing and oral argument, the Texas Supreme Court agreed and dismissed the suit for lack of subject-matter jurisdiction.  State v. Lueck, 290 S.W.3d 876, 886 (Tex. 2009).

In addition to State v. Lueck, Ryan Clinton handled two more cases in the Texas Supreme Court on the same issue.  The Court also held for the state agency at issue in each of the two additional companion cases.  See Texas Dept. of Health & Human Services v. Okoli, 440 S.W.3d 611 (Tex. 2009); Texas Dept. of Transp. v. Garcia, 293 S.W.3d 195 (Tex. 2009).

State of Texas's Brief
Supreme Court of Texas Opinion (Lueck)

In In re Waller Independent School District, the school district petitioned the Texas Supreme Court to issue a writ of mandamus to force the Texas Attorney General to approve public securities even though the validity of those securities was contested in pending litigation.  The Supreme Court required the Attorney General to file a brief in response to the petition, which was filed 11 days later.  After receiving the Attorney General's response, the Supreme Court denied the school district's petition.  In re Waller Indep. Sch. Dist., No. 08-0079 in the Supreme Court of Texas.

Attorney General's Brief

In Texas Parks & Wildlife Department v. E.E. Lowrey Realty, Ltd., the Texas Supreme Court resolved a conflict among the courts of appeals over whether an employee of a governmental agency sued in his or her official capacity is entitled to interlocutory review of the denial of a plea to the jurisdiction.  The Court held that the employee is entitled to interlocutory review, and that under the facts of the case, the state governmental entity and its employees sued in their official capacity were protected by sovereign immunity from suit because the Texas Legislature has not waived sovereign immunity for suits for alleged property damage arising from a dangerous condition.

Texas Parks and Wildlife's Brief on the Merits
Texas Supreme Court Opinion

In In re the Honorable Errlinda Castillo, a sitting justice on Texas's Thirteenth Court of Appeals filed a petition for writ of mandamus against the Thirteenth Court of Appeals as a whole and its other sitting justices.  Justice Castillo brought the petition after the court enacted a transition plan that limited Justice Castillo's assignment of additional opinions after Justice Castillo lost a bid for reelection to the court.  After the Thirteenth Court amended its transition plan in response to Justice Castillo's petition, the remaining justices argued that her petition was without merit because appellate justices may have a constitutional right to participate in appellate proceedings but they have no entitlement to initial authorship of majority opinions.  The Texas Supreme Court agreed, denying Justice Castillo's petition for writ of mandamus.

The Thirteenth Court's Brief
The Texas Supreme Court Opinion

In In re Commitment of Fisher, the Texas Supreme Court was asked to determine the constitutionality of the Texas Civil Commitment of Sexually Violent Predators Act.  The Act permits the State of Texas to commit a sexual predator to outpatient treatment and supervision upon release from a prison or state hospital.  The court of appeals had struck the Act as violating the United States Constitution.  Ryan Clinton's petition for review earned the rare distinction of leading the Texas Supreme Court to grant the petition before requesting or receiving full briefing on the merits.  Ultimately, the Texas Supreme Court reversed the court of appeals's judgment and fully upheld the constitutionality of the statute.  In re Commitment of Fisher, 164 S.W.3d 637 (Tex. 2005).

State of Texas's Brief
Texas Supreme Court Opinion