On June 1, 2015 the Amarillo Court of Appeals issued an opinion [1] William Scisco, et al v. Enbridge Gathering (North Texas), LP, et al 2015 WL 3463490 (Tex. App.—Amarillo June 1, 2015, no. pet. h.) concerning whether a landowner may have a cause of action for nuisance or trespass against a company conducting regulated oil and gas operations in the vicinity. In reversing the trial court’s summary judgment in favor of the defendant-companies, the Amarillo court held that a cause of action for trespass is available when particles migrate from regulated operations onto neighboring property and that liability for nuisance will not be avoided by mere regulatory compliance.
The plaintiffs, including the City of DISH and several residents of the City (collectively, “DISH”) filed suit against several companies who owned or performed operations collateral to the “Ponder Compression Station.” The Ponder Compression Station began operations in February 2005 and the neighboring landowners began to complain about excessive noise and offensive odors emanating from the operations. However, DISH claimed that they did not learn the true alleged danger of the airborne particles until the release of an environmental report prepared in 2009. Shortly thereafter, the TCEQ and the Texas Department of State Health Services performed investigations into the air quality and the effects on the surrounding community, both finding that exposure levels were no higher in DISH than in the general population.
DISH filed suit seeking compensation for past injuries, primarily for the diminution in value of the respective properties. No pecuniary relief was sought for personal injuries or medical expenses, nor did DISH seek injunctive relief. The trial court granted summary judgment in favor of the Defendants, but the judgment was reversed in part on appeal.
The Amarillo court rejected the Defendants’ contention that migrating particles could never, as a matter of law, be the basis for a trespass claim. However, while the Amarillo court found that the migrating particles could constitute a trespass, the court made clear that the plaintiff must still prove the remaining elements of the claim. DISH’s nuisance claim was analyzed in conjunction with Defendants’ arguments that a nuisance claim was preempted by local, state, and federal regulations. However, the Amarillo court concluded that regulatory compliance will not insulate a party from liability because “[r]egulatory compliance or licensure is not a license to damage the property interest of others.” The court did find, however, that DISH’s demand for damages in an amount equal to $1,000 per day that operations continued, was more similar to a penalty than compensation for an injury. The court concluded that such a “penalty” would amount to a psuedo-regulatory scheme which is preempted.
The Amarillo court’s opinion can be found here.
Chris Halgren
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