AUSTIN, Texas (Legal Newsline) – The Texas Supreme Court ruled Feb. 24 that ExxonMobil does not have to pay to clean up soil contamination at two inactive oil drilling sites at the Lazy R Ranch in west Texas. The court did ask a trial court to revisit the case for two oil sites still in operation at the same property.
For nearly six decades, ExxonMobil conduced oil and grass drilling and production operations at the ranch, which spans nearly 20,000 acres, near Monahans, Texas. In 2009, the ranch hired an environmental engineer, Jerry Nickell, who found that soil contamination from the company rigs on the property exceeded the levels set by state law and threatened to poison the groundwater.
The ranch sued to have ExxonMobil pay to clean up the sites. It estimated that damages for remediation would cost $6.3 million.
Later, a court found that some evidence existed showing that any loss in value to the ranch’s property due to the alleged contamination was minimal. The ranch then changed its pleadings to drop its claim for damages and seek only injunctive relief. This move ordered ExxonMobil to immediately fix or stop the conditions causing contamination at any cost.
ExxonMobil went on to argue that Helen McDaniel, one of the owners of Lazy R Ranch, knew about the several oil spills around the property in question before 2005. Later, when the company would take general responsibility of the issue, it would argue that McDaniel had the power to reach out at any moment to stop the contamination.
ExxonMobil and Lazy R Ranch argued over injection details, with the court eventually deciding that, to obtain summary judgment on limitations, ExxonMobil would have to establish that the ranch’s claims for contamination happened outside of the limitations period.
The ranch argued that its injunctive relief claim would work to fix the contamination “nuisance” that is not subject to limitations. The ranch argued that regardless of when its contamination claims accrued, its claims for groundwater contamination cannot be ceased by limitations because it had not yet happened.
ExxonMobil did not argue against contamination evidence, as Nickell’s report clearly established proof, the court said. The ranch pushed to contend that limitations should be tolled by the company’s attempt to conceal the contamination. However, the court did not find any evidence of such misconduct or fraudulence on ExxonMobil’s part.
The ranch later dropped its claim for remediation costs as money damages; now it only sought a mandatory injunction ordering the company to fix the problem.
Overall, the state Supreme Court held that some claims, but not all, are barred by limitations, and refused to consider the option of injunctive relief to remedy contamination because the issue was not properly raised in the trial court. The court partly affirmed and partly reversed the judgment of the court of appeals.