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State Bar Litigation Section Report STATESTATE BARBAR LITIGATIONLITIGATION SECTIONSECTION REPORTREPORT HE HE T T AADDVVOOCCATEATE OOILIL && GGASAS LLITITIIGGATIATIOONN ✯ VOLUME 85 WINTER 2018 STATE BAR LITIGATION SECTION REPORT THE ADVOCATE COUNCIL MEMBERS JASON P. FULTON MATTHEW HOFFMAN TERMS EXPIRE IN 2019 Diamond McCarthy, LLP Vinson & Elkins MITCHELL C. CHANEY 2711 N. Haskell Avenue, Suite 3100 1001 Fannin Street, Suite 2500 Brownsville, TX Dallas, TX 75204 Houston, TX 77002 JASON P. FULTON ALLYSON N. HO BRIAN P. LAUTEN Dallas, TX EDITORS Morgan, Lewis & Bockius LLP Brian Lauten, P.C. 1000 Louisiana Street, Suite 4200 3811 Turtle Creek Blvd., Suite 1450 GEOFF GANNAWAY EDITOR IN CHIEF Houston, TX 77002 Dallas, Texas 75219 Houston, TX PROFESSOR LONNY HOFFMAN University of Houston Law Center LISA HobbS KRISTINA MEYER Amy Leila (Saberian) Prueger 100 Law Center Kuhn Hobbs PLLC Vinson & Elkins LLP Austin, TX Houston, TX 77204-6060 101 West 6th Street, Suite 812 1001 Fannin Street, Suite 2500 [email protected] Austin, TX 78701 Houston, TX 77002 REBEccA VELA Edinburg, TX EDITOR EMERITUS RogER WADE HugHES ALEX RobERTS J. PATRICK HAZEL* Adams & Graham, LLP Beck Redden LLP University of Texas School of Law 222 E. Van Buren, West Tower 1221 McKinney St., Suite 4500 TERMS EXPIRE IN 2020 *Deceased Harlingen, TX 78550 Houston, TX 77010 ELIZABETH C. BRANDON Dallas, TX GRAPHIC DESIGNER THomAS KURTH KRISTEN VANDER-PLAS JANIE ALDERMAN Thomas Kurth Arbitration, P.L.L.C. Brad J. Davidson Law Firm, PC Quentin Brogdon [email protected] 8150 North Central Expressway 12405 Quaker Avenue, Suite B Dallas, TX 10th Floor Lubbock, TX 79424 Dallas, TX 75206 EDITORIAL BOARD HON. RobIN MALONE DARR Midland, TX JESSICA L. MANGRum 2017-2018 LITIGATION SOFIA ADRoguÉ, PC Thompson, Coe, Cousins & Irons, LLP SECTION OFFICERS ALISSA RubIN GomEZ Diamond McCarthy LLP 701 Brazos St. Houston, TX 909 Fannin Street, 37th Floor Austin, TX 78701 JAMES “WES” CHRISTIAN, CHAIR Two Houston Center Christian Smith & Jewell LLP REBEccA SImmoNS Houston, Texas 77010 2302 Fannin St, Suite 500 SHAWN RAYmoND San Antonio, TX Susman Godfrey LLP Houston, TX 77002-9136 JENNIFER PARKER AINSwoRTH 1000 Louisiana, Suite 5100 JENNIFER HALTom DOAN, CHAIR-ELECT Wilson, Robertson & Cornelius, PC Houston, TX 77002-5096 TERMS EXPIRE IN 2021 909 ESE Loop 323, Suite 400 Haltom & Doan RAYmoND L. THomAS JR. Tyler, TX 75701 REBEKAH PERRY RICKETTS 6500 Summerhill Rd, Suite 100 MCALLEN, TX Gibson, Dunn & Crutcher, LLP Texarkana, TX 75503 W. STEPHEN BENESH 2100 McKinney Avenue Christine Stetson Bracewell, LLP HON. XAVIER RODRIguEZ, VICE-CHAIR Dallas, TX 75201 Beaumont, TX 111 Congress Avenue, Suite 2300 United States District Court Austin, TX 78701-4061 HON. KAREN GREN SCHOLER Western District of Texas 655 East Cesar Chavez Blvd. Slater Elza United States District Court Amarillo, TX JOHN K. BRouSSARD, JR. Northern District of Texas San Antonio, TX 78206 LyondellBasell 1100 Commerce St Ste 1654 Sofia Ramon LyondellBasell Tower CADE W. BRowNING, TREASURER Dallas, TX 75242-1090 McAllen, TX 1221 McKinney Street Browning Law Firm Houston, TX 77010 KEN SLAVIN P.O. Box 1600 Abilene, TX 79604-1600 Morgan Gaskin Thomas Kemp Smith LLP Houston, TX HON. JEFF BRowN 221 N. Kansas, Suite 1700 Supreme Court of Texas El Paso, TX 79901 JUDSON PAUL MANNING, SECRETARY 201 W. 14th Street, Room 104 Field, Manning, Stone, Hawthorne LIAISONS/ADVISORS Austin, TX 78701 MICHELLE STRATTON & Aycock, PC CHRISTY AmuNY Smyser Kaplan & Veselka, LLP 2112 Indiana Avenue Board Advisor CRAIG D. CHERRY 700 Louisiana, Suite 2300 Lubbock, TX 79410 Cleburne, TX Haley & Olson, PC Houston, TX 77002 100 Ritchie Road, Suite 200 CARLOS E. CÁRDENAS, ImmEDIATE PAST CHAIR FIDEL RODRIguEZ, JR. Waco, TX 76712 KENNON WooTEN Law Office of Carlos Eduardo Cardenas, PC Alternate Board Advisor Scott, Douglass & McConnico, LLP 717 East San Antonio Street Beaumont, TX HON. TRACY CHRISTopHER 600 Congress Avenue, Suite 1500 Third Floor - Toltec Building 14th Court of Appeals Austin, TX 78701-3234 El Paso, TX 79901 HON. PAUL W. GREEN 301 Fannin Street Supreme Court Liaison Houston TX 77002 STEPHEN YELENOSKY Austin, TX Yelenosky Mediation & Arbitration CHAIR EMERITUS MEMBERS HON. KARIN CRump P.O. Box 1748 Raymond Baeza 250th Judicial District Court Austin, TX 78767 CRAIG ENocH TYLA Liaison 1000 Guadalupe Street, Suite 412 Enoch Kever PLLC El Paso, TX Austin, TX 78701 EVAN YOUNG 600 Congress Ave, Suite 2800 Baker Botts, LLP Austin, TX 78701-3044 TRACY NucKOLS ALISTAIR DAWSON 98 San Jacinto Blvd., Suite 1500 State Bar of Texas Liaison Beck Redden LLP Austin, TX 78701-4078 PAULA WEEMS HINTON Austin, TX 1221 McKinney, Suite 4500 Winston & Strawn LLP Houston, TX 77010 Associate Editors, ex officio members 1111 Louisiana, 25th Floor of editorial board Houston, TX 77002-5242 ✯ EDWARD C. DAWSON Southern Illinois University CORY L. CARLYLE PAT LONG-WEAVER VOM LU E 85 School of Law Law Office of Cory Carlyle Long-Weaver & Manning LLP Lesar Law Building, Room 252 1825 Market Center Blvd., #350 24 Smith Road, Suite 306 WINTER Carbondale, IL 62901 Dallas, TX 75207 Midland, TX 79705-4432 2018 1 STATE BAR LITIGATION SECTION REPORT THE ADVOCATE TABLE OF C ON T EN T S WINTER 2018, VOLUME 85 EDITOR’S CommENTS BY LONNY HOFFMAN ...................................................................... 3 CHAIR’S REpoRT BY JAMES W. CHRISTIAN ....................................................................... 4 SUSTAINING MEmbERS OF THE LITIGATION SECTION OF THE STATE BAR OF TEX AS ..................... 5 SYMPOSIUM: OIL & GAS LITIGATION PERSUASION INSIDE FouR CORNERS: How PRINCIPLES OF OIL AND GAS INSTRumENT CONSTRucTION DRIVE OIL AND GAS LITIGATION by Derek Cook & Harper Estes ...............................................................................7 AppLYING CONVENTIONAL OIL AND GAS JURISPRUDENCE IN AN UNcoNVENTIONAL WORLD: BROWNING OIL V. LUECKE AND MURPHY EXPLOR ATION V. ADAMS by Jack Balagia, Jr. ......................................................................................... 10 RED DEER: ANOTHER LooK AT JUDICIAL RELucTANCE TO TERMINATE LEASES by Stephen Crain & Edmund Robb .................................................................... 14 THE EXEcuTIVE DUTY: HERE WE GO AGAIN by Stuart Hollimon. ........................................................................................ 18 ROYALTY LITIGATION AND CLASS ACTIONS IN TEX AS AND THE FIFTH CIRcuIT by Tim McConn & Robert Woods ...................................................................... 22 HouSE BILL 40 AND THE PREEmpTION OF LocAL FRACKING ORDINANCES by Mark Havens ...... ....................................................................................... 26 RISKS TO THE ENERGY SECTOR POSED BY CLIMATE CHANGE LITIGATION by Jeff Civins ................................................................................................ 30 RECENT DEVELopmENTS IN PIPELINE CONDEMNATION L AW by Thomas J. Forestier, Shae E. Keefe & Shannon M. Terry ................................. 34 THE TEX AS OIL & GAS PATTERN JURY CHARGE: WHAT You NEED TO KNow by Ricardo E. Morales .................................................................................... 37 TABLE OF C ON T EN T S , C ON T INUED N EX T PAGE 2 THE ADVOCATE ✯ WINTER 2018 TABLE OF C ON T EN T S , C ON T INUED CURRENT ISSUES IN OILFIELD-POLLUTION LITIGATION ......................................................... by Bill Keffer ................................................................................................. 40 You SUFFERED A WELL FAILURE: Now WHAT? A PRIMER FOR GENERAL CouNSELS AND LITIGATORS .................................................................................. by Thomas M. Weber & Paul R. Tough .............................................................. 44 ADDITIONAL CONTRIBUTIONS EVIDENCE & PRocEDURE UPDATES by Luther H. Soules III & Robinson C. Ramsey ............. 50 FRom MY SIDE OF THE BENCH by Judge Randy Wilson ................................................... 59 18 THE ADVOCATE ✯ WINTER 2018 THE EXECUTIVE DUTY: HERE WE GO AGAIN BY STUART HOLLIMON I. Introduction II. Texas Outfitters In Texas oil and gas law, the “executive right” is the right to Prior to 2002, the Carter family (collectively, “Carter”) owned take or authorize all actions that affect the exploration and the surface and 50% of the minerals in a 1082-acre tract development of the mineral estate, including the right to situated in Frio County, Texas known as the Derby Ranch. execute leases of the mineral estate. Smith & Weaver, Texas In 2002, Texas Outfitters Limited, LLC (“TOL”) purchased Law of Oil and Gas, Vol. 1 § 2.6 (1998). It is one of the five the surface, 4.16% of the minerals and the executive right “sticks” that together comprise the “bundle” of attributes of to Carter’s 50% mineral interest for $1 million. The sale was mineral ownership. Altman v. Blake 712 S.W.2d 117 (Tex. partially owner financed. TOL commenced a commercial 1986). The executive right is frequently severed from other hunting and deer breeding operation on the surface and incidents of mineral ownership and when that occurs, the the owner of the company, Frank Fackovec, made plans to non-executive owns the minerals in place, but does not have construct a home for his family on the property. the right to lease them. Lesley v. Veterans Land Board of Texas, 352 S.W.3d 479, 487 (Tex. 2011). The owner of the executive In 2010, TOL received two offers to lease the 50% mineral right owes the non-executive mineral owner a duty of utmost interest it controlled in the ranch. The initial offer, received
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