Texas Landowner Files to Join as Defendant in Endeavor Energy Lawsuit Against City
11/04/2007
http://www.mywesttexas.com/site/news.cfm?newsid=18987841&BRD=2288&PAG=461&dept_id=475626&rfi=6
Owner of surface rights to proposed drilling site says attorneys representing city are not raising some of the points that would help win case
A motion to intervene in a lawsuit filed by Endeavor Energy against the city regarding its right to drill on property in northern Midland has been filed by the owner of the surface rights on the basis that he feels attorneys representing the city are not providing adequate counsel.
Endeavor filed suit in May against the city after its request for a permit to drill on property located north of Mockingbird Lane and to the east of the future Midkiff Road extension was denied by a 3-2 vote of the City Council in January.
Endeavor alleged in its lawsuit that the city’s denial of the permit request amounted to inverse condemnation because it deprived Endeavor of the “only economically viable use that Endeavor can make” of that property. Endeavor’s pleading also stated that denying Endeavor’s request while approving a request by Patriot Resources to drill on property owned by Midland Country Club amounted to a violation of the 14th amendment of the United States’ Constitution by denying the company equal treatment under the law. City officials who voted against the permit argued that the city’s ordinance permits officials to deny a request if it interferes with orderly growth and development. At the direction of the court, Endeavor and the city are currently discussing whether a settlement could be reached to eliminate the need for a trial. If an agreement cannot be reached, the trial is scheduled for January of 2008.
Jud Walton, who owns surface rights to property in the area around the proposed drilling location, stated in his motion to intervene that the drill site would be in the middle of a “planned and zoned shopping center and in close proximity to a planned townhouse subdivision” and that these developments would be adversely impacted if a well is drilled. Walton stated in the motion that his interests may not be adequately addressed by attorneys with Taylor, Olson, Adkins, Sralla and Elam, L.L.P, the law firm representing the city.
Walton told the Reporter-Telegram that there were several special exceptions, or responses to Endeavor’s initial pleading, that the attorneys representing the city should have made. Walton made note in court documents that a new sewer line was crossing developments in the growth area before Endeavor acquired its lease and that the Planning and Zoning Commission and city staff had drawn a distinction between the impact of drilling a well on or near his property and drilling wells on property owned by Midland Country Club, where no residential developments are currently planned. He said these and other details should have been mentioned in the response to Endeavor’s initial pleading.
Walton also stated that attorneys representing the city were “under a misapprehension of the present and controlling case law” and cited Helton v. City of Burkburnett as an example of case law that guarantees the city has the authority to deny Endeavor the right to drill without being subject to the state’s inverse condemnation statute, which calls for governmental bodies to compensate property owners if a regulation or action denies them the use of their land or devalues it substantially.
“If I’m allowed in as a defendant what I intend to do is apprise the judge of the issues and ask if he’ll entertain briefs and let him know the real question involved here,” Walton said. He also said he believes if the judge in the case were fully informed of the background surrounding the City Council’s decision and case law related to a city’s right to deny a drilling permit, a motion for summary judgment against Endeavor would be granted, eliminating the need for a trial.
Frederick “Fritz” Quast, one of the attorneys representing the city, told the Reporter-Telegram that the case law cited by Walton as evidence that the city has an airtight defense is not applicable to an inverse condemnation, or regulatory takings, case. In the Helton case, he said, a well was drilled without a permit from the city of Burkburnett. The plaintiff claimed in his lawsuit that the city did not have the right to require a drilling permit. The court upheld the city’s right to require a permit for drilling, but the case did not determine whether or not compensation is required if the denial of a permit request results in economic hardship for the property owner, Quast said.
“A lot of Mr. Walton’s complaints are based on what I believe are erroneous views of the law,” Quast said. “As far as how the law applies in this case, since there’s still pending litigation, I don’t want to get into any (specifics regarding defense strategy.)”
Walton said the Helton decision clearly demonstrates that cities have the authority to prohibit drilling through the denial of a permit. The only question, he said, is if requiring a permit to drill within a city and maintaining the authority to deny its issuance is constitutional. If it is constitutional, Walton said, a city cannot be required to compensate mineral owners who are not allowed to drill and the court found in its decision on the Helton case that the city’s drilling ordinance, which is similar to Midland’s old drilling ordinance, was constitutional.
Quast said he believes if the case does go to court that there are compelling arguments that can be made defending the city’s right to deny Endeavor’s request without providing compensation, but that the law is not cut and dry and that the Helton decision is unlikely to be a part of their defense strategy.
“The concept here… There are a lot of things a government can do, but sometimes, in certain circumstances, even if it does those things it has to pay,” Quast said.