Earlier this month, the Texas Supreme Court issued its decision in Envt’l Processing Sys., L.C. v. FPL Farming Ltd. The case garnered a significant amount of attention from the oil and gas industry because it involved the issue of whether a party can sue for trespass over the subsurface migration of wastewater. Indeed, a number of amicus briefs were filed on this issue. The Supreme Court refrained from ruling on that issue, however.
This case arises from a dispute between two neighbors. FPL Farming, Ltd. (FPL) owned the groundwater rights to its tract of land but not the mineral rights. Environmental Processing System (EPS) operated two injection wells on an adjoining tract of land. FPL filed suit against EPS, alleging, among other things, trespass. The jury ruled in favor of EPS, and the court of appeals affirmed.The court of appeals reasoned that, as a matter of law, a trespass did not occur because EPS possessed a state permit allowing it to operate the well. The Supreme Court rejected the court of appeals’s reasoning, holding that a permit was insufficient, by itself, to stave off a trespass claim. On remand, the court of appeals held that FPL possessed a property interest in the subsurface of its tract and could sue EPS for trespass to protect its property rights. In addition, the court reasoned that the jury instructions were incorrect because they placed the burden of proving consent on the plaintiff.

The Supreme Court reversed the court of appeals and held that the jury instructions were proper, thereby upholding the jury verdict that no trespass occurred. According to the Court, to successfully allege a trespass claim, plaintiffs must prove that the other party did not have consent to commit the trespass. Because the jury found that no trespass occurred, the Court did not have to decide the subsurface trespass issue.

Read the opinion.