September 16, 2019

The Texas Supreme Court’s new session is underway and this term, the Court will be hearing arguments in numerous “high stakes” oil and gas industry cases, including one $535 million fight over what constitutes a “pipeline partnership.” They will also consider several significant oil and gas contracting issues, interpreting specific contracts in these cases, with the resulting decisions expected to have an impact on future oil and gas lease and contract disputes.

Partner Jonathan Baughman, Chair of the firm’s Oil and Gas Practice Group, was called on for his expertise by Law360 Senior Energy Reporter Keith Goldberg, on one of the more complicated cases.

In ConocoPhillips Co. v. Leon Oscar Ramierz Jr. et al., the Court was scheduled to hear oral arguments on September 17 regarding ConocoPhillips Co.’s bid to overturn a pair of judgments against the company totaling $11.7 million. The judgments were imposed after a family alleged that the company had trespassed on their rights by drilling on their property, and were affirmed by the Fourth Court of Appeals in 2017. The case is a complicated one as the foundational disputes date back to the 1940s, and deal with complex issues around inheritance of oil and gas interests.

Jonathan said a key secondary issue in the case is whether the landowners were properly awarded attorney fees or prejudgment interest, which make up more than $4.1 million of the total $11.7 million judgment. Conoco argues that the case is a legitimate title dispute and, therefore, the Texas Natural Resources Code bars the awarding of attorney fees and prejudgment interest.

"The court is going to have to decide whether in that particular instance, the landowners can recover attorneys fees when the general rule is in a trespass-to-try title action, you can't collect attorneys fees," Baughman said. "And typically, you can't recover prejudgment interest if there's a good-faith [title] dispute."

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