Last Friday, February 6, 2015, the Texas Supreme Court released its eagerly awaited opinion in Environmental Processing Systems, L.C. v. FPL Farming, Ltd., 58 Tex. Sup. J. 293 (Tex. 2015). Unfortunately, what many energy companies and landowners had hoped would be the definitive tome on subsurface trespass, was not.

The fracking boom has resulted in renewed interest in the law of subsurface trespass. Not only may fracture treatments extend across property boundaries, but millions of gallons of wastewater that may contain salt, chemicals, heavy metals, and sometimes-radioactive material, is often disposed of by being injected deep underground. This material has the potential to migrate across property lines.

The Texas Supreme Court's first modern subsurface trespass case arising from fracking was Coastal Oil & Gas Corp. v. Garza Energy Trust, 268 S.W.3d 1 (Tex. 2008). There, the plaintiff alleged that hydraulic fracturing of a natural gas well extended into its property and constituted a subsurface trespass. It sought as damages the value of gas drained as a result of the fracture treatment. The Supreme Court avoided the subsurface trespass issue by invoking the rule of capture. It held that "actionable trespass requires injury" and that, under the rule of capture "the gas [plaintiff] claims to have lost simply does not belong to him."

The Court, however, made some tantalizing observations about the law of subsurface trespass:

Had Coastal caused something like proppants to be deposited on the surface of Share 13, it would be liable for trespass, and from the ancient common law maxim that land ownership extends to the sky above and the earth's center below, one might extrapolate that the same rule should apply two miles below the surface. But that maxim – cujus est solum ejus est usque ad coelum et ad inferos – "has no place in the modern world." Wheeling an airplane across the surface of one's property without permission is a trespass; flying the plane through the airspace two miles above the property is not. Lord Coke, who pronounced the maxim, did not consider the possibility of airplanes. But neither did he imagine oil wells. The law of trespass need no more be the same two miles below the surface than two miles above.

So then, just what is the law of subsurface trespass in Texas? The Court in Garza did not say. It did, however, hold that "mineral lessors with a reversionary interest have standing to bring an action for subsurface trespass causing actual injury," so presumably subsurface trespass remains a viable cause of action in some circumstances, notwithstanding the Court's airplane analogy. Thus, the answer may lie in the plaintiff's ability to show actual harm resulting from the alleged trespass.

This brings us to the FPL case and its decade long trek through the judicial system.

FPL owns the surface and non-mineral subsurface rights to land in Liberty County that it uses primarily for rice farming. Environmental Processing Systems, L.C. (EPS) leased a small tract on adjacent property where it operated a wastewater disposal facility. The dispute involved FPL's claim that EPS committed a subsurface trespass when its wastewater migrated on to FPL's property approximately 8,000 feet below ground in the Frio rock formation.

FPL sued EPS in Liberty County seeking injunctive relief and alleging trespass, unjust enrichment, and negligence. FPL Farming, Ltd. v. Envtl. Processing Sys., L.C., 305 S.W.3d 739, 741 (Tex. App.—Beaumont 2009, pet. granted). The case was tried before a jury, which found against FPL on all causes of action. The Beaumont court affirmed, holding that an actionable trespass did not occur because the Texas Commission on Environmental Quality (TCEQ) permitted EPS' injection wells. FPL appealed to the Texas Supreme Court, which reversed on the narrow basis that the TCEQ permit did not shield EPS from civil tort liability that may stem from the use of the permit, and remanded to the court of appeals for consideration of issues related to the trespass claim. FPL Farming, Ltd. v. Envtl. Processing Sys., L.C., 351 S.W.3d 306 (Tex. 2011).

On remand, the Beaumont court reversed the judgment on the ground that the charge improperly placed the burden of proving EPS's affirmative defense of consent on FPL. FPL Farming, Ltd. v. Envtl. Processing Sys., L.C., 383 S.W.3d 274 (Tex. App.—Beaumont 2012, pet. granted).

Both parties promptly petitioned the Texas Supreme Court, which agreed to hear the case, and again reversed the Beaumont court's ruling. Instead of definitively answering whether similarly situated landowners have a claim for subsurface trespass, however, it decided the case on the narrow ground that there was no charge error because the burden of proving lack of consent belongs to the plaintiff. Envtl. Processing Sys., L.C. v. FPL Farming, Ltd., 58 Tex. Sup. J. 293 (Tex. 2015). The Court expressly declined to address whether wastewater that migrates under adjoining land is considered a trespass and stated that because the jury found no liability for deep subsurface trespass, there was no need to address whether it is a viable cause of action in Texas.

Since the Court has dodged the trespass issue, there will no doubt be future lawsuits claiming subsurface trespass related to wastewater migration. In light of the continuing uncertainty associated with deep subsurface trespass, those in the energy industry would do well to take practical steps to head off or mitigate potential liability. These include addressing subsurface migration issues with adjoining landowners via contract where possible, and reviewing insurance coverage and indemnity provisions that may apply to these types of claims.

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