Face Challenges Confidently

220 City of Mont Belvieu v. Enter. Prods. Operating, L.P.

Friday, September 4th, 2015

Richard F. Brown

The following is not a legal opinion. You should consult your attorney if the case may be of significance to you.
City of Mont Belvieu v. Enterprise Products Operating, 222 S.W.3d 515 (Tex. App.—Houston [14th Dist] 2007, no pet.) holds that the Legislature did not intend to fully preempt a municipality’s authority with respect to regulation of underground salt-dome hydrocarbon storage facilities which would have given the Texas Railroad Commission (TRRC) exclusive authority over these facilities. The court clarifies the extent to which Chapter 211 of the Natural Resources Code preempts a municipality’s authority regarding salt dome storage facilities, and limits the district courts subject matter jurisdiction. In pertinent part Chapter 211 “Powers of Local Governments” provides:
[TRRC] has jurisdiction over all salt dome storage of hazardous liquids and over salt dome storage facilities used for the storage of hazardous liquids.

  • This chapter does not reduce, limit, or impair the authority provided by law to any municipality, except as provided by Subsection (b) of this sec
  • A municipality or county may not adopt or enforce an ordinance or other regulation that establishes safety standards or practices applicable to hazardous liquid salt formation storage facilities that are subject to regulation by federal or state l

The City of Mont Belvieu brought claims for temporary and permanent injunction, as well as damages, against the holder of a state permit to operate an underground salt-dome hydrocarbon storage facility and state permit to drill a well for access to the facility, alleging defendant’s drilling violated city ordinances and constituted a nuisance. The City’s enforcement of its ordinances requiring a permit to drill is not a collateral attack on the validity of TRRC permits, nor does it seek to contradict or overturn them.
The grant of jurisdiction to the TRRC in § 211.011 merely gives the TRRC jurisdiction, it does not grant them exclusive jurisdiction over underground salt-dome hydrocarbon storage facilities. Thus, the district courts, being of general jurisdiction, have subject matter jurisdiction absent a showing to the contrary.
For a state statute to preempt a subject matter usually encompassed by municipal authority, the statute must do so with unmistakable clarity.7 Furthermore, § 211.002 of the code specifically preserves a municipality’s authority even in spite of Chapter 211’s reservation of powers to the TRRC. Also, the phrase “safety standards or practices” has a specific meaning in Chapter 211 which does not include all actions a municipality might take regarding a salt dome or even all matters related to safety. Thus, the City’s permitting process was not preempted by TRRC’s permitting process.
According, this case does not present an issue of forum preemption, but instead a question of choice of law preemption, which does not operate as a judicial bar to the City’s claims. The trial court therefore has jurisdiction to determine whether, and to what extent, the ordinances at issue are preempted by the Legislature’s grant of regulatory authority to TRRC.