Face Challenges Confidently

294 Berkley v. R.R. Comm’n of Tex.

Tuesday, September 8th, 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.
Berkley v. Railroad Commission of Texas, 282 S.W.3d 240 (Tex. App.—Amarillo 2009, no pet.) held that a permit to inject salt water issued by the Texas Railroad Commission (“TRC”) did not authorize a trespass to adjacent landowners, nor constitute a government taking of land, and that TRC did not exceed its statutory authority by issuing the permit. TRC approved an injection permit for a salt water disposal well. Adjoining landowners contended that TRC exceeded its statutory authority by granting the permit because it violated the law of trespass, amounted to an unconstitutional government taking of land, and was against the public interest.
The court relied on FPL Farming Ltd. v. Texas Natural Resource Conservation Commission to uphold the permit. FPL Farming rejected a similar claim that a permit granted for a disposal well by the Texas Natural Resource Conservation Commission was tantamount to a governmentally approved trespass or an unconstitutional taking of the adjacent owner’s property. FPL Farming reasoned that securing a permit does not authorize the invasion of another’s property right, and thus does not constitute a government taking.
The Berkley court noted that statutes, regulations, and other cases are in accord with the proposition “that the permit process has limited effect” and “does not immunize the recipient from the consequences of its actions if those actions affect the rights of third parties.” The Texas Water Code states that injection well permits do not relieve permittees from civil liability to third parties. Similarly the court recognized that a permit granted under the applicable provision of the Texas Administrative Code “does not authorize any injury to persons or property or an invasion of other property rights, or any infringement of state or local law or regulations.” The court stated that the permit process instead ensures that the government’s concerns and interests are addressed and that the regulatory agency will not stop the permittee from proceeding. The court recognized that third parties may still protect their rights and property. The court noted “Any dispute regarding the rights of the permittee in relation to others is left for the courts, not [TRC], to resolve.”
The court concluded that TRC did not exceed its statutory authority by issuing the permit. Because there was no trespass or government taking of land, the court examined whether TRC exceeded its authority by granting a permit that is contrary to the public’s interest. TRC is obligated to consider “whether granting the application lies within the public’s interest.” TRC determined that an injection well was within the public’s interest because additional disposal capacity was needed in the area, new wells required hydraulic fracturing that used water, a disposal well would reduce the costs of hydraulic fracturing in the area, and that the injection pressure was appropriate and posed no danger to the underlying formation. TRC was presented with evidence that the issuance of the permit could cause dangerous traffic conditions because of the well’s location.  The court noted that while public safety concerns should be considered by the TRC, the mere presence of such evidence does not warrant overruling TRC’s decision since substantial evidence indicated that the permit furthered public interest.
The significance of the case is that a permit issued by TRC does not authorize a trespass to a third party. The purpose of requiring a permit is to ensure that the government’s interests are met, and that the permit will further public interest. The permit application process does not consider the rights of third parties, but does not prevent a cause of action against the permittee.