Coastal Oil & Gas Corp. v. Garza Energy Trust, No. 05-0466 268 S.W.3d 1(Tex. Aug. 29, 2008)
(Hecht) (oil and gas, trespass, rule of capture)
The primary issue in this appeal is whether subsurface hydraulic fracturing of a natural
gas well that extends into another’s property is a trespass for which the value of gas
drained as a result may be recovered as damages. We hold that the rule of capture bars
recovery of such damages. We also hold:
• mineral lessors with a reversionary interest have standing to bring an action for subsurface trespass
causing actual injury;
• the measure of damages for breach of the implied covenant to protect against drainage is the value
of the minerals lost because of the lessee’s failure to act with reasonable prudence, and there is no
evidence of that value in this case;
• some evidence supported the jury’s finding of breach of the implied covenant to develop, and
whether lessors’ repudiation of the lease was a defense was, on this record, a matter of law;
• some evidence supported the jury’s finding of bad faith pooling;
• admission into evidence of a memorandum containing a racial slur was reversible error; and
• the trial court did not abuse its discretion in refusing to abate this case for two related cases.
We reverse the judgment of the court of appeals[3] and remand the case to the trial court for further
proceedings.
COASTAL OIL & GAS CORPORATION AND COASTAL OIL & GAS USA, L.P. v. GARZA ENERGY TRUST ET AL.; from Hidalgo
County; 13th district
(13-02-00136-CV, 166 SW3d 301, 05-05-05)
The Court reverses the court of appeals' judgment, renders judgment in part, and remands the case to the trial
court.
Justice Hecht delivered the opinion of the Court, in which Justice Brister, Justice Green, Judge Christopher, and
Justice Pemberton joined, and in all but Part II-B of which Chief Justice Jefferson, Justice Medina, Justice
Johnson, and Justice Willett joined.
Justice Willett delivered a concurring opinion.
Justice Johnson delivered an opinion concurring in part and dissenting in part, in which Chief Justice Jefferson
joined, and in Part I of which Justice Medina joined.
(Judge Tracy Christopher and Justice Robert Pemberton sitting by appointment pursuant to section 22.005 of
the Texas Government Code)
(Justice O'Neill and Justice Wainwright not sitting)