Of Lawsuits and Lies

With all those piggy bank ads from the other side, people are wondering about lawsuits and the proposed fracking ban. Won’t we get sued? Will it cost tons of money?

These are indeed important questions. We encourage voters to think this through with a level-head (rather than get caught up in the industry scare tactics). Because once you do that, you will find two things: 1. the proposed ban is smartly written and legally sound; 2. defending the ban will not cost anything close to what they are threatening us with.

To make a complex issue more digestible, we’ll slice things up into five main points.

1. The mere fact of a lawsuit. Most likely, the city will be sued once the ban passes. Though that is certainly not a trivial affair, we should keep this in perspective. It’s worth remembering that the City of Denton regularly finds itself in lawsuits. The mere fact of a lawsuit should not cause us to shudder. When an issue is of vital importance, it is nearly impossible for it to not find its way to court. The courts are forges where we test the mettle of competing claims to justice. We can and often do take a different attitude toward lawsuits: not fear, but conviction. Our rights to clean air and water and the peaceable enjoyment of our homes are worth fighting for. The industry’s ads say lawsuits will “waste” city tax dollars. Since when is it a “waste” to protect our homes and families?

2. The cost of a lawsuit. The industry claims a lawsuit is not just a waste, but will cost Denton “millions.” But we don’t have to guess how much it will cost. Other cities around the country are defending bans against industry lawsuits. How much has it cost them? $38 to $125 thousand — a small fraction of Denton’s $4 million already set aside for legal costs, far less than the “millions” industry claims, and money well spent to protect our air, water, and property. (We’ve got word from Longmont’s attorney that their ban has cost $125k to defend. The source used in the below meme states $109k for three Colorado cities. Even at the higher figure, the point still holds: this is far from “millions” and is about 3% of the funds that have been set aside).


3. A preemption lawsuit. The ban is not pre-empted by state law. As Tom Phillips even acknowledges, Texas home-rule cities have the power to “regulate exploration and development of mineral interests.” He leaves this part out, from the Texas Municipal League: “…home rule cities have the inherent authority to do just about anything that qualifies as a ‘public purpose’ and is not contrary to the constitution or laws of the state.”

That is pretty sweeping legal authority. You can find other strong claims about home rule powers in the Texas Local Government Code, which, for example, grants home-rule municipalities the power to regulate the location of industrial activities and to “define and prohibit any nuisance within the limits of the municipality and within 5,000 feet outside the limits” and the power to “enforce all ordinances necessary to prevent and summarily abate and remove a nuisance” (Sec. 211.003 and Sec. 217.042).

There is a long history of courts upholding municipal regulations on industries that are often also regulated at the state level. The basic rationale is that the purpose of municipal regulations is different from state regulations. It was on this basis that the New York appellate Court upheld the Town of Dryden’s ban on fracking.

Just because the state of Texas seeks to foster and promote mineral development does not mean that Texas cities have to capitulate to their interests. The city also has legitimate and legally recognized interests in protecting community integrity and citizen health, safety, and welfare. The proposed ban on hydraulic fracturing is a reasonable exercise of the powers of local government.

The state of Texas has adopted new rules for hydraulic fracturing in Texas. Those rules are found in the Texas Administrative Code; however, the new rules do not preempt municipal regulation of hydraulic fracturing. First, there is no doctrine of implied preemption under state law (meaning that just because the State enacts legislation does not imply that a city is powerless to address the issue) and second, for any municipal regulation to be preempted by state law, the State Legislature must do so “with unmistakable clarity.” There is nothing in the new State rules that specifically preempt the City from adopting the ordinance as proposed.

Finally, you should read this peer-reviewed article by an independent attorney who points out the fact that Texas cities have a perfect winning track record in lawsuits against the industry. Texas home rule cities, like Denton, are Texas tough. From that article: “Texas common law generally favors municipal authority to regulate oil and gas activities…. every direct challenge to a city’s police powers has been soundly defeated” (p. 372).

piggy bank

Saving what’s really valuable…our air, water, safety, and health!

4. A takings lawsuit. Despite their confident assertions, there is nearly no established case law in Texas on this issue. An independent law firm, however, has made a very strong case that the ban is not a taking of private property. The biggest reason for this is that the ban only applies to hydraulic fracturing (a secondary recovery process) not drilling. There are 18,000 conventional wells in our area that do not require fracking to produce gas. Furthermore, even after the ban, all of Denton’s 281 gas wells will continue to produce gas. The ban does not turn off some magic valve on already producing wells.

The ban mirrors the long-standing legal tradition of prioritizing health, safety, and welfare when it conflicts with maximization of private property rights. It does so without depriving mineral owners of all economically viable uses of their property.

There is just one good case law precedent for this in Texas. And it favors our position. It refers to a valid ordinance in Houston that is more restrictive (because it bans all drilling) than the proposed fracking ban in Denton. A very recent ruling by the Texas Supreme Court upheld a lower court’s ruling in favor of Houston. Their more restrictive ordinance was upheld and they did not owe anything to any mineral owners.

The article cited above notes that the Fort Worth Court of Appeals ruled “any deprivation resulting from a lawful ordinance enforced pursuant to the legitimate policing authority of a municipality does not constitute a loss of property without due process under the law… the reasonableness of a municipal ordinance is presumed and considered controlling by courts ‘unless the unreasonableness of the ordinance is fairly free from doubt’” (p. 371). Consider fracking less than 200 feet from homes in Denton, which is the reality without the ban. Remember the dozens of health complaints from nearby residents, and recall that that situation will happen again and again as the city grows despite years of attempts to regulate it at the local level. There is no way one could say a ban in such a situation is clearly unreasonable.

Just because a dangerous process has come along that allows maximization of one’s mineral interests, one is not endowed suddenly with an unimpeachable right to use that process with impunity, especially in a situation where health and safety regulations can be systematically ignored.

The ban is very defensible. But imagine the worst case scenario where it is overturned by a judge. All the minerals will still be there. That’s how this is different than surface takings cases where the state, say, paves over your yard, fences it in, and calls it State Highway 57. In that case, you have been clearly deprived of your property. But even in the unlikely case of a ruling against the ban, no one will have taken any minerals or rendered them unusable.

5. Vested rights. Here is what the industry doesn’t want you to think about when it comes to the legal dimensions of the ban. It is written to bypass their claim to vested rights. The industry is claiming that they have 10,000 acres of Denton and 281 existing gas wells all grandfathered under older laws. Then they turn around and say we just need to work on more “responsible” rules when they know darn well that any rules we pass won’t apply to them and they can go on with business as usual.

That is, unless we pass the ban. Why? Because the ban treats hydraulic fracturing for what it is – an aspect of business operations, not a land use. The vested rights or grandfathering only applies to land uses. In other words, the ban close the loophole they have been exploiting. It is the only way to prevent the mass industrialization of our neighborhoods, further poisoning of our air and water, and further drags to our economy and property values.