Ahead of the November 4th vote that could make it the first city in Texas to ban hydraulic fracturing, the City of Denton has been sued by a group of royalty interest owners claiming that the city’s current temporary ban violates their property rights. As previously covered by the North America Shale Blog, on May 6, 2014, the Denton, Texas, city council enacted a drilling moratorium which prohibited the acceptance, receipt, processing, or approval of applications for gas well permits within the Denton city limits.
On September 29, 2014, Charles Chandler Davis filed suit in the 431st District Court of Denton County on behalf of his company, Arsenal Minerals and Royalty, NASA Energy Corp., and his son’s trust fund, claiming damages in excess of $1 million. The City of Denton has removed the suit to the United States District Court of the Eastern District of Texas. Davis’s suit alleges claims related to mineral takings, and states that prior to filing suit, Plaintiffs sought a “takings impact assessment”, which Plaintiffs allege the City should have conducted to determine the impact of the drilling moratorium.
Beyond the suit by Davis, various energy industry representatives have stated their intention, if the hydraulic fracturing ban passes, to file similar takings suits. At the July 15, 2014, meeting where the Denton City Council voted 5-2 to reject the proposed ban and set up the November 4th vote, Tom Phillips, a former chief justice of the Texas Supreme Court who is currently representing the Texas Oil & Gas Association, stated that “some members of [the Texas Oil and Gas Association] will undoubtedly sue.” Phillips also broadcast his belief that if citizens in Denton wish to ban hydraulic fracturing they should seek to do so at the state-wide, rather than municipal, level. “If they want Texas law to ban hydraulic fracturing, they should take their cause to the Texas Legislature. That is the only governing body in the state with the authority to grant the relief they seek.” Rep. Phil King, R-Weatherford, said the most likely action the legislature would take on the issue would be to outlaw cities from passing bans. “If it passes in Denton, I feel very confident that there will be legislation—in fact, I’ll probably file it myself—to prohibit cities from total bans on fracking,” he said.