Texas Supreme Court Says Limitations Bar Relief For Historical Contamination, But Questions Remain

The Lazy R Ranch (the “Ranch”) complained that ExxonMobil contaminated four separate areas within the Ranch.  For two of the areas, all of the contamination occurred more than four years before suit, and the Texas Supreme Court upheld dismissal as to those historical areas under the statute of limitations.  For the other two areas, contamination may have occurred both before and within four years of suit, and the Court reversed summary judgment and remanded the case to the trial court as to those two areas.

Decision Based on Limitations

In ExxonMobil v. Lazy R. Ranch, the Court focused on the statute of limitations.  In upholding dismissal as to the two historical areas, the Court observed that applying limitations in contamination cases is usually straightforward.  For example, the Ranch could not rely on the discovery rule, because that rule only applies when the injury is “inherently undiscoverable.”  The Court noted that the Ranch’s representatives saw operations that indicated the possibility of spills, and that the Ranch could have hired an expert to test the soils and water at any time.  Thus, the contamination at the two historical locations was not inherently undiscoverable.  In contrast, the other areas may have been contaminated much later, so that limitations would not bar recovery.

Continuing Nuisance Doctrine Not Addressed

The Ranch argued that the historical areas were a continuing nuisance, due to the threat of future migration contaminating groundwater.  The Ranch argued that the statute of limitations does not bar a demand for injunctive relief in order to protect groundwater from a continuing nuisance.  The Court declined to address that issue, because the parties had not properly presented the continuing nuisance issue for appeal.

Extent of Available Injunctive Relief Not Addressed

ExxonMobil argued that the injunctive relief sought by the Ranch was unavailable under Texas law, because the cost of complying with the injunction would cost far more than the value of the contaminated property.  The Ranch did not seek monetary damages, and ExxonMobil argued that the case should be dismissed in its entirety, because the only relief requested was not available under law.  (My September 12, 2016 Alert gives more details of the parties’ arguments on this issue.)

The Court’s opinion suggests that, on remand, ExxonMobil can still raise its argument regarding the extent of injunctive relief available under law, as to the two areas not subject to dismissal under the statute of limitations.

For a copy of the Court’s opinion click here.

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