The Texas Supreme Court ruled late last month that the Railroad Commission of Texas, the state’s oil and gas regulator, does not have exclusive jurisdiction over environmental contamination cases, which can be settled in court.
The decision came from a years’ long dispute between a rancher, Jimmy McAllen, and the Denver-based Forest Oil, which McAllen accused of polluting his property and exposing him to radiation. Forest Oil, now a part of the Houston-based Sabine Oil and Gas Corp., argued that McAllen couldn’t sue the company and seek millions in damages through the court system because only the Railroad Commission has jurisdiction over contamination cases. Forest Oil objected to paying damages in addition to being forced to clean up McAllen’s property.
But on April 28, the Supreme Court issued a ruling affirming the previous decision of an appeals court: McAllen had every right to sue, the court said, and that the law did not intend for the Railroad Commission to be a property owner’s sole recourse in pollution case.
“While the Railroad Commission may make determinations with respect to McAllen’s 27 contamination claims — indeed, it has already done so — it cannot thereby oust the court of jurisdiction to decide those claims or refer the decision to arbitration,” the court said.
“… only the Railroad Commission has jurisdiction over contamination cases.”
Contracts.