On February 24, 2017, the Supreme Court of Texas found that a plaintiff’s oil-field contamination claims are barred by the state’s four-year statute of limitations because the claims were brought more than four years after the alleged spills and releases occurred. The plaintiff in the case alleged oil-field contamination claims resulting from an operator’s production activities that occurred over a 60-year period. Once the operator sold its leasehold interest in the tract, the plaintiff hired an environmental manager to investigate whether the tract had been contaminated from development operations. The environmental manager alleged that 1.2 acres of the tract suffered contamination, and estimated that remediation would cost $6.3 million. The plaintiff sought an injunction requiring the operator to remediate the alleged contamination.
The Texas Supreme Court found that the statute of limitations began to run when the plaintiff became aware of the alleged contamination. Deposition testimony demonstrated that the plaintiff was aware of periodic spills throughout the operator’s tenure on the tract, but that none of the spills occurred within four years of the date of the lawsuit. The Court found that where the plaintiff is actually aware of the spills that allegedly result in contamination, the limitations clock begins to run immediately, and not when the scope of the contamination is investigated or understood.
The case is ExxonMobil Corp. v. Lazy R Ranch, LC, et al., No. 15-0270 (Tex. Feb. 24, 2017).