Today’s a busy day, so we can’t lay out the details of the Texas Court of Appeals’ opinion in City of Dallas v. Trinity East Energy, LLC, No. 05-20-00550-DV (Aug. 1, 2022). But we want to post up the decision and urge you to read it because it is a rare bird: not only did the property owner win a takings claim at trial – the verdict survived appellate review.

The takings claims (Lucas and Penn Central) were based on the city’s denial of a Special Use Permit. The city argued that its denial of the SUP for the desired drilling locations did not cut off completely the owner’s ability to access the minerals, since there were other ways to get at them. Here’s what happened at trial:

The trial court found that other than the drill sites proposed in Trinity’s three SUP requests, “Trinity did not have reasonable access to other surface locations from which it could have economically accessed the minerals under lands covered by [the] Group I Lease or under Trinity’s private leases in the area of the property covered by the Group I Lease.” The jury found that the fair market value of Trinity’s property immediately after the City’s non-approval of the SUPs was zero.

Slip op. at 11.

The court of appeals affirmed, applying the standard of review:

We conclude the evidence is legally and factually sufficient to support the trial court’s finding that other than the three sites proposed in the SUPs, Trinity did not have reasonable access to other locations from which it could economically develop its mineral interests. Based on the evidence and the trial court’s findings we agree with the trial court that the City’s denial of the SUPs resulted in a regulatory taking of Trinity’s property.

Slip op. at 15.

The court also concluded that the owner’s valuation evidence — the testimony of “a petroleum engineer specializing in reservoir engineering” — that the “before” value was either $40 million or $26 million, and that the “after” condition of the property was “zero,” was within the standards for expert testimony. Thus, although “the jury was presented with conflicting evidence,” slip op. at 24, the “jury is the sole judge of the weight and credibility of the evidence[.]’ Slip op. at 25. The court concluded “there is more than a scintilla of evidence supporting the jury’s finding that the fair market value of Trinity’s property before and after the denial of the SUPs … [and] the evidence is legally and factually sufficient to support the trial court’s award of damages for inverse condemnation to Trinity.” Slip op. at 26.  

City of Dallas v. Trinity East Energy, LLC, No. 05-20-00550-CV (Tex. App. Aug. 1, 2022)