POOR PRISCILLA OWEN. The embattled Texas Supreme Court justice whose appointment to the U.S. Fifth Circuit Court of Appeals has stalled for the second time over charges of “ultraconservative judicial activism” now finds herself in the middle of another controversy, this one the oil-patch equivalent of a range war. It’s the landowners versus the oil-and-gas producers who pay them royalties—and if you don’t know how vicious this feud can be, you haven’t seen the 1956 classic Texas film Giant, with Rock Hudson as cattle baron Bick Benedict and James Dean as new-rich producer Jett Rink. The legal battle involves the opinion favoring producers that Owen wrote in August in an oil-and-gas case known as Natural Gas Pipeline v. Pool. This flare-up and an earlier one over an Owen opinion with the same pro-producer outcome in a case called HECI v. Neel have passed unnoticed in the political brouhaha over her appointment, because they involve an obscure area of the law that, on the surface, is just a fight between rich folks and richer folks. But the issue is the same as in her confirmation battle: Is she a judicial activist who rules according to her ideology rather than the law?
In the political arena, the criticism of Owen comes from liberal groups such as People for the American Way, the National Organization for Women, and the NAACP, and it involves her stands on hot-button issues like abortion and discrimination. “She reflexively favors manufacturers over consumers, employers over workers, and insurers over sick people,” said the New York Times in an editorial opposing her appointment. In the oil-and-gas arena, the criticism of Owen comes from lawyers and law professors who have seen decades of precedents favoring landowners tossed aside to favor producers. Laura Burney, a professor at St. Mary’s University law school, in San Antonio, says of HECI’s pro-producer stance, “Apparently I have been teaching oil and gas law wrong for the past fifteen years. I still agree with the Court of Appeals opinion [favoring Neel] in HECI.” The reason to look at these cases, then, is to view the work of Priscilla Owen apart from emotional issues, in a legal realm in which most of us do not start out with a predetermined bias and in which she is a recognized expert.
Exhibit 1: Natural Gas Pipeline v. Pool. The case began in the dusty files of the Texas Railroad Commission, where researchers poring over decades-old records uncovered numerous instances of wells near Amarillo that had stopped producing natural gas for days or months at a time, as long ago as the forties and fifties, only to resume production later. Under Texas law, a stoppage in production—unless there is a good reason for it, such as a mechanical breakdown or an agreement that permits interruptions—terminates the producer’s right to the oil and gas, which returns to the landowner. The research generated a slew of lawsuits by landowners and royalty owners, Pool among them. Cases like these—one side trying to play “gotcha!” with the other—are not the most shining examples of the law’s majesty, but they do reflect the ill will that frequently accompanies the landowner-producer relationship.
The legal doctrine that applies to stoppages of production is so well settled that it has acquired an acronym: TCOP, for “Temporary Cessation of Production.” After production begins, a temporary delay due to some reason beyond the producer’s control does not result in a forfeiture of rights. What appeared to be a straightforward TCOP case—in which the argument would focus on whether the cessation was both temporary and justified—evolved into an opportunity for Priscilla Owen to rewrite Texas oil-and-gas law on behalf of producers. She bypassed the TCOP doctrine to blaze a trail where the Texas Supreme Court had never ventured: Even if the producer had lost its right to the oil and gas, she wrote, it had regained the right, and breathed new life into its lease, through adverse possession (commonly known as squatters’ rights).
This was too much of a detour from the legal mainstream for Owen’s colleague Justice Wallace Jefferson, who dissented. He pointed out the age-old rule that adverse possession requires some sort of notorious, hostile action that provides the original landowner with notice of the adverse claim. But here, he wrote, “Both the [producer] and [landowner] proceeded as though the leases were still in effect. Thus, the [producer’s] possession was arguably permissive and not hostile.” What troubled Jefferson most was that the decision could wreak havoc, disturbing “the delicate [landowner-producer] relationship.” It certainly renders the TCOP doctrine comatose; no longer does it matter whether the cessation was the result of an accident or deliberate. The latter was apparently the case in Natural Gas Pipeline (the producer was hoping that prices would rise). Above all, Jefferson was concerned that Owen’s reasoning could allow producers in future cases to claim that they no longer had to pay royalties—that adverse possession allowed them to claim all of the production, including the fraction previously held by royalty owners. In short, it is a license to steal. As Owen’s critics go, Jefferson can hardly be classified as a liberal. He is a Rick Perry appointee to the court and is, like Owen, like all nine justices on the court, a Republican.
Exhibit 2: HECI v. Neel. Russell Neel, a Fayette County (La Grange) landowner, gave HECI Exploration the right to produce oil and gas on his land in return for a one-sixth royalty payment. In 1988, three years after HECI began pumping oil, the company discovered that another producer, operating on adjacent land not owned by Neel, had damaged the underground reservoir, making it impossible for HECI to extract some of the oil. HECI sued the other operator in 1989 and won $3.7 million for its lost production. But it never told Neel about the damage to the reservoir or about the lawsuit and its outcome, and it never paid him a dime for the royalties he lost. Eventually Neel, and his