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Suit against city cost taxpayers $78K

Profile image for By Peggy Heinkel-Wolfe
By Peggy Heinkel-Wolfe

30 percent of land office’s tab preceded Denton’s vote on ban

State taxpayers ponied up more than $78,000 in the Texas General Land Office lawsuit against Denton’s ban on hydraulic fracturing, according to documents obtained by the Denton Record-Chronicle.

About 30 percent of those costs came before the ballots approving the ban were even counted, records showed.

Denton voters overwhelmingly passed a citizens’ initiative to ban fracking in the city limits on Nov. 4, 2014. The next morning, both the state and the Texas Oil and Gas Association filed lawsuits to block the ban. Denton district judges dismissed both lawsuits in September 2015 after the Denton City Council repealed the citizens’ initiative and lifted a drilling moratorium.

The billing records also showed a push to recruit other state agencies to the case against Denton’s frack ban. City Attorney Anita Burgess said Denton’s legal team was aware the city could have faced more state foes beyond the land office, a state agency that manages public lands.

“It seemed they were doing everything they could to block it [the ban],” Burgess said.

In all, the state’s legal bills were comparable to the city’s. Denton paid more than $75,000 to outside attorneys to defend itself against the land office.

Denton also paid more than $121,000 to outside attorneys in the industry’s lawsuit. Through its spokeswoman, Gretchen Fox, the Texas Oil and Gas Association declined to say how much it paid its attorneys to sue Denton.

Mark Havens, general counsel for the land office, said the state agency had been talking with Denton officials before the vote. The land office believed its interest was larger than a singular ban on fracking in Denton.

“This was not only Denton-focused, but a statewide issue,” Havens said.

In addition, agency officials said they felt they had to move quickly.

“If the city were allowed to enforce the ban, there would have been financial impacts on operators,” Havens said.

Neither lawsuit ended up blocking the city from enforcing the ban. That move would ultimately come from the Texas Legislature.

The land office had sued in part because the ordinance that was part of the citizens’ initiative did not differentiate between private- and state-owned minerals.

The Texas General Land Office has few parallels in other states. It began with the Republic of Texas, and the elected office of land commissioner continued after Texas joined the Union to oversee public lands. In 1876, the new state constitution set aside half the public lands, including Gulf of Mexico tidelands, to help fund public schools. Money from public land sales and leases goes to the Permanent School Fund. In 2014, the land office deposited $1.2 billion, largely from oil and gas revenue. Recently, the land office has diversified its work on behalf of Texas schools, such as pursuing offshore leases for renewable energy.

Recent technological advancements in fracking made it possible for energy companies to get much more oil and gas out of tighter rock formations. But the technology has also brought a host of problems — noise, traffic, lights, air emissions, threats to water supplies and property values, fires, blowouts, and even earthquakes — to communities where the industry moved in.

Denton accommodated the burgeoning industry for more than a decade. But in November 2014, Denton voters decided they’d had enough. Nearly 15,000 people, or about 59 percent of the city’s voters, approved a citizens’ initiative to ban fracking in the city limits.

Before the ballots were even counted on Election Day, attorneys for both the state and the industry had already drafted their lawsuits and shared them with each other, records showed.

Throughout the brief time both lawsuits against the ban were in court, the state and industry made similar claims. The state filed in Travis County and the Texas Oil and Gas Association filed in Denton County, but many filings, from the original claim to the final pleadings, contained the same language.

Early billings showed the Texas Railroad Commission might join the fight. But that state agency, which regulates the oil and gas industry, never filed suit itself or joined the land office’s case as a co-plaintiff.

Denton proposed a compromise to the land office in early December 2014. To settle with the state, they would make it clear that the citizens’ initiative wouldn’t apply to state-owned lands.

Texas cities typically don’t claim that their ordinances affect state agencies. The state fire marshal, for example, not the city’s, oversees fire codes at the University of North Texas, Texas Woman’s University and the Denton State Supported Living Center.

The land office considered the offer, but the records also showed they also spent that month working to transfer the case to the state attorney general’s office.

The original case had been brought under former Land Commissioner Jerry Patterson. The new administration under George P. Bush took its own look at the case, Havens said. They sought additional counsel whether the Texas attorney general should be handling the case.

Cynthia Meyer, spokeswoman for Texas Attorney General Ken Paxton, declined an interview, saying the office does not comment on legal strategy.

Burgess said she suspected the state may have been getting ready to argue that the attorney general represented all the state agencies and keep the case in Austin. In some states, agency officials prefer staying close to the capital because the judges are more likely to lean in the state’s favor, legal experts say.

In the end, neither case went very far in court. A Travis County judge ordered the land office case be moved to Denton County. Then, both cases essentially stopped as the Texas Legislature moved swiftly to pass House Bill 40 in early 2014.

The legislation both nullified Denton’s ban and greatly limited the ability of local governments to make rules for oil and gas companies operating in their jurisdictions. The day after Gov. Greg Abbott signed HB 40 into law, Vantage Energy began fracking in far western Denton.

Within days, both the industry and the state amended their lawsuits to press the Denton City Council to both repeal the ban and end a drilling moratorium. The council repealed the ban in June and ended the moratorium in August.

The votes to repeal the ban, lift the moratorium and relax some local restrictions on drillers deeply divided the City Council and Denton voters.

Many legal experts call HB 40 a legislative overreach. Activists say they are working to repeal HB 40 in the next session and campaign against the legislators who supported it. Several legislators who supported HB 40, including Myra Crownover, R-Denton, announced they would not run again. In Denton, activists have forced the recall election of at least one council member who voted to repeal the ban, District 4 representative Joey Hawkins.

Recall efforts for District 1 council member Kevin Roden appear to have languished. Eight weeks have passed since activists ostensibly began circulating a recall petition. The charter does not allow any signatures on a recall petition to be more than 45 days old.

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881 and via Twitter at @phwolfeDRC.