State v. Bp America Production Co.

• Decision Date: 08 May 2009
• Docket Number: No. 03-07-00685-CV.,03-07-00685-CV.
• Citation: 290 S.W.3d 345
• Parties: The STATE of Texas; Jerry Patterson, in his Official Capacities as Land Commissioner and as Chairman of the School Land Board; and The General Land Office, Appellants, v. BP AMERICA PRODUCTION COMPANY, as Successor to Vastar Resources, Inc., Appellee.
• Court: Texas Court of Appeals

290 S.W.3d 345

The STATE of Texas; Jerry Patterson, in his Official Capacities as Land Commissioner and as Chairman of the School Land Board; and The General Land Office, Appellants, v. BP AMERICA PRODUCTION COMPANY, as Successor to Vastar Resources, Inc., Appellee.

No. 03-07-00685-CV.

Court of Appeals of Texas, Austin.

May 8, 2009.

Rehearing Overruled June 24, 2009.

Priscilla M. Hubenak, Assistant Atty. Gen., Austin, TX, for appellant.

Dan Miller, McElroy, Sullivan & Miller, L.L.P., Austin, TX, for appellee.

Before Justices PURYEAR, PEMBERTON and WALDROP.

OPINION

BOB PEMBERTON, Justice.

This is an interlocutory appeal from a district court order denying a plea to the jurisdiction based on sovereign immunity. The underlying controversy concerns ownership of Harris County property that, while once fast land, now lies under the waters of the San Jacinto River. Claiming that this property is State-owned submerged land, the Commissioner of the General Land Office, through the School Land Board, granted oil and gas leases on the property to a third party, Etoco, Inc. Appellee BP America Production Company claims the same property under a recorded deed and asserts that it retained title because the San Jacinto River's encroachment resulted from subsidence caused by the acts of third parties.

BP¹ sued the State of Texas; the General Land Office (GLO); and the Hon. Jerry Patterson, in his official capacities as Land Commissioner and as Chairman of the School Land Board² (collectively, the State Defendants); as well as Patterson, in his individual capacity; and Etoco. BP asserted a trespass-to-try-title claim, claims for declaratory relief under the Uniform Declaratory Judgments Act (UDJA) and section 2001.038 of the Administrative Procedure Act, a constitutional takings claim, and a statutory takings claim under the Private Real Property Rights Preservation Act (PRPRPA). The State Defendants filed a plea to the jurisdiction, asserting that sovereign immunity barred all of BP's claims. The district court overruled the State Defendants' plea in its entirety.

In a single issue, the State Defendants contend that the district court erred in denying their plea to the jurisdiction. Concluding that the district court erred in denying the plea as to most of BP's UDJA claims, its APA claim, and its PRPRPA claim, we will reverse the district court's order in part and affirm in part.

STANDARD AND SCOPE OF REVIEW

An assertion that sovereign immunity from suit deprives a trial court of subject-matter jurisdiction over a claim may be raised through a plea to the jurisdiction. See Texas Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225-26 (Tex.2004); Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex.2000); Hendee v. Dewhurst, 228 S.W.3d 354, 366 (Tex. App.-Austin 2007, pet. denied). The determination of whether the trial court has subject-matter jurisdiction begins with the pleadings. See Miranda, 133 S.W.3d at 226. The pleader has the initial burden of alleging facts that affirmatively demonstrate the trial court's jurisdiction to hear the cause. Id. (citing Texas Ass'n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993)). Whether the pleader has met this burden is a question of law that we review de novo. Id. We construe the pleadings liberally and look to the pleader's intent. Id. We also assume the truth of the jurisdictional facts alleged in the pleadings unless the defendant presents evidence to negate their existence. Id. at 227 (citing Bland, 34 S.W.3d at 555). Where such a challenge implicates the merits of the pleader's claims, the defendant must meet the same burden as the movant in a traditional summary judgment motion. Id. at 227-28; see Hendee, 228 S.W.3d at 366-69. In resolving the jurisdictional challenges presented by the plea we may also consider evidence that the pleader has attached to its petition or submitted in opposition to the plea. See Bland, 34 S.W.3d at 555; Hendee, 228 S.W.3d at 361 n. 6, 362 n. 7, 365 nn. 14-15.

If the pleadings do not contain sufficient facts to affirmatively demonstrate the trial court's jurisdiction but do not affirmatively demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency and the plaintiffs should be afforded the opportunity to amend. See Miranda, 133 S.W.3d at 226-27. If the pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be granted without allowing the plaintiffs an opportunity to amend. Id. at 227.

THE RECORD

In its live pleading — its third amended petition — BP alleges that it is "the fee simple owner of 810.041 acres of real property located in Harris County, Texas (the `Subject Property')," and that it claims the property under a valid deed.³ Portions of the "Subject Property," BP pleads, are "adjacent to the San Jacinto River" and "have been encroached upon by water from the river." The State Defendants acknowledge in their brief that these areas (the "disputed property") were "once fast land but [are] now covered by the waters of the San Jacinto River." BP's petition and attachments reflect that the State Defendants have claimed title to the disputed property as State-owned submerged land.⁴ BP pleads that, to the contrary, it has retained title to the disputed property, notwithstanding the San Jacinto River's encroachment, because the encroachment was due to "a significant amount of subsidence caused by the withdrawal of groundwater by nearby municipalities."⁵

BP further alleges that "[i]n May 1997, the State, by action of its School Land Board ... and the Commissioner of the GLO pursuant to Chapters 32 and 52 of the Texas Natural Resources Code and Chapter 9 of the Texas Administrative Code, intentionally granted oil, gas, and mineral leases to Etoco for acreage that included the [disputed property]." BP pleads that "[t]he state's purported leases to Etoco are for public use, in that the royalty to be received is for the benefit of public education." In September 2000, BP adds, it also purported to grant Etoco an oil, gas, and mineral lease for acreage that included the disputed property. Thereafter, on October 2, 2000, BP asserts, the GLO legal staff wrote Etoco asserting that the disputed property was State-owned submerged land and demanding payment to the State of any royalties for hydrocarbons produced therefrom.⁶

In November 2000, BP further alleges, Etoco formed three different units that each included portions of the disputed property, and placed one well on each unit. It adds that two of these wells began production in April 2001, and the third began production in August 2001. Since November 2001, BP further pleads, Etoco has deposited into the court's registry royalties on production from the disputed property assigned to the three wells.⁷

Based on these factual allegations, BP asserts a trespass-to-try title claim;⁸ claims for declaratory relief under the UDJA⁹ and section 2001.038 of the Administrative Procedures Act;¹⁰ a takings claim under the takings clauses of the state and federal constitutions, the due course of law clause of the state constitution, and the due process clause of the federal constitution;¹¹ and a statutory takings claim under PRPRPA.¹² BP does not allege that it obtained a legislative waiver of sovereign immunity beyond any provided in the statutes themselves.

The State Defendants filed a plea to the jurisdiction. They asserted that sovereign immunity bars each of BP's claims, that BP has failed to allege any legislative waiver of that immunity, and that the district court, consequently, lacked subject-matter jurisdiction over the suit. The State Defendants relied solely on BP's pleadings and attachments; they did not present jurisdictional evidence to challenge the existence of the facts BP alleged. Emphasizing BP's acknowledgments in its pleadings and attachments that the State had asserted a title claim to the disputed property, the State Defendants argued that each of BP's claims would require the district court to determine the validity of that claim — to "try the State's title" — and that sovereign immunity bars the district court from deciding such an issue absent legislative consent. Relatedly, the State Defendants argued that BP's claims further implicated sovereign immunity by seeking "money damages" — if BP won the title dispute, it would stand to recover the accrued royalties Etoco had paid into the court's registry. While acknowledging that the UDJA, APA section 2001.038, the takings clause of the Texas Constitution, and PRPRPA each waive sovereign immunity to some extent,¹³ the State Defendants urged that (1) the UDJA and section 2001.038 did not waive sovereign immunity as to suits against the State to try its title to property; (2) BP failed to allege a proper takings claim because its pleadings demonstrate "the State Defendants believe that the State — not BP — owns the disputed land" and thus "lacked the requisite intent to take property belonging to BP"; and (3) BP failed to exhaust administrative remedies before filing its PRPRPA claim.¹⁴ The district court denied the State Defendants' plea in its entirety. The State Defendants appealed.¹⁵

ANALYSIS

In a single issue on appeal, the State Defendants argue that the district court erred in denying their plea to the jurisdiction.

Trespass-to-try-title claim

Through its trespass-to-try-title claim, BP sought judgment that it "has title to the [disputed property,] ousting the Commissioner and, to the extent it claims under the lease from the Commissioner, Etoco from that property." See Tex.R. Civ. P. 784, 785, 804. BP's claim implicates sovereign immunity, the State Defendants argue, because it seeks to adjudicate the validity of the State's claim to the disputed property and obtain a judgment that BP owns the disputed property and is entitled to possession. In support of these contentions, the State Defendants rely principally on State...