2018 Q4

VirTex Operating Co., Inc. and VirTex Producing Company, L.P. (“VirTex”) currently operate nine wells on the property, all equipped with a diesel generator run pumpjack. In 2012, VirTex approached the Bauerles with a plan and an easement agreement to install overhead powerlines. The proposed layout of these powerlines was likened to that of a spider’s web with many different powerlines going in all different directions. The Bauerles refused to sign the agreement. The Bauerles asked VirTex to halt construction of the powerlines, which VirTex obliged. Id. at *1. action stating that the proposed plan violated the accommodation doctrine because it would significantly impair their use of helicopters on the “lateral surface and super-adjacent airspace.” Id. at *2. A jury found in favor of the Bauerles, and the trial court rendered a verdict in their favor, which also awarded attorney’s fees. Virtex appealed. Id. at *1. 2. The Court of Appeals VirTex argued to the appellate court that the Bauerles failed to prove the elements of the accommodation doctrine. More specifically, they failed to prove that: (1) the proposed powerlines would completely or substantially impair existing hunting operations on the land; (2) there was no reasonable alternative to these existing operations; and (3) there was a reasonable, customary and industry-accepted alternative available to VirTex. Id. at *4. The court found that the first element was met because there was enough evidence presented for a jury to properly conclude that the powerlines would substantially impair the Bauerles’s use of the surface for their commercial hunting operation. The evidence presented showed that the powerlines would make flying helicopters on the property “a very dangerous situation.” Some of the pilots even stated that it would be so dangerous that they would no longer perform the task. Id. at *5. The court also found that the second element, no reasonable alternatives to the existing operations, was met. VirTex argued that the Bauerles could use four wheelers on the acreage where the proposed powerlines would be located and could continue to use helicopters on the other The Bauerles then filed a declaratory judgment

5,500 acres of unleased property. However, the Bauerles argued that due to the size of the property and the unpredictability of the deer, the only reasonable means of capture was by helicopter. The Bauerles also argued that hunters lease the property specifically so that they can use helicopters to cover large amounts of terrain and quickly capture the deer. Two of the hunters who lease the land confirmed (1) that four wheelers would not work because the amount of land they have to cover; (2) that they may have to fly into VirTex’s leased area because of the unpredictability of the animals; and (3) that they would no longer lease the land from the Bauerles if they were not able to use helicopters. Id. at *7. Lastly, the court found that the Bauerles satisfied the third element by proposing a number of alternatives to overhead powerlines such as: underground powerlines, fueling the pumpjacks by diesel or natural gas, or continue renting the generators currently powering the pumpjacks. Evidence presented showed that powering the pumpjacks by natural gas was a potential option, but would cost an extra $200-$300 per month. Testimony presented also showed that underground lines were a reasonable alternative, albeit at an additional cost. Finally, Dale Phipps, an owner and officer of VirTex testified that the temporary generators currently powering the pumpjacks were a feasible option as they had been, and were currently, being used to power wells in other counties, although it was more expensive. Id. at *10. As a result, the appellate court concluded that the evidence was factually sufficient to support the jury’s finding and the trial court’s ruling in favor of the Bauerles. Id. at *10. 3. The Texas Supreme Court On February 26, 2018, VirTex petitioned the Texas Supreme Court for review, claiming that the Bauerles have not met the elements of the accommodation doctrine on two grounds. First, the hunters use the helicopters for only part of the year. Second, the wells cover a small portion of the land. VirTex also continues to claim that the Bauerles have not provided sufficient evidence of other reasonable, industry-accepted methods for powering the wells.

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