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Texas Supreme Court sticks with its Hyder decision

The Texas Supreme Court denied a request to revisit a case pitting Chesapeake Energy against the well known Hyder family in Fort Worth.
The Texas Supreme Court denied a request to revisit a case pitting Chesapeake Energy against the well known Hyder family in Fort Worth. Star-Telegram archives

Last year, Chesapeake Energy hoped that the Texas Supreme Court would throw it a life preserver and revisit its decision in its lawsuit with the Hyder family of Fort Worth. It was a ruling in favor of the Hyders that Chesapeake had characterized as a “sea change in the law.”

Well, on Jan. 29, while the state’s highest court did take the opportunity to tweak it’s original June opinion — changing a word here and a line there — it denied Chesapeake’s request for a rehearing, bringing the case to an end.

By doing so the court upheld a 2014 San Antonio appeals court ruling that awarded the Hyder family at least $1 million in royalties, interest and attorney fees.

In its ruling, written by none other than Chief Justice Nathan Hecht, the majority ruled that the agreement the Hyder family signed with the original production company, a lease that was bought by Chesapeake, specifically barred the company from subtracting the money from the checks.

David Drez, the Hyders' attorney, argued the case involved a specifically negotiated, heavily tailored lease. But Chesapeake stated the court “disregarded its own precedent” and “inexplicably ignored the law.” Chesapeake's lawyers said the court was, “wrong, and its rushed decision should be corrected.”

Other energy companies anxious about the ruling such as BP American, Devon Energy and XTO Energy of Fort Worth backed Chesapeake’s argument.

At the same time attorneys representing the city of Fort Worth, Tarrant County College and landowners large and small suing Chesapeake over royalty payments wanted the Supreme Court to hold its ground.

Don’t be surprised if the high court’s decision gets mentioned in the upcoming cases against the Oklahoma City energy giant.

Max B. Baker: 817-390-7714, @MaxbakerBB

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