PYR Energy Corp. v. Samson Resources Co., --- F.Supp.2d ----, 2007 WL 106169(E.D.Tex. Jan 10, 2007) (NO. 1:05CV530)
Judge: Earl S. Hines
Holding:
I'll let Judge Hines' order speak for itself. It begins.
One hundred and six years ago today, within the territorial jurisdiction of this district and less than ten miles south of the present courthouse, the ground beneath a small wooden derrick housing an ongoing drilling operation of a single wildcat well began to shudder. Around 10:30 A.M.,
“··· with an ear-shattering roar, the earth began to spew uncounted tons of mud, gas, rocks, and finally a towering column of heavy green crude oil, six inches around, erupting almost two hundred feet in the air.
The roaring geyser of oil hurled pipe skyward and scattered it over the prairie like straws. It blasted aawy the crown block of the homemade derrick, knocked off the superstructure, and sent the terrified crew scrambling for safety before it blazoned the Southeast Texas sky with a soaring banner of oil. With the advent of this well-the Lucas Gusher, named for Captain Anthony F. Lucas, the Austrian mining engineer who brought it in-the Spindletop oil field was born.”
(Internal citation omitted). The Spindletop field itself peaked within two years and then steadily declined. But it generated an oil exploration boom unlike any before. By 1917, there were twenty-six refineries operating in Texas, and by the eve of World War II, there were forty-six oil fields within a hundred-mile radius of Spindletop, with 2440 producing wells.
Needless to say, an abundance of legal disputes inevitably accompanied this much commercial activity. Texas jurists, legislators, and regulators were required to steadily and vigorously develop the state's standards governing the rights of those who own and produce such vital commodities as oil and natural gas. Texas now is richly endowed with a body of natural resources law fashioned by more than a century of experience.
Unfortunately, that endowment does not fully sustain the present lawsuit which centers on one of Spindletop's offshoot fields known as the Nome Prospect, located not far away from Spindletop in Jefferson County, Texas.
(Internal citations omitted; emphasis added). With that colorful introduction, Judge Hines embarks on an analysis of competing motions for reconsideration of his prior summary judgment orders in this case. Judge Hines observes:
In most instances, the specter of additional expense, protracted proceedings and uncertain outcomes propels litigants, especially sophisticated businesses more interested in achieving optimum economic results than in developing arcane points of state law, to negotiate a resolution of their differences through alternative means. To date, however, the parties here prefer a judicial resolution. So, the wheels of justice shall grind, unavoidably slow but exceedingly fine. Future law professors, legal commentators, and seminar speakers, at least, and perhaps some courts will benefit if the parties stay their course.
In the end, with the single exception of addressing one issue left unaddressed in his original order, Judge Hines did not depart from his original conclusions, but ended the case on a interesting note:
PYR's new brief makes a far better argument in support of its position regarding the reversionary working interest than was in any of its earlier briefs. Moreover, Samson's reply does not address any of these new arguments, and says little more than that the court correctly decided the issue in its original opinion. This leaves the debate in a “court versus PYR” posture. Given that Samson's lawyers are more experienced in the present subject matter than the generalist presiding judge, Samson's silence is cause for pause. It raises concern that Samson is unable or unwilling to answer PYR's new arguments.
While the court is unpersuaded by PYR's new arguments, in candor the court's original analysis and PYR's new opposing arguments run at almost a dead heat. This issue is as close to 50/50 as it could possibly be. The court, however, cannot simply leave the scales of justice evenly balanced as a law professor might do at the end of a stimulating lecture on a perplexing issue. The scales must tip, and the final tipping point for the court is consistency. . . . Consistency and balance generally are considered hallmarks of impartial justice. There is a nuanced view that “a foolish consistency is the hobgoblin of little minds.” [Ralph Waldo Emerson, Self Reliance, in Essays: First Series (1841)].Others must judge whether the court has fallen victim to a foolish consistency. But for the reasons expressed in this section, the court will adhere to its original view.