On February 7, 2017, a Texas appellate court ruled that the city of Dallas must face a $200 million lawsuit filed back in 2014, where a driller alleged that the city acted improperly by entering into a mineral lease with the company and then denying it permits to drill—effectively rendering the lease worthless. See City of Dallas v. Trinity East Energy, LLC, No. 05-16-00349-CV (Tex. App.- Dallas Feb. 7, 2017). Dallas had argued that it was immune from suit because it was acting in a governmental function when it entered into the lease; however, the court held that the city was actually acting in a proprietary function and therefore was not immune.
Trinity East Energy, LLC signed a mineral lease with the city to drill for oil and gas, but then the city of Dallas refused to approve Trinity’s applications for permits to drill. Trinity in turn sued for breach...
