VirTex Operating Co. v. Bauerle

Robert and Cynthia Bauerle (plaintiffs) owned an 8,500-acre ranch in Texas. The Bauerles ran a commercial-hunting business in which they leased the ranch to hunters for game hunting. The hunters regularly used helicopters to survey game and capture whitetail deer on the ranch. ExxonMobil owned the mineral estate underlying the Bauerles’ ranch and executed an oil-and-gas lease to VirTex Operating Co. (VirTex) (defendant). VirTex operated nine oil wells on the ranch. VirTex’s wells were equipped with pumpjacks, and VirTex expected that overhead power lines would eventually be installed as the pumpjacks’ power source. In 2012, VirTex asked the Bauerles to sign an easement allowing power lines to be installed on the ranch. The Bauerles refused, expressing concern that the power lines would interfere with the hunting helicopters. The Bauerles then sued VirTex in Texas state court, seeking a declaration that installing the power lines would substantially impair the Bauerles’ preexisting use of the ranch property’s lateral surface and super-adjacent airspace. VirTex counterclaimed, alleging that the Bauerles’ refusal to allow the power lines unreasonably interfered with VirTex’s mineral-extraction rights. VirTex asserted that installing power lines was a reasonable and customary practice used by oil-well operators and that there was no other industry-accepted power-generation method available. At trial, the Bauerles presented testimony that the power lines would make helicopter use extremely dangerous and would hinder hunting operations on the ranch. The Bauerles’ witnesses testified that there were no reasonable alternatives to helicopter use and said that they would not lease the ranch from the Bauerles for hunting unless using helicopters was possible. The Bauerles also produced evidence identifying natural gas as a reasonable and industry-accepted alternative power source for VirTex’s pumpjacks. The jury returned a verdict in the Bauerles’ favor, and VirTex appealed.