Dallas Loses Long Fight With Trinity East Over Drilling in Parks

One of Dallas' longest-standing legal fights is over.
One of Dallas' longest-standing legal fights is over.
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Finally, after a court case that's moved up and down the appellate ladder in fits and starts since 2014, Dallas is going to have to pay Trinity East back for all those drilling rights the city never let the energy company use.

Thursday afternoon, according to The Dallas Morning News' Robert Wilonsky, a Dallas County jury found that the city was liable for between $23 million and $33 million. A judge will make a final decision on the actual payout.

As Wilonsky and Jim Schutze documented in article after article in the Observer, the saga that wrapped up Thursday began with a broken promise made more than a decade ago. The city, facing a budget crunch and under the leadership of former Dallas City Manager Mary Suhm, agreed to take $19 million from Trinity East in exchange for the right to drill for natural gas on Dallas' parkland.

We'll let 2014 Schutze take it from there:

The story starts in 2007 when the city was facing a $90 million budget shortfall in an operating budget of about $1.8 billion. That's 5 percent. If it were you and you had an annual disposable family budget of $50,000, that would be the same as being short by $2,500. Maybe not the end of the world, but where do you get the $2,500?

Dallas City Manager Mary Suhm was looking, and one way to get the extra money quick was by selling gas drilling rights on city-owned land. The City Council said OK, but they told her they would not go along with any "surface drilling" in parks, meaning there could be no drilling rigs on parkland. She could sell somebody the right to put a rig on some other kind of city land and drill sideways under a park, but there could be no rigs on the park itself.

Suhm said she got it. But then she went ahead and signed a contract with Trinity East explicitly including parkland, and she signed a letter of agreement with them saying she was "reasonably confident" she could win them the right to put up rigs and to surface drill on those park sites. At that point Trinity East wrote the city a check for $19 million.

But in August 2013, Suhm failed to get the votes she needed at council, and Trinity East was effectively denied the right to drill on those park sites. So Trinity is now suing the city for violating its contract but also for fraud, basically painting the whole deal as a scam.

Suhm resigned in 2013, shortly after her letter was discovered by the City Council.

At trial, according to Wilonsky, Shayne Moses, Dallas' lead attorney, said that Suhm's confidence, and then her failure to deliver, didn't amount to a breach of contract. The company never actually planned to drill in Dallas, Moses said.

As the lawsuit went forward, Dallas initially won a dismissal, only to see the state's 5th Court of Appeals revive the suit in 2016. 

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