On June 11, 2020, the Texas Supreme Court ruled 5-4 in favor of PMBG’s client, respondent Margaret Strickhausen. Justice Blacklock authored the majority opinion, joined by Justices Guzman, Lehrmann, Devine, and Busby. Justice Boyd filed a dissenting opinion, joined by Chief Justice Hecht and Justices Bland and Huddle.
At issue was the affirmative defense of implied ratification, and whether a landowner’s acceptance of royalty checks from a wrongfully pooled well will always prevent a challenge to the underlying pooled unit. According to the Supreme Court, the answer is no, and depends on the circumstances and language of the lease.
According to the latest Annual Statistical Report for the Texas Judiciary, the Texas Supreme Court affirmed only 20% of its cases, making Ms. Strickhausen’s win more significant.
Margaret Strickhausen was represented by PMBG partners Baldemar Garcia Jr. and Ricardo E. Morales. When contacted by Law 360 for a quote, Mr. Garcia stated “Margaret Strickhausen feels vindicated that the Texas Supreme Court agreed with her belief that her rightfully-owed royalties could not be held for ransom by an oil and gas well operator seeking to exact an implied ratification of its undisputed wrongful pooling. Fortunately, asking for forgiveness instead of permission is not always easier in the oil and gas industry. We are reassured by the Court’s decision that implied ratification remains a fact-intensive determination.”