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Judge rules that Dallas City Hall owes gas driller Trinity East more than $44 million

Trinity East

The Dallas Morning NewsDallas City Hall owes gas driller Trinity East Energy $44.5 million — and counting.

That’s according to the final judgment signed Thursday afternoon by Judge Craig Smith, who presided over the recent two-week trial pitting the city against the company that paid Dallas $19 million for the right to drill on parkland and was eventually denied the permits needed to do so.

Earlier this month, a jury found the city liable for negligent misrepresentation, statutory fraud and a regulatory taking, denying them use of the parkland. After five hours of deliberation, the jury said Dallas owed Trinity East somewhere between $23 million and $33 million in damages. Smith was ultimately left to determine the final amount.

And after a hearing Thursday, Smith hit Dallas for the maximum amount: $33.6 million. To which he added an interest payment worth $10.9 million.

On top of that, Smith ruled, Dallas owes an additional $4,608 in interest every day it refuses to pay Trinity East.

Attorneys for Trinity East had little to say when reached Wednesday. Art Anderson said only, “We’re pleased that the court judgment was in conformance with the jury’s verdict.”

City Manager Mary Suhm at the Feb. 27, 2013, Dallas City Council meeting where it was revealed she had told Trinity East Energy she was confident she could secure the permits they needed to drill on city parkland.
City Manager Mary Suhm at the Feb. 27, 2013, Dallas City Council meeting where it was revealed she had told Trinity East Energy she was confident she could secure the permits they needed to drill on city parkland.(Mona Reeder / Staff Photographer)

 

Interim City Attorney Chris Caso did not immediately respond when asked for comment. The city has not issued a public comment since the verdict was initially handed down on Feb. 6.

City attorneys didn’t actually try the case. Instead, the City Council approved spending $1.17 million on outside counsel — including a $300,000 bump OK’d only two weeks ago.

Dallas initially took Trinity East’s $19 million in 2007, when then-city manager Mary Suhm needed help closing a $90 million budget gap. The company was one of two gas drillers that paid millions for leases on city parkland in northwest Dallas near the Luna Vista Golf Course and the gun range near the Trinity River’s Elm Fork. Trinity East said then, and again at trial, that it believed there was a fortune to be extracted from the easternmost edge of the Barnett Shale.

Suhm told Trinity East, in writing, that she was “reasonably confident” that she could get the company the specific use permits it needed to drill — just as she was telling the council there would be no drilling on parkland. Years of protests and task force meetings followed, and in August 2013, the council declined to approve the permits Trinity East needed. Shortly after, Dallas essentially banned urban drilling by not allowing gas fracking within 1,500 feet of homes and businesses.

In 2014, Trinity East sued the city.

Protesters demonstrated during the city of Dallas' official Luna Vista Golf Course re-opening on October 26, 2012. This is near the land where Trinity East Energy had once hoped to drill for natural gas.
Protesters demonstrated during the city of Dallas’ official Luna Vista Golf Course re-opening on October 26, 2012. This is near the land where Trinity East Energy had once hoped to drill for natural gas.(Kye R. Lee / Staff Photographer)

 

The city can appeal the jury’s verdict or try to settle, based on Smith’s ruling. Because the city won’t comment, it’s not yet clear where it would get the funds to cover the $44.5 million verdict.

The city could issue general obligation bonds to pay the settlement, as it did in 2017 and 2018 when doling out $235 million for back-pay lawsuits involving police and firefighters. The city also has a risk reserve, but it’s not large enough to cover $44.5 million … and counting.

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