Opinion filed August 30, 2013

In The

Eleventh Court of Appeals __________

No. 11-11-00237-CV

__________

JUD WALTON, Appellant

V.

CITY OF MIDLAND, Appellee

On Appeal from the 238th District Court

Midland County, Texas

Trial Court Cause No. CV-47,184

O P I N I O N

Jud Walton appeals the trial court’s order granting the City of Midland’s 

plea to the jurisdiction. In his sole issue, Walton contends that the trial court erred 

in granting the City’s plea to the jurisdiction. We affirm.

Background Facts

Walton owns the surface estate of a 35.4-acre tract located inside the city 

limits of Midland. Endeavor owns an oil and gas lease that includes Walton’s 

tract. Endeavor applied for a permit from the City to drill a well on Walton’s tract.

The City initially denied Endeavor’s application. Endeavor subsequently filed suit,
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contending that the City’s decision constituted inverse condemnation. Endeavor 

and the City ultimately reached a settlement agreement, and as part of their 

agreement, the City granted the previously denied drilling permit application. 

Walton alleges that the City’s act of granting Endeavor a permit to drill constitutes 

a regulatory taking under TEX. CONST. art. I, § 17.

In his trial court pleadings, Walton asserted that the granting of the permit to 

drill on his property constituted a physical invasion of his surface estate. He 

additionally alleged that a provision of the permit that required the drilling of a 

water well for maintaining trees constituted an invasion of his groundwater. He 

asserted a cause of action for inverse condemnation based upon these allegations.

On appeal, Walton focuses primarily on the water well requirement of the 

drilling permit. He asserts that this provision constitutes a physical invasion of his 

property that is indefinite and without restriction. The requirement provides in 

relevant part as follows:

Operator shall drill one (1) freshwater well for the provision of 

irrigation water to maintain the trees required above. Said water well 

shall not be closer than five hundred (500) feet to the permitted oil 

and gas well. Operator shall maintain all required trees in a healthy 

and growing condition. The operator is authorized to drill only one 

well for irrigation purposes.

The drilling permit also required Endeavor to place trees around the well and to 

provide for their care for a period of time. Walton contends that the water well 

requirement required Endeavor to drill a water well on his property for landscaping 

purposes and that this requirement exceeded Endeavor’s right to use water under 

its oil and gas lease.

Standard of Review

A plea to the jurisdiction challenges a court’s subject-matter jurisdiction and 

is a question of law that is reviewed de novo. Tex. Dep’t of Parks & Wildlife v. 
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Miranda, 133 S.W.3d 217, 227–28 (Tex. 2004). Subject-matter jurisdiction is 

essential for a court to have the authority to resolve a case. Tex. Dep’t of 

Transp. v. Jones, 8 S.W.3d 636, 638–39 (Tex. 1999). To invoke the subject-matter 

jurisdiction of a court, the one bringing the claim must allege facts that 

affirmatively demonstrate that the court has jurisdiction to hear it. Miranda, 133 

S.W.3d at 226; Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 

(Tex. 1993). To prevail on a plea to the jurisdiction, a defendant must show an 

incurable jurisdictional defect apparent from the face of the pleadings that makes it 

impossible for the plaintiff’s petition to confer jurisdiction on the district court. 

Bybee v. Fireman’s Fund Ins. Co., 331 S.W.2d 910, 914 (Tex. 1960). Courts must 

consider evidence when necessary to decide jurisdictional issues. Miranda, 133 

S.W.3d at 221; Tex. Natural Res. Conservation Comm’n v. White, 46 S.W.3d 864, 

868 (Tex. 2001); Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554–55 (Tex.

2000). We do not look to the merits of the plaintiff’s case in conducting our 

review, but consider only the plaintiff’s pleadings and the evidence pertinent to the 

jurisdictional inquiry. Miranda, 133 S.W.3d at 225–26. We presume all wellpleaded facts to be true and construe the pleadings liberally in favor of conferring 

jurisdiction. Id. at 226–28.

Sovereign immunity, unless waived, protects the State and its various 

divisions from damage suits. Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 

694 (Tex. 2003); Gen. Servs. Comm’n v. Little-Tex Insulation Co., 39 S.W.3d 591, 

594 (Tex. 2001). As opposed to the State and its various divisions, the term 

“governmental immunity” is the appropriate term to apply to immunity enjoyed by 

political subdivisions of the State, including counties, cities, and school districts. 

Wichita Falls State Hosp., 106 S.W.3d at 694 n.3. Governmental immunity has 

two components: immunity from suit and immunity from liability. Tooke v. City of 

Mexia, 197 S.W.3d 325, 332 (Tex. 2006). Immunity from suit bars suit against a 
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governmental entity altogether. Id. When a political subdivision of the State is 

immune from suit under the doctrine of governmental immunity, a court lacks 

subject-matter jurisdiction over the suit. Jones, 8 S.W.3d at 638. Immunity from 

suit can be waived only by statute or legislative resolution. Fed. Sign v. Tex. S. 

Univ., 951 S.W.2d 401, 405 (Tex. 1997). Governmental immunity from suit is 

properly asserted in a plea to the jurisdiction. See Miranda, 133 S.W.3d at 225–26.

Analysis

Walton has alleged a claim for inverse condemnation against the City. 

When a landowner’s property has been taken or damaged for public use without 

compensation, the landowner may bring an inverse condemnation proceeding. See 

City of Carrollton v. HEB Parkway South, Ltd., 317 S.W.3d 787, 792 (Tex. App.—

Fort Worth 2010, no pet.). The proceeding is “inverse” because the property 

owner brings the suit, as compared to a condemnation proceeding brought by a 

governmental entity to appropriate private property for a public purpose. Id. The 

Texas constitution provides a clear and unambiguous waiver of immunity from suit 

for inverse condemnation claims under the takings clause. TEX. CONST. art. I, 

§ 17; El Dorado Land Co., L.P. v. City of McKinney, 395 S.W.3d 798, 801 (Tex.

2013); Steele v. City of Houston, 603 S.W.2d 786, 791 (Tex. 1980). However, a 

trial court lacks jurisdiction and should grant a plea to the jurisdiction where a 

plaintiff cannot establish a viable takings claim. Tex. Dep’t of Transp. v. A.P.I. 

Pipe & Supply, LLC, 397 S.W.3d 162, 167 (Tex. 2013).

The elements of an inverse condemnation claim are (1) the governmental 

entity intentionally performed an act in the exercise of its lawful authority, (2) that 

resulted in the taking, damaging, or destruction of the claimant’s property, (3) for 

public use. See City of Houston v. Trail Enters., Inc., 377 S.W.3d 873, 878 (Tex.

App.—Houston [14th Dist.] 2012, pet. filed). An inverse condemnation claim may 

be based on a physical or regulatory taking. Mayhew v. Town of Sunnyvale, 964 
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S.W.2d 922, 933 (Tex. 1998). Walton’s inverse condemnation claim involves an 

alleged regulatory taking.

The Texas Supreme Court recently addressed regulatory takings in Edwards 

Aquifer Authority v. Day, 369 S.W.3d 814, 837–41 (Tex. 2012). Citing Sheffield 

Development Co. v. City of Glenn Heights, 140 S.W.3d 660 (Tex. 2004), the court 

noted that Texas courts have generally been guided by the United States Supreme 

Court’s construction and application of the similar guarantee provided by the Fifth 

Amendment to the United States Constitution. The court recognized that the 

Supreme Court has developed three analytical categories for regulatory takings as 

summarized in Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (2005). The court 

quoted the following text from Lingle:

Our precedents stake out two categories of regulatory action 

that generally will be deemed per se takings for Fifth Amendment 

purposes. First, where government requires an owner to suffer a 

permanent physical invasion of her property—however minor—it 

must provide just compensation. See Loretto v. Teleprompter 

Manhattan CATV Corp., [458 U.S. 419, 102 S.Ct. 3164, 73 L.Ed.2d 

868] (1982) (state law requiring landlords to permit cable companies 

to install cable facilities in apartment buildings effected a taking). A 

second categorical rule applies to regulations that completely deprive 

an owner of “all economically beneficial us[e]” of her property. 

[Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1019, 112 

S.Ct. 2886, 120 L.Ed.2d 798 (1992) (emphasis in original).] 

. . .

Outside these two relatively narrow categories (and the special 

context of land-use exactions ... ), regulatory takings challenges are 

governed by the standards set forth in Penn Central Transp. Co. v. 

New York City, [438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631] (1978). 

The Court in Penn Central acknowledged that it had hitherto been 

“unable to develop any ‘set formula’” for evaluating regulatory 

takings claims, but identified “several factors that have particular 

significance.” [Id. at 124, 98 S.Ct. 2646.] Primary among those 
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factors are “[t]he economic impact of the regulation on the claimant 

and, particularly, the extent to which the regulation has interfered with 

distinct investment-backed expectations.” Ibid. In addition, the 

“character of the governmental action”—for instance whether it 

amounts to a physical invasion or instead merely affects property 

interests through “some public program adjusting the benefits and 

burdens of economic life to promote the common good”—may be 

relevant in discerning whether a taking has occurred. Ibid. The Penn 

Central factors—though each has given rise to vexing subsidiary 

questions—have served as the principal guidelines for resolving 

regulatory takings claims that do not fall within the physical takings 

or Lucas rules.

Although our regulatory takings jurisprudence cannot be 

characterized as unified, these three inquiries (reflected in Loretto, 

Lucas, and Penn Central) share a common touchstone. Each aims to 

identify regulatory actions that are functionally equivalent to the 

classic taking in which government directly appropriates private 

property or ousts the owner from his domain. Accordingly, each of 

these tests focuses directly upon the severity of the burden that 

government imposes upon private property rights.

Day, 369 S.W.3d at 838–39 (quoting Lingle, 544 U.S. at 538–39) (alterations in

original).

Walton contends that the water well requirement in the permit constitutes a 

taking under Loretto because it required him to suffer a permanent physical 

invasion of his property. We disagree. We initially note that the provision did not 

require Endeavor to drill the water well on Walton’s property. The requirement 

only provided that the water well was to be located no closer than 500 feet to the 

permitted oil and gas well. Thus, the water well could have been drilled on 

someone else’s property and still have complied with the permit’s requirement. 

Accordingly, the water well provision did not require Walton to suffer a permanent 

physical invasion of his property.
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Additionally, a drilling permit granted to Endeavor to drill an oil and gas 

well did not compel Walton to suffer a physical invasion of his property. The 

Texas Supreme Court held in Magnolia Petroleum Co. v. Railroad Commission, 

170 S.W.2d 189, 191 (Tex. 1943), that a permit to drill an oil and gas well is 

“purely a negative pronouncement” that “grants no affirmative rights to the 

permittee to occupy the property.” The court recently reaffirmed the holding in

Magnolia Petroleum Co. in FPL Farming Ltd. v. Environmental Processing 

Systems, L.C., 351 S.W.3d 306, 310–12 (Tex. 2011), wherein the court held that, 

as a general rule, a permit granted by an agency does not act to immunize the 

permit holder from civil tort liability from private parties for actions arising out of 

the use of the permit. The court in FPL Farming cited a recent opinion from the 

Amarillo Court of Appeals for the following proposition: “‘[O]btaining a permit 

simply means that the government’s concerns and interests, at the time, have been 

addressed; so, it, as a regulatory body, will not stop the applicant from proceeding 

under the conditions imposed, if any.’” 351 S.W.3d at 311 (alteration in original)

(quoting Berkley v. R.R. Comm’n of Tex., 282 S.W.3d 240, 243 (Tex. App.—

Amarillo 2009, no pet.)).

Under the authorities cited above, the permit issued by the City did not grant 

any affirmative rights to Endeavor to occupy or use Walton’s property. The permit 

did not authorize Endeavor to undertake any action that was not otherwise 

authorized, and it did not shield Endeavor from any liability to Walton.1

 Securing 

a permit does not immunize the recipient from the consequences of its actions if 

those actions affect the rights of third parties. Berkley, 282 S.W.3d at 243. 

Furthermore, a permit also does not authorize the recipient to act with impunity 

toward third parties. Id.

 1

We express no opinion regarding Endeavor’s potential liability to Walton for any action it took 

on his property.
8

The ordinance at issue in Loretto provided that a landlord “must permit a 

cable television company to install its cable facilities upon his property.” 458 U.S. 

at 421. The ordinance in Loretto also contained a provision that limited the compensation due the landlord from the cable company to a one-time payment of one 

dollar for the intrusion. 458 U.S. at 423–24. Loretto is inapplicable to the facts in 

this case because the permit issued by the City does not require Walton to 

acquiesce in any action taken by Endeavor. Furthermore, the permit does not 

contain any provisions limiting the compensation that Walton could seek from 

Endeavor.2

Walton also contends that he asserted a viable claim under Lucas. As noted 

previously, Lucas applies to regulations that completely deprive an owner of all

economically beneficial use or productive use of his or her property. Day, 369 

S.W.3d at 838; Sheffield, 140 S.W.3d at 671. A Lucas taking is sometimes 

referred to as a total regulatory taking. Lingle, 544 U.S. at 538, 548; Hallco Tex., 

Inc. v. McMullen Cnty., 221 S.W.3d 50, 56 (Tex. 2006). It is limited to the 

extraordinary circumstance when no productive or economically beneficial use of 

land is permitted and the landowner is left with a token interest. Sheffield, 140 

S.W.3d at 671.

Walton contends that the City’s act of granting a permit to Endeavor to drill 

an oil and gas well on his property deprived him of all economically beneficial use 

of the property. In asserting this contention, Walton states that, at the time that he 

acquired his property, he did not anticipate that the City would permit the owner of 

the mineral estate to drill on his property. We conclude that Walton has not 

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Walton contends that the permit contains “coercive” provisions designed to force a landowner to 

acquiesce in the drilling of a water well on his property. He contends that, if the landowner consents to 

the water well, the permit requires the operator to periodically test the water well but that, if the landowner does not consent, the operator is not required to test the well. However, Walton has not cited a 

provision in the permit setting out this requirement for the water well to be drilled for landscaping 

purposes.
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asserted a viable claim under Lucas. Walton’s evidence indicates that his property 

had a value of at least $3,000 per acre after Endeavor drilled the well. 

Accordingly, the granting of the permit did not deprive him of all economically 

beneficial use of the property to the extent that he was only left with a token 

interest.

Walton concedes that he acquired the property subject to the mineral 

severance in favor of Endeavor and its predecessors. As noted by Walton, “the 

City simply allowed what the title itself would have allowed.” Thus, the City’s act 

of granting a permit to Endeavor to drill an oil and gas well comports with the 

parties’ already existing property rights. As noted previously, the permit did not 

confer any rights to Endeavor that it did not otherwise possess. Accordingly, the 

permit granted by the City to Endeavor simply does not rise to the level of a taking. 

Walton’s sole issue on appeal is overruled.

This Court’s Ruling

We affirm the judgment of the trial court.

TERRY McCALL

JUSTICE

August 30, 2013

Panel consists of: Wright, C.J.,

McCall, J., and Judge Herod.3

Willson, J., not participating.

 3

Steven R. Herod, Judge, 91st District Court, Eastland, sitting by assignment.