Court Opinion

ID: 2868802
Source: CourtListenerOpinion
Date Created: 2015-09-06 02:28:54.570438+00
Date Added: 2024-06-11T11:35:01.179561
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

ON MOTION FOR REHEARING

NO. 03-02-00474-CV
NO. 03-03-00045-CV
NO. 03-03-00046-CV

Pantera Energy Company, Appellant

v.

Railroad Commission of Texas; ConocoPhillips Company; and Pioneer
Natural Resources, USA, Appellees

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 250TH JUDICIAL DISTRICT
NOS. GN103473, GN200177 & GN200727, HONORABLE W. JEANNE MEURER,
JUDGE PRESIDING

O P I N I O N

	To address concerns raised in the Railroad Commission's motion for rehearing, we
withdraw our original opinion and judgments issued on October 30, 2003, and substitute this opinion
in its place.  Pantera Energy Company filed two suits for judicial review challenging orders of the
Commission that dismissed its forty-eight applications to dissolve certain pooled gas units in the
Panhandle West Field.  It also filed an action for declaratory relief that the Commission had acted
arbitrarily and capriciously by requiring Pantera to provide notice of its applications to offset
operators and mineral owners.  Pantera asserts that the version of Rule 38(d)(3) in effect when its
applications were filed did not require such notice, and that the Commission could not consider other
provisions of Rule 38--particularly Rule 38(h), governing exceptions to density provisions--and
must have approved its applications without a hearing.  See 14 Tex. Reg. 1575 (1989), adopted 14
Tex. Reg. 5255 (1989) (former 16 Tex. Admin. Code § 3.38(d)(3), (h)) (Tex. R.R. Comm'n)
(hereinafter cited as Former Rule 38(d)(3)); 16 Tex. Admin. Code § 3.38(h) (2003). (1)  While the three
causes were pending, the Commission amended Rule 38(d)(3) to expressly require notice to affected
persons listed in Rule 38(h)(1)(A).  See 16 Tex. Admin. Code § 3.38(d)(3) (2003) (hereinafter cited
as New Rule 38(d)(3)).  The district court held that the amendment to the rule was procedural in
nature and thus the Commission, whether it properly required such notice under Former Rule
38(d)(3), could require notice to offset operators and owners in its ongoing consideration of these
applications.  The trial court thus dismissed all three actions as moot.
	We have consolidated the three causes on appeal to consider the common issue:
whether the amendment to Rule 38(d)(3) is procedural in nature and thus applicable to the pending
applications.  We grant the motion for rehearing and affirm the district court's dismissal of the suits
for judicial review because the amended rule moots the controlling issue in those actions;
additionally, we affirm the dismissal of the declaratory-judgment action because it is duplicative of
the relief sought in the suits for judicial review.
BACKGROUND

	In 1948, the Commission adopted special field rules specifying that each well in the
Panhandle West Field will drain 640 acres, making 640 the acreage required for each well drilled. (2)
If a tract does not contain 640 acres, an operator may pool several tracts into one unit in order to drill
a well.  See 16 Tex. Admin. Code § 3.40 (2003).  Almost sixty years ago, more than 150 separate
tracts were pooled to form these forty-eight units on which forty-eight wells have been drilled.  The
operator of a unit that contains an existing well may seek the right to drill an additional well by
applying for an exception to the density restrictions and proving another well is necessary to prevent
the waste of hydrocarbons or confiscation of the operator's property.  See id. § 3.38(f) (2003).  Under
either theory, the operator must present engineering and geological data to prove its entitlement to
an exception to the density rule.  See id. § 3.38(i) (2003).  More importantly to this dispute, the
operator seeking an exception must also give notice to all affected persons, including the operators
and unleased mineral owners of adjacent tracts, because additional wells might adversely affect their
interests.  See id. § 3.38(h) (2003).  In 1997, Pantera applied for a density exception to drill an
additional well on one of the units at issue here.  Phillips Petroleum Company, an offset operator,
received notice and filed a protest; Pantera withdrew its application. (3)
	Subsequently, in December 2000 and September 2001, Pantera filed a total of forty-eight applications to dissolve formerly pooled units in the Panhandle West Field into their
component parts.  Pantera filed its applications pursuant to Former Rule 38(d)(3); (4) the Commission,
however, determined that the applications were, in effect, attempts to obtain exceptions to the density
provisions without complying with Commission rules. (5)  The Commission declined to consider the
applications until Pantera gave notice to offset operators and owners of unleased mineral interests.
See id.  Pantera refused, relying on Former Rule 38(d)(3), which requires notice to only operators
and lessees of tracts within the pooled unit to be dissolved, in this case only to Pantera itself.  See
Former Rule 38(d)(3).  Specifically, Pantera insisted that the last sentence in Former Rule 38(d)(3)
required the Commission to grant its applications without deliberation:  "If written waivers are filed
or if a protest is not filed within the time set forth in the notice of application, the application will
be granted administratively."  See id.  The Commission declined to grant Pantera's applications
administratively.  Regarding two of the applications, the Commission informed Pantera that it could
seek a hearing, but only after giving notice to offsetting operators and unleased mineral interest
owners.  Pantera continued to refuse to give notice and asked the Commission to reconsider.  The
Commission declined to change its ruling and dismissed the applications.
	On October 19, 2001, while the applications were still pending before the
Commission, Pantera filed the first lawsuit in district court seeking a declaratory judgment that the
Commission was improperly applying Former Rule 38(d)(3) by requiring notice to the affected
persons listed in Rule 38(h)(1)(A).  The Commission, in response, challenged the court's jurisdiction
to grant declaratory relief when the Commission's actions were subject to challenge in a suit for
judicial review.  In October 2001, the Commission dismissed Pantera's first two applications; in
December, the Commission dismissed Pantera's remaining applications.  Pantera filed two new suits
seeking judicial review of both Commission orders. (6)
	On January 24, 2002, the Commission amended Rule 38(d)(3) to expressly require
notice to the "affected persons described in subsection (h)(1)(A)."  See New Rule 38(d)(3); 16 Tex.
Admin. Code § 3.38(h).  In April 2002, the district court granted the Commission's and intervenors'
pleas to the jurisdiction and dismissed the declaratory-judgment action.  The Commission and
intervenors then asserted a plea to the jurisdiction in the two suits for judicial review, urging that the
parties' dispute had become moot because of the Commission's amendment to Rule 38(d)(3).  The
district court agreed that the amendment to the rule was a procedural change that applied to the
application process when the rule became effective, mooting any dispute about what notice Pantera
was required to give for these applications.  It dismissed the two suits for judicial review.  Pantera
asks this Court to reverse all three district-court judgments and remand the causes to the district court
for proceedings on the merits.

DISCUSSION

	Pantera urges that the district court erred by declaring its dispute with the
Commission moot because (1) the Commission's amended rule should not be applied retroactively
to its applications and (2) the district court had jurisdiction to determine whether the Commission
violated its own rule by arbitrarily and capriciously requiring notice to offset operators and other
affected persons.  We review a district court's ruling on a plea to the jurisdiction under a de novo
standard of review because subject matter jurisdiction is a question of law.  Mayhew v. Town of
Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998); Cornyn v. County of Hill, 10 S.W.3d 424, 427 (Tex.
App.--Waco 2000, no pet.).

Mootness
	The mootness doctrine implicates subject-matter jurisdiction.  Speer v. Presbyterian
Children's Home & Serv. Agency, 847 S.W.2d 227, 229 (Tex. 1993).  It dictates that courts avoid
rendering advisory opinions by only deciding cases that present a "live" controversy at the time of
the decision.  Camarena v. Texas Employment Comm'n, 754 S.W.2d 149, 151 (Tex. 1988); see
Valley Baptist Med. Ctr. v. Gonzalez, 33 S.W.3d 821, 822 (Tex. 2000).  For a plaintiff to have
standing, a controversy must exist between the parties at every stage of the legal proceedings,
including the appeal.  Williams v. Lara, 52 S.W.3d 171, 184 (Tex. 2001) (citing United States v.
Munsingwear, Inc., 340 U.S. 36, 39 (1950)).  If a controversy ceases to exist, "the issues presented
are no longer 'live' or the parties lack a legally cognizable interest in the outcome," and the case
becomes moot.  Id. (quoting Murphy v. Hunt, 455 U.S. 478, 481 (1982)).  If a case becomes moot,
the parties lose standing to maintain their claims.  Id.  A case becomes moot when (1) it appears that
one seeks to obtain a judgment on some controversy, when in reality none exists, or (2) when one
seeks a judgment on some matter which, when rendered for any reason, cannot have any practical
legal effect on a then-existing controversy.  Texas Health Care Info. Council v. Seton Health Plan,
Inc., 94 S.W.3d 841, 846 (Tex. App.--Austin 2002, pet. denied) (citing Scholl v. Firemen's &
Policemen's Civil Serv. Comm'n, 520 S.W.2d 470, 471 (Tex. Civ. App.--Corpus Christi 1975, no
writ)).  In this instance, the second rationale is implicated:  a decision on the merits in the three
cases--whether the Commission properly required Pantera to give notice to offset operators or acted
arbitrarily and capriciously in so doing--would be an advisory opinion with no practical effect on
a live controversy if New Rule 38(d)(3) is a procedural amendment that now applies to future steps
concerning this dispute.  To decide this appeal, we must determine whether the amended rule is
applicable to the pending applications.

Procedural v. substantive
 Pantera claims that Former Rule 38(d)(3), as it existed on the dates its applications
were filed, governs the notice Pantera was required to give, and that therefore the district court erred
in dismissing these causes as moot.  To sustain this position, Pantera argues that the amendment to
the rule is substantive in nature and thus cannot apply retroactively.  In the alternative, Pantera urges
that even if the amendment is procedural, it cannot be applied retroactively because to do so would
deprive Pantera of vested rights.  The Commission, on the other hand, contends that the notice
required under New Rule 38(d)(3) is only a procedural requirement and thus should be applied from
its effective date forward to govern any consideration of Pantera's pending applications.  See Texas
Dep't of Health v. Long, 659 S.W.2d 158, 160 (Tex. App.--Austin 1983, no writ).
	The basis for Pantera's three suits in district court was that the Commission acted
arbitrarily and capriciously by requiring notice to offsetting operators and unleased mineral owners,
the "affected persons" named in Rule 38(h)(1)(A), when that requirement was not specified in
Former Rule 38(d)(3).  This would seem to mirror the situation in Long, where the legal issue
presented in district court was whether the Department of Health failed to obtain a necessary
certificate from the local commissioners court before granting an application for a municipal landfill.
Before the case could be heard, the Department repealed its rule requiring the certification.  This
Court held, "We have no difficulty in concluding that agency requirements for inclusion, or not, of
items in an application for a landfill are procedural in character."  Id.  We thus held that the new rule
would retroactively govern any pending landfill application, including the appellee's.  This Court
then determined that omitting the very requirement complained of had the effect of eliminating the
whole foundation of the legal complaint and removed this Court's subject-matter jurisdiction.  "A
judgment by this Court on the merits of this appeal, under these circumstances, would be ineffectual
for want of a subject matter upon which it could operate, the validity or application of the
Department's superseded rule being immaterial."  Id.
	In the present appeal, the district court faced the same dilemma.  It first applied the
principle announced in Long to determine that the amended notice requirement in the new rule was
procedural in nature.  Notice requirements have long been considered to be procedural in nature.  See
Parrish v. Brooks, 856 S.W.2d 522, 526 (Tex. App.--Texarkana 1993, writ denied) (notice
provision of tort claims act is procedural, not substantive); Hydrocarbon Research, Inc. v. Calvert,
429 S.W.2d 539, 546 (Tex. Civ. App.--Austin 1968, writ ref'd n.r.e.) (notice provision of tax statute
is wholly procedural in nature).  Although New Rule 38(d)(3) added a requirement while the
amended rule in Long eliminated one, the same principle applies to future steps in pending litigation: 
that no litigant has a vested right in a procedural remedy.  Id. (citing Merchants Fast Motor Lines
v. Railroad Comm'n, 573 S.W.2d 502 (Tex. 1978)).  The gravamen of Pantera's legal
complaint--that the Commission improperly interpreted and applied its former rule--would be
eliminated if that rule were superseded by the new rule.  A legal opinion regarding the proper
interpretation of the former rule "would constitute nothing more than an advisory opinion on an
abstract question of law."  Id. at 161.
	Pantera insists that the amended rule did more than expand the notice provisions for
an application; it also added a provision that the Commission would grant administrative approval
of an application only if it "determines that granting the application will not result in the
circumvention of the density restrictions of this section or other Commission rules . . . ."  New Rule
38(d)(3).  Pantera has asserted that under Former Rule 38(d)(3), the Commission had no discretion
and had to grant an application when a protest was not filed.  The last sentence of the former rule
reads, "If written waivers are filed or if a protest is not filed within the time set forth in the notice
of application, the application will be granted administratively." (7)  By contrast, the amended rule
clearly affords the Commission discretion to consider whether density restrictions or other rules are
being circumvented before granting an application:

A Commission designee may grant administrative approval if the Commission
designee determines that granting the application will not result in the circumvention
of the density restriction of this section or other Commission rules, and if either . . .
written waivers are filed [or] no protest is filed[.]

New Rule 38(d)(3). (8)

	Pantera argues that this makes the amendment substantive in nature, and as such it
may apply only prospectively to applications filed after its effective date.  A substantive act, and by
analogy a substantive rule, will be applied only prospectively unless it appears by fair implication
from the language used that it was the intent of the legislature (or agency) to make it applicable to
both past and future transactions.  Ex parte Abell, 613 S.W.2d 255, 258 (Tex. 1981); Davis v. State,
846 S.W.2d 564, 569 (Tex. App.--Austin 1993, no writ).  Although the merits of Pantera's suit are
not before us, we find it helpful to our analysis to address Pantera's complaint that the Commission
wrongfully withheld granting its applications when all of the then-required notice had been given,
as this goes to Pantera's argument that the rule was substantively changed.  Pantera implicitly asserts
that the use in the former rule of the phrase "will be granted administratively" means that the
Commission had (1) no choice but to grant its application in the absence of any protests, (2) no
discretion to require notice to additional people if it deemed such notice necessary, and (3) no right
to consider any other factors in granting an application, such as how density restrictions might be
circumvented.  Thus, it concludes, the new rule's reference to whether an application's grant will
circumvent density restrictions is a substantive change because an application's grant, in the absence
of a protest, is no longer automatic.  However, it is quite possible that the use of the word "will" in
the former rule is not mandatory but merely directive, especially considering the Commission's duty
to "regulat[e] the production of oil and gas for the prevention of waste as well as for the protection
of correlative rights."  See Texaco, Inc. v. Railroad Comm'n, 583 S.W.2d 307, 310 (Tex. 1979).
	By analogy, although the word "shall" is generally construed as mandatory by courts,
see Cities of Austin, Dallas, Ft. Worth and Hereford v. Southwestern Bell Tel. Co., 92 S.W.3d 434,
442 (Tex. 2002), courts have construed it as merely directive when legislative intent supports such
a construction.  See Thomas v. Groebl, 212 S.W.2d 625, 630-31 (Tex. 1948); Texas Dep't of Pub.
Safety v. Guerra, 970 S.W.2d 645, 648-49 (Tex. App.--Austin 1998, pet. denied).  In determining
whether a statutory provision is directive or mandatory, a court should consider the entire act, its
nature and object, and the consequences that would follow from either construction.  Chisolm v.
Bewley Mills, 287 S.W.2d 943, 945 (Tex. 1956).  "Provisions [that] are not of the essence of the
thing to be done, but [that] are included for the purpose of promoting the proper, orderly, and prompt
conduct of business, are not generally regarded as mandatory."  Id.  If the word "shall" can be
directive rather than mandatory, certainly the future-tense verb "will" is susceptible to a similar
interpretation.  Because it is possible that the Commission did not have to grant Pantera's
applications simply because no protests had been filed, we are not persuaded that the amended rule
added a substantive requirement that impeded the former "automatic" grant of an application.
	We are persuaded, rather, that the only issue presented in the three lawsuits turned
on a procedural question:  whether Pantera had to give notice to the operators and owners of mineral
interests on adjacent offsetting tracts.  The Commission required the notice and when Pantera refused
to give it, the applications were dismissed.  We are further persuaded that the Commission could
make a procedural change in the notice requirements that would apply to future steps in pending
applications. (9) See Long, 659 S.W.2d at 160.  That moots the only issue presented in Pantera's
lawsuits.  The district court need not address the moot question of whether the Commission had the
authority or discretion to require the notice under Former Rule 38(d)(3) because it now has explicit
authority to do so under the amended rule.

Not arbitrary or capricious
	Pantera also asserts that the Commission's actions were arbitrary and capricious.  In
our original opinion, we expressed concern that by issuing an amended rule while these applications
were pending, the Commission had changed the rules in the middle of the administrative process,
a practice this Court condemned in Flores v. Employees Retirement System, 74 S.W.3d 532, 545
(Tex. App.--Austin 2002, pet. denied).  In that situation a former employee who was denied benefits
complained that the ERS board of trustees acted arbitrarily and capriciously by deviating from its
own precedent, citing two decisions awarding benefits under similar circumstances.  After a
contested-case hearing before the administrative law judge who recommended that benefits be
awarded, the ERS adopted a resolution that purported to change its policy and denied the benefits. 
We concluded that by adopting this new policy months after the hearing, without pre-hearing notice,
when it was no longer possible for the employee to present her case differently, the ERS acted
arbitrarily and capriciously.
	By contrast, here the Commission announced at the beginning of the process that
Pantera must give notice to offset operators and owners, and then never wavered from that position.
The rules did not change in the middle of the process, but were applied consistently.  Pantera insists
that by requiring notice when an application was submitted under Former Rule 38(d)(3), the
Commission deviated from its treatment of other similar applications.  The Commission alleged that
it was following a longstanding practice to review all such applications for attempts to circumvent
density provisions or other Commission rules before granting administrative approval.  We find that
there is sufficient evidence of this Commission practice to distinguish this situation from that
condemned in Flores.  We reject the assertion that the Commission acted arbitrarily and capriciously.

Vested rights not divested
	Pantera argues that even if the new rule was procedural in nature, it cannot be applied
to these pending applications if its application would deprive Pantera of vested rights.  "The rule is
well settled that procedural statutes may apply to suits pending at the time they became effective, but
even a procedural statute cannot be given application to a suit pending at the time it becomes
effective if to do so would destroy or impair rights which had become vested before the act became
effective."  Baker Hughes, Inc. v. Keco R. & D., Inc.,12 S.W.3d 1, 4 (Tex. 1999) (quoting Wilson
v. Work, 62 S.W.2d 490, 490 (Tex. 1933)); Grocers Supply, 978 S.W.2d 638, 643 (Tex.
App.--Austin 1998, pet. denied).  We disagree that by changing the notice procedure, the
Commission deprived Pantera of a vested right.  Pantera had at best an expectation, not a right, to
dissolve its units.  It still has that remedy available after the amended rule, subject to a changed
notice provision.
	The production of oil and gas is subject to the Commission's jurisdiction and control.
See Tex. Nat. Res. Code Ann. § 81.051 (West 2001).  Pantera had no absolute right to do what it
wished with its property but was subject to the Commission's oversight and regulation.  Although
Pantera cites Buttes Resources Co. v. Railroad Commission in support of its argument, that case
turned on the fact that the Commission had set a retroactive effective date for the forced pooling of
certain acreage with another unit, which, the court held, deprived Buttes of its vested property rights;
the court did not, notably, hold that forced pooling itself is unlawful, even though it is "in derogation
of the right of one to do with his own property as he so desires."  See 732 S.W.2d 675, 682 (Tex.
App.--Houston [14th Dist.] 1987, writ ref'd n.r.e.) (quoting Superior Oil Co. v. Railroad Comm'n,
519 S.W.2d 479, 482 (Tex. Civ. App.--El Paso 1975, writ ref'd n.r.e.)).  If forced pooling does not
unconstitutionally interfere with vested property rights, neither can procedural limits on the
unpooling of a unit.  The procedural limits at issue here on Pantera's right to "do with its property
as it desires" are certainly within the Commission's authority to regulate oil and gas production in
Texas and do not interfere with a vested property right such as that at issue in Buttes.
	Although Pantera argues that the Commission had no choice but to grant its
applications in the absence of a protest being filed, the issue of notice undeniably affected the
likelihood that a protest would be filed.  That is what this dispute is all about.  And we reject
Pantera's analogy that under its interpretation of the former rule it was entitled to a time bar to
prevent any timely protests.  We hold that the application of the new notice provision did not divest
Pantera of any vested rights.

Declaratory judgment
	Pantera's declaratory-judgment action seeks the same relief as its two suits for judicial
review:  a determination that the former rule applies to its applications, that Pantera was not required
to give notice to offset operators under the rule, and that the Commission acted arbitrarily and
capriciously in not granting its applications.  Thus, its declaratory-judgment action is duplicative of
its other two suits and was properly dismissed by the district court.  See Young Chevrolet, Inc. v.
Texas Motor Vehicle Bd., 974 S.W.2d 906, 911 (Tex. App.--Austin 1998, pet. denied) (trial court
properly dismissed declaratory-judgment action requesting same relief as administrative appeal).

CONCLUSION

 The notice requirement added by New Rule 38(d)(3) was a procedural change that
applies prospectively to all pending applications, whenever filed.  As such it superseded the notice
requirement of the former rule and applied to all future steps concerning these applications.  By
expressly requiring notice to all affected persons described in subsection (h)(1)(A), the new rule
moots the inquiry as to whether such notice could be required under the former rule.  To decide
whether the former rule allowed the Commission to require notice to offset operators and owners
would constitute nothing more than an advisory opinion on an abstract question of law when the new
rule expressly requires such notice.  Long, 659 S.W.2d at 160-61.  The district court properly held
that the amended rule applied to Pantera's applications and made the controversy moot.  The
application of this notice requirement does not deprive Pantera of any vested rights.  Furthermore,
the declaratory-judgment action was duplicative of the issues presented in the two suits for judicial
review.  We affirm the district court's dismissal of all three lawsuits.

 
					Bea Ann Smith, Justice
Before Chief Justice Law, Justices B. A. Smith and Patterson
Affirmed on Motion for Rehearing
Filed:   February 5, 2004
1.   Because the other relevant portions of the former rule were not amended along with
subsection (d)(3) and do not differ from the current rule, citations to these other portions will be to
the current rule.  See, e.g., 16 Tex. Admin. Code § 3.38(h) (2003).
2.   The Commission's statewide rules require an operator to have forty acres to drill and
produce an oil or gas well.  See id. §§ 3.37(b), 3.38(b)(2)(B) (2003).  However, the Commission may
adopt special field rules to protect the rights of mineral-interest owners in a certain reservoir and to
allow for the orderly and scientific development of the field.  See Tex. Nat. Res. Code Ann.
§ 85.042(b) (West 2001).  In the absence of a special rule for a field, the statewide density rule
governs.
3.   Pantera then filed for a permit to drill at exactly the same well location, subject to not
producing concurrently with the existing well.  When the new well was completed, Pantera shut-in
the existing well.
4.   After a unit has been voluntarily pooled and accepted by the Commission, the joined tracts
may not be divided into separate tracts composed of substandard acreage, "unless and until the
commission approves such division after application, notice to all current lessees and unleased
mineral interest owners of each tract within the joined or unitized tract, and an opportunity for
hearing."  Former Rule 38(d)(3).
5.   According to the memorandum of Colin K. Lineberry (Office of General Counsel for the
Commission) dated April 3, 2001, Pantera is alleging that because the component tracts that would
result from dissolving these forty-eight units are alleged to have taken their current size and shape
prior to the attachment of the field rules requiring 640-acre units, each substandard-sized tract would
become a "legal subdivision" on which one well could be drilled.  According to Intervenor
ConocoPhillips Company, if all forty-eight applications were granted, Pantera would be entitled to
drill one well on each of the resulting 157 component tracts, whereas they are currently entitled to
only forty-eight producing wells on the same acreage.  Pantera does not dispute this assertion and
indeed advanced its "legal subdivision" argument before the Commission.  
 
	Lineberry concluded that Pantera's applications were, in effect, seeking exceptions to the
density provisions and that Rule 38(d)(3) did not apply to these facts.  Lineberry agreed with the
examiner that Pantera was seeking to obtain an exception to density restrictions without complying
with the notice provisions of Rule 38(h):

	If Rule 38(d)(3) did apply to these facts as urged by Pantera, Pantera could
effectively grant itself exceptions to the density rule for the Panhandle, West
Field without giving notice to offset operators (or any third party) and without
any discretion on the part of the Commission to grant or deny the exception.  This
interpretation would preclude the Commission from exercising its statutorily
mandated duties of protecting correlative rights and preventing waste.

	Lineberry recommended that the Commission deny Pantera's appeal, which it did.
6.   Eventually three other operators in the Panhandle West Field intervened in all three suits,
urging their own pleas to the jurisdiction:  Conoco Inc., Phillips Petroleum Company, and Pioneer
Natural Resources USA, Inc.
7.   The former rule reads:

Division after joinder or unitization.

If two or more separate tracts are joined or unitized for oil, gas, or
geothermal development and accepted by the commission, the joined
or unitized tracts may not . . . be divided into the separate tracts . . .
unless and until the commission approves such division after
application, notice to all current lessees and unleased mineral interest
owners of each tract within the joined or unitized tract, and an
opportunity for hearing.  If written waivers are filed or if a protest is not
filed within the time set forth in the notice of application, the
application will be granted administratively.

14 Tex. Reg. 1575 (1989), adopted 14 Tex. Reg. 5255 (former 16 Tex. Admin. Code § 3.38(d)(3)
(Tex. R.R. Comm'n) (hereinafter cited as Former Rule 38(d)(3)).
8.   The new rule reads:

	(3)  Unit dissolution.

	(A)	If two or more separate tracts are joined to form a unit for oil and gas
development, the unit is accepted by the Commission, and the unit has
produced hydrocarbons in the preceding twenty (20) years, the unit may
not thereafter be dissolved into the separate tracts . . . unless the
Commission approves . . . . 

	(B)	The Commission shall grant approval only after application, notice, and
an opportunity for hearing. [. . .]  [I]f one or more wells on the unitized
tract has produced from the field within the 12-month period prior to
the application, the applicant shall include on the list all affected
persons described in subsection (h)(1)(A) [including offset operators]
of this section . . . .

	(C)	A Commission designee may grant administrative approval if the
Commission designee determines that granting the application will not
result in the circumvention of the density restrictions of this section or
other Commission rules, and if either . . . written waivers are filed . . .
[or] no protest is filed . . . .

16 Tex. Admin. Code § 3.38(d)(3) (2003) (hereinafter cited as New Rule 38(d)(3)).
9.   We reject Pantera's suggestion that there are no future steps to be taken concerning these
applications, only past steps to be reviewed.  Pantera incorrectly suggests that the district court or
this Court could actually grant the applications that the agency should have granted, or could remand
the applications with "instructions" that the Commission grant them administratively.  In a suit for
judicial review, the administrative procedure act empowers the reviewing court to examine the
agency record for error, but only empowers the court to reverse or remand the case to the agency.
Sierra Club v. Texas Nat. Resource Conservation Comm'n, 26 S.W.3d 684, 688 (Tex. App.--Austin
2000) (citing Tex. Gov't Code Ann. § 2001.174(2) (West 2000)), aff'd, 70 S.W.3d 809 (Tex. 2002).
The reviewing court may identify error but may not dictate how to correct the error because to do
so would usurp the authority and discretion delegated to the agency by the legislature.  Texas Dep't
of Transp. v. T. Brown Constructors, Inc., 947 S.W.2d 655, 659 (Tex. App.--Austin 1997, pet.
denied).