The lawsuit in which several Scurry County taxing entities have accused Kinder Morgan of fraud has landed at the Texas Supreme Court.
On Dec. 20, Kinder Morgan filed paperwork with the Texas Supreme Court asking for the court to overturn the 11th Texas Court of Appeals’ Nov. 7 decision upholding 132nd District Judge Ernie B. Armstrong’s ruling that Kinder Morgan had not filed a motion to dismiss before the deadline to do so.
Kinder Morgan sought to have the original lawsuit, in which Scurry County, Snyder ISD, Scurry County Hospital District (Cogdell Memorial Hospital) and Scurry County Junior College District (Western Texas College) claimed Kinder Morgan undervalued mineral interests between 2013 and 2018, dismissed as frivolous.
The taxing entities in 2018, sought to have Kinder Morgan’s mineral values re-appraised, a request the Scurry County Appraisal District’s Appraisal Review Board (ARB) denied.
The taxing entities then filed suit in District Court in an effort to get a ruling ordering the re-appraisals.
The company filed its motion to dismiss the taxing entities’ lawsuit in district court, citing the Texas Citizen Participation Act (TCPA), also known as anti-SLAPP. Armstrong ruled that the motion was filed after the 60-day deadline to do so.
Kinder Morgan argued in its 164-page filing to the Texas Supreme Court that the taxing entities amended the reason for wanting the re-appraisals from a “cursory (barely seven pages, in all)” filing that “omitted any factual allegations concerning rights protected by TCPA,” to charges of fraud against the company.
In its filing with the Supreme Court, Kinder Morgan’s attorneys argue that the plaintiffs can take advantage of the Strategic Lawsuit Against Public Participation (SLAPP) by making vague allegations until the 60-day deadline has passed, and then filing a more specific petition.
Kinder Morgan argued that it filed its motion to dismiss within 60 days of the more specific, amended petition that included the charge of fraud.
“The Taxing Units did not allege that Kinder Morgan made any misrepresentations that caused its mineral assets to be omitted,” Kinder Morgan’s attorneys wrote in the Supreme Court filing. “Rather, the Taxing Units told the ARB that the challenge centered on an allegation that an appraiser, T.Y. Pickett (‘Pickett’), made a mistake in the appraisals. Thus, the Taxing Units’ counsel argued that ‘just straight math [shows] that somewhere Pickett missed $14 billion worth of oil reserves.’”
The attorney representing the four taxing entities, D. Brent Lemon, wrote to the court on Monday that the taxing entities “do not intend to file a response unless the Court requests that they do so.”
Lemon is working at no cost to the taxing entities, but will receive 20 percent of any settlement between the entities and Kinder Morgan. U.S. Consults, LLC, will also receive 20 percent of any settlement.
However, if Kinder Morgan is successful in its effort to have the lawsuit dismissed under the TCPA, the taxing entities could be required to pay the company’s legal fees related the lawsuit.
Kinder Morgan appealed its mineral valuations this year, which was denied by the ARB, and has withheld a portion of its ad valorem taxes payable until the case can be heard, which is expected to be this summer.
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