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Click here for the full text of this decision FACTS:In 1948, the Texas Railroad Commission established rules that specified that each well in a particular oil field would drain 640 acres, meaning that only one well could be on a 640-acre tract. The rules allowed owners of multiple tracts to pool their tracts to reach 640 acres. To drill any additional wells on the tract, whether the tract is singular or made up of pooled tracts, the operator may apply for an exception to the density requirements. As part of this process, an operator must give notice to all “affected persons” of adjacent tracts. In 1997, Pantera Energy Co. applied for an exception to the density rules, but withdrew its application after Phillips Petroleum Co., an offset operator, objected. In December 2000 and September 2001, Pantera filed 48 applications to dissolve formerly pooled units in the area into their component parts. Determining that Pantera was merely seeking a way around the density requirements, the TRC said it would not consider the applications until Pantera notified the affected persons on the adjacent tracts. Pantera refused, saying that the former Rule 38(d)(3) of the Administrative Code required notice only to operators and lessees of tracts within the pooled unit to be dissolved, which was Pantera itself. As part of its refusal, Pantera claimed the TRC was ignoring the last sentence of Rule 38(d)(3): “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.” Pantera took that to mean that TRC was required to grant Pantera’s applications. The TRC said it would hold a hearing on two of the applications, but only if Pantera provided notice. When Pantera again refused, the commission dismissed all of the applications. While the applications were pending, Pantera filed suit against the TRC for a declaration that the commission was improperly applying Rule 38(d)(3). TRC dismissed the applications shortly thereafter, so Pantera filed two new suits seeking review of the TRC’s orders. In January 2002, the TRC amended Rule 38(d)(3), known also as Administrative Code �3.38(h), to explicitly require notice to affected persons listed in the density rules exception. Upon this amendment, the trial court dismissed the first suit, the one asking for a declaratory judgment, on TRCs plea to the jurisdiction. The trial court granted TRC’s plea to the jurisdiction on the two suits asking for judicial review of TRC’s orders, too. The trial court agreed that the change to Rule 38(d)(3), was purely procedural, and had mooted Pantera’s complaint. Pantera seeks appeal on all three of the dismissed suits. Pantera asks for a remand for reconsideration on the merits. HOLDING:Affirmed on motion for rehearing. The court first considers whether TRC’s amended rule should be applied retroactively to Pantera’s applications. A case becomes moot, the court explains, 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.” The second rationale is implicated in this case. Pantera claims the amendment to the rule was substantive change. TRC claims the amendment was procedural only. The court cites Texas Dep’t of Health v. Long, 659 S.W.2d 158 (Tex.App. Austin 1983, no writ), relied on by the trial court, with approval. The Long court held that agency requirements for inclusion, or not, of items in an application for a landfill were procedural. This case is like Long, the court concludes. If the basis of Pantera’s complaint is that TRC improperly interpreted and applied its former rule, that basis would be eliminated by an amended rule, and a legal opinion on the application of the former rule would be an abstract question of law. The court rejects Pantera’s contention that the amended rule did more than expand notice provisions; it also eliminated what Pantera claims was TRC’s mandatory duty to grant the application. The court finds “it is quite possible” that the former rule (which used the word “will”) did not impose a mandatory duty for TRC to grant the application, but was merely a directive. For instance, the old rule did not use the word “shall,” which is almost always seen as a mandatory instruction. “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.” The court is instead persuaded that the only issue presented in any of the three lawsuits dealt with the procedural question of “whether Pantera had to give notice to the operators and owners of mineral interests on adjacent offsetting tracts.” The court next considers whether the district court had jurisdiction to determine whether TRC violated its own rule by arbitrarily and capriciously requiring notice to offset operators and other affected persons. TRC told Pantera from the beginning what its position was on notice and that position was held consistently. There was no evidence that TRC acted arbitrarily or capriciously. The court rules additionally that application of the new rule will not divest Pantera of vested rights. Pantera had “at best” an expectation, not a right, to dissolve its units, and it can still attempt to dissolve these units, provided it first complies with the notice provisions of the new rule. Finally, the court rules the suit for declaratory judgment is duplicative of the relief sought by the two suits for judicial review. OPINION:Smith, J.; Law, C.J., Smith and Patterson, JJ.

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