Opinion

Opinion issued January 26, 2006

In The

Court of Appeals

For The

First District of Texas

NO. 01–04–01277–CV

____________

Jim Wells County and Premont Independent School District, Appellants

v.

El Paso Production Oil and Gas Company; El Paso Production Oil and Gas

USA, L.P.; El Paso CGP Company; Coastal Oil and Gas Corporation; The

Coastal Corporation; Coastal States Trading, Inc.; Coastal States Crude

Gathering Company; Coastal Gas Marketing Company; Coastal Limited

Ventures, Inc.; and El Paso Merchant Energy Company, Appellees

On Appeal from the 79th District Court

Jim Wells County, Texas

Trial Court Cause No. 03–08–41749

Appealed to the Court of Appeals for the Fourth District of Texas

Appellate Cause No. 04–04–00725–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01278–CV

____________

Brooks County and Brooks County ISD, Appellants

v.

El Paso Production Oil and Gas Company; El Paso Production Oil and Gas

USA, L.P.; El Paso CGP Company; Coastal Oil and Gas Corporation; The

Coastal Corporation; Coastal States Trading, Inc.; Coastal States Crude

Gathering Company; Coastal Gas Marketing Company; Coastal Limited

Ventures, Inc.; and El Paso Merchant Energy Company, Appellees

On Appeal from the 79th District Court

Brooks County, Texas

Trial Court Cause No. 03–08–11950CV

Appealed to the Court of Appeals for the Fourth District of Texas

Appellate Cause No. 04–04–00726–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01279–CV

____________

Brooks County and Brooks Independent School District, Appellants

v.

Texaco E&P, Inc. and Shell Western E&P, Inc., Appellees

On Appeal from the 79th District Court

Brooks County, Texas

Trial Court Cause No. 03–08–11943

Appealed to the Court of Appeals for the Fourth District of Texas

Appellate Cause No. 04–04–00727–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01280–CV

____________

Duval County; San Diego Independent School District; and Freer

Independent School District, Appellants

v.

Shell Western E&P, Inc., Appellee

On Appeal from the 229th District Court

Duval County, Texas

Trial Court Cause No. DC–03–313

Appealed to the Court of Appeals for the Fourth District of Texas

Appellate Cause No. 04–04–00728–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01281–CV

____________

Duval County; San Diego Independent School District; and

Freer Independent School District, Appellants

v.

Conoco, Inc.; Continental Oil Company; Brandywine Industrial Gas;

ConocoPhillips Company; Phillips Petroleum Company; El Paso Production

Oil and Gas Company; El Paso Production Oil and Gas USA, L.P.; El Paso

CGP Company; Coastal Oil and Gas Corporation; The Coastal Corporation;

Coastal States Trading, Inc.; Coastal States Crude Gathering Company;

Coastal Gas Marketing Company; Coastal Limited Ventures, Inc.; and El

Paso Merchant Energy Company, Appellees

On Appeal from the 229th District Court

Duval County, Texas

Trial Court Cause No. DC–03–320

Appealed to the Court of Appeals for the Fourth District of Texas

Appellate Cause No. 04–04–00729–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01282–CV

____________

Jim Hogg County and Jim Hogg Independent School District, Appellants

v.

Chevron U.S.A., Inc. a/k/a Chevron Products Company, Appellee

On Appeal from the 229th District Court

Jim Hogg County, Texas

Trial Court Cause No. CC–03–115

Appealed to the Court of Appeals for the Fourth District of Texas

Appellate Cause No. 04–04–00730–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01283–CV

____________

Jim Wells County and Premont Independent School District, Appellants

v.

Anadarko Petroleum Corporation and Anadarko Holding Company f/k/a

Union Pacific Minerals, Inc. and f/k/a Union Pacific Resources Group, Inc.,

Appellees

On Appeal from the 79th District Court

Jim Wells County, Texas

Trial Court Cause No. 03–08–41740

Appealed to the Court of Appeals for the Fourth District of Texas

Appellate Cause No. 04–04–00731–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01284–CV

____________

Webb County, Appellant

v.

Chevron U.S.A., Inc. a/k/a Chevron Products Company; Texaco E&P, Inc.;

and Four Star Oil & Gas Company, Appellees

On Appeal from the 49th District Court

Webb County, Texas

Trial Court Cause No. 2003-CVQ-1374-D1

Appealed to the Court of Appeals for the Fourth District of Texas

Appellate Cause No. 04–04–00732–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01285–CV

____________

Webb County, Appellant

v.

Conoco Inc.; Continental Oil Company; Brandywine Industrial Gas;

ConocoPhillips Company; Phillips Petroleum Company; El Paso Production

Oil and Gas Company; El Paso Production Oil and Gas USA, L.P.; El Paso

CGP Company; Coastal Oil and Gas Corporation; The Coastal Corporation;

Coastal States Trading, Inc.; Coastal States Crude Gathering Company;

Coastal Gas Marketing Company; Coastal Limited Ventures, Inc.; and El

Paso Merchant Energy Company, Appellees

On Appeal from the 111th District Court

Webb County, Texas

Trial Court Cause No. 2003CVQ001368-D2

Appealed to the Court of Appeals for the Fourth District of Texas

Appellate Cause No. 04–04–00733–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01286–CV

____________

Zapata County and Zapata Independent School District, Appellants

v.

Conoco Inc.; Continental Oil Company; Brandywine Industrial Gas;

ConocoPhillips Company; Phillips Petroleum Company; El Paso Production

Oil and Gas Company; El Paso Production Oil and Gas USA, L.P.; El Paso

CGP Company; Coastal Oil and Gas Corporation; The Coastal Corporation;

Coastal States Trading, Inc.; Coastal States Crude Gathering Company;

Coastal Gas Marketing Company; Coastal Limited Ventures, Inc.; and El

Paso Merchant Energy Company, Appellees

On Appeal from the 49th District Court

Zapata County, Texas

Trial Court Cause No. 5,519

Appealed to the Court of Appeals for the Fourth District of Texas

Appellate Cause No. 04–04–00734–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01287–CV

____________

Zapata County and Zapata Independent School District, Appellants

v.

Chevron U.S.A., Inc. a/k/a Chevron Products Company; Shell Western E&P,

Inc.; Anadarko Petroleum Corporation; and Anadarko Holding Company

f/k/a Union Pacific Minerals, Inc. and f/k/a Union Pacific Resources Group,

Inc., Appellees

On Appeal from the 49th District Court

Zapata County, Texas

Trial Court Cause No. 5,520

Appealed to the Court of Appeals for the Fourth District of Texas

Appellate Cause No. 04–04–00735–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01326–CV

____________

Hidalgo County, Texas, Appellant

v.

Texaco, Inc., a surviving subsidiary of merger between Texaco, Inc. and

Chevron Inc.; TotalFinaElf E&P USA Inc.; Kerr–McGee Oil & Gas Onshore,

L.L.C.; Shell Western E&P, Inc.; and El Paso Production Oil & Gas

Company, Appellees

On Appeal from the 92nd District Court

Hidalgo County, Texas

Trial Court Cause No. C–640–03–A

Appealed to the Court of Appeals for the Thirteenth District of Texas

Appellate Cause No. 13–04–00542–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01327–CV

____________

Edinburg Consolidated Independent School District, Appellant

v.

Fina Oil and Chemical Company; Atofina Petrochemicals, Inc.; Fina, Inc.;

TotalFinaElf Gas & Power North America, Inc.; Fina Natural Gas Company;

Mokeen Oil Company; Conoco, Inc.; Continental Oil Company; Brandywine

Industrial Gas, Inc.; Shell Oil Company; Shell Western E&P, Inc.; Shell Gas

Trading Company; El Paso Production Oil and Gas Company; El Paso

Production Oil and Gas USA, L.P.; El Paso CGP Company; IBC Petroleum,

Inc.; Texas Independent Exploration, Inc.; Sun Operating Limited

Partnership; Oryx Energy Company; ANR Production Company; Coastal Oil

and Gas Corporation; The Coastal Corporation; Coastal States Trading, Inc.;

Coastal States Crude Gathering Company; Coastal Gas Marketing

Company; Coastal Limited Ventures, Inc.; El Paso Merchant Energy

Company; American Exploration Company; Contract Energy, L.L.C.; EOG

Resources, Inc.; Arco Oil & Gas Co.; Cody Energy LLC; Samedan Oil

Corporation; Cabot Oil & Gas Corporation; Vastar Resources, Inc.; BP

America Production Company; Kerr–McGee Oil & Gas Onshore LLC; Mobil

Producing TX. & N. M. Inc.; Chevron U.S.A. Inc.; Texaco, Inc.; and Socony

Mobil Company, Inc., Appellees

On Appeal from the 275th District Court

Hidalgo County, Texas

Trial Court Cause No. C–401–03–E

Appealed to the Court of Appeals for the Thirteenth District of Texas

Appellate Cause No. 13–04–00543–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01328–CV

____________

McAllen Independent School District, Appellant

v.

Fina Oil and Chemical Company; Altofina Petrochemicals, Inc.; Fina, Inc.;

TotalFinaElf Gas & Power North America, Inc.; Fina Natural Gas Company;

TotalFinaElf E&P USA, Inc.; Total E&P USA, Inc.; Denovo Oil & Gas, Inc.;

and Virtex Petroleum Company, Inc., Appellees

On Appeal from the 389th District Court

Hidalgo County, Texas

Trial Court Cause No. C–2195–03–H

Appealed to the Court of Appeals for the Thirteenth District of Texas

Appellate Cause No. 13–04–00544–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01329–CV

____________

Kleberg County and Kingsville Independent School District, Appellants

v.

Atofina Petrochemicals, Inc. f/k/a Fina Oil & Chemical Co.; Total Fina Elf

Holdings USA, Inc.; Anadarko Petroleum Corporation; and Anadarko

Holding Company f/k/a Union Pacific Minerals, Inc. and f/k/a Union Pacific

Resources Group, Inc., Appellees

On Appeal from the 105th District Court

Kleberg County, Texas

Trial Court Cause No. 03–441–D

Appealed to the Court of Appeals for the Thirteenth District of Texas

Appellate Cause No. 13–04–00553–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01330–CV

____________

Kleberg County and Kingsville Independent School District, Appellants

v.

El Paso Production Oil and Gas Company; El Paso Production Oil and Gas

USA, L.P.; El Paso CGP Company; Coastal Oil and Gas Corporation; The

Coastal Corporation; Coastal States Trading, Inc.; Coastal States Crude

Gathering Company; Coastal Gas Marketing Company; Coastal Limited

Ventures, Inc.; and El Paso Merchant Energy Company, Appellees

On Appeal from the 105th District Court

Kleberg County, Texas

Trial Court Cause No. 03–446–D

Appealed to the Court of Appeals for the Thirteenth District of Texas

Appellate Cause No. 13–04–00554–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01331–CV

____________

Willacy County, Appellant

v.

El Paso Production Oil and Gas Company; El Paso Production Oil and Gas

USA, L.P.; El Paso CGP Company; Coastal Oil and Gas Corporation; The

Coastal Corporation; Coastal States Trading, Inc.; Coastal States Crude

Gathering Company; Coastal Gas Marketing Company; Coastal Limited

Ventures, Inc.; and El Paso Merchant Energy Company, Appellees

On Appeal from the 357th District Court

Willacy County, Texas

Trial Court Cause No. 03–264

Appealed to the Court of Appeals for the Thirteenth District of Texas

Appellate Cause No. 13–04–00555–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01332–CV

____________

Edcouch–Elsa Independent School District; La Villa Independent School

District; Progresso Independent School District; Weslaco Independent School

District; City of La Joya; City of Edinburg; City of Mercedes; and City of

Penitas, Appellants

v.

Chevron U.S.A., Inc. a/k/a Chevron Products Company; Texaco E&P, Inc.;

Shell Western E&P, Inc.; Atofina Petrochemicals, Inc. f/k/a Fina Oil &

Chemical Co.; and Total Fina Elf Holdings USA, Inc., Appellees

On Appeal from the 332nd District Court

Hidalgo County, Texas

Trial Court Cause No. C–2166–03–F

Appealed to the Court of Appeals for the Thirteenth District of Texas

Appellate Cause No. 13–04–00556–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

and

____________

NO. 01–04–01333–CV

____________

Kenedy County, Appellant

v.

El Paso Production Oil and Gas Company; El Paso Production Oil and Gas

USA, L.P.; El Paso CGP Company; Coastal Oil and Gas Corporation; The

Coastal Corporation; Coastal States Trading, Inc.; Coastal States Crude

Gathering Company; Coastal Gas Marketing Company; Coastal Limited

Ventures, Inc.; and El Paso Merchant Energy Company, Appellees

On Appeal from the 105th District Court

Kenedy County, Texas

Trial Court Cause No. 03–CV–103

Appealed to the Court of Appeals for the Thirteenth District of Texas

Appellate Cause No. 13–04–00557–CV

and Transferred to the Court of Appeals for the First District of Texas

by the Supreme Court of Texas

Misc. Docket No. 04–9270

CONCURRING OPINION

In their second amended plea to the jurisdiction, appellees, the oil companies,

sought to dismiss the lawsuits of appellants, the taxing units, on the ground that,

under the Texas Tax Code,

the pertinent appraisal review boards have exclusive

jurisdiction over the claims of the taxing units. The oil companies argue that the trial

court did not have subject matter jurisdiction over the claims of the taxing units

because the units did not exhaust their administrative remedies with the appraisal

review boards before filing their lawsuits in various district courts. Alternatively, the

oil companies assert that there is no basis for original jurisdiction in the district courts

over the claims of the taxing units.

In four issues, the taxing units argue that the trial court erred in granting the

plea to the jurisdiction because the trial court had original jurisdiction over their

“common law remedy for fraud,” the units “have not failed to exhaust an

administrative remedy,” their “cause of action” is not found in the Tax Code, and the

Tax Code “is not a ‘pervasive regulatory scheme’ meant to vest exclusive jurisdiction

of all matters pertaining to property taxes” with appraisal review boards.

Exclusive Jurisdiction

Our analysis as to whether an entity such as an appraisal review board has

exclusive jurisdiction over certain administrative determinations must begin with a

recognition of the presumption that Texas courts are authorized to resolve disputes.

In re Entergy , 142 S.W.3d 316, 322 (Tex. 2004). A district court’s jurisdiction

“consists of exclusive, appellate, and original jurisdiction of all actions, proceedings,

and remedies, except in cases where exclusive, appellate, or original jurisdiction may

be conferred . . . on some other court, tribunal, or administrative body.” Tex. Const.

art. V, § 8. Thus, these courts of general jurisdiction will “generally have subject

matter jurisdiction over a dispute absent a showing to the contrary.” In re Entergy ,

142 S.W.3d at 322 ; Dubai Petroleum Co. v. Kazi , 12 S.W.3d 71, 75 (Tex. 2000).

“[A] similar presumption does not exist for administrative agencies, which may

exercise only those powers the law confers upon them in clear and express statutory

language and those reasonably necessary to fulfill a function or perform a duty that

the Legislature has expressly placed with the agency.” In re Entergy Corp. , 142

S.W.3d at 322 . “Courts will not imply additional authority to agencies, nor may

agencies create for themselves any excess powers.” Subaru of Am., Inc. v. David

McDavid Nissan, Inc. , 84 S.W.3d 212, 220 (Tex. 2002).

Under the exclusive jurisdiction doctrine, “the Legislature grants an

administrative agency the sole authority to make an initial determination in a

dispute.” Subaru of Am., Inc ., 84 S.W.3d at 221 . The Texas Supreme Court has

explained that “[a]n agency has exclusive jurisdiction ‘when a pervasive regulatory

scheme indicates that [the Legislature] intended for the regulatory process to be the

exclusive means of remedying the problem to which the regulation is addressed.’”

Id . (quoting Andrew G. Humphrey, Comment, Antitrust Jurisdiction and Remedies

in an Electric Utility Price Squeeze , 52 U. Chi. L. Rev. 1090 , 1107 n.73 (1985)). If

an agency has exclusive jurisdiction, typically, “a party must exhaust all

administrative remedies before seeking judicial review of the agency’s action.” Id .

“When exhaustion is required, courts have only limited review of the administrative

action.” Id .

Here, “[t]he Texas Constitution creates the obligation to appraise and assess

property for purposes of taxation,” and the Legislature codified this obligation in the

Tax Code. Atascosa County v. Atascosa County Appraisal Dist. , 990 S.W.2d 255,

257 (Tex. 1999). All real property, which includes mineral interests, unless exempt,

shall be taxed “in proportion to its value, which shall be ascertained as may be

provided by law.” Tex. Const . art. VIII, § 1(b). “Taxation shall be equal and

uniform.” Id . § 1(a). Moreover, “all lands and other property not rendered for

taxation by the owner thereof shall be assessed at its fair value by the proper officer.”

Id . § 11. The Tax Code creates appraisal districts and requires each district to

appraise property for the ad valorem taxing units within the district. Tex. Tax Code

Ann. § 6.01 (Vernon 2001). It also establishes an appraisal review board for each

district, which is charged with ensuring that property is properly appraised. Id . § 6.41

(Vernon Supp. 2005), § 41.01 (Vernon 2001).

Appraisal review boards shall “determine protests initiated by property

owners,” “determine challenges initiated by taxing units,” and “take any other action

or make any other determination that this title specifically authorizes or requires.”

Id . § 41.01(a)(1), (2), (6). Taxing units are entitled to bring challenges of designated

actions before the appraisal review board, including challenges to the level of

appraisals of any category of property in the district and challenges to an exclusion

of property from the appraisal records. Id . § 41.03(a) (Vernon 2001). Moreover,

Chapter 42 of the Tax Code provides for trial de novo in a district court on appeal of

orders of the appraisal review board determining, inter alia, protests of property

owners and challenges by taxing units. Id . §§ 42.01, 42.02, 42.031 (Vernon 2001).

Chapter 43 authorizes suits by taxing units against the appraisal district to compel a

district’s compliance with Tax Code provisions, rules of the Texas Comptroller, or

other applicable law. Id . § 43.01 (Vernon 2001). Thus, as quoted in the majority

opinion, the Amarillo Court of Appeals concluded that

Despite the absence from the Tax Code of specific language so

providing, the nature of the governmental function exercised through the

Tax Code, the constitutional mandates it implements, its comprehensive

and detailed provisions concerning appraisal of property, and its

provision of remedies combine to require the conclusion that the

Legislature intended the Code procedures to be the exclusive means

through which the taxing units may seek a remedy for the injuries

caused them by the tortious conduct alleged here.

In re ExxonMobil Corp. , 153 S.W.3d 605, 618 (Tex. App.—Amarillo 2004, orig.

proceeding). I agree with this conclusion.

Here, specifically, the taxing units allege that the oil companies defrauded them

by manipulating reported sales prices so as to undervalue oil and gas reserves. The

Tax Code provides that if real property interest in oil and gas is appraised by a

method that takes into account future income from the sale of oil and gas to be

produced from the interest, “the method must use the average price of the oil or gas

from the interest for the preceding year as the price at which the oil or gas produced

from the interest is projected to be sold in the current year of the appraisal.” Tex.

Tax Code Ann. § 23.175 (Vernon 2001). Although the taxing units allege fraud in

their lawsuits against the oil companies, the entire basis of their fraud claims, as

asserted in their briefing to this Court, is that the oil companies “manipulated the

Texas Tax Code so as to produce significant under-valuations of their oil and gas

reserves for the purposes of ad valorem (property) taxes.” As noted above, the Tax

Code specifically provides that the taxing units are entitled to make such challenges

in front of the pertinent appraisal review boards, and the boards have the duty to

determine such challenges. Id . §§ 41.01(a), 41.03.

Accordingly, I would hold that the pertinent appraisal review boards in this

case had exclusive jurisdiction over the taxing units’ claims, which actually constitute

a challenge to the appraised values of the oil companies’ oil and gas reserves for the

purpose of ad valorem taxes. Based on this holding, I would overrule the second,

third, and fourth issues of the taxing units and affirm the order of the trial court

granting the oil companies’ plea to the jurisdiction.

Original Jurisdiction

In additional briefing to the trial court in support of their second amended plea

to the jurisdiction, the oil companies asserted that there is “no such thing as a

common law action for collecting taxes.” The taxing units, in their first issue, argue

that the trial court erred in granting the oil companies’ plea to the jurisdiction on the

grounds that “they have no common law right to sue for damages arising from fraud.”

On appeal, certain oil companies contend that “the Legislature has not given the

district courts original jurisdiction to determine appraised values of property in

disregard of the official appraisals of the appraisal districts.” The other oil companies

argue that because no Texas court “has ever recognized a common law cause of

action for damages resulting from an underpayment of taxes,” this Court “should

affirm on grounds that the district court is without original jurisdiction.” They further

argue that “because there is no basis for original jurisdiction, the Court need not reach

the issue of exclusive jurisdiction to affirm.”

Here, the parties’ arguments depend on how the claims of the taxing units are

characterized. The taxing units allege that they were unlawfully deprived of tax

revenue through the fraudulent actions of the oil companies. The oil companies

characterize the claims simply as an action to recover underpaid taxes. Regardless

of how the claims are characterized, as noted above, the trial court did not err in

granting the oil companies’ plea to the jurisdiction on the grounds that the pertinent

appraisal review boards in this case had exclusive jurisdiction over the claims of the

taxing units. Thus, it is not necessary for this Court to address the taxing units’ first

issue, and counsel for certain oil companies conceded this point at oral argument.

Conclusion

Accordingly, I concur in the judgment of the Court.

Terry Jennings

Justice

Panel consists of Justices Taft, Jennings, and Hanks.

Justice Jennings, concurring.