Uri, Inc. v. Kleberg County

543 S.W.3d 755 (2018)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

Texas authorized P to commence uranium mining operations in the third production area (PAA 3). Operations were suspended, due to opposition from D and local activists, including a group called South Texas Opposes Pollution (STOP). Ensuing litigation and contentious negotiations produced a settlement agreement. The parties now dispute whether P is in compliance with myriad terms of the Settlement Agreement. The provision at issue conditions P's resumption of mining operations in PAA 3 on P's certification that wells in a previously mined area-PAA 1-have been restored to pre-mining water quality if the water had been suitable for specified uses before P began mining that area in 1988. In 2007, P recommenced mining in PAA 3 after certifying that (1) 6 pore volumes of water in PAA 1 had been treated and (2) no wells in PAA 1 were subject to restoration to the levels specified in the parties' agreement. D disputed P's compliance with subsection 11.1(1)(ii)'s 90%-restoration requirement and resolved to enforce the Settlement Agreement before any further mining could take place. P sought a declaration that it had complied with its contractual obligations while D countersued for breach of contract and declaratory relief to the contrary. D claims the wells described in subsection 11.1(1)(ii) had to have water suitable for drinking, livestock, or irrigation uses before P started mining that area. Well I-11 was at issue. P determined the water in Well I-11 was not suitable for any of the contractually specified uses before P began mining PAA 1 in 1988. Having undertaken the certification process outlined in the Settlement Agreement, P took the position that it had no obligation. D argued P was obliged to restore Well I-11's groundwater to use for irrigation. D cites the 2004 transcript of a Kleberg County Commissioners' Court meeting which concluded with a majority of the commissioners voting to execute the Settlement Agreement. STOP's representative argued section 11.1 was 'totally worthless' because documentation she had obtained showed only one well would be subject to restoration on the terms stated. The transcript of the meeting indicates that some of the commissioners believed the Settlement Agreement's terms, separately and in the aggregate, would provide more affirmative relief than they could expect in the pending litigation and administrative proceedings. D cites these circumstances as supporting a construction of the Settlement Agreement that prohibits the use of the 1987 baseline data and requires restoration of Well I-11's water quality to suitability in accord with the 1985 baseline data. The trial court accepted D's interpretation of the agreement and found P breached its obligation to restore Well I-11 to its pre-mining water use. The trial court awarded D $20 in nominal damages; ordered P to continue restoring Well I-11 until the water was suitable for agricultural irrigation use. The court of appeals affirmed all liability issues but reversed and remanded as to remedies. P appealed. P contends (1) the lower courts improperly considered extrinsic evidence of D's subjective intent rather than construing section 11.1 according to its plain and unambiguous language and (2) according to the Settlement Agreement's plain language, the 1987 data may-and indeed, must-be considered in determining whether any of the PAA 1 wells with baseline data were suitable for any of the contractually specified uses 'before P's mining in PAA 1' began in 1988.