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Can Texas courts decide cases involving oil and gas properties located in another state or country?

Determining whether a Texas court has jurisdiction (i.e., the authority to preside) over a lawsuit related to real property situated outside of Texas can be a challenging endeavor due to the fact that Texas cases on the issue can be very confusing.  However, the general principles outlined below are helpful in determining whether Texas courts have jurisdiction over such actions.

If an action requires a Texas court to determine a party’s title interest in foreign real property, (e.g., where the facts lead to the conclusion that both parties claim present ownership of the same foreign property), then Texas courts lack jurisdiction to hear the case.  If the action requires the court to enforce a right in foreign real property arising from a pre-existing ownership interest, Texas courts have jurisdiction over the action.  Texas courts have also exercised jurisdiction over suits to enforce contract rights or equitable duties[1] that are related to foreign property even though a party’s title interest in the property may be affected by the court’s decision (so long as the court isn’t required to adjudicate present ownership of the foreign property).

It has been said that the ultimate measure of a court’s jurisdiction is its power to enforce its own judgments.  In fact, the general rules set out above flow from the power of Texas courts to enforce various forms of relief.  So another way of analyzing the jurisdiction of Texas courts over claims related to foreign property is to determine whether the court has the power to enforce the type of relief requested.

If the requested relief will act directly on the title to foreign property, Texas courts lack jurisdiction over the action—because they do not have the power to enforce such a judgment.  For example, if a party asks a Texas court to void the deed to foreign property, the court does not have that power.  Only a court of the state where the land is located has the power to determine ownership of the land.  On the other hand, if a Texas court is asked to order the other party to convey foreign property, the court has the power to enforce such a judgment.

A Texas court lacks jurisdiction (i.e., authority) to enforce the first thing (voiding a deed), because it does not have the authority to alter the deed records of another state.  In other words, a Texas court does not have control over land situated outside of Texas.  But Texas courts have jurisdiction to enforce the second thing (ordering a party to convey property), because they have the power to compel people within Texas’ borders to do an act.  So, while a Texas court cannot void a deed to foreign property, it can order a party to sign over the same deed to another party.

— By Roger Chrisco.  Roger is an attorney at LaGarde Law Firm, P.C., a civil litigation firm whose practice encompasses a broad range of commercial litigation, including contract, oil and gas, and property disputes as well as personal injury litigation.  You can write to him by e-mail at roger@www.lagardelaw.com or call him at 713-993-0660.

[1] Equitable duties are those duties that Texas courts recognize out of legal tradition or fairness even though they are not explicitly set out in a contract.

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