USA – TEXAS Law and Practice Contributed by: Gerald J. Pels, Elizabeth E. Mack, Gerald D. Higdon, Susan Rainey, Elizabeth Corey and Brett A. Miller, Troutman Pepper Locke LLP
10.3 Class or Group Actions Class actions or multi-plaintiff cases may be brought in Texas, including those involving alleged environ- mental harm. 10.4 Landmark Cases Texas has been home to several landmark environ- mental cases. For example, Cooper Industries, Inc. v Aviall Services, Inc. addressed the circumstances under which CERCLA claims for cost recovery may be available. Upon remand to the federal district court in Texas, it addressed the relationship between certain Texas statutory and contractual claims. Furthermore, the Matter of Bell Petroleum, Inc. was a Fifth Circuit Court of Appeals holding and allowed for apportion- ment of CERCLA liability, utilising theories derived from the Restatement (Second) of Torts. Certain recent cases decided outside of Texas courts will certainly affect business in Texas. For example, in Sackett v EPA , the US Supreme Court recently held that juris- dictional “waters of the United States” must generally be relatively permanent or continuously flowing bod- ies of water. Further, in 2024, the US Supreme Court overruled the Chevron deference doctrine in Loper Bright Enterpris- es v Raimondo , which had provided a judicial review framework for statutory interpretations by federal agencies for 40 years. In 2025, following Loper Bright , the US Supreme Court in Seven County Infrastruc- ture Coalition v Eagle County Colorado upheld the US Surface Transportation Board’s decision to approve an application to construct a railroad line after the Board analysed an Environmental Impact Statement prepared under NEPA. Seven County addressed judi- cial deference post- Loper Bright , emphasising that the “central principle” of judicial review is deference in NEPA cases. In other words, agencies must be afforded “substantial deference,” and courts should not “micromanage” agency decisions, provided such decisions “fall within the broad zone of reasonable- ness.”
safe harbour. Texas, however, has certain defined cri- teria to ensure the safe harbour is met. First, the lender must sell, lease or undertake a government-approved clean-up within a “commercially reasonable time” after the foreclosure (or similar event). A presumption of divestiture exists if the asset is listed or advertised within 12 months after the title is acquired. The Texas safe harbour can be lost if pollution conditions arise after foreclosure. 9.2 Lender Protection Touchstones exist to mitigate the potential for lender liability. First, there must be an awareness of the safe harbour. Second, due diligence is critical not only of the asset to be taken as collateral, but also of the borrower’s environmental management team. Third, it is important to maintain an ongoing understanding of the asset during the loan term, as well as ensuring that the loan documentation provides protections and assurances appropriate for the asset. Finally, experi- enced post-foreclosure staffing should have opera- tional experience in the relevant industry to avoid envi- ronmental liability that could arise post-foreclosure and avert the Texas safe harbour. Civil claims may be brought under several Texas envi- ronmental statutes, depending on the relevant facts. Additionally, claims at common law may be brought under traditional common law theories, including nui- sance, negligence, and trespass. Suits may also be brought in a transactional context based upon com- mon law or statutory fraud, as well as breach of appli- cable contractual provisions. 10.2 Exemplary or Punitive Damages 10. Civil Liability 10.1 Civil Claims These damages can be waived by contract, but oth- erwise may be available in cases where the plaintiff seeks recovery for damages resulting from “fraud, malice, or gross negligence.” The basis for these damages must be proven by “clear and convincing evidence.” Under certain circumstances, these dam- ages may be available in a statutory fraud case.
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