Amount in Controversy Determined at Filing, Not by Future Legislation: Business Court Remands Oil & Gas Dispute Below $10 Million Threshold
Judge Jerry D. Bullard
Decided August 11, 2025
Mem. Op.
Jurisdiction & Remand
In OWL Assetco1 v. EOG Resources, the Business Court granted remand after EOG removed an oil and gas contract dispute from Harris County district court, with OWL seeking compensatory damages exceeding $1 million for remediating three produced water spills and EOG counterclaiming for approximately $929,192 in liquidated damages. The court's forthcoming written opinion will explain in detail why it concluded the case should be remanded to state district court.
Court Staff Summary
Granting a motion to remand arguing that the plaintiffs failed to satisfy the $10 million minimum amount in controversy and that HB 40, lowering the requirement to $5 million, but effective after the date of the ruling, does not affect the ruling.
Background: Produced Water Spills and Contractual Dispute
OWL AssetCo1, LLC and EOG Resources, Inc., oil and gas industry operators, entered into a December 31, 2019 agreement governing delivery and disposal of produced water and the parties' respective responsibilities. After incurring what OWL characterized as "millions of dollars" and "significant costs" remediating three separate produced water spills over three years—the Fruit State, Cigarillo, and Bon Bon spills—OWL sued EOG for breach of contract in the 152nd Judicial District Court of Harris County, Texas on April 9, 2025.
OWL alleged that EOG breached provisions of the agreement obligating EOG to deliver produced water meeting certain specifications and to reimburse and indemnify OWL for injury caused by EOG's failure to deliver compliant produced water. OWL sought compensatory damages exceeding the district court's jurisdictional minimum—at minimum, monetary relief of more than $1 million.
EOG's Removal and Counterclaims
On May 12, 2025, EOG answered and countersued for breach of contract and declaratory judgment. EOG asserted that the district court has jurisdiction over the action because the amount in controversy exceeds $10 million. According to EOG, the amount in controversy encompasses the indeterminate millions of compensatory damages pleaded by OWL and the specific monetary relief sought by EOG in its breach-of-contract claim.
For its breach-of-contract counterclaim, EOG alleged that OWL breached the contract by failing to take dedicated volumes of produced water, entitling EOG to liquidated damages worth approximately $929,192.00. EOG also specially excepted to the relief sought by OWL, requesting that OWL be required to specify the maximum amount claimed.
The Remand Order
On June 9, 2025, OWL moved to remand the case. The motion was submitted for consideration without oral argument on July 17, 2025. On July 25, 2025, the Business Court of Texas, Eleventh Division, signed an order granting OWL's Motion to Remand. The court stated in its order that a written opinion explaining its ruling in further detail would be forthcoming. The memorandum opinion issued on August 11, 2025 provides that detailed explanation.