The wind is blowing in Texas and the courts are making laws about the movement of air. With apologies to Bob Dylan, given the recent $1.4 million jury award for wind rights violations, this is more than just Blowing in the wind.
A Texas jury has awarded damages in a first-of-its-kind lawsuit alleging wind rights infringement. At a time when government actions, including by the courts, on climate change represent much of the opportunity in the coming years, including the increasing emphasis on renewable energy, wind is critical.
According to the pleadings, a wind rights lease was entered into in 2010 for a 256-acre property in Hale County, Texas. Importantly, that wind lease had a development term of seven years, which meant that unless electrical energy was generated and sold on August 24, 2017, the lease agreement was terminated. That was not the case and the lease was terminated on the basis of that provision. Before that date, the property had been sold and the seller had reserved the wind rights to that transport.
In 2018, the new owner of the building concluded a follow-up lease for wind rights. Two wind turbines were built and started producing thousands of megawatts of electricity in June 2019.
In 2020, Ridge Renewables, LLC purchased all wind rights associated with the land from the former property owner, who had reserved these rights at the time of sale. After failing to receive compensation from the wind turbine operator on December 30, 2020, Ridge Renewables filed suit against the operator, alleging trespass and trespass to title. On March 23, 2022, District Judge Danah Zirpoli granted Ridge Renewable’s motion for partial summary judgment, including finding that Ridge alone owns the interest in the wind rights and receives income from the wind and that Southwestern Public Service Company committed bad faith infringement on Ridge’s rights. and continues to do so with its wind turbines. The case was referred to a jury on the issue of damages. On May 11, 2023, the jury awarded $1,049,634 in damages, with $115,848 in attorney fees and $204,000 in interest.
The judge’s ruling in this case is reported to be the first time a Texas court has ruled under Texas law that wind rights are separable from the land. Furthermore, Her Honor expressly held that these wind rights were proprietary rights subject to trespass. Additionally, the jury award is the first of its kind in dollar terms resulting from wind rights.
Accept that wind rights are a new part of American law, but that is not the case The last airbender groundbreakingly new, and yes, historically before the year 1800 the Dutch paid ‘wind duty’, a tax paid on wind capture under a windmill, with our focus on decarbonising the economy, which saw more and more wind turbines being built. of huge imports.
And not all states may follow Texas’ example. The Maryland Court of Appeals, in an admittedly very different set of facts, refused to recognize a severable right to rescind held in 2021“This has been settled law of Maryland since at least 1857, when the Court of Appeals declined to apply the English common law rule of ‘old lights’ – that property owners could acquire negative prescriptive easements over adjacent properties for air access and light.”
Also, this Texas court decision does not address all issues, including exactly what interest in land is the underlying document described as a wind easement agreement (.. is it an easement or a lease)? Can a lien on wind or wind rights be perfected and if so, how (for example by a mortgage or a UCC financing statement or..). Where do air rights end and wind rights begin if there is no statute? Where is the intersection of wind and oil regulation (and other mineral rights), as both rights are separated from the land surface?
Having a regulatory system for the observable natural movement of the air is simply not something that is done on a large scale in the US, something that seems to be lacking to many if it would take 48,704 solar panels to equal the same kWh of electricity generated by one of the wind energy installations. turbines on this site in Texas.
Clearly, these modern climate-related issues, including renewable energy, are resulting in a new and emerging legal system, but perhaps not quickly enough nor with enough urgency to make aeolian energy expansion a reality. These new laws should be implemented across the country to provide the necessary certainty and create a fertile environment to support wind turbine investments as part of the transition to a low-carbon economy. Although we have been advising clients for over twenty years on some of these emerging legal issues, including how to document these transactions, we are acutely aware that with new technology and the resulting future will continue to exist. Blowing in the wind.
A live webinar “Greenwashing: how to limit your risk” 30 Talking Points in 30 Minutes, Tuesday, July 25 at 9:00 am ET presented by Stuart Kaplow and Nancy Hudes on behalf of ESG Legal Solutions, LLC. The webinar is free, but you must register here.