The opinion of the Texas Supreme Court in Myers-Woodward, LLC v. Underground Services Markham, LLC, No. 22-0878 (May 16, 20205), doesn’t involve eminent domain, takings, land use, or any of our usual topics.
But we’re posting it here because at bottom, students of these topics must be conversant in plain old property law, what we affectionately refer to as “dirt law.” And this case is pretty dirty.
Short story: “A” owned the surface and conveyed the subsurface mineral estate to another. A portion of that mineral estate — the right to mine salt — was conveyed, in turn, to “B,” who exercised that right. The extraction of the salt resulted in large caverns, which could be used to store (you guessed it) oil and gas storage. As a consequence, a dispute arose about who owned that cavern space, the surface owner, or the owner of the salt deed.
Here’s how the court described the issues:
The parties agree that USM owns the salt under the 160-acre tract. They also agree that Myers’s surface estate includes not just the surface of the land, but also any portion of the subsurface that was not included in the 1947 conveyance of “all . . . oil, gas, and other minerals.” The question, then, is whether empty spaces within salt formations, created decades later as a byproduct of salt production, were included within the 1947 conveyance of “other minerals” to USM’s predecessors. Or, as USM frames it, whether its ownership of the “salt formations” includes the empty space created inside the salt formations by its salt-production efforts. If so, then USM owns those empty spaces. If not, then Myers owns them.
Slip op. at 8.
The Supreme Court held that, at least as the conveyances in this case were drafted, the cavern space belongs to the surface owner. Here’s what the court viewed as the essential approach in these cases, and this reminder is why we’re posting the opinion:
As far as we are aware, with respect to these 160 acres, Myers owns every stick in the proverbial bundle except for the mineral interest conveyed by the corrected 1947 mineral deed. Under that deed, USM’s predecessor obtained “all of the said oil, gas and other minerals in, on and under said land, together with all and singular the rights and appurtenances thereto in anywise belonging.” Out of that broad mineral estate, USM obtained only the salt—“all of Grantor’s right, title and interest, in and to all of the salt and salt formations only.”
Although we refer to Myers’s interest as the “surface estate” and to the interest that was severed and conveyed in 1947 as the “mineral estate,” we caution that the rights encompassed by these general labels may vary depending on the language chosen by the parties to any particular conveyance. Not all mineral estates are created equal. Resolving a dispute over the scope of a mineral conveyance should therefore begin with the text of the conveyance—not with generalizations about the default nature of a “surface estate” or a “mineral estate.” Doctrinal labels such as these—and the caselaw from which they derive—are of course very useful, indeed essential, when courts are confronted
Slip op. at 7.
The salt deed owner acknowledged the longstanding rule in Texas that voids left behind are the property of the surface owner. But, it argued, all of these cases involved voids left after the production of oil or gas, and there should be a different rule when the minerals extracted are not migratory and thus subject to the rule of capture (like oil and gas), but are in-place. We owned that salt formation, and if we improve that area by creating useful caverns, well those caverns are ours as well. See slip op. at 11 (“USM argues that if it improves its salt formations by creating useable caverns within them, then the caverns are simply a part of the salt formations it already owns, and so it owns the caverns just as surely as it owns the salt.”).
While that argument “is not without intuitive appeal,” the Supreme Court held that no, the salt deed owner doesn’t own the salt formations, but rather the salt itself. That much is clear from the conveyance documents, and “much of this case boils down to the elementary observation that empty space is not salt.” Slip op. at 14. Moreover, Texas dirt law allocates ownership of these subsurface caverns to the surface owner “absent a contrary agreements. Id.
And because you can make agreements to apportion your rights, the role of the law here is to “stick with simple, bright-line rules and to apply them consistently across a variety of fact patterns.” Id.
Myers-Woodward, LLC v. Underground Services Markham, LLC, No. 22-0878 (Tex. May 16, 2025)