This news story first appeared on January 6, 2012.

Oil company and Houston settle 20 years of wrangling

Check of more than $4 million ends drilling lawsuit

By Chris Moran, HOUSTON CHRONICLE; January 6, 2012

More than 20 years ago, Maguire Oil prepared to start drilling by the banks of Lake Houston. It finally got a payday last week.

The city of Houston sent Maguire a check for $4,285,812.07 on Dec. 29, to settle a lawsuit that spanned two trials, four appeals and the administrations of four mayors.

The story starts in 1991, when the city granted Maguire a drilling permit near the lake. A Maguire crew brought in a rig to within 300 feet of a lake that is one of the city's primary sources of drinking water. A city officer patrolling the lake ordered the crew to stop, citing an ordinance prohibiting drilling within 1,000 feet of the shore. The Maguire team countered with its permit.

The dispute got kicked up to the administrative level, and the city revoked the permit.
Then the lawyers took over. That was 1993. The city insisted the permit was based on an inaccurate map provided by Maguire, while the company argued that the city had illegally taken away property rights worth tens of millions of dollars.

Defending a principle

It took 14 years to sort out which court had jurisdiction and how to proceed. In 2009, a Harris County court-at-law jury awarded Maguire $2 million in damages, plus $2.2 million in interest. The city appealed.

It took 14 years to sort out which court had jurisdiction and how to proceed. In 2009, a Harris County court-at-law jury awarded Maguire $2 million in damages, plus $2.2 million in interest. The city appealed.

Officials on both sides said they settled because of the cost of continuing.

"I concluded that it was in the best interest of the taxpayers of Houston to stop paying 5 percent interest," City Attorney David Feldman said. Feldman did not know how much the city had spent on legal fees, but a memo to City Council from Controller Ronald Green states that the city has spent $900,000 on an outside law firm just in the last five years.

Cary Maguire, the 83-year-old founder of the Dallas-based company, said the amount he has spent in legal fees exceeds the amount of the settlement. He said he continued to litigate for so long because he thought it was important to defend the principle that while government has the right to take property for the public good, it does not have the right to do so without compensating the property owner.

Donated the winnings

Asked if the long battle had been worth it, he said, "Not from a financial point of view, but we made the right decision trying to establish that in the law."

Asked if the long battle had been worth it, he said, "Not from a financial point of view, but we made the right decision trying to establish that in the law."

Maguire, who donated the money to found the Center for Ethics & Public Responsibility that bears his name at Southern Methodist University, said he had the resources to make a stand but did not necessarily recommend it for the average person.

"Don't fight City Hall," he said, "because only the lawyers win."