Cemex Wins Monumental Case Against The State Of Texas

All over Texas, business owners and landowners who deal with removing and selling minerals breathed a sigh of relief as Judge Carlos Villa ruled in favor of CEMEX and against the State of Texas and the GLO (General Land Office) on December 22, 2009. It would be a merry Christmas for some, while Texas and the GLO leave the courtroom empty-handed.

Texas Loses $558 M in Alleged Royalties

This case began when the commissioner of the GLO, Jerry Patterson, decided to file a suit on behalf of the GLO and the State of Texas against CEMEX for not only trespassing on its land located in El Paso County, but also to collect $558 M in royalties and the total worth of the sand and gravel removed and sold at CEMEXs McKelligon Canyon quarry.

CEMEX acquired McKelligon Canyon quarry in 2006 from a previous business and uses this quarry to remove gravel and sand in order to sell these minerals. The State of Texas and the GLO claim that, for the past 60 years, they havent received royalty payments that are their due from CEMEX and from the previous quarry owners for removing and selling gravel and sand from the McKelligon Canyon quarry. However, the GLO never filed charges against any of the previous business owners, which hurt their lawsuit and helped CEMEX overcome these charges.

Unfortunately for Texas and the GLO, precedence was not on their side. CEMEX cited rulings and opinions delivered by the Texas Supreme Court, as well as the attorney general of Texas, to support their side of the story. Judge Villa obviously thought that precedence was on the side of the business owner rather than the State of Texas. He ruled that granite, limestone, sand, gravel, soil and caliche are all minerals that belong to the landowner and business owner. This essentially means that the GLO cannot claim rights to royalties for any of these minerals that are removed and sold, including those removed and sold from McKelligon Canyon quarry by CEMEX.

Why This Ruling is Important

Judge Villa ruled in favor not only of CEMEXs claims to operate their business removing and selling sand and gravel without owing royalty payments to the GLO or the State of Texas, but in favor of business owners and landowners throughout Texas. If the GLO decided to pursue these claims against a smaller company, this company might have gone bankrupt or not had the funds to efficiently fight a similar suit in court.

Because CEMEX was able to prove that previous court decisions supported their right to remove and sell minerals from McKelligon Canyon quarry, they really assured other businesses that their mineral-classified land was safe from the State of Texas and the GLO.

Landowners can take this monumental ruling and feel safe conducting their business of removing and selling granite, limestone, soil, gravel, sand or caliche from their property without interference and without the threat of owing a huge amount in back payments to the State of Texas and the GLO.