Texas Attorney General Files Oyster Lawsuit Against Chambers Liberty County Navigation District and STORM

by / Newsroom Ink on August 5, 2015

By Ed Lallo, Gulf Seafood News Editor

Storm clouds circling Galveston Bay have collided releasing what promises to be a hurricane of paperwork, legal wrangling and an inevitable end to the “Battle for the Bay” that has for more than a year compromised oyster production, damaged businesses and hurt the American oyster consumer.

STORM and CLCND cite Texas Water Code §61.111 in their claim to manage the resources. The conflict between the CLCND and Texas Parks and Wildlife is the latest in a series of fierce legal and political battles in Texas over who controls land covered by water. Photo: Prestige Oysters

Storm clouds circling Galveston Bay have collided releasing what promises to be a hurricane of paperwork, legal wrangling and an inevitable end to the “Battle for the Bay” that has for more than a year compromised oyster production, damaged businesses and the hurt the American oyster consumer. Photo: Prestige Oysters

On the final day of July, the Texas Attorney General’s office, on behalf of the Texas Parks and Wildlife Department (TPWD), filed a lawsuit naming Chamber-Liberty Counties Navigation District (CLCND) and Sustainable Texas Oyster Resource Management (STORM) as attempting to circumvent the state’s sole authority and jurisdiction to regulate the conservation and harvesting of oysters, mussels, and clams by executing an unauthorized lease.

According to the petition filed by Texas Assistant Attorney General Craig Pritzlaff, the CLCND and STORM have entered into an illegal lease on more than 23,000 acres of submerged lands and waters within Galveston Bay which the State legislature has vested the TPWD with sole authority and jurisdiction to regulate. By granting the lease, the District and its Commissioners subverted, preempted and interfered with the state’s regulatory and conservation programs.

The District and STORM have asserted unlawful possession over oysters in state waters and STORM is attempting to exclude entities from lawfully harvesting oysters. Through the lawsuit, the state is looking to void the lease and seeks restitution from STORM and the District.

State of Texas Finds Its Voice

“We are elated to see the State file this lawsuit exposing the unlawful lease granted by the Chambers-Liberty Counties Navigation District to STORM,” said Lisa Halili, Vice-President of Prestige Oysters in San Leon, TX, and a member of the Gulf Seafood Institute. “For the past eight months, working with Concerned Citizens of Texas Gulf Coast we have led the opposition, speaking when the state could not comment. We are glad it has found its voice and stepped into this fight to preserve the bay for all Americans.”

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“We are elated to see the State file this lawsuit exposing the unlawful lease granted by the Chambers-Liberty Counties Navigation District to STORM,” said Lisa Halili, Vice-President of Prestige Oysters in San Leon, TX, and a member of the Gulf Seafood Institute. Photo: Ed Lallo/Newsroom Ink

Listed as plaintiffs in the lawsuit are Mary Beth Stengler, CLCND General Manager, and Tracy Woody, manager of STORM, who inked the final agreement, as well as CLCND Commissioners Terry Haltom, Allen Herrington, Ken Coleman, Ken Mitchell and Dave Wilcox.

Tracy Woody and his father-in-law Ben Nelson formed STORM in 2014. They own Jeri’s Seafood, a company that harvests oysters from Smith Point, TX and sells to companies that include Houston based Pappas Restaurants and San Antonio’s H.E. Butts Grocery (HEB).

In April of last year STORM leased the submerged bottomland owned by the Navigation District, bypassing the State of Texas. The lease conflicted with current state leasing practices of private oysters beds historically issued and administered by Texas Parks and Wildlife. The 30-year lease covered a majority of northern Galveston Bay and included public and private oyster leases issued by Parks and Wildlife to other harvesters.

STORM was awarded the lease after Woody first approached the district with an offer to pay up to $69,000 a year for the exclusive rights to plant and harvest oysters.

In an effort to get state legislation passed that would make things “codified and clarified”, the “Battle for the Bay” moved from water to land earlier this year. With the purpose of moving the oversight of oysters from Texas Parks and Wildlife to the Navigation Districts, State Representative Joe Deshotel introduced HB3335. After receiving very little support in open testimony, HB3335 never made it out of the Culture, Recreation and Tourism Committee . Individuals who opposed the legislation told the committee “HB 3335 was an attempt to give STORM a legal window to justify its lease in court”.

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With the Texas legislature not scheduled to meet for another two years, the Attorney General’s lawsuit comes two months after legislators left Austin. Photo: Ed Lallo/Newsroom Ink

In his testimony, Woody stated that HB 3335, like STORM, was focused on giving private industry the right to step in and save a resource that everyone agrees is in trouble.

With the Texas legislature not scheduled to meet for another two years, the Attorney General’s lawsuit comes two months after legislators left Austin.

Current Texas Parks and Wildlife code is clear that the state owns and holds in trust for its citizens all fish, and aquatic wildlife, including shellfish such as oysters, mussels, and clams. The Legislature has decreed, “All the beds and bottoms and the products of the beds and bottoms of the public rivers, bayous, lagoons, creeks, lakes, bays, and inlets in this state and that part of the Gulf of Mexico within the jurisdiction of this state are the property of this state. The state may permit the use of the waters and bottoms and the taking of the products of the bottoms and waters.”

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Oyster companies have spent millions of dollars planting and restoring reefs that STORM now claims as theirs. Photo: Ed Lallo/Newsroom Ink

State Navigation Districts are also governed by the Texas legislature. A navigation district’s authority is generally limited to improving navigation and promoting marine commerce in waters of the state within a district’s boundaries. Self-liquidating navigation districts, like CLCND, are authorized to make improvements for navigation of coastal waters, preservation and conservation of coastal waters for navigation, and other improvements necessary or incidental to the navigation of coastal water.

Since the granting of the lease on April 15th of last year, STORM has sought to exclude license holders and private lease holders from lawfully harvesting oysters from public and private oyster reefs within the CLCND boundaries, and has issued “no trespass notices” to one or more entities seeking to exclude them from the lease.

High Seas Oyster Hijinks

In June of this year, high seas oyster hijinks in the Bay reached a boiling point. As floodwaters from central Texas started to pour into to the northern waters of the Liberty-Cambers area of the Bay, fishermen scrambled to try and save more than a million dollars worth of oysters from certain death resulting from the fresh water infusion.

While trying to move oysters from private reefs to an area with higher salinity, oyster crews were met with continual harassment by STORM boats.

“Our crews were being videotaped by STORM,” said Halili “We eventually had to pull the crews from the area because STORM boats were continually coming too close to our vessels, with one harvester being grounded from the harassment.”

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“What makes me sick is that a company saying it was founded to better manage the oysters in Galveston Bay let thousands of oysters die rather than help move them to safer waters. The big loser is the American consumer who could have enjoyed eating those oysters,” said Raz Halili, who also works for the family company. Photo: Ed Lallo/Newsroom Ink

Crews were able to move some of oysters to the east side of the Bay nearer the ship channel, but nothing near the total amount sitting ready for harvest later this year. More than 100,000 sacks of oysters worth in the six figures were left to die.

“What makes me sick is that a company saying it was founded to better manage the oysters in Galveston Bay let thousands of oysters die rather than help move them to safer waters. The big loser is the American consumer who could have enjoyed eating those oysters,” said Raz Halili, who also works for the family company.

The floodwater caused devastation to almost every public and private reef in the area with little hope for a harvest in the next five years.

Oyster Industry Economically Important to State

According to the lawsuit, the oyster industry is a long-standing and economically important industry to the state. The District’s actions and the lease, if allowed to stand, would negatively impact the industry and cause significant harm to the state’s ability to regulate the conservation and taking of aquatic wildlife. The District’s action could also lead other local and regional governmental agencies across the state to vie for similar control of wildlife within their jurisdiction.

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The lawsuit states that by seeking to exclude one or more entities from their lawful Certificates of Location, STORM prevented the transplanting of oysters pursuant to permits issued by the state. Photo: Ed Lallo/Newsroom Ink

Under the Texas Civil Practice & Remedies Code, the state may determine that the District and its Commissioners were without legal authority to enter into the lease, thus declaring the lease illegal and void.

The lawsuit states that by seeking to exclude one or more entities from their lawful Certificates of Location, STORM prevented the transplanting of oysters pursuant to permits issued by the state. It has prevented commercial fishermen and recreational anglers from taking oysters from public oyster reefs and is seeking to take oysters from the waters and submerged lands without proper authorization from the TPWD.

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The CLCND/STORM lawsuit was filed by Texas Attorney General Ken Paxton’s office just days before he was indicted on felony charges. Photo: Texas AG Office

The Attorney General’s office is asking the court to issue:

  • An order declaring that the District and/or its Commissioners acted ultra vires and were without legal authority to enter into the Lease;
  • An order declaring that the Lease is illegal, against public policy and, therefore, void;
  • An award for the value of each shellfish, including each oyster, mussel, and clam, unlawfully killed, caught, taken, possessed, or injured;
  • An award to the State for its reasonable attorney’s fees, court costs, and reasonable expert witness fees in this action; and
  • An award for other relief, general and special, at law and in equity, to which it may show itself justly entitled.

Gulf Seafood News has continued to contact Tracy Woody and the Texas Attorney General’s office for comment, but neither have yet responded.

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About the Author

About the Author: Ed Lallo is the former editor of Gulf Seafood News and CEO of Newsroom Ink, an online brand journalism agency. .

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