Lawsuit Filed Against STORM as the Fight Over Texas Oyster Reefs Continues

The way things have been going with the parties grappling over the Sustainable Texas Oyster Resource Management it was probably only a matter of time before somebody filed a lawsuit.

Well, the time has come and the lawsuit was filed in the Galveston County District Court on Thursday afternoon. The suit calls for "injunctive and declaratory relief pursuant of the Texas Open Meetings Act." Johnny and Lisa Halili, the founders and owners of Prestige Oysters, along with Clifford Hillman, of Hillman's Seafood, Michael Ivich, owner of Misha's Seafood, and oystermen Jure Slabic and Ivo Slabic have all been listed as plaintiffs in a suit filed against STORM and the Chambers Liberty Counties Navigation District.

STORM is the brainchild of Tracy Woody and his father-in-law, Ben Nelson, the owners of Jeri's Seafood, a company that oysters from Smith Point, as we wrote in a feature story earlier this year. Back in early 2014, Woody and Nelson set up a separate company, Sustainable Texas Oyster Resource Management (a.k.a. STORM). Then they obtained a 30-year lease through the CLCND for more than 23,000 acres of submerged land in Trinity and Galveston bays. And then, after they had secured the lease, Woody and Nelson started informing the other oystermen who held oyster reef leases in those waters that STORM now held the rights to that submerged land and the oyster reefs on it.

Now, STORM and the CLCND are accused of violating the the Texas Open Meetings Act, a move that the plaintiffs claim allowed STORM to quietly arrange to get the lease, paying $1.50 per acre to start with for the property, without getting the public's attention until the lease was signed and approved in April 2014.

The anti-STORM people previously filed a criminal complaint in Chambers County against STORM and CLCND over the way the lease was approved by the navigation district. STORM spokesman Ted Royer described the complaint filed by former-investigative-reporter-turned-consultant Wayne Dolcefino as "bogus," noting that release issued on the complaint mentioned Dolcefino's name repeatedly :

The bogus complaint was filed by Wayne Dolcefino, and announced in a press release that mentioned Dolcefino's name no fewer than 12 times in 12 paragraphs. Dolcefino is a paid consultant for Concerned Citizens of the Texas Gulf Coast, a front group created by Prestige Oysters, the self-proclaimed "world's largest oyster shipping company" that owns 40,000 acres of private leases throughout the Gulf of Mexico.

(It's worth noting here that the people on both sides of this issue have stated repeatedly that they're just trying to help the Texas oyster industry. The hitch in all this is that they have very different ideas about what helping actually means.)

Chambers County Attorney Scott Peal decided at the end of March that "no action will be brought" on the criminal complaint, declining to file charges. "It's sad that a huge corporate interest is hiring hatchet men to attack anyone who stands in the way of their profits," Woody stated in a release. "The fact that our opponents would knowingly waste taxpayers' money with this frivolous complaint indicates that they feel threatened by the prospect of small oystermen uniting to protect the bay from overharvesting."

In the court documents the plaintiffs allege that negotiations for the lease were being quietly conducted in Fall 2013, according to the lawsuit. The lawsuit also states that the CLCND and Nelson and Woody on behalf of STORM kept things vague in the published agendas for the navigation district meetings. They outlined how they believe this was done:

"While we now know, in retrospect, that the discussion most likely dealt with the 'Oyster Lease' [sic] the agenda item on the 'proposed lease of submerged lands,' without more was wholly insufficient to put the public on notice that something as unique and of special interest as the 'Oyster Lease' [sic] was being considered."

The lawsuit goes on to contend that CLCND commissioners kept the terms vague, never directly mentioning oyster reefs in their agenda items. The word "oyster" didn't even show up on April 15, 2014, the day the lease was approved, according to the lawsuit. Also, it all happened pretty fast according to the court documents:

"[T]he audiotape of the meeting also shows that there was no actual deliberation on the item. Altogether, the 'STORM' contract was approved in less than three minutes, amidst laughter, with the closing comment by one commissioner, 'Now we get rich.'"

We've asked the CLCND for a comment on the allegations in the lawsuit. We'll update with that as soon as we hear back.

A lot of the information in the lawsuit was gleamed by Texas Public Information Requests filed by Dolcefino on behalf of the plaintiffs. Dolcefino told us how he tracked down the information that came to be used in the lawsuit:

After my criminal complaint and TPIA lawsuit, hundreds of documents were released to me that I was originally told did not exist. In addition, audio tapes were provided in the last few days. Those audio tapes confirm our worst beliefs about this deal. And the notices and agendas of these meetings were a classic violation of TOMA.

Based on my investigation (which is what my firm does), the oyster folks sought out Feldman and Feldman to review the documents and audio tapes and that is what initiated the lawsuit.

While they only filed this week STORM's opponents were expecting they'd have to go to court over the lease. Lisa Halili told us in December that she and the rest of oystermen have been working against STORM's lease since they learned about it last summer, but they always knew it would likely come down to a lawsuit.

However, Woody told us in January that he and Nelson had the lease vetted by a bevvy of lawyers who tore into the document to close any legal gaps. He said that he was confident the lease would stand up in court if it came to that.

We've asked Woody for his response to the lawsuit filed against STORM and CLCND. We'll update when we hear back.

Litigation started to look even more inevitable after state Rep. Joe Deshotel, a Beaumont Democrat, filed HB 3335 in the Texas Legislature. Those for the bill say it's merely language that will help private industry protect and cultivate the Texas oyster industry. Those against it say the measure is nothing but an attempt by a single group to control the bulk of Texas oyster reefs. After a hearing last week that saw both sides working to persuade the House Culture, Recreation and Tourism Committee to take their part, the bill is currently stuck in committee.

So it's hard to tell if HB 3335 will go anywhere, but in the meantime STORM and the CLCND have a lawsuit to contend with. The lawsuit is seeking a "uniform declaratory judgment" that the lease between CLCND and STORM is "null and void and of no effect."

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Dianna Wray is a nationally award-winning journalist. Born and raised in Houston, she writes about everything from NASA to oil to horse races.
Contact: Dianna Wray