Texas Supreme Court Reinforces Denbury Decision on Eminent Domain. Again.
For the third time, The Texas Supreme Court has ruled against a pipeline company’s use of eminent domain.
But the oil and gas industry did not give this one up without a fight.
Here’s some background: In a landmark ruling at the Texas Supreme Court last August, a rice farmer in Beaumont (along with a rice farming consortium, Texas Rice Land Partners) won his case against the Denbury Green pipeline company, which had used eminent domain to route a carbon dioxide pipeline across his land. The 24-inch line stretches from Donaldsonville, Louisiana to the Hastings Field, outside of Houston, Texas. The farmer, Mike Latta, argued that the pipeline wasn’t in the public interest, as it was a private pipeline that would only be used by one company. The Supreme Court of Texas agreed. (But the case took several years to make it to the Supreme Court, and in the meantime the company built the pipeline anyways.)
Then the pipeline company — joined by the Texas Oil and Gas Association and several others associated with the industry (including notable names like the Koch Pipeline Company, Kinder Morgan and Occidental Chemical) — asked for an entire rehearing of the case, something of a rare move. In March, the Supreme Court said no, the decision stands. Then the pipeline company Denbury Green asked again for a rehearing.
This week comes the latest answer: No. And as the decision still stands, it could become the basis for more legal arguments against pipelines using eminent domain to seize private land.
In another case currently making its way though court in Lamar County (that could ultimately end up at the Texas Supreme Court) farmer Julia Trigg Crawford is using the Denbury decision in her fight against the Keystone XL pipeline. The company behind the pipeline used eminent domain against her (and over a hundred other Texas landowners) to route the pipeline through private land.
To get eminent domain to route a pipeline across private land in Texas — a state that is 95 percent private property, and a bastion of landowner rights — all a company has to do is check a box on a two-page form to the Railroad Commission of Texas (which regulates drilling and pipelines in the state).
By checking that box, the pipeline company says it is a “common carrier,” i.e. a pipeline that will be available at market rates for other companies to use, and therefore in the public interest.
The Supreme Court reaffirmed this week that simply checking a box isn’t good enough. “The Court holds that, to be a “common carrier” carbon dioxide pipeline, and endowed by the Natural Resources Code with the power to exercise eminent domain for public use, it must do more than check a box on a government form,” Justice Dale Wainwright (joined by Justice Phil Johnson) wrote in the latest concurring opinion in the case this week denying a second request for a rehearing.
Many have called on the legislature to figure out eminent domain and common carrier status in Texas during the upcoming session.