How the New Challenge to TransCanda’s Pipeline Could Be Different

September 19, 2012 | 11:49 AM

By Mose Buchele

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When a North Texas Judge ruled in favor of TransCanda in its legal battle with landowner Julia Trigg Crawford last August, representatives for the Canadian pipeline company were, understandably, happy with the outcome.

“This ruling reaffirms that TransCanada has — and continues — to follow all state and federal laws and regulations as we move forward with the construction of the Gulf Coast Project,” TransCanada spokesman Grady Semmens told the New York Times.

Now the company is facing another legal challenge, from another Texas farmer, on similar grounds to the Crawford case.

Given all those similarities it makes sense to ask: what chance could the new challengers possibly have?

The new objection comes from South Texas rice farmers David Holland and his brother James. TransCanda wants to take some of the Hollands’ land to build part of its pipeline. Like Crawford, the Hollands (and other rice farmers) are challenging TransCanada’s claim that it is a “common carrier,” an entity with the right to condemn land for the public good.

According to their lawyer, there may not be much difference between their case and Crawford’s case except for one key factor: the Judge.

“This particular judge [Jefferson County Court Judge Tom Rugg Sr] has certified a question to the ninth circuit court of appeals that pertains exactly directly to TransCanada’s status as a common carrier and it’s right to condemn,” Terry Wood, the Hollands lawyer, told StateImpact Texas.

According to Wood, that demonstrates that Judge Rugg is open the to idea that TransCanada may not qualify to condemn land in Texas. The predisposition of the Judge in a case like this is, obviously, important. The judge in the Crawford case came under criticism from landowner groups for appearing dismissive of their concerns. He issued his ruling for TransCanada by iPhone.

Another difference between this case and the challenge in North Texas are the Hollands themselves. The two brothers are no strangers to taking on pipeline companies and winning.

Almost all of the legal strategy to blocking TransCanada’s pipeline has included arguing a precedent set by the Texas Supreme Court in the Denbury Green pipeline case. It was a decision that complicated the process by which companies could take land.

“In Denbury Green, what you have is an acknowledgment by the Supreme Court that, if a common carrier pipeline is going to have eminent domain power unrestricted,  there has to be some process as to who is designated a common carrier,” UT legal scholar Lynn Blais told StateImpact Texas earlier this year.

The Hollands were the landowners that brought that case to the state Supreme Court. That leaves anti-pipeline activists hopeful that they’ve found in the brothers challengers who are willing to fight TransCanda to the bitter end.

“I commend the Hollands for being such a brave family and one that has the capacity to fight this,” said Rita Beving, a representative with the East Texas 391 Commission, a coalition of East Texas Communities opposed to the pipeline.

Of course those hopes could be misplaced. Much of the Hollands opposition to TransCanada appears to come not from a distaste for pipelines, but from a desire for more compensation from the Canadian company.

“The bottom line is it’s all about money,” David Holland told StateImpact Texas. “We offered them the easement at a discount to fair market value but that wasn’t enough. They needed more of a discount.”

And for its part, TransCanada remains confident that the new case, like the old, will be found in its favor.

“We believe this is a situation where the language of the law is plain, and that we have followed the law to the letter. We have demonstrated that we qualify as a common carrier under Texas statute in previous proceedings in State Court, and we believe we have done that again in this Court,” Jim Prescott, a spokesman for TransCanada, wrote to StateImpact Texas in an email last week.

Judge Rugg plans to issue his ruling on September 24.