Co-author Chance Decker

Two recent cases from the same Texas court reflect the ongoing uncertainty over the threat to private property rights posed by the Keystone XL and other pipelines. Is there a theme, a common thread, running through law on this subject? Not in Texas. Today we discuss one of these decisions, Next time we review the other.

In Re Texas Riceland Partners, Ltd., confirmed TransCanada Corp’s common carrier status and affirmed its right to immediate possession of landowners’ property in Jefferson County for the Keystone XL pipeline. A consortium of rice farmers alleged TransCanada could not use the power of eminent domain to take over private property because it was not a “common carrier” under the Texas Natural Resources Code. The Code grants common carriers the power of eminent domain, and defines a “common carrier” as someone who “owns, operates, or manages a pipeline or any part of a pipeline in the State of Texas for the transportation of crude petroleum to or for the public for hire, or engages in the business of transporting crude petroleum by pipeline.”

The trial court denied the farmers’ challenge to TransCanada’s common carrier status and upheld the condemnation. The court of appeal upheld TransCanada’s right to possession of the condemned property during the farmers’ appeal. The farmers relied upon the 2012 Texas Supreme Court decision Texas Rice Land Partners, Ltd. v. Denbury Green Pipeline-Texas, LLC that a pipeline owner’s power to condemn must be fully resolved through the judicial process before the pipeline can take possession of private property. The flaw in that challenge was that in Denbury, the court denied common carrier status.

The court found ample evidence — including affidavits from TransCanada employees about the Keystone XL Pipeline’s ownership and planned operations—to find TransCanada a common carrier.

The takeaways: 

  • The pipeline/condemnor need not wait until the end of the seemingly interminable appeal process to take the land and construct its pipeline.
  • Some cases raising “big” policy issues are decided by a mundane examination of the statutes creating the rules, not flowery speeches by one side or the other.