Co-author Rusty Tucker
San Miguel Electric Coop is a Texas nonprofit electric cooperative that owns and operates a power plant that supplies electricity to 38 Texas counties. After a four-week absence, they return to these pages, this time in DCP Sand Hills Pipeline, LLC v. San Miguel Elec. Coop., Inc. Read on to learn about the “paramount importance doctrine”.
San Miguel’s only source of fuel is lignite it strip mines in Atascosa and McMullen counties. DCP, a common carrier, operates a 721-mile long 20-inch pipeline that contributes to a larger system that transports 20 percent of all natural gas liquids produced in the Permian and Eagle Ford basins to the Gulf Coast for processing.
In 1954, the Wheelers granted San Miguel’s predecessor-in-interest a coal, lignite and mineral lease covering 2,200 acres. San Miguel has exclusive rights from the surface to a depth of 350 feet. The Wheelers reserved the right to explore for oil and gas below 350 feet so long as it does not interfere with strip mining operations. In 1975, San Miguel spent substantial sums of money in preparation for mining the tract.
In 2011, DCP negotiated a pipeline easement over the Wheeler’s tract. DCP and San Miguel agreed on a route that would not interfere with San Miguel’s planned operations, and DCP installed its first pipeline. In 2013, without consulting San Miguel, DCP installed a second pipeline north of the first pipeline. San Miguel discovered this second pipeline and informed DCP that the pipeline would interfere with future mining operations. DCP refused to move the second pipeline.
San Miguel sued seeking declarations that DCP’s pipeline easement was invalid, void, or voidable and that San Miguel’s rights under the coal lease were superior to DCP’s rights under the pipeline easement; a permanent injunction requiring DCP to relocate the pipeline; and attorney’s fees. DCP counterclaimed for condemnation of the land under its easement and also claimed the lignite lease was invalid.
After a summary judgment in favor of San Miguel and a bench trial, the trial court declared that San Miguel’s rights under the lignite lease were superior; DCP’s pipeline easement was void, invalid, and/or voidable; and ordered DCP to remove sections of pipeline that interfered with San Miguel’s operations.
DCP argued that San Miguel sought to determine title to real property and therefore should have brought a trespass to try title action. The court reasoned that the suit was over the validity of an easement, not to determine title to real property; the TTT statute did not apply.
On DCP’s condemnation counterclaim San Miguel argued the land was already dedicated to a public use, and under the paramount importance doctrine, DCP could not condemn the land for a different public use. Under this doctrine, a party may prevent a condemnation by showing:
- the property is already devoted to a public use, and
- the condemnation would practically destroy or materially interfere with the use to which it has been devoted.
The court reasoned that, regardless of whether San Miguel’s use constitutes an existing public use, conflicting evidence at the trial court raised questions about whether DCP’s condemnation of the land would destroy or materially interfere with San Miguel’s existing public use. The court reversed the portions of the judgment granting San Miguel relief on DCP’s counterclaim. So, it’s back to the trial court for more action.
A musical interlude, … from the runner-up at the trial court?