Texas landowners win $2.1 M judgment against pipeline company over lower property value

North Texas family members have won a $2.1 million verdict against a pipeline company after their parcel of land lost value because an easement was taken for a gas line. This marks the third time Texas property owners recently have prevailed in similar eminent domain cases.

The Johnson County dispute represents a fundamental debate between the pipeline industry and Texas landowners: Does a pipeline devalue only the narrow easement strip or some larger portion of the overall property? The jury agreed that land outside the easement lost value. 

"This verdict sends a strong message that pipeline easements often cause significant damages to property beyond the easement area," Austin-based eminent domain attorney Luke Ellis of John Marrs Ellis & Hodge LLP, who represented the family partnership at trial, said in a press release. "Unfortunately, many Texas landowners don't realize that they have a constitutional right to seek just compensation for such damages."

The dispute began in 2007 when Midland-based Peregrine Pipeline Co. sued family-owned Eagle Ford Land Partners to gain a mile-long easement for a natural gas pipeline. Peregrine claimed Eagle Ford's damages totaled only about $80,000. The family's appraisers and lawyers countered that damages should account not only for the easement strip, but also for the loss in value to the remaining property.

After a one-week trial in County Court at Law No. 2 in Johnson County, jurors awarded the family partnership more than $1.6 million. Judge Robert Dohoney entered the final judgment of $2.1 million, which includes interest. The case is Peregrine Pipeline Co., L.P. v. Eagle Ford Land Partners, LP, No. E-2007-00046. Peregrine plans to appeal.

The judgment continues a trend in similar Texas condemnation cases and is one of the largest so far in favor of a landowner. Last year, the Texas Supreme Court denied review of a McMullen County verdict against LaSalle Pipeline LP. Earlier this month a Fort Worthappeals court denied reconsideration of its decision in favor of a landowner over Crosstex DC Gathering Co.