Split appeals opinion bestows pipeline project with eminent domain power and common carrier status

David Yates Sep. 24, 2009, 9:25am

Local rice farmers and land owners cringed Thursday, Sept. 24, after an appellate court affirmed a lower court's ruling granting a pipeline company common carrier status.

After being granted the power of eminent domain, Denbury Green Pipeline-Texas sought and received a permanent injunction earlier this year that stopped Texas Rice Land Partners from delaying construction of a pipeline running through private famers' lands.

Arguing that Denbury Green has its own interest at heart and not the public's, Texas Rice Land Partners appealed the ruling.

However, a split decision by justices seated on Texas' Ninth Court of appeals stated that Denbury meets all the requirements of a common carrier, granting the company to take private lands for public use at below market prices.

Igor Frenkel, an attorney close to the case, told the Record during a phone interview that TRLP will take the issue up to the Supreme Court of Texas.

Frenkel is not the only one who thinks justices erred.

Justice David Gaultney dissented and argued that "genuine issues of material fact preclude summary judgment in this case."

He wrote in his dissenting opinion that there is evidence on Denbury's Web page suggesting the pipeline will be used for the company's own private use.

As the Record reported in June 2008, shortly after being informed that the police would be called if the pipeline company's surveyors came anywhere near a rice paddy, Denbury Green filed its petition for an injunction against TRLP and Mike Latta in Jefferson County.
That same day, Judge Donald Floyd, Jefferson County 172nd Judicial District, approved the TRO.

On Jan. 5, Judge Floyd approved Denbury Green's motion for summary judgment, granting the company full access to the farmer's lands.

Shortly afterwards, TRLP and Latta appealed, arguing that "the trial court erred � since TRLP showed proof that Denbury Green's pipeline is a private carrier," court papers say.

Denbury Green has planned a 314 mile, 24-inch pipeline starting near the Texas-Louisiana border and ending at the Hastings Field located in Brazoria and Galveston counties. The pipeline will transport carbon dioxide (CO2), which will be injected into oil reservoirs to recover additional crude oil.

TRLP argued in its appellate brief that Denbury Green is not a common carrier under the Texas Natural Resources Code and "therefore does not have the right to enter" their property to conduct a survey and appraisal of their land.

Denbury Green had determined that it is in "the best interest of the public to perform preliminary surveys across land located along the route of the proposed pipeline," court papers say.

"Denbury Green has been delegated the power of eminent domain and has the right to enter and upon and condemn the real property of any person or entity," argued Denbury Green in its reply brief to TRLP's appeal.

In his order granting Denbury Green access to the farmer's land, Judge Floyd ruled that the company is indeed a "common carrier" and has "the power of eminent domain."

Case Background

Denbury Green says in its suit that to date, the company's survey team is in the process of surveying across all the tracts of lands along the route of the proposed pipeline.

However, the defendants, its agents and attorney "have continuously refused to allow Plaintiff's survey crew to enter upon the land in which Defendant Texas Rice Land Partners Ltd. owns," the suit states.

"Specifically, when Defendant Texas Rice Land Partners Ltd. was contacted for permission to enter its property, Plaintiff was told by Texas Rice Land Partners Ltd. to contact its attorney, Mr. Anthony G. Brocato for all further dealings concerning Plaintiff s pipeline. Upon contacting Mr. Brocato on numerous occasions, Plaintiff was refused survey access for approximately two months.

"Upon information and belief, Mr. Mike Latta is a tenant on the Property owned by Texas Rice Land Partners Ltd. On June 12, Plaintiff's agent Dan Roberts contacted Mr. Latta to obtain permission to conduct an on the ground survey, but was denied and told that "Brocato � specifically instructed him (Mr. Latta) to call the police if anyone tried to enter onto the Property for surveying, appraisal or otherwise.

"Notwithstanding the fact that Plaintiff is responsible for any damage occasioned by such surveying activities, Defendants continues to refuse to allow Plaintiffs survey team to enter upon Defendants' property."

Denbury Green is represented by Thomas Buchanan of the Flowers Davis law firm.

TRLP is represented by attorney Anthony G. Brocato.

Trial case No. E181-923
Appeals case No. 09-09-002-CV

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