Denbury Green Pipeline loses appeal of $444K condemnation judgment

David Yates Feb. 25, 2012, 7:44am

The Denbury Green company website shows this photo of the pipeline construction.

Denbury Green Pipeline-Texas lost an appeal Thursday when the Ninth Court of Appeals affirmed a final judgment awarding damages in the amount of $444,587 in a condemnation proceeding.

Denbury 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.

Court records show that in March 2009 Denbury sought an easement across property owned by Star-L Land Co.

The request was granted following a special commissioner's hearing. Star-L objected to the award and, according to court records, converted the administrative condemnation proceeding into a judicial proceeding.

During trial, presided over by Orange County Court at Law Judge Michael W. Shuff, a judgment of $444,587 was awarded in favor of Star-L.

Denbury filed an appeal on Oct. 20, 2010.

On appeal, Denbury asserted that the trial court abused its discretion when it admitted into evidence unaccepted offers to purchase the property, court papers say.

Conversely, Star-L argued that Denbury waived its objections to the evidence when it failed to object to the trial testimony of Star-L's expert witnesses.

"In this case, testimony related to the unaccepted offers came in through documentary evidence, as well as through three different witnesses..." wrote Justice Charles Kreger in the Ninth Court's memorandum opinion released Feb. 23.

"Denbury was required to repeat its objections or obtain a running objection from the court regarding the unacceptable evidence that made clear the scope of the objection. Any error in the admission of the evidence is deemed harmless and is waived if the objecting party subsequently permits the same or similar evidence to be introduced without objection.

"Accordingly, we conclude that Denbury failed to timely object to the evidence and, therefore, failed to preserve error. We affirm the trial court's judgment."

Houston attorney John T. McDowell represents Star-L.

Thomas H. Buchanan and Melanie S. Reyes represent Denbury.

The pipeline company was also sued in Jefferson County (Case No. E181-923)by a group of rice farmers who fought the condemnation of their property by Denbury Green.

The trial court found that Denbury Green met criteria for "common carrier" status, and could seize the farmers' property by eminent domain.

The Ninth Court of Appeals upheld the decision in 2009. However, in August 2011 the Texas Supreme Court reversed their ruling.

Justice Don Willett wrote that while the Natural Resources Code plainly gives private pipelines the power of eminent domain, the authority is subject to special scrutiny by courts.

He found that the lower courts gave too much weight to the Texas Railroad Commission's declaration of Denbury Green as common carrier.

"Private property is constitutionally protected, and a private enterprise cannot acquire condemnation power merely by checking boxes on a one page form," he wrote. "Nothing in Texas law leaves landowners so vulnerable to unconstitutional private takings."

Appeals case No. 09-10-00475-CV
Trial case No. 20129

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