SC denies Denbury Greeen's motion for rehearing in common carrier case

David Yates Aug. 20, 2012, 5:16am

Local rice farmers and landowners breathed a collective sigh of relief on Friday, after the Texas Supreme Court denied a pipeline company's second motion on rehearing in a case over its common carrier status.

In 2009, Denbury Green Pipeline-Texas, claiming it was armed with the power of eminent domain, obtained a permanent injunction in Jefferson County District Court that stopped Texas Rice Land Partners from delaying construction of a pipeline running through private famers' lands.

Texas Rice Land Partners appealed the ruling, arguing that Denbury has its own interest at heart and not the public's, court records show.

Nonetheless, the Ninth Court of Appeals found that Denbury meets all the requirements of a common carrier, granting the company the right to take private lands for public use at below market prices.

The case was appealed to the Texas Supreme Court and on Aug. 26, 2011, justices removed Denbury's common carrier status and remanded the case, court records show.

On Aug. 17, nearly a year later, the Supreme Court denied Denbury's second motion on rehearing.

"The Court holds that to be a 'common carrier' carbon dioxide pipeline, and endowed by the Natural Resources Code with the power to exercise eminent domain for public use, it must do more than check a box on a government form," wrote Justice Dale Wainwright in his concurring opinion.

"The right of private property is a fundamental right expressly protected in the constitution. The Court also holds that for a carbon dioxide pipeline owner to be a common carrier engaged in transporting the resource to or for the public, the pipeline's only users must be more than a 'corporate parent or affiliate.'"

Justice Wainwright was joined by Justice Phil Johnson.

Denbury filed the second motion for rehearing solely on the issue of the breadth of the court's use of the term "affiliate" under sections 111.002(6) and 111.019 of the Texas Natural Resources Code, the opinion states.

Case background

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, 2009, 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.

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

Anthony Brocato represents Texas Rice.

Trial case No. E181-923
Appeals case No. 09-09-002-CV
Supreme court case No. 09-0901

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