TransCanada Keystone Pipeline receives boost from appeals court

By David Yates | Dec 3, 2012

The Ninth Court of Appeals affirmed on Nov. 29 a ruling that denied summary judgment against TransCanada Keystone Pipeline – a foreign company armed with the power of eminent domain. 

TransCanada had filed a petition for condemnation against Rhinoceros Ventures Group Inc. and Batson Corridor, asserting that it is the owner and economic operator of the Keystone Pipeline System, which includes the Keystone Gulf Coast Section, court papers say.

According to TransCanada, Gulf Coast is a common carrier pipeline that, upon completion, will extend from across Texas from Fannin County to Nederland in Jefferson County. The entity claims it enjoys common carrier status, giving it the right to take land from landowners for the construction of its pipeline.

Hoping to stop TransCanada’s advance, Rhinoceros and Batson filed a motion for summary judgment sustaining their plea to the jurisdiction “and dismissing this cause and condemnation proceeding for lack of subject matter jurisdiction,” court papers state.

Rhinoceros and Batson filed an appeal on March 12, arguing that TransCanada could not be declared a common carrier. They also argued TransCanada could not have received the appropriate permits to construct the pipeline within Texas because the Texas Railroad Commission had found it to be part of an interstate operation.

In turn, TransCanada argued that according to the Texas Natural Resources Code, "an entity that engages in the business of transporting crude petroleum by pipeline in Texas is a common carrier, regardless of whether it is interstate or intrastate."

Appellate justices wrote that the state Legislature intentionally did not use the words "interstate" or "intrastate" when drafting the specific sections of the code at issue.

The justices affirmed the trial court’s decision to deny summary judgment, opining that the appellants "provide no other pertinent authorities supporting their contention, nor do they explain why their broad policy argument should trump the rules of statutory construction.”

The Law Offices of Anthony G. Brocato in Beaumont represents the appellants.

Chief Justice Steve McKeithen authored the court’s memorandum opinion.

On Appeal from the County Court at Law No. 1, Jefferson County, trial cause No. 119233.

Appeals case No. 09-12-00128-CV.

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