Eminent domain fight between Denbury Green Pipeline and rice farmers now before Texas SC

By David Yates | Jul 18, 2017

BEAUMONT – After suffering a recent defeat, Denbury Green Pipeline Texas has taken its eminent domain case against Texas Rice Land Partners to the highest court in the Lone Star State.

BEAUMONT – After suffering a recent defeat, Denbury Green Pipeline Texas has taken its eminent domain case against Texas Rice Land Partners to the highest court in the Lone Star State.

On July 12, Denbury filed a petition for writ of mandamus, requesting Texas Supreme Court justices issue a writ directing a Jefferson County judge to vacate a June 29 order preventing the company from “accessing its easement” on the rice farmers’ land.

The condemnation case has been snaking its way through Texas courts for the better part of a decade and began when area landowners James E. Holland and David C. Holland (Texas Rice Land Partners) and tenant Mike Latta were approached by Denbury to conduct a survey on their land with plans to build a gas pipeline through the property.

When the landowners declined, Denbury claimed common carrier status and that the pipeline would be for public use, exercising the right of eminent domain to take their property.

In 2010, Denbury constructed a portion of the pipeline and has since been pumping carbon dioxide. When Denbury sought to inspect the line earlier this year, Texas Rice refused access.

In response, Denbury filed a motion for a temporary restraining order on June 9, court records show.

Following a hearing, the trial court concluded Denbury did not gain lawful possession of the pipeline easement because the landowners had been enjoined, at Denbury’s request, from taking compensation funds out of the court’s registry eight years earlier.

The ruling prompted Denbury to file a petition for writ of mandamus with the Ninth Court of Appeals, which justices dismissed for lack of jurisdiction on July 11, leading the company to then petition the Texas Supreme Court the very next day.

On appeal, Denbury argues Judge Gerald Eddins, Jefferson County Court at Law No. 1, abused his discretion by ruling the company is not entitled to immediate possession of its easement and denying its TRO.

Denbury also maintains it did not restrict Texas Rice’s access to the funds deposited in the registry.

In its July 17 response, Texas Rice contends Denbury “knowingly” took possession of the land to install the pipeline “undeniably well after the trial court enjoined any party from withdrawing the funds on deposit in the registry of the court.”

“In doing so, Denbury effectively took possession of the Landowner’s property unlawfully and assumed the risk that it might not be able to freely access the Landowner’s property thereafter,” the response states.

Texas Rice also points out that Denbury ran straight to the Supreme Court, rather than seeking reconsideration of jurisdictional determination with the Ninth Court.

“Denbury’s filing of the present original proceeding is effectively an end-run around the court of appeals’ finding of a jurisdictional pleading defect in Denbury’s Petition for Writ of Mandamus,” the response states.

Case background

Denbury filed its petition for condemnation on April 16, 2009. Special Commissioners were appointed, awarding $12,361 to Texas Rice and $120,000 to Latta.

On June 12, 2009, Denbury deposited into the court’s registry twice the amount of the Special Commissioner’s award and also posted a cost bond, which the trial court approved.

Denbury then took possession of the easement and constructed the “Green Line.”

On June 18, 2009, Denbury moved to amend the Special Commissioners’ award because the award bifurcated damages between the landowners and the tenant, rather than determining the damages to the whole property. Denbury also filed an objection to withdrawal, which sought to enjoin withdrawal of the award until the trial court could rule on the motion.

The next day, Texas Rice filed an “Objection to Withdrawal of Funds,” in which it contested the power of Denbury to condemn the easement and stating that it objected “to the withdrawal of the funds deposited or any apportionment thereof by the Court,” court records state.  

On July 14, 2009, the trial court denied Denbury’s motion to amend the award and ordered that “all parties are enjoined and restrained from withdrawing any amount of the Special Commissioners’ Award from the registry of the Court during the pendency of this case.”

Texas Rice never sought modification of the order and never sought to withdraw any registry funds, according to Denbury.

On June 5, 2015, Denbury and Latta (the tenant) resolved their dispute and filed an agreed motion to dismiss. Latta then withdrew $120,000 from the court’s registry, causing a Texas Rice objection.

“Texas Rice has repeatedly objected to the withdrawal of any funds in this case because Texas Rice contests Denbury’s eminent domain authority,” Denbury’s writ for mandamus states.

“Texas Rice could have moved to withdraw the funds at any time, but it never did because it did not want to moot its eight-year-long challenge of Denbury’s right to take, which it recently lost.”

Denbury is represented by Zabel Freeman attorneys Thomas Zabel and James Freeman.

In addition to Rex White Jr. and Cory Crenshaw, Texas Rice is also represented by Nicholas Laurent, Roy Brandys and Blaire Knox, attorneys for the Austin law firm Barron, Adler, Clough & Oddo.

Supreme Court case No. 17-0556

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