Summary
The Texas Supreme Court held that a Railroad Commission common-carrier permit does not conclusively establish a CO2 pipeline company's authority to exercise eminent domain. A landowner may challenge in court whether the proposed pipeline will actually serve a public use and satisfy the statutory requirements for common-carrier status. The Court reversed the court of appeals' judgment and remanded for further proceedings.
Topics
Practice areas
Questions Presented
- Whether a Railroad Commission T-4 permit conclusively establishes a carbon-dioxide pipeline's common-carrier status and eminent-domain power.
- Whether a landowner may challenge in court the pipeline company's assertion that the proposed pipeline will serve a public use rather than a private use.
- What showing is required for a person intending to build a carbon-dioxide pipeline to qualify as a common carrier under Texas Natural Resources Code section 111.002(6).
- Whether Denbury Green established common-carrier status and entitlement to summary judgment as a matter of law.
Holdings
- A T-4 permit alone does not conclusively establish a carbon-dioxide pipeline's common-carrier status or confer unchallengeable eminent-domain power.
- A landowner may challenge in court whether a pipeline claiming common-carrier status satisfies the statutory and constitutional requirements for eminent-domain authority.
- To qualify as a common carrier with eminent-domain power under Texas Natural Resources Code section 111.002(6), a person intending to build a carbon-dioxide pipeline must show a reasonable probability that, after construction, the pipeline will serve the public by transporting gas for one or more customers who retain ownership of the gas or sell it to parties other than the carrier.
- Denbury Green did not establish common-carrier status as a matter of law and therefore was not entitled to summary judgment or the resulting injunctive relief.
Key quotations
“Unadorned assertions of public use are constitutionally insufficient.” (at 195)
“Merely registering as a common carrier does not conclusively convey the extraordinary power of eminent domain or bar landowners from contesting in court whether a planned pipeline meets statutory common-carrier requirements.” (at 195)
“Private property cannot be imperiled with such nonchalance, via an irrefutable presumption created by checking a certain box on a one-page government form. Our Constitution demands far more.” (at 200)
“A sine qua non of lawful taking . . . for or on account of public use . . . is that the professed use be a public one in truth. Mere fiat, whether pronounced by the Legislature or by a subordinate agency, does not make that a public use which is not such in fact . . . .” (at 203)
“A private enterprise cannot acquire unchallengeable condemnation power under Section 111.002(6) merely by checking boxes on a one-page form and self-declaring its common-carrier status.” (at 207)
Factual background
Denbury Green Pipeline-Texas, LLC, a wholly owned subsidiary of Denbury Resources, sought to construct a carbon-dioxide pipeline from Mississippi through Louisiana into Texas to support Denbury's tertiary oil-recovery operations. Denbury Green filed a one-page Railroad Commission Form T-4 designating the pipeline as a common carrier, and the Commission issued the permit without notice or a hearing for affected landowners. Texas Rice owned interests in two tracts along the proposed route, and rice farmer Mike Latta leased the property. When they refused access for surveying, Denbury Green sought an injunction, asserting common-carrier status and eminent-domain authority. The record included evidence that Denbury intended primarily to transport its own or affiliated entities' carbon dioxide, with only a possible future use by unaffiliated entities.
Procedural history
Denbury Green obtained a Railroad Commission T-4 permit designating its carbon-dioxide pipeline as a common carrier. After Texas Rice and its lessee Mike Latta refused access for surveying, Denbury Green sued for injunctive relief. The trial court granted Denbury Green's motion for summary judgment and permanently enjoined interference with surveying. The Ninth Court of Appeals affirmed, holding that Denbury Green had established common-carrier status as a matter of law. The Supreme Court of Texas reversed and remanded for further proceedings.
Remand instructions
Reverse the court of appeals' judgment and remand to the district court for further proceedings consistent with the opinion.