Here's the latest pipeline takings case from Texas.
This one has been to the Texas Supreme Court before (see our post "'Common Carrier' Claim Subject To Actual Judicial Review"). That decision required trial courts to make an actual and factual inquiry into a claim that a pipeline company is a common carrier with the power of eminent domain, and not just accept the fact that the company registered as a common carrier as conclusive. The court sent the case back down, but the trial court concluded that the pipeline operator was a common carrier because after the pipeline's construction, the operator had the intent to move some CO2 belonging to another entity through the pipeline. It granted the pipeline company summary judgment on the common carrier issue.
In Texas Rice Land Partners, Ltd. v. Holland, No. 09-14-00176 (Feb. 12, 2015), the court of appeals disagreed after applying the test set out in the Supreme Court's decision, and concluded that reasonable minds could differ about whether the pipeline operator is or is not a "common carrier" as defined in Texas statutes. Under Texas law, a common carrier is defined as an entity that:
owns, operates, or manages, wholly or partially, pipelines for the transportation of carbon dioxide or hydrogen in whatever form to or for the public for hire, but only if such person files with the commission a written acceptance of the provisions of this chapter expressly agreeing that, in consideration of the rights acquired, it becomes a common carrier subject to the duties and obligations conferred or imposed by this chapter[.]
Tex. Nat. Res. Code Ann. § 111.002(6).
In order to qualify under the Supreme Court's fact-based test, the entity must have the intent to be a common carrier at the time of its plans to construct the pipeline. The court of appeals focused on this language from the Supreme Court's opinion:
for a person intending to build a [carbon dioxide] pipeline to qualify as a common carrier under Section 111.002(6), a reasonable probability must exist that the pipeline will at some point after construction serve the public by transporting gas for one or more customers who will either retain ownership of their gas or sell it to parties other than the carrier.
Slip op. at 9 (emphasis added) (quoting Texas Rice Land Partners, Ltd. v. Denbury Green Pipeline-Texas LLC, 363 S.W.3d 192, 202 (Tex. 2014)). It didn't matter that after construction, the entity produced evidence that showed the gas of others would be transported:
The record demonstrates that the Green Line was first contemplated in 2008, but Airgas did not approach Denbury Green about transporting carbon dioxide until after the Green Line was completed. Tellingly, when Airgas raised the issue in an email sent after the Texas Supreme Court’s ruling, Airgas stated, “Given the recent ruling about your pipeline, I thought it might be advantageous for you to have another company transport some CO2 down this line.” As the Texas Supreme Court has noted, the professed use must be a public use in truth. Id at 202. We cannot say that the Airgas contract, reached after the Green Line’s completion, speaks to Denbury Green’s intent at the time of its plan to construct the Green Line.
Slip op. at 10. This makes sense to us, because the power of a private entity to take property as a common carrier should be determined by its intent at the time of the taking, not whether after acquisition it can devote the property taken to public use.
Because the common carrier issue turned on issues of fact (the entity's intent -- about which reasonable persons could differ -- the court concluded that summary judgment was not warranted. It sent the case back down for more.
Texas Rice Land Partners, Ltd. v. Holland, No. 09-14-00176-DV (Tex. App. Feb. 12, 2015)
