Denbury Green Pipeline-Texas, Llc v. Texas Rice Land Partners, Ltd.
510 S.W.3d 909
Tex.2017Background
- Denbury Green Pipeline‑Texas, LLC built the "Green Line," a CO2 pipeline along the Gulf Coast intended to serve refineries, plants, and oil fields; construction completed in 2010.
- Texas Rice Land Partners owns farmland across the proposed route and denied preconstruction survey access; Denbury Green obtained a Railroad Commission T‑4 permit and sought eminent domain to survey and construct.
- This Court in Texas Rice I (2012) held that a pipeline seeking eminent domain must show a "reasonable probability" it will at some point transport gas for unaffiliated customers who retain or sell title to the gas, and remanded for Denbury Green to produce objective proof of such future customers.
- On remand Denbury Green produced transportation agreements with unaffiliated shippers (Airgas Carbonic and Air Products) and an agreement involving Denbury Onshore; Airgas retained title to CO2 shipped and began receiving CO2 in 2013; Air Products had a long‑term capture/sequestration agreement tied to the Green Line.
- The court of appeals reversed the trial court, finding fact issues about Denbury Green’s preconstruction intent and requiring a showing of a "substantial" public interest; the Supreme Court granted review.
- The Supreme Court held that, viewed in the light most favorable to Texas Rice, the post‑remand evidence (including the Airgas and Air Products agreements and the pipeline’s proximity to third‑party shippers) established as a matter of law a reasonable probability the Green Line would serve the public; Denbury Green is a common carrier and has eminent domain authority.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Denbury Green is a common carrier entitled to eminent domain under the Texas Natural Resources Code | Denbury Green failed to show a reasonable probability the pipeline would transport third‑party CO2; evidence shows pipeline intended for owner’s use | Denbury Green argued contracts and pipeline design prove it will transport unaffiliated parties’ CO2 and thus serve the public | Held: Denbury Green satisfied Texas Rice I—summary judgment that it is a common carrier reinstated |
| Relevance of post‑construction or post‑challenge contracts to Texas Rice I test | Such contracts are irrelevant or create only a fact issue because they occurred after construction or after Texas Rice I | Post‑construction contracts can be relevant and, with other evidence, can prove reasonable probability of future public use | Held: Post‑construction agreements (Airgas, Air Products) are admissible and here support common‑carrier status |
| Whether a showing of a "substantial" public interest is required | The court of appeals required substantial public benefit; Texas Rice urged this standard | Denbury Green argued Texas Rice I requires only reasonable probability of serving one or more unaffiliated customers | Held: No separate "substantial" public‑interest threshold; serving even one unaffiliated customer satisfies the public‑use test |
| Procedural: Whether trial court could enter final judgment after summary judgment on common‑carrier status | Texas Rice contended remaining declaratory claims required further proceedings | Denbury Green argued remaining claims raised no injury and final judgment was proper | Held: Trial court did not abuse discretion entering final judgment; judgment disposed of all issues |
Key Cases Cited
- Texas Rice Land Partners, Ltd. v. Denbury Green Pipeline‑Texas, LLC, 363 S.W.3d 192 (Tex. 2012) (establishing the "reasonable probability" test for pipeline common‑carrier status)
- SeaBright Ins. Co. v. Lopez, 465 S.W.3d 637 (Tex. 2015) (de novo review of summary judgment)
- Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009) (summary judgment burdens and standards)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standards for reviewing evidence and reasonable inferences at summary judgment)
- State v. K.E.W., 315 S.W.3d 16 (Tex. 2010) (defining "reasonable probability" as "more likely than not")
- Coastal States Gas Producing Co. v. Pate, 309 S.W.2d 828 (Tex. 1958) (public benefit in eminent domain context)
- Lehmann v. Har‑Con Corp., 39 S.W.3d 191 (Tex. 2001) (when a judgment that disposes all issues is final for appeal)