388 S.W.3d 405
Tex. App.2012Background
- TransCanada Keystone Pipeline, L.P. filed a petition for condemnation against Rhinoceros Ventures Group, Inc. and Batson Corridor, L.P. and others.
- TransCanada asserts Gulf Coast is a common carrier pipeline it owns and operates, with authority to condemn land for construction, maintenance, or operation.
- Rhinoceros and Batson moved for summary judgment to dismiss for lack of subject-matter jurisdiction, arguing TransCanada isn’t a common carrier and citing inter/intrastate, tariff, and Railroad Commission permit issues.
- The trial court denied the motion for summary judgment; TransCanada seeks to proceed under Texas Natural Resources Code §111.002 and related statutes.
- The court engaged in statutory construction of §111.002 and related provisions, ultimately holding TransCanada is a common carrier under §111.002(1) and affirming the denial of summary judgment.
- The court noted §111.002(1) contains no interstate/intrastate limitation and that §111.002(6) applies only to CO2/hydrogen pipelines; it rejected Tex. Rice’s applicability to §111.002(1) and declined to follow Vardeman; it also rejected a policy-based challenge to the statute and affirmed the trial court’s ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is TransCanada a common carrier under §111.002(1)? | TransCanada is a common carrier under §111.002(1) by transporting crude petroleum by pipeline in Texas. | Rhinoceros/Batson argue §111.002(1) applies only to intrastate pipelines and question jurisdiction. | Yes; TransCanada is a common carrier under §111.002(1). |
| Does §111.002(6) govern common-carrier status for TransCanada? | §111.002(6) requires Road Commission regulation for CO2/hydrogen pipelines, not §111.002(1). | §111.002(6) controls only CO2/hydrogen pipelines and is not a substitute for §111.002(1). | No; §111.002(1) governs here, and §111.002(6) does not apply. |
| Does the interstate nature of the pipeline defeat jurisdiction under Texas law? | Plain reading of §111.002(1) does not require intrastate operation to confer common-carrier status. | Some arguments rely on interstate status to deny common-carrier status. | Interstate status does not defeat common-carrier status under §111.002(1). |
| May a policy argument about Texas oil/gas conservation override statutory construction? | Texas law aims to conserve resources, so transporting oil across borders could contravene that purpose. | Policy cannot override clear statutory text and construction rules. | No; policy arguments do not trump statutory construction; the statute governs. |
Key Cases Cited
- Tex. Rice Land Partners, Ltd. v. Denbury Green Pipeline-Texas, LLC, 363 S.W.3d 192 (Tex.2012) (limits §111.002(6) to carbon-dioxide pipelines; did not address §111.002(1))
- Vardeman v. Mustang Pipeline Co., 51 S.W.3d 308 (Tex.App.-Tyler 2001) (engrafted §111.002(6) into §111.002(1) not warranted; not binding on the court)
- Peterson v. Grayce Oil Co., 37 S.W.2d 367 (Tex.Civ.App.-Fort Worth 1931) (oil/gas law conservation policy; but not dispositive on common-carrier status)