409 S.W.3d 908
Tex. App.2013Background
- TransCanada Keystone Pipeline, L.P. sought to condemn a 50-foot-wide permanent easement across Crawford Family Farm Partnership land in Lamar County for a 36-inch buried crude-oil pipeline (Gulf Coast Project leg of the larger Keystone system).
- Special commissioners awarded $10,395 in condemnation damages; Crawford appealed and challenged TransCanada’s eminent-domain authority and other claims.
- TransCanada moved for combined traditional and no-evidence summary judgment asserting common-carrier status (and lack of evidence for Crawford’s tort/fraud claims); parties later stipulated the damage amount and some issues, and the court granted a writ of possession.
- Crawford argued TransCanada is not a Chapter 111 "common carrier" entitled to eminent domain because (a) interstate pipelines are subject to FERC rate jurisdiction and thus cannot comply with certain state Chapter 111 provisions, (b) the Texas Railroad Commission had indicated no present jurisdiction, and (c) legislative history allegedly supports excluding interstate carriers.
- The trial court denied Crawford’s jurisdictional dismissal, granted TransCanada’s summary judgment, awarded the easement, and partially denied Crawford’s motion for continuance; the court of appeals affirmed.
Issues
| Issue | Plaintiff's Argument (Crawford) | Defendant's Argument (TransCanada) | Held |
|---|---|---|---|
| Whether trial court had subject-matter jurisdiction because TransCanada lacks statutory eminent-domain authority | TransCanada is not a Chapter 111 common carrier entitled to eminent domain because interstate pipelines cannot comply with all Chapter 111 provisions and the RRC said operations are interstate | Section 111.002(1) covers entities that transport crude oil in Texas for the public for hire, including interstate carriers; RRC permit and practice show TransCanada falls within Chapter 111 | TransCanada is a Chapter 111 common carrier; trial court had jurisdiction (affirmed) |
| Whether interstate status defeats ‘‘common carrier’’ characterization under §111.002(1) | The phrase "subject to the provisions of this chapter" requires compliance with all Chapter 111 duties, which interstate pipelines cannot meet | The phrase is descriptive, subsections are disjunctive, Legislature did not exclude interstate pipelines; no express interstate exclusion | §111.002(1) includes interstate carriers; interstate status does not bar common-carrier/eminent-domain rights (affirmed) |
| Whether TransCanada’s pipeline is for a public use (Denbury reasonable-probability test) | Pipeline is a contract/carrier and thus not truly for the public for hire | Keystone showed binding TSAs, open seasons, third-party shippers retaining title and ability to ship — satisfying reasonable-probability test | TransCanada presented undisputed evidence of third-party shippers and binding TSAs; pipeline meets public-use/common-carrier requirements (affirmed) |
| Whether trial court abused discretion by partially denying continuance for new counsel/discovery | New counsel needed more time for discovery and depositions to oppose summary judgment | New counsel had represented she would not seek continuance of trial; discovery sought was not shown material or pursued with due diligence; trial date already extended | Denial of additional discovery/time was not an abuse of discretion (affirmed) |
Key Cases Cited
- Buffalo Bayou, Brazos & Colo. R.R. Co. v. Ferris, 26 Tex. 588 (1863) (early recognition that Legislature may delegate eminent-domain power to nongovernmental entities)
- Imperial Irr. Co. v. Jayne, 104 Tex. 395 (Tex. 1911) (scope of legislative delegation of eminent-domain power rests with Legislature)
- Coastal States Gas Producing Co. v. Pate, 309 S.W.2d 828 (Tex. 1958) (statutes granting eminent domain strictly construed in favor of landowners)
- Atlas Pipe Line Co. v. Sterling, 4 F. Supp. 441 (E.D. Tex. 1933) (state regulation can reach interstate pipelines operating in Texas)
- Denbury Green Pipeline-Tex., LLC v. Texas Rice Land Partners, Ltd., 363 S.W.3d 192 (Tex. 2012) (reasonable-probability test for common-carrier/public-use where carrier must show likelihood of third-party shippers)
- Rhinoceros Ventures Grp., Inc. v. TransCanada Keystone Pipeline, L.P., 388 S.W.3d 405 (Tex. App.—Beaumont 2012) (construing §111.002(1) to include TransCanada; similar facts and outcome)