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Eminent Domain Dispute Spurs Texas Pipeline Lawsuits

September 2nd, 2014

A 2011 Texas pipeline lawsuit has demonstrated a clash between two hallmarks of the state’s identity: the booming oil industry and independent land owners. Many pipeline companies are seeking declarations of “eminent domain” from the state that will allow them to run their pipes across privately-owned land. Many landowners have filed Texas pipeline lawsuits to protect their holdings from the noise, pollution and toxic chemicals that pipelines bring to some of the state’s most scenic and valuable acreage.

Texas Pipeline Lawsuits And Common Carriers

The Texas Railroad Commission, the state agency that oversees the oil industry and its 426,000 miles of pipelines, attempted to clarify when pipelines serve as “common carriers”. Examples of common carriers include utilities such as electric cables, water and sewage pipes, and natural gas services to homes and businesses. Under Texas law, common carriers can cite eminent domain and seize private lands for public use. The core issue behind these Texas pipeline lawsuits lies in whether oil and gas pipelines for commercial use qualify as common carriers and can exercise their powers of eminent domain.

Texas Pipeline Lawsuits Spur Closer Regulation

Prior to the Texas pipeline lawsuits, a pipeline provider only needed to mark a line on a permit application to be considered a common carrier. The rush of Texas pipeline lawsuits by property owners has now compelled the Railroad Commission to examine an applicant’s information more carefully. The Commission now has 45 days to review an application and determine whether the pipeline company qualifies as a common carrier.

Oil vs. Land In Texas Pipeline Lawsuits

Pipeline operators maintain that the added scrutiny brought about by the Texas pipeline lawsuits will slow down their growth. They believe the delays will place additional burdens on regulators and bring their operations to a halt, which would have a devastating effect on the state’s economy. Landowners maintain that the Texas pipeline lawsuits are about the rights of private citizens to control their land. The landowners believe that eminent domain claims would curb their bargaining power with pipeline providers and prevent them from receiving fair offers for their land usage.

State Supreme Court Ruling on Texas Pipeline Lawsuit

In 2011, the state’s Supreme Court ruled in favor of a landowner in a Texas pipeline lawsuit against a pipeline operator. The court ruled that “merely registering as a common carrier” with the Railroad Commission does not automatically grant the pipeline operator with powers of eminent domain. The ruling also stated that landowners have the right to file Texas pipeline lawsuits that question an operator’s status as a common carrier. The Commission spoke out against the ruling, stating it could “significantly impact the development” of current and future pipelines.

Source: Longview News-Journal

Know Your Rights in a Texas Pipeline Lawsuit

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