Thursday, August 9, 2012

Takings Case Proceeds Against TransCanada

A potentially critical pre-trial hearing is scheduled for tomorrow, August 10, as one Texan seeks to halt TransCanada’s use of eminent domain to facilitate the construction of a pipeline that would transport dense crude oil diluted with liquid natural gas.

As discussed here on this blog earlier this year, Julia Trigg Crawford is challenging TransCanada’s “common carrier” status.  Texas statutory law grants “common carriers” the right and power of eminent domain.  Yet for some time, private pipeline operators seeking to exercise this authority needed to do little more than check a box to indicate their status as a “common carrier” (as opposed to checking a box marked “private line”) on a one-page registration form submitted to the Railroad Commission of Texas.   Reports suggest that the Commission has never denied one of these registration requests. 

In its 2011 decision in Texas Rice Land Partners v. Denbury, a case involving a carbon-dioxide pipeline, the Texas Supreme Court authorized landowner challenges to an entity’s designating itself a “common carrier,” and generally called for a more thorough process for determining the public nature of pipeline projects.  In other words, the court declared that checking the box is not sufficient in and of itself to establish condemnatory authority.  The court said that it is the applicant—not the original landowner—who bears the burden of proving a “reasonable probability” that the pipeline “will at some point after construction serve the public.”   The strength of this standard remains to be seen, as do larger questions surrounding the very applicability of the Denbury decision in the context of oil and gas pipelines.

Stay tuned to the Environmental Law Prof Blog for updates on this important takings case.

-Tim Mulvaney

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