The Ninth District Court of Appeals in Beaumont issued a second decision involving a common carrier pipeline on May 23. In this case, In re Texas Rice Land Partners, Ltd., James E. Holland, and David C. Holland (No. 09-12-00484-CV), relators petitioned the court of appeals for a writ of mandamus ordering the trial court to vacate a writ of possession issued to TransCanada Keystone Pipeline in conjunction with the pipeline’s condemnation suit. The court of appeals denied mandamus.
The case arose from TransCanada’s condemnation of an easement across land owned by Texas Rice Land Partners (TRL) for the Gulf Coast section of the Keystone pipeline project, which extends from Cushing, Oklahoma to Port Arthur. Unable to settle on a purchase price for the easement, TransCanada filed a petition of condemnation. The trial court appointed special commissioners, who awarded compensation to TRL. TRL objected both to the amount of compensation and challenged TransCanada’s common carrier status. TransCanada responded by filing a writ of possession. After holding two hearings, the trial court issued the writ of possession in favor of TransCanada.
After reviewing the relators’ burden in proving an abuse of discretion by the trial court, the court of appeals evaluated TRL’s claim that the trial court should have determined whether TransCanada was a common carrier under §111.002, Natural Resources Code, before granting the writ of possession. The trial court reasoned that nothing in the Denbury decision requires or allows a pre-possession determination of common carrier status, and that whether a writ of possession may be granted is governed by Chapter 21, Property Code, and is a separate question. As long as the condemnor pays the property owner the amount of damages and costs awarded by the special commissioners or deposits the amount of the award into the court’s registry, the condemnor has constructive possession of the easement pending further litigation.
The court of appeals evaluated the evidence presented by TransCanada to the trial court supporting its common carrier status, which included testimony regarding the existing of several binding Transportation Service and Throughput Agreements with third party shippers under FERC tariffs. TRL, on the other hand, presented nothing to refute this evidence. Nevertheless, the court of appeals did find that the trial court committed error in failing to make a preliminary finding that TransCanada is, in fact, a common carrier, though the error was harmless in this instance. The court of appeals found that the trial court did not abuse its discretion in issuing the writ of possession and denied the petition for writ of mandamus.
The Ninth Court’s opinion appears to regard common carrier status as an issue that should be “preliminarily decided” by the trial court in conjunction with the condemnation procedure under Chapter 21, Property Code. The full implications of this ruling are unclear, but it seems possible that condemnation proceedings concerning the level of compensation may now involve a full evidentiary review of whether the condemnor satisfies the Denbury test for common carrier status.