Analysis: Pipelines can use eminent domain to take land

Most people probably understand that governmental bodies like cities can use their inherent power of eminent domain to take private land for public use. But recent court battles have highlighted that the State of Texas also grants eminent domain powers to private pipeline companies.

In 2011, for example, landowners stood up and said that the company wanting to construct a gas pipeline across their land did not have the power of eminent domain as they claimed. In the ‘Texas Rice Land Partners Ltd. and Mike Latta v. Denbury Green Pipeline-Texas LLC’ case, the Texas Supreme Court ruled for the landowners stating among other opinions that the pipeline company did not meet the definition of ‘common carrier.’

A ‘common carrier’ pipeline means that it will be used to transport the product of many producers, not just by the company that owns the pipeline. It is argued that this multiple-user requirement meets the definition of ‘public use.’

The significance of the Latta/Denbury case is that it brought to light that the only requirement for a pipeline company to be granted eminent domain power in Texas was for the company to check a box labeled “common carrier” on a short application form required by the Texas Railroad Commission which regulates pipelines in Texas. There was no one who checked if the information was correct – unless a landowner challenged the classification in court.