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Texas Court upholds Eminent Domain for Canadian Oil Pipeline

TransCanada, a Canadian energy company has been granted eminent domain rights to take a 50 foot easement through a property owners farm in Texas. The issue before the local court was whether TransCanada had “common carrier” status for the Keystone XL project, which would allow it to use eminent domain to acquire property for the project when the property owner would not agree to grant an easement. The case highlights an unusual loop hole in the Texas law which simply allows a company to claim its status as a common carrier on a simple one page form to avail itself of condemnation authority.

The common carrier process has recently been challenged successfully in the State Supreme Court where the court refused the pipeline company’s condemnation claim. Texas Rice Land Partners v. Denbury Green.

"Private property is constitutionally protected," Justice Willett wrote, "and a private enterprise cannot acquire condemnation power merely by checking boxes on a one-page form."

Most states, including Oregon and Washington, have strict statutory provisions granting condemnation authority and procedures to establish just compensation for property acquired for a public use.

This has been a controversial project due to its scope and the type of product being disturbed through the pipeline. The pipeline project history can be viewed at here.

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We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.
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