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Luke Ellis and Justin Hodge (Program Co-Chair) – Faculty at Houston Eminent Domain Conference

09 Wednesday May 2018

Posted by texascondemnation in Houston, Houston eminent domain, Pipelines, Politics, Property Rights, texas condemnation, texas condemnation lawyer, texas eminent domain, Texas Eminent Domain Attorney, Texas Eminent Domain Lawyer

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Luke Ellis and Justin Hodge (Program Co-Chair), Marrs Ellis & Hodge LLP, are both faculty at the upcoming Houston, Texas Eminent Domain: CLE International Conference on Thursday, May 10, 2018 and Friday, May 11, 2018.  Luke will be speaking on Thursday at 10:00 am on Texas Eminent Domain Legislative Reform Efforts and Justin will be speaking as part of a panel on Friday at 10:15 am on the Legal Impacts of Hurricane Harvey.   The full conference schedule can be found here.  We hope you can join us at the conference.

Screen Shot 2018-05-09 at 11.15.20 AM

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Oil Pipeline Ruptures – Landowners Evacuate

21 Friday Jul 2017

Posted by texascondemnation in Pipelines, Property Rights, texas condemnation, texas condemnation lawyer, texas eminent domain, Texas Eminent Domain Attorney, Texas Eminent Domain Lawyer, Texas Railroad Commission, Uncategorized

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Bastrop County, Condemnation, Crane, Crude Oil, Diesel, Eminent Domain, Evacuation, Houston, Longhorn, Magellan, oil and gas, pipeline, Rupture, Spill, Takings

The Longhorn pipeline, a crude oil pipeline operated by Magellan Midstream Partners (“Magellan”), ruptured approximately 4 miles southwest of Bastrop, Texas on July 13, 2017. The pipeline transports crude oil from Crane, Texas to Houston, Texas, a distance of roughly 500 miles. A contractor was performing maintenance on the pipeline, which was operating when it ruptured. As a result, an estimated 1,200 barrels (50,400 gallons) of crude oil spilled into the surrounding area.

Residents within a 1-mile radius of the rupture were asked to evacuate while residents within a 2-mile radius were given the option to either evacuate or take shelter in their homes. FM 520, the nearby thoroughfare, was shut down in both directions.

When it ruptured, the Longhorn pipeline was running at or near its full capacity. The Longhorn pipeline is a large capacity pipeline capable of transporting upwards of 200,000 barrels of crude oil per day. A prolonged shutdown could potentially mean that suppliers would have to look elsewhere to get their crude oil transported to the Gulf Coast.

This is not the first spill involving a Magellan operated pipeline. In January, a pipeline transporting diesel fuel spilled roughly 45,000 gallons of diesel in Northern Iowa.

A significant portion of property takings in Texas are the result of oil and gas pipeline projects. Incidents such as this serve as a reminder that even after condemnation proceedings have concluded, pipelines can still carry risks and create health and safety concerns. Due to the hazardous nature of the products pipelines transport, the potential for accidents poses an enduring threat to crops, livestock, water supplies, and property values. Landowners would do well to keep these considerations in mind when approached by oil and gas companies seeking to obtain an easement across their land.

Written by Graham Taylor

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Liberty County to be Epicenter of Grand Parkway Construction in 2018

14 Friday Jul 2017

Posted by texascondemnation in Grand Parkway, Liberty County, texas condemnation, texas eminent domain, TxDOT

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Eminent Domain, Grand Parkway, Highways, infrastructure, Liberty County, project, Traffic, Transportation, TxDOT

way Segments F and G. Courtesy of HoustonFreeways.com

With Construction on Segments H & I-1 of the Grand Parkway set to begin in 2018, it seems likely that a wave of eminent domain proceedings is imminent in Liberty County. The Right-of-Way acquisition process for this 37-mile long segment of the project is estimated to take 24 months and will involve approximately 375 parcels of land. Following standard practice, the Texas Department of Transportation (“TxDOT”) will present the current landowners with a series of purchase offers. Should any of these landowners reject TxDOT’s offers, the State will exercise their power of eminent-domain to condemn properties they deem necessary for the project.

Segments H and I-1, located to the northeast of Houston, will run through Chambers, Harris, Liberty and Montgomery counties. Liberty County, however, will be the epicenter of the project with a large portion of the expansion taking place within its boundaries. As construction is right around the corner, Liberty County landowners with properties located in the project’s Right-of-Way have likely already received or will soon receive offers for their land from TxDOT.

The project will add two tolled lanes each direction between US 59 and Interstate 10 (“I-10”).

Construction will include the addition of 74 bridges, spread across the entire length of the project segment. The project is expected to cost $855 million and is anticipated to be completed in 2022.

Written by Graham Taylor

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Legislature Bails Out Railroad Commission- Helps Landowners

07 Friday Jul 2017

Posted by texascondemnation in Pipelines, texas condemnation, texas eminent domain, Texas Eminent Domain Attorney, Texas Eminent Domain Lawyer, Texas Railroad Commission, Uncategorized

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budget increase, Condemnation, Constitution, Eminent Domain, landowner rights, pipeline, pipeline data, Pipelines, power of eminent domain, Texas Constitution, Texas Legislature, Texas Railroad Commission, TRC, United States Constitution

The Texas Railroad Commission (“TRC”), an agency that has suffered financial difficulties due to budget cuts and reduced revenues, recently received a budget increase of 46 percent ($79.6 million) in the recently ended legislative session. These budgetary increases will hopefully allow the TRC to improve upon their ability to be an effective resource for landowners and make pipeline data readily available to the everyday Texan. Pipeline construction often requires pipeline companies to use the power of eminent domain to condemn property, commonly referred to as a “taking.” Public access to information collected by the TRC is vital to keeping landowners aware of activities that could affect their property.

The budget increase follows a year that saw monthly budget cuts of over a million dollars, a hiring freeze, and the postponing of desperately needed technological updates. In light of these financial difficulties, the TRC was forced to limit their operations to two core functions, the permitting and inspection of wells. Another one of the TRC’s functions is the issuance of T-4 permits which grants pipeline constructors the common carrier status required to exercise the power of eminent domain. A vital component of fulfilling this function is to maintain a public database of pipeline easements in the State of Texas.

The increased funding is intended, in part, to improve programs for well plugging, oil field clean up, and pipeline safety by financing the hiring of additional staff. The TRC’s staff is capped at 827 employees. Presently, the TRC is roughly 150 employees short of that maximum number. Additionally, the TRC was granted one-time authorization to retain nearly $40 million in revenue collected through its administration of the Natural Gas Utility Pipeline Tax. Roughly $27.6 million of that money will also be used to hire additional employees. The remainder will be used to provide salary increases.

An additional purpose of the budget increase is to continue, and hopefully expedite, the drawn-out process of updating the TRC’s computers and digitizing decades of oil and gas records which include pipelines constructed with and without the power of eminent-domain in the State.

In addition to updating its computer systems and digitizing historical records, the TRC provides an interactive map, accessible to the public, that tracks existing and operational pipelines throughout the State. The data represented by the interactive map may not always be current. This ambiguity diminishes the capacity of Texans to appreciate the scope of pipeline activity and its effect on their lives and property. One day, perhaps, the TRC will expand the functionality of its interactive map to include planned pipelines. This would allow landowners to determine whether a project under development will impact their property.

Landowners, under both the U.S. and Texas Constitutions, are entitled to just compensation when their land is taken. These database improvements can help begin to level the playing field between landowners and powerful oil and gas interests by keeping landowners current on projects that could impact their property rights.

– Co-Authored by Graham Taylor and Justin Hodge

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‪Vote to support to end #eminentdomain ‬for private gain. YES on SB 740 @loiskolkhorst

18 Tuesday Apr 2017

Posted by texascondemnation in common-carrier status, Denbury, Pipelines, Politics, SB 747, texas condemnation, texas condemnation lawyer, texas eminent domain, Texas Eminent Domain Attorney, Texas Eminent Domain Lawyer, Texas Transportation Commission

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‪Vote to support to end #eminentdomain ‬for private gain. YES on SB 740 @loiskolkhorst

Please watch the “‘TRANS PECOS’ | TEASER” on Vimeo.

 

The website for “TRANS PECOS” can be viewed here.

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Luke Ellis interviewed on Fox News: Border wall faces legal battles over eminent domain in Texas

12 Wednesday Apr 2017

Posted by texascondemnation in Border Fence, Border Wall, Landowner Rights, Politics, Property Rights, texas condemnation, texas condemnation lawyer, Texas Eminent Domain Attorney, Texas Eminent Domain Lawyer

≈ 1 Comment

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Border Fence, Border Wall, Condemnation, Eminent Domain

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The story can be viewed on our website.

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Texas Supreme Court Pipeline Ruling Sets back Texas Land Owner Rights

03 Friday Feb 2017

Posted by texascondemnation in common-carrier status, Denbury, Environmental Permitting, Landowner Rights, Pipelines, Politics, Property Rights, Supreme Court, texas condemnation, texas condemnation lawyer, texas eminent domain, Texas Eminent Domain Attorney, Uncategorized

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Appellate Court, Common Carrier, Common Carrier Test, common-carrier status, Denbury, Denbury Green Pipeline, landowner rights, Landowners, Opinion, politics, property rights, Public Benefit, Public Use, supreme court of texas, Texas, texas property rights, Texas Rice Land Partners, Third Party Contract

According to the Fifth Amendment of the U.S. Constitution and Article I, Section 17 of the Texas Constitution, applications of the eminent-domain power must be for public use. Jurisdictions have developed legal and administrative structures which allow private interests limited uses of the power. For Texas pipelines, the granting of eminent-domain authority can only take place when a project fulfills certain requirements. Chief among these is the ability to prove that the pipeline has a public use, meaning it is not being built exclusively for and used only by the entity condemning the land. Statewide, the common-carrier definition, and the derivative test determining whether the definition can describe a given pipeline, is used to establish and enforce the public use requirement.

In the recently decided Denbury Green Pipeline – Texas, LLC v. Texas Rice Land Partners, Ltd., the Texas Supreme Court clarified the access conditions for common-carrier status. In 2015, an appellate court established two additional barriers to common-carrier status. First, it held that a pipeline’s common carrier status must result from an examination of the intent of the constructing party to use the pipeline for public benefit at the onset of the project’s contemplation. Second, the pipeline’s use must serve a “substantial” public interest. The Supreme Court decision reversed these two holdings, the first on the grounds that it misinterpreted case law, and the second because it proceeded beyond the limits of precedent. The Supreme Court also held that Denbury’s post-construction product transportation contracts with third parties, and the fact that certain third parties would retain product title, was sufficient to evidence public use and therefore common-carrier status after the pipeline is built. This opinion is a significant blow to Texas landowner rights.

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Mitigation Credits as “Highest and Best Use”

22 Friday Jul 2016

Posted by texascondemnation in Highest and Best Use, Landowner Rights, texas condemnation

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California Tiger Salamander, condemnor, County of Santa Barbara, Double H Properties, Eminent Domain, entitlements, environmental impact, financially feasible, Highest and Best Use, King County WA, Landowner Compensation, legally permissible, maximally productive, mitigation bank, mitigation credit theory, mitigation credits, physically possible, rural farmland, sensitive or protected habitat

In Eminent Domain cases, the acquiring entity or condemnor, must compensate the landowner for the property they are taking. Fulfilling this requirement typically raises two questions:

             1) How much should the landowner receive for their land?

             2) How should we determine that amount?

Under Texas law, a landowner is entitled to compensation for an amount to be determined by an application of the “Highest and Best Use” (HBU) principle. The principle requires that the value of the land be established, not merely by evaluating the current use, but by analyzing four factors. Thus, a landowner may receive an amount derived from a potential highest and best use, rather than the current one. Therefore, an application of the HBU principle must operate within the boundaries established by these four limiting conditions. The purported HBU must be:

             1) Legally permissible

             2) Physically possible

             3) Financially feasible

             4) Maximally productive

In short, the HBU attempts to hold the condemnor responsible for the greatest compensation amount that can be sustained by an objective analysis of a respective property.

An interesting application of the principle was attempted recently in the California case of County of Santa Barbara (Plaintiff and Respondent) v. Double H Properties, LLC (Defendant and Appellant). This case was initiated by the County for the purposes of obtaining an easement to serve as a habitat for the endangered California Tiger Salamander. In valuing the land, the owner’s appraiser submitted two theories, one which analyzed the property as rural farmland, and one which calculated the value of the property when used for mitigation credits.

Mitigation credits are a way that a developer can obtain entitlements when a project is likely to impact an environmentally sensitive or protected habitat. To earn these entitlements, the developer can purchase mitigation credits with a mitigation bank. The bank then purchases and preserves another property to offset the environmental impact of the original construction.

The owner’s appraiser argued that, only when the land was valued as mitigation credits, did it fulfill its highest and best use, and obtain the greatest value. Their assessment also exceeded in value the one put forth by the County’s appraiser, who valued the property as farmland. The County moved to exclude the landowner’s valuation, a motion which the Trial Court granted.

The owner took the case on appeal. In reviewing the Trial Court’s dismissal of the owner’s mitigation credit theory, it became apparent to the Appeals Court that the appraiser had never provided any evidence that the land could be entitled for mitigation credits. In other words, the appraiser had failed to show that the use of the land for mitigation credits was affirmatively permissible in the law. The Appellate Court held that the Trial Court did not abuse its discretion in excluding the mitigation credit appraisal.

This will likely not be the last time we see this argument made in regards to a highest and best use analysis in California or elsewhere.

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Transfer of Pipeline Easements Cannot Be For Private Use

10 Friday Jun 2016

Posted by texascondemnation in Pipelines, texas condemnation, texas eminent domain, Uncategorized

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Allen v. Enbridge, Aycock v. Houston Lighting and Power Co., Cantu v. Cent. Power & Light co., Condemnation, Eminent Domain, pipeline, pipeline easements, Private Benefit, private use, Proposed Easement Agreement, Texas Utilities Code, Tyler Court of Appeals

In Allen v. Enbridge G & P, L.P., Enbridge G & P brought condemnation action against the Allens for the purpose of securing two easements, one permanent and one temporary, from the landowners. Enbridge required the easements for the installation and maintenance of a pipeline which would carry natural gas products. A permanent easement of 50 feet in width would contain the pipeline and a 25-foot easement would be used as a temporary workspace. At the special commissioners’ hearing, Enbridge was awarded the easements. Mr. and Mrs. Allen filed objections, and the proceeding was brought to the trial court.

On appeal, Mr. and Mrs. Allen brought two issues, the second of which concerned the ability of the easement holder both to maintain the benefits and burdens of the Plaintiff and Defendants, and allow an assignee to do likewise. Paragraph X of Enbridge’s Second Amended Petition contained the following:

“The benefits and burdens of this Permanent Easement shall be binding upon and shall ensure to the benefit of Plaintiff and Defendants, and to their respective successors and assigns.”

Mr. and Mrs. Allen argued that this language allowed Enbridge to assign the property for private use, rather than strictly public use, and was therefore in violation of the constitutional prohibition against private use takings. The Tyler Court of Appeals found that though “certain easements may be assigned to a third party, that third party’s use cannot exceed the rights expressly conveyed to the original easement holder.” Cantu v. Cent. Power & Light co. It also found that “companies possessing the right to condemn private property for a public use cannot do what they please with the land condemned, but only what is reasonably necessary to carry out the purpose for which the land is taken,” and that “anything beyond this is not the taking of private property for public use, but the taking of private property for private use.” Aycock v. Houston Lighting and Power Co.

Because the language in the Second Amended Petition permitted Enbridge to assign the easement without restriction, the Court of Appeals modified the trial court’s final judgment by restricting the easement’s assignment only to an assignee that qualifies as a transporter of natural gas as defined in Texas Utilities Code, Section 121.001(a).”

In summary, landowners should diligently look at the language of the pipeline company’s proposed easement to make sure it cannot be transferred for a private benefit.

To view the case, click here.

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Houston Churches Face Goliath in Eminent-Domain Battle

21 Friday Aug 2015

Posted by texascondemnation in Houston, Landowner Rights, Property Rights, texas condemnation, texas condemnation lawyer, texas eminent domain, Texas Eminent Domain Attorney, Texas Eminent Domain Lawyer

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Attorneys, Austin, Austin condemnation, Austin eminent domain lawyer, Blog, Church, Condemnation, Condemnation claims, Eminent Domain, Houston, Houston condemnation, Houston eminent domain lawyer, property rights, Texas, Texas condemnation lawyer, texas eminent domain, Texas eminent domain lawyer

He and the church have helped congregants through drug addictions and gang violence, establishing a youth center and food pantry as part of the church’s mission, but they may have encountered a problem they cannot overcome: the power of eminent domain.

Bishop Roy Lee Kossie has been preaching at Latter Day Deliverance Revival Church in Houston’s Fifth Ward for 50 years, starting his work in 1965 when the area had gained notoriety as one of the city’s most dangerous neighborhoods.

At that time, the Fifth Ward became known as the “Bloody Nickel.” But, decades before the spur of its neighborhood violence, locals simply called it the “Nickel.” The neighborhood had served as a hub for minority-owned businesses and development during an era of redlining and de facto segregation. Congressman Mickey Leland and Congresswoman Barbara Jordan are products of the Fifth Ward, both attending Phillis Wheatley High School on Lyons Avenue, one of the nation’s largest black schools before desegregation.

The neighborhood, once flourishing with the hustle-and-bustle of local businesses, began to change in the 60s, according to the Texas State Historical Association, when upwardly mobile residents moved out to seek broader opportunities that stemmed from integration. Some attribute the neighborhood’s economic and social fall to Highway 59’s exclusion of Lyons Avenue and Jensen Drive – two of the Fifth’s busiest streets at the time – as exits on the major roadway, according to Houston History Magazine.

“The decline was slow,” Patricia Pando wrote in the Houston History Magazine. “Businesses did not disappear overnight. Nevertheless, by the late 1960s, the Lyons Avenue and Jensen Drive intersection was all but abandoned except for the still booming nightclub activity.”

The area’s decline did not, however, scare Bishop Kossie away from his church on Lyons Avenue. The church worked to acquire property, including the lots of two neighboring nightclubs, for its ministry.

“People shot first and asked questions later,” he said in a news release from the Liberty Institute. “But, we love this community. This is where the Lord called us and this is where we want to stay.”

He and the church have helped congregants through drug addictions and gang violence, establishing a youth center and food pantry as part of the church’s mission, but they may have encountered a problem they cannot overcome: the power of eminent domain.

The Houston Housing Authority (“HHA”) has made offers to purchase three of the church’s properties and has threatened to use eminent domain if those offers are not accepted, according to a lawsuit filed August 3 by Latter Day Deliverance Revival Church (“Latter Day”) and Christian Fellowship Missionary Baptist Church (“Christian Fellowship”). Liberty Institute is representing the churches and stated that the HHA was also seeking property owned by Christian Fellowship, a church that has been in the neighborhood for nearly 40 years.

The two churches in Houston’s Fifth Ward assert that the HHA’s use of eminent domain for a redevelopment project infringes upon the churches’ right to practice religion freely as the entity is seeking to take an “undeveloped” plot that Latter Day currently uses for parking and for its outdoor ministry in addition to other properties owned by the churches.

The HHA was seeking a total of four parcels from the two churches, three from Latter Day and one from Christian Fellowship, according to the Houston Chronicle. Christian Fellowship resides on one of those parcels, and the HHA planned to demolish the church to build a library, according to a lawyer for the Liberty Institute quoted in the Houston Chronicle Aug. 4.

The HHA initiated a redevelopment project in the Houston neighborhood in partnership with the Fifth Ward Community Redevelopment Corporation (“FWCRC”), an organization dedicated to revitalizing the historic Houston neighborhood through various development projects. The project, however, has come under public scrutiny since the lawsuit was filed. The HHA and the FWCRC altered their initial plan in response to the criticism, and their new plan would allow Pastor Quinton Smith to continue his 20-year career at Christian Fellowship.

“Toward ensuring [Pastor Smith’s] congregation continues its important presence in this community, I have asked our authority’s president, Tory Gunsolley, to work with our consultants to create an alternate development plan that does not include the property of First Christian Fellowship Missionary Baptist Church,” Chairman of the Houston Housing Authority Board of Commissioners Lance Gilliam said. “Unfortunately, that alternate plan will not allow us to include a new library. We recognize, however, that this sacrifice is balanced by the very real impact Pastor Smith and his congregation will have on the lives of existing and future residents of the Fifth Ward.”

Despite this alteration, the HHA and the FWCRC still plan to acquire Latter Day’s property to build a private health clinic.

“Although I applaud Bishop Kossie’s and his congregation’s impact on the quality of life in the Fifth Ward, I cannot provide him any comfort regarding our disagreement,” Gusnolley said.

The court has granted the churches a temporary restraining order to keep the housing authority off their properties but has not yet decided on whether the potential HHA taking violates the Texas Religious Freedom Restoration Act.

The HHA and the FWCRC may have noble intentions for the Fifth Ward as the FWCRC has a history of involvement in the community that includes the building of more than 300 homes in an effort to revitalize the Nickel. But, if we have learned anything since Kelo, it is that economic growth and development should not be cause enough to infringe upon someone’s constitutionally-protected property rights. Latter Day purchased its parcels of land with a vision in mind, and the HHA should not come between the church and that vision without having a compelling reason vested in the public interest to do so.

Co-authored by Justin Hodge and Ayla Syed.

If you have any questions about this blog, please feel free to contact Justin Hodge (jhodge@jmehlaw.com). 

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Luke Ellis and Justin Hodge are partners with Marrs Ellis & Hodge LLP. Justin heads the firm's eminent domain practice in the Houston office. Luke heads the firm's eminent domain practice in the Austin office. Luke Ellis is widely recognized as one of Texas’s top young lawyers—and one of the top lawyers of any age practicing in the area of eminent domain. Mr. Ellis has broad experience and has enjoyed success in many types of civil litigation. Justin Hodge is a trial lawyer who represents Texas landowners in condemnation, eminent-domain, and real-estate lawsuits. He represents landowners in condemnation proceedings, not the governmental authorities or private companies taking property. Mr. Hodge has handled complex condemnation and eminent-domain cases throughout the State of Texas. If you have questions about any of the issues raised in this blog, we invite you to discuss them with us at jhodge@mehlaw.com or lellis@mehlaw.com.

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