$1.74 Billion for New Roads in Texas to Help Meet State’s Growing Demand

30 Friday Jan 2015

Posted by in Property Rights, texas condemnation, texas condemnation lawyer, texas eminent domain, TxDOT

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The Texas Department of Transportation (TxDOT) announced a list of potential projects last week that would utilize funds from the Texas Transportation Funding Amendment (also known as “Proposition 1”), which passed with 80% of the votes during the November elections.

Proposition 1 is projected to funnel about $1.74 billion to TxDOT projects from oil and gas tax revenues, money that previously went solely to the state’s “Rainy Day Fund.” Half of these revenues will continue going toward the Rainy Day Fund, but the other half will now help finance road projects.

TxDOT has allocated about $150 million of Proposition 1 funds to Austin, most of which will likely go toward expanding I-35, one of the nation’s most congested highways, by two lanes. TxDOT also earmarked $278 million for projects in Houston, and part of those funds could potentially help expand US-59 to a 6-lane highway.

Texas, especially areas in Houston and Austin, has seen some of the highest rates of population growth in the nation in recent years, and this growth comes hand-and-hand with expansion.

While Texan drivers may find some relief from rush-hour congestion in the near future, many of these projects may require the use of eminent domain to acquire property needed for expansion.

TxDOT has not yet finalized its list of projects and will continue to accept comments from the public on the projects proposed last week.

If you would like more information regarding these proposed projects, please feel free to contact Justin Hodge (jhodge@jmehlaw.com).

Coauthored by Justin Hodge and Ayla Syed.

Denbury Tug-of-War Continues

23 Friday Jan 2015

Posted by in Chambers County, Denbury, Fort Bend County, Harris County, Jefferson County, JMEH Law News, Pipelines, Power Lines, Property Rights, texas condemnation, texas condemnation lawyer, texas eminent domain

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Denbury Green Pipeline

The 120-mile “Green” Pipeline, completed in 2010, runs from Donaldsonville, Louisiana to Houston, Texas.

Despite the drop in oil prices, the tug-of-war between landowners and the Denbury Green pipeline company continues to play out in court in the landmark case that defined common-carrier status in Texas.

Texas Rice Partners, Ltd. v. Denbury Green Pipeline, involving Denbury’s right to invoke eminent domain to obtain the properties of Texas Rice Land Partners, Ltd., a consortium of rice farmers, was ruled in the pipeline company’s favor by both the 172nd District Court and the Texas Ninth District Court of Appeals in Beaumont, Texas, in 2011. These courts claimed that Denbury was indeed a common carrier, and, therefore, could use eminent domain to obtain land to build its pipeline.

The Texas Supreme Court, however, reversed those rulings, arguing that Denbury’s classification as a common carrier rested too heavily on a pipeline company simply checking a box on a one-page document for the Texas Railroad Commission (RRC) and that the RRC’s findings could not reliably and conclusively determine a company’s power to use eminent domain.

The Supreme Court remanded the case back to the district court late 2011, and the district court again ruled in favor of Denbury’s common carrier status in 2014. The case continued again to the appellate court in Beaumont, which heard oral arguments for the case last month. Denbury built the pipeline during this legal back-and-forth, but the landowners hope the appellate court will send the case back to the Supreme Court as the case has yet to be heard by a jury and that Denbury’s intent to serve as a common carrier at the time of condemnation has not been established (Read more here).

While the court of appeals has not yet ruled on this matter, the RRC announced new regulations for granting a T-4 permit – required for property condemnation by pipeline companies – effective March 2015 in an effort to better regulate this process. The new regulations will ask for more substantial information and supporting documentation from companies applying for the permit and enforce a new timeline for the application process (Read more about the new regulations here).

As laws and precedent for private companies to invoke eminent domain continue to change, landowners should try to stay up-to-date to better protect their property rights. In fact, we all should. The laws are changing quickly, and the tug-of-war between pipeline companies and landowners will impact us all.

Justin Hodge is a law partner in Houston, Texas. He focuses on eminent domain, condemnation and landowner defense. For more information, please see http://www.jmehlaw.com.  

Coauthored by Justin Hodge and Ayla Syed.

The Texas Supreme Court reverses $5 million award to historical, family-owned beach in Galveston, Texas.

13 Wednesday Aug 2014

Posted by in Politics, Property Rights, texas condemnation, texas eminent domain, Uncategorized

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Although Porretto Beach survived the Great 1900 Storm, Hurricane Carla, Hurricane Camille, Hurricane Alicia, and Hurricane Ike, it was unable to endure the Texas Supreme Court’s recent hurricane-season battering.  The Court’s opinion shows just how hard it is for a landowner to win an “inverse condemnation case” in Texas.

There are two types of cases when the government takes property through eminent domain. First, there are physical takings cases like highway, power lines, and pipelines where landowners are absolutely entitled to just and adequate compensation under the Texas constitution.  Second, there are inverse cases, like Porretto, where the State does not physically occupy the property, but its actions have a real-world, negative impact on the ability to use the property.

In Porretto, the Texas Supreme Court goes to great length to avoid having the State “take” property.  The evidence showed that the State: (1) claimed ownership of the property through the General Land Office, (2) transferred ownership under the tax records to the State, and (3) leased a portion of the property to the City of Galveston.  If these steps do not constitute a “taking,” then a landowner is left with the question of what actually does.  The takeaway is that mere threats (and even some steps) are likely not going to be enough to establish an inverse condemnation taking in Texas.

In light of this ruling, Texas landowners must be very careful when negotiating and reaching agreements with the State.  Porretto is a perfect example of where the State may go back on its word!

You can read the full opinion here.

Why is this man smiling again? Perot family lands a sweetheart deal from TxDOT

15 Tuesday Apr 2014

Posted by in texas condemnation, texas eminent domain, TxDOT

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Texas Department of Transportation (“TxDOT”) officials said right-of-way acquisitions for its Loop 9 Southeast project in Dallas would not begin for another year, but one prominent developing company sold its property for a handsome cost to TxDOT while others in its position have been left in limbo.

Bill Mote, a landowner in the area who has not yet received an offer for his property, reported to the Dallas Morning News that he has not been able to build on his land or sell it for eight years now because of TxDOT’s interest in the area. The landowner, also a commercial real estate owner, found a state land sale document for a deal in 2010 between TxDOT and Ross Perot Jr.’s firm, Hillwood Development Company.

Hillwood received $4.4 million for 34 acres of land in the sale that took place five years before TxDOT stated it would begin right-of-way purchases. This discrepancy raised a few eyebrows among landowners like Mote, especially considering the development firm’s long-term relationship with TxDOT and that this was the only such sale for this project.

This sale was also unique in that it is one of the few open options contracts offered by TxDOT that guarantees the landowner half of the agreed price regardless of whether the project moves forward. The other half will be paid later if the landowner agrees to stop development, the Dallas Morning News reported on Feb. 16th.

TxDOT and Hillwood officials both stated that the land owned by the firm was in a known key area for the highway expansion project and that stopping development by Perot Jr.’s company helped save TxDOT money from having to purchase the land from future homeowners in the subdivision. While this deal may seem to make sense, it still offers Hillwood an unfair advantage not extended to others in the area.

Mote and other landowners like him who may not have the luxury of a cordial and long-term relationship with TxDOT deserve the same treatment as Hillwood, and this situation, brought to light by Watchdog, shows the depth of discretion allowed by eminent-domain laws in Texas. Landowners must protect their rights in condemnation, but TxDOT also has the responsibility of treating each property owner with the respect it gives to high-profile landowners.

Coauthored by Justin Hodge and Ayla Syed.

Shell’s Ho-Ho Pipeline Ruptures in Jefferson County, Texas

11 Tuesday Mar 2014

Posted by in Pipelines, Property Rights, texas condemnation, texas eminent domain

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A construction crew “accidentally pierced” Shell’s pipeline on Thursday afternoon, resulting in a 364 barrel oil spill on a property in Port Neches, Texas near the intersection of Highway 136 and Interstate 366 (about 100 miles east of Houston). Emergency crews were deployed to the scene and are using absorbent booms to contain the oil. The scale of environmental damage to the property is not immediately known.

The Houma-to-Houston line transports 360,000-barrels-per-day from Port Neches and terminates in Houma, Louisiana. Last year, Shell completed a reversal of the pipeline’s flows. It now carries oil from Texas to Houma. Shell discovered another leak near one of the pipeline’s pumping stations in Channelview, Texas, in February.

These types of risks must be considered when property is condemned for a pipeline. As the Texas Supreme Court explained in Zwahr, eminent domain is the property owner’s one-and-only chance to be made “whole.”

TexasEminentDomainLawyer.com

02 Monday Dec 2013

Posted by in JMEH Law News, Pipelines, Power Lines, Property Rights

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We are excited to announce the launch of our new blog, TexasEminentDomainLawyer.com!  This blog will provide case law updates and summaries on recent eminent-domain decisions in Texas.

TexasEminentDomainLawyer.com

We invite you to enjoy our recent posts summarizing pipeline cases.  We will be adding summaries of new billboard valuation cases soon.  TexasCondemnation.com will continue to provide breaking news and commentary on Condemnation and eminent domain issues.

 

Black Friday: Missouri Gas Pipeline Explosion

30 Saturday Nov 2013

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A gas pipeline in western Missouri exploded Friday morning and sent a 300 foot high fireball into the air. The glow from the burning Panhandle Eastern Pipeline could be seen for miles and three homes within a half-mile of the blast were evacuated. The blaze took more than two hours to extinguish and by mid-morning on Friday the residents had been allowed back into their homes. according to Fox. A “smoldering moon-like crater” could be seen at the site of the explosion.

The flames also destroyed seven buildings on a nearby farm. One commenter said the fire “lit up the whole area like it was daytime.” Other residents reported their homes were shaking.
The explosion can be seen here courtesy of YouTube user Jason Knox:

This is not the first time an explosion has occurred on this pipeline. According to the Pipeline and Hazardous Materials Safety Administration, the same line ruptured on August 25, 2008, causing an explosion and a 7-feet deep crater, about 50 feet wide. The accident caused about $1 million in damage.

Tesoro Logistics Responsible for Recent Oil Spill, Landowner to Receive Compensation for Damages

24 Thursday Oct 2013

Posted by in JMEH Law News, Pipelines, Politics, Property Rights, Uncategorized

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A Texas-based oil company discovered a leak in one of its pipelines in North Dakota after a local farmer reported it to ND officials on Sept. 29, but the oil company did not spill this news until 11 days after discovering the pipeline rupture that released an estimated more-than 20,000 barrels of crude oil.

State officials initially reported a 750-barrel spill that the company in question, Tesoro Logistics LP, did not publicize because of the smaller initial estimate and what it considered to be a lack of environmental damage.

Kris Roberts, an environmental geologist with the North Dakota Health Department, was quoted in a New York Times article stating that Tesoro officials reported the spill to the state within 24 hours of first discovery and that the state does not have to release information of all oil spills publicly.

While Tesoro responded to the spill promptly, the cleanup process could take a couple of years and will cost an estimated $4 million. The local wheat farmer, Steve Jensen, who notified the State Department of Health of the oil spill after seeing crude oil coating the wheels of his combine, will also receive compensation for damages to his field that could keep his wheat crops out for a couple of years.  He and Tesoro are negotiating a settlement in regards to this matter.

The spill seems to have originated from a hole — about a quarter-inch in diameter — in a segment of the 20-year-old pipeline originally built by BP in 1993 but purchased by Tesoro in 2001, according to Reuters. The pipeline runs 35 miles within the state.

Many people have criticized Tesoro for not detecting the spill of about 20,600 gallons over 7.3 acres, or the equivalent of seven football fields according to the NYT, and the spill comes during an oil boom for the state following its 1951 discovery of oil. This spill surely will not help mitigate those concerned about the much larger Keystone XL pipeline expansion that will cross international borders and include 1,700 new miles of pipeline if approved. The Keystone Pipeline did not see its day in Congress during the debt-ceiling debates, and a decision on its expansion will likely not come until 2014.

TransCanada, the company heading the Keystone project, Tesoro Corp. and other pipeline owners cannot afford to slack on detecting leaks under the current political climate. These companies must employ vigilance and preemptive measures to mitigate environmental concerns and to protect landowners like Jensen whose income depends on the land surrounding oil pipelines.

Coauthored by Justin Hodge and Ayla Syed.

Note: Tesoro Logistics LP is a partnership formed by Tesoro Corp. 

To read more about the spill, please click here.

Pipeline May Be Key to Unlocking Next Government Shutdown

02 Wednesday Oct 2013

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Photo by Anne Sherwood for The New York Times. Dawson County Montana–one of the areas through which the proposed Keystone Pipeline XL would pass if approved.

The Keystone Pipeline XL may be a key to unlocking the next cement door put up by the GOP to meeting fiscal deadlines, the New York Times reported. The Republican Party will likely seek approval of the pipeline in the discussion to raise the national debt ceiling, which has an Oct.-17 deadline, rather than in debates pertaining to the missed Oct. 1 budget deadline that defunded the U.S. government and brought the government into its second day of the shutdown. Tying the pipeline to the debt ceiling could have a significant impact on landowners’ rights as TransCanada, the pipeline builders, try to attain land for the project, which will bring into question the eminent domain rights of the company as a “public” utility as well as any resulting condemnation claims.

House of Representative member Lee Terry (R-Nebraska) said to the NYT that the Republicans feel the debt ceiling debate may be their “only option” in seeing the pipeline come to fruition, and his opinion may not be far from the truth considering President Obama’s more aggressive approach toward preventing climate change in his second term. The pipeline crosses an international border and needs approval from the Obama administration in order to continue, and the President has ordered an internal review to consider the potential environmental risks the Keystone Pipeline XL may impose. A decision on the pipeline from the President without interference from Congress could come in early 2014, but a Republican-led, last-ditch effort to guarantee the pipeline’s completion may change that timeline.

President Obama stated that he has little patience for any provisions on the upcoming debt ceiling bill, and considering the lack of bipartisanship that has become a trademark of about the last 4 years of U.S. politics, another looming budget battle about the national debt ceiling, and, therefore, the Keystone Pipeline, likely awaits the Congress currently tied up on approving a national budget.

This battle will most likely not carry the same momentum as the current budget debates simply because it follows the budget deadline that resulted in defunding the U.S. government, a move not well received or likely to be repeated within the same term. But, nothing is certain, especially the future of the Keystone Pipeline XL.

Supporters of the pipeline argue that it would help decrease the United States’ dependency on the Middle East for oil and create more jobs within the nation, while opponents fear the carbon emissions that would result from such a large build.

The Center for Biological Diversity, a non-government organization that often lobbies for greater environmental protection for endangered species, recently released a study about the potential damage the pipeline will cause on habitats it crosses, according to Al Jazeera America on Sept. 29. Al Jazeera America also reported that the Intergovernmental Panel on Climate Change, sponsored by the United Nations, released a report linking global warming to “human carbon dioxide output from fossil fuels, including carbon-rich tar sands oil like that which the Keystone pipeline is designed to transport.”

The Pew Research Center reported that about two-thirds of Americans support the pipeline, but the same margin of Americans also opposes great carbon emissions. Waiting for the Obama administration’s report on the Keystone Pipeline XL could lead to a well-informed decision that considers all different arguments for and against the pipeline, but forcibly linking that decision to the debt ceiling may rush an important decision on an issue that is clearly more grey than black or white.

The decision to link the pipeline to the Oct. 17 deadline might change considering the potential political ramifications that will result from the current government’s continued failure to pass a budget — a move not boding well for Republicans in office as their constituents begin to feel the effects of a government shutdown domestically and abroad.

Coauthored by Justin Hodge and Ayla Syed.

With the Keystone decision looming, will the President propose a quid pro quo?

03 Monday Jun 2013

Posted by in Pipelines, Politics

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To many, the ultimate approval of the Keystone XL pipeline project is inevitable. Environmentalists and oil and gas advocates have long been engaged in a heated debate that has narrowed its focus to TransCanada’s Keystone XL pipeline.

Here are a few of President Obama’s options: a) approve the pipeline and offer an energy-efficient tax incentive or alternative energy goal proposal for the future; b) approve the pipeline and disregard the cries of environmentalists; c) strike the pipeline and disregard upset oil and gas investors that are likely to pursue the pipeline’s construction anyways; d) strike the pipeline and offer some kind of proposal to alleviate what to advocates of traditional energy forms would seem like an utter crisis; e) indefinitely postpone the decision entirely. The problem with creating an additional proposal to his decision to strike or approve the pipeline is that it would require approval from Congress, which we all know has been facing much difficulty seeing eye to eye. Regardless of the path President Obama chooses, someone is bound to be upset; such is the nature of dramatic once-in-a-term decisions like this. Because of the opportunity’s rarity, the decision to keep or remove the contentious pipeline will leave a lasting impact on how the Obama legacy will be perceived. What is left undeciphered now is through which lens the President’s term will be remembered – will he be envisioned as the environmental advocate or the oil and gas subjugate?

To read about additional possible outcomes of this contentious debate, please click here.