In a case which could set judicial precedence, the 1st Court of Appeals in Houston recently ruled in favor of a property owner against a pipeline company using eminent domain for an easement.
The court reversed two trial court rulings in the case of Hlavinka et al. v. HSC Pipeline Partnership, LLC, ruling in favor of the Texas rancher on two matters.
First, it stated HSC did not establish “common carrier” status, and second, the landowner should not have excluded testifying in the jury trial on the value of the easement.
Regarding the common carrier status, the court cited two previous cases when reversing the lower court ruling, stating the construction of a pipeline for a single end-user does not meet Texas’s requirement of public use, and therefore the right and power of eminent domain.
On omitting the testimony of Terrance Hlavinka, a landowner with years of experience negotiating and selling pipeline easements, the court stated, “The trial court abused its discretion by excluding Terry’s testimony.”
Background
The Hlavinkas purchased four tracts of land in 2002-2003 totaling 15,000-16,000 acres in Brazoria County, TX, “for the primary purpose of generating income by acquiring additional pipeline easements,” according to the court opinion. At the time of purchase, 25 pipelines were traversing the tracts.
In 2016, HSC, a subsidiary of Enterprise Products Partners, applied to the Texas Railroad Commission for a pipeline project named Oyster Creek Lateral Project. The pipeline would carry propylene—a product of refining crude oil—from Texas City, across Galveston and Brazoria Counties, and end at a plant owned and operated by Braskem America, Inc., an Enterprise customer. HSC contracted with Braskem to sell it propylene at Mont Belview, and then ship it for Braskem to Braskem’s plant in Brazoria County.
HSC contacted the Hlavinkas and attempted to acquire a 30-foot-wide permanent right-of-way and easement and temporary workspace easement across the four tracts of land. The Hlavinkas and HSC were unable to reach an agreement for the easement. As a result, HSC filed three condemnation proceedings involving the four tracts, which were later consolidated into a single case.
Challenging the use of eminent domain, the Hlavinkas “argued that the trial court did not have jurisdiction over this matter because HSC was not a common carrier. Therefore, HSC did not have the authority to condemn their property.”
The Hlavinkas sought nearly $3.4 million from HSC for the pipeline easement based on prior easements on the property. The trial court excluded the testimony of Terrance Hlavinka related to damages and the valuation of the easement. Instead, it awarded $132,293.36, representing $108,957.35 for crop and surface damages and $23,326 for the easement. The Hlavinkas appealed the decision.
Bradbury and the TSCRA
James D. Bradbury filed an amicus brief on behalf of Texas and Southern Cattle Raisers Association (TSCRA) and several other agriculture organizations supporting Hlavinka.
As Bradbury notes in an editorial regarding the decision and eminent domain, “It reiterates the essential need for protecting private property rights in Texas. As the last refuge for affected property owners, the courts must apply special scrutiny to eminent domain cases and ensure property owners are protected against excessive and unpredictable condemnation of their land.”
Bradbury states this case ruling could have judicial precedent and affect other private property cases in Texas.
“Overall, the opinion from the 1st Court of Appeals in Houston reinforced, in no uncertain terms, the importance of private property rights and the right of landowners to have a full and fair process to determine adequate compensation for the taking of their land,” Bradbury wrote. The case was remanded to the trial court and may be further appealed, including up to the Texas Supreme Court. — Charles Wallace, WLJ editor
