Partners Tré Fischer and Ben Rhem recently published an article in Texas Lawyer discussing the outcome of Denbury Green Pipeline-Texas v. Texas Rice Land Partners. The case involves a dispute over the common carrier status of Denbury Green Pipeline-Texas LLC’s CO2 pipeline, the “Green Line.”
In the article, Tré and Ben detail the almost 10-year-long case which has taken two trips to the Texas Supreme Court. The first Supreme Court ruling (Texas Rice I) established a new test for determining a pipeline’s common carrier status and held that Denbury had not shown common carrier status when it began construction of the pipeline.
“This holding transformed eminent domain practice in Texas and was widely considered a substantial victory for private property owners and individual property rights,” Tré and Ben wrote in Texas Lawyer.
After Texas Rice I, the case was remanded to the trial court which granted summary judgment to Denbury, based on two transportation contracts it had acquired since construction of the pipeline. This ruling was reversed by the Court of Appeals, which led to the second trip to the Supreme Court (Texas Rice II). The ruling in Texas Rice II held that Denbury had established common carrier status through transportation agreements that were established after the pipeline had been constructed.
“While Texas Rice I established new standards and rigor for obtaining common carrier status and the power of eminent domain for pipeline companies, Texas Rice II demonstrates that those standards are not as rigorous as many believed,” they wrote.
“Texas Rice II also provides insight into the factors courts may consider in determining whether a pipeline has met standards provided in Texas Rice I.”
The court based its decision in Texas Rice II on the idea that Denbury had established a reasonable probability that the pipeline would eventually serve the public.“This decision concludes an almost 10-year saga, with the court restoring balance to the interests of pipeline companies and landowners and making it relatively easy to establish common carrier status in many cases,” they wrote.
For more information, read “Texas Supreme Court Establishes a Pipeline-Friendly Threshold” in Texas Lawyer.
About Tré Fischer
Joseph “Tré” August Fischer, III represents energy and manufacturing companies in litigation, transactional, and regulatory matters. He has extensive experience in environmental law, and has represented clients in prosecution and defense of governmental enforcement actions and claims involving natural resource damage, personal injury and property damage, and cost-recovery and indemnification.
About Ben Rhem
Benjamin R. Rhem is an environmental and legislative attorney who advises clients on federal and state regulatory issues in the power generation, oil and gas and mining industries. His experience is primarily based on work before the Texas Commission on Environmental Quality and the Environmental Protection Agency, however, he also counsels clients on regulatory issues involving the FERC, PHMSA, the Railroad Commission of Texas, and MSHA.
