Pipeline Condemnation & Eminent Domain Disputes

In the context of real estate (including pipeline condemnation), eminent domain is the inherent power of a governmental entity to take privately owned property and convert it to public use, subject to reasonable compensation for the taking.  The fifth amendment of the U.S. Constitution’s “just compensation” clause is based on the government’s acknowledgment that there is a moral obligation for the it to reimburse a landowner for the government’s interference with, through, or on private property.  Furthermore, the Texas Constitution provides that if private property is taken for public use, the owner must be adequately compensated unless the owner waives his right to compensation by consent.

 

However, eminent domain law in Texas has evolved and expanded to permit not only the government, but also common carriers, water providers, pipeline companies, gas and water utilities, and gas corporations to take someone’s private property by a process called “condemnation.”  Condemnation is defined as the determination and declaration that certain property (esp. land) is assigned to public use, subject to reasonable compensation.  It is the process that the government or a company must go through in order to take your private land.

 

Traditionally, a common carrier is an entity that owns, operates, or manages a pipeline or any part of a pipeline in Texas for the transportation of crude petroleum to or for the public for hire; or engages in the business of transporting crude petroleum by pipeline.

 

Nowadays, “common carrier” status has been expanded to include not only oil and gas companies, but also railroad, irrigation, mining, electric, and pipeline companies.  These industries may exercise eminent domain through condemnation as common carriers.  “Pipeline company” doesn’t just mean oil and gas companies, but also water pipelines, too.  In order to be classified as a common carrier (and thus acquire the right of eminent domain), a person or company only has to file with the Texas Railroad Commission a written acceptance of the relevant Texas law that governs this area of regulation.  This is all that is required of the company seeking common carrier status.  Considering the property rights involved, the process to become classified as a common carrier is very easy.

 

As a landowner, you are entitled to adequate and just compensation for the government’s or common carrier’s right to take your land.  However, although Texas courts have held that adequate compensation generally means the market value of your property that was taken, there are three methods the government and common carriers may use to determine your condemned land’s market value.  Whichever appraisal method they ultimately use, the condemnor must make you a bona fide (“good faith”) offer for your land, but that offer doesn’t need to be for market value; it can be for any price at all.  This is why it’s important to discuss your options with an attorney before you agree to any offer made by the government or common carrier for taking your private property.

If you have been approached by a company wanting to put a pipeline or other easement through your land, please contact the Yanta Law Firm online or toll-free (1-800-313-2555 or 1-866-IS-YANTA) to set up free 1st and 2nd consultations to discuss all of your legal, economic and other options.

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