All the action on this week’s orders list involved motions for rehearing.
The Court granted rehearing of two cases that it had previously declined to review, restoring them to its docket (but not yet granting review or scheduling argument). It also denied rehearing in a high-profile case about limits on the exercise of eminent domain power by private pipelines.
Private pipelines: Eminent domain cannot be used for purely private use
Texas Rice Land Partners Ltd., et al. v. Denbury Green Pipeline-Texas LLC, No. 09-0901 (op. on reh’g) (PDF)
The Court denied rehearing in this case, leaving intact its earlier judgment that a private pipeline had failed to prove its authority to condemn property under provisions of Texas law that lend the State’s eminent-domain authority to certain common carriers. The segment of pipeline at issue was to be used by Denbury Green to transport its own CO2. The Court adhered to its earlier holding that a permit from the Railroad Commission authorizing the pipeline (after what the opinion calls “checking boxes on a one-page form”) was not conclusive proof of public use.
A new opinion issued on rehearing. Along with some technical changes to the text, its expanded conclusion is (perhaps) a response to critics of the original opinion:
Pipeline development is indisputably important given our State’s fast-growing energy needs, but economic dynamism — and more fundamentally, freedom itself — also demand strong protections for individual property rights. [John] Locke deemed the preservation of property rights “[t]he great and chief end” of government, a view this Court echoed almost 300 years later, calling it “one of the most important purposes of government.” Indeed, our Constitution and laws enshrine landownership as a keystone right, rather than one “relegated to the status of a poor relation.”
A private enterprise cannot acquire unchallengeable condemnation power under Section 111.002(6) merely by checking boxes on a one-page form and self-declaring its common-carrier status. Merely holding oneself out is insufficient under Texas law to thwart judicial review. While neighboring states impose fewer restrictions on the level of public use required for such takings, meaning companies may seize land to build pipelines for their exclusive use, the Texas Legislature enacted a regime more protective of landowners.
The opinion then provides a little guidance to pipeline companies who are trying to invoke the eminent-domain power — have a customer besides yourself:
If a landowner challenges an entity’s common- carrier designation, the company must present reasonable proof of a future customer, thus demonstrating that the pipeline will indeed transport “to or for the public for hire” and is not “limited in [its] use to the wells, stations, plants, and refineries of the owner.”
That phrase “future customer” does not appear in the original opinion. This seems to be the biggest substantive change. The old opinion suggested that the key moment was the time of the permit:
to qualify as a common carrier of CO2 under Chapter 111, a reasonable probability must exist, at or before the time common-carrier status is challenged, that the pipeline will serve the public (p.13).
The new opinion makes more clear how pipelines can comply with the rule, by having evidence of a future market for its use:
to qualify as a common carrier under Section 111.002(6), a reasonable probability must exist that the pipeline will at some point after construction serve the public (p.14)
The opinion from August is still online here. The Court’s public information officer also emailed out an overview of the changes.
Petitions in which rehearing was granted
Grants of rehearing are rare, so it’s notable that the Court issued two today. Neither of these cases has (yet) been selected for oral argument.
Commission for Lawyer Discipline v. Schaefer, No. 10-0609. The orders list notes that a motion for sanctions has been denied.
Lee C. Ritchie, et al. v. Ann Caldwell Rupe, No. 11-0447. This case involves shareholder oppression in a closely-held corporation, which seems to be the specialty of the Dallas Court these days. The petition had (originally) been denied without a response being requested. The grant of rehearing now restores the case to the Court’s docket. The Court has not yet granted review (or even requested merits briefing, which seems likely given the grant of rehearing). (( The Court has sometimes requested a petition response, or even full merits briefing, with the rehearing still pending. )) You can read the Petition or the Response to Motion for Rehearing.