9th COA Rules: No Common Carrier Status.

In a 7 year legal tussle over whether Denbury is a common carrier, the 9th Court of Appeals ruled that Denbury is not a common carrier.  Sounds innocuous, except that common carrier status grants Denbury, a private pipeline company, the power of eminent domain. Common carrier status comes with great power.

The Legislature tried to fix the common carrier issue in 2013, but an elegant point of order stopped it. In the summer of 2014, the Railroad Commission tried to fix it by rule making.  

In 2014, the Texas Supreme Court established a standard for determining whether an entity is a common carrier. The common carrier test used by the 9th Court of Appeals is:

• “reasonable probability
• that at some point after construction
• the pipeline will serve the public
• by transporting gas
• for at least one customer who uses the pipeline to transport CO2 that the customer either keeps or sells
• to someone other than an affiliate of the pipeline company.”

The legal wrangling began when Denbury representatives entered private property to survey land. Pre-condemnation surveying comes hand in hand with the power of eminent domain.

In the few last years, courts have struck down the ability to enter private property before eminent domain begins. Its a legal trend that has been protecting private property rights, even in left leaning states like California. 

Southeast Texas Record