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Corporate abuse of eminent domain law

April 12, 2012

All of you finding yourselves on the wrong end of corporate abuse of eminent domain may be interested in an appeal currently before the Texas Supreme Court.  In the case of Texas Rice Land Partners Ltd. and Mike Latta vs. Denbury Green Pipeline-Texas, LLC, the court held that a pipeline owner shipping exclusively for a corporate affiliate is not a common carrier within the definition required for exercise of eminent domain.  In a nutshell, eminent domain is a common law descendant of the sovereign’s power to take private property when needed for the common good, like road-building.  In the present day, private parties must show common carrier status, meaning that their project (transmission lines, pipelines, etc.) is available to the public on fairly negotiated terms.  If the project is meant for private use – as the court believed this pipeline to be – then it isn’t a common carrier and eminent domain isn’t available.  Corporations would have to buy easements from every landowner along the way on the landowner’s terms, and landowners could simply refuse.

For this reason, Denbury Pipeline is singing the virtues of respect for “corporate separateness” where common carrier status is at stake.  In the Motion for Rehearing, 4 attorneys from Houston and Fort Worth argue that all kinds of mischief will be created by considering it a private transaction when the corporate owner of a pipeline ships natural gas only for its corporate affiliate.  This is nothing but an extension of the “special rights for corporations” doctrine so favored by the people who brought us the Citizens United U.S. Supreme Court majority.  If Joe owned a pipeline and only used it to ship his sister Alison’s gas, it would be perfectly obvious that this was a private, sweetheart deal for a family member and Joe had no reasonable argument that his pipeline was a common carrier.  When corporations do the same thing, “corporate separateness” is suddenly the basis of our economic system, no matter how closely tied they are.  Corporations are not only people, apparently, they’re people whose intimate dealings can never deprive them of common carrier status and the fearsome, sovereign power of eminent domain.  So far the Texas Supreme Court has recognized this argument for the garbage that it is.  Let’s hope they stick to their guns (always a good bet in Texas).

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