JudicialStatewide NewsTexas Supreme Court Hears Oral Arguments in Eminent Domain Pipeline Case

In a case between landowners and a pipeline company, the Supreme Court will decide issues about eminent domain authority and how the land should be valued.
March 7, 2022
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The Texas Supreme Court heard arguments on February 23 in a case to determine whether a company has eminent domain authority to build a pipeline across private land to carry a product other than crude petroleum.

The case is between the Hlavinka family, which owns over 15,000 acres of land in Brazoria County, and the HSC Pipeline Partnership. 

In 2016, HSC made an offer for a 50-foot wide easement through the Hlavinka property for a pipeline to transport polymer-grade propylene (PGP). The Hlavinkas rejected the offer so HSC began condemnation proceedings to gain the easements, extending almost two miles across the land.

The Hlavinkas have sold multiple pipeline easements on their land, including one to Dow Chemical for $3.4 million and one to Praxair for $3.45 million.  

The case reached the Texas Supreme Court on appeal from the First Court of Appeals in Houston.

The Texan Tumbler

Several issues were argued before the court. First, whether the pipeline would be a public use as required by the constitution, whether the pipeline company has statutory authority to condemn the property, and finally if the property is condemned, how it should be valued.

The Hlavinkas assert that the pipeline is not a public use. Their attorney, Clay Steely, told the court, “I believe constructing a pipeline solely to sell your product to a customer is not a public use. That’s a private use.”

HSC Pipeline, represented by attorney David Keltner, argues that the pipeline is for public use because the title to the goods being transported passed before they entered the pipeline.

Steely also argued that the HSC Pipeline does not have the authority to condemn under any statute because it is not carrying crude petroleum, as required by the Texas Natural Resources Code

However, HSC Pipeline responded, and the First Court of Appeals agreed, that it is entitled to eminent domain authority as a common carrier carrying oil products under the Texas Business Organizations Code.

“Under their theory, the only ability for a common carrier to have eminent domain authority is if they’re a crude oil pipeline. Liquified natural gas would not fall within that category,” Keltner told the justices.

The court also asked questions about valuing the land and whether a landowner ought to be able to provide testimony about previous arms-length transactions they have reached for other pipelines. 

Another attorney for HSC Pipeline, Thomas Zabel, told the court that the land is more valuable because of their pipeline.

However, Steely replied that the Hlavinkas have been very successful in selling easements for pipelines for over a decade and ought to be able to provide testimony regarding the valuation of the land based on similar previous arms-length transactions.

Regarding the case, Terry Hlavinka said, “We have been in the business of selling the pipeline easements business for a long time. Unfortunately, we are now being forced to defend our constitutional rights to obtain the adequate and just compensation other companies have voluntarily paid without a lawsuit in the past and have negotiated since this case began.”

“We are simply asking the Texas Supreme Court to protect the rights of Texas landowners, and fairly enforce the Constitution,” he continued.

The Hlavinka pipeline case is not the only eminent domain case before the Texas Supreme Court currently.  In January, they heard oral arguments in the Miles vs. Texas Central case to determine if the high-speed rail company qualified for eminent domain authority. That opinion has not yet been released. 

HSC Pipeline Partnership did not reply to a request for comment before the time of publication.

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Kim Roberts

Kim Roberts is a regional reporter for the Texan in the DFW metroplex area where she has lived for over twenty years. She has a Juris Doctor from Baylor University Law School and a Bachelor's in government from Angelo State University. In her free time, Kim home schools her daughter and coaches high school extemporaneous speaking and apologetics. She has been happily married to her husband for 23 years, has three wonderful children, and two dogs.