In one paragraph, the Texas Supreme Court reiterated that landowners must allow easement holders to conduct their operations, consistent with the easement that they hold.
Landowner Must Allow Access for Regulatory Compliance
On July 26, 2017, the Court issued an Order directing a trial court to issue any necessary temporary orders to allow Denbury Green Pipeline-Texas to conduct an integrity survey of its pipeline. The Court also vacated that trial court’s denial of Denbury Green’s request for access to conduct this survey.
Federal pipeline safety regulations require these surveys. Texas easement holders have a right of access to the surface in order to do those things reasonably necessary for the easement, including regulatory compliance.
Courts Determine Common Carrier Status
The Court’s ruling is the latest in a saga that has helped determine when pipeline owners are common carriers. Only common carrier pipeline operators can use eminent domain in order to obtain an easement for pipeline use.
For almost a decade, Denbury Green and Texas Rice Land Partners have litigated the nature of rights that Denbury Green may have regarding this pipeline. Initially, Texas Rice alleged before a trial level court that Denbury Green was not going to operate this pipeline as a common carrier, and could not use eminent domain to acquire an easement. The trial court found that Denbury Green was a common carrier with eminent domain authority.
On appeal of that issue, the Texas Supreme Court reversed and ruled that Denbury Green may be a common carrier, but that Denbury Green had to prove to the trial court that it would operate the pipeline as a common carrier. The Court directed the trial court to determine common carrier status, based on evidence.
With this directive and additional evidence that Denbury Green submitted, the trial court again ruled that Denbury Green was a common carrier. Texas Rice appealed that decision to the Beaumont Court of Appeals, which ruled that Denbury Green’s evidence did not conclusively establish its common carrier status. Denbury Green then appealed to the Texas Supreme Court, which reversed the Court of Appeals, ruling that Denbury Green’s evidence had conclusively established that it would operate as a common carrier. In doing so, the Texas Supreme Court identified proof that pipeline companies can use to establish that a particular pipeline will be a common carrier.
Easement Rights Include Reasonable Access for Regulatory Compliance
A new dispute arose because Denbury Green needed to conduct an integrity survey to comply with federal pipeline safety rules. Texas Rice refused to allow Denbury Green to enter its land to conduct the survey, arguing that Denbury Green had no right to enter because the eminent domain compensation was in the trial court’s registry, and Texas Rice did not have access to the funds. The trial and appellate courts refused to issue orders allowing Denbury Green to perform the survey. The Texas Supreme Court reversed these decisions, and ordered the trial court to issue any orders necessary for the survey to go forward.
In rejecting Texas Rice’s arguments, the Court implicitly reiterated that Texas law treats an easement as a “dominant estate.” Easement rights include the right to reasonable access to perform actions necessary for regulatory compliance, even if the surface owner would prefer not to allow the access.