Modern Legal Marketing: Pipeline Industry Grumbles over Texas Eminent Domain Ruling

The phones have been ringing nonstop at eminent domain attorney offices throughout Texas after a ruling against pipeline companies looking to develop on private property. The Texas Supreme Court recently sided with landowners in recent eminent domain case, giving them the power to challenge a pipeline company's right to condemn their property and takeover large swaths of private land for the construction of pipeline passageways.

Pipeline operators say they extremely frustrated by the recent development because it will complicate construction and throw uncertainty into the entire industry.

"To go to a policy change that would make this a judicial review (instead of an administrative one) ... could severely impede the development of pipelines in this state," Greg Schnacke, a representative for Plano-based Denbury Associates, told the Houston Chronicle.

Earlier this week the state house Commitete of Land and Resource Management heard testimony for Texas Rice Lands v. Denbury Green Pipeline and sided with the landowner after reviewing the forms oil and gas companies use to employ eminent domain and condemn private property for corporate profit.

Before the ruling, pipeline operators simply checked off a box on a permit application to the Texas Railroad Commission to show they had the right to take over land or force landowners into selling their property. Now the companies will be exposed to legal battles each time they want to build a new pipeline, threatening the viability of their business operations.

As a result, state judicial courts say they expect a large spike in cases against pipelines operators in the coming years. Local eminent domain lawyer offices are sure to be buzzing with activity as more and more landowners try to defend their property against trans-national corporations.

Texas Representative Rene Oliveira, chairperson of the Land and Resource Management committee, described the ruling as the state's effort to find a balance between landowner rights and the needs of the oil and gas industry. The outcome of the decision, though problematic in the eyes of industry leaders, remains to be seen.

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