Keystone Pipeline and Eminent Domain in Texas

May 8th, 2012

What happens when a Texas farm-owner refuses to let TransCanada build the Keystone XL pipeline across his land? Eminent domain, of course:

But TransCanada did not go away. Their people kept coming back, offering more and more money.

Then on Aug. 26, 2011, Ms. Crawford received a letter from Keystone, TransCanada’s American subsidiary. The letter made a “final offer” of $21,626. Then, it said, “if Keystone is unable to successfully negotiate the voluntary acquisition of the necessary easements, it will have to resort to the exercise of its statutory right of eminent domain.”

“In other words,” Ms. Crawford said, “sign or we’ll take it.”

The deadline on the offer was three days later. When she read the letter, Ms. Crawford said, “I panicked. I didn’t know if that meant they were going to take just the pipeline easement, or the whole pasture, or the whole farm.”

Ms. Crawford, 52, who serves as the farm’s manager, called the rest of the family. They agreed to sign. “We thought that at least if we signed we’d have some say in what happened,” she said.

They called the TransCanada representative. “He told us that if we could come up with a contract that worked for both parties, they wouldn’t condemn the land,” Ms. Crawford said.

So she and her brother spent hours bent over the kitchen table going over the lease agreement, creating a version they could live with. She presented their version to TransCanada.

“I fully expected them to counter,” she said. “There were about five or six things we wanted, and we would have been happy to take one or two.”

Then, she said, TransCanada “went full radio silence.” The Crawfords never heard back from them — until October, when they got a letter saying their land had been condemned and a lease awarded to TransCanada.

The Times has a nice discussion of eminent domain law in the lonestar state:

But as the Crawfords discovered, when voluntary compensation agreements are not reached, Texas law allows certain private pipeline companies to use the right of eminent domain to force landowners to let pipelines through. This was true even for TransCanada, which has yet to get State Department permission to bring the Keystone XL across the Alberta border.

The Crawfords’ condemnation hearing happened in front of a district judge. They were not invited to that hearing — landowners in Texas do not get to go to the actual condemnation hearing. They are invited only to the next step, after the condemnation, when a three-person panel of county landowners decides on a value for the property being condemned.

John Pieratt, Ms. Crawford’s lawyer, told her not to go to that appraisal hearing.

“These landowners only look at value,” Mr. Pieratt said. “By the time you get there, a judge has already decided to condemn. There’s an argument that just by showing up you agree to their right to take the land.

“The only way Texas law allows you access to a judge is if you appeal the condemnation.”

So the Crawfords are appealing. Their hearing is scheduled for July 9.

Update: Ilya Somin points out that in some cases, broad eminent domain powers do not serve the interests of environmentalists (who tend to be very pro-Kelo):

Back in 2006, co-blogger Jonathan Adler and I published an article explaining the environmental dangers of allowing the use of eminent domain for private economic development projects, as the Supreme Court ruled in the Kelo case. At the time, some environmentalists pooh-pooed the article, and one group even declared our article the environmental “outrage of the month” (it must have been a slow month for actual pollution). Ironically, as Jonathan explained here, several environmental groups are now trying to use post-Kelo reform laws restricting economic development takings to block the Keystone takings.