Right-Way Sand Co. A/K/A Right Way Sand, Inc., RPRS Investments, Ltd. and Adloy, LLC v. South Texas Pipelines LLC and HSC Pipeline Partnership LLC

CourtCourt of Appeals of Texas
DecidedApril 30, 2024
Docket01-23-00573-CV
StatusPublished

This text of Right-Way Sand Co. A/K/A Right Way Sand, Inc., RPRS Investments, Ltd. and Adloy, LLC v. South Texas Pipelines LLC and HSC Pipeline Partnership LLC (Right-Way Sand Co. A/K/A Right Way Sand, Inc., RPRS Investments, Ltd. and Adloy, LLC v. South Texas Pipelines LLC and HSC Pipeline Partnership LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Right-Way Sand Co. A/K/A Right Way Sand, Inc., RPRS Investments, Ltd. and Adloy, LLC v. South Texas Pipelines LLC and HSC Pipeline Partnership LLC, (Tex. Ct. App. 2024).

Opinion

Opinion issued April 30, 2024

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-23-00573-CV ——————————— RIGHT-WAY SAND CO. A/K/A RIGHT WAY SAND, INC., RPRS INVESTMENTS, LTD., AND ADLOY, LLC, Appellants V. SOUTH TEXAS PIPELINES LLC, Appellee

On Appeal from the County Civil Court at Law No. 2 Harris County, Texas Trial Court Case No. 1162308

MEMORANDUM OPINION

Texas law permits private entities that are “common carriers” to exercise the

right and power of eminent domain, or condemnation. See TEX. NAT. RES. CODE

§ 111.019(a); TEX. BUS. ORGS. CODE § 2.105. In this case, appellee South Texas

Pipelines LLC (“STX”) sued the appellants, Right-Way Sand Co., a/k/a Right Way Sand, Inc., RPRS Investments, Ltd., and Adloy, LLC (collectively, “appellants” or

“landowners”), to exercise a statutory power of eminent domain in connection with

the construction of a new pipeline. STX alleged that the pipeline would be a

common carrier of polymer grade propylene (“PGP”), and it sought an easement

over appellants’ property for the pipeline.

In the trial court, the appellants filed a plea to the jurisdiction, in which they

argued that STX had not satisfied the statutory requirements for exercising the

power of eminent domain. The appellants also moved for a temporary and

permanent injunction. In response to the plea to the jurisdiction, STX filed a

traditional and no-evidence motion for partial summary judgment on the question

of whether it had satisfied the statutory requirements for exercising the power of

eminent domain.

The trial court considered the motions, the plea to the jurisdiction and

responses, and the request for injunction. The court granted partial summary

judgment in favor of STX, and it denied the appellants’ plea to the jurisdiction and

request for injunction. The appellants filed this interlocutory appeal from the order

denying their request for injunctive relief.

The appellants argue that the trial court erred in its determination that STX is

a common carrier and that the court abused its discretion by denying their request

for an injunction. STX asserts that it satisfies the statutory requirements for

2 exercising the power of eminent domain, and, therefore, the trial court did not

abuse its discretion by denying the request for an injunction. STX has also filed a

motion to dismiss this appeal, arguing that it is an improper attempt to seek

interlocutory review of the trial court’s partial summary judgment, which is not an

appealable interlocutory order.

We deny the motion to dismiss. Because we conclude that the appellants did

not demonstrate their entitlement to a temporary injunction, we hold that the trial

court did not abuse its discretion by denying injunctive relief. We affirm the trial

court’s order.

Background

STX is a wholly-owned subsidiary of Enterprise Products Partners L.P.

(“Enterprise”). The appellants in this case are the corporate owners of adjacent

properties, where STX wanted to situate a new pipeline to carry PGP from

Enterprise’s Mont Belvieu facility in Harris County to another Enterprise facility.

In December 2020, STX filed original petitions for condemnation against each of

the appellants. The appellants have common ownership and representation, and the

cases were later consolidated in the trial court.

STX alleged that it was expanding its “common carrier pipeline system” by

adding a “new common carrier pipeline” for transporting “liquefied mineral

derived from oil and, or gas through refining, processing or other methods, and

3 including without limitation . . . propylene . . . or mixtures [of hydrocarbons] . . . .

STX alleged that the new pipeline would pass “on, over, across and through

Chambers and Harris Counties.” STX alleged that the new pipeline would

transport hydrocarbons “owned by others for a fee on, over, across, and through”

Chambers and Harris counties. It also said that “[s]hippers on the [new pipeline]

will retain title to the [hydrocarbons] in the [new pipeline] and will pay [STX] a

transportation fee.” Finally, STX alleged:

[STX], as the owner[] of the Pipeline[] [is a] common carrier[] as defined in the Texas Business Organizations Code, the Texas Natural Resources Code, and the common law, and as such, ha[s] the right and power, in either and, or both capacities, to enter on, condemn, and appropriate land, rights-of-way, easements, and other property of any person or corporation as may be necessary for the construction, maintenance, or operation of the Pipeline[].

The appellants answered with a general denial and a plea to the jurisdiction.

They argued that the trial court lacked jurisdiction because STX had no right to

condemn, there was no public necessity for the project, the project was not for a

public purpose, STX was not a common carrier, and STX could not condemn for

the product to be transported in the pipelines.

In response to the plea to the jurisdiction, STX filed a combined traditional

and no-evidence motion for summary judgment. STX asserted that it was entitled

to exercise the power of eminent domain as a matter of law and that the only issue

4 to be resolved was the amount of compensation.1 Relying on a Texas Supreme

Court opinion, STX argued that it was a common carrier because the product to be

transported in the new pipeline, PGP, was an oil product for the purpose of section

2.105 of the Business Organizations Code.2 STX also argued that it was entitled to

1 STX attached the following summary-judgment evidence to its motion:

• An affidavit from Thomas McNeely, who was, among other things, the custodian of the records of STX;

• Texas Railroad Commission permit applications and pipeline operating permits, which were issued to Enterprise Products, as operator, (“T-4 permits”), and which show the new pipeline and indicate that the pipeline is a common carrier;

• An assignment of an existing transportation services agreement (“TSA”) between Equistar Chemicals, LP (“Equistar”) and Enterprise Products Operating LLC (“EPO”), a company affiliated with STX but not the actual TSA;

• A tariff for intrastate transportation of propylene from Mont Belvieu, Texas to Webster, Texas, filed on July 1, 2022;

• A printout from the Texas Comptroller’s Online Eminent Domain Database stating that STX “has reported to the Comptroller that it possesses eminent domain authority” under several statutes including the Texas Business Organizations Code section 2.105 and The Texas Natural Resources Code section 111.002; and

• STX’s “Second Amended Written Consent of the Board of Directors in Lieu of an Organizational Meeting,” in which the board of directors “determined that a public use and purpose” as well as “a necessity” exist for the “acquisition, by acquire by negotiation or condemnation” easements or other property interests in the appellants’ properties for the new pipeline. 2 See Hlavinka v. HSC Pipeline P’ship, LLC, 650 S.W.3d 483, 488 (Tex. 2022) (holding that Texas Business Organizations Code section 2.105 “grants common- carrier eminent domain authority for the construction and use of a polymer-grade propylene pipeline”). To show that the pipeline would serve the public, STX relied 5 a no-evidence summary judgment because the landowners had no evidence to

support a possible affirmative defense that STX’s determinations of public use and

necessity were arbitrary and capricious, an abuse of discretion, or fraudulent.

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Right-Way Sand Co. A/K/A Right Way Sand, Inc., RPRS Investments, Ltd. and Adloy, LLC v. South Texas Pipelines LLC and HSC Pipeline Partnership LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/right-way-sand-co-aka-right-way-sand-inc-rprs-investments-ltd-and-texapp-2024.