T.B. Farms, Ltd. v. Grand Prix Pipeline, LLC

CourtCourt of Appeals of Texas
DecidedMarch 27, 2025
Docket01-23-00243-CV
StatusPublished

This text of T.B. Farms, Ltd. v. Grand Prix Pipeline, LLC (T.B. Farms, Ltd. v. Grand Prix Pipeline, 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.

Bluebook
T.B. Farms, Ltd. v. Grand Prix Pipeline, LLC, (Tex. Ct. App. 2025).

Opinion

Opinion issued March 27, 2025

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-23-00243-CV ——————————— T.B. FARMS, LTD., Appellant V. GRAND PRIX PIPELINE, LLC, Appellee

On Appeal from the 278th District Court Madison County, Texas Trial Court Case No. 18-15085

MEMORANDUM OPINION

This is a condemnation case in which a landowner challenges the right of a

pipeline company to condemn an easement running across the landowner’s land in Madison County, Texas pursuant to statutory “common carrier” condemnation

rights.1 See TEX. NAT. RES. CODE § 111.002. We affirm.

I. Background

An overview of the law governing common-carrier pipelines and their

powers of eminent domain is useful in understanding the background to this case.

Accordingly, we begin with an overview of the applicable law, followed by a

summary of the facts specific to this case.

A. Common-carrier pipelines

“[T]he Legislature grants common carriers the right to condemn private

property for the construction of pipelines that transport certain products. The

Texas Constitution, however, limits the exercise of this eminent domain power to

purposes that serve a ‘public use.’” Hlavinka v. HSC Pipeline P’ship, LLC, 650

S.W.3d 483, 487 & n.2 (Tex. 2022) (citing TEX. CONST. art. I, § 17(a)–(b)).

“Public use” is thus a “constitutional requirement that a pipeline common carrier

must fulfill to exercise eminent-domain authority.” Id. at 494.

Under the Natural Resources Code, a person qualifies as a common carrier if

it “owns, operates, or manages a pipeline or any part of a pipeline in the State of

1 Pursuant to its docket-equalization authority, the Supreme Court of Texas transferred this appeal from the Tenth Court of Appeals to this Court. See Misc. Docket No. 23-9017 (Tex. Mar. 21, 2023); see also TEX. GOV’T CODE § 73.001(a) (authorizing transfer of cases). We are unaware of any conflict between the precedent of that court and of this Court on any relevant issue. See TEX. R. APP. P. 41.3.

2 Texas for the transportation of crude petroleum to or for the public for hire, or

engages in the business of transporting crude petroleum by pipeline.” TEX. NAT.

RES. CODE § 111.002(1). Natural gas liquids (“NGLs”)—the materials being

transported through the pipeline at issue here—“are liquid hydrocarbons that fall

under the umbrella of crude petroleum.” Hlavinka, 650 S.W.3d at 493 n.29.

If an entity qualifies as a common carrier, it has the power of eminent

domain to condemn private property for the construction of a pipeline. “The

Legislature has cultivated two sources of condemnation authority for pipelines, one

in Business Organizations Code Section 2.105, and the other in Natural Resources

Code Chapter 111.” Id. at 491. These statutes “provide alternative paths” under

which a common carrier obtains the power of eminent domain. Id. at 492.

Under the Natural Resources Code, “[c]ommon carriers have the right and

power of eminent domain,” including the right to “enter on and condemn the land,

rights-of-way, easements, and property of any person or corporation necessary for

the construction, maintenance, or operation of the common carrier pipeline.” TEX.

NAT. RES. CODE § 111.019(a)–(b). Under the Business Organizations Code, an

entity “engaged as a common carrier in the pipeline business for the purpose of

transporting oil, oil products, gas, . . . liquefied minerals, or other mineral solutions

has all the rights and powers conferred on a common carrier by Sections 111.019–

111.022, Natural Resources Code.” TEX. BUS. ORG. CODE § 2.105.

3 Like all condemning authorities, common-carrier pipelines must follow the

procedures set out in Chapter 21 of the Texas Property Code to condemn property.

See TEX. PROP. CODE § 21.011; Amason v. Nat. Gas Pipeline Co., 682 S.W.2d 240,

242 (Tex. 1984). Chapter 21 establishes a “two-part procedure involving, first, an

administrative proceeding, and then if necessary, a judicial proceeding.” Id. at

241. In the administrative phase, the condemning authority is required to make

various disclosures and then to make a bona-fide offer to the landowner to acquire

the property voluntarily. See TEX. PROP. CODE §§ 21.0111–.0113.

If the condemnor and the landowner cannot agree on damages for a

voluntary taking, the condemnor must file a condemnation petition in the

appropriate court. See id. §§ 21.012–.013. The trial court then appoints three

disinterested real-property owners who reside in the county as special

commissioners, and the special commissioners conduct hearings, assess damages,

and file an award reflecting their opinion of the value of the land to be taken. See

id. §§ 21.014–.016. If satisfied with the special commissioners’ award, the

condemnor can pay the amount to the landowner or deposit that amount into the

registry of the court. See id. § 21.021(a).

Any party to the condemnation proceedings can object to the special

commissioners’ award by filing a written objection in the trial court. See id.

§ 21.018(a). Filing a timely objection vacates the special commissioners’ award

4 and converts the administrative proceeding into a judicial one, with the condemnor

as plaintiff and the landowner as defendant. Amason, 682 S.W.2d at 242. In that

event, the trial court must “cite the adverse party and try the case in the same

manner as other civil causes.” TEX. PROP. CODE § 21.018(b).

During this judicial phase of the condemnation proceedings, “the condemnor

may take possession of the condemned property pending the results of further

litigation if the condemnor”: (1) pays the landowner the amount awarded by the

special commissioners or deposits that amount into the registry of the court;

(2) deposits a surety bond into the registry of the court to cover any damages that

may be awarded by the court in excess of the amount awarded by the special

commissioners; and (3) executes a bond to cover any additional costs that may be

awarded to the landowner. Id. § 21.021(a).

B. The Grand Prix pipeline

The pipeline at the center of this case is the Grand Prix pipeline (“the

Pipeline”). It is an approximately 720-mile pipeline that transports NGLs across

the state, from the Permian Basin area of west Texas to Mont Belvieu.

The Pipeline was originally owned and operated by Targa NGL Pipeline

Company, LLC (“Targa NGL”), an affiliate of Targa Resources Corp. Targa NGL

applied for and received the necessary permits from the Texas Railroad

Commission for construction and operation of the pipeline, including a T-4 permit

5 classifying the pipeline as a common carrier.2 With the Railroad Commission’s

approval, Targa NGL later transferred all of the Pipeline’s mileage to another

Targa affiliate, Targa Downstream LLC, as the operator of the pipeline, and to

Appellee Grand Prix Pipeline, LLC (“Grand Prix”) as the owner and economic

operator of the pipeline. Grand Prix is a joint venture between Targa Resources

and Blackstone Energy Partners. Targa Downstream constructed the pipeline and

now runs its day-to-day operations, and Grand Prix is the owner of the pipeline.

Grand Prix filed tariffs with both the Railroad Commission and the Federal

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