Face Challenges Confidently

310 Fort Worth & W. R.R. Co., v. Enbridge Gathering (NE Tex. Liquids), L.P.

Tuesday, September 8th, 2015

Richard F. Brown

The following is not a legal opinion. You should consult your attorney if the case may be of significance to you.
Fort Worth & Western Railroad Co. v. Enbridge Gathering (NE Texas Liquids), L.P., 298 S.W.3d 392 (Tex. App.—Fort Worth 2009, no pet.), held that gas utilities and pipeline companies have the power to condemn rail district property and run pipelines underneath railroads. Three utility companies sought easements to lay pipelines under railroad tracks owned by Cen-Tex Rural Rail Transportation District (“Cen-Tex”). When the utility companies were unable to negotiate a purchase of easements from Cen-Tex, they filed condemnation proceedings. Jurisdiction was challenged on the theory that the utility companies had no authority to condemn rail district property or lay pipelines underneath existing railroads.
Section 181.004 of the Texas Utilities Code provides “[a] gas or electric corporation has the right and power to enter on, condemn, and appropriate the land, right-of-way, easement or other property of any person or corporation.” Similarly, the Texas Natural Resources Code provides “a common carrier may 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.”
It was claimed that Cen-Tex, a rail district, was not a “person” within the meaning of the statutes, and, therefore, the utility companies had no power to condemn Cen-Tex’s property. The court, however, considered the Code Construction Act’s definition of person, which includes governmental subdivisions, as well as the Rail District Act’s express pronouncement that a rail district is a “public body and a political subdivision of the state” and held “Cen-Tex is a ‘person’ whose property may be condemned by a gas corporation or common carrier.”
It was also argued that Texas Utilities Code Section 181.005 does not allow utility companies to lay pipelines underneath railroads. In support of that argument, Cen-Tex cited former Section 181.005, which stated that “[a] gas corporation has the right to lay and maintain lines over and across a public road, a railroad, railroad right-of-way, an interurban railroad, a street railroad, a canal or stream, or a municipal street or alley” and did not include “under.” The court considered the legislative intent behind Section 181.005 and the 1911 version of the statute which stated “pipes may be placed under the ground, as the exigencies of the case may require.” The court stated “[c]onstruing the utilities code to exclude placement of pipelines under a railroad would not only thwart the purpose of the statute, it would lead to the absurd result of allowing pipelines over, but not under, railroads-even when an underground pipeline would be the safest and most suitable placement of the pipeline.”
The court also considered Texas Utilities Code Section 181.022 which “grants gas corporations the express authority to lay and maintain pipelines ‘through, under, along, across, or over … public highways’” and Article X Section 2 of the Texas Constitution which “declares railroads  to  be  ‘public  highways’”  in  holding  that  utility  companies  are  authorized  to  lay pipelines under railroads.
The significance of this case is the court’s holding that gas and pipeline companies may condemn railroad property for pipeline easements and lay pipelines underneath existing railroads.