TransCanada Sued By Texas Landowners Over Keystone XL Pipeline

A group of landowners in Texas is suing TransCanada Corp. over the Keystone XL oil pipeline, saying that the company does not have the right to acquire their property by eminent domain. The group is challenging TransCanada’s status as a common carrier.

The lawsuit by the landowners is an obstacle for the phase of the pipeline that is planned from Cushing, Oklahoma to the Gulf coast of Texas. Another phase, from Alberta, Canada to Steele City, Nebraska, has been delayed by environmental concerns and still needs government approval. The finished pipeline will transport tar-sands oil from Canada to refineries on the Texas coast.

The lawsuit is being heard in the Ninth Court of Appeals in Beaumont, Texas, after District Court Judge Tom Rugg ruled against the landowners in September. A number of similar cases are making their way through the courts.

The landowners are hoping to build on the precedent of Texas Rice Land Partners Ltd. v. Denbury Green Pipeline-Texas LLC, a 2011 Texas Supreme Court case that opened the door for challenges to common-carrier status. In the Denbury case, a pipeline company tried to establish its status as a common carrier of carbon dioxide by filing an application with the Texas Railroad Commission. Landowners refused Denbury Green entry onto their land, and argued successfully in court that the company must do more to prove that it would be operating a pipeline that would be available for public use.