Supreme Court Hits Home Run on Property Rights

By Terri Hall l April 25, 2012

There’s been lots of good news for landowners in recent weeks. First, the U.S. Supreme Court upheld the right of an Idaho couple, Michael and Chantell Sackett, to challenge the Environmental Protection Agency (EPA) that’s designated their home site in an established residential neighborhood as federal wetlands. The EPA threatened the couple with exorbitant fines in excess of $30,000 a day if they didn’t return the land to its original state prior to starting work on building their dream home.

The Sackett case has been watched closely for years, bringing new hope that landowners can indeed fight to protect their property rights after decades of horrible economic development & environmental laws and regulations as well as damaging case law, like the 2005 Kelo decision, that’s stacked the deck against private property rights.

The Sacketts said in a statement after their unprecedented Supreme Court victory: “We are very thankful to the Supreme Court for affirming that we have rights, and that the EPA is not a law unto itself and that the EPA is not beyond the control of the courts and the Constitution.”

They continued, “The EPA used bullying and threats of terrifying fines, and has made our life hell for the past five years. It said we could not go to court and challenge their bogus claim that our small lot had ‘wetlands’ on it. As this nightmare went on, we rubbed our eyes and started to wonder if we were living in some totalitarian country.”

‘Rolling’ shoreline doesn’t fly in Texas

Closer to home, the Texas Supreme Court also recently upheld its prior decision in the case of the Texas Land Commissioner Jerry Patterson against Gulf Coast property owner Carol Severance. The Severance case puts to rest this notion that an easement for a public beach cannot move when a tumultuous natural event dramatically shifts the shoreline onto private property.

Under his interpretation of the Texas Open Beaches Act, Patterson tried to assert that the public easement ‘rolls’ with the shoreline and argued that even though the landowner has no control over naturally occurring shifts in the shoreline (as was the case with her Galveston homes during Hurricane Rita in 2005), his office insisted that her home could be torn down, without compensation of any kind, to make way for the public beach.

The Supreme Court ruled in her favor in November 2010, and re-issued its favorable decision on March 30, 2012, despite granting a re-hearing last year. Another big S-C-O-R-E for Texas property rights.

Won’t let it rest

But a competing interest to property rights in Texas is the oil and gas industry. Devastated by the Texas Supreme Court’s Texas Rice Land Partners v. Denbury Green Pipeline Company decision last August, Denbury Green, backed by key players in the industry, is asking the Texas Supreme Court for another re-hearing of the case, even though the court recently denied the motion for a re-hearing and re-issued its decision in favor of landowners. This time, Denbury Green is narrowing its request to one thing: allow a private pipeline company ‘common carrier’ status, if it transports gas for a company’s own affiliates. If the court grants it, it would gut its entire decision and the basis for the decision in the first place.

At issue is whether or not a private pipeline company has the legal authority to exercise eminent domain. In Texas, a private pipeline company must meet the legal definition of a common carrier in order to gain eminent domain powers over landowners. Essentially, for a pipeline company to meet the legal definition of a common carrier it must allow third parties to transport their product through a common pipeline and sell it to or for the public for hire – that’s the key distinction between whether a pipeline meets the definition of a public use versus a private use.

The Texas Supreme Court ruled that a private company transporting its own product that eventually gets sold to the public is not a legitimate ‘public use’ nor does it meet the definition of a common carrier pipeline.

Justice Don Willet writing for the court states: “The Texas Constitution safeguards private property by declaring that eminent domain can only be exercised for ‘public use.’ Even when the Legislature grants certain private entities ‘the right and power of eminent domain,’ the overarching constitutional rule controls: no taking of property for private use. Accordingly, the Natural Resources Code requires so-called ‘common carrier’ pipeline companies to transport carbon dioxide ‘to or for the public for hire.’ In other words, a CO2 pipeline company cannot wield eminent domain to build a private pipeline.”

The Court also concludes: “…the fact that the pipeline ‘will be available for public use from the outset of its operation’…that eminent-domain power cannot extend to the taking of property for private use and that ‘[m]erely offering a transportation service for a profit does not distinguish a private use from a public use.’”

In an effort to get around this very clear decision by the court, Denbury Green seeks to undermine the entire decision by allowing a private pipeline company to masquerade as a ‘public use’ pipeline and gain common carrier status and thus eminent domain authority by simply gaming the system and transporting the company’s own product through its own affiliates. It’s hard to fathom the Texas Supreme Court buying this argument after it unequivocally stated that the Texas Constitution safeguards private property from eminent domain takings for private use, and if there is a conflict, the constitution controls, not statutes.

So, it’s clear the industry refuses to allow any precedents that grant property owners the right to challenge the exercise of eminent domain authority by a private entity. So regardless of what the Texas Supreme Court ultimately decides, many anticipate an all-out blood bath in the Texas Legislature next year between property rights advocates and the special interests wishing to exploit eminent domain for private gain.

Terri Hall is the founder of Texans Uniting for Reform and Freedom (TURF), which defends against eminent domain abuse and promotes non-toll transportation solutions. She’s a home school mother of eight turned citizen activist. Ms. Hall is also a contributor to

SFPPR News & Analysis.