Texas Supreme Court Tackles Major Land Condemnation Dispute

by Janet Elliott, Contributing Writer

AUSTIN (January 11) – A 2011 state law extending the power of electric utilities to condemn land took center stage Wednesday during Texas Supreme Court arguments in a case being closely watched by utilities and pipeline companies as well as private property rights advocates.

The case, Oncor Electric Delivery Co. v. Dallas Area Rapid Transit and Fort Worth Transportation Authority, grew out of a dispute over how much Oncor should pay for an aerial easement over the two commuter rail lines. After Oncor filed suit, the trial court appointed special commissioners to determine how much Oncor should pay to cross the lines.

DART and The T appealed the commissioners’ award to the county court-at-law and asked that the case be dismissed based on governmental immunity. The court refused to dismiss and the commuter rail lines appealed. The 5th Court of Appeals ruled in favor of the rail lines and dismissed the case.

Gibson Dunn partner James Ho, arguing for Oncor, told the court that House Bill 971 passed during the 2011 legislative session makes the dispute irrelevant. The bill extends the power of eminent domain for transmission facilities to include all public land, except land owned by the state.

After a few minutes of speaking about the bill with little questions from the justices, Ho took his advantage and ended his arguments well before his time was up.

Joycell Hollins, senior assistant legal counsel at DART, wasn’t so lucky. She faced questions from several justices about the new law. She said that the law should not be applied retroactively and that its language did not clearly waive governmental immunity from suit in a condemnation proceeding.

The only issue that the law makes clear, Hollins said, is that transmission companies have the power to condemn the land of a person or a corporation. “DART and The T are neither of those,” she said.

Hiram Sasser of the Plano-based Liberty Institute, argued as amicus curiae in support of Oncor. He said the court of appeals ruling is “Texas’ version of Kelo,” referring to the 2005 U.S. Supreme Court case that allowed a Connecticut woman’s home to be condemn for municipal economic development. Exemption public property from condemnation leads to greater taking of private property, Sasser said.

Even without HB 971, a century of law supports the right of electric utilities to condemn public land, Ho said.

DART and The T have agreed more than 800 times to allow Oncor to cross their lines, Hollins said, but must have right to effectively use their resources.

If the court of appeals ruling stands, Ho said during his rebuttal, those agreements becomes “800 opportunities for extortion.”

Requiring Oncor, which runs the largest transmission system in the state, to avoid DART lines criss-crossing Dallas would “turn our energy transmission into an obstacle course,” Ho said.

The case attracted amicus briefs from other electric utilities and pipeline companies, including the proposed $7 billion transcontinental Keystone pipeline.