By Jennifer Dorsett
Field Editor
After years of legal wrangling, a Brazoria County landowner recently won an eminent domain abuse case against a large pipeline company.
In 2016, Terry Hlavinka was approached by HSC Pipeline, a subsidiary of Enterprise Products Partners, to acquire a 30-foot easement to build a transmission line.
Hlavinka’s land lies along Chocolate Bayou in eastern Brazoria County. There are more than two dozen different transmission lines running across his 16,000-acre property, so it wasn’t the first time he dealt with pipeline companies seeking to use eminent domain.
But in this instance, despite evidence to the contrary, HSC Pipeline claimed common carrier status, which would allow the company to use eminent domain to obtain the property through condemnation proceedings instead of paying fair market value for the land.
In Brazoria County Court, Hlavinka challenged both HSC’s eminent domain authority and the amount of damages they offered to pay him for the property—only $132,000.
He had initially sought $3.4 million for the pipeline easement.
“Mr. Hlavinka had negotiated pipeline easements before this, and he knew what his land was worth,” Texas Farm Bureau (TFB) Associate Legislative Director Marissa Patton said. “And while it may seem at first glance like he was asking for a lot of compensation, this is the forced taking of land in perpetuity. Once the deal is signed, that land’s use by Terry, his family or any future owner is gone forever. Land is one of those things Texans really hold dear, and companies should be willing to pay fairly for the use of someone else’s property, especially when they weren’t exactly invited to come build on that land in the first place.”
The pipeline, called the Oyster Creek Lateral Project, carries propylene along a 49-mile route from Texas City to a petrochemical plant in Freeport owned by Braskem America, an Enterprise customer. Hlavinka alleged under Texas law, a pipeline must deliver product to a third party, such as the public, for it to be considered a common carrier.
Unfortunately, Patton said the trial court denied Hlavinka’s ability to challenge HSC’s eminent domain status and excluded evidence of comparable sales of easements made through private, free market transactions.
“That’s just not respective of the free market process,” Patton said. “The trial court clearly did not take into account everything private property rights should stand for—the ability to negotiate whatever price you wish on property you rightfully own.”
Hlavinka promptly appealed the court’s condemnation proceedings.
Recently, a Texas court of appeals reversed a portion of the trial court’s judgement, ruling the evidence of voluntary sales is relevant for purposes of establishing fair market value.
Allowing evidence of comparable sales when determining valuation is significant because it proves what the market is truly willing to pay, Patton added.
Easements negotiated by Hlavinka in the past for similar, private non-common carrier pipelines were worth $3.4 million and $2 million.
“HSC will be forced to take the comparable sales into account when re-negotiating the deal,” Patton said “So, it’s a pretty big win for the Hlavinka family.”
It’s another example of a pipeline company abusing the state’s eminent domain laws in an attempt to claim private property at unfair prices, TFB Director of Government Affairs Regan Beck said.
TFB, which has long been fighting for eminent domain reform and fair treatment of private property owners, collaborated with Texas and Southwestern Cattle Raisers Association to file an amicus curiae brief in the case.
“Allowing evidence of comparable sales is one of many commonsense reforms Texas Farm Bureau has pushed for at the Texas Legislature,” Beck said. “Texas landowners are frustrated with the heavy grip that oil and gas pipelines have on private property rights. In the Hlavinkas’ case, all they were asking for was the going rate in their area, but this pipeline company sought to undermine their ability to negotiate fairly. Thankfully, the appeals court saw the egregiousness of this and reversed the trial court’s decision.”
It was a big win, but justice comes with a price. Hlavinka has been fighting the pipeline company for four years now, investing time, energy and funds, and it’s still not over.
“It’s another example of why Texas Farm Bureau will keep fighting for eminent domain reform and private property rights,” he said. “No one should have to spend that much time and money just to get a company claiming eminent domain authority to do what’s right and fair.”
Click here for more information about TFB’s eminent domain reform efforts.