Eminent Domain Might Be Losing Power in Texas

Eminent domain in Texas might be redefined if a recent court ruling is upheld by higher courts. The court considered the remainder value of the Donnell’s family lands in McMullen County, TX and not the pipeline right-of-way alone. The decision required the Eagle Ford pipeline company to compensate the family for depreciation of all lands.  That includes land not directly impacted by the pipeline.

The family successfully argued that the land lost value due to its proximity to the pipeline. Essentially, they argued more than just the right-of-way was affected by the pipeline and additional compensation should be required. The pipeline company has been ordered to pay the family $600,000, but the decision will be challenged in higher courts before we get a final decision.

The question wasn’t whether LaSalle Pipeline LP — which has the right of eminent domain — could lay a 16-inch, 52-mile pipeline that would cross two tracts of McMullen County land owned by Donnell Lands LP, a family partnership.

The biggest issue was whether the value of the rest of the ranchland would be affected by the pipeline’s presence.

The company said no. But the landowners said yes, and a trial jury agreed with them to the tune of more than $600,000.

That decision has been winding its way through the Texas court system, and along with some legislative changes that went into effect in September, could represent a small step in giving landowners a larger voice in eminent domain battles.

Read more at mysanantonio.com

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Kenneth E. DuBose

Kenneth E. DuBose

Kenneth DuBose is the past President of Cheyenne Minerals Inc., an independent oil and gas operator. He began his energy industry career with ARCO Oil & Gas. Mr. DuBose then directed development of natural gas storage projects with Tejas Power Corp. He was a founding member of U.S. Minerals, (acquired by Torch Energy in 1999) a provider of internet based education for America’s mineral owners. Mr. DuBose holds a BS in Petroleum Engineering from Mississippi State University. He has served on various industry steering committees, non-profit boards, and is an active member of the Society of Petroleum Engineers, the National Association of Royalty Owners, the American Association of Professional Landmen, as well as being a Registered Investment Advisor. He writes on topics of oil and gas investing, wealth management and personal finance, having appeared in the Wall Street Journal, Kiplinger’s, Kiplinger’s Personal Finance, Houston Business Journal, Financial Advisor and various radio and TV outlets.

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