the Crawford Family Farm Partnership v. TransCanada Keystone Pipeline, L. P. , 409 S.W.3d 908 ( 2013 )

In The
Court of Appeals
Sixth Appellate District of Texas at Texarkana
No. 06-12-00113-CV
THE CRAWFORD FAMILY FARM PARTNERSHIP, Appellant
V.
TRANSCANADA KEYSTONE PIPELINE, L.P., Appellee
On Appeal from the County Court at Law
Lamar County, Texas
Trial Court No. 80810
Before Morriss, C.J., Carter and Moseley, JJ.
Opinion by Justice Moseley
OPINION
I. Background
This is a case regarding an exercise of the right of eminent domain by a nongovernmental
entity. Historically, Americans in general and Texans in particular have placed great value on
individual property rights and looked askance at the exercise of the power of eminent domain.
Both Amendment V of the United States Constitution and Article I, Section 17 of the Texas
Constitution prohibit the taking of private property without just compensation. As recently as
2009, the voters of Texas were presented with a proposed amendment to the State Constitution,
which appeared on the ballot as Proposition Eleven, entitled, “Limits on power of eminent
domain.” According to the Office of the Secretary of State of Texas, the proposition passed by a
vote of 81.01 percent in favor and 18.98 percent opposed. 1
Even so, from an early date in its history, Texas courts have recognized that the
Legislature may delegate its power of eminent domain to nongovernmental entities. See Buffalo
Bayou, Brazos & Colo. R.R. Co. v. Ferris, 26 Tex. 588, 588 (1863). The scope of the delegation
of the government’s power of eminent domain rests entirely with the elected representatives of
the people, the State Legislature. Imperial Irr. Co. v. Jayne, 104 Tex. 395, 417 (1911).
The crux of this lawsuit lies with the contention by The Crawford Family Farm
Partnership (Crawford) that the pipeline planned by TransCanada Keystone Pipeline, L.P. 2
(TransCanada) fails to sufficiently fall within the specifications made by the Legislature to
1
Race Summary Report, 2009 Constitutional Amendment Election, TX. SEC’Y OF STATE,
http://elections.sos.state.tx.us/elchist.exe (select “2009 Constitutional Election” in drop-down menu; then select
“Statewide Race Summary” radio button; then follow “Submit” hyperlink) (Nov. 3, 2009).
2
TransCanada’s petition was filed by and through its general partner, TransCanada Keystone Pipeline, GP, LLC.
2
authorize TransCanada to exercise the power of eminent domain to compel the grant of a
pipeline right-of-way over Crawford lands.
TransCanada filed its original statement and petition for condemnation in the County
Court at Law for Lamar County, wherein it sought to exercise the power of eminent domain to
acquire an easement for a buried pipeline for the transmission of crude petroleum across rural
real property owned by Crawford. The ensuing proceedings and Crawford’s spokesperson have
attracted substantial attention. 3 The Keystone Pipeline system owned by TransCanada as
projected contemplates the installation and operation of a network of over 2,100 miles of
pipeline for the transmission of crude petroleum which originates in Canada, traversing markets
within the midwest United States to Cushing, Oklahoma. The crude petroleum which is gathered
at Cushing, Oklahoma, enters a portion of the Keystone Pipeline System known as the Gulf
Coast Project, which crosses over into Texas to its ultimate destination in the Port Arthur, Texas,
area. 4 It is this Gulf Coast Project portion of the pipeline that has been planned to traverse the
Crawford property in Lamar County.
TransCanada, under authority statutorily granted to common carriers, seeks to invoke the
power of eminent domain for the purpose of obtaining the necessary easements and rights-of-
way to construct a buried pipeline thirty-six inches in diameter across the Crawford property.
After TransCanada filed its papers seeking the right to cross the Crawford property, the trial
court appointed three special commissioners to assess the condemnation damages due the
3
Megan James, Checking the Box is Not Enough: The Impact of Texas Rice Land Partners, Ltd. v. Denbury Green
Pipeline-Texas and Texas’s Eminent Domain Reforms on the Common Carrier Application Process, 45 TEX. TECH
L. REV. 959 (2013).
4
Because the Gulf Coast Project does not cross an international border, it does not require a presidential permit.
3
landowner. After due notice of a hearing (which Crawford apparently opted to not attend), the
commissioners awarded the easements to TransCanada and assessed condemnation damages of
$10,395.00. 5 Crawford appealed the commissioner’s award in the County Court at Law, and, on
February 21, 2012, a notice was sent by the clerk that the matter had been set for a bench trial
April 30, 2012. 6
Thereafter, TransCanada filed a combined traditional and no-evidence motion for
summary judgment. In its motion for summary judgment, TransCanada alleged that its summary
judgment proof established, as a matter of law, its common carrier status with the right of
eminent domain; the motion also alleged that there was no evidence to support Crawford’s
counterclaims of gross negligence and fraud.
Crawford responded to TransCanada’s motion for summary judgment by raising a new
argument—that because TransCanada is an interstate pipeline which contemplates the
transmission of crude oil, it is not a common carrier under Section 111.002(1) and (6) of the
Texas Natural Resources Code. See TEX. NAT. RES. CODE ANN. § 111.002(1), (6) (West 2011). 7
5
TransCanada deposited double the damage amount into the registry of the court.
6
This trial date was ultimately continued to September 2012. In the interim, Crawford filed a document with this
Court nominally seeking mandamus relief but, alternatively, asking this Court to treat the document as its attempt to
perfect an interlocutory appeal and as its appellate brief. This Court denied the petition for writ of mandamus, and
the document was treated as a notice of appeal from the trial court’s order denying a temporary injunction. This
appeal was dismissed for want of prosecution.
7
Although Crawford had previously asserted multiple other claims and defenses (including alleged failures to
comply with requirements of the Texas Property Code, to file permits, to provide a required material safety data
sheet report, and to negotiate in good faith, along with claims that the proposed pipeline will not be transporting
crude petroleum, that there had been a denial of a required presidential permit for the pipeline, and that TransCanada
had violated the Texas Antiquities Code and been guilty of gross negligence, entitling Crawford to punitive
damages), these claims were addressed in neither Crawford’s summary judgment response nor its brief on appeal.
See San Jacinto River Auth. v. Duke, 783 S.W.2d 209–10 (Tex. 1990) (per curiam) (it is “well-established rule that
4
While the summary judgment motion was pending, Crawford filed its fourth motion for
continuance, asking for an extension of time after substitution of counsel. 8 The trial court, while
denying the continuance motion to the extent that Crawford sought additional time to conduct
discovery, amend or supplement pleadings, or designate experts, granted it in all other respects,
extending the deadlines for the filing of Daubert 9 challenges and dispositive motions.
In addition, the trial court’s order rescheduled the trial for September 4, 2012. A final
pretrial hearing was rescheduled for August 10. On that date, Crawford filed a motion to dismiss
for want of jurisdiction, this motion being based on the same argument Crawford had advanced
in its response to TransCanada’s motion for summary judgment. Crawford’s motion to dismiss
was heard at the pretrial hearing, together with TransCanada’s motions for summary judgment 10
and for writ of possession. The trial court entered an order granting TransCanada a writ of
possession, finding TransCanada had “satisfied all of the requirements of § 21.021 of the Texas
Property Code.” 11
grounds of error not asserted by points of error or argument in the court of appeals are waived”) (citing Gulf Coast
State Bank v. Emenhiser, 562 S.W.2d 449, 452–53 (Tex. 1978)).
8
On June 12, 2012, the trial court entered an order substituting Wendi Hammond as counsel for Crawford.
Hammond replaced John Pieratt and Mark Lesher.
9
Daubert v. Merrel Dow Pharms., Inc., 509 U.S. 579 (1993).
10
At the pretrial hearing, the parties stipulated the amount of damages as determined by the special commissioners—
$10,395.00—thus, rendering moot TransCanada’s Daubert motions. The parties further stipulated that Crawford
was to withdraw its objection to TransCanada’s petition under the Texas Antiquities Code.
11
This section of the Texas Property Code permits the condemnor to take possession of the condemned property
after the special commissioners have made an award in a condemnation proceeding, pending the results of further
litigation, when the section’s requirements have been satisfied. TEX. PROP. CODE ANN. § 21.021 (West 2004).
5
The trial court entered an order on August 27 that denied Crawford’s motion to dismiss,
which claimed the trial court lacked jurisdiction to hear TransCanada’s petition. On the same
date, the trial court entered a summary judgment order granting TransCanada’s motion for
combined traditional and no-evidence summary judgment. The trial court entered its amended
final judgment September 4, awarding TransCanada a fifty-foot-wide, nonexclusive, permanent
easement and a right-of-way to access the easement. 12 The judgment specifically included the
following:
TransCanada has the legal capacity to bring this proceeding and to recover the
easements sought; TransCanada is a common carrier; [Crawford] is the owner of
the Property; that there is a public necessity for the Easements along, across, and
over the Property sought in this proceeding by TransCanada and that
TransCanada has strictly complied with the statutes authorizing this
condemnation proceeding.
On appeal, Crawford contends that (1) the trial court erred in denying its motion to
dismiss for want of jurisdiction, (2) the trial court erred in granting TransCanada’s combined
traditional and no-evidence motion for summary judgment, and (3) the trial court erred by
denying, in part, Crawford’s fourth motion for a continuance.
12
The crux of the final judgment sets forth the respective rights and liabilities of the parties regarding the easement.
An amended final judgment was entered on September 4. The only apparent change is the attachment of Exhibit
“A,” which includes easement plats, various legal descriptions, and a survey.
6
II. Analysis
A. The Trial Court Correctly Denied Crawford’s Motion to Dismiss for Lack of
Jurisdiction
1. Standard of Review
A plea to the jurisdiction challenges the trial court’s authority to determine the subject
matter of the action. Harris County v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004). Whether a trial
court has subject-matter jurisdiction is a question of law that we review de novo. Tex. Dep’t of
Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). “Whether a pleader has alleged
facts that affirmatively demonstrate a trial court’s subject matter jurisdiction is a question of law
reviewed de novo.” Id. When a plea to the jurisdiction challenges the existence of jurisdictional
facts, we consider relevant evidence submitted by the parties when necessary to resolve the
jurisdictional issues. See Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000)
(confining evidentiary review of evidence relevant to jurisdictional issues). We take as true all
evidence favorable to the nonmovant, indulge every reasonable inference, and resolve any doubts
in the nonmovant’s favor. Miranda, 133 S.W.3d at 228. If the evidence creates a fact question
regarding the jurisdictional issue, then the trial court cannot grant the plea to the jurisdiction, and
the fact question will be resolved by the fact-finder. Id. at 227–28; Bland, 34 S.W.3d at 555. If
the relevant evidence is undisputed or fails to raise a fact question on the jurisdictional issue,
however, the trial court rules on the plea to the jurisdiction as a matter of law. Miranda, 133
S.W.3d at 228; Bland, 34 S.W.3d at 555. This standard “generally mirrors that of a summary
judgment under [Rule 166a(c)].” Miranda, 133 S.W.3d at 228.
7
2. The Jurisdictional Challenge
Only an entity with eminent domain authority may condemn real property. TEX. PROP.
CODE ANN. § 21.012 (West Supp. 2012). “District courts and county courts at law have
concurrent jurisdiction in eminent domain cases.” TEX. PROP. CODE ANN. § 21.001 (West 2004).
Crawford’s jurisdictional claim is based on the premise that TransCanada does not possess the
power of eminent domain; accordingly, Crawford contends that the trial court lacked the
jurisdiction to hear this case. In Texas, “[c]ommon carriers have the right and power of eminent
domain.” TEX. NAT. RES. CODE ANN. § 111.019(a) (West 2011). In the exercise of that power,
“a common carrier may enter on and condemn the land, rights-of-way, easements, and property
of any person or corporation necessary for the construction, maintenance, or operation of the
common carrier pipeline.” TEX. NAT. RES. CODE ANN. § 111.019(b) (West 2011). Thus,
TransCanada’s right of eminent domain depends on its status as a common carrier under Texas
law. 13 “It is required that the condemnor have the statutory authority to condemn as a
prerequisite to invoking the court’s jurisdiction.” Gulf Ref. Co. v. A.F.G. Mgmt. 34 Ltd., 605
S.W.2d 346, 347 (Tex. App.—Houston [14th Dist.] 1980, writ ref’d n.r.e.), overruled on other
grounds by Lewis v. Blake, 876 S.W.2d 314, 315 (Tex. l994) (per curiam). Crawford asks this
Court to address the sole issue of whether TransCanada qualifies as a Texas common carrier
endowed with eminent domain authority “that wields the enormous power to condemn and seize
13
“Unlike gas pipelines, oil pipelines lack the federal eminent domain authority and federal preemptive rights that
accompany the FERC natural gas certificate process . . . .” Christopher J. Barr, Growing Pains: FERC’S Responses
to Challenges to the Development of Oil Pipeline Infrastructure, 28 Energy L.J. 43, 49–50 (2007). Accordingly,
eminent domain is subject to “a patchwork quilt of differing state laws.” Id. For example, Ohio only grants eminent
domain authority to crude pipelines, while Connecticut provides no eminent domain authority to oil pipelines. Id. at
50 n.30.
8
private property against the will of a landowner.” Crawford maintains that (1) because a
common carrier is subject to the provisions of Chapter 111 of the Texas Natural Resources Code
and TransCanada is not subject to (all of) those provisions, it is not a common carrier,
(2) TransCanada is not a common carrier because the Texas Railroad Commission determined
that it lacks jurisdiction over TransCanada’s interstate pipeline, and (3) legislative history
supports Crawford’s arguments.
3. TransCanada Is a Common Carrier With the Right of Eminent
Domain
a. TransCanada Is Subject to the Applicable Provisions of
Chapter 111
TransCanada relies on Section 111.002(1) of the Texas Natural Resources Code as
authority for its claim to common carrier status. This section provides,
A person is a common carrier subject to the provisions of this chapter if it:
(1) owns, operates, or manages a pipeline or any part of a pipeline
in the State of Texas for the transportation of crude petroleum to or for the
public for hire, or engages in the business of transporting crude petroleum
by pipeline . . . .
TEX. NAT. RES. CODE ANN. § 111.002(1). 14 Crawford contends that even though “common
carrier” is broadly defined, eminent domain authority is limited only to common carriers subject
14
TransCanada also relies on Section 2.105 of the Texas Business Organizations Code for its claim of eminent
domain authority. Section 2.105 provides that a corporation or other specified entity “engaged as a common carrier
in the pipeline business for the purpose of transporting oil, oil products, . . . or other mineral solutions has all the
rights and powers conferred on a common carrier by Sections 111.019–111.022, Natural Resources Code.” BUS.
ORG. CODE ANN. § 2.105 (West 2012). This provision does not, however, address the issue of how one qualifies as
a common carrier. Crawford does not address this provision in its brief. TransCanada points out that this provision
does not distinguish between intrastate and interstate carriers.
9
to each of the provisions of Chapter 111. 15 In support of this contention, Crawford relies on the
language preceding subsection (1) stating that “[a] person is a common carrier subject to the
provisions of this chapter.” This phrase, as interpreted by Crawford, limits common carrier
status to entities subject to all of the provisions of Chapter 111. Such an interpretation, Crawford
contends, is consistent with the concept that the legislative grant of eminent domain power is to
be strictly construed. Tex. Rice Land Partners, Ltd. v. Denbury Green Pipeline-Tex., LLC, 363
S.W.3d 192, 198 (Tex. 2012) (“strict compliance with all statutory requirements is required. . . .
[I]n instances of doubt as to the scope of the power, the statute granting such power is ‘strictly
construed in favor of the landowner and against those corporations and arms of the State vested
therewith.’”) 16 (quoting Coastal States Gas Producing Co. v. Pate, 309 S.W.2d 828, 831 (Tex.
1958)) (citations omitted). Crawford contends that because TransCanada is an interstate
pipeline, it cannot subject itself to all of the provisions of Chapter 111. 17 These “other
15
It is undisputed that TransCanada engages in the business of transporting crude petroleum by pipeline or part of a
pipeline and engages in the business of transporting crude petroleum by pipeline. Crawford disputes TransCanada’s
“public use” status.
16
State v. Bristol Hotel Asset Co., 65 S.W.3d 638, 640 (Tex. 2001), is cited in support of the proposition that “strict
compliance with all statutory requirements is required.” (“Proceedings to condemn land are special in character, and
the party attempting to establish its right to condemn must show strict compliance with the law authorizing private
property to be taken for public use.”).
17
Crawford provides examples of “other provisions” of Chapter 111 to which it claims TransCanada either cannot be
subjected or with which it has failed to indicate compliance:
No person, including a common carrier, may transport crude oil or petroleum in this state unless
the crude oil or petroleum has been produced or purchased or both in accordance with the laws of
this state or a rule of the commission made under those laws, or both.
TEX. NAT. RES. CODE ANN. § 111.004 (West 2011).
A pipeline subject to the provisions of this chapter not exempt under Section 111.003, which is
used in connection with the business of purchasing or purchasing and selling crude petroleum, or
10
in the business of transporting coal, carbon dioxide, hydrogen, feedstock for carbon gasification,
the products of carbon gasification, or the derivative products of carbon gasification in whatever
form by pipeline for hire in Texas, shall be operated as a common carrier and shall be subject to
the jurisdiction of the commission.
TEX. NAT. RES. CODE ANN. § 111.013 (West 2011).
Common carriers shall make and publish their tariffs under rules prescribed by the commission.
TEX. NAT. RES. CODE ANN. § 111.014 (West 2011).
Subject to the law and the rules prescribed by the commission, a common carrier shall receive and
transport crude petroleum delivered to it for transportation and perform its other related duties
without discrimination.
TEX. NAT. RES. CODE ANN. § 111.015 (West 2011).
(a) A common carrier in its operations as a common carrier shall not discriminate
between or against shippers with regard to facilities furnished, services rendered, or rates charged
under the same or similar circumstances in the transportation of crude petroleum.
(b) A common carrier shall not discriminate in the transportation of crude petroleum
produced or purchased by itself directly or indirectly.
TEX. NAT. RES. CODE ANN. § 111.016(a), (b) (West 2011).
(a) No common carrier in its operations as a common carrier may charge, demand,
collect, or receive either directly or indirectly from anyone a greater or lesser compensation for a
service rendered than from another for a like and contemporaneous service.
TEX. NAT. RES. CODE ANN. § 111.017(a) (West 2011).
(a) A common carrier shall exchange crude petroleum tonnage with each like
common carrier.
TEX. NAT. RES. CODE ANN. § 111.023(a) (West 2011).
(a) No common carrier may abandon any of its connections or lines except under
authority of a permit granted by the commission or with written consent of the owner or duly
authorized agent of the wells to which connections are made.
(b) Before granting a permit to abandon any connection, the commission shall issue
proper notice and hold a hearing as provided by law.
TEX. NAT. RES. CODE ANN. § 111.025(a), (b) (West 2011).
11
provisions,” Crawford contends, necessarily become qualifying elements which limit the basic
common carrier definition set forth in Section 111.002.
Crawford focuses its argument on Sections 111.014 (“Common carriers shall make and
publish tariffs under rules prescribed by the commission”) and 111.181 (“The commission shall
establish and promulgate rates of charges for . . . transport[ ] and deliver[y of] crude petroleum
by common carriers . . . .”). See TEX. NAT. RES. CODE ANN. §§ 111.014, 111.181. TransCanada
cannot comply with these provisions under any circumstance, Crawford contends, because the
tariff of an interstate crude oil pipeline is not subject to the rate-setting powers of the Texas
Railroad Commission but, instead, is subject to that jurisdictional power of the Federal Energy
Regulatory Commission (FERC). 18 See 49 U.S.C. § 60502 (West 2013) (FERC “has the duties
If more crude petroleum is offered for transportation by a common carrier than can be
transported immediately, it shall be apportioned equitably, and the commission may make and
enforce general or specific rules for equitable apportionment.
TEX. NAT. RES. CODE ANN. § 111.142 (West 2011).
The commission shall establish and promulgate rates of charges for gathering,
transporting, loading, and delivering crude petroleum by common carriers in this state and for use
of storage facilities necessarily incident to this transportation.
TEX. NAT. RES. CODE ANN. § 111.181 (West 2011).
18
Federal regulation of oil pipelines began in 1906 when Congress passed the Hepburn Act. ExxonMobil Oil Corp.
v. F.E.R.C., 487 F.3d 945, 956 (D.C. Cir. 2007) (per curiam). The Act applied the Interstate Commerce Act to oil
pipelines and gave the Interstate Commerce Commission jurisdiction over interstate oil pipelines. In 1977, Congress
transferred responsibility for oil pipeline regulation to the FERC. Id. The FERC’s jurisdiction over oil pipelines is
limited primarily to interstate pipeline rates. See Farmers Union Cent. Exch., Inc. v. F.E.R.C., 734 F.2d 1486, 1509
n.51 (D.C. Cir. 1984) (FERC has no authority over interstate oil pipeline’s decision to abandon service); see also W.
Ref. Sw., Inc. v. F.E.R.C., 636 F.3d 719, 724 (5th Cir. 2011) (FERC has no jurisdiction over decision by pipeline to
purchase, lease, or contract to operate pipeline). The limited scope of the FERC’s regulation of oil pipelines stands
in contrast to its pervasive role in pipeline infrastructure under the Natural Gas Act, which prohibits a would-be
pipeline sponsor from digging a line until a certificate of public convenience and necessity is issued. See generally
12
and powers related to the establishment of a rate or charge for the transportation of oil by
pipeline . . .”). Because TransCanada cannot subject itself to these provisions of the state law,
Crawford contends that TransCanada cannot meet the definition of a common carrier (carrying
with it, the right of eminent domain) under Section 111.002(1) of the Natural Resources Code.
TEX. NAT. RES. CODE ANN. § 111.002(1). We disagree.
Crawford’s conclusion that TransCanada cannot meet the definition of a common carrier
is based on the premise that the introductory phrase (“A person is a common carrier subject to
the provisions of this chapter.”) means that any such common carrier must comply with each and
every provision set forth in Chapter 111 of the Natural Resources Code. We do not believe this
is a proper reading of the statute. First, the language preceding the definition of “common
carrier” does not specifically state that such common carrier is subject to all of the provisions of
the chapter. It merely states, in a descriptive manner, that a common carrier under this section is
one that is subject to the provisions of the chapter. Moreover, this language does not confer
common carrier status to such carriers only if they are subject to each of the provisions of the
chapter. 19
Independence Pipeline Co., et al., 91 F.E.R.C. 61102, 61347, 2000 WL 490943, at *21 (Apr. 26, 2000). The FERC
does, however, have exclusive jurisdiction to determine whether pipeline rates and terms of service are just,
reasonable, and not unduly discriminatory. 18 C.F.R. § 342.4 (2011); Christopher J. Barr, Unfinished Business:
FERC’s Evolving Standard for Capacity Rights on Oil Pipelines, 32 Energy L.J. 563, 565 (2011).
19
Subsections (6) and (7) provide that a person is a common carrier subject to the provisions of Chapter 111 if it:
(6) owns, operates, or manages, wholly or partially, pipelines for the transportation
of carbon dioxide or hydrogen in whatever form to or for the public for hire, but only if such
person files with the commission a written acceptance of the provisions of this chapter expressly
agreeing that, in consideration of the rights acquired, it becomes a common carrier subject to the
duties and obligations conferred or imposed by this chapter; or
13
Crawford misinterprets this opening phrase as being prescriptive, rather than descriptive.
The language “subject to the provisions of this chapter” is merely descriptive of the type of
common carrier to which reference is made. For example, the operator of a municipal transit
system is generally recognized as a common carrier. See Transit Mgmt. Co. of Laredo v.
Sanchez, 886 S.W.2d 823, 824–25 (Tex. App.—San Antonio 1994, no writ). Even so, a
municipal transit system is not the type of common carrier that is subject to the provisions of
Chapter 111. Here, TransCanada is such a common carrier as contemplated in Chapter 111.
However, because TransCanada owns and operates an interstate crude oil pipeline, it is subject to
the rate-setting jurisdiction of the FERC and not the similar powers that would otherwise be
exercised by Texas regulatory authorities.
b. TransCanada’s Status as an Interstate Carrier Does Not
Impair its Status as a Common Carrier
Crawford maintains that, correctly construed, a common carrier with eminent domain
authority under Chapter 111 does not include an owner or operator of a solely interstate pipeline,
the purpose of which is to transport into Texas crude petroleum from outside the State of Texas.
(7) owns, operates, or manages a pipeline or any part of a pipeline in the State of
Texas for the transportation of feedstock for carbon gasification, the products of carbon
gasification, or the derivative products of carbon gasification, in whatever form, to or for the
public for hire, but only if the person files with the commission a written acceptance of the
provisions of this chapter expressly agreeing that, in consideration of the rights acquired, it
becomes a common carrier subject to the duties and obligations conferred or imposed by this
chapter.
TEX. NAT. RES. CODE ANN. § 111.002(6), (7) (West 2011) (emphasis added). In the trial court (and perhaps less
clearly on appeal), Crawford maintained that (in a variation of its current position) the definition of “common
carrier” is limited by the requirements of subsection (6). This argument, however, was correctly rejected by our
sister court in Rhinoceros Ventures Grp., Inc. v. TransCanada Keystone Pipeline, L.P., 388 S.W.3d 405, 409 (Tex.
App.—Beaumont 2012, pet. denied). The court noted that the subsections within Section 111.002 are connected
disjunctively by the use of the word “or.” “Therefore, if an entity meets the requirements for common-carrier status
contained in section 111.002(1), it need not also meet the requirements of section 111.002(6).” Id. Finally, the court
noted that subsection (6) is expressly limited to pipelines for the transportation of carbon dioxide or hydrogen. Id.
14
Crawford’s argument here primarily relies on the notion that strict compliance with all statutory
requirements under Chapter 111 is required, pointing out that in instances of doubt as to the
scope of eminent domain power, the statute granting such power is “‘strictly construed in favor
of the landowner and against’” the person or entity seeking to exercise the power of
condemnation. Denbury, 363 S.W.3d at 198 (quoting Coastal States Gas Producing, 309
S.W.2d at 831).
Section 111.002(1) contains two separate clauses that define a common carrier. The first
clause provides that a person is a common carrier if it “owns, operates, or manages a pipeline or
any part of a pipeline in the State of Texas for the transportation of crude petroleum to or for the
public for hire . . . .” TEX. NAT. RES. CODE ANN. § 111.002(1). The second clause provides that
a person is a common carrier if it “engages in the business of transporting crude petroleum by
pipeline . . . .” Id. Neither clause makes any kind of distinction between intrastate and interstate
pipelines.
The Texas Railroad Commission is imbued with the authority to regulate common carrier
pipelines. TEX. NAT. RES. CODE ANN. § 81.051 (West 2011). 20 This authorization of power
20
This provision addresses the jurisdiction of the Texas Railroad Commission, and provides,
(a) The commission has jurisdiction over all:
(1) common carrier pipelines defined in Section 111.002 of this code in Texas;
(2) oil and gas wells in Texas;
(3) persons owning or operating pipelines in Texas; and
(4) persons owning or engaged in drilling or operating oil or gas wells in Texas.
15
makes no distinction between intrastate and interstate pipelines. Instead, this section has been
held to give the commission regulatory authority over anyone who owns or operates pipelines in
Texas. See Bullock v. Shell Pipeline Corp., 671 S.W.2d 715, 719 (Tex. App.—Austin 1984, writ
ref’d n.r.e.) (noting that commission has jurisdiction over crude products line running from
Texas to Louisiana with “specific jurisdiction and duty to issue a permit . . . for the transportation
of oil productions by pipeline” and that pipeline owner held permit from ICC (predecessor of
FERC)); see also Atlas Pipe Line Co. v. Sterling, 4 F. Supp. 441, 442 (E.D. Tex. 1933) (per
curiam) (“No reason presents itself to our minds for believing that the Legislature, having the
authority to conserve the natural resources of the state, is without power to impose upon common
carriers by pipeline, inter and intra state, police regulations to make its prohibition against
wasteful production effective.”).
Moreover, had the Legislature intended to exclude interstate petroleum pipelines from the
definition of common carrier, it could have easily done so with an express limitation. It did not.
The principle of exclusion unius recognizes that “‘[t]he inclusion of the specific limitation
excludes all others.’” Zamora v. Edgewood Indep. Sch. Dist., 592 S.W.2d 649, 650 (Tex. Civ.
App.—Beaumont 1979, writ ref’d n.r.e.) (quoting Harris Co. v. Crooker, 248 S.W. 652, 655
(Tex. 1923)). Expressly excluded from Chapter 111’s provisions are “pipelines that are limited
in their use to the wells, stations, plants, and refineries of the owner and that are not a part of the
pipeline transportation system of a common carrier as defined in Section 111.002 of this code.”
(b) Persons listed in Subsection (a) of this section and their pipelines and oil and gas
wells are subject to the jurisdiction conferred by law on the commission.
TEX. NAT. RES. CODE ANN. § 81.051.
16
TEX. NAT. RES. CODE ANN. § 111.003 (West Supp. 2012). Similarly, Chapter 111 places certain
express limitations on the exercise of eminent domain authority. TEX. NAT. RES. CODE ANN.
§ 111.0192 (West 2011) (limitation of eminent domain rights on pipelines transporting coal).
Chapter 111, however, places no express limitation on the grant of eminent domain power to
persons transporting crude petroleum by interstate pipeline. The Legislature’s other express
limitations in Sections 111.003 and 111.092 preclude reading an “interstate” or “foreign
production” exclusion into Section 111.002(1). See TEX. NAT. RES. CODE ANN. §§ 111.003,
111.092.
In the recent case of Rhinoceros Ventures Group (a case so similar to the case before us
in that one of the litigants is the same, it involves another part of the same leg of the
contemplated pipeline system as here, and virtually the same issues are raised), our sister court
arrived at the same conclusion at which we arrive here. In that case, the parties agreed that
TransCanada—as here—engages in the business of transporting crude petroleum in Texas by a
pipeline or a part of a pipeline. “Therefore, construing section 111.002(1) according to its plain
meaning, TransCanada is a common carrier.” Rhinoceros Ventures Grp., 388 S.W.3d at 408.
The Beaumont court rejected the notion that this section applies only to intrastate pipelines,
noting that the Legislature did not use the words “interstate” or “intrastate” in Section 111.002(1)
when describing the type of pipeline the section describes. It was, therefore, presumed that such
terms were excluded for a reason. Id.
Finally, the Legislature’s silence with respect to terms used elsewhere in a statute is
indicative of its intent. See Cameron v. Terrell & Garrett, Inc., 618 S.W.2d 535, 540 (Tex.
17
1981) (“[W]e believe every word excluded from a statute must also be presumed to have been
excluded for a purpose[.]”). The Legislature has drawn intrastate/interstate distinctions in other
sections of the Natural Resources Code. For example, Section 117.012 provides that the
commission “shall adopt rules that include safety standards for and practices applicable to the
intrastate transportation of hazardous liquids or carbon dioxide by pipeline and intrastate
hazardous liquid or carbon dioxide pipeline facilities . . . .” TEX. NAT. RES. CODE ANN.
§ 117.012 (West Supp. 2012). By contrast, Section 111.002(1) contains no such limiting
language, and no such language can be reasonably read into the statute. 21
c. TransCanada is Subject to the Jurisdiction of the Texas
Railroad Commission
Crawford further maintains that TransCanada is not subject to the jurisdiction of the
Commission because the Commission said it was not subject to their jurisdiction. In response to
its application for a T-4 permit to operate a pipeline in Texas, the Texas Railroad Commission
wrote the following letter to TransCanada:
21
We further note that the Commission’s definition of “transportation or to transport” is sufficiently broad to include
interstate transportation:
The movement of any crude petroleum oil or products of crude petroleum oil or the products of
either from any receptacle in which any such crude petroleum or products of crude petroleum oil
or the products of either has been stored to any other receptacle by any means or method
whatsoever, including the movement by any pipeline . . . . It is the purpose of this definition to
include the movement or transportation of crude petroleum oil and products of crude petroleum oil
and the products of either by any means whatsoever from any receptacle containing the same to
any other receptacle anywhere within or from the State of Texas, regardless of whether or not
possession or control or ownership change.
16 TEX. ADMIN. CODE ANN. § 3.79(25) (West 2013) (Tex. Dep’t of Econ. Regulations, Definitions) (emphasis
added). A “[t]ransporter” includes “any common carrier by pipeline . . . and/or any person transporting oil or a
product by pipeline . . . .” Id. at § 3.79(26).
18
Review of the completed pipeline permit information questionnaire for
systems operating under the above-referenced T-4 permit number has concluded
the following:
Operations appear to be interstate and thereby under federal control.
On the basis of the conclusions, it appears the operations under the above
referenced T-4 permit number do not at this time constitute those of a Railroad
Commission jurisdictional hazardous liquids pipeline operator. However, at a
future date, a representative of the Pipeline Safety Section may contact you
telephonically or by on-site investigation to verify the conclusions listed herein.
Should your operation change by residential development or system
expansion, notification must be made to the Gas Services Division of this
Commission.
The letter references T-4 Permit Number 07873, 22 is dated October 21, 2008, and is signed by
Kathy Arnold, engineering technician. Crawford argues that TransCanada is bound by this
determination. TransCanada, on the other hand, states that this argument is unfounded because
the Commission has permitted the pipeline as a common carrier interstate crude petroleum
22
The form T-4 is needed for operational authority of the system. The instructions for the form T-4 state, “Operator
must file a Form T-4 for each classification of pipeline(s) and/or gathering system(s), i.e., interstate, or intrastate,
gas or liquid, or common carrier or private.” A cover letter from Keystone legal counsel to the Railroad
Commission transmitting various forms to the Commission, dated October 17, 2008, indicates:
The purpose for these permit applications is to construct and operate the proposed Keystone Gulf
Coast Expansion Project (Keystone XL), which is complementary to the Keystone Pipeline and
would serve existing refineries and markets on the U.S. Gulf Coast in Texas. It would link a
growing and reliable supply of Canadian crude oil with a rising North American demand for
energy. The proposed project is an approximately 1,980-mile (3,200-kilometre), 36-inch crude oil
pipeline that would begin at Hardisty, Alberta and extend southeast through Saskatchewan,
Montana, South Dakota and Nebraska. It would incorporate a portion of the Keystone Pipeline to
be constructed through Kansas to Cushing, Oklahoma, before continuing through Oklahoma to a
delivery point near existing terminals in Nederland, Texas to serve the Port Arthur, Texas
marketplace. Also proposed is an approximately 50-mile (80-kilometre) pipeline to the Houston,
Texas marketplace. Keystone will be operated as one integrated pipeline system which will
include the proposed Keystone XL pipeline project.
19
pipeline. 23 The permit certifies that Keystone “has complied with 16 TAC § 3.65 of the
Commission Rules and Regulations governing pipelines in accordance with the Natural
Resources Code § 81.051 and is granted this permit by the Commission to operate the following
line or lines . . . .” 24 The permit has been amended twice since its initial issuance. This
argument is without merit.
d. Crawford’s Legislative History/Policy Argument
Crawford relies on the legislative history of the present provisions of the Natural
Resources Code in support of its contention that TransCanada is not a common carrier
23
Interestingly, on the date the referenced letter was drafted, the Commission also issued a permit to operate
pipeline, in apparent contradiction to the letter. Both the letter upon which Crawford relies and the permit to operate
the pipeline are signed by the same person. The new construction report issued by the Railroad Commission
pipeline permitting and mapping department indicates that the pipeline will pass through the following Texas
counties: Fannin, Lamar, Delta, Hopkins, Franklin, Wood, Upshur, Smith, Cherokee, Rusk, Nacogdoches,
Angelina, Polk, Hardin, Jefferson, Liberty, Chambers, and Harris.
24
This section, entitled “Pipeline Permits Required,” states:
(a) No pipeline or gathering system, whether a common carrier or not, shall be used to transport
oil, gas, or geothermal resources from any tract of land within this state without a permit from the
commission. Application for the permit shall be made upon the required form, and the permit will be
granted if the commission is satisfied from such application and the evidence in support thereof, and its
own investigation, that the proposed line is, or will be, so laid, equipped, and managed, as to reduce to a
minimum the possibility of waste, and will be operated in accordance with the conservation laws and
conservation rules and regulations of the commission.
(b) The permit, if granted, shall be revocable at any time after hearing held after 10 days’ notice, if
the commission finds that the line is so unsafe, or so improperly equipped, or so managed, as likely to
result in waste. If the commission finds the line is in such condition as to cause waste, five days’ written
notice shall be given to the operating company to correct the condition before notice of hearing for
revocation of the permit is given. A permit may also be revoked after 10 days’ notice and hearing, if the
commission finds that the operator of the line, in its operation thereof, is willfully violating or contributing
to the violation of the laws of Texas regulating the production, transportation, processing, refining, treating,
and/or marketing of crude oil or geothermal resources, or any of the laws of the state to conserve the oil,
gas, or geothermal resources, or any rule or regulation of the commission enacted under such laws.
16 TEX. ADMIN. CODE § 3.65 (2002). This section now appears at 16 TEX. ADMIN. CODE § 3.70 (West 2012) (Tex.
Dep’t of Econ. Regulation, Pipeline Permits Required). The language has not been altered.
20
possessing eminent domain powers. See TEX. GOV’T CODE ANN. § 311.023 (West 2013) (in
construing statute, court may consider, inter alia, legislative history, common law or former
statutory provisions). After citing the provisions of the 1917 law relating to common carriers,
Crawford points out that from that time forward, the Texas Legislature limited common carrier
pipelines to those pipelines subject to the jurisdiction, control, and regulations of the Texas
Railroad Commission. Crawford argues that TransCanada cannot meet the current statutory
provisions pertaining to common carriers (as previously discussed); thus, it contends,
TransCanada cannot qualify as a common carrier and has no eminent domain authority.
Crawford contends that when the initial Pipeline Petroleum Law of 1917 (Senate Bill 68, 35th
Legislature, R.S.) was enacted, Texas was prompted by its interest in conserving the oil and gas
resources of the state for the benefit of its producers in order that the value of the oil and gas
would be guarded. This purpose cannot be achieved, Crawford contends, when the oil in the
pipeline has been produced and sold in a foreign jurisdiction.
As Crawford correctly recognizes, the substance of the provisions found in the Natural
Resources Code relating to the common carrier status of crude oil pipelines has remained
virtually unchanged for over a century. We do not infer from the statute’s language, however,
that the Legislature intended its purposes to be anything other than what was expressly stated.
Crawford’s arguments to the contrary are more appropriately addressed to the Legislature; we
may not judicially amend the statute to include an interstate or foreign production exception to
the common carrier status of crude oil pipelines in Texas. See Rhinoceros, 388 S.W.3d at 408.
21
We conclude that TransCanada is a common carrier with the power of eminent domain.
A simple statutory construction analysis indicates that Section 111.002(1) covers both interstate
and intrastate carriers. Atlas Pipeline held that the Commission has regulatory authority over
interstate pipelines in 1933. See Atlas Pipe Line Co., 4 F. Supp. at 442. Additionally, the
Beaumont court recently held, in a case where the landowner claimed the trial court lacked
subject-matter jurisdiction under the same circumstances presented here, that the trial court did,
indeed, have jurisdiction. Rhinoceros, 388 S.W.3d at 409. In this case, the trial court likewise
correctly determined the matter of its own jurisdiction.
B. The Trial Court Correctly Granted TransCanada’s Motion for Summary
Judgment
Crawford contends the trial court erred in granting TransCanada’s motion for summary
judgment. 25 This argument is based on the assertion that TransCanada failed to establish as a
matter of law that it qualifies as a Texas common carrier with eminent domain authority.
Crawford incorporates all arguments regarding the jurisdictional challenge, as discussed above.
25
TransCanada filed a combined traditional and no-evidence motion for summary judgment. The no-evidence
motion was filed on the grounds that Crawford had no evidence that TransCanada acted fraudulently, in bad faith, or
arbitrarily or capriciously, failed to satisfy personal and property jurisdictional requirements and conditions
precedent, made erroneous jurisdictional averments, and/or acted with gross negligence. Both motions were granted
by the trial court. On appeal, Crawford contends that the trial court erred in granting TransCanada’s “Motions for
Summary Judgment.” While Crawford recites the standard of review for a no-evidence summary judgment, the
issues pertaining to this motion are not addressed or briefed. The Texas Rules of Appellate Procedure require that
an appellant’s brief “must contain a clear and concise argument for the contentions made, with appropriate citations
to authorities and to the record.” TEX. R. APP. P. 38.1(i). Issues raised on appeal, but not briefed, are waived. In re
Estate of Taylor, 305 S.W.3d 829, 836 (Tex. App.—Texarkana 2010, no pet.) (failure to cite legal authority or to
provide substantive analysis of legal issues presented results in waiver of complaint); Rammah v. Abdeljaber, 235
S.W.3d 269, 275 (Tex. App.—Dallas 2007, no pet.). Because Crawford has failed to meet this requirement, it has
waived any appellate point relating to the trial court’s grant of TransCanada’s no-evidence motion for summary
judgment.
22
Crawford also adds a new argument, claiming that TransCanada’s contemplated pipeline is not
for public use.
1. Standard of Review
A summary judgment is reviewed de novo. Mann v. Frankfort Stein & Lipp Advisors,
Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). The moving party has the burden to show
that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law
on the issues set forth in the motion. Id.; TEX. R. CIV. P. 166a(c). Every reasonable inference is
resolved in favor of the nonmovant, and all evidence favorable to the nonmovant is taken as true.
Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985).
2. Public Use
Article I, Section 17 of the Texas Constitution prohibits the taking of private property by
eminent domain except for a “public use.” The Texas Supreme Court recently determined that a
pipeline company seeking to exercise the use of eminent domain must do more than transport its
own product to one of its other facilities or to those of its affiliates. Denbury, 363 S.W.3d at 200.
Instead, a pipeline company must demonstrate a reasonable probability that third-party customers
will use the pipeline. Id. at 202.
Denbury was engaged in recovery operations that involved the transmission of carbon
dioxide (CO2) to be injected into existing oil wells in order to increase production. Denbury
owned a naturally-occurring CO2 reserve in Mississippi known as the Jackson Dome and desired
to build a pipeline to deliver CO2 from the Jackson Dome to Texas oil wells in order to facilitate
tertiary operation on the wells. In summary judgment proceedings, Denbury submitted evidence
23
that it obtained a common carrier permit, filed a tariff, and agreed to make the pipeline available
for public use. Id. However, the evidence also indicated that Denbury intended to transport CO2
for its own consumption, with no evidence in the record of potential customers unaffiliated with
Denbury. Id. at 203. The Texas Supreme Court disagreed with Denbury’s assertion that making
the pipeline available for public use is sufficient to confer common carrier status upon its owner.
Instead, to qualify as a common carrier under Section 111.002(6), “a reasonable probability must
exist that the pipeline will at some point after construction serve the public by transporting gas
for one or more customers who will either retain ownership of their gas or sell it to parties other
than the carrier.” Id. at 202 (footnotes omitted). The court in that case determined that Denbury
could not qualify as a common carrier because it failed to meet this reasonable probability test.
TransCanada disputes the applicability of Denbury to this situation, since it involved
common carrier status under Section 111.002(6). As stated by our sister court, “we are not
persuaded the Court’s reasoning concerning the process of obtaining a T-4 permit applies only to
carbon dioxide lines.” Crosstex NGL Pipeline, L.P. v. Reins Rd. Farms-1, Ltd., No. 09-12-
00563-CV, 2013 WL 2250747, at *5 (Tex. App.—Beaumont May 23, 2013, no pet. h.) (citing
Denbury, 363 S.W.3d at 202 n.28). 26 Even if Denbury should apply here, TransCanada
contends, it has done all that is required under the reasonable probability test established in that
case to show that it is a common carrier. We agree.
26
In Denbury, the high court recognized that a permit by the Railroad Commission “granting common-carrier status
is prima facie valid.” Denbury, 363 S.W.3d at 202. But, “once a landowner challenges that status, the burden falls
upon the pipeline company to establish its common-carrier bona fides if it wishes to exercise the power of eminent
domain.” Id.
24
The affidavit of Louis Fenyvesi, director of markets and supply for TransCanada
(attached as an exhibit to TransCanada’s motion for summary judgment), states that he is
familiar with the Keystone Gulf Coast Project. Fenyvesi’s affidavit went on to explain that the
Gulf Coast Project pipeline system will commence at the crude petroleum supply hub at
Cushing, Oklahoma, and will terminate at existing crude storage terminal facilities near
Nederland, Texas, and Houston, Texas. The affidavit further explained that the Gulf Coast
Project will transport crude petroleum owned by third-party shippers unaffiliated with Keystone
or Keystone’s parent companies or affiliates. In addition, an open season was held for the
Cushing, Oklahoma, connection point, and various third-party shippers have committed to
binding Transportation Service and Throughput Agreements (TSAs). 27 Fenyvesi’s affidavit
further stated that there are several binding TSAs with third-party shippers for transportation of
crude petroleum on the Gulf Coast Project for an aggregate daily volume of approximately
200,000 barrels of crude petroleum per day. The third-party shippers, in accordance with the
TSAs, will own the petroleum transported in the pipeline. They will not transfer title to the
petroleum that will be shipped for a fee to be set forth in the tariff filed with the FERC. Fenyvesi
testified that the Gulf Coast Project pipeline will be operated as a common carrier pipeline in that
any shipper wishing to transport crude petroleum meeting the specifications set forth in the tariff
to be filed with the FERC will have access to ship its crude petroleum. “Accordingly, Keystone
will not own any crude petroleum shipped in the Pipeline; the shippers retain ownership of the
crude petroleum in the Pipeline.” Further, most of the companies that will ship crude petroleum
27
Glossary of Terms, NW. ENERGY, http://www.northwesternenergy.com/display.aspx?Page
=Glossary_of_Terms&Item=23#O (last visited Aug. 22, 2013).
25
on the Gulf Coast Project pipeline will be refiners, producers, and marketers. Per Fenyvesi,
Keystone itself neither owns any refineries nor does it produce any crude petroleum. Fenyvesi
testified by deposition that “we offered open to everybody a variety of contract terms. And so
to the extent that a shipper signed up for a specific contract, they would be able to ship
according to the rate associated with that contract.” Fenyvesi’s deposition, offered as
summary judgment evidence, further indicates that an additional open season for the
Cushing Marketlink has been held and one open season for the Bakken Marketlink Project
(a separate leg of the same TransCanada oil transmission system) has been held. An
uncommitted shipper will nominate volumes to ship but does not have a take-or-pay contract.
Crawford submitted no evidence to the trial court 28 to contradict or otherwise challenge
the evidence of TransCanada as a common carrier “to or for the public for hire.” See TEX. NAT.
28
Crawford contends that “[e]ven [the] Federal Energy Regulatory Commission found TransCanada’s practice as a
contract carrier to be ‘unjust, unreasonable and unduly discriminatory.’” This statement ignores the context in
which the FERC’s statement was made, and is, therefore, not relevant to the public use issue. TransCanada
attached, as an exhibit to its motion for summary judgment, the Order on Petition for Declaratory Order issued by
the FERC at the request of TransCanada. As recited in the order, TransCanada filed the petition for declaratory
order:
[R]equesting that the Commission approve the rate structure agreed to by Keystone and shippers
that have signed Transportation Service Agreements (TSAs) under which they have made long-
term commitments to utilize, or pay for, capacity on the Keystone pipeline system. Keystone also
requests Commission approval of the methodology by which Keystone plans to design its
uncommitted or “spot” rate. Finally, Keystone requests Commission approval to offer and provide
a level of firm transportation, or unapportioned access, both to shippers in the United States that
have signed TSAs to date and that are anticipated to sign TSAs in an upcoming open season for an
expansion of the system. For the reasons discussed below, the Commission will grant in part
Keystone’s petition for declaratory order.
The order approved four of the five rate proposals submitted by Keystone. This was, in essence, a pre-approval
process to avoid running afoul of FERC rate regulations. The FERC order thus allows Keystone the opportunity to
structure its rates in compliance with applicable regulations. The order is not a determination that Keystone has
violated any such regulations.
26
RES. CODE ANN. § 111.002(1). 29 TransCanada produced undisputed evidence, through the sworn
affidavit and deposition testimony of Fenyvesi, that it will ship crude petroleum for one or more
customers who will retain ownership of the oil. It has, therefore, complied with the reasonable
probability test in Denbury. We affirm summary judgment in favor of TransCanada.
C. No Abuse of Discretion in Partial Denial of Crawford’s Fourth Motion for
Continuance
Crawford complains of the trial court’s partial denial of its fourth motion for continuance,
claiming the need for “additional discovery and more time to adequately prepare and respond to
TransCanada’s summary judgment motions.”
We review the decision to grant or deny a motion for continuance for an abuse of
discretion. Villegas v. Carter, 711 S.W.2d 624, 626 (Tex. 1986); In re A.D.A., 287 S.W.3d 382,
387 (Tex. App.—Texarkana 2009, no pet.). A trial court abuses its discretion “‘when it reaches
a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law.’”
BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 800 (Tex. 2002) (quoting Johnson
v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex. 1985)). Here, Crawford’s original
counsel withdrew from the case and current counsel was substituted June 12, 2012. At the time
of the substitution, trial had been previously scheduled for July 30, 2012. 30 Before ruling on the
motion to withdraw, the trial court advised the parties that if the motion was granted, it would
have no impact on the July trial setting. The parties both agreed to this. When current counsel
29
Crawford contends that Denbury applies, but then ignores the reasonable probability test. Instead, Crawford
submits that because TransCanada is a “contract carrier,” its pipeline is not operated “for the public for hire.”
Denbury requires shipment by third-party unaffiliated shippers who retain ownership of their product or sell it to
parties other than the carrier. Denbury, 363 S.W.3d at 202.
30
The previous April 30, 2012, trial setting had been continued until June 13, 2012, and then to July 30, 2012.
27
filed her notice of substitution, she represented that she would not attempt to seek a continuance
of the July 30 trial setting.
Despite that representation, Crawford filed its fourth motion for continuance on July 9.
The trial court granted the motion with respect to Crawford’s request to extend the deadlines for
the filing of Daubert challenges and dispositive motions. Final bench trial was continued to
September 4, 2012. The trial court denied the motion to the extent it requested additional time to
conduct discovery, amend or supplement pleadings, or designate experts. Crawford claims that it
was the duty of the court to continue the case for a sufficient length of time to permit new
counsel to investigate and make a defense. As previously noted, however, Crawford expressly
agreed not to seek an extension of the trial date upon substitution of counsel, at which time it was
fully advised of pending deadlines. Even so, Crawford received an approximate two-month
extension of the trial date.
Crawford contends that the trial court’s refusal to allow additional discovery or
supplemental discovery responses amounts to a clear abuse of discretion. When a motion for
continuance is based on inadequate discovery, the appellate court considers the following non-
exclusive factors: (1) the length of time the case has been on file, (2) the materiality of the
discovery sought, and (3) whether due diligence was exercised in obtaining discovery. Joe v.
Two Thirty Nine Joint Venture, 145 S.W.3d 150, 161 (Tex. 2004).
This case was initially filed in the trial court August 31, 2011, and was scheduled for a
bench trial September 4, 2012. The parties had almost one year to complete discovery. Counsel
for Crawford explained that previous trial counsel did very little trial preparation. Instead, “It
28
was all just . . . work on settlement, to get the largest settlement possible, to coerce his client
[(Crawford)] into taking the settlement so this would never go to trial.” Counsel further
explained to the trial court that she would like to serve TransCanada with requests for production
of documents to verify certain TransCanada documents that were prepared and produced in a
similar case and that this could take at least forty-five days. In addition, Crawford wished to
depose Texas Railroad Commission engineer technician, Kathy Arnold, regarding the
implications of her October 21, 2008, letter to TransCanada (to which reference has been
previously made) regarding interstate operations. Counsel for Crawford substituted in this case
over thirty days prior to the hearing on the motion for continuance. Yet, the discovery claimed
to be needed at the hearing had not been previously requested. Nothing in the record indicates
that counsel had attempted to schedule Arnold’s deposition. The record is devoid of a request
for production of documents to TransCanada, seeking the documents counsel mentioned at the
continuance hearing. 31
We know, in hindsight, that the documents from the Rhinoceros case were not material.
On very similar arguments, that case went against Crawford on all issues. Crawford makes no
argument as to why Arnold’s deposition was material to its claims or defenses. Even though
counsel was only on board for thirty days prior to the continuance hearing, counsel knew in
advance of the hearing that she wished to request the referenced documents and deposition. Due
diligence is questionable here. Taking into account that there is scant evidence of the materiality
of the content of the desired deposition and the lack of due diligence, together with the extension
31
Nevertheless, counsel for Crawford worked diligently with counsel for TransCanada in scheduling four
additional depositions requested by TransCanada in June 2012.
29
of the pretrial and trial dates, the trial court’s denial of additional time in which to conduct
discovery was not an abuse of discretion.
III. Conclusion
We affirm the judgment of the trial court.
Bailey C. Moseley
Justice
Date Submitted: July 30, 2013
Date Decided: August 27, 2013
30