In The
Court of Appeals
Ninth District of Texas at Beaumont
________________
NO. 09-12-00128-CV
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RHINOCEROS VENTURES GROUP, INC. AND BATSON CORRIDOR, L.P.,
Appellants
V.
TRANSCANADA KEYSTONE PIPELINE, L.P. AND J.L. CALDWELL
COMPANY TRUST F/B/O GUSTAVUS ADOLPHUS NORTHCUTT McFADDIN,
Appellees
________________________________________________________________________
On Appeal from the County Court at Law No. 1
Jefferson County, Texas
Trial Cause No. 119233
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OPINION
This is an appeal from the denial of appellants’ motion for summary judgment, in
which appellants contended the trial court lacked subject matter jurisdiction because
appellees were not statutorily authorized to condemn appellants’ property. We affirm the
trial court’s order denying appellants’ motion for summary judgment.
1
BACKGROUND
Appellee TransCanada Keystone Pipeline, L.P. (“TransCanada”) filed a petition
for condemnation against appellants Rhinoceros Ventures Group, Inc. (“Rhinoceros”)
and Batson Corridor, L.P. (“Batson”) as well as other entities. TransCanada alleged that
it is the owner and economic operator of the Keystone Pipeline System, which includes
the Keystone Gulf Coast Section (“Gulf Coast”). According to TransCanada, Gulf Coast
is “a common carrier pipeline that, upon completion of construction, will extend from
Fannin County, Texas, to Nederland, Texas.” TransCanada further alleged that as owner
and economic operator of Gulf Coast, it is a common carrier “as that term is used and
defined in the Texas Business Organizations Code and the Texas Natural Resources
Code,” and therefore possesses the authority to condemn land, rights-of-way, easements,
and property necessary for the construction, maintenance, or operation of the common
carrier pipeline.
Rhinoceros and Batson filed a motion for summary judgment,1 in which they
sought a summary judgment sustaining their plea to the jurisdiction “and dismissing this
cause and condemnation proceeding for lack of subject matter jurisdiction.” Rhinoceros
and Batson argued that TransCanada is not a common carrier because (1) TransCanada
cannot subject itself to the jurisdiction of the Texas Railroad Commission, (2) the
pipeline is a contract carrier limited in its use to shippers having long-term contracts, (3)
1
Rhinoceros and Batson filed their motion for summary judgment subject to their
previously-filed plea to the jurisdiction.
2
TransCanada has no tariff rate schedule on file with the Railroad Commission, and (4)
TransCanada has no permit from the Railroad Commission to construct an intrastate
pipeline since the Railroad Commission had found TransCanada’s operation to be
interstate. In response, TransCanada argued that section 111.002(1) of the Texas Natural
Resources Code provides that an entity that engages in the business of transporting crude
petroleum by pipeline in Texas is a common carrier, regardless of whether the pipeline is
interstate or intrastate, and that appellants’ reliance upon section 111.002(6) is misplaced.
See Tex. Nat. Res. Code Ann. § 111.002(1), (6) (West 2011). The trial court signed an
order denying the motion for summary judgment, and this appeal followed.
ANALYSIS
Rhinoceros and Batson challenge the trial court’s ruling in three appellate issues.
In issue one, Rhinoceros and Batson contend the trial court lacked subject matter
jurisdiction of TransCanada’s petition for condemnation brought by TransCanada
because the pipeline at issue was an interstate pipeline. In issue two, appellants argue
that Chapter 111 of the Natural Resources Code does not apply to the owner of an
interstate pipeline. Finally, appellants assert in issue three that because the purpose of the
oil and gas laws of Texas is to conserve oil and gas resources, a pipeline transporting
crude petroleum from outside Texas contravenes that alleged purpose. We address these
issues together.
3
Section 111.002 of the Texas Natural Resources Code provides as follows, in
pertinent part:
A person2 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;
...
(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
(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[.]
Tex. Nat. Res. Code Ann. § 111.002 (1), (6), (7) (West 2011) (emphasis added). Section
111.019(a) of the Natural Resources Code provides that “[c]ommon carriers have the
right and power of eminent domain.” Id. § 111.019(a). Section 111.011 provides that
“[t]the operation of common carriers covered by this chapter is a business in which the
public is interested and is subject to regulation by law.” Id. § 111.011.
2
“Person” is defined as “any individual, partnership, firm, corporation, association,
or any other business entity, a state agency or institution, county, municipality, school
district, or other governmental subdivision.” Tex. Nat. Res. Code Ann. § 113.002(13)
(West 2011).
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In construing a statute, we must “determine and give effect to the Legislature’s
intent.” Nat’l Liab. & Fire Ins. Co. v. Allen, 15 S.W.3d 525, 527 (Tex. 2000). We look
first and foremost to the statute’s words. Hernandez v. Ebrom, 289 S.W.3d 316, 318
(Tex. 2009). However, in determining the Legislature’s intent, we do not confine our
review to isolated words, phrases, or clauses, “but rather we examine the entire act to
glean its meaning.” Meritor Auto., Inc. v. Ruan Leasing Co., 44 S.W.3d 86, 90 (Tex.
2001); see also Tex. Gov’t Code Ann. § 311.011(a) (West 2005) (instructing courts to
construe words and phrases in context). “We look first to the statute’s language to
determine that intent, as we consider it ‘a fair assumption that the Legislature tries to say
what it means, and therefore the words it chooses should be the surest guide to legislative
intent.’” Leland v. Brandal, 257 S.W.3d 204, 206 (Tex. 2008) (quoting Fitzgerald v.
Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 866 (Tex. 1999)). “If the statute’s
language is unambiguous, its plain meaning will prevail.” Id.; see also City of Houston v.
Harris Cnty. Outdoor Adver. Assoc., 732 S.W.2d 42, 53 (Tex. App.—Houston [14th
Dist.] 1987, writ ref’d n.r.e.).
A court may not judicially amend a statute and add words that are not contained in
the language of the statute unless doing so is required to give effect to a clear legislative
intent. Jones v. Liberty Mut. Ins. Co., 745 S.W.2d 901, 902 (Tex. 1988); Cameron v.
Terrell & Garrett, Inc., 618 S.W.2d 535, 540-41 (Tex. 1981). Every word used in a
statute is presumed to have been used for a purpose, and every word excluded from a
5
statute must be presumed to have been excluded for a purpose. Cameron, 618 S.W.2d at
540. In construing a statute, we may also consider the object sought to be attained; the
circumstances under which the statute was enacted; legislative history; common law or
former statutory provisions, including laws on the same or similar subjects; consequences
of a particular construction; administrative construction of the statute; and the statute’s
title, preamble, and emergency provision. Tex. Gov’t Code Ann. § 311.023 (West 2005).
The parties agree that TransCanada engages in the business of transporting crude
petroleum in Texas by a pipeline or part of a pipeline. Therefore, construing section
111.002(1) according to its plain meaning, TransCanada is a common carrier. See Tex.
Nat. Res. Code Ann. § 111.002(1); Leland, 257 S.W.3d at 206; Hernandez, 289 S.W.3d
at 318. As previously discussed, appellants contend that section 111.002(1) applies only
to intrastate pipelines. However, the Legislature did not use the words “interstate” or
“intrastate” in section 111.002(1) when describing the type of pipeline to which the
subsection applies, and we must presume that the Legislature excluded these terms for a
purpose. See Jones, 745 S.W.2d at 902; Cameron, 618 S.W.2d at 540-41; see also Tex.
Nat. Res. Code Ann. § 111.002(1). In addition, we note that, in other portions of the
Natural Resources Code, the Legislature expressly includes the term “intrastate” when it
wishes to limit the application of a particular statute to intrastate pipelines. See Tex. Nat.
Res. Code Ann. §§ 91.251(1), 91.255(e), 118.002(a), 211.012(a) (West 2011); Id. §
6
117.012(a), (k) (West Supp. 2012); see also Tex. Gov’t Code Ann. § 311.023(4) (In
construing a statute, a court may consider other laws on the same or similar subjects.).
Appellants argue that the trial court lacked subject matter jurisdiction because
TransCanada cannot comply with the requirement in section 111.002(6) that it subject
itself to regulation by the Railroad Commission. See Tex. Nat. Res. Code Ann. §
111.002(6). However, as previously discussed, when we construe section 111.002(1)
according to its plain meaning, TransCanada meets the requirements for common carrier
status pursuant to that subsection. See id. § 111.002(1). In addition, the subsections
within section 111.002 are connected disjunctively by the Legislature’s use of the word
“or.” See id. § 111.002(6); see also Spradlin v. Jim Walter Homes, Inc., 34 S.W.3d 578,
581 (Tex. 2000) (“Or” is a disjunctive conjunction that signifies a separation between two
distinct ideas.). 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). We also note that subsection (6) of section 111.002 is expressly limited to
pipelines for the transportation of carbon dioxide or hydrogen. See Tex. Nat. Res. Code
Ann. § 111.002(6).
In an attempt to engraft the requirements of section 111.002(6) of the Texas
Natural Resources Code onto section 111.002(1), appellants cite Tex. Rice Land
Partners, Ltd. v. Denbury Green Pipeline-Texas, LLC, 363 S.W.3d 192 (Tex. 2012). In
Tex. Rice, the Supreme Court addressed the issue of whether a landowner may challenge
7
the eminent domain power of a carbon dioxide pipeline owner that has been granted a
common-carrier permit from the Railroad Commission. Tex. Rice, 363 S.W.3d at 195.
The Supreme Court held that section 111.002(6) governed whether Denbury Green was a
common carrier. Id. at 197-98, 200. The Tex. Rice court did not address subsection
111.002(1), and the Supreme Court expressly stated in a footnote that its decision “is
limited to persons seeking common-carrier pipeline status under Section 111.002(6)” and
expressed no opinion concerning other types of pipelines. Id. at 202 n.28. Furthermore,
the record in Tex. Rice included evidence suggesting “the pipeline would be exclusively
for private use.” Id. at 203.
Appellants also cite Vardeman v. Mustang Pipeline Co., 51 S.W.3d 308 (Tex.
App.—Tyler 2001, pet. denied). In Vardeman, the pipeline at issue was transporting
ethylene, which fit within the broad definition of “crude petroleum,” but the parties and
the Court seemed to believe that section 111.002(6), rather than 111.002(1), governed.
Vardeman, 51 S.W.3d at 312-13. Nothing in Vardeman indicates that the Tyler Court of
Appeals meant to engraft the requirements of section 111.002(6) onto section 111.002(1).
Id. Furthermore, opinions of our sister Courts of Appeals are not binding on this Court.
Mitchell v. John Wiesner, Inc., 923 S.W.2d 262, 264 (Tex. App.—Beaumont 1996, no
writ). Therefore, to the extent that Vardeman could be arguably interpreted as engrafting
the requirements of section 111.002(6) of the Natural Resources Code onto section
111.002(1), we decline to follow Vardeman.
8
Finally, appellants make a broad policy argument in issue three. Citing Peterson
v. Grayce Oil Co., 37 S.W.2d 367, 371 (Tex. Civ. App.—Fort Worth 1931), aff’d, 98
S.W.2d 781 (Tex. 1936), appellants contend that Texas’s laws “relating to oil and gas
have as their purpose the conservation of oil and gas resources for the benefit of Texas
producers and landowners so the oil and gas will have value[,] and this purpose is not
served by a pipeline transporting crude petroleum outside of Texas.” However, while
Peterson generally holds that Texas’s oil and gas laws were intended to conserve Texas’s
resources, Peterson does not support appellants’ contention that affording common-
carrier status to an entity that is transporting oil produced and sold in a foreign
jurisdiction contravenes that intention. See id. at 371-76. Appellants provide no other
pertinent authorities supporting their contention, nor do they explain why their broad
policy argument should trump the rules of statutory construction discussed above. See
Tex. R. App. P. 38.1(i) (Briefs must contain appropriate citations to authorities.). For all
of the aforementioned reasons, we overrule appellants’ issues and affirm the trial court’s
judgment.
AFFIRMED.
________________________________
STEVE McKEITHEN
Chief Justice
Submitted on October 4, 2012
Opinion Delivered November 29, 2012
Before McKeithen, C.J., Gaultney and Kreger, JJ.
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