Lawsuits against Flower Mound & Haltom City challenge denials for gas pipelines

By WENDY HUNDLEY / The Dallas Morning News
whundley@dallasnews.com

Two local lawsuits are pitting municipalities against natural gas companies, and the outcomes of these legal battles could have far-reaching effects on urban drilling in the Barnett Shale.

The issue: whether gas pipeline companies can use the power of eminent domain to acquire easements on public property.

"This will be a landmark decision in Texas," said Tom Hayden, a member of the Flower Mound Town Council. "It will decide whether a municipality trumps a utility or vice versa."

Both Flower Mound and Haltom City have been sued because they have failed to approve requests to run gas pipelines on municipal property.

In Flower Mound, Mockingbird Pipeline wants to run 500 feet of pipe through a 30-foot pipeline easement behind a fire station.

In Haltom City, Enterprise Texas Pipeline LLC wants to transport processed gas to market by running a pipeline through the city, cutting across parkland, several streets and acreage that may be a future nature area.

Haltom City Attorney Steven Wood said a pipeline would restrict use of the public land. "You can't build on top of a pipeline," he said. "And you can't imagine how many trees they'd have to tear down to get that pipeline in."

While the power of eminent domain is usually associated with government bodies, other entities – such as electric and telephone companies – have also been granted this authority because they provide a service for the public.

In Texas, many pipeline companies are considered public utilities with eminent domain power. Of the 34 pipeline companies in the Texas Pipeline Association, more than half are public utilities and all have some public utility assets, said executive director Patrick Nugent.

While condemnation lawsuits involving private property owners are not uncommon, "I'm not familiar with any litigation filed between a pipeline and a municipality," said Nugent.

He said he had not heard about the Flower Mound and Haltom City cases but speculated that they would be closely watched by the gas industry.

For municipalities, the legal battle is over sovereign immunity and the right to protect public property from unwanted encroachment.

Flower Mound lost the first round in its argument that municipalities have immunity from lawsuits when Denton County Probate Judge Don Windle ruled Feb. 25 that the court had jurisdiction. He said the pipeline company had no alternative, except to move the pipe and take private land.

"Governments have no purpose to own and hold land except for the public trust and benefit," Windle said, according to a court transcript.

Robert Brown, who is representing the town, is appealing to the Texas Court of Appeals.

The case "could have far-reaching consequences around Texas, particularly for those municipalities that do not agree with pipeline companies that want to locate and install natural gas pipelines in parks, across fire station properties, in front of city halls and at other municipal properties," Brown said in a written statement.

Hayden agreed.

"We need to defend our town," he said. "If we didn't do that, it would set a dangerous precedent."

In Flower Mound, Hayden said granting the right of way could open the door to other pipelines, including ones that could transport wastewater from gas drilling sites to a centralized collection facility.

"That doesn't mean it's going to happen," he said. "But I don't want to have the possibility that town land could be used for that."

Williams Production, which has been at the center of an ongoing debate over natural gas drilling in Flower Mound, has not filed an application for a collection facility and has limited its request to pipelines.

"We're talking about a short stretch of land that the city previously condemned to obtain," said Kelly Swan, a spokesman for Williams, which is affiliated with Mockingbird Pipeline.

"Today, that right of way on the edge of the fire station property is an existing utility corridor that has another natural gas pipeline and a sewage line," he said. "Our short stretch of pipe would fall between them."

He said pipelines are needed to transport natural gas and bring new supplies to consumers.

"The gas from the wells in the area needs to get to other pipelines to carry the gas into the marketplace," Swan said. "If gas lines are needed, it's really a question about locating an appropriate route, which is why our project makes sense."