Fort Worth & Western Railroad Company and Cen-Tex Rural Rail Transportation District v. Enbridge Gathering (NE Texas Liquids), L.P. ( 2009 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 2-07-403-CV
FORT WORTH & WESTERN RAILROAD APPELLANTS
COMPANY AND CEN-TEX RURAL
RAIL TRANSPORTATION DISTRICT
V.
ENBRIDGE GATHERING APPELLEE
(NE TEXAS LIQUIDS), L.P.
NO. 2-07-405-CV
FORT WORTH & WESTERN RAILROAD APPELLANTS
COMPANY AND CEN-TEX RURAL
RAIL TRANSPORTATION DISTRICT
V.
COWTOWN PIPELINE PARTNERS LP APPELLEE
NO. 2-07-406-CV
FORT WORTH & WESTERN RAILROAD APPELLANTS
COMPANY AND CEN-TEX RURAL
RAIL TRANSPORTATION DISTRICT
V.
WORSHAM-STEED GAS STORAGE, L.P. APPELLEE
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FROM COUNTY COURT AT LAW OF HOOD COUNTY
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OPINION
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Appellants Cen-Tex Rural Rail Transportation District and Fort Worth &
Western Railroad Company filed this interlocutory appeal from the trial court’s
orders denying their pleas to the jurisdiction in three separate pipeline
condemnation cases brought by appellees Worsham-Steed Gas Storage, L.P.,
Cowtown Pipeline Partners LP, and Enbridge Gathering (NE Texas Liquids), L.P.
The primary issue we must decide is whether gas utilities and pipeline
companies have the power to condemn rail district property and to run pipelines
under the railroads. We hold that they do and affirm the orders of the trial
court denying appellants’ pleas to the jurisdiction.
I. Background
Three separate pipeline condemnation cases were filed by appellees
Worsham-Steed Gas Storage, L.P. (Worsham-Steed), Cowtown Pipeline
Partners LP (Cowtown), and Enbridge Gathering (NE Texas Liquids), L.P.
(Enbridge). Each entity sought acquisition of an easement for installation and
maintenance of a pipeline under railroad tracks located in Hood County that are
owned by Cen-Tex Rural Rail Transportation District (Cen-Tex), and on which
Fort Worth & Western Railroad Company (Fort Worth & Western) owns
2
easements to conduct rail operations. Prior to filing the condemnation
proceedings, appellees attempted to negotiate the purchase of permanent
easements from Cen-Tex, but the parties failed to reach agreement.
Pursuant to the Texas Property Code, the trial court appointed a panel of
special commissioners to determine appellants’ damages arising from the
condemnations. 1 After hearings in each proceeding, the commissioners
awarded damages to Cen-Tex and Fort Worth & Western arising from the
condemnations and assessed costs against appellees.
Appellants did not appear at the hearings. Instead, they both filed pleas
to the jurisdiction in the trial court, objecting to the condemnation proceedings
on the grounds that appellees have no authority to condemn rail district
property and that the statute authorizing gas utilities to obtain easements to lay
pipelines does not authorize laying pipelines under railroads. Appellants also
complained that appellees failed to exhaust their administrative remedies and
that the condemnation proceedings were preempted by federal law.2 The trial
court denied the pleas, and these consolidated appeals followed.
1
… See Tex. Prop. Code Ann. § 21.014 (Vernon 2004) (providing in part
that, in a condemnation or eminent domain case, the judge “shall appoint three
disinterested freeholders who reside in the county as special commissioners to
assess the damages of the owner of the property being condemned”).
2
… See 49 U.S.C. § 10501(b) (2007).
3
II. Analysis
A. Standard of Review
We review de novo the denial of a plea to the jurisdiction.3 A plea to the
jurisdiction is a dilatory plea; its purpose is to defeat a cause of action without
regard to whether the claims asserted have merit.4 The purpose of a dilatory
plea is not to force the plaintiff to preview the case on its merits but to
establish a reason why the merits of the plaintiff’s claims should never be
reached.5
When a plea to the jurisdiction challenges the pleadings, we determine if
the pleader has alleged facts that affirmatively demonstrate the court’s
jurisdiction to hear the cause. 6 We construe the pleadings liberally in favor of
the plaintiff and look to the pleader’s intent.7 If 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
3
… See Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226
(Tex. 2004).
4
… Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000).
5
… Id.
6
… See Miranda, 133 S.W.3d at 226; Tex. Ass’n of Bus. v. Tex. Air
Control Bd., 852 S.W.2d 440, 446 (Tex. 1993).
7
… See Miranda, 133 S.W.3d at 226.
4
raised, as the trial court is required to do.8 If the evidence creates a fact
question regarding the jurisdictional issue, then the court cannot grant the plea
to the jurisdiction and the fact issue will be resolved by the fact finder. 9
However, if the relevant evidence is undisputed or fails to raise a fact question
on the jurisdictional issue, the trial court rules on the plea to the jurisdiction as
a matter of law.10
B. Exhaustion of Administrative Remedies
Appellants argue that the trial court lacked subject matter jurisdiction over
the condemnation proceedings because appellees failed to exhaust their
administrative remedies under the Administrative Procedure Act (APA) by failing
to appeal Cen-Tex’s offered terms and rates to the Cen-Tex board and to the
State Office of Administrative Hearings (SOAH). 11 According to appellants, only
8
… Id. at 227; Bland ISD, 34 S.W.3d at 555.
9
… Miranda, 133 S.W.3d at 227–28.
10
… Id. at 228; see Bland ISD, 34 S.W.3d at 555; City of Fort Worth v.
Shilling, 266 S.W.3d 97, 101 (Tex. App.—Fort Worth 2008, pet. denied).
11
… See Tex. Gov’t Code Ann. § 2003.021 (Vernon 2008) (providing that
SOAH is an “independent forum” to conduct executive branch adjudicative
hearings in cases under chapter 2001 of the government code and cases
voluntarily referred by a governmental agency).
5
after a final SOAH determination of the issue would appellees have been
permitted to appeal in the appropriate district court.12
The APA applies to the decisions of a “state agency,” which is defined
by the statute as “a state officer, board, commission, or department with
statewide jurisdiction that makes rules or determines contested cases.” 13
Consistent with this definition, courts have held that the APA does not apply
to administrative bodies that lack state wide jurisdiction.14
Under the provisions of the Rural Rail Transportation District Act (Rail
District Act), 15 Cen-Tex does not have statewide jurisdiction. Instead, the Rail
District Act establishes that rail districts may be formed only by certain counties
12
… See id. § 2001.171 (Vernon 2008) (“A person who has exhausted
all administrative remedies available within a state agency and who is aggrieved
by a final decision in a contested case is entitled to judicial review under this
chapter.”).
13
… See id. § 2001.003(7) (Vernon 2008) (emphasis added).
14
… See, e.g., Sanchez v. Huntsville Indep. Sch. Dist., 844 S.W.2d 286,
289 (Tex. App.—Houston [1st Dist.] 1992, no writ) (school district not “state
agency” under APA); Bd. of Trs. of Big Spring Firemen’s Relief & Retirement
Fund v. Firemen’s Pension Comm'r, 808 S.W.2d 608, 610–11 (Tex.
App.—Austin 1991, no writ) (firefighters’ relief and retirement fund board not
“state agency” under APA); Hawthorne v. City of Dallas, No. 05-99-01123-CV,
2000 WL 1240015, at *2 n.8 (Tex. App.—Dallas Aug. 31, 2000, pet. denied)
(not designated for publication) (police department not “state agency” under
APA).
15
… See Tex. Rev. Civ. Stat. Ann. art. 6550c, §§ 1–9 (Vernon Supp.
2008).
6
and are limited geographically to the counties that form them. 16 Because Cen-
Tex lacks state wide jurisdiction, it is not a “state agency” within the meaning
of the APA. Therefore, we hold that appellees were not required to follow APA
procedures by appealing Cen-Tex’s offer to the SOAH before filing
condemnation proceedings in the trial court.
C. Gas Utilities Authority and Common Carrier Authority to Condemn
Property of Rural Rail Transportation Districts
Appellants contend that appellees are not empowered to condemn
property owned by Cen-Tex because the Texas Utilities Code and the Texas
Natural Resources Code only authorize gas companies and common carriers to
condemn the property of “any person or corporation,” and, according to
appellants, Cen-Tex is neither a person nor a corporation.17
Section 181.004 of the utility code provides:
16
… See id. § 3(b) (“A county eligible to create or re-create a district is
one in which is located a rail line that is in the process of being or has been
abandoned through a bankruptcy court or Interstate Commerce Commission
proceeding, or any line carrying 3 million gross tons per mile per year or less.”);
id. § 3(c)(1) (stating a multi-county rail district may declare its “boundaries . .
. as the boundaries of the counties included” in the rail district); id. § 3A(b)
(stating the boundaries of a single-county rail district “are the boundaries of the
county in which the district is created”); id. § 5 (establishing rail district powers
and duties).
17
… See Tex. Util. Code Ann. § 181.004 (Vernon 2007); Tex. Nat. Res.
Code Ann. § 111.019 (Vernon 2001).
7
A gas or electric corporation has the right and power to enter on,
condemn, and appropriate the land, right-of-way, easement, or
other property of any person or corporation.18
Similarly, section 111.019 of the natural resources code provides:
(a) Common carriers have the right and power of eminent domain.
(b) In the exercise of the power of eminent domain granted under
the provisions of Subsection (a) of this section, 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. 19
The Code Construction Act governs our interpretation of the Texas
Utilities Code and Texas Natural Resources Code. 20 We are to apply its
definitions when interpreting statutes “unless the statute or context in which
the word or phrase is used requires a different definition.” 21
18
… Tex. Util. Code Ann. § 181.004 (emphasis added).
19
… Tex. Nat. Res. Code Ann. § 111.019 (emphasis added).
20
… See Tex. Gov’t Code Ann. § 311.002(1) (Vernon 2005) (stating that
the Code Construction Act “applies to . . . each code enacted by the 60th or
a subsequent legislature as part of the state’s continuing statutory revision
program”); see also Act of May 8, 1997, 75th Leg., R.S., ch. 166, §§ 1–12,
1997 Tex. Gen. Laws 713, 1018 (enactment of Texas Utilities Code); Act of
May 21, 1977, 65th Leg., R.S., ch. 871, art. I, §§ 1–17, 1977 Tex. Gen. Laws
2345, 2697 (enactment of Texas Natural Resources Code).
21
… Tex. Gov’t Code Ann. § 311.005 (Vernon 2005).
8
“Person” is defined in the Code Construction Act to include a
“corporation, organization, government or governmental subdivision or agency,
business trust, estate, trust, partnership, association, and any other legal
entity.” 22 The Rail District Act expressly provides that a rail district is a “public
body and a political subdivision of the state exercising public and essential
government functions.” 23 Thus the term “person” in the utilities and natural
resources codes includes rail districts such as Cen-Tex. Nothing in the language
of either code, or the context in which the term “person” is used in the codes,
require a different definition. We, therefore, hold that Cen-Tex is a “person”
whose property may be condemned by a gas corporation or common carrier
under section 181.004 of the utilities code and section 111.019 of the natural
resources code, respectively.24
22
… Id. § 311.005(2) (emphasis added).
23
… Tex. Rev. Civ. Stat. Ann. art. 6550c § 5(a); id. § 1(5) (stating rail
districts are “political subdivisions”).
24
… Appellants contend that using this Code Construction Act definition
of “person” to include governmental subdivisions is too broad because it would
allow gas corporations to condemn the property of any governmental
subdivision. Our construction of the statutes at issue, however, is limited to
the question of whether a rail district is a “person” whose property is subject
to condemnation by a utilities corporation and common carrier. We do not
address the issue of whether other governmental units would fall within this
definition.
9
D. Gas Corporations’ Right to Place Pipelines “Under” Rail District Property
Appellants argue that former section 181.005 of the utilities code does
not authorize Worsham-Steed and Cowtown to lay pipelines under railroads.
That section stated:
A gas corporation has the right to lay and maintain lines over and
across a public road, a railroad, railroad right-of-way, an interurban
railroad, a street railroad, a canal or stream, or a municipal street
or alley.25
In construing former section 181.005, we rely on the plain meaning of
the text unless a different meaning is supplied by legislative definition or is
apparent from context, or unless such a construction leads to an absurd
result.26 We may consider other matters in ascertaining legislative intent,
25
… See Act of May 8, 1997, 75th Leg., R.S., ch. 166, § 1, 1997 Tex.
Gen. Laws 713, 983 (emphasis added). Section 181.005 was amended during
the 81st Legislature by Act of May 25, 2009, 81st Leg., R.S., ch. 1311, § 2,
2009 Tex. Sess. Law Serv., 4117, 4117 (Vernon 2009) (effective June 19,
2009) (providing that a gas corporation has the “right to lay and maintain lines
over, along, under, and across a public road, a railroad, railroad right-of-way,
an interurban railroad, a street railroad, a canal or stream, or a municipal street
or alley” (emphasis omitted)). The former version of section 181.005 applies
to this case.
26
… Tex. Gov’t Code Ann. § 311.011 (Vernon 2005); Entergy Gulf
States, Inc. v. Summers, 282 S.W.3d 433, 437 (Tex. 2009); City of Rockwall
v. Hughes, 246 S.W.3d 621, 625–26 (Tex. 2008).
10
including former statutory provisions on the same subject, the objective of the
statute, and the circumstances under which the statute was enacted.27
We believe that the history of section 181.005, the legislature’s
objectives for it and its predecessor, and the circumstances under which both
versions of the statute were enacted evidence a legislative intent that gas
corporations be allowed to lay pipelines under railroads. The predecessor
statute to section 181.005 provided as follows:
Art. 1436 Right-of-Way
Such corporation shall have the right and power to enter
upon, condemn and appropriate the lands, right-of-way, easements
and property of any person or corporation, and shall have the right
to erect its lines over and across any public road, railroad, railroad
right-of-way, interurban railroad, street railroad, canal or stream in
this State, any street or alley of any incorporated city or town in
this State with the consent and under the direction of the
governing body of such city or town. Such lines shall be
constructed upon suitable poles in the most approved manner, or
pipes may be placed under the ground, as the exigencies of the
case may require.28
27
… Tex. Gov’t Code Ann. § 311.023(1)–(5) (Vernon 2005); State v.
Shumake, 199 S.W.3d 279, 284 (Tex. 2006) (“We may consider other matters
in ascertaining legislative intent, including the objective of the law, its history,
and the consequences of a particular construction.”); Union Bankers Ins. Co. v.
Shelton, 889 S.W.2d 278, 280 (Tex. 1994) (“When determining legislative
intent, the courts may look to the language of the statute, legislative history,
the nature and object to be obtained, and the consequences that would follow
from alternate constructions.”).
28
… Act approved Mar. 25, 1911, 32nd Leg., R.S., ch. 111, § 4, 1911
Tex. Gen. Laws 228, 229 (emphasis added), repealed by Act of May 8, 1997,
11
Prior to the enactment of article 1436, electric companies suspended electric
wires across public roads without any real authority.29 If the wires fell, causing
injury, the companies were subjected to liability. To alleviate the situation, the
legislature, through passage of article 1436, granted authority to gas and
electric corporations to cross roads, railroads, streams, and other such
obstacles.30 Thus, by enacting article 1436, the legislature recognized the
importance and public necessity associated with the construction and operation
of pipelines by public utilities.31 The legislature also recognized that pipelines
would have to cross the long corridors created by public roads, railroads, canals
and streams and provided a means for public utilities to meet their obligations
to serve the public, including placing the pipelines underground if necessary.32
75th Leg., R.S., ch. 166, § 1, secs. 181.004–.006, 1997 Tex. Gen. Laws
713, 983 (current version at Tex. Util. Code Ann. §§ 181.004–.006 (Vernon
2007)).
29
… See Incorporated Town of Hempstead v. Gulf States Utils. Co., 146
Tex. 250, 254, 206 S.W.2d 227, 229 (1947).
30
… Id. at 254–55, 206 S.W.2d at 229–30.
31
… See, e.g., id. at 254, 206 S.W.2d at 228–29 (noting importance of
electric companies’ ability to condemn and cross public roads and railroads even
if permission is refused); Lo-Vaca Gathering Co. v. Mo.-Kan.-Tex. R.R. Co., 476
S.W.2d 732, 739 (Tex. Civ. App.—Austin 1972, writ ref’d n.r.e.) (same applies
to pipeline corporations).
32
… Act approved Mar. 25, 1911, 32nd Leg., R.S., ch. 111, § 4, 1911
Tex. Gen. Laws 228, 229 (repealed 1997); see Lo-Vaca, 476 S.W.2d at 739
12
Construing the utilities code to exclude placement of pipelines under a
railroad would not only thwart the purpose of the statute, it would lead to the
absurd result of allowing placement of pipelines over, but not under,
railroads—even when an underground pipeline would be the safest and most
suitable placement of the pipeline. Certainly, the legislature did not intend to
limit the power of gas utilities and pipeline companies to laying pipeline only
over or above ground, regardless of the risk to public safety or convenience.
We also find authority for the laying of pipelines underground in section
181.022 of the utilities code. This section grants gas corporations the express
authority to lay and maintain pipelines “through, under, along, across, or over
. . . public highway[s].” 33 Article X, section 2 of the Texas Constitution
declares railroads to be “public highways.” 34 Because railroads are public
(legislature gave utilities and pipeline corporations “the extraordinary power of
eminent domain” to ensure the ability to cross “any public road, railroad,
railroad right of way, interurban railroad, street railroad, canal or stream in this
State”); Koslosky v. Tex. Elec. Serv. Co., 213 S.W.2d 853, 854 (Tex. Civ.
App.—Eastland 1948, writ ref’d) (discussing importance of eminent domain so
that power lines would not be required to stop absent permission to cross).
33
… Tex. Util. Code Ann. § 181.022 (Vernon 2007) (emphasis added).
Unlike utilities code section 181.005, section 181.022, was not amended by
the 81st legislature.
34
… Tex. Const. art. X, § 2 (“Railroads heretofore constructed or which
may hereafter be constructed in this state are hereby declared public highways
. . . .”).
13
highways, we hold that appellees possess additional statutory authority to lay
pipelines under railroads by virtue of section 181.022 of the utilities code.
Appellants contend, however, that if railroads are public highways, laying
the pipelines would destroy appellants’ prior public use of the land. 35 The
Supreme Court of Texas has held, however, that courts need not consider
whether a utility easement is consistent with or destructive of a railroad’s prior
public use of the property because, when the legislature granted utilities the
power to condemn and cross railroads, it implicitly determined that the use of
the property for a utility crossing is consistent with the railroad’s prior public
use.36 Consequently, “no question as to the comparative importance of the two
uses” is “left open for the courts to determine.” 37 Moreover, the trial court
found that appellees’ condemnation for the pipeline easement at issue would
“not interfer[e] with railroad operations.” There is no evidence in the record
35
… When property is already devoted to public use, it may not be
condemned if the proposed use “would practically destroy the use to which it
has been devoted,” absent a showing of paramount necessity. Canyon Reg'l
Water Auth. v. Guadalupe-Blanco River Auth., 258 S.W.3d 613, 616–17 (Tex.
2008) (quoting Sabine & E.Tex. Ry. Co. v. Gulf & Interstate Ry. Co. of Tex.,
92 Tex. 162, 166, 46 S.W. 784, 786 (1898)).
36
… Fort W orth & Rio Grande Ry. Co. v. Sw. Tel. & Tel. Co., 96 Tex.
160, 173, 71 S.W. 270, 275 (1903); see Lo-Vaca, 476 S.W.2d at 737.
37
… Fort Worth & Rio Grande Ry. Co, 96 Tex. at 173, 71 S.W. at 275;
see Lo-Vaca, 476 S.W.2d at 738–39.
14
that appellants’ prior public use of the property for railroad operations would be
destroyed.
Accordingly, we hold that appellees are authorized to lay pipelines under
railroads and that their exercise of this right is consistent with, and will not
destroy, the railroad’s prior public use.
E. Exclusive Federal Jurisdiction
Finally, appellants argue that appellees’ condemnation proceedings are
preempted by the exclusive jurisdiction of the federal Surface Transportation
Board (STB) because the easements at issue are so broad as to impact railroad
operations. In determining issues of federal preemption, we start with a
“presumption against pre-emption” unless it was the clear and manifest purpose
of Congress to supercede state powers.38
The STB’s jurisdiction is set out in 49 U.S.C. § 10501(b) as follows:
The jurisdiction of the [STB] over–
(1) transportation by rail carriers, and the remedies provided
in this part with respect to rates, classifications, rules
(including car service, interchange, and other operating rules),
practices, routes, services, and facilities of such carriers; and
38
… Wyeth v. Levine, ---- U.S. ----, 129 S. Ct. 1187, 1194–95 & 1195
n.3 (2009) (quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485, 116 S. Ct.
2240, 2250 (1996)).
15
(2) the construction, acquisition, operation, abandonment, or
discontinuance of spur, industrial, team, switching, or side
tracks, or facilities, even if the tracks are located, or intended
to be located, entirely in one State,
is exclusive. Except as otherwise provided in this part, the
remedies provided under this part with respect to regulation of rail
transportation are exclusive and preempt the remedies provided
under Federal or State law.39
This statute expresses Congress’s intent to preempt state regulatory
authority over railroad operations. 40 However, exclusive federal jurisdiction
applies only when the state action is regulatory in nature or would otherwise
impede railroad operations. 41
39
… 49 U.S.C. § 10501(b) (2007).
40
… See 49 U.S.C. § 10102(9)(A) (2007); Friberg v. Kan. City S. Ry. Co.,
267 F.3d 439, 443 (5th Cir. 2001) (“The regulation of railroad operations has
long been a traditionally federal endeavor, to better establish uniformity in such
operations and expediency in commerce . . . .”); CSX Transp., Inc. v. Ga. Pub.
Serv. Comm'n, 944 F. Supp. 1573, 1582 (N.D. Ga. 1996) (holding that 49
U.S.C. § 10501(b) provides “an incredibly wide grant of exclusive jurisdiction
to the STB to regulate railroad operations”).
41
… See Friberg, 267 F.3d at 443–44; City of Sachse, Tex. v. Kan. City
S., 564 F. Supp. 2d 649, 656 (E.D. Tex. 2008).
16
Appellants do not contend that appellees’ laying of gas pipelines under
the railroads involve the regulation of railroad operations. Moreover, appellants
offered no evidence that appellees’ pipelines will impede railroad operations.
Therefore, we must presume that Congress did not intend the scope of STB
preemption to include appellees’ exercise of eminent domain powers in these
cases.42 We, therefore, hold that appellees’ condemnations do not invoke the
STB’s exclusive jurisdiction.
III. Conclusion
Having overruled all of appellants’ issues, we hold that the trial court did
not err in denying appellants’ pleas to the jurisdiction. The orders of the trial
court are affirmed.
JOHN CAYCE
CHIEF JUSTICE
PANEL: CAYCE, C.J.; GARDNER and WALKER, JJ.
DELIVERED: October 1, 2009
42
… See, e.g., Wyeth, ---- U.S. ----, 129 S. Ct. at 1194–95 & 1195 n.3
(requiring initial presumption against federal preemption of state power); CSX
Transp., 944 F. Supp. at 1582 (holding that STB has exclusive jurisdiction “to
regulate railroad operations”).
17