## IN THE SUPREME COURT O F TEX AS

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. 15-0225

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### D E N B U R Y 

### G R E E N 

### P IP E L IN E


### - T E X A S 

### , L L C , P E T IT IO N E R 

### ,

v. 

### T E X A S 

### R IC E 

### L A N D 

### P A R T N E R S 

### , L T D


### . , E T A L


### . , R E S P O N D E N T S

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O N P E T I T I O N F O R R E V I E W F R O M T H E C O U R T O F A P P E A L S F O R T H E N I N T H D I S T R I C T O F T E X A S

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Argued Septem ber 15, 2016

J U S T I C E G R E E N delivere d the opinion of the Court in which C H I E F J U S T I C E H E C H T , J U S T I C E W I L L E T T , J U S T I C E G U Z M A N , J U S T I C E L E H R M A N N , J U S T I C E B O Y D , J U S T I C E D E V I N E , and J U S T I C E B R O W N joined.
J U S T I C E J O H N S O N joined in the judgme nt only

. We must decide whether D e n b u r y G r e en Pipeline-Texas, L L C (De nbury Gre en) is a common

car rier pursuant to the Texas Natura l R es o u rces Code and the test we set out in Texas Rice Land Partners, Ltd. v. D enbury Gree n Pipeline-Tex as, LL C ( Texas Rice I

). 363 S.W.3d 192, 202 (Tex

. 2012); T E X
. N A T
. R E S
. C O D E § 111.019(a)

. Be cause Denbur y Gre en’s summary judgme nt evidenc e conclusively established a rea sonable probability that, at some point a fter construction, the car bon
diox ide pipeline known as “the Gre en L ine” would serve the public, as it does curr ently , we hold thatDenbur

y Gre en is a common car

rier as a matter of law. Acc ording ly , we reve rse the judgme nt of the
court of a ppeals a nd reinstate the trial court’ s judgme nt.

I. Background and Proc edural History
Denbur y Gre en is an aff

iliate of Denbur

y Onshore, L L C, and both are wholly owned, indirect
subsidiaries of De nbury

Resource s, a publi cly trade d holding company

. J ames E. Holland, D avid
C. Holland, and Texas Rice L and Partners, L td. (collectively “Te x as Rice”) own approximately 1 3,800 acr es of land in Jeffe rson County , Texas. The land is lease d and used f or rice far ming.
Acc ording to the aff

idavit testimony of Dan Cole, Denbur y Green ’s Vice President of
Marke ting and Business Deve lopment, Denbur y Gre en was formed to build, own, and opera te a

car bon diox ide pipeline known as “the Gre en L ine” as a common car rier in Texas. The Gre en L ine
beca me part of a pipeline network formed, at least in part, to transport car bon diox ide from J ackson,
Mississ ippi (kno wn as the “Jackson Dome” are a), along with anthropog enic car bon diox ide

2 (manmade CO ) from natura lly occur ring source s and produce rs located along the Gre en L ine’s

route. Cole stated that the Gre en L ine’s route throug h Texas was desig ned to be close to ref ineries,

2 plants, and other fac iliti es t hat could use t he li ne as a m ea n s t o t ra nsport CO

. I n fac t, the Green 2

2 L ine is the only pipeline curr ently available to those CO ref ineries, plants, and oth er industrial
fac iliti es. Acc ording to Cole, Denbur y Gre en chose the pipeline’s specific location for its proxi mity

2 to those industrial fa ci lities, which could transport anthropog enic CO to oil fields, underg round

T e x a s R i c e L a n d P a r t n e r s , L t d

. i s a f a m i l y l i m i t e d p a r t n e r s h i p w i t h D a v i d C

. H o l l a n d a s g e n e r a l p a r t n e r a n d 1 h i s t h r e e c h i l d r e n a s l i m i t e d p a r t n e r s
.

T h e G r e e n L i n e r u n s w e s t a l o n g t h e G u l f C o a s t f r o m t h e T e x a s / L o u i s i a n a b o r d e r t o t h e O y s t e r B a y o u F i e l d 2 i n C h a m b e r s C o u n t y , T e x a s , a n d c o n t i n u e s t o t h e W e s t H a s t i n g s F i e l d i n B r a z o r i a a n d G a l v e s t o n C o u n t i e s , T e x a s
. 22

storag e rese rvoirs, or other locations wher e CO could be used or stored. As a result, Cole testified,
the Green L ine has serve d a public use since its completion in 2010, and it is curr ently used to

2 2 transport CO owned by Denbur y Gre en and it s af

fi l i at es as well as CO owned by unaff iliated
entities.
Be fore the Gre en L ine’s construction bega n , De nbury Gre en soug ht permission from
landowner s acr oss the proposed Gulf Coast route, including Texas Rice, to survey their prope rty

. I n late 2007, Denbur

y Gre en attempted to survey two trac ts of Texas Rice’s land in J eff erson County
but was denied acc ess. Not long afte r, in ear ly 2008, Denbur y Gre en filed a T-4 permit application
with the Texas Railroad Commi ssion to obtain common-ca rrier status, which would g ive it eminent
domain authority pursuant to the Natura l Resource s Code. See T E X
. N A T
. R E S
. C O D E § 111.019(a) (“Common car

riers have the rig ht and power of eminent domain.”). Shortly there afte r, the Railroad
Commi ssion g rante d Denbur y Gre en a T-4 permit. Armed with the permit, Denbur y Gre en filed suit
ag ainst Texas Rice for an injunction a llowing acc ess to the J eff erson County trac ts so that it c ould complete the pipeline survey
. Whil e the suit was pending , Denbur y Gre en took possession of Texas
Ri c e ’ s p r operty pursuant to section 21.021(a) of the Texas Property Code, which allows a condemno r
to tak e p o s session even while the proper ty owner challeng es the condemnor ’s eminent domain authority

. T E X
. P R O P
. C O D E § 21.021(a)

. Denbur y Gre en then survey ed for and constructe d the
Gre en L ine.
On cross-motions for su m m ar y judgme nt, the trial court found that Denbur y Gre en was a

common car

rier with eminent domain authority pursuant to the Natura l Resource s Code. The court of appea ls aff

irmed the trial court’s judgme n t

. T ex
. Rice Land Partners, Ltd. v. Denbury Gree n
3Pipeline-Tex

. , L L C , 296 S.W .3d 877, 881 (Tex. App.—B eaumont 2009), rev’ d , 363 S.W .3d 192

(Tex. 2012). Texas Rice then appea led to this Court. Texas Rice I , 363 S.W .3d 192. We reve rsed
and rema nded the case to the trial court for proce eding s consistent with the common-ca rrier test we established, aff

ording Denbur

y Gre en the opportunity to produce “re asona b l e proof of a future
customer, thus demonstrating that [t he Gre en L ine] will indeed transport to or for the public for hire
and is not limit ed in [i ts] use to the wells, stations, plants, and ref ineries of the owner .” Id

. at 204.
On rema nd, Denbur

y Gre en adduce d evidenc e not befor e this Court in Texas Rice I to support its asser tion of common-ca

rrier status. Denbur

y Gre en p roduced transporta tion ag ree ments with
unaff iliated entities Airg as C ar b o n i c, I nc. and Air Products and Chemicals, I nc (Air Products).
Additional evidenc e included a transporta tion ag ree ment betwee n Denbur y Gre en and Denbur

y Onshore, acting on b ehalf of itself and other working -intere st owner s that are unaff iliated with
Denbur y Gre en or a

ny of its affiliates. 3 Airg as Carbonic, a wholly owned subsidiary of Airg as, I nc., manu fa ct u res and distributes

2 2 liquid CO , commonly selling its CO to customers in the industrial, me dical, and food-pr ocessing

2 industries. I n 2012, Airg as Carbonic beg an looking for a method to ship its out-of-state CO to the
Houston are a. Awar e of the rec ently constructe d Gre en L ine, Airg as Carbonic approa ched Denbur y Gre en and in J anuar

y 2013 finalized a transporta tion ag ree ment allowin g Denbury Gre en to ship

B e c a u s e w e h o l d t h a t t h e s u m m a r y j u d g m e n t e v i d e n c e , i n c l u d i n g e v i d e n c e r e l a t e d t o u n a f f i l i a t e d s h i p p i n g 3
a g r e e m e n t s , e s t a b l i s h e s D e n b u r y G r e e n ’ s c o m m o n c a r r i e r s t a t u s , i n f r a a t

_ _ _ , w e e x p r e s s n o o p i n i o n o n w h e t h e r c o n t r a c t s b e t w e e n a f

f i l i a t e d e n t i t i e s t h a t m a y b e n e f i t u n a f f i l i a t e d w o r k i n g i n t e r e s t o w n e r s s a t i s f y t h e T e x a s R i c e I

t e s t

.

42

CO , owned by Airg as Carbonic, from the Texas/L ouisiana border t h ro u gh the Gre en L ine to 4
Br azoria County , Texas, wher e it is rec eived and proce ssed in a new Airg as Carbonic manufa cturing

2 plant. The CO is ultimately sold to Airg as Carbonic customers in the Ho u s t o n are a. The new 5

2 Airg as Carbonic plant beg an rec eiving and proce ssing Airg as Carbonic’ s C O delivere d over the
Gre en L ine in October

2013.
Air Products specia liz es in the manufa cture and s u p p ly of industrial g ases. Air Products beg an neg otiating with Denbur y Gre en in 2008, in anticipation of the Gre en L ine’s construction. I n 2010, the United States Depart ment of Energ y , throug h its I ndustrial Carbon Capture and Sequestration Prog r a

m, s e le cted Air Products to rec eive $285 milli on in funding for the development

2 and opera tion of a sy stem to captur e and sequester CO from Air Products’s steam methane
ref ormer s l o ca t ed wi thin the Valer o Refiner y in Port Arthur, Texas. By doing so, Air Products

2 reduc es the amount of CO rele ased into the atmosph er e by the ref ormers. I n order to rema in

2 2

. economica lly viable, howeve r, Air Products require s a CO pipeline to transport the captur ed CO
After finalizing its ag ree ment with the Depa rtment of Energ y , Air Pr o d u ct s enter ed into a transporta tion ag ree ment with Denbur y Gre en. Under the ag ree ment, Air Produ ct s fi rs t ships

2 2 captur ed CO over a latera l pipe line connec ting the Valer o Refiner y and the Gre en L ine. The CO
is then transporte d over the Gre en L ine to the West Hasting s Field in Br azoria County , Texas, wher e

2 title and ownership of t he C O transfe rs to Denbur y Gre en. Once there , Denbur y Gre en first uses

2 the CO in its t ertiar

y rec overy

opera tions, but t he g as is ultimately sequester ed under g round once

2 A c c o r d i n g t o t h e t r a n s p o r t a t i o n a g r e e m e n t , A i r g a s C a r b o n i c r e t a i n s t i t l e t o t h e C O s h i p p e d o v e r t h e G r e e n 4 L i n e
.

2

T h e n e w p l a n t l i q u e f

i e s a n d p u r i f

i e s C O o r i g i n a t i n g f

r o m a n A i r g a s C a r b o n i c p l a n t i n S t a r , M i s s i s s i p p i

. 5
5oil and g as opera tions are abandone d. Acc ording to Air Products, approximately 51.5 milli on cubic

2 fee t of CO per day will be shipped over the Gre en L ine and ulti m at el y s equeste red during the
fiftee n-y ear

contra ct term. Upon revie wing the evidenc e adduce d on rema nd, the court of ap p ea l s co n cluded that
“re asonable minds could differ reg arding whether , at the time Denbur y Gre en intended to build the
Gre en L ine, a re as o n ab l e p robabili ty exis ted that the Gre en L ine would serve the public” and

reve rsed the trial court’s order g ranting De n b u ry Gre en summary judgme nt. 457 S.W .3d 115, 121–22 (Tex. App.—Be aumont 2015, pet. g rante d).
II. Texas Rice I
To comport with t h e T ex as C o nstitut ion, we held in Texas Rice I that “[t] o qualify as a

common car

rier with the power of eminent domain, the pipeline must serve the public; it cannot be built only for the builder ’s exclusive use.” 363 S.W.3d at 200. Specifica lly ,

2 for a person intending to build a CO pipeline to qua lify as a common car rier under Section 111.002(6) [of the Natura l Re source s Code], a rea sonable probability must exis t that the pipelin e wi l l at some point afte r construction serve the public by transporting g as for one or more customers who will either reta in owner ship of their g as or se ll it t o parties other than the ca

rrier

. Id

. at 202 (footnotes omitted). For purposes of this test, “a rea sonable probability is one that is more likely than not.” Id. at 202 n.29. Additionally , once a landowner challeng es common-ca rrier status, “the burden falls upon the pipeline company to establish its common-ca rrier bona fides if it wishes to exercise the powe r of e minent domain.” Id . at 202.
Under this constitutional fra mew o rk , we h eld that Denbur y Gre en was “not entitled to

common-ca

rrier status simply beca

use it obtained a common-ca rrier permit, filed a tariff

, and ag ree d

6to make the pipeline availab l e t o any third party wishing to transport its g as in the pipeline and

willing to pay the tariff

.” Id

. Affida

vit testimony in Texas Rice I supported that Denbur y Gre en was

2 neg otiating with parties to tr an s p o rt CO over the Gre en L ine, but the testimony did not indicate
whether the g as would be used solely by Denbur y Gr ee n or for the benef

it of other parties. Id

. at
203. Additionally , rec ord evidenc e support ed only the possibili ty of future customers using the
Gre en L ine, but the rec ord was devoid of any identified potential customers. Id

. Moreo v er , the

rec ord included objective evidenc e of Denbur y Gre en’s intent to use the pipeline solely for its own
purposes. Id. Severa l sta t em en ts on Denbur y Gre en’s website sug g ested that Denbur y Gre en’s
intended use for the pipeline actua lly rela ted to the eventua l purcha se and acquisition of all natura lly

2 occur ring CO in the reg ion in an effort to fully harne ss the Green L in e for Denbury Gre en’s own tertiary rec overy opera tions. Id . at 203–04. Thus, the evidence before the C o u rt i n T exas Rice I established only a possi bility , and not

a rea sonable probability , that the pipeline “at some point afte r construction” would serve the public. Cf

. State v. K.E.W

., 315 S.W .3d 16, 23 (Tex. 2010) (re cog nizi ng that “proba bility ” is sy

nony mous with “ likelihood”). Be cause “[a] sine qua non of lawf ul taking . . . f

or or on a ccount of public use

. . . is that the profe ssed use be a public one in truth,” we held that Denbur y Gre en’s mere asser

tions
of the possib i l i t y of public use wer e insufficient to conclude that Denbur y Gre en was a common

car rier. Texas Rice I

, 363 S.W .3d at 202 (quoting Hous. Auth. of Cit y of Dallas v. Higginbotham , 143 S.W .2d 79, 84 (Tex. 1940)). We re manded the c ase to the trial court for further proce eding s, concluding that once a pi peline’s c ommon-car rier sta tus has been challeng ed, “the company must
prese nt rea sonable proof of a future customer, t h us demonstrating that the pipeline will indeed

7transp o rt ‘to or for the publ ic for hire’ and i s not ‘limited in [i ts] use t o the wells, stations, plants,

and ref ineries of the owner .’” Id

. at 204 (qu o t i n g T E X
. N A T
. R E S
. C O D E §§ 111.002(a) , .003(a) (alter ation in orig inal)). I n this appea l, the parties dispute whether Denbur y Gre en’s new evidenc e adduce d on rema

nd entitles it to summary judgme nt on the issue of whether it is a common car rier.
Be cause “the rig ht to condemn proper ty is constitutionally limit ed and turns in part on whether the

use of the proper

ty is public or private,” we rec og nize that “the ultimate question of wh ether a particula r use is a public use is a judicial question to be decide d by the courts.” Id. at 198 (quoting
Maher v. Lasater , 354 S.W .2d 923, 925 (Tex. 1962)). We are ag ain called upon to apply the test we

announce d in Texas Rice I to the fac ts of this case , considering whether Denbur y Gre en established

as a matter of law a rea sonable probability that, at some point afte r construction, the Gre en L i n e would serve the public by transporting g as fo r o ne or more customers who will either reta in

owner ship of their g as or sell it to parties other than the carri er
. W e h o ld that Denbur y Gre en satisfied the test established in Texas Rice I and is a common car rier pursuant to Chapter 111 of the
Natura l Resource s Code. 6 III. App lication of Texas Rice I Test
We revie w a g rant of summary judgme nt de novo. SeaBright Ins. Co. v. Lopez , 465 S.W .3d 637, 641 (Tex. 2015). The movant must prove that there is no g enuine issue of materia l fac t and that
it is entitled to judgme nt as a matter of law. T E X
. R. C I V
. P. 166a(c ); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding , 289 S.W

. 3 d 844, 848 (Tex. 2009). We revie w summary judgme nt

I n i t s b r i e f

i n g , D e n b u r y G r e e n a s k s t h a t w e d e t e r m i n e w h e t h e r s e c t i o n 2

. 1 0 5 o f t h e B u s i n e s s O r g a n i z a t i o n s 6 C o d e p r o v i d e s a n i n d e p e n d e n t g r a n t o f e m i n e n t d o m a i n a u t h o r i t y f o r a c o m m o n c a r r i e r
. S e e T E X
. B U S

. O R G S

. C O D E § 2

. 1 0 5

. B e c a u s e w e h o l d t h a t D e n b u r y G r e e n i s a c o m m o n c a r r i e r u n d e r C h a p t e r 1 1 1 o f t h e N a t u r a l R e s o u r c e s C o d e , w e n e e d n o t d e c i d e t h i s q u e s t i o n
. 8evidenc e “in the light most favor able to the party ag ainst whom the summary judgme nt was

rende red, cre diting evidenc e favor able to that party if rea sonable jurors could, and d i s re gar ding

contra ry evidenc e unless rea sonable jurors could not.” Mann Frankfort , 289 S.W .3d at 848 (citing City of Keller v. W

ilson , 168 S.W .3d 802, 827 (Tex. 2005)). A. The Court of App eals’ Inter pretat ion of Intent as Centr al to the Texas Rice I Test
The c ourt of appe als incorr ectly interpre ted the prefator

y phrase “for

a per son intending to
buil d ” t h at introduced the Texas Rice I test when it held that “ce ntral to our inquiry is Denbur y Gre en’s intent at the time of its plan to construct the Gre en L ine.” 457 S.W .3d at 120. Reliance on this phrase to focus on intent is improper beca use “per son intending to build” does not descr ibe the requisite int ent of a p ar t y at t he ti me t he pipeline was contemplated. Rather, the pref atory phrase
demonstrates who must prove common-ca rrier status—the pipeline company
. Foc using on intent,
the court of appea ls disreg arde d rele vant evidenc e submitt ed by Denbur y Gre e n th at Airg as Carbonic

2 had enter ed into a contra ct to transport its CO over the Gre en L ine, noting that the contra ct was
enter ed into afte r the pipeline’s construction. Id

. Additionally , the court of appea ls reje cted rele vant

2 evidenc e that the Gree n L ine’s future publ ic us e could be supported by its prox imity to other CO shippers once construction was completed. Id

. As a result, by shifting the analy sis to one focuse d

on intent, the court of appea ls ultimately ignor ed re l ev an t evidenc e supporting Denbur y Gre en’s

common-ca

rrier status.
I n Texas Rice I

, our revie w of the evi d en ce was nece ssarily limit ed to Denbur y Gre en’s

as sertions that it intended the Gre en L ine to be used by the public, but our deter mination that
Denbur y Gre en was not entitled to summary judgme nt rested on the absenc e of evidenc e establishing

9a reasonable probability of t h e Gr ee n L ine’s future publ ic us e. Texas Rice I , 363 S.W .3d at 204. Standing alone, evidenc e of Denbur y Gre en’s intent d id not meet Texas Rice I ’s rea sonable probability

standard—at most, it sug g ested only a mere poss ibilit y of future public use. See id . at
203–04. I n revie wing aff idavit testimony supporting De n b u ry Green’s asser tion that it was

2 neg otiating with other parties to transport CO over the Gre en L ine, we deter mined that the evidenc e failed to establish public use beca use, absent con t ra ry ev i dence , the testimony sug g ested that
Denbur y Gre en would transport ga s only for its own t ertiar y rec overy opera tions. Id. at 203. The testimony “did not identify any possible customers and [Denbury Gre en] was unawa re of any other

2 entit y u n af

fi liated with Denbur

y Gre en that owned CO near the pipeline route in L ouisiana and
Mississ ippi.” Id . Addre ssing De nbury Gre en’s c laims on its website, we conc luded:
Denbur y Gre en’s repr esenta

tions sug g esting t hat it (1) owns most or all of the

2 2 natura lly occur

ring CO in the reg ion, (2) intends to purcha se all the man-made CO

2 that might be produce d under curr ent and future ag ree ments, (3) see its acc ess to CO as g iving it a signific ant advanta g e over it s competitors, and (4) intends to fully u t iliz e the pipeline for its own purposes, are al l inconsistent with public use of t h e pipeline

. Id

. at 204 (empha sis added)

. We there fore held that Denbur y Gre en failed to establish a rea sonable probability

that, “at some point af

ter c onstruction,” the Gr een L ine would serve the public. Id

. The objective Texa s R i ce I t est balanc es t he property rig hts of Tex as l andowne rs wit h our state’s robust public policy interest in pipeline development, while also respe cting the constitutional
limit ations place d on the oil and g as industry

. See id

. at 197, 204. Prior to Texas Rice I , a pipeline

owner neede d to do littl e more than “che ck[] a cer tain b o x o n a one-pa g e g overnme nt form” to obtain common-ca

rrier status. Id. at 199. Essentially , a pipeline owner only neede d to assert that

1 0it was a common car rier, and it beca

me one. Howeve r, “[o] ur Constit ution demands far more.” Id

. To protec t the rig hts of proper ty owner s, the Texas Constit ution require s at least so m e objective
evidenc e that a pipeline will proba bly serve the public for its owne r to g ain the power to c ondemn private proper

ty under the authority of eminent domain. Id

. at 202. Co n t ra ct s wi th unaff iliated
entities that show non-pipeline-ow ned g as being transporte d for the benef it of the unaff

iliated entity
can be rele vant to showing rea sonable proba bility of future public use.
Texas Rice would have this Court ho ld th a t b eca use the Airg as Carbonic contra ct was enter ed
into afte r the Gre en L ine was contemplated—a nd even afte r this Court’s holding in Texas Rice I —it
is irrele vant and, at most, ra i s es a fact issue as to whether Denbur y Gre en intended to make the pipeline ava ilable to the public. Simply put, this rea ding misunderstands the Texas Rice I test and
the re asoning behind it.
At o ra l ar g ument, both parties expressed their belief that evidenc e of post-construction

contra cts is rele vant to the common-ca rrier analy sis. We ag ree
. Whil e post-construction contra cts considered without any other rele vant evidenc e would normally establish only a pre- construction possibili ty of future public use, such contra cts can be rele vant to showing a rea sonable probability that, “at some point afte r construction,” a pipeline will serve the public. For example, such contra cts

2 ca n speak direc tly to whether specific , identified potential customers own CO near a pipel i n e’ s route, a s in this ca se. More over, w hen combined w ith other evidenc e, post-construc tion contrac ts could allow a rea sonable observe r to deter mine that, g iven the reg ulatory atmosphere and proxi mity
of the pipeline to potential customers, at the time common-ca rrier status was challeng ed it was “more likely than not” that a pipe line would someday serve the public.

1 1When considere d in the li gh t most favor able to Texas Rice, indulging ever y rea sonable
in f e r e n c e in it s favor , Denbur y Gre en conclusively established that there was a rea sonable probab il it y that, at s o m e p o i n t afte r construction, the Green L ine would serve the publ ic. Wit h evidenc e that

2 Denbur y Gre en enter ed into a contra ct in 2013 to transport CO for Airg as Carbonic, along with the proxi mity of t he Green L ine t o potential customers such as Airga s Carb o n i c and Air Products, no longe r could a rea sonable fac t- fi n d er d eter mine that a g enuine fac t issue exis ts as to whether the
Gre en L ine would, at some point after construction , do what it now most c erta inly does: transport

2 CO owned by a customer who re tains owner ship of the g as. The Airg as Carbonic contra ct does

more than show that it is “more likely than not” that the Gre en L ine will someday be used for public

use; it shows that the Gree n L ine is used for public use today

. Most importantly , the Air Products transporta tion ag ree ment supports Denbur y Gre en’s contention that the pipeline route was desig ned
in part to fac ilitate the transfe r of g as owned by third parties. Acc ording to Air Products, “[w]i thout

2 the Denbur

y Gre en Pipeline, the Air Products CO captur e prog ram would not have been economica l
and would not have been undertake n.” The proposed Gre en L ine was not only within g eog raphic
prox imity to Air Products’s ref ormers in the Valer o Refiner y , but it was the only pipeline close

2 enoug h to transport Air Products’s CO

. The close proxi mit y , an d l ac k of competing pipelines,

cause d Air Products to beg in neg otiating with Denbur y Gre en in 2008, befor e the pipeline was
construc t ed

. I t i s t rue that the Air Products contra ct, standing alone, would not satisfy the Texas

2 Rice I test beca

use title to t h e C O t ra n s fe rs to Denbur y Gre en at the end of its transport. Id. (“I f
Denbur y consumes all the pipeline product for itself, it is not transporting g as ‘to

. . . the public for
hire.’” ). Howeve r, when considere d toge ther with the Gre en L ine’s proxi mity to identified potential

1 2customers, including Air Products, and the Airg as Carbonic transporta tion co n t ra ct , under which

2 Airg as Carbonic reta ins tit le to the CO , the summary judgme nt e vidence conclusively establishes
that it was “more likely than n o t ” t h at, “at some point afte r construction,” the Gre en L ine would

serve the public.

B. Th e Court of Ap peals’ Requirem ent of a Su bstantial Public In ter est
The court of appea ls err oneously require d that the rea sonably probable future use o f the pipeline serve a “substantial public interest.” 457 S.W .3d at 121. The court of appea ls discounted
Denbur y Gre en’s claim that small interest owner s in the West Hasting s and J ackson Dom e fi el d s

2 benef itted from CO transfe rre d from those units over the Gre en L ine even though Denbur y Onshore
owned the c ontrolling intere sts in both uni ts, c oncluding that it raised a f act issue of

whether such

use was s u b s t an t ial. Id

. Additionally , the court of appea ls deter mined that the Air Products

2 ag ree ment, under which Air Products would transfe r owner ship of its CO to D enbury Gre en even though Denbur

y Gre en was require d to sequester the g as in a method t h at complied with Air
Products ’s ag ree ment with the fede ral g overnme nt, was not sufficie ntly “substantial” to survive
summary judgme nt. Id. I n imposing this a dditional r equire ment, the cour t of appea ls e rrone ously
relied on this Court’s 1958 decision i n C o astal States Gas Producing C o. v. Pate

. Id

. (citing 309
S.W .2d 828, 833 (Tex. 1958)).
I n Pate , Coastal States Gas Producing Co. attempted to condemn a 1.84-ac re trac t to further develop an oil and g as lease

. Pate , 309 S.W .2d at 830. I n deciding that Coastal States had eminent
domain authority to drill a direc tional well, we deter mined that the state’s benef it—one-four

th of the
g ross production reve nue dedica ted t o t h e Permane nt School Fund—wa s a “dire ct, tang ible and

1 3substantial interest” in the taking

. Id

. at 833. We did not hold that the interest need be di re ct ,

tang ible, or substantial, but rathe r that the fac ts befor e us in Pate supported that the public’s interest
would be serve d. Id

. To the extent that the deg ree of service to the public was woven into our test
in Texas Rice I

, we held that for the pipeline to serve the public it must “transport[] g as for one or

more customers who wi l l ei t h er reta in owner ship of their g as or sell it to parties other than the

car rier.” 363 S.W .3d at 202 (empha sis added) (footnote omitted). Ex istential arg uments rela ted to the power and im portanc e of the i ndividual notwithst anding , we hold that evidenc e establishing a

rea sonable probabi l i t y t h at the pipeline will, at some point afte r construction, serve even one
customer una ffiliated with the pipeline ow ner is substantial enoug h to satisfy public use under the
Texas Rice I

test.
IV. Conclusion
After rema

nd, the evidenc e in the summary judgme nt rec ord befor e the trial court below was

no longe r l i m i ted to naked asser tions or Denbur

y Gre en’s subjective beliefs, as it was when we considere d Texas Ri ce I

. W e hold that the evidenc e adduce d by Denbur y Gre en on rema

nd

est ab l i s h ed as a matter of law that there was a rea sonable probability that, at some point afte r

2 construction, the Gre en L ine would serve the public by transporting CO for one or more customers who will either reta in owner ship of their g as or sell it to parties other than the car rier. Acc ording ly ,

we r ever se the c ourt of appe als’ judg ment and re instate the trial cour t’s judgme nt. 7

T e x a s R i c e a l l e g e s t h a t t h e t r i a l c o u r t e r r e d b y e n t e r i n g f i n a l j u d g m e n t o n i t s r e m a i n i n g d e c l a r a t o r y j u d g m e n t 7
c o u n t e r c l a i m s a n d D e n b u r y G r e e n ’ s d e c l a r a t o r y j u d g m e n t c l a i m s a d d e d a f t e r t h e t r i a l c o u r t g r a n t e d s u m m a r y j u d g m e n t o n c o m m o n - c a r r i e r s t a t u s , w i t h o u t a t r i a l o r h e a r i n g a d d i t i o n a l e v i d e n c e
. I n i t s A p r i l 4 , 2 0 1 4 , h e a r i n g o n t h e m a t t e r , t h e t r i a l c o u r t d e n i e d T e x a s R i c e ’ s m o t i o n t o s e v e r i t s c o u n t e r c l a i m s , g r a n t e d l e a v e f o r D e n b u r y G r e e n t o a m e n d i t s p e t i t i o n , a n d e n t e r e d f

i n a l j u d g m e n t

. B e c a u s e D e n b u r y G r e e n ’ s a m e n d e d c l a i m s r a i s e d n o a d d i t i o n a l i s s u e s a n d c o u l d n o t r e s u l t i n a n y i n j u r y t o T e x a s R i c e , w e h o l d t h a t t h e t r i a l c o u r t d i d n o t a b u s e i t s d i s c r e t i o n w h e n a l l o w i n g D e n b u r y G r e e n t o a d d
1 4____________________________________ Paul W. Green J ustice

OP INION DELIVERED: J anuar y 6, 2017

d e c l a r a t o r y j u d g m e n t c l a i m s p r i o r t o e n t r y o f f i n a l j u d g m e n t

. S e e Vi c t o r y v
. S t a t e , 1 5 8 S

. W

. 2 d 7 6 0 , 7 6 3 ( T e x
. 1 9 4 2 )

. F i n a l l y , b e c a u s e T e x a s R i c e ’ s c l a i m s f o r r e l i e f r e l i e d u p o n t h e t r i a l c o u r t f i n d i n g D e n b u r y G r e e n w a s n o t a c o m m o n c a r r i e r , w e h o l d t h a t t h e t r i a l c o u r t p r o p e r l y e n t e r e d f i n a l j u d g m e n t

. S e e L e h m a n n v
. H a r - C o n C o r p
. , 3 9 S

. W

. 3 d 1 9 1 , 2 0 0 ( T e x
. 2 0 0 1 ) ( “ A j u d g m e n t t h a t a c t u a l l y d i s p o s e s o f e v e r y r e m a i n i n g i s s u e i n a c a s e i s n o t i n t e r l o c u t o r y m e r e l y b e c a u s e i t r e c i t e s t h a t i t i s p a r t i a l o r r e f e r s t o o n l y s o m e o f t h e p a r t i e s o r c l a i m s
. ” )

.

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