Court Opinion

ID: 6345139
Source: CourtListenerOpinion
Date Created: 2022-05-30 00:11:47.900712+00
Date Added: 2024-06-11T09:12:55.398904
License: Public Domain

Supreme Court of Texas
                              ══════════
                               No. 20-0567
                              ══════════

Terrance J. Hlavinka, Kenneth Hlavinka, Tres Bayou Farms, LP,
            and Terrance Hlavinka Cattle Company,
                                 Petitioners,

                                      v.

                    HSC Pipeline Partnership, LLC,
                                Respondent

   ═══════════════════════════════════════
              On Petition for Review from the
       Court of Appeals for the First District of Texas
   ═══════════════════════════════════════

                       Argued February 23, 2022

       JUSTICE BLAND delivered the opinion of the Court.

       Recognizing the important role that pipeline development plays
in meeting our state’s manufacturing and energy needs, the Legislature
grants common carriers the right to condemn private property for the
construction of pipelines that transport certain products. 1 The Texas

       1 Tex. Rice Land Partners, Ltd. v. Denbury Green Pipeline-Tex., LLC
(Tex. Rice I), 363 S.W.3d 192, 204 (Tex. 2012); Tex. Nat. Res. Code § 111.002(1)
(granting common-carrier status to pipeline owners or managers when the
Constitution, however, limits the exercise of this eminent domain power
to purposes that serve a “public use.”2
       In this eminent domain dispute, we decide whether a pipeline
company has demonstrated common-carrier status with eminent
domain authority to condemn an easement and construct a pipeline that
transports polymer-grade propylene.            If so, we decide whether a
landowner may testify to recent, arms’ length sales of pipeline
easements as evidence of the market value for such an easement across
his property.
       The landowner in this case challenges the pipeline company’s
right to condemn, contending that transport of polymer-grade propylene
does not grant the pipeline company common-carrier status, and that
the company’s transport to an unaffiliated customer is insufficient to
demonstrate that such transport is for public use.                 The pipeline
company, in turn, seeks to exclude past sales of pipeline easements

pipeline transports crude petroleum “to or for the public for hire”); Tex. Bus.
Orgs. Code § 2.105 (“In addition to the powers provided by the other sections
of this subchapter . . . entities engaged as a common carrier in the pipeline
business for the purpose of transporting oil, oil products, gas, carbon dioxide,
salt brine, fuller’s earth, sand, clay, liquefied minerals, or other mineral
solutions ha[ve] all the rights and powers conferred on a common carrier by
Sections 111.019-111.022, Natural Resources Code.”); see also Tex. Nat. Res.
Code § 111.019(a) (conferring right of eminent domain).
       2Tex. Const. art. I, § 17(a)–(b) (“No person’s property shall be taken,
damaged, or destroyed for or applied to public use without adequate
compensation being made . . . . ‘[P]ublic use’ does not include the taking of
property . . . for transfer to a private entity for the primary purpose of economic
development or enhancement of tax revenues.”); see also Tex. Rice I, 363
S.W.3d at 194–95 (noting that the Texas Constitution’s public-use requirement
safeguards private property rights).

                                        2
across the property as evidence of the value of the easement that the
pipeline company seeks to condemn.
      The trial court agreed with the pipeline company on all fronts,
concluding that the company possessed common-carrier eminent
domain authority, that it had established that its pipeline transport was
for public use, and that the landowner was limited to testifying about
the agricultural value of the property in proving the market value of the
property taken. The trial court thus excluded the landowner’s evidence
of sales of other pipeline easements. The court of appeals agreed with
the trial court that a pipeline transporting polymer-grade propylene is
eligible for common-carrier status with eminent domain authority.3 It
determined, however, that whether the pipeline serves a public use
presented a fact question for a jury to resolve.4 Finally, the court of
appeals held that the trial court erred in excluding the landowner’s
testimony about easement sales.5 We granted review.
      Like the trial court and the court of appeals, we conclude that
Texas Business Organizations Code Section 2.105 grants common-
carrier eminent domain authority for the construction and use of a
polymer-grade propylene pipeline. Section 2.105 directly incorporates
the right of eminent domain found in Texas Natural Resources Code
Section 111.019(a),6 and the evidence establishes that polymer-grade

      3   605 S.W.3d 819, 829–30 (Tex. App.—Houston [1st Dist.] 2020).
      4   Id. at 835.
      5   Id. at 842.
      6Tex. Bus. Orgs. Code § 2.105; Tex. Nat. Res. Code § 111.019(a)
(“Common carriers have the right and power of eminent domain.”).

                                      3
propylene qualifies as an “oil product” derived from the refinement of
either oil or natural gas liquids, both of which are components of crude
petroleum. We further conclude that the company demonstrated that
its pipeline serves a public use, and we reaffirm that such a
determination is a legal one, not one for a jury to decide. Finally, we
conclude that a property owner may testify to sales of pipeline
easements across the property made to other pipeline carriers, secured
through arms’ length transactions, as some evidence of the current
highest and best use of the property taken. Accordingly, we affirm in
part, reverse in part, and remand the case to the trial court for a new
trial to determine the market value of the property taken.
                                    I
                                   A
      Terrance J. Hlavinka, Kenneth Hlavinka, Tres Bayou Farms, LP,
and Terrance Hlavinka Cattle Company, Petitioners and Cross-
Respondents, own four tracts of land in Brazoria County totaling over
13,000 acres. The land is geographically situated near the Texas Gulf
Coast directly between refinery and industrial centers in Texas City and
the Oyster Creek/Freeport area. Though the Hlavinkas use the land for
agricultural purposes, Terrance Hlavinka, who runs the family
business, testified that the family’s primary purpose in acquiring it was
to sell pipeline easements. The land has about twenty-five pipeline
easements on it, including at least two Hlavinka negotiated with other
pipeline companies in recent, arms’ length transactions. Before this
suit, the Hlavinkas received $3.45 million for one pipeline easement and

                                   4
$2 million for another from other pipeline companies in private sales.
The trial court excluded this testimony.
       HSC Pipeline Partnership, LLC, the Respondent and Cross-
Petitioner, installed its polymer-grade propylene pipeline on the
Hlavinkas’ property in 2017. The HSC pipeline runs adjacent to, and
parallel with, two existing pipelines across tracts 2, 3, and 4 of the
Hlavinkas’ land.     A separate series of pipeline easements follows a
different route across tract 4. These easements are more or less parallel
to, though distant from, HSC’s pipeline. The HSC pipeline transports
the propylene about forty-four miles from Texas City to its terminal
point at a Braskem America plant near Oyster Creek.                  Braskem
America, Inc. is the pipeline’s only customer to date, though HSC
negotiated with INEOS, another potential customer, ultimately failing
to secure a contract.      The pipeline has additional capacity, and it
interconnects to an existing network of other pipelines in the Texas City
area. It has publicly filed its tariff.
       HSC owns the pipeline.                 It has affiliations with various
Enterprise entities. Enterprise Products OLPGP, Inc., is HSC’s sole
managing member.          Enterprise Products Operating LLC is the
pipeline’s operator, and it also manufactures and sells polymer-grade
propylene, which HSC transports. Enterprise Products manufactures
the polymer-grade propylene by obtaining refinery-grade propylene
from more than forty refineries in the Texas City area.
       Refinery-grade propylene is a byproduct of crude petroleum
refining.   Enterprise further distills refinery-grade petroleum into
streams of propane and propylene. HSC’s agreement with Braskem

                                          5
provides that Braskem will purchase and pay to ship polymer-grade
propylene to Braskem’s facility in Oyster Creek. Braskem is not an
Enterprise-affiliated entity.   Braskem purchases the polymer-grade
propylene from Enterprise Products before it enters HSC’s pipeline.
                                     B
        HSC initiated condemnation proceedings after the Hlavinkas
rejected HSC’s offer to purchase a pipeline easement. HSC sought to
condemn a total of 6.41 acres of the Hlavinkas’ property for an easement
30 feet wide and about 1.8 miles long. The Hlavinkas sought dismissal
of HSC’s suit by filing a plea to the jurisdiction, in which they challenged
HSC’s power to exercise common-carrier eminent domain authority.
        HSC in turn moved for partial summary judgment, seeking a
legal determination as to its common-carrier status.         It attached a
certified copy of its T-4 permit from the Texas Railroad Commission,
authorizing it to operate the pipeline. It adduced evidence that it is a
common-carrier pipeline, available to all who desire to ship on the line
and meet the terms of its tariff, which it provided as evidence. HSC also
attached the transportation services agreement it has with Braskem,
which    defines   polymer-grade     propylene    and    includes   testing
specifications to confirm that it is a natural gas liquid transported by
volume that is a minimum of 99.5% propylene and a maximum of .5%
propane, with maximum parts per million of other various distillates.
        HSC detailed the history of Business Organizations Code Section
2.105, and its predecessor, the Common Carrier Act, which by 1935

                                     6
included oil products and liquefied minerals as among the products for
which a common carrier could obtain pipeline condemnation authority.7
       HSC also relied on testimony and affidavits from Roger Herrsher,
an Enterprise Products employee. Herrsher described polymer-grade
propylene as an “oil product[] and liquefied mineral[]”, a “natural gas
liquid[],” and one of “various liquified minerals and, or oil products
obtained from crude petroleum and, or natural gas liquids.” Natural gas
liquids, he testified, are “a subset of crude petroleum” that fall “under
the crude oil—crude petroleum umbrella.” Natural gasoline, according
to Herrsher, “is a component of NGLs [natural gas liquids] and is a
component of crude oil and then, there’s refined gasoline.” Refiners may
use “either one of those” to make “propane or the refinery grade
propylene,” which in turn, is further distilled to make nearly pure
polymer-grade propylene.

       7 See Act of May 15, 1899, 26th Leg., R.S., ch. 117, § 1, § 4, 1899 Tex.
Gen. Laws 202, 202, reprinted in 11 H.P.N. Gammel, The Laws of Texas 1897-
1902, at 202, 202 (Austin, Gammel Book Co. 1902) (providing condemnation
powers to corporations “for the purpose of storing, transporting, buying and
selling of oil and gas, salt, brine and other mineral solutions”); Act of Apr. 27,
1935, 44th Leg., R.S., ch. 110, § 1, 1935 Tex. Gen. Laws 296, 296 (adding
“liquefied minerals” to list of products the transportation of which conferred
condemnation powers). The 1955 replacement of the earlier condemnation
statutes with the Texas Business Corporation Act, which, like its successor
Business Organizations Code Section 2.105, provided condemnation powers to
any corporation “engaged as a common carrier in the pipeline business for
transporting oil, oil products, gas, salt brine, fuller’s earth, sand, clay, liquefied
minerals or other mineral solutions,” similarly cross-referenced the Natural
Resources Code’s predecessors, Articles 6020 and 6022 of the 1925 Revised
Civil Statutes. Texas Business Corporation Act, 54th Leg., R.S., ch. 64, art.
2.01(B)(3)(b), 1955 Tex. Gen. Laws 239, 241.

                                          7
      The trial court granted HSC’s motion for summary judgment and
denied the Hlavinkas’ plea to the jurisdiction. The case proceeded to a
bench trial to determine the Hlavinkas’ compensation for value of the
land HSC had taken for the pipeline easement.
      To that end, the Hlavinkas proffered Terrance Hlavinka’s
testimony that the highest and best use of the condemned land was for
pipeline development. He recounted two recent, arms’ length easement
sales to other pipeline operators as evidence of the property’s highest
and best use before the taking. Based on these comparisons and other
assumptions, he calculated a “per rod” valuation of $3.3 million.
      HSC moved to exclude Hlavinka’s testimony about sales of
easements to other pipelines. The trial court granted HSC’s motion,
leaving agricultural value as the only remaining testimony as to the
value of the property taken. The trial court awarded the Hlavinkas
$132,293.36 in compensation, representing $108,967.36 for crop and
surface damage and $23,326.00 for the easements themselves. The
Hlavinkas appealed.
      The court of appeals held that Business Organizations Code
Section 2.105 grants condemnation authority to common-carrier
pipelines that carry oil products or liquefied minerals.8 It observed that
its holding accords with the long-standing construction of Section 2.105’s
predecessor statute.9 Consistent with industry terminology and related
statutory definitions, it also held that polymer-grade propylene

      8   605 S.W.3d at 829.
      9   Id. at 828.

                                    8
constitutes an “oil product” under that section.10 Thus, on those issues
in dispute, the court of appeals affirmed the trial court.
       The court of appeals reversed the trial court, however, on two
other issues. Notwithstanding our Court’s decision in Denbury Green
Pipeline v. Texas Rice Land Partners (“Texas Rice II”), in which we held
that “evidence establishing a reasonable probability that the pipeline
will, at some point after construction, serve even one customer
unaffiliated      with    the   pipeline   owner”   satisfies   the    public-use
requirement,11 the court concluded that the existing contract between
HSC and Braskem did not conclusively demonstrate public use.12 The
court of appeals also reversed the trial court’s exclusion of Terrance
Hlavinka’s valuation testimony, holding that sales of easement rights
granted on the same property are admissible as some evidence of the
market value of the land taken at its highest and best use.13
       Both parties sought review in this Court, and we granted both
petitions.      We first address the Hlavinkas’ challenges to HSC’s
condemnation authority for this pipeline.           We next address HSC’s
challenge to the court of appeals’ holding that, on this record, public use
requires a factual, rather than a legal, determination.               Finally, we
address whether a landowner’s testimony about sales of comparable

       10   Id. at 829.
       11510 S.W.3d 909, 917 (Tex. 2017); see also Tex. Rice I, 363 S.W.3d at
202 (requiring a reasonable probability that a pipeline will serve the public by
transporting product for “one or more customers who will either retain
ownership of their [product] or sell it to parties other than the carrier”).
       12   605 S.W.3d at 833–35.
       13   Id. at 840–41.

                                           9
easement rights on the same property is admissible to show the market
value of the land taken and to rebut the presumption that the land’s
highest and best use before its taking was purely agricultural.
                                           II
         The trial court granted summary judgment to HSC, ruling that it
is a common carrier that has condemnation power under Texas Business
Organizations Code Section 2.105. The court of appeals affirmed this
ruling. The Hlavinkas argue that polymer-grade propylene is not a
product identified in either Section 111.002 of the Natural Resources
Code or Section 2.105 of the Business Organizations Code, which is
necessary to qualify HSC as a common carrier with eminent domain
authority for this particular pipeline. Alternatively, even if polymer-
grade propylene qualifies as an “oil product” or a “liquefied mineral”
under Section 2.105 of the Business Organizations Code, the Hlavinkas
argue, then its listing in that section does not independently confer
eminent domain authority. Rather, such authority must be found in
Section 111.002 of the Natural Resources Code. In that section, neither
“oil product” nor “liquefied mineral” is separately listed from “crude
petroleum” as a product for transport for which a pipeline company has
condemnation authority.
         We      review    a   trial   court’s   summary    judgment     and   its
interpretation of statutory language de novo.14 We enforce a statute “as
written,”15 and “avoid construing individual provisions of a statute in

         14   SeaBright Ins. Co. v. Lopez, 465 S.W.3d 637, 641 (Tex. 2015).
         15   Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 443 (Tex.
2009).

                                           10
isolation from the statute as a whole.”16 We give effect to all included
words without treating any language as surplusage, if possible.17 As the
movant, HSC must prove that no genuine issue of material fact exists
and that it is entitled to judgment as a matter of law.18
                                         A
       The Legislature has cultivated two sources of condemnation
authority for pipelines, one in Business Organizations Code Section
2.105, and the other in Natural Resources Code Chapter 111.                The
Hlavinkas argue that any entity claiming common-carrier status
through Business Organizations Code Section 2.105 must first qualify
as a common carrier under Natural Resources Code Section 111.002,
which identifies different products for pipeline transportation than the
products Section 2.105 identifies.19 Section 111.002 does not purport to
be an exclusive list of common-carrier pipeline products, but the

        R.R. Comm’n v. Tex. Citizens for a Safe Future & Clean Water, 336
       16

S.W.3d 619, 628 (Tex. 2011).
       17   Spradlin v. Jim Walter Homes, Inc., 34 S.W.3d 578, 580 (Tex. 2000).
       18   Tex. Rice II, 510 S.W.3d at 914.
       19 Compare Tex. Nat. Res. Code § 111.002 (qualifying pipeline owners
or managers as common carriers when pipeline transports crude petroleum,
coal, carbon dioxide, hydrogen, or feedstock for carbon gasification and carbon
gasification’s products and derivatives), with Tex. Bus. Orgs. Code § 2.105
(conferring “rights and powers” on common-carrier “entities engaged . . . in the
pipeline business for the purpose of transporting oil, oil products, gas, carbon
dioxide, salt brine, fuller’s earth, sand, clay, liquefied minerals, or other
mineral solutions”). HSC argues that its pipeline qualifies under either
statute.    Because we conclude “oil products” in Section 2.105 grants
condemnation authority to pipelines that transport such products, and that
polymer-grade propylene is such a product, we do not address whether it also
falls within Section 111.002’s listed products.

                                         11
Hlavinkas nonetheless argue that Section 2.105 is essentially
subordinate to Section 111.002 when it comes to condemnation
authority, rather than an independent grant of that authority for the
pipeline-transportation products Section 2.105 identifies.
      Section 2.105, however, does not refer to Section 111.002.
Instead, Section 2.105 explicitly expands condemnation authority to
pipeline entities engaged as common carriers for the transport of
products beyond those included in Section 111.002.           It does so by
incorporating Sections 111.019 through 111.022 from Chapter 111,
without reference to Section 111.002:
      . . . [E]ntities engaged as a common carrier in the pipeline
      business for the purpose of transporting oil, oil products,
      gas, carbon dioxide, salt brine, fuller’s earth, sand, clay,
      liquefied minerals, or other mineral solutions ha[ve] all the
      rights and powers conferred on a common carrier by
      Sections 111.019–111.022, Natural Resources Code.20

      Section 111.019 grants eminent domain power to common-carrier
pipelines.     Because Section 111.002 and Section 2.105 separately
incorporate its provisions, they provide alternative paths to obtaining
that power.21
      To limit common-carrier status for pipeline companies claiming it
under Section 2.105 to only those that transport the products listed in

      20   Tex. Bus. Orgs. Code § 2.105 (emphasis added).
      21Tex. Nat. Res. Code § 111.019 (“(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.”).

                                      12
Natural Resources Code Section 111.002 imposes a statutory constraint
that the Legislature did not. Such a reading deprives Section 2.105 of
its effect for those products it explicitly identifies but that are not listed
in Section 111.002.22 Recognizing as much, courts have long interpreted
Section 2.015 and its predecessor statutes23 to be an independent grant
of condemnation authority.24
       We hold that Business Organizations Code Section 2.105 confers
the condemnation “rights and powers” found in Natural Resources Code
Sections 111.019 through 111.022 for those common-carrier pipelines
that transport the products that Section 2.105 identifies.
                                         B
       Given that Section 2.105 grants condemnation authority for
common-carrier pipelines that transport the products it identifies, the
Hlavinkas next argue that HSC has failed to establish that polymer-
grade propylene is an “oil product” identified within Section 2.105.
Section 2.105 does not define “oil product.” The Natural Resources Code,

       22See Spradlin, 34 S.W.3d at 580 (quoting Chevron Corp. v. Redmon,
745 S.W.2d 314, 316 (Tex. 1987)) (rejecting statutory interpretation that would
render provision superfluous).
       23   See infra note 8 (describing predecessor versions).
       24 See, e.g., Harris County v. Tenn. Prods. Pipe Line Co., 332 S.W.2d 777,
780 (Tex. App.—Houston 1960, no writ) (holding that, “under Article 2.01 of
the Texas Business Corporations Act, [appellees] have the right as common
carriers in the pipe line business transporting oil products, to lay their pipes”);
see also ExxonMobil Pipeline Co. v. Bell, 84 S.W.3d 800, 803–04 (Tex. App.—
Houston [1st Dist.] 2002, pet. denied) (“ExxonMobil, as a common carrier, is
accorded the power of eminent domain. See Tex. Bus. Corp. Act Ann. art.
2.01(B)(3)(b).”).

                                         13
however, defines “oil” as “crude petroleum oil,”25 and “petroleum
product” to include “any other liquid petroleum product or byproduct
derived from crude petroleum oil.”26 Further, the Railroad Commission
defines “product” to include “refined crude oil, . . . processed crude
petroleum, residue from crude petroleum, . . . blends or mixtures of
petroleum, and/or any and all liquid products or by-products derived
from crude petroleum oil or gas, whether hereinabove enumerated or
not.”27
          HSC adduced summary-judgment evidence that polymer-grade
propylene is an “oil product,” as it can be derived as a byproduct of crude
oil.28 The Hlavinkas challenge this evidence by pointing to the various
ways that Herrsher described it. They also argue that an “oil product”
must be naturally occurring, and, as a byproduct of refined petroleum,
polymer-grade propylene is not.

          25   Tex. Nat. Res. Code § 115.001(5).
          26   Id. § 115.001(7)(X).
         16 Tex. Admin. Code § 3.79(21). Section 2.105 does not define “oil
          27

product,” but words “that have acquired a technical or particular meaning,
whether by legislative definition or otherwise, shall be construed accordingly.”
Tex. Gov’t Code § 311.011(b). Further, we reject the Hlavinkas’ argument that
the Texas Railroad Commission lacks regulatory jurisdiction over Section
2.105 pipelines. See Tex. Nat. Res. Code § 81.051(a)(3) (giving the Railroad
Commission jurisdiction over all “persons owning or operating pipelines in
Texas”).
          The Hlavinkas challenged the admission of Herrsher’s affidavits,
          28

which include some evidence that polymer-grade propylene also qualifies as a
liquefied mineral. HSC argued, and the court of appeals agreed, that the
Hlavinkas had waived their objections to those affidavits. We do not reach the
court of appeals’ waiver ruling because we conclude that other evidence in
HSC’s motion for partial summary judgment establishes polymer-grade
propylene qualifies as an oil product for Section 2.105 purposes.

                                           14
      The summary-judgment evidence demonstrates that polymer-
grade propylene is a derivative of crude petroleum.        Refiners make
polymer-grade propylene by further distilling refinery-grade propylene
into streams of propane and propylene using a catalytic process.
Refinery-grade propylene is in turn derived from propane and natural
gas liquids, which are components of crude petroleum.29 Enterprise
collects this refinery-grade propylene from more than forty area
refineries that refine crude oil before Enterprise further refines it into
polymer-grade propylene. Because the Natural Resources Code defines
oil as “crude petroleum oil,” and polymer-grade propylene is a product
derived from crude oil’s refinement and distillation, we conclude that it
qualifies as an “oil product” under Business Organizations Code
Section 2.105.    This interpretation also aligns with the Railroad
Commission’s definition of “product” to include “all liquid products or
by-products derived from crude petroleum oil or gas.”30

      29  Natural gas liquids are liquid hydrocarbons that fall under the
umbrella of crude petroleum. U.S. Energy Information Administration,
Hydrocarbon gas liquids explained: Where do hydrocarbon gas liquids come
from?      Basics,     https://www.eia.gov/energyexplained/hydrocarbon-gas-
liquids/where-do-hydrocarbon-gas-liquids-come-from-in-depth.php (Oct. 26,
2021); see also U.S. Dep’t of Energy, Natural Gas Liquids Primer, 5 (2018),
https://www.energy.gov/sites/prod/files/2018/07/f54/NGL_Primer.pdf
(categorizing propane as a natural gas liquid and stating that “NGLs are
hydrocarbons—in the same family of molecules as natural gas and crude oil,
composed exclusively of carbon and hydrogen”).
      30 16 Tex. Admin. Code § 3.79(21); see also Reynolds v. McMan Oil &
Gas Co., 11 S.W.2d 778, 789 (Tex. Comm’n App. 1928, holding approved)
(“Crude oils or petroleums are mixtures of bituminous hydrocarbons, some of
which are solids, some are liquids, and some are gases, the solids and gases
being soluble in the liquids. A crude oil may consist of these various
hydrocarbons in almost any proportions, its physical properties varying

                                    15
       The Hlavinkas do not challenge HSC’s evidence about the nature
of polymer-grade propylene, but instead point out inconsistencies in
Herrsher’s testimony describing polymer-grade propylene and its
sources. Herrsher testified that propylene is produced from propane,
and propane is a “‘component of crude petroleum,” which places
polymer-grade propylene “under the umbrella” of crude petroleum. He
also testified that refinery-grade propylene can be made from either
crude oil or refined gasoline. Because polymer-grade propylene can be
derived from crude petroleum, however, it qualifies as an oil product
under Section 2.105.
       We hold that HSC has established that polymer-grade propylene
is an oil product. Accordingly, we affirm the trial court and court of
appeals rulings that Section 2.105 confers to HSC condemnation
authority to build and construct a common-carrier pipeline to transport
it.
                                     C
       The final question about HSC’s condemnation authority is
whether its pipeline serves a public use. Public use is a constitutional
requirement that a pipeline common carrier must fulfill to exercise
eminent-domain authority. Section 2.105 incorporates this element by
requiring that a pipeline transporter be “engaged as a common

accordingly.” (quoting J.O. Lewis, Bureau of Mines, U.S. Dep’t of Interior,
Bulletin 148, Methods for Increasing the Recovery from Oil Sands 11 (1917))).

                                     16
carrier.”31 This standard prevents the misuse of eminent domain for
purely private purposes.
      In the Texas Rice cases, our Court established the test for
determining public use in this context: a pipeline serves a public use as
a matter of law if it is reasonably probable that, in the future, the
pipeline will “serve even one customer unaffiliated with the pipeline
owner.”32     The Hlavinkas argue that there should be an additional
requirement: the manufacturer of the transported product must also
have no affiliation with the pipeline owner.             The court of appeals
concluded that a jury must resolve such a question.33
      In Texas Rice I, landowners challenged a pipeline company’s
condemnation authority when it sought to build a pipeline to connect its
out-of-state carbon dioxide reserves to its Texas oil wells.34 We observed
that for a company “[t]o qualify as a common carrier with the power of
eminent domain, the pipeline must serve the public; it cannot be built
only for the builder’s exclusive use.”35 A pipeline built to transport a

      31  Tex. Bus. Orgs. Code § 2.105. Common carriers are individuals or
entities that hold themselves out to the public for hire in the business of
transporting passengers or goods. VIA Metro. Transit v. Meck, 620 S.W.3d 356,
361 (Tex. 2020). A statute cannot abridge constitutional protections, which
apply whether a pipeline derives its eminent-domain power from either Section
111.002 or Section 2.105.
      32   Tex. Rice II, 510 S.W.3d at 917; accord Tex. Rice I, 363 S.W.3d at 200–
02.
      33   605 S.W.3d at 834–35.
      34   363 S.W.3d at 195–96.
      35   Id. at 200.

                                        17
company’s product from one of its own sites to another it also owns is
not a public use.36
      We later held in Texas Rice II that transportation contracts
between the pipeline company and an unaffiliated entity for future
pipeline transport establish a public use.37 One contract in that case did
not establish a public use because the pipeline company regained title
to the transported product after transporting it.38 But another contract
with an unaffiliated customer established a reasonable probability that
the pipeline would serve the public.39
      HSC’s contract with Braskem proves that the HSC pipeline
serves “even one customer unaffiliated with the pipeline owner.”40
Accordingly, it meets the Texas Rice public use standard.              It is an
existing transportation contract with an unaffiliated customer, and the
pipeline     connects       to   existing    pipeline   networks,   making   the
transportation network feasible. The pipeline has additional capacity
and terminates near other potential customers. HSC has publicly filed
a tariff with the Railroad Commission demonstrating that it offers and
markets the pipeline for public hire.
      The Hlavinkas argue that we should enlarge the conditions
expressed in Texas Rice I and limit pipelines for public use to those that
carry products for which a pipeline or its affiliate never possess an

      36   Id.
      37   510 S.W.3d at 917.
      38   Id. at 916–17.
      39   Id.
      40   Id. at 917.

                                            18
ownership interest. Though they acknowledge that Braskem takes title
to the polymer-grade propylene before it enters the HSC pipeline, they
argue that Braskem could just as easily have taken title at the other
end.41
         As in Texas Rice II, however, the HSC pipeline serves at least one
unaffiliated customer, satisfying the test we laid out in Texas Rice I,
which facilitates the public transportation of pipeline products for use
in industry and commerce. Requiring that transported goods be sold
and delivered to a non-affiliate ensures that the pipeline is not private;
it instead is open to non-affiliate customers. Unlike the contract found
insufficient in Texas Rice II, title to the Braskem product does not revert
to either HSC or to any of its affiliates.42
         The court of appeals erred in suggesting that, notwithstanding
the absence of any disputed issues of fact, a jury must resolve the
question of whether HSC’s pipeline serves a public use.43 This would
inject        substantial   uncertainty    into   multi-parcel   infrastructure
development, risking inconsistent adjudications among multiple triers
of fact. Recognizing as much, our Court has reiterated through the

          See id. at 916–17; see also Crosstex NGL Pipeline, L.P. v. Reins Rd.
         41

Farms-1, Ltd., 404 S.W.3d 754, 761–62 (Tex. App.—Beaumont 2013, no pet.)
(holding no public use when a pipeline company took title of a product before
it entered the pipeline).
         See Tex. Rice I, 363 S.W.3d at 200 (“The term ‘for the public for hire’
         42

implies that the gas is being carried for another who retains ownership of the
gas, and that the pipeline is merely a transportation conduit rather than the
point where title is transferred.”).
         43   605 S.W.3d at 835.

                                          19
decades that “the ultimate question of whether a particular use is a
public use is a judicial question to be decided by the courts.”44
         We hold that the HSC pipeline serves at least one unaffiliated
customer, and thus HSC established that the pipeline serves a public
use.45
                                         III
                                          A
         Having concluded that HSC possesses the authority to condemn
an easement for a polymer-grade propylene pipeline, we address its
challenge to the court of appeals’ holding that Terrance Hlavinka’s
testimony about sales to secure other easements on the property is
admissible to show the market value of the land taken. The trial court
excluded this testimony. We review the trial court’s decision to exclude
testimony for abuse of discretion.46
         To value condemned land for the purpose of compensating the
landowner, one generally measures the difference in the market value
of the land immediately before and immediately after the taking.47 And,
“[i]n measuring the landowner’s compensation for condemned property,

        Maher v. Lasater, 354 S.W.2d 923, 925 (Tex. 1962); Tex. Rice II, 510
         44

S.W.3d at 914.
          Tex. Rice II, 510 S.W.3d at 917. Our holding today accords with Texas
         45

Rice II, in which the contract held to be evidence of public use involved a
product sale from an entity affiliated with the pipeline owner to an unaffiliated
customer. Id. at 916–17.
         Enbridge Pipelines (E. Tex.) L.P. v. Avinger Timber, LLC, 386 S.W.3d
         46

256, 262 (Tex. 2012).
         47   Exxon Pipeline Co. v. Zwahr, 88 S.W.3d 623, 627 (Tex. 2002).

                                         20
‘the question is, what has the owner lost, not what has the taker
gained.’”48 A factfinder should consider the highest and best use of the
land in determining the market value of the property taken.49 The
existing use of the land is presumed to be its highest and best use, “but
the landowner can rebut this presumption by showing a reasonable
probability that when the taking occurred, the property was adaptable
and needed or would likely be needed in the near future for another
use.”50
          A property owner may testify about the market value of the
property taken.51 The owner’s testimony must be based on facts that
demonstrate the property’s market value, “rather than intrinsic or some
other speculative value of the property.”52 “Market value is ‘the price
which the property would bring when it is offered for sale by one who
desires, but is not obligated to sell, and is bought by one who is under
no necessity of buying it.’”53 Arms’ length transactions are appropriate

           Avinger Timber, 386 S.W.3d at 262 (quoting Bost. Chamber of Com.
          48

v. City of Boston, 217 U.S. 189, 195 (1910)).
          49   Id. at 261.
          50   Zwahr, 88 S.W.3d at 628.
          51   Nat. Gas Pipeline Co. of Am. v. Justiss, 397 S.W.3d 150, 155 (Tex.
2012).
         Id.; see also Porras v. Craig, 675 S.W.2d 503, 505 (Tex. 1984) (holding
          52

that landowner’s testimony provided no evidence of market value because
decrease in value was based on landowner’s subjective valuation of the
property), abrogated on other grounds by Gilbert Wheeler, Inc. v. Enbridge
Pipelines (E. Tex.) L.P., 449 S.W.3d 474 (Tex. 2014).
        State v. Windham, 837 S.W.2d 73, 77 (Tex. 1992) (quoting State v.
          53

Carpenter, 89 S.W. 194, 202 (Tex. [Comm’n Op.] 1936)).

                                          21
evidence of market value, provided the sales are voluntary,
contemporary, local, and “involve land with similar characteristics.”54
Finally, the “project enhancement rule” in condemnation law disallows
the inclusion of any increase in market value attributable to the project
itself.55
                                          B
         In his offer of proof, Terrance Hlavinka testified that the
Hlavinkas purchased the property for the express purpose of pipeline
development.           He delineated the property’s unique geographic
characteristics that make it particularly suitable for pipeline
development. It is situated directly between two substantial industrial
and refining hubs. The Gulf of Mexico to the south limits the feasibility
of pipeline development in that direction. At least one pipeline ran
across the property at the time the family purchased it. By the time of
trial, “closer to 25” pipelines traversed the property. Hlavinka had
privately negotiated with other pipeline companies for two pipeline
easements across this property in the two years immediately before the
condemnation. He sought to introduce evidence of these transactions
(with some adjustments) as comparable uses as part of establishing the
value of the property taken.

         54   City of Harlingen v. Estate of Sharboneau, 48 S.W.3d 177, 182 (Tex.
2001).
          Zwahr, 88 S.W.3d at 627–28 (observing that because the judicial
         55

objective in the context of condemnation is to “make the landowner whole,” the
factfinder may not consider, in determining market value, any enhancement
to property value resulting from the property’s condemnation).

                                         22
        In seeking to exclude this testimony, HSC submitted that the
Hlavinkas’ current use of the proposed easement was for agriculture,
and thus it must be presumed that agriculture is the condemned
property’s highest and best use.56
        A landowner, however, may rebut the presumption that the
current use is the highest and best use of the land taken.57 Arms’ length
sales    to     the   other   pipeline   companies   that   were    voluntary,
contemporary, local, and involve land with similar characteristics are
some evidence demonstrating that the highest and best use of the
property was as a pipeline easement. That is, Terrance Hlavinka’s
testimony is some evidence that the easement that HSC condemned
could have been granted to another pipeline at a significantly higher
price than its agricultural value.
        Relying on Exxon Pipeline Co. v. Zwahr, HSC argues that
Terrance’s valuation testimony impermissibly considers enhancement
to the land resulting from the pipeline itself, which violates the
project-enhancement rule.58 Hlavinka’s testimony, however, is not that

         Avinger Timber, 386 S.W.3d at 261 (“There is a presumption that the
        56

highest and best use of the land is the existing use of the land.”).
        57   Zwahr, 88 S.W.3d at 628.
        58See id. at 627. In Zwahr, Exxon sought to condemn a tract already
substantially encumbered with an existing 50-foot-wide easement. Id. at 625–
26. The landowners adduced expert testimony that the easement was “a self-
contained, separate economic unit, which had a value independent from that
of the surface acreage, with a highest and best use as a pipeline easement.” Id.
at 626. Our Court held that the trial court erred in admitting this testimony
because the expert relied on the Exxon condemnation itself to establish the
property’s value. Id. at 628. As we explained, “had the Exxon project never
come along, the .82 acres would have continued to have no value to the

                                         23
the easement is valuable due to HSC’s interest; rather, it is valuable
because purchasers other than HSC also value the easement’s
geographic qualities—its location between industrial areas and the
unsuitability of the land to the north and the south. Such a valuation is
not based on value HSC created by its interest, but instead is based on
the value of the easement were the Hlavinkas to sell it to another ready
and willing market participant. The multitude of pipelines crossing the
tract, including those parallel and adjacent to HSC’s pipeline—and the
prices paid to secure those easements—is some evidence that the land
is valuable to other pipeline carriers for its intrinsic qualities,
notwithstanding HSC’s decision to condemn it.
       The impact of HSC’s taking was the loss of the ability to sell the
tract to a different pipeline, which distinguishes this case from the court
of appeals’ decision in Enbridge G & P v. Samford.59 The expert in
Samford testified that the “going rate” for pipeline easements was $850,
supported by no evidence of sales.60 Nor was there any indication that
the landowners in Samford had opportunities to sell the land to other
pipeline companies and successfully had done so.

[landowners]. [The expert] provided no explanation, other than the Exxon
project itself, to explain the increase in the value of the .82–acre covering the
[existing] easement from zero to $35,720 an acre. Moreover, he admitted twice
that the value he placed on the land did not exist before Exxon’s
condemnation.” Id. at 630. The Hlavinkas, in contrast, adduced evidence that
HSC’s easement had value to the Hlavinkas because they could encumber it in
a fair market transaction to another pipeline company. The value existed
before and apart from HSC’s pipeline.
       59   470 S.W.3d 848, 862 (Tex. App.—Tyler 2015, no pet.).
       60   Id. at 856, 861–62.

                                       24
       In the ordinary condemnation case, there is no credible evidence
to suggest that, if the land had not been condemned, a pipeline easement
could be sold to another. This is no ordinary condemnation case. Sales
of easements on this property to other pipeline companies, combined
with the existence of pipelines running parallel and adjacent to HSC’s
pipeline, provide some evidence from which a factfinder reasonably
could conclude that the Hlavinkas could have sold to another the
easement that they instead were compelled to sell to HSC.
       HSC further challenges some of Hlavinka’s assumptions as
speculative, as well as his “per rod” calculation of value.61 We do not
address these remaining valuation challenges, other than to simply note
that no valuation assumption may be speculative. The foundation of
Hlavinka’s valuation testimony was the excluded evidence of
comparable arms’ length easement sales on this property.               Because
exclusion of this testimony denied the landowners their opportunity to
rebut the presumption that the land’s highest and best use was purely
agricultural, we conclude that the trial court’s error was harmful,
warranting a new trial as to market value.62 On remand, HSC is free to
challenge any valuation assumption, and the factfinder is free to adjust
the market valuation based on all the admissible evidence.63

       61See id. at 859–61; see also Exxon Pipeline Co. v. Hill, 788 So. 2d 1154,
1164 (La. 2001) (“Rods standing alone fail to consider many important
attributes which insure proper valuation of land.”).
       62See Caffe Ribs, Inc. v. State, 487 S.W.3d 137, 145 (Tex. 2016) (holding
that error in excluding admissible, non-cumulative evidence to determine
market value of the property taken is harmful).
       63   Estate of Sharboneau, 48 S.W.3d at 182.

                                       25
      This is not to say that land that a pipeline traverses either
instantly or always becomes a “pipeline corridor” with a corresponding
rise in market value. A landowner must show a “reasonable probability”
that the land would “likely be needed in the near future for another
use”64—that is, to sell to another interested market participant. A single
or ancient pipeline may not be sufficient to show market value because,
standing alone, it may not indicate that a current market for the
easement exists absent the taking.          The evidence in this case, in
contrast, of frequent, recent, comparable sales, should have been
admitted to show a “reasonable probability” that the easement
condemned by HSC would likely have been sold to another pipeline in
the near future. The factfinder, as always, is free to disbelieve that
evidence or reject the notion that this easement presents such a case.
      A condemnation should not be a windfall for a landowner.65 Nor
should it be a windfall for a private condemnor. A condemnor must pay
a fair price for the value of the land taken.66 Evidence of recent fair
market sales to secure easements running across the property that
precede the taking are admissible to establish the property’s highest and
best use, and its market value, at the time of the taking.
                                *      *      *
      For these reasons, we affirm in part and reverse in part the
judgment of the court of appeals. We remand the case to the trial court

      64   Zwahr, 88 S.W.3d at 628.
      65   Id.
      66   Estate of Sharboneau, 48 S.W.3d at 183.

                                      26
for a determination of the fair market value of the property at the time
it was taken.

                                       Jane N. Bland
                                       Justice

OPINION DELIVERED: May 27, 2022

                                  27