The Lingering Uncertainty Of Valuations In Eminent Domain Actions

As oil and gas exploration companies continue developing the EagleFord Shale and other plays throughout Texas, the need increases for pipelines capable of transporting production from such development. Pipeline companies' negotiations with landowners to obtain necessary easements usually end in one of two ways. Either the pipeline company and landowner reach an agreement with respect to the value and terms of the easement or the pipeline company is forced to turn to the courts via eminent domain actions to obtain the applicable easement. Not surprisingly, the main point of contention typically disputed during these actions is the value of the property affected by the desired easement. This is exactly the type of situation that led to the valuation issues discussed before the Fourth Court of Appeals – District of Texas (San Antonio) in LaSalle Pipeline, LP v. Donnell Lands, L.P.1

LaSalle Pipeline, LP, filed an eminent domain action to acquire temporary workspace easements and permanent right-of-way easements on two tracts of land in McMullen County, Texas, owned by Donnell Lands, L.P. The first tract of land comprised approximately 8,034 acres (of which LaSalle acquired 15.95 acres of permanent easement), and the second tract comprised about 46 acres (of which LaSalle acquired .97 acres of permanent easement). LaSalle's natural gas pipeline was approximately 16 inches in diameter and...