Is your land impacted by the Kinder Morgan Permian Pipeline? In this video, Landowner Condemnation Rights Attorney Philip Hundl describes the pipeline and then talks about landowners’ rights in the condemnation process. It’s extremely important for landowners to talk with an experienced attorney before they sign an easement agreement. For an appointment with Mr. Hundl, please call 800-929-1725 or click this link for a no-obligation case evaluation.
Summary of the Kinder Morgan Permian Pipeline Video
– I want to thank everybody for coming to this presentation. A little bit about myself, I’m Philip Hundl, I’m an attorney, I work for a firm, Wadler, Perches, Hundl & Kerlick, I’m a partner there. The law firm’s in my hometown of Wharton, Texas.
Before that, I practiced with Fulbright & Jaworski, a much larger firm in San Antonio. It’s an international firm that also had offices in Houston and different places. I primarily did litigation, commercial litigation, product liability litigation.
Moving back to my hometown, I tended to do almost all kinds of litigation and transactional work. Over the years, I’ve narrowed my practice to more land litigation, being partitions, disputes over land boundaries, adverse possession and also condemnation.
My practice area covers anywhere from San Antonio to Houston — I’ve had cases all the way up to Dallas and everywhere in between. Along the Gulf Coast, what we see a lot of is condemnation cases because many of these of these pipelines that originate in the Permian or out in West Texas all go to almost one place and that’s the Gulf Coast. A lot of times, it’s the Brazoria County area, Angleton or on the other side of Houston. So, Wharton County and Colorado County and Jackson County and Fort Bend are affected. Matagorda County has a lot of pipelines going through and therefore, I see a lot of these condemnation cases, and I represent a lot of land owners.
Pipeline Companies and Eminent Domain
So that’s a little bit on my background but let’s get started. Areas of condemnation and I’ll talk a little bit about eminent domain versus condemnation. Eminent domain, you’ll hear the two words used interchangeably sometimes. Eminent domain is the power that a government has, the inherent power to take property, take land, take fee simple land, take an easement, for different reasons.
So governments take land for highways, utility lines possibly, or quasi governmental entities like the LCRA for canals and even possibly pipelines. If a city municipality wants to put in a waterline, well, that would be a pipeline. However, most of the time, the pipeline work that we see is by a private entity. And yes, private entities can have the power of eminent domain.
The reasoning is because the purpose of that pipeline would be for a public use. We can spend all day talking about what that is, is it really a public use? But the courts have been, especially in Texas, fairly flexible with what constitutes a public use. And we’ll talk a little bit about that. But areas of condemnation as I mentioned, major ones, pipelines, highways, power lines. We see those obviously connected with infrastructure and growth, and then canals. I’ve had, believe it or not, quite a few canal cases and waterline cases.
Who Is Building Pipelines in Texas
You’ll hear different names of different pipeline projects, now and in the next couple of years. Names like Targa, Magellan, All Plains, Phillips 66, Kinder Morgan. We’re going to talk mostly about the Kinder Morgan Permian Pipeline today, because that’s what we’re here to talk about — the KInder Morgan Permian Highway Pipeline. Aspen Midstream, AMP is very active and EOG Enterprise, and the big Epic Pipeline is almost complete.
Here’s the map that I referred to earlier. And these are the mainlines, there’s a lot of other lines that are being put in, but they all originate out in West Texas, and they’re all mostly going to the Gulf Coast, Corpus, Freeport or Houston. Let’s talk a little bit more specifically about this Permian Highway Pipeline. It’s the green line, this is a rough diagram that Kinder Morgan put out on their website some time ago. It just shows the rough route of the line, and that’s the green line.
About the Kinder Morgan Permian Pipeline
These are the counties listed in their T-4 application. These are the counties that are affected all the way from way out in West Texas to Colorado County and Sheridan, Texas. Colorado County has a few tracts affected, but not like these others.
Let’s talk about some of the facts of the PHP line, Permian Highway Pipeline, and that’s the name Kinder Morgan’s given it. That’s the entity that Kinder Morgan has created to own this particular line. Kinder Morgan initially filed the T-4 application in September. An important part of that T-4 classification is the check the box part of the T-4 application — whether it’s a gas, utility or not. The T-4 was approved by the Railroad Commission in October 2018.
Well before that, I know folks were being contacted by Kinder Morgan or the survey crews. There was a slight addition, I’ll say an amendment, to their T-4 in November. That’s where they added the diameter of the line, and then that was approved by a Railroad Commission again. These are listings that are required on the Railroad Commission T-4 application.
But who’s the pipeline operator and who’s the pipeline owner? I’ll refer to Kinder Morgan, it’s essentially Kinder Morgan, but one is Kinder Morgan Texas Pipeline LLC and the other one is Permian Highway Pipeline LLC. Why do they do that? I won’t get into asset protection measures or liability protection measures, but I would imagine that that’s what the reasoning is. In other words, not to have all your eggs in one basket, so to speak. And the miles permitted is 423.
Here’s the document I talked about on the T-4, the check the box. I have a website, it’s an informational website, it’s called txcondemnationrights.com. I have these documents linked on there, and attached to there. So if you want to see the T-4 or the PHP Pipeline, just go to the website. But this is where they affirm or state that yes, this is a gas utility and therefore, we’re common carrier, it’s for the public use, it’s for the public good. Therefore, we have the right or power of eminent domain. It’s essentially what Kinder Morgan is saying.
The green line, it’s a little bit more detailed, the lines. This was filed back in September, right? When they filed their application. So there’s going to be some deviations and variations in this route, based upon when they initially survey and things they may discover while they’re surveying, they may deviate the route some. Can they do that under the Railroad Commission guidelines? I believe they can. I know they believe they can, so that’s why they deviate.
Some facts about the project, most everyone whose land will be or could have been affected by the PHP project has received this fact sheet from Kinder Morgan. Just some highlights of the project, this is kind of more marketing type information that they sent out. Interesting, they claim that this is a two billion dollar project, so that’s of interest, how much they believe they’ll spend on it. Has there been public opposition to the PHP project? Yes, especially in the Hill Country here where we are. And what has Kinder Morgan done? They’ve tried to have meetings, open houses, to discuss the project.
So right, I agree. The comment is there’s been a lot of discussion here in the Hill Country about it, and then you’re absolutely right. Some of the marketing materials or materials that they’ve put out, and I find this of interest. And I don’t really want to call this propaganda, but they want to talk about in this packet, the economic effect that this will have on the county and how many tracts are affected, and the local tax increase in local tax revenue, because of this project. So they’re wanting to try to show the positive side of this project to the public here in the Hill Country.
If you are able to go to these meetings, please do. I know there’s a meeting that’s going to happen, actually tonight. Hays County commissioners are going to have a meeting at the junior high near Buda, talking about the right to condemn, This is always a topic that’s brought up, and cities and states, or cities and counties, have that right as public entities — the government, the state, and quasi-governmental entities, we mentioned like the LCRA.
These private for profit corporations — how’s that possible? We’ve already talked about that a little. But these infrastructure projects are claimed to be for the public good, a public use. The case law has basically said we’re going to start out assuming that a pipeline is for public use, if in the T-4 that box is checked for a gas utility. So we’re going to start out assuming if that’s what they check and that’s what they say it’s for, then we’re going to start out assuming that they have a right to do it. Now it can be challenged, and there are ways to challenge it.
Steps in the Condemnation Process
Steps in condemnation, as a landowner, it’s really important to get the big picture of where you’re at in the process. I have multiple landowners that are clients on this line and I often times have to remind myself, let me show them the big picture, and show them where we’re at in the process. And frankly to have patience, because we may only be on step one or step two right now. And that may have taken a while.
First step is yes, as a landowner, you’re going about your business and thinking this is just going to be a normal day and then you get a knock on the door, you get a letter and you get someone that is saying, we’re going to come on your property to survey or is it okay if we come on your property to survey. So you can be approached several different ways, and I hear all kinds of different stories. But first you’re contacted for the purpose of surveying a possible route.
Next, right of way agents attempt to informally buy an easement from you. They try to offer X amount of dollars for you to sign this piece of paper and this piece of paper is an easement. I always call that the informal offer, because often times, and I’ve unfortunately seen this happen, is at this second stage of the right of way agents attempting to buy an easement from you, the surveying hasn’t even been finalized. There aren’t even metes and bounds for the easement that they want to buy from you. And so what often times will happen is the right of way agents will, if they have a landowner that’s willing to sign the easement, will buy basically a blanket easement over the property.
Initial and Final Offers for Your Easement
Next, landowner gets notices regarding condemnation, basically the initial offer’s what that will be called. In this particular PHP line, those have gone out to most landowners. They all haven’t gone out on exactly the same day, but they’ve started going out a few weeks ago. Then you get a final offer, and that final offer should have an appraisal with it, which supports the pipelines position on how much your land is worth, how much land they’re taking is worth, and what’s just compensation to you. Does that automatically mean that that’s what just compensation is for you, objectively? They decide what just compensation is to you, and the answer is no. That’s their position, that’s their interpretation of how much you should be compensated. Is it right and correct? I will say no, I don’t think it is right and correct. Nine times out of 10, or frankly 99 times out of a hundred.
Condemnation Suit Following Failure to Agree to Pipeline Offers
So after 14 days, then they can file a condemnation suit. So long story short, if landowner didn’t reach an agreement here with representative from the pipeline company being the right of way agent, then what happens? Yes, the pipeline company will sue you. They will file suit against you, it’s a condemnation suit. Condemnation suits are, I’m going to say slightly different than a normal litigation, or a normal lawsuit, because I kind of call it, there’s a special proceedings portion, and then there’s the normal litigation.
The Special Commissioners Hearing
The special proceedings portion is this portion that is handled by the special commissioners. And so lawsuit is filed, almost at the same time the lawsuit is filed, the court often times will appoint special commissioners. The court will appoint three landholders of the county to be special commissioners. And often times, appoint alternates as well. Suit can be filed and the court doesn’t appoint special commissioners for a while, it just depends. It depends on, frankly, how much the pipeline company is insistent on having special commissioners appointed right away. Each side can strike one of the special commissioners.
Now common question is well, are these county commissioners? They’re not the country commissioners. That’s why they’re called special commissioners. They’re different people from the county commissioners. Who are they normally? They’re persons normally familiar with real estate, could be a realtor, it could be a farmer, rancher, that manages a lot of, or owns and manages a lot of land and therefore, is familiar with land issues. Especially if the pipeline, and most pipelines run through rural areas, familiar with rural issues and valuations of the rural land, be it pasture, row crop, whatnot.
So the parties will agree on a date to have a special commissioners hearing. At the special commissioners hearing, the special commissioners will hear evidence from both sides. Often times from the pipeline company, they’ll hear from a pipeline representative about the project, the details of the project, and then an expert, a real estate appraiser for the pipeline company on their calculation of value. And their calculation of just compensation for the landowner.
The landowner has the right to put on evidence and testimony. His own testimony, or the landowner can have an expert at the special commissioners hearing or other fact witnesses at the special commissioners hearing. Special commissioners, after both sides have put on testimony, and the special commissioners can also ask questions. But after both sides quote unquote rest and special commissioners no longer have any questions, then the special commissioners will convene, normally in the same room, and they ask everyone to leave. They’ll come up with an award, and they will announce the award that day. And they’ll have the parties come back into the room and they’ll announce the award and hand out a piece of paper that will have the award written out.
Either side can object to that award within a certain amount of time. And that’s extremely important, because even if the special commissioners hearing goes really well for landowner or really bad for the landowner, the landowner has a right to object to the award, just like the pipeline company has that same right. So both sides can object to the award. The award, whatever it was, once the condemner, in this case, the pipeline company, deposits the award, construction can start. So whether one side objects to the award, doesn’t like the award, doesn’t agree with the award, construction can still begin once the award is deposited.
Condemnation Civil Litigation
Then the case moves into what I call regular civil litigation. It continues to be a lawsuit, the rules of regular civil procedure, Texas civil procedure apply, discovery, written discovery, depositions, designation of experts, striking of experts, motions for summary judgment, being ordered to mediation by the court. All those things that a normal litigation case involve, are in a condemnation case, in this stage. Ultimately ending in a trial, and a trial can be by either judge or jury. And the result at trial, just like any civil litigation, can be appealed.
Let’s talk about your first few steps of this condemnation process. The right of way agents on this particular project are from a company called TRC. TRC does a lot of different things related to land for companies. One of which is acquiring right of ways. Hence the right of way agents.
Right of Way Agents Work for the Pipelines — Not You!
Right of way agents — if there’s one thing you take away from this, maybe two things you take away from this talk today is please remember that the right of way agents don’t represent you, the landowner. Why do I have it in there and why do I have it underlined? Is it something I’m just making up? It’s not, I hear this almost on a daily basis. Landowners being very frustrated because they start out saying, well, I lost trust in the right of way agent or he told me something that now I don’t trust him.
When I hear that that tells me that at one point, the landowner did trust him. Now I’m not saying that some of these right of way agents aren’t good folks, I think they’re all fairly professional, there’s some tactics that they use that I think aren’t very professional and they’re counterproductive to what they’re trying to accomplish.
Make no mistake, they don’t represent you, they’re not trying to get the best deal for you, they may say they are but they’re not. I step back, my questions is are you the land owner? Did you hire ’em? Are you paying ’em? You didn’t hire ’em, you’re not paying them to do a job, they’re getting paid by someone else — that’s who they work for, they don’t work for you. The agent’s objective, once again, make no mistake, their objective is to try to get the easement. And how are they trying to get the easement? As quickly and as cheaply as possible, that’s their job. The quicker they get it, the cheaper they get it, in the eyes of their employer, boss, client, that they’ve done a good job.
Watch out for these high pressure sales tactics. I talked about strategies and that’s a big one. This is clients telling me this — the right of way agent will keep saying it’s got to be signed by Friday, it’s got to be signed by Friday. So they create these artificial deadlines that may be their deadlines but it’s not your deadline to land on. Misrepresentations, sure, sure, I’ll put that in the easement agreement. And then they don’t put it in the easement agreement. Or they put it in the easement agreement but then they put something else in the easement agreement. False promises.
How did I start doing this type of work in the first place? I had a former client, I represented him in a completely separate, non-land related case. He comes to me and says, hey, Philip, can you take a look at this easement? Sure, happy to, no problem. Because there’s some things I want to make sure are in there. Okay, great. ‘Cause, yeah, there’s going to be this pipeline going through my property and I want to make sure that there’s double-walled pipe, okay, great. Look in there and I say, well, you’ve already signed this easement agreement, it’s a done deal. And his response was, well, but the right of way agent said that we could always change it or that it would be changed or this was only temporary. I don’t remember exactly what the story was there but to me, that’s a false promise, that’s a misrepresentation and unfortunately, for that client, he was then stuck with that easement agreement and it was very frustrating.
So, don’t rush to sign, there’s things that in the condemnation process, there are deadlines, there’s a deadline to strike a special commissioner, there’s a deadline to produce expert reports before a special commissioner’s hearing. Once you get into civil litigation, there’s deadlines for discovery and all those kinds of things. But a right of way agent’s deadline because something’s got to be signed is once again, his deadline, not your deadline, okay? So be careful, please.
This is something I pulled up, you may not see this, I’m just going to interpret this. This was in the Pipeline & Gas Journal by a gentleman who has been in the industry a long time. He talked about how things are changing in the compensation that has to be payed to landowners. He says back in the day, we did the across the fence method, the ATF, he called it. Which determined property values by basically saying, hey, you know, the next door neighbor, this is what he accepted or this is what he thinks this property’s worth. So, yeah, your property should be about the same, right? So just kind of a, I almost want to say a good ol’ boy’s way of valuing the property.
He goes, but if things got sticky — these are his words, not mine — or time consuming in negotiating with the landowner in question, the agent could always play a condemnation card and threaten to invoke eminent domain seizure. In other words, if things weren’t going the way the right of way agent wanted them to go, he just threatened condemnation. I hear that threat to this day. They’re not threatening me, they’re threatening the landowner.
Then he talks about this now and says that enlightened land owners are rejecting the old assumptions and are demanding and getting more lucrative contracts. In other words, landowners are getting more money because they’re more educated, Why are they more educated? Because of the internet and because of information from programs like this one.
Texas Farm Bureau Video Clip
I have this clip, this is not a video I created, this is the Texas Farm Bureau. They put out a video and it kind of sums things up.
– Been contacted by a pipeline company.
– They tried to be real nice to me at first, they did everything they could to koozie up to me and be real friendly.
– The landman comes and speaks to you, we’re offering you this, all your neighbors have already done it, you’re the last holdout.
– He gave me an unbelievably, extremely low offer.
– The low ball offer.
– A very low ball offer.
– They try not to give you very good deals at all.
– A lot of people get short-changed.
– Their negotiating tactics were not always that full of integrity.
– If you don’t agree to those terms almost immediately, then somehow you’re taken to court. And you weren’t doing anything wrong, you were just minding your own business.
– They don’t care and they try to push you, the rudest people.
– Strong arm tactics.
– They certainly do their best to take advantage of people.
– Trying to intimidate you.
– So, I saw that video the other day and I’ve heard many of those same things from clients and landowners.
Negotiating Pipeline Easement Agreements
So, the Do’s and Don’ts in Negotiating. This is the part where the landowner says, yeah, I want to talk to the right of way agent, I want to try to work on a deal. Okay, do’s and don’ts, reject the first offer, yes, do that and the proposed easement agreement. I promise you that proposed easement agreement is not landowner friendly.
Don’t provide information to the right of way agent. One of the first things you will get along with this agreement to allow us to go on your property and survey is a big questionnaire asking all kinds of information about your property. You’re not required to give that information to them, you’re not required to answer that questionnaire. There could come a time in the condemnation case that, yes, you’re going to be required to provide information, documents, whatnot, to the other side of the pipeline company but not at this stage.
Don’t agree on a monetary number first. That’s very, very common and I go back to, you don’t know what the monetary number should be until you know how good or how bad for you the easement agreement is going to be. I’ve seen easement agreements where the easement agreement in addition to a 50 foot wide pipeline right of way easement also allows for access over the landowner’s property and over his adjacent property. You will oftentimes see that inserted in kind of unbeknownst to the landowner. Well, if that remains in the easement agreement, that sustainably damages your property because now it’s burdened by a pipeline easement and a road access right of way agreement. So, that would absolutely change the monetary number. If that’s removed from that easement agreement, I think that changes the number. So get an easement agreement, a favorable easement agreement in place first and then work on the monetary number.
And it’s patience, I think you’ll see in this PowerPoint presentation, don’t rush to do things, be patient, absolutely do that.
Key terms of the easement agreement, this is always mentioned. And these are just the basic things that absolutely this should be in easement agreements. And it’s not always in easement agreements to begin with, I think they’re almost always not in easement agreements to begin with. It needs to be specific, not a blanket easement. Make it nonexclusive, the width of the easement, I mean, yes, that normally is in there. Limit it to one pipeline, that’s normally not in there. A lot times, it will say, allow to lay pipelines, S, so plural. So limit the type of products to in the line. Limit the pipeline diameter. Sometimes it may mention the diameter of the pipe but then it may say that they are allowed to relay a line in to whatever maximum diameter. And then depth requirement, typically, the depth that they are hoping to achieve is about 36 inches surface above the pipe, we push for and argue for much more coverage. I’ve got lots clients that are, row crop farmers, rice farmers, turf grass farmers and surface coverage or soil coverage is important. Other key terms, surface facilities and that can be referred to oftentimes as above ground appurtenances.
What you don’t want is thinking that you’re agreeing to a pipeline easement, the pipeline’s going to be four feet into the ground, the next thing you know, you have a valve station or compressor station. So, reserve the surface use, be real specific on what you can do on the ground in the easement area. What do I mean by that? Oftentimes, the pipeline company, the right of way agent will say, well, once the pipeline’s in the ground, you won’t even know it, you can do everything above the pipeline or in the easement area that you could before and don’t worry about it. Well, there’s some restriction to your use and normally, it’s phrased as, you can do anything above in the easement area.
Typically, they’ll restrict it from no improvements, can’t build buildings, can’t do all these kind of things in the easement area. But then, there’s this catchall phrase of, or nothing that will interfere with the pipeline company’s use of the pipeline or the easement area. Well, let’s be a little more specific on what are some things that you can do so that they in the future don’t say, well, that kind of use interferes with our use, so therefore, you can’t do that. So be real careful there.
Double ditching just the segregation of soil. Added damages provision for extra damages, things that occur that obviously they didn’t intend to have happen. But if it’s additional damage to your property to even, like I said, personal property, that could be your cattle, whatnot, if they don’t properly fence the trench, things like that that causes damage.
Always require restoration, put the land back to the way it was or better. And there’s some specifications or specifying fencing and road repairs, just to say the road to the condition it was before then you may have an argument back and forth. Well, what was the condition before the construction? And then the termination of the easement. I get this question a lot. For non-use, we typically would push for a termination of easement provision.
No arbitration provision, I don’t see pipeline companies trying to put arbitration provisions in easement agreements. I’ve seen them from time to time and I just don’t like arbitration provisions.
Your Damages Include More than the Pipeline Easement
Damage calculations, this is something I kind of go over quickly and I’ll use some terms that you may hear thrown around. But one big component of valuation is, okay, what’s the land’s highest and best use? You may think, well, let me kind of say it this way. Highest and best use doesn’t always mean what the land’s being used for right now. So, it’s what it could be used for in the reasonable future. So, just because it’s not highly developed residential property right now doesn’t mean that’s not its highest and best use.
So when we come up with valuations, you look at the value of the part taken. So just for simple purposes, land’s worth, for simple math, $10,000 an acre and their easement area is one acre, that would be $10,000. Well, because it’s an easement and not a complete fee simple taking, they’re not taking 100% of the land, so there’s a percentage that they’re taking, that permanent easement has a percentage and normally it’s 90%. So, the value of the one acre permanent easement taking would be $9,000, okay. 90% of times, $10,000.
Then, this is a key component of valuation is what’s the damage to the remainder of your property because of this pipeline easement. Okay, so let’s say that your land value, less the part they’re taking, is a hundred thousand dollars. And these are all just general, hypothetical numbers but that pipeline on your property diminishes the value of the rest of your property by 10%. So, if the whole property’s worth a hundred thousand dollars, with a10% reduction in value to the remainder because of that pipeline, your property is actually now valued at $90,000. Damage to the remainder would be $10,000.
So you add part taken, $9,000 plus damage to the remainder, $10,000, so that’s $19,000 just for part taken and damage to the remainder. There’s some other additional damage components that should be looked at and added as costs to cure. Those might be loss of production for row crops or loss of grazing for cattle.
There will likely be additional damages for access roads and temporary easements — yes, you have to calculate in temporary workspace easements. Additional workspace easements is the phrase they use for if they’re boring under a road. and they’re going to need a lot more land to work the equipment to bore the road or the creek or whatever.
So you have to calculate all that in, it’s not just a matter of this is a 50 foot wide easement or 75 foot wide easement. The additional damage for access roads, well, if they are wanting an access road easement, that’s another calculation because that’s another easement. So there’s pipeline easement and they actually could get an access road easement, sometimes the access road easements are temporary and oftentimes, they’re permanent.
Attorney’s Fees and Expert Fees
So, I just want everybody to know this, my talk today is to educate landowners. Unfortunately, in Texas, attorney’s fees are not recoverable. Win/lose, you’re not going to recover your attorney’s fees. Your expert fees are not recoverable. So that puts the landowner at, I think, a huge disadvantage. If you want to fight the valuation, the pipeline company and the offers that they make, yes, you have to spend some money on an expert. We’ll talk about attorney’s fees because most of these cases are handled in a contingency fee basis. So, one could argue, well, there aren’t any attorney’s fees, there’s just a portion of the recovery. Some states do allow attorney’s fees but not Texas.
How do attorney’s fees work? That’s really, really important. Yes, you can hire a lawyer on an hourly bases. Some landowners will do that or try to do that or on a contingency fee basis. Most landowner condemnation lawyers handle these kind of cases on a contingency fee basis, that’s just the normal, that’s the way these most of the time are handled. So I want you to understand what is that contingency fee, what does that mean, how is it calculated?
So, it’s a fee or percentage rate on a certain amount, you need to know what that amount is. And so, in my fee agreements, it’s typically whatever the initial offer is that’s made to the landowner, that’s the landowner’s 100% to keep. So now, let’s just call it, that’s our base. So anything above the base is the amount that’s going to be used to calculate the contingency fee. And if we use a contingency of 1/3, just for simple math, you’re offered a hundred thousand dollars and with a lawyer, the lawyer’s able to work to get you an additional hundred thousand dollars, so what’s being calculated is a hundred thousand dollars, you take that and 1/3 of that will be 33,333. So, that’s the fee for the lawyer, the rest, the 2/3 will be for the landowner. So you get the initial amount plus the 2/3.
Who pays the expert? This is a huge question that you need to ask your lawyer. How do we cover the case expenses? A big part of that case expense is the expert, most of the time. So how do we handle case expenses which includes expert fees? That depends, some lawyers will say that comes out of your share, landowner, not the lawyer’s contingency fee. Or the attorney may say, well, let’s share that cost just like we are sharing in the contingency, the amount subject to the contingency fee and that’s what, for the most part, I do, now each case is different. And so, just know that that’s a question you need to ask. And it’s something that I explain to my clients and then a lot of ’em, and I’m glad they ask me that question too, so we talk about it at length.
Law Firms Representing the Kinder Morgan Permian Pipeline
The law firms that are involved in the Kinder Morgan Permian Pipeline project for the pipeline company. So, for Kinder Morgan, they’ve got several law firms and I’m really just focusing really from Gillespie County down to Colorado County. Gordon Rees and that’s the name of the law firm, not a person, so its last names are Gordon Rees, Gillespie, Blanco & Hays and Zabel Freeman, firm out of Houston and Gordon Rees is Houston-based. Then Ross Molina Oliveros, out of San Antonio is handling Caldwell County. And this can fluctuate sometimes, sometimes if there’s tracts that, well, this same landowner has land in Gonzales in Caldwell County then one firm will handle both and whatever.
How Can You Protect Your Interests in Condemnation
So, what should you do as a landowner? I’m sure you’re sitting out there saying, okay, well, this all good and fine but what do we do? What exactly do we do? Document your land, so kind of the before and after you see these pictures, before and after, when someone works out before and after picture. Do the before and after of your land, really the before, do a lot of before. Document your land, take pictures of trees, fences, pasture, if there’s cows in the shade of the trees that are now going to be taken out, that’s all really important. Improvements, the pens, the corrals that are going to be taken out, all that has a value and it’s not cheap to replace, that’s all I can say, so document that. And then the improvements, what they cost you, the invoices if you have all that, keep all that.
Now, once again, this is not stuff to turn over to the right of way agent, there could be a time and place to turn this over by and through your lawyer. Don’t lose pipeline letters, plats, schematics, I’ve got some clients that, what’s the old term? File number 13, I mean, I don’t know their, I don’t understand their filing system. So, I try to explain to them that it’s important to keep all stuff, even if they just throw it in a box and keep it but don’t throw it away. And then, as you get a lawyer, get your lawyer involved, you can share those pipeline letters and plats and schematics with your lawyer.
Keep notes of the conversations and comments of the right of way agents. Perhaps a right of way agent called you and he told you one thing and then a different right of way agent told you something different. That’s all helpful for the lawyer because the lawyer can say, look, I know that two or three and these are the right of way agents said this, now that doesn’t mean that. Unfortunately, that will not make Kinder Morgan do what the right of way agents promised. But at least that will get the company and the attorney’s for the company to take a look and check into it and see if there is some validity to what you’re saying and probably what you’re asking for actually can be done because someone at some point thought it could be done. So, jot down important issues and concerns and questions,
I really stress this with my landowners because you know your land backwards and forwards, you live there, you know all the ins and outs, you know what’s important, you know what’s concerning you may not be concerning other land owners that are clients of mine. And so, I really want to know what is on your mind and what’s concerning and what you, these are the top five things I want easement agreement or these are the top two, at minimum, we need this. And then questions also, look, we’ve all been there where I know I had a question but I forgot. Well, jot all your questions down and then you won’t forget. And then talk to a landowner condemnation attorney, extremely important and actually visit with several. Get out and see which one you understand, you believe listens to you, that’s really important, us attorney’s aren’t always very good listeners. And so, find one that is a good listener and explains things to you and answer your questions. So, important to find a landowner condemnation lawyer you feel comfortable working with.
Eminent Domain Reform Update
This is something I’ve added to this presentation. There’s eminent domain reform in the legislature this session. Senate Bill 421 and House Bill 991 are kind of almost the same bills — they’re companion bills. They’re being sponsored by Representative Burns and Senator Lois Kolkhorst.
Interesting, if you got some time to look at it, please do. It’s being supported by a lot of landowner organizations — the Texas and Southwestern Cattle Raisers Association, and the Texas Farm Bureau are really behind it.
What that bill tries to do is get the right of way agents and the pipeline company to put just the basic, favorable easement terms into easement agreements. So that first version of the easement agreement that the landowner gets will be slightly more favorable to the landowner. It’s going to have double ditching in there, and it’s going to have number of pipes and it’s going to have the diameter.
The legislature is trying to be involved in the drafting of the easement portion and that’s fine. So they want these basic terms in the easement agreement and these are all terms that, for the most part, the pipeline companies are okay with.
Okay, the next part is the public meeting portion of it and I find this portion very interesting. Part of the legislation says the pipeline company is going to need to conduct a public meeting and notice all the affected landowners. So, do I like that public meeting? Of course, the more meetings that they can answer questions about the project, great.
The next component is the “fair offer”. What they tried to create with these bills is a disincentive for the pipeline company to make initial low ball offers. If at the special commissioners hearing, the landowner receives a higher award and there’s a percentage and a breakdown, then there’s what’s being called a landowner bonus, It’s’s a pipeline company penalty or landowner bonus. So, it’s trying to create a disincentive for the pipeline companies to make these low ball offers.
I think there are some possible, unintended consequences, right? I think it all sounds good on the surface, but what I’m fearful of is if this goes through, there will be right of way agents saying the law requires us to make you fair offers, so this is by law, a fair offer. I hope that landowners won’t take offer and believe that since the right of way agent said it was fair, it’s fair. The landowner might think the law says that it’s fair. I’m really concerned that landowners aren’t going to question the offer, no matter what it is. Whatever you’re offered, question it and whatever you’re given to review, question it and definitely don’t sign it.
Another Texas Farm Bureau Video
This is kind of a video I thought was very interesting, it wraps it up.
– It felt like we were going up against the live.
– The little guy versus the big guy.
– I’m up against a big corporation.
– It was intimidating as all get out.
– My advice to landowners who may be experiencing the same type of issues would be to obtain good legal counsel, just right away from the start.
– They’ll tell you that you don’t need an attorney, trust me, you do need an attorney.
– Talk to your lawyers, talk to your neighbors on both sides of you.
– Partner up with your neighbors so you can split the legal fees.
– But whatever you do, you need to have those lawyers in the background helping you.
– You just have to get united and use every resource at your power because right now, the laws are in their favor and we’re at the losing end of it.
– I know that the eminent domain is necessary but the landowner needs to be fairly compensated.
– A fair seat at the table.
– Fair pricing.
– A fair trade on both sides.
– The processes needs to be more open and transparent and fair, thank you.
Happy to answer any questions.
– Thank you.
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