Energy Law

First Circuit Holds That Common Carrier Cannot Expropriate Private Property to Perform Routine Service and Maintenance on its Ethylene Pipeline

By Emma J. Hinnigan

In ExxonMobil Pipeline Co. v. Union Pacific Railroad Co., 08-2347 (La. App. 1. Cir. 5/13/09), the First Circuit held that ExxonMobil was not entitled to expropriate land owned by Union Pacific because the expropriation was not for a public purpose. ExxonMobil wanted to build an access road so that it could perform routine service and maintenance on one of its ethylene pipelines. Under Louisiana law, a common carrier does have the right to expropriate private property for use in its common carrier business. However, to exercise this right, the common carrier must prove that the expropriation is for a public and necessary purpose. For there to be a public purpose, there must be a general public right to a definite use of the property, as distinguished from the public benefiting due to property being used by a corporation or an individual. The court held that ExxonMobil failed to prove that the expropriation served a public purpose because only ExxonMobil would be able to use the access road due to a locked gate. Further, the routine inspection and maintenance of such a pipeline does not promote the health, safety and morals of the public, which is typically considered a public purpose. Judge Kuhn dissented. In his dissent, he explained that the expropriation of private property to perform routine service on a pipeline does serve a public purpose. He further noted that ExxonMobil did not have to prove that the public would have direct use of the access road to establish a public purpose.
 

Full post as published by The Energy Law Blog on July 28, 2009 (boomark / email).