Texas Court Orders Patience For COVID Delay In Pipeline Row

By Katie Buehler
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Law360 (April 6, 2020, 8:06 PM EDT) -- A Texas appellate court has declined to intervene in Kinder Morgan's fight to dissolve a temporary injunction blocking construction on the $2.2 billion Permian Highway natural gas pipeline, urging the developer to allow the trial court some more time to figure out the technology needed to hold a hearing during the coronavirus pandemic.

A Third Court of Appeals three-judge panel told Kinder Morgan Texas Pipeline LLC and Permian Highway Pipelines LLC on Friday to allow a Hays County Court-at-Law judge another week to figure out the best way to hold a hearing remotely. The pipeline is fighting to dissolve temporary restraining orders that block construction on the pipeline granted to groundwater services company Electro Purification LLC, which operates groundwater wells on the contested pieces of land.

Kinder Morgan had accused the judge of abusing his discretion by indefinitely postponing a March 24 hearing on the restraining orders. The developer told the appellate court that if the restraining orders stayed in place, they could result in "catastrophic consequences," including costing Kinder Morgan $65 million to stop construction and reroute the pipeline around the contested pieces of land.

But the panel said because of the "extenuating circumstances" caused by the coronavirus and the judge's assurances that he was working on a solution, it could not conclude that the lower court judge had abused his discretion.

"We recognize that these are unprecedented circumstances and that the trial court may need additional time to put an appropriate system in place to successfully hold a remote evidentiary hearing involving multiple law firms and attorneys, numerous litigants, and the submission of evidence," the panel said. "We are also sympathetic to the trial court's concern that it not endanger essential staff who fall into the category of people who are most at risk from an in-person hearing."

The panel ordered Kinder Morgan and Electro to provide the trial court a status update by April 10, four days after Kinder Morgan said construction was scheduled to reach the contested pieces of land. A Kinder Morgan representative, who declined to comment on the order, told Law360 on Monday that construction of the pipeline is on schedule but would not elaborate.

Electro applied for the temporary restraining orders in two related cases March 12, asserting all of its alleged injuries could be resolved by Kinder Morgan condemning its groundwater estate in the planned path of the pipeline and paying for the property, according to court documents. The judge granted the application later that day.

On March 19, Permian filed a motion to dissolve the restraining orders, arguing that the court-at-law had no jurisdiction to grant the restraining orders and requesting a hearing on the matter. Later that day, the judge overseeing the cases told both parties there would be no in-person hearings due to the coronavirus pandemic and that he was working on determining whether a telephonic or video hearing could be conducted, according to court documents.

The next day, the parties were informed there would be no hearing on the motions to dissolve and that the restraining orders would be extended until a future hearing was set.

Permian filed an emergency motion requesting an emergency hearing on March 23, but that hearing was canceled and continued until an undetermined date, according to court documents.

Kinder Morgan told the appellate panel that the restraining orders are void because the court-at-law lacks jurisdiction and didn't state the reason for granting the orders, according to its petition filed March 26.

"The court offers no explanation in extending the temporary restraining order 'until the temporary injunction hearing can be held' because there is no reason why the trial court could not hold a telephonic hearing now," Kinder Morgan said.

Counsel for Electro didn't immediately respond to requests for comment Monday.

Justices Melissa Goodwin, Chari L. Kelly and Edward Smith sat on the panel for this case.

Permian and Kinder Morgan are represented by Warren W. Harris, W. Stephen Benesh and David B. Springer of Bracewell LLP.

Electro is represented by Edmond R. McCarthy Jr. and Edmond R. McCarthy III of McCarthy & McCarthy LLP and Charles Soechting Sr.

The case In re Permian Highway Pipeline LLC and Kinder Morgan Texas Pipeline LLC, case number 03-20-00214-CV, in the Court of Appeals for the Third District of Texas.

--Editing by Gemma Horowitz.

For a reprint of this article, please contact reprints@law360.com.

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