Texas Chemist, Former Marine, Charges Keystone Pipeline Fraud
If it turns out that a court decides that TransCanada defrauded Texas landowners when it was establishing its right of way for the Keystone XL pipeline’s southern leg, legal proceedings in Nacogdoches County Court at Law could stop further construction as early as Dec. 19, but any final resolution of the dispute between TransCanada and pipeline opponents most likely remains a long way off.
Judge Jack Sinz of the County Court at Law has already issued one temporary restraining order and injunction on Dec. 7, ordering TransCanada to halt pipeline construction, pending a hearing on Dec. 19. The order took effect on Dec. 11. Then, after granting the Canadian corporation an emergency hearing on Dec. 13, he vacated the initial order and injunction while leaving the scheduled merits hearing on the docket.
Marine vet and retired chemist Michael Bishop of Douglass, Texas, filed the initial complaint that persuaded Judge Sinz there was sufficient cause to issue an injunction. Bishop owns land through which the pipeline's right of way now passes a right of way that Bishop argues TransCanada acquired by fraud—lying to him and other landowners about the nature of the “oil” the pipeline would carry.
Before Bishop’s case could be heard on the facts, TransCanada petitioned the court to withdraw the injunction since company had paid Bishop for the use of his land and he had signed an agreement and cashed their check.
Bishop acknowledged to the judge that he had settled with TransCanada, but only after a prolonged legal struggle in the eminent domain case the company brought against him and which he could no longer afford to fight. He had rejected TransCanada’s first offer of $8,000. When he finally settled “under duress,” as he put it, TransCanada paid him $75,000, of which he kept about $3,800. The rest went mostly to his lawyers as well as a fee to a Texas land agency.
In the County Court at Law case, Bishop is representing himself without a lawyer.
The Judge Did Not Throw Out the Case
When he vacated the injunction, Judge Sinz explained the decision this way:
“I feel I have no choice but to dissolve the temporary restraining order. You’ve raised some interesting questions but you’ve taken their money and given them an easement. And you knew all this when you did it. The case will proceed and I’ll continue to consider it.”
TransCanada has argued that Bishop is bound by the agreement he signed and for which he was paid, which is a strong contractual argument and the company has a countersuit to that effect. But Bishop’s argument that TransCanada committed fraud—that the company lied about the pipeline and used coercion to make him give them an easement—could defeat the contractual argument if the judge finds Bishop’s evidence persuasive and credible.
A TransCanada said after the hearing, referring to Bishop: “he agreed to the easement and he knew what would be in the pipe.” But they will have to prove that to the judge’s satisfaction.
The fundamental issue underlying the name-calling arguments is whether the contents of the pipeline will be “crude oil” as defined by law or not.
There is no question that TransCanada is building the pipeline for tar sands oil—also known diluted bitumen. There is no question that bitumen is a solid that must be treated in an environmentally unfriendly method to become liquid and that it must be heated to remain liquid as it passes through the pipeline.
Tar Sands Oil, or Diluted Bitumin, Is Toxic
There is no question that even TransCanada acknowledges that tar sands oil is more of an environmental threat than traditional oil that comes out of the ground as a liquid. Environmentalists point to the 2010 failure of an Enbridge corporation pipeline that dumped about a millions gallons of tar sands oil into the Kalamazoo River in Michigan where the clean-up continues after more than two years and a still-rising cost of $800 million in damages. TransCanada says its pipelines have state of the art in security.
There is no question that Texas crude oil and Canadian tar sands oil are significantly different substances in reality. But reality won’t matter that much to the court. What will matter is whether the substance TransCanada wants to ship more than 2,000 miles across the U.S. fits the legal definition of crude oil in the statute or regulation the court considers most relevant.
Both sides say they have the law on their side in one form or another—state regulations, state court decisions, federal regulations and even an Internal Revenue Service definition.
When Judge Sinz rescinded his injunction, national media responded with a burst of media coverage for the corporate victory, dwarfing the scant coverage of the injunction when it was granted. But few reports took detailed notice of the reality that the originally scheduled hearing on the facts is still scheduled for Dec. 19.
Bishop Targets Pipeline, Judges, Texas Legislature
“Today I got knocked down, but I didn’t get hurt, because I’ve got friends supporting me,… and I’ve got truth on my side…. I was forced to bring these people into court because they have not only defrauded me and other Texas landowners, they have defrauded the American public since the day this project was conceived and I am sick and tired of legislators, elected officials, county judges, county commissioners, district court judges that will rule in favor of a private foreign corporation carrying a hazardous material….
“I may lose again in the hearing on the 19th… [but] when the jury of landowners and taxpayers in this county hear my arguments and sit in that seat in that very courtroom that you all were in, the case is going to run opur way, we’re going to be in charge, and then we’re going after the Texas Legislature, we’re going after the county commissioners and county judges, we’re going to get justice.”
Bishop has also filed suit against the Texas Railroad Commission, the agency that regulates pipelines in Texas. Bishop’s complaint asserts that the commission failed to protect the environment by failing to investigate the contents of the pipeline—tar sands oil—before granting TransCanada a permit.
Also on Dec. 19, the commission will be the subject of a hearing on whether it should be disbanded. The Texas Sunset Advisory Commission will meet in Austin to take public comment as the pipeline opponents are organizing people to testify against the commission for what they call “eminent domain abuse” and “tar sands fraud.”