March 27, 2019 - Craig Enoch, Retired Justice, Texas Supreme Court -
Banding together for protection and common welfare was one of the earliest signs of civilization. Oftentimes, individuals would be required to dedicate some of their land for common use. We find this dynamic play out when governments authorize private entities to use eminent domain proceedings to develop transportation corridors, such as highways, electric transmission lines, oil and gas pipelines, or yes, railroads.
The efficient movement of people, goods, and services is critical to Texans’ economic vitality. Eminent domain has been long-recognized as essential to a community’s well-being, enabling progress and providing an orderly process for determining and paying private landowners a reasonable price for land use. Since the founding of this state, the Legislature has considered railroads sufficiently important to the economic well-being of Texans to grant those enterprises the tool of eminent domain.
All states recognize this fundamental dynamic, and each ameliorates the individual’s loss by requiring the community to pay reasonable compensation – market value. Texas permits local juries to determine that value if the property owner disagrees with the community’s offering price.
Individuals, when anticipating their own property may be sought for the larger community’s benefit, sometimes seek a court’s help in circumventing the procedures otherwise in place. Such an effort is playing out in Leon County, Texas.
James Miles sued Texas Central Railroad & Infrastructure Inc., which is developing a high-speed train. He asserted that Texas Central was ready to take his property and he asked a judge to conclude it and its affiliate, Integrated Texas Logistics Inc., had no authority to do so.
The dispute is rooted in the meaning of Texas Transportation Code, Sections 81.002 and 131.011. Under the first section, the question is whether Texas Central is an “operating” railroad. Under the second, it is whether Texas Central is “chartered . . . to operate an interurban electric railway?” If the answer is yes to either, then Texas Central also has the statutory authority to initiate eminent domain proceedings.
Recently, that Leon County judge ruled in favor of Miles, saying Texas Central is neither operating a railroad nor chartered to operate an interurban electric railway. Not surprisingly, Texas Central plans to appeal.
The crux of Miles’ argument is that because Texas Central’s equipment isn’t literally rolling down the track, it isn’t “operating.”
The appeals court closely will study the root issue, the relevant statutes and legislative intent . To me, Texas Central has the stronger argument – that it, in fact, is operating a railroad and, most certainly, it’s chartered to operate an interurban electric railway.
Look at the law. Texas’s Transportation Code, Section 81.002, says a railroad company is one that is “operating” a railroad. Section 131.011 says an interurban electric railway is a corporation chartered under state laws to conduct and operate an electric railway between two municipalities.
What are the facts? Texas Central was organized under Texas law to operate a railroad, a high-speed electric rail system connecting two urban centers, Dallas and Houston. Texas Central started operating seven years ago; Texas Logistics started two years ago.
Texas Central has full-time employees engaged in daily operations, planning, developing, presenting proposals, raising investor capital, conducting local-area information sessions and participating in governmental agency reviews of the project.
Several other factors support Texas Central’s standing. That includes legislative instructions that courts give its statutes a reasonable construction. And as applies in Leon County, the Legislature expressly tells courts that when it uses the present tense of a verb in a statute, it also intends the future tense.
In pushing the idea that “operating” a railroad means only an engine pulling cars along already laid rails, Miles violates all those statutory construction rules. Saying that developing a railroad is not a railroad operation because it is not yet running a train is, even at first blush, unreasonable.
As well, it’s absurd to say a tool for acquiring a track corridor is available only after the corridor has been acquired, built upon and over which trains are running.
Nothing in the statute suggests the Legislature intended to authorize eminent domain for only companies with running trains, essentially favoring legacy operations over start-up innovations. Saying otherwise is totally inconsistent with decades of legislative enactments encouraging competition and new business entrants into Texas. The laws are clear for Texas Central to move forward.
Craig T. Enoch retired as a Justice on the Texas Supreme Court, having also served as Chief Justice of Texas’ Fifth District Court of Appeals and Presiding Judge of Texas’ 101st District Court. Justice Enoch co-founded Enoch Kever PLLC, an Austin firm that advocates for business.