Texas Oil and Gas Attorney Blog
The Texas Supreme Court has recently agreed to hear an appeal in a case involving the Texas Central Railroad. Oral argument is scheduled for January 11, 2022.
The case is Miles v. Tex. Central R.R. & Infrastructure, Inc., 2020 WL 2213962 (Tex. App.—Corpus Christi–Edinburg 2020), pet. granted, (Oct. 15, 2021) [20-0393]. As you may recall, Texas Central wants to build high speed passenger rail service between Dallas and Houston. To do that, while some land may be purchased voluntarily, it will probably need to use eminent domain to obtain most of the land needed for the railroad.
The Plaintiff, Miles, claims that Texas Central has not shown a reasonable probability of project completion, as required by Texas Rice Land Partners, LTD. v. Denbury Green Pipeline-Texas, LLC, 363 S.W.3d 192, 198, 202 (Tex. 2012). Miles asserts that the Denbury decision requires entities show a reasonable probability that a project will be completed before obtaining eminent domain power.Miles contends that Texas Central has not met this standard, and so it does not have eminent domain authority. For example, Miles points out that Texas Central has not yet laid any track or done anything else that could be called operating a railroad. In fact, the Texas Central website admits they have not even bought any land yet, but instead “have control over” about 600 acres of land” (probably through options to purchase).
Texas Central claims that it is a “railroad company” and an “interurban electric railway” under the Texas Transportation Code, and so has condemnation powers.
The trial court agreed with Miles, but the Court of Appeals agreed with Texas Central.
This is a hotly contested issue along the projected path of the rail line because, in a number of cases, it will split farms and ranches in two. In addition, some Texans have argued that a high speed rail between just two cities just isn’t needed, and will lack sufficient ridership to allow it to be profitable. If Texas Central has to condemn most of the land for its tracks and stations, the increased costs due to attorney’s fees may tip the cost benefit analysis towards unprofitability. A lot of Texans are going to be watching for the opinion on this case.