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Texas Central Wins Authority to Take Land for High-Speed Rail System

Move over luxury bus lines and quick flights. Central Texans should be on the lookout for bulldozers and train stops. On June 24, 2022, the Supreme Court of Texas held that Texas Central Railroad & Infrastructure, Inc. and related entities (collectively “Texas Central”) have eminent domain authority to acquire property for a proposed high-speed rail system between Dallas and Houston.[1] Specifically, the Court held that the corporation qualifies as an “interurban electric railway company” under the Texas Transportation Code. This ruling grants Texas Central the broad condemnation authority to procure land for the project.

Texas Central has Statutory Authority to Take Land

The plaintiff in the matter, a farm owner with property south of Dallas along the proposed path of the bullet train, challenged the companies power to condemn land. The landowner’s declaratory judgment action challenged Texas Central’s eminent-domain authority. Under Texas law, condemnation power must be conferred by the legislature, either expressly or by necessary implication.[2]

Here, Texas Central was created for the purpose of constructing, acquiring, maintaining, or operating lines of electric railway between Texas municipalities. The Court found that Texas Central is engaged in activities to further that purpose. Therefore, the Court concluded, that although legislators did not contemplate high-speed railways at the time of drafting the Transportation Code, Texas Central nonetheless qualified as “interurban electric railway companies” under the statute.

The Texas Transportation Code grants eminent domain powers to corporations commissioned for the purpose of constructing, acquiring, maintaining, or operating lines of electric railway between municipalities in Texas for the transportation of freight, passengers, or both. The Court further held that Texas Central does not have to demonstrate a “reasonable probability that the railway will be successfully completed.”[3]

Impact on Texans and Industries

Approximately 24,300 people travel daily between Dallas and Houston by air or personal vehicle.[4] Thus, the demand for easy travel between the two major cities exists. The proposed railway system cuts the nearly four-hour drive to approximately 90 minutes. Now that Texas Central has eminent domain authority, investors will likely emerge to back the high-speed rail project.

Beyond the shorter commute, the project will impact many communities and industries. For example, Texas Central will need to commence the eminent domain process on effected lands along the railway path. The land taking process in Texas involves a hearing on the just and adequate compensation of the property. This affects landowners in the high-speed rail pathway. Further, Texas Central will need to construct the railway, which will involve a substantial construction project leading to bids, and later the project management and monitoring of the railway construction.


FOOTNOTES

[1] Miles v. Tex. Cent. R.R. & Infrastructure, Inc., 647 S.W.3d 613 (Tex. 2022)

[2] See Tex. Const. art. 1, § 17.

[3] Miles, 647 S.W.3d at 627.

[4] https://www.bizjournals.com/dallas/news/2020/04/15/texas-central-high-speed-rail.html#:~:text=Between%20personal%20vehicles%20and%20air,Dallas%20and%20Houston%20every%20day

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 270
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About this Author

Barclay R. Nicholson Houston Business Attorney Sheppard Mullin
Partner

Barclay Nicholson is a partner in the Business Trial Practice Group out of Sheppard Mullin's Houston office.

Barclay offers clients in-depth knowledge and expertise in energy-related, construction and commercial disputes. He has represented a broad range of clients from the largest of the Fortune 500 companies to entrepreneurial business owners. He has significant experience handling energy related litigation and has represented some of the world's major oil and gas producing and refining companies as well as some of the nation's biggest...

713-431-7177
Erica C. Gibbons Houston Business Attorney Sheppard Mullin
Attorney

Erica Gibbons is an attorney in the Business Trial Practice Group out of Sheppard Mullin's Houston office. Prior to law practice, Ms. Gibbons worked as a Paralegal and legal assistant at a litigation firm in Chicago.

Erica represents clients in a variety of complex commercial and business litigation matters in both state and federal courts as well as private arbitration settings. She has litigated claims involving breach of contract, construction, fraud, insurance defense, managed care disputes and other business torts across several industries...

713-431-7119
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