AUSTIN, Texas (CN) — The Texas Supreme Court heard oral arguments Tuesday in a case concerning whether a company attempting to build a high-speed train in the Lone Star State has the right to use eminent domain to take private property.
The dispute began in 2015, when James Miles, a property owner in Leon County, Texas, refused to allow Texas Central Railroad and Infrastructure to survey his land for the company's project to build a high-speed rail line from Houston to Dallas. The proposed route of the railway would run through Miles’ 600-acre property.
Miles sued the company, seeking a court order barring it from trying to seize his land via eminent domain, which gives the government power to take private property for public use. That power can be extended to private firms like railroad, telephone and electric companies.
Miles argues Texas Central is not a railroad company, citing a section of the Texas Transportation Code that says an entity must have established tracks and currently running rail services to qualify as a railroad company.
Under state law, private railroad companies may use eminent domain to procure up to a 200-foot wide strip of land for the development of a railroad track. According to Miles' complaint, the transportation code does not address whether high-speed electric rail builders are included in the state's understanding of a railroad company.
Texas Central filed a counterclaim, seeking a declaration that it qualifies as an electric railroad company under the transportation code and is therefore entitled to the use of eminent domain for its project.
The trial court ruled against Texas Central, finding it is not a railroad company and could not survey or procure Miles’ land. An appeals court reversed and ruled in favor of the company, leading Miles to appeal to the Texas Supreme Court.
During Tuesday’s hearing, the landowner's attorney Jeffrey Levinger reiterated to the state high court his client's assertion that Texas Central is not a railroad company and brought into question the company’s interpretation of the transportation code.
“A railroad company is a legal entity operating a railroad,” said Levinger. “The defendants are not that, certainly not conclusively and as a matter of law.”
Levinger argued that the base requirement for a company to qualify as an operator of a railroad is showing that it has the money and equipment to do so. Texas Central has plans for a future railroad, but no current functioning rail service.
“How do you get to be [a railroad company] if you do not have eminent domain?” Justice Jeffrey Boyd asked.
Levinger responded by explaining that a company just has to be an operator of a railroad, including railroads outside of the state.
Seeking to determine where the line is drawn on who is and is not a railroad company, Justice Evan Young asked Levinger if Texas Central would qualify it it built a mile of track.
“Hard to say without knowing a bit more,” the attorney replied. “I would need to know if it is a bona fide railroad, I would need to know if they were actually operating it.”
The state has thrown its weight behind Miles in the dispute. Late last year, the Texas Attorney General’s Office submitted an amicus brief in the case, echoing many of the arguments made by Miles’ attorneys.
Texas Solicitor General Judd Stone spoke during the hearing and laid out the state’s argument in the case.
“The Legislature would sensibly require that someone, before exercising the highly disfavored practice of having an eminent domain be exercised by a private party, might require the actual operation of real trains on real tracks,” Stone told the court.
Texas Central’s attorney Marie Yeates of Vinson & Elkins said that both Levinger and Stone are misinterpreting the transportation code. Yeates asserted that under a strict reading of the code, a railroad company does not have to own railroad materials for it to be a legitimate entity. Because the company has cultivated a presence as a railroad company and invested toward the production of a high-speed rail service, it meets the requirement to be entitled to use eminent domain, she said.
Another piece of Yeates’ argument is that Texas Central has been engaged in other activities with the federal government that prove its legitimacy as a railroad company.
“Texas Central is not a sham,” she said. “Look at all the different things Texas Central is doing and has done… the hundreds of millions of private investment money that has already been put into this project to trigger the regulatory activity by the Federal Railroad Administration.”
Yeates concluded that if the court rules for Miles, it would chill public infrastructure projects that would benefit the people of Texas.
“It would create a monopoly to say you cannot exercise [eminent domain] unless you already have trains on tracks,” she said.
The justices did not indicate when they would issue a ruling in the case.
The project to use high-speed rail to connect two of Texas’ largest metropolitan areas began in 2014 and has been gaining funds and government approval since. If completed, up to 400 passengers would be able to get from Houston to Dallas in around 90 minutes. Traveling by car, the trip typically takes four hours. On its website, Texas Central claims that the project would take five to six years to complete and would create an estimated 17,000 jobs.
The bullet train would be the first of its kind in the Lone Star State. Similar projects have been proposed in California to connect major cities such as Los Angeles to San Francisco.
During the hearing, Yeates said Texas Central has raised over $400 million of the $30 billion estimated to complete the project.
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