Part 7: What the Texas Court Did, and Didn’t, Say

Written by David Peter Alan, Contributing Editor
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In the previous article in this series, I looked at the surprising decision by the Supreme Court of Texas in the case of Miles v. Texas Central Railroad & Infrastructure, Inc. and Integrated Texas Logistics, Inc., Case No. 20-0393 (“Texas Central”), decided on Friday, June 24. 

The Court held that Texas Central has the authority to take land under eminent domain to build its railroad, because it is an “electric interurban railway company” under the applicable provision of the Texas Transportation Code. The Court stopped short of actually calling Texas Central a “railroad company” and, thereby, seemed to reach a holding that does not appear to comport with the general understanding of what a “railroad” is.

I examined the majority opinion in detail in Part 6, our recent news story about the decision. I also looked at the concurring and dissenting opinions that went with it. Our last report was comparable to the “analysis” section of a scholarly case comment in a law review, and this commentary is comparable to the “evaluation” section of such an article. I will evaluate the case by looking at the holding that the Court rendered and what the judges could have said but did not, as concerns railroad law. I will not look at where the Texas Central entities stand now, because I will have more on that subject soon.

Texas Central: The New Interurban?

Texas Supreme Court Justice Debra Lehrmann

Writing for the majority, Justice Debra Lehrmann examined and interpreted the provision of the Texas Transportation Code that concerns interurban railways. It was enacted in 1907, as interurban lines were beginning to crisscross the nation, bringing transit to folks who lived outside the cities where streetcars had begun to make their appearance. They were electrically operated, and they ran between cities or other towns that could be considered urban areas at the time. So, to Justice Lehrmann and four of her colleagues, the proposed high-speed rail (HSR) line that Texas Central wants to build is essentially a new and faster interurban line that would stretch over a longer distance, with different technology, but with the same spirit as the historic interurbans of the past century.

This characterization may make romantic sense, a return to a transit mode that worked well and took people where they wanted to go cleanly and efficiently. The old interurbans should not have died, and much of the blame for killing them goes to the automobile and the highway, and the government policies that favored them, and still do today. To an extent, interurbans of a sort have made a small comeback, but they are never identified by that name. Electrically-operated light-rail lines like those operated by DART in Dallas and Metro in Houston fit the statutory definition of an “electric interurban railway company” as well as the proposed Texas Central railroad does, probably better. 

Justice Rebecca Huddle used much of her dissenting opinion to distinguish the Texas Central project from the historic interurban lines. However, the majority said that the words of the statute itself control, and the Texas Central project fits within the meaning of the statute. Looking at the picture simplistically, that should be enough. Texas Central is a modern interurban, and that’s all there is to it. The question remains, and will always remain, whether the characterization makes good railroad sense.

The technologies of high-speed rail and historic interurbans are vastly different, a factor that gives Huddle’s argument a certain appeal and, perhaps, a certain validity. The old interurbans were more like streetcars than trains, and they were never intended to have the range of HSR, or even of conventional passenger trains. That does not mean that interurbans should have died (or, as some say, should have been murdered by the automobile industry and its allies), but railroaders could easily consider it quite a stretch to equate the two, no matter what an old Texas statute says. Will that, in itself, stop Texas Central? The answer is No because, if Texas Central fails, that will not be the reason. Still, a direct comparison between high-speed rail and historic interurban operations sounds too much like an apples-to-oranges comparison for comfort.

So, is Texas Central Really a “railroad”? I have been asking that since the beginning of this series last winter. The sad fact is that I still don’t know, at least as far as Texas law is concerned and, even worse, I will probably never know. The majority held that Texas Central had eminent domain authority in its capacity as an “electric interurban railway company” and found no reason to decide whether it had such authority as a “railroad” too. That apparent inconsistency could limit the persuasiveness of the Court’s holding, and it leaves unsettled the issue of whether an entity planning to build a high-speed rail line is a “railroad” after all. 

Even if Miles petitions the U.S. Supreme Court to review the case, that Court would probably not be in a position to decide whether or not Texas Central is actually a “railroad” within the meaning of the Texas statute. The highest court of a state is the final authority on the construction of the laws of that state. Considering the liberties that the Court has been taking recently, it is conceivable that they could take the case, but they would be more likely to do so for the purpose of agreeing with Justice Devine’s strong stand for the supremacy of private property rights than declare that Texas Central is a “railroad.” 

Texas Supreme Court Chief Justice Nathan L. Hecht

Texas Supreme Court Chief Justice Nathan L. Hecht and two other members of the Texas Court would have ruled that Texas Central is also a “railroad” for the purposes of the case. It seems to make sense on its face that Texas Central is a “railroad” for all practical purposes. It is (or, at least it had been), moving forward on many aspects of getting its railroad organized and built. To this writer, Hecht’s opinion makes sense, but he would have had to convince two more of his colleagues to make it part of the Court’s decision.

There is an argument that could have disposed of the issue, but my review of the many briefs and support letters filed with the Court did not demonstrate that it had been raised. The FRA conducted an administrative proceeding and promulgated new safety rules specifically for Texas Central, Title 49 of the Code of Federal Regulations (C.F.R.), Part 299. That set of rules was created especially for Texas Central when builds its railroad and is in a position to operate it. The rule-making procedure is complex: the agency must publish the proposed rules in the Federal Register, allow members of the public to comment on them, and sometimes hold hearings about them. If the FRA went to the trouble to promulgate safety rules for Texas Central, that means that it considered Texas Central to be a “railroad” and not merely a local rail-transit line, over which the FTA now has jurisdiction concerning safety.

With that recognition by the FRA and Texas Central’s business ties to Amtrak, that might have brought Texas Central within the ambit of “interstate commerce,” which is regulated nationally under the Commerce Clause of the U.S. Constitution. Interstate and foreign commerce is an area of federal pre-emption, where federal law prevails over state law. Surprisingly, Texas Central did not brief that issue, nor did its supporters who filed amicus (“friend of the Court”) briefs. It appears (to this writer, anyway) that the FRA’s rule-making involvement that specifically concerned Texas Central should have been sufficient to convince the majority of the Texas Court that Texas Central should have been declared a “railroad” for the purposes at issue in the case.

It appears reasonable to believe that classifying Texas Central as a “railroad” would have strengthened the arguments that it would need eminent-domain authority to fulfill its purpose. As it promoted itself, Texas Central is a modern railroad, making its trip within Texas at a faster speed than any train now operating in this country. While the majority may believe that a high-speed rail operation is a glorified interurban line (or, to be generous, at least the reincarnation of one), it seems difficult to fathom that persons and companies who build and promote these high-speed trains would see a connection between their projects and the historic interurbans, as a majority of the Court did. To be sure, transit with a nostalgic touch has its place among the modes. The McKinney “M-Line” streetcar in Dallas runs vintage cars and provides a ride with an old-time flavor that is fun to ride and provides useful transit. Some of the streetcars on McKinney Avenue date from the same era as the original interurban cars. While the M-Line provides an enjoyable experience that deserves to be preserved, it would otherwise bear little resemblance to the high-speed trains that Texas Central and its supporters hope will someday whisk passengers quickly to a location only a few light-rail stops away from McKinney Avenue.

Another issue that cropped up often was whether Texas Central was a “railroad” without having buit infrastructure or operated any trains. To anybody familiar with railroads, the contention that it is not a “railroad” is utter nonsense. It is impossible to run trains when there is no line on which to run them. That means infrastructure has to be built, and it can only be built on a right-of-way, which can only be established by possession of necessary land or easements to build that right-of-way on that land. Chief Justice Hecht mentioned that issue in his concurrence, but he fell two votes short of a majority, so Texas Central being a “railroad” is not part of the law of the case.

A Limit on Technology?

The operative language that confers eminent-domain authority on Texas Central is that it was found to be an “electric interurban railway company” as defined by statute. Electrically powered vehicles were new at the time, a concept first applied to streetcars only 20 years previously. Today, most streetcars and light-rail lines are electrically powered, but technology is changing. There are few electrified railroads providing passenger service today, and most of those are located in the Northeast, on or near Amtrak’s Northeast Corridor (NEC). In Chicago, there are the three historic Illinois Central Electric lines (now part of Metra) and the NICTD (South Shore) Line to South Bend Airport. There is also the pending electrification of the Caltrain line going south from San Francisco, ancillary to the California High-Speed Rail project. High-speed rail lines are electrified everywhere they operate at this time, so the 1907-vintage statutory limitation that requires electric operation may not be particularly important, especially in Texas. 

There is a potential problem, though. Technology is changing, especially with batteries that could soon supply power, although probably not on high-speed lines. There is also an emerging fuel cell technology that is scheduled to be implemented in San Bernardino County, California. Would these new means of moving trains satisfy the statutory definition enforced by the Court? That seems unclear. Batteries and fuel cells are devices that deliver electrical energy, which is used to propel a vehicle on tracks. A broad view of the word “electric” would satisfy the definition, but a narrow view that limits electric operation to overhead wires and a power-collecting device like a trolley pole would consider those technologies as straying too far from the from the original 1907 definition which the Court cited.

A Limit to Persuasiveness?

Decisions of the highest court of a state must be followed in that state, but are not mandatory elsewhere. They are often persuasive in other states and in Federal cases, though, as lawyers must use them to support their arguments if there is no in-state precedent that is on point. What the Texas Court delivered is a ruling that a modern HSR line is like an interurban from the past century and has the authority that the companies which built and operated the interurbans of the past century had. The Court did not say that Texas Central is a “railroad” with such authority, though.

It does not appear that the issues in the Texas Central case will pop up in other states like California, where a high-speed line is currently under construction, or in other places where a similar line is being planned. Calling a high-speed rail operation in the planning stage a “railroad” is not much of a stretch for the imagination. Calling it an “interurban” and analogizing it to an extensive transportation network of the past that should be living today but is not, is a huge stretch. The decision in Texas may make it possible for the planned Texas Central line to be built and operated some day.  If it accomplishes that objective, it still appears unlikely that it have much (if any) influence anywhere else.

An Overarching Problem with the U.S. Judicial System?

As anyone connected or concerned with railroading knows, railroad infrastructure (including street railways) is a complex technical field. Railway Track & Structures (RT&S) is a sibling publication to Railway Age and reports only stories about rail infrastructure. Yet, the judges on the Court in Texas demonstrated their lack of familiarity with that important aspect of railroading. It would be unfair to blame them for not knowing about this infrastructure, because it is not their job to know about it.  

There are very few areas of law where specialized judges work full-time on cases concerned with a specific legal field. Bankruptcy, which is standardized under a federal code, is one. Workers’ Compensation, which is administered under state law, is another. Some states have court administrators who assign judges to cases in a specific field, like family law or criminal cases. Still, there is no such system for dealing with cases that involve a branch of technology by finding judges who are familiar with that field and assigning them to such cases. Indeed, if an area of technology is sufficiently specialized, it would be impossible to find judges who had studied that technical field, and the few who did probably studied it before they went to law school and changed careers from technical to legal.

Most courts at the federal and state levels exercise general jurisdiction, which means judges as assigned cases covering the entire range of subject matter concerning every legal dispute. Appellate judges never spend full time on a specialized subject-matter area, and high-court judges usually decide which cases they want to review. Those cases also run the full gamut of possible subject matter.

So, while judges must tackle legal disputes based on subject matter with which they are not familiar, they must do so using what knowledge about the field they can get from the lawyers who argue the cases and from other sources. There are “railroad lawyers” who understand railroading and railroad issues, and they demonstrated their familiarity during the STB hearings which I have been covering. The STB is different from a court, though. It is a highly-specialized administrative agency that has only five members, who spend full time on cases that involve transportation issues, often about railroad operations. Courts are not like that, and there is no reason to expect that they will ever be like that.

So where do we go from here? In a nutshell, it’s too early to predict that. I now know that Texas Central, if it can somehow be resurrected, has authority to take or use land along its proposed right-of-way, including building its railroad on James Frederick Miles’s land. But authority is only one part of the picture. Carlos Aguilar, Texas Central’s leader, has quit, as I recently reported. Will he come back, will somebody else replace him, and can Texas Central find enough investors to build the line and start operating it?

Advocates and construction companies hope so, and I will report on those hopes in the next article in this series (Part 8). Then I will take a look at what sort of prospects Texas Central faces, as things stand now (Part 9). That will wrap up this stage of the series, as I wait for future events to develop, so I can report them to you when they happen.

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