the Burlington Northern and Santa Fe Railway Company v. the City of Houston, Texas

Reversed and Remanded and Majority and Concurring Opinions filed May 12,

2005

Reversed and Remanded and Majority and Concurring

Opinions filed May 12, 2005.

In The

Fourteenth Court of

Appeals

____________

NO. 14-03-01311-CV

____________

THE BURLINGTON

NORTHERN AND SANTA FE RAILWAY COMPANY , Appellant

V.

THE CITY OF

HOUSTON, TEXAS ,

Appellee

On Appeal from the County

Civil Court at Law No. 4

Harris County, Texas

Trial Court Cause No. 789,496

M A J O R I T Y O P I N I O N

In this condemnation suit, appellant, The

Burlington Northern and Santa Fe Railway Company (“BNSF”), is attempting to

condemn an easement to build a federally-approved rail line through property

owned by appellee, The City of Houston.

BNSF appeals from the county court’s dismissal of its condemnation

suit. We reverse and remand.

BACKGROUND

It has long been

national policy to promote an adequate and efficient rail transportation

service. Norfolk & W. Ry. v. Am.

Train Dispatchers’ Ass’n , 499 U.S. 117, 119 (1991). In 1995, Congress passed the Interstate

Commerce Commission Termination Act (“ICCTA”), which reinforced the federal

government’s continued goals “to promote a safe and efficient rail

transportation system” and “to ensure development and continuation of a sound

rail transportation system with effective competition among rail carriers.” 49 U.S.C. § 10101 (3), (4) (2000). To accomplish these and other goals, the

ICCTA abolished the former Interstate Commerce Commission and created the

Surface Transportation Board (“STB”), which has exclusive jurisdiction over

transportation by rail carriers and the construction and operation of rail

tracks. Id. § 10501(b).

Pursuant to its broad statutory powers,

the STB played an integral role in the 1996 merger between Union Pacific (“UP”)

and Southern Pacific (“SP”), which was the largest merger in American railroad

history. In determining whether to

approve the merger, the STB examined its impact on existing service and

competition. The Bayport District in

southeast Houston contains one of the largest concentrations of petrochemical

producers in the world. Before 1996, SP

was the sole rail service provider to this area through its Strang Subdivision

line. However, the Bayport District was

within a few miles of a nearby UP line called the GH&H line, which allowed

for the possibility of competition through a build-out from the GH&H line

to the Bayport District. Because the

merger would result in UP owning both the Strang Subdivision and GH&H lines

and therefore render the shippers in the Bayport District captive to UP, as a

condition of the merger, the STB required UP to give its next largest remaining

competitor, BNSF, trackage rights on the GH&H line. See Union Pac. Corp. – Control &

Merger – S. Pac. Rail Corp. , STB Finance Docket No. 32760, 1996 WL 467636 ,

at *7 (1996). These trackage rights would

allow BNSF to build-out from the GH&H line to provide service to the

Bayport District, thereby preserving the possibility of competition.

In June 2001, BNSF formed a Delaware

limited partnership called San Jacinto Rail Limited (“SJRL”) with four shippers

in the Bayport District. The purpose of

this partnership, of which BNSF was the dominant partner, [1]

was to build a rail line from the GH&H line to the Bayport District using

the trackage rights BNSF obtained in the UP/SP merger. Under their agreement, SJRL is to build the

line, and BNSF is to have exclusive operational control. [2] In August 2001, BNSF and SJRL filed a

petition with the STB seeking authority for SJRL to construct and BNSF to

operate this new 12.8 mile line. BNSF

would be a common carrier and provide service to the four shippers partnered

with BNSF as well as any other shipper who so requested.

In response to this petition, the STB

initiated its lengthy evaluation process, including assessing the potential

environmental impacts of the proposed rail line. This environmental impact assessment includes

an analysis of a broad range of potential issues, including safety; noise and

vibration; impacts on air, water, and soil; land use; hazardous materials

issues; socioeconomics; cultural resources; and environmental justice. The STB sought public input in many ways, including

establishing a toll-free hotline and holding two public meetings. The meetings were attended by nearly 200

people, and the STB received hundreds of written comments. In August 2002, the STB approved the proposal

to build a new rail line, subject to the results of the ongoing environmental

impact study. The STB explained that

building this new line was in the public interest and consistent with national

rail transportation policy in that it would allow suppliers to realize the

benefits of competition and fulfill a condition of the UP/SP merger. The STB later issued a draft environmental

impact statement and, after more public meetings and considering hundreds more

written comments, a final environmental impact statement. Both the draft and the final statement were

each several hundred pages long.

The STB studied in detail five proposed

routes for the line, each of which would run through the City’s property. The City actively participated in the STB’s

assessment process, submitting detailed comments to the draft environmental

impact statement and objecting to each of the proposed routes. The City even passed a resolution declaring

its opposition to every route under consideration. BNSF worked with the STB to develop a route,

called Route 1-C, to address some of the City’s objections, but the City

opposed this route as well. The STB

determined that the new line would pose no significant environmental threats

and approved all five lines, designating Route 1-C as the preferred route.

Route 1-C is to run through an undeveloped

portion of Ellington Field, which is one of three airports in the Houston

Airport System. Ellington Field is a

small airport used mostly by the military and for corporate and private general

aviation. It has been a constant

financial drain on the airport system, and the City hopes to reverse that. The City objected to Route 1-C, claiming it

would interfere with plans to develop the property for aviation-related

business because, among other things, the line would bisect the property, allow

the transportation of hazardous materials, and make access to the property more

difficult, thereby decreasing its marketability. The City also believes construction of the

line would prevent the City from building a new road to make the property more

accessible and relieve severe traffic congestion on nearby residential

roads. The City presented these concerns

and others to the STB, and the STB concluded that the proposed line would not

significantly interfere with any reasonably foreseeable use the City had for

its property.

The City filed a motion for

reconsideration of the STB’s decision and a motion for stay pending judicial

review, see 49 C.F.R. § 1115.5 (a) (2004), both of which the STB

rejected. The City then filed a notice

of appeal with the Fifth Circuit Court of Appeals, but the City dismissed that

appeal, thereby making the STB’s decision final. See 28 U.S.C. §§ 2321 (a), 2342(5),

2344 (2000).

BNSF then attempted to purchase the

necessary easement from the City to build along Route 1-C, but the City refused

to sell. Therefore, BNSF commenced a

condemnation action under Tex. Rev. Civ.

Stat. Ann. art. 6336 (Vernon 1926), which authorizes a railroad to

condemn land. [3] The City filed a plea to the jurisdiction,

claiming immunity from suit and that BNSF had no right to take the property. [4] BNSF responded to each of the City’s points

and also asserted federal preemption.

After a two-day trial, the county court dismissed the condemnation

suit. In its findings of fact and

conclusions of law, the court rejected BNSF’s preemption argument, determining

that state law controls, and found that although the City’s sovereign immunity

had been waived, BNSF did not have the right to take the property under state

law.

In its first two issues, BNSF challenges

the county court’s conclusion that BNSF had no right to condemn the City’s

property under state law and asserts that, in any event, the county court’s

interpretation and application of state law conflicts with federal law and is

therefore preempted. In its third issue,

BNSF asserts that the county court erred in rejecting two of its three theories

as to why the City’s sovereign immunity has been waived. In its third cross-issue, the City challenges

the county court’s ruling that its sovereign immunity has been waived. In its first and second cross-issues, the City

provides two alternative state law grounds it contends are bases for affirming

the county court’s judgment. We conclude

that the City’s sovereign immunity has been waived and that federal preemption

precludes the county court’s application of its interpretation of state law,

and therefore we reverse and remand.

ANALYSIS

Our review of the county court’s ruling on

a plea to the jurisdiction is de novo, as is our review of the county court’s

conclusions of law and statutory interpretation. See Nipper-Bertram Trust v. Aldine Indep.

Sch. Dist. , 76 S.W.3d 788, 791 (Tex. App.—Houston [14th Dist.] 2002, pet.

denied); TRST Corpus, Inc. v. Fin. Ctr., Inc. , 9 S.W.3d 316, 320 (Tex.

App.—Houston [14th Dist.] 1999, pet. denied).

Attacks on the county court’s factual findings are governed by a legal

and factual sufficiency standard of review.

See Catalina v. Blasdel , 881 S.W.2d 295, 297 (Tex. 1994).

Sovereign

Immunity

Sovereign immunity bars suits against the

state unless the state has consented to suit.

Tex. Natural Res. Conservation Comm’n v. IT-Davy , 74 S.W.3d 849,

853 (Tex. 2002). Cities, as political

subdivisions of the state, are entitled to sovereign immunity unless it has

been waived. San Antonio Indep. Sch.

Dist. v. McKinney , 936 S.W.2d 279, 283 (Tex. 1996).

BNSF argues that immunity had been waived

three ways: (1) by article 6336, which

grants a railroad corporation the right to condemn “any real estate,” under

certain circumstances, (2) by Local Government Code section 51.075, which

states that a home-rule municipality such as the City “may plead and be

impleaded in any court,” Tex. Loc. Gov’t

Code Ann. § 51.075 (Vernon 1999), and (3) by a provision in the City’s

charter that says the City may “sue and be sued” and may “implead and be

impleaded.” The county court found that

the railroad condemnation statutes constituted an express waiver of

immunity. The City challenges this

finding in its third cross-issue. The

county court rejected BNSF’s other two theories, and BNSF complains of this in

its third issue.

After the county court’s ruling, this

court determined that Local Government Code section 51.075 constitutes a waiver

of the City’s sovereign immunity. City

of Houston v. Clear Channel Outdoor, Inc. , No. 14-03-00022-CV, ___ S.W.3d

___, 2004 WL 62561 , at *4 (Tex. App.—Houston [14th Dist.] Jan. 15, 2004, pet.

filed). Therefore, we sustain BNSF’s

third issue as it relates to section 51.075.

We need not reach the City’s third cross-issue that the railroad

condemnation statutes do not waive immunity since the City’s immunity has been

waived on another basis.

Federal

Preemption

The county court’s ruling that BNSF did

not have the right to condemn the City’s property under state law was based on

three separate conclusions. First, only

railroad corporations have condemnation power under article 6336 and SJRL is

not a railroad corporation. BNSF is the

condemning entity, but it has agreed to transfer the condemned easement to

SJRL, who is to build the rail line.

Article 6336 provides that a railroad corporation can condemn for any

lawful purpose connected with building or operating “its road.” The county court concluded that BNSF could

not contract away its power of condemnation and since SJRL, not BNSF, would be

the ultimate owner, the condemnation was unlawful since BNSF would not be

condemning for “its road.” Second,

article 6336 provides that a railroad corporation may not condemn any land

“situated more than two miles from the right of way of such railroad

corporation.” BNSF has trackage rights

on the GH&H line, but the county court concluded that trackage rights are

not a sufficient right of way under the statute because they are not fee simple

ownership. Since BNSF has no other right

of way within two miles of the property it is seeking to condemn, the county

court concluded that condemnation was improper.

Finally, under the common-law paramount public use test, [5]

the county court concluded that construction of the rail line would practically

destroy the City’s plans of future aviation-related development at Ellington

Field and construction of a new access road and that the City’s planned public

use was paramount to the public benefit of constructing the rail line.

BNSF challenges the correctness of the

county court’s interpretation of article 6336 and its conclusions in applying

the paramount public use test. We need

not determine whether the county court’s interpretation and application of

state law is correct because, even if correct, it conflicts with federal law

and is therefore preempted.

Preemption of state law by federal law is

rooted in the Supremacy Clause of the United States Constitution. U.S.

Const. art. VI, cl. 2. The

Supreme Court has determined that federal preemption can arise in three ways:

(1) when Congress expressly provides that state law is preempted, (2) when

congressional intent to exclusively occupy the field can be inferred from

pervasive federal regulation, and (3) when state law actually conflicts with

federal law. English v. Gen. Elec. Co. ,

496 U.S. 72 , 78–79 (1990).

Where a statute contains a specific

preemption clause, as does the ICCTA, that clause becomes the focus of our

analysis. Friberg v. Kansas City S.

Ry. , 267 F.3d 439, 442 (5th Cir. 2001).

The ICCTA section entitled “General Jurisdiction” states, in relevant

part:

(b) The jurisdiction of the Board

over‑‑

(1) transportation by rail

carriers, and the remedies provided in this part with respect to rates,

classifications, rules (including car service, interchange, and other operating

rules), practices, routes, services, and facilities of such carriers; and

(2) the construction, acquisition,

operation, abandonment, or discontinuance of spur, industrial, team, switching,

or side tracks, or facilities, even if the tracks are located, or intended to

be located, entirely in one State,

is exclusive.

Except as otherwise provided in this part, the remedies provided under this

part with respect to regulation of rail transportation are exclusive and

preempt the remedies provided under Federal or State law.

49 U.S.C. § 10501 .

As the Fifth Circuit stated in Friberg , “[t]he language of the

statute could not be more precise.” 267

F.3d at 443 . Courts have consistently

interpreted this preemption language to be broad in scope. See, e.g. , id. ; City of

Auburn v. United States , 154 F.3d 1025 , 1030–31 (9th Cir. 1998); Dakota,

Minn. & E. R.R. Corp. v. South Dakota , 236 F. Supp. 2d 989, 1005

(D.S.D. 2002), aff’d in part & rev’d in part on other grounds , 362

F.3d 512 (8th Cir. 2004); Wis. Cent. Ltd. v. City of Marshfield , 160 F.

Supp. 2d 1009, 1013 (W.D. Wis. 2000).

Indeed, “[i]t is difficult to imagine a broader statement of Congress’s

intent to preempt state regulatory authority over railroad operations.” CSX Transp., Inc. v. Georgia Pub. Serv.

Comm’n , 944 F. Supp. 1573, 1581 (N.D. Ga. 1996). As such, under principles of express and

conflict preemption, courts have found that state laws that constitute

regulation of a railroad are preempted. See,

e.g. , Friberg , 267 F.3d at 443 ; City of Auburn , 154 F.3d at

1031 ; South Dakota , 236 F. Supp. 2d at 1006–07; Wis. Cent. , 160

F. Supp. 2d at 1013–14.

In South Dakota , the court analyzed

preemption in the context of South Dakota’s eminent domain law. The railroad there applied to the STB for

authority to build a new rail line, which the STB eventually approved. 236 F. Supp. 2d at 996 . While the railroad was waiting for the STB’s

approval, the state amended its formerly broad eminent domain law and added

many new restrictions on a railroad’s ability to condemn property. Id. at 997–98. Primarily at issue were the requirements

that, before it could condemn property, a railroad have 100% financing for the

project arranged and file a plat describing in intricate detail the exact route

of the rail line. Id. at

998 . The court found that both

provisions constituted an impermissible regulation of the railroad and were

expressly preempted because they would pose an “insurmountable barrier” for the

railroad and therefore “completely block[]” and “wholly prevent” the project. [6] Id. at 1006–07; see also City

of Auburn , 154 F.3d at 1031 (concluding that any state law that prevents a

railroad from constructing or operating a line constitutes an impermissible

regulation); Wis. Cent. , 160 F. Supp. 2d at 1013–14 (finding that city’s

attempt to condemn railroad property constituted a regulation and was therefore

expressly preempted).

Here, the conditions the county court

imposed on BNSF’s use of its condemnation authority amount to regulation. The STB approved a new rail line to be owned

and constructed by SJRL and operated by BNSF, its predominant partner. Under the county court’s interpretation of

article 6336, which focuses on the phrase “its road,” BNSF and SJRL can never

construct and operate the line in the manner approved by the STB. Similarly, because the STB-approved routes

are not within two miles of any property BNSF owns, the county court’s

interpretation of the phrase “right of way” to require fee simple ownership as

opposed to trackage rights means that BNSF cannot use its trackage rights on the

GH&H line (acquired by STB order) to build the new line. Because these conditions wholly prevent

construction of the STB-approved rail line, they constitute regulation and are

preempted as applied to BNSF in these circumstances. See City of Auburn , 154 F.3d at 1031 ; South

Dakota , 236 F. Supp. 2d at 1006–07; Wis. Cent. , 160 F. Supp. 2d at

1013–14.

The county court also applied the

paramount public use test in a manner as to block the rail line. The STB, in its extensive two-year evaluation

and approval process, reviewed the City’s concerns over the proposed routes as

well as hundreds of other comments and concluded that construction of this

line, with eighty mitigating measures in place, was in the public interest and

important to promote national rail transportation policy. The county court’s application of the

paramount public use test re-balanced a portion of these interests and placed

the City’s planned uses over the public interest and national rail

transportation policies as determined by the STB, the agency with the expertise

and exclusive jurisdiction to make such determinations. As such, the county court’s application of

the paramount public use test in these circumstances amounts to impermissible

second-guessing of the agency’s expertise and would prevent construction of the

STB-approved rail line. See Chicago

& N.W. Transp. Co. v. Kalo Brick & Tile Co. , 450 U.S. 311, 326

(1981) (“Because Congress granted the exclusive discretion to make such

judgments to the Commission, there is no further role that the state court

could play.”). Therefore, it is

preempted as well. See City of Auburn ,

154 F.3d at 1031 ; South Dakota , 236 F. Supp. 2d at 1006–07; Wis.

Cent. , 160 F. Supp. 2d at 1013–14.

The City claims that South Dakota

supports its argument that the county court’s application of the railroad

condemnation statute and the paramount public use test are not preempted in

this case. As the South Dakota

court noted, even the STB has acknowledged that eminent domain is a question of

state law and a railroad is responsible for obtaining the land necessary to

complete the project. 236 F. Supp. 2d at

1009 . “Thus STB approval of the [rail]

project does not carry with it any federal power to take the land to complete

the project. For such authority, [the

railroad] is wholly dependent upon the State of South Dakota.” Id.

Because of this, the South Dakota court concluded that Congress

did not intend the ICCTA to preempt the field of eminent domain law. Id.

However, BNSF does not argue, and we do not hold, that the entire field

of eminent domain law is preempted.

Rather, we have determined that when state eminent domain law, as

applied in the circumstances, amounts to a regulation by blocking a federally-approved

rail line, it is expressly preempted. [7] The City also points to the court’s finding

that other portions of South Dakota’s eminent domain statute requiring a

showing of public use and necessity were not preempted. Id. at 1012 . However, unlike in the present case, there

was no indication that this requirement would completely prohibit construction

of the rail line. See id.

Therefore, we sustain BNSF’s first and

second issues to the extent BNSF contends the county court’s interpretation and

application of state law is preempted. [8]

In its first cross-issue, the City argues that BNSF cannot

use its condemnation power in this case because the City, as a home-rule

municipality, has the authority to prohibit the use of its grounds by a

railroad. Tex. Rev. Civ. Stat. Ann. art. 1175, § 1 (Vernon Supp.

2004–2005). A railroad’s condemnation

authority originated from the Texas Constitution, [9]

and the legislature has specifically authorized a railroad corporation to

condemn “any real estate” if it cannot agree with the owner for purchase and to

construct and operate a railroad “between any points within this State,”

including on public lands. See Tex. Rev. Civ. Stat. Ann. arts. 6316,

6317, 6336 (Vernon 1929). Thus, even

assuming article 1175 somehow trumps the legislature’s specific grant of

condemnation authority, [10]

the City’s refusal to consent to any route (all of which run through the City’s

property) is but another form of regulation that prevents construction of this

federally-approved line and is therefore preempted. See City of Auburn , 154 F.3d at

1031 ; South Dakota , 236 F. Supp. 2d at 1006–07; Wis. Cent. , 160

F. Supp. 2d at 1013–14. We overrule the

City’s first cross-issue.

In its second cross-issue, the City asserts that a railroad

cannot condemn the property of a home-rule municipality that is already

dedicated to a specific public purpose, citing Rockport & P.A.R. Co. v.

State , 135 S.W. 263, 265 (Tex. Civ. App. 1911, no writ). We have already rejected the City’s argument

that its status as a home-rule municipality can prohibit BNSF from using its

condemnation power in this case.

Further, to the extent Rockport ’s holding is somehow distinct

from the paramount public use test, if applying its holding would result in

elevating the City’s interest over the public interest in building the rail

line, as determined by the STB, and preventing the construction of the

railroad, then it is preempted as well.

Therefore, we overrule the City’s second cross-issue.

Having disposed of all issues raised in

this appeal [11]

and having concluded that the county court correctly determined that the City’s

sovereign immunity has been waived but incorrectly determined that federal

preemption did not apply in this case, we reverse and remand for further

proceedings consistent with this opinion.

/s/ Leslie Brock Yates

Justice

Judgment

rendered and Majority and Concurring Opinions filed May 12, 2005.

Panel

consists of Justices Yates, Edelman, and Guzman (Edelman, J. concurring).

[1] BNSF and

BayRail, LLC, a wholly-owned subsidiary of BNSF, own a 49% interest in SJRL.

[2] According to

the STB, who filed an amicus brief in this appeal, “It is not uncommon for one

entity to hold title to the rail line, while another is the operator licensed

to provide the rail service over the line, as such arrangements advance a

variety of legitimate business purposes.”

[3] Article 6336

is entitled “When corporation and owner disagree” and provides in pertinent

part:

If any railroad corporation shall at any time be

unable to agree with the owner for the purchase of any real estate, or material

thereon, required for the purpose of its incorporation or the transaction of

its business, for its depots, station buildings, machine and repair shops, for

the construction of reservoirs for the water supply, or for the right of way,

or for a new or additional right of way, for change, or relocation or road bed,

to shorten the line, or any part thereof, or to reduce its grades, or any of

them, or for double tracking its railroad or constructing and operating its

tracks, which is hereby authorized and permitted, or for any other lawful

purpose connected with or necessary to the building, operating or running its

road, such corporation may acquire such property by condemnation thereof. . . .

No railroad corporation shall have the right under this law to condemn any land

for the purposes mentioned in this article situated more than two miles from

the right of way of such railroad corporation.

Tex. Rev. Civ. Stat. Ann. art. 6336.

[4] This case is

before us on appeal from the granting of a plea to the jurisdiction, though

many of the issues raised in this appeal, such as federal preemption and the

requirements of the railroad condemnation statute, are not traditionally

considered jurisdictional issues. We

need not address whether such matters are properly raised in a plea to the

jurisdiction in a condemnation case because neither party has raised this

argument and, though the record is silent, BNSF represented without

contradiction at oral argument that all issues raised in this appeal were tried

by consent. See Tex. R. Civ. P. 67; Frazier v.

Havens , 102 S.W.3d 406, 411 (Tex. App.—Houston [14th Dist.] 2003, no pet.)

(“A party’s unpleaded issue may be deemed tried by consent when evidence on the

issue is developed under circumstances indicating both parties understood the

issue was in the case, and the other party fails to make an appropriate

complaint.”). Thus, even assuming that a

plea to the jurisdiction is not the appropriate vehicle for addressing issues

such as preemption, any such error is waived.

See Whitten v. Vehicle Removal Corp. , 56 S.W.3d 293, 298 (Tex.

App.—Dallas 2001, pet. denied) (“We need not decide, however, whether VRC

properly utilized a plea to the jurisdiction in this instance because Whitten

did not object to the plea below, nor does he complain on appeal of any defect

in the manner that the preemption issue was raised before the trial court. Therefore, any such error was waived.”).

[5] If property is

already devoted to public use, a condemning authority may not seek to condemn

that property if doing so would practically destroy its existing use unless it

shows that its intended use is of paramount public importance and that its

purpose cannot be otherwise accomplished.

In re Burlington N. & Santa Fe Ry. , 12 S.W.3d 891 , 894 n.1

(Tex. App.—Houston [14th Dist.] 2000, orig. proceeding [mand. denied]) (citing Sabine

& E.T. Ry. v. Gulf & I. Ry. , 46 S.W. 784, 786 (Tex. 1898)).

[6] The City

stated at oral argument that South Dakota stands for the proposition

that only state economic regulations are preempted. Even assuming such a

distinction would impact this case since the requirements at issue would

prevent construction of the rail line, which certainly has economic

consequences, we disagree with this reading of South Dakota . The court explicitly stated that “state

regulation of such areas [as economic, environmental, and public safety issues]

in the context of railroads is preempted by federal law.” 236 F. Supp. 2d at 1007 ; see also Friberg ,

267 F.3d at 444 (holding that common-law negligence claim and application of

state criminal statute regarding blocking of roads by trains were preempted); City

of Auburn , 154 F.3d at 1031 (finding state environmental regulations were

preempted as applied to railroad).

[7] The City’s

reliance on Hayfield Northern Railroad Co. v. Chicago & North Western

Transportation Co. , 467 U.S. 622 (1984), is similarly misplaced. Like South Dakota , Hayfield

merely stands for the proposition that federal railroad law does not preempt

the entire field of state eminent domain law.

Id. at 632.

[8] We note that

our holding applying federal preemption is consistent with the STB’s position

as reflected in the amicus brief it filed with this court. See CSX , 944 F. Supp. at 1584 (noting

that because Congress delegated authority to the STB to implement the ICCTA,

the STB is “‘uniquely qualified’” to determine whether state law should be

preempted (quoting Medtronic, Inc. v. Lohr , 518 U.S. 470, 496 (1996))); accord

Grafton & Upton R.R. v. Town of Milford , 337 F. Supp. 2d 233, 240 (D.

Mass. 2004). The Association of American

Railroads, of which BNSF and UP are both members, and the American Chemistry

Council filed amicus briefs urging federal preemption as well.

[9] Tex. Const. art. 10, § 1 (repealed), quoted

in Tex. Channel & Dock Co. v. State , 135 S.W. 522, 523 (Tex. 1911).

[10] But see

Tex. Tpk. Auth. v. Shepperd , 279 S.W.2d 302 , 361–62 (Tex. 1955) (finding

that statute granting Turnpike Authority power to condemn “any land . . .

necessary or appropriate for the construction or the efficient operation of any

Turnpike Project” allowed Turnpike to condemn property of home-rule

municipality); cf. Tex. Rev. Civ.

Stat. Ann. art. 6336 (“If any railroad corporation shall at any time be

unable to agree with the owner for the purchase of any real estate, or material

thereon, required for the purpose of its incorporation or the transaction of

its business . . . , such corporation may acquire such property by condemnation

thereof.”).

[11] After this

appeal was filed and argued, BNSF and UP entered into an agreement for UP to

provide certain trackage rights to BNSF, which would allow BNSF to build a rail

line into the Bayport District. The City

has filed a motion to dismiss, claiming this agreement constitutes a concession

by BNSF that it no longer needs to condemn the City’s property and therefore,

this appeal is moot. BNSF disagrees that

its agreement with UP, to which the City is not a party, resolves its dispute

with the City or provides a complete substitute to the proposed rail line

through the City’s property because its trackage rights agreement with UP

provides only limited access to a portion of the Bayport District’s shippers. BNSF further contends that the appeal is not

moot because the trial court awarded over $1,000,000 in attorneys’ fees and

expenses to the City under Tex. Prop.

Code Ann. § 21.019(c) (Vernon 2004), which provides for attorneys’ fees

and expenses to the property owner if the court grants a motion to dismiss the

condemnation proceeding. Generally, a

case becomes moot when a court’s actions cannot affect the rights of the

parties. Pinnacle Gas Treating, Inc.

v. Read , 104 S.W.3d 544, 545 (Tex. 2003).

Neither party raised an issue contesting the award or amount of

attorneys’ fees, and thus we do not address the propriety of the trial court’s

decisions. However, because the trial

court’s award of attorneys’ fees and expenses was contingent upon its properly

dismissing the condemnation proceeding, our reversal of the trial court’s

dismissal affects the City’s right to attorneys’ fees and expenses. Thus, this appeal is not moot. See id. at 545–46 (concluding that

appeal of dismissal of condemnation proceeding was not moot, despite condemnor

subsequently obtaining property by other means, because trial court awarded

over $100,000 in damages, expenses, and attorneys’ fees when dismissing

condemnation proceeding under section 21.019(c) and thus there was a live

controversy over correctness of trial court’s dismissal). We overrule the City’s motion to dismiss.