Union Pac. RR v. City of Palestine, No. 21-40445 (5th Cir. 2022)

Union Pacific Railroad Company (“Union Pacific”) sought to end its operations in Palestine, Texas but has been unable to do so because of a 1954 Agreement between its predecessor and Defendants City of Palestine (“Palestine”) and Anderson County, Texas (“Anderson County”) has prevented it from leaving.
 
Union Pacific filed a motion for summary judgment, which the district court granted, holding that the 1954 Agreement was expressly and impliedly preempted. After the district court entered judgment, Palestine and Anderson County filed suit in Texas state court seeking to enforce the 1955 Judgment which had approved the 1954 Agreement.
 
Defendants appealed the district court’s grant of summary judgment for Union Pacific and the denials of their motion to dismiss for failure to join a necessary party, motion for judgment on the pleadings, and cross-motion for summary judgment.
 
The Fifth Circuit affirmed the district court’s ruling granting summary judgment for Union Pacific after determining that federal law preempts the statutorily mandated contractual agreements between the parties, both expressly and as applied. The court explained that there is no requirement for contemporaneous movement of property related to the rails for the regulation to be preempted. If the facilities or services—in any non-incidental way—relate to the movement of property by rail, they are preempted by the ICCTA.  Further, the court held that the district court properly determined that the Anti-Injunction Act does not bar Union Pacific from seeking declaratory relief.