United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

FILED July 22, 2022 No. 21-40445 Lyle W. Cayce Clerk Union Pacific Railroad Company,

Plaintiff—Appellee,

versus

City of Palestine, Texas; County of Anderson, Texas,

Defendants—Appellants.

Appeal from the United States District Court for the Eastern District of Texas USDC No. 6:19-cv-574

Before Higginbotham, Dennis, and Graves, Circuit Judges. James E. Graves, Jr. Circuit Judge: Union Pacific Railroad Company (“Union Pacific”) seeks to end its operations in Palestine, Texas, but has been unable to do so because a 1954 Agreement between its predecessor and Defendants City of Palestine (“Palestine”) and Anderson County, Texas (“Anderson County”) has prevented it from leaving. Because the 1954 Agreement is preempted by the Interstate Commerce Commission Termination Act (“ICCTA”), Union Pacific is free to leave. We affirm. Case: 21-40445 Document: 00516403839 Page: 2 Date Filed: 07/22/2022

No. 21-40445

I. The background of this case spans 150 years, and we have discussed much of it in prior opinions. We nonetheless recount it here to illuminate the intersection between the parties’ purported contractual agreements and increased federal regulation of the railroad system. A. The 1872 Original Agreement In the 1870s, during the boom of westward railroad expansion, small towns bid for railroad depots and stops as essential parts of their continued economic power and survival. One of these towns was Palestine, Texas. Palestine was uniquely positioned to serve as the crossroads between the International Railroad, approaching Palestine from Hearne, Texas to the southwest, and the Houston and Great Northern Railroad Company (“HGNR”), approaching Palestine from Houston to the south. See City of Palestine v. United States, 559 F.2d 408, 410 (5th Cir. 1977). In 1872, Palestine and Anderson County orally agreed to raise $150,000 in bonds from their citizens to finance the railroad. Id. In turn, HGNR agreed to “run[] cars regularly” to Palestine, construct a depot, and “locate and establish and forever thereafter keep and maintain” its “general offices, machine shops and roundhouses” in Palestine. Id. In 1873, HGNR merged with the International Railroad to create the International & Great Northern Railroad (“IGNR”). Id. The Texas legislature approved the merger so long as IGNR assumed “all acts done in the name of either of the companies,” including HGNR’s obligations in the 1872 Agreement with Palestine. Id. Consideration included another $150,000 in bonds and Palestine’s commitment to construct housing for the IGNR employees. Id.

2 Case: 21-40445 Document: 00516403839 Page: 3 Date Filed: 07/22/2022

No. 21-40445

B. The 1892 and 1911 Foreclosure Sales and the 1914 Judgment Granting Injunctive Relief In 1892, IGNR’s assets were sold at a foreclosure sale, but because the