05-22 RR-01

Attorneys for Palestine and Anderson County said UP should drop its 'frivolous lawsuit,' which attempts to dissolve their 150-year-old contract. If the railroad declines, the city and county have demanded a jury trial.

Responding to a Union Pacific lawsuit filed in District Court, Palestine and Anderson County are demanding a jury trial – unless UP drops its “frivolous lawsuit” to abrogate the railroad's 150-year-old contract with the city.

“Union Pacific's case is without foundation,” attorney James Allison, of Allison, Bass & Magee, told the Herald-Press Tuesday. The city and county have hired the Austin law firm to fight the UP lawsuit.

“They should drop it, and continue to perform under, and comply with, their original agreement,” Allison said.

In its lawsuit, UP argued its contract with the city “interferes with the efficient operation of its interstate railroad.”

Nonsense, Allison said.

“The agreement in no way interferes with the operation of the railroad,” he said. “The amount of economic promises made by Union Pacific in this agreement are a very small part of their operating budget.”

Calls by the Herald-Press to Union Pacific were not returned. No court dates have been set.

Union Pacific filed suit against the city and county on Nov. 27, seeking to dissolve a 150-year-old contract that keeps a train-shop in Palestine, and guarantees a number of jobs for city residents.

At stake are roughly 65 local jobs, averaging $65,000 a year, that pump an estimated $5 million annually into the local economy.

Anderson County Judge Robert Johnston and Palestine Mayor Steve Presley declined to comment, on advice from their attorneys.

Attempts to contact Palestine City Manager Leslie Cloer were unsuccessful.

If Palestine loses the case, legal fees will be split between the city and Anderson County. If the city and county prevail, they hope the court will order UP to pay the fees.

City and county officials petitioned the court to affirm the “moral and legal commitment,” of their contract. If the railroad decides to go to court, Allison said, his team is ready.

Whoever performs under an agreement, without dispute, for a length of time, loses the legal right to dispute that agreement, he said.

“UP allowed and accepted economic benefits from the city and county for years without complaint,” Allison said.

Moreover, Allison said the legal argument of “laches,” where a party allows an unreasonable amount of time to expire before making a complaint, also applies in the case against the railroad.

The claims made by UP in its suit, filed in November, were relevant since 1995, and again after the repeal of the Texas Office-Shops Act in 2007. To advance an argument that could have been made decades ago, Allison said, is unreasonable.

The Fifth Circuit Court upheld the contract in 1977, Allison said, so its ruling should stand.

Railroad officials should be good corporate citizens and withdraw their suit, Allison said.

“The railroad has profited enormously from its agreement with Palestine and Anderson County,” court documents say. “The people of Palestine and Anderson County have relied on the railroad's commitments, undertaking many aspects of city and county planning, and economic development, with a view to nurturing the success of the railroad.”

Recommended for you