Houston Belt & Terminal Ry. Co. v. City of Houston

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Shortly after the City of Houston enacted a drainage-free ordinance, Houston Belt & Terminal Railway, BNSF Railway, and Union Pacific Railway (collectively, the Railroads) received notices of proposed charges for their properties in Houston. Daniel Krueger, the City’s Director of Public Works and Engineering, determined that the properties were “benefitted” and thus subject to drainage charges and determined that the Railroads should pay roughly $3 million based on their benefitted properties’ “impervious surface” area. The Railroads filed suit against the City and Krueger in his official capacity, alleging ultra vires claims against Krueger and seeking prospective injunctive relief. The trial court sustained the City’s plea to the jurisdiction as to the Railroads’ ultra vires claims based on governmental immunity. The court of appeals affirmed in part and reversed in part, concluding that the Railroads pleaded a viable ultra vires claim challenging Krueger’s determination that their properties were benefitted but that the railroads’ challenge to Krueger’s “impervious surface” determination did not fall within the ultra vires exception. The Supreme Court reversed in part, holding that the Railroads’ pleadings affirmatively alleged that Krueger acted “without legal authority” in both his “benefitted property” and “impervious surface” determinations, and thus the pleadings alleged viable ultra claims as to each. View "Houston Belt & Terminal Ry. Co. v. City of Houston" on Justia Law