California High Speed Rail Dodges Legal Bullet

by Stoel Rives LLP
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In Town of Atherton v. CA High Speed Rail Authority, No. C070877 (Cal. Ct. App. 3d Dist., July 24, 2014), the Third Appellate District upheld the High-Speed Rail Authority’s (HSRA) Program Environmental Impact Report/ Program Environmental Impact Statement (PEIR/PEIS) for the Bay Area to San Joaquin Valley segment of California’s High Speed Rail system (the Project).  The appellate court ruled that the HSRA properly limited the environmental analysis to a program level and properly deferred site-specific analysis, and that the PEIR/PEIS studied an adequate range of alternatives.

In 2008, the HSRA certified the PEIR/PEIS for the Bay Area to San Joaquin Valley segment and identified the Pacheco Pass Corridor as the preferred alignment.  Shortly after certification of the PEIR/PEIS, several interested parties (collectively, the Petitioners) filed suit, and the trial court found fault with the PEIR/PEIS’s project description, alternatives, and mitigation measures (Town of Atherton I).  After revising the PEIR/PEIS, the HSRA asked the trial court to approve the revisions.  A second group of litigants that included the Petitioners then filed suit to challenge the revised analysis.  That suit is the root of the instant appeal (Town of Atherton II).

In Town of Atherton II, Petitioners alleged that the revised PEIR/PEIS improperly deferred analysis of the impacts of  a portion of the train alignment and that the alternatives analysis did not consider new information provided by its own expert consulting company that identified a different feasible  alignment.  The trial court held that impacts of the alignment were properly deferred and the HSRA was not required to consider the Petitioner’s alternative.

On appeal, the appellate court first considered the HSRA’s contention that the appeal must be dismissed because federal law preempts state environmental law.  Moving on to the merits, the court then analyzed the appellants’ arguments regarding whether the PEIR/PEIS properly analyzed the impacts of the Project and the alternatives. 

Preemption

As an initial matter, the HSRA urged the appellate court to dismiss the case on the grounds that federal law preempts application of CEQA to the Project.  In 2013, the Surface Transportation Board found that it had jurisdiction over the Project because it will be a part of the Interstate Rail Network governed by the Interstate Commerce Commission Termination Act (ICCTA), which implements minimum regulations for an interstate form of transportation and expressly preempts remedies provided under federal or state law.  The HSRA argued that the appeal should be dismissed because the ICCTA preempts state environmental law. 

Without deciding whether the ICCTA preempts CEQA, the appellate court held that the market participation doctrine exception to federal preemption applies because the HSRA is a market participant taking proprietary actions in the market, and not acting as a state regulator.  The HSRA’s arguments to the contrary were struck down by the court because the Legislature (and the HSRA itself) had demonstrated that it intended to comply with CEQA pursuant to Proposition 1A (the legislation that allocated state funds to the HSRA).   

Impacts Analysis

On the merits, the appellate court considered the appellants’ argument that the HSRA improperly deferred analysis of the impacts of a section of the Project.  The PEIR/PEIS was drafted as a first-tier program EIR that selected the route alignment, the alignment alternatives, and station location options on a conceptual level.  The HSRA planned for a second-tier EIR that would provide site-specific analysis in the future.  One month before the PEIR/PEIS was to certified, however, the HSRA issued a Supplemental Alternatives Analysis Report as part of its second-tier project-level analysis and concluded that an aerial viaduct (elevated structure) was the only feasible alignment for a portion of the Project.

The appellants argued that the elevated structure was a foreseeable part of the future project and should have been addressed in the PEIR/PEIS, and not deferred to the second-tier project-level analysis.  But simply because the determination was made before the Final PEIR/PEIS was certified did not require specific site analysis at the PEIR/PEIS level.  The policy behind tiering is “to focus upon the issues ripe for decision at each level of environmental review” and “[r]equiring a first-tier program EIR to provide greater detail as revealed by project-level analyses [would] ‘undermine the purpose of tiering and burden the program EIR with detail that would be more feasibly given and more useful at the second tier stage.’”  (Slip Opinion, p. 35, quoting In re Bay-Delta etc. (2008) 43 Cal. 4th 1143, 1173.) 

The appellants also argued that the HSRA’s ridership model was flawed.  The appellate court held that the appellants’ experts did not present sufficient evidence demonstrating that the HSRA’s travel model was clearly inadequate or unsupported.  Rather, the HSRA’s expert had exercised “professional judgment” and the only relevant issue for the court to consider was the “principles and methodology” of the studies and “whether the studies are sufficiently credible to be considered as part of the total evidence that supports the agency’s decision”, not on the conclusions that they generate.  (Slip Opinion, p. 39 (emphasis original), quoting State Water Resources Control Bd. Cases (2006) 136 Cal.App.4th 674, 795.) 

Alternatives Analysis

The appellants also argued that the PEIR/PEIS failed to consider the alternative alignments for the Altamont pass proposed by their experts, and did not present evidence that these alternatives were infeasible or substantially similar to those already considered.  While the appellants offered some additional information not contained in the PEIR/PEIS, the appellate court noted each of the additional alternatives failed to demonstrate that the HSRA’s consideration of alternatives was inadequate.  Specifically, disagreement between experts was not unusual and did not amount to an inadequate analysis.  Furthermore, the appellants’ analyses required too much speculation, was substantially similar to those already discussed, and ultimately, the court was required to afford great deference to the HSRA’s findings. 

HRSA:  Where Next?

On the heels of this decision comes another success for the Project from the Third District Court of Appeal.  Last Thursday, an appellate panel overturned a Sacramento Superior Court ruling that invalidated the sale of $6.8 billion of the $68.4 billion voter-approved bonds under Proposition 1A for failing to meet appropriate environmental clearances and failing to identify the funding source for the first segment of the Project.  (See California High-Speed Rail Authority v. The Superior Court of Sacramento County No. C075668 (Cal. Ct. App. 3d Dist., July 31, 2014).)  The appellate court’s decision afforded deference to the state finance committee and the Legislature to determine whether the HSRA’s funding plan is appropriate for the sale of bonds. 

While there are still pending legal battles for the HSRA, these victories coupled with the Legislature’s recent budget allocation to the Project is providing some light at the end of the high-speed rail tunnel.  (See also http://www.hsr.ca.gov/ for information)

 

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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