Judge’s rulings favor opponents of rail project

Issue Date: November 27, 2013
By Christine Souza

Kings County farmer John Tos, Hanford landowner Aaron Fukuda and Kings County officials prevailed this week in their case against the California High-Speed Rail Authority, the agency responsible for construction of the state's high-speed rail project from San Francisco to Los Angeles.

On Monday, Sacramento County Superior Court Judge Michael Kenny issued a pair of rulings that observers said don't bode well for the authority. Kenny barred it from issuing more than $8 billion in high-speed rail bonds to help finance the project, and also rescinded the project's $68 billion funding plan.

"It's definitely a very favorable ruling. We didn't obviously get everything that we were after, but in a case like this you take what you can get," said Fukuda, who also represents the grassroots organization Citizens for California High-Speed Rail Accountability. "We're challenging the behavior of our state's elected and appointed officials, so it is definitely an uphill battle. Judge Kenny replenishes my faith in that somewhere along the line, you can plead your case."

The judge's decision will prevent the authority from spending bond measure funds for construction of the project until the funding plan is brought into compliance. Though Kenny ordered the authority to rescind its funding plan, he did not block the project entirely.

"The financial protections of Proposition 1-A have served their purpose well," said Michael Brady, the lead attorney for the plaintiffs in the case. "Our litigation to enforce those provisions will protect the state from financial risk. Our clients are very pleased."

Under Proposition 1-A, which California voters approved in 2008, the authority was required to specify the source of the funding for the first operable segment of the high-speed rail line and have all the necessary environmental clearances in place. Kenny had said the agency did not comply with either mandate in approving the start of construction of the train from Madera to Fresno, a segment of about 30 miles.

In a statement, high-speed rail authority board Chairman Dan Richard said the authority will review both of the judge's decisions to determine its next steps.

"It is important to stress that the court again declined the opposition's request to stop the high-speed rail project from moving forward," Richard said. "Additionally, the judge did not invalidate the bonds as approved by the voters in Proposition 1-A. Like all transformative projects, we understand that there will be many challenges that will be addressed as we go forward in building the nation's first high-speed rail system."

Stuart Flashman of Oakland, co-counsel for the plaintiffs, said the rail authority had assured the judge that it would be spending only federal funds to start construction, and that no state bond funds would be used on the project. However, because the federal funds must be matched with state funds, Flashman said, Monday's rulings mean that state bond funds will not be available to provide that match.

"That could cause the federal government to rethink whether to put its funds at risk. If the federal government withholds its funds, the project will never break ground," Flashman said.

Though the rulings mark what the plaintiffs' attorneys called a successful conclusion to the first part of their suit, a second part of the case involves showing that the project now proposed by the authority cannot meet other requirements set by the bond measure, including that it operate without a subsidy.

Flashman called the rulings "a major setback" for the high-speed rail authority.

"They need to step back and rethink their whole approach," he said.

California Farm Bureau Federation environmental attorney Chris Scheuring said, "There are very real questions about the viability of this project, and whether it will ever mature into a sound public investment. The livelihoods of a lot of Central Valley farmers who just happen to be in the way of this project are certainly hanging in the balance."

(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.

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