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Court cases for High-Speed Rail heard this week

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There’s a lot going on this week with the high-speed rail project. The decisions could affect the very life of the project. There are two appellate court cases being heard this week and one in Superior court hearing in Kings County.

Atherton II and the Surface Transportation Board

The first hearing will be held Tuesday May 20th and it involves an older case called Atherton case. This is an appeals case. It is a CEQA case about the Bay Area to Central Valley Program level EIR/EIS. It is being appealed because there are questions regarding the inadequacy of the EIR including impacts and how the ridership model was arrived at.

The Authority caused this case to be delayed months ago when they introduced a new factor, the Surface Transportation Board. (STB) They claim since the STB has control over who starts a new railroad then the California’s environmental law does not apply. The consequences of this case could have significant effect on the Atherton case and future CEQA lawsuits.

Prop 1A Appeal: Extraordinary Writ

The next case known as the Tos/Fukuda/Kings County Case is about the appeal of Judge Michael Kenny’s Superior Court rulings. First concerning the court’s opinion that the Rail Authority did not follow Prop 1A when they approved their funding plan back in November 2011. The judge found they did not have all environmental work completed and they did not have the funds to go with their selected Initial Operating Segment, which goes from Madera to the San Fernando Valley, 300 miles. The reason it can’t be the smaller segment of approximately 130 miles is it does not have the standalone ridership to make enough money and would require a subsidy, forbidden by Prop 1A.

There were several people on the board or their own attorneys that attested over the years that the initial construction segment (ICS) could not be a usable segment.

Example March 13, 2012 Senate Joint Committee Meeting in Mountain View, Dan Richard, the chairman of the HSR board said this in answer to questioning by senators.

Dan Richard: “Our business plan never intended, our business plan does not contemplate that we would operate the HSRS in the central valley that has never been part of our plan, for exactly the reason you said there’s not sufficient ridership to do that. In our plan of November 1st, we said after this ICS was built the next thing that would happen was an IOS and that would be the first true operation of high-speed.”

The second part of the appeal in this same case is regarding the Superior Court’s ruling that denied the validation of the $8,599,715,000 of general obligation bonds needed for the high-speed rail project. The court said no evidence was presented at the High-Speed Train Finance Committee that showed that the bonds were necessary or desirable.

Here is the link to the Extraordinary Writ filed by the Attorney General’s office and the briefs that followed by both sides.

Kings County vs. The High-Speed Rail Authority

There is another, little known case that will occur the same day as the Tos case. On May 23rd that will occur in Kings County. It was about the High-Speed Rail Authority’s right to come on County and public property to test land, drilling 200 ft. down. The original case was not heard on April 11th because they could not find a judge that didn’t have family, friends or some connection to the project.

Finally they found a judge out of San Jose, Hon. Leslie C. Nichols, who agreed to come to Kings County and hear the case. This is the same day as the Tos/Fukuda/Kings County case is being heard in Sacramento. See the original article written about this case:

Other Items that have slipped under the radar this past 30 days and could signal trouble for the Rail Authority:

Bottom line, BNSF is an unhappy camper:

Once thought of as a friend of the Authority, BNSF railroad sent a stinging letter to the Authority, the FRA and posted on the STB website that says the approval of the Fresno to Bakersfield EIR is premature which was approved May 7th in Fresno. They are missing a lot of information and the Authority hasn’t given them satisfactory answers. They said the Authority said it cannot begin construction without their approval and they’re not ready to give that approval until they get their answers.

Budget battles begin:

The Legislature begins battle over their budget and even now lame duck President Pro Temp of the Senate Darrell Steinberg predicts no easy road forward to get the cap-and-trade funding for the Governor’s favorite project, HSR.

If the Senate does not approve what the Governor needs in cap-and-trade funds or does not find an alternate solution by July 2014, the project will be in danger since they must have state funds to begin to match federal funds already spent in the July timeframe. The matching funds are desperately needed due to lack of availability of bond funds. See the LA Times write up about budget woes. See the LA Times

Editorial board opinion: They say don’t spend cap-and-trade dollars on the high-speed rail project.

Trouble concerning project costs

Next, the 2014 Business Plan was approved with a few million less than the April 2012 business plan. See the Fresno Bee’s report. There have been challenges that the construction estimates were not accurately displayed in the business plan per the Los Angeles Times’ interesting article written by Ralph Vartabetian.

The full report that URS, one of the Authority’s selected companies for the Fresno to Bakersfield segment, shows that the Authority actually asked them to hold the line on costs.

Here are a few key quotes:

. In a progress report dated, January 2014, a sub-contractor URS, called a regional consultant (RC), disclosed some information concerning the Fresno to Bakersfield Route. “RC participated in a teleconference with PMT on January 22 to discuss the RC’s comments on the final FB cost estimate prepared by the PMT. The PMT explained that the capital cost estimates developed for the 2012 Business Plan were the costs agreed to by the Authority and that this Business Plan established the budget for the overall High-Speed Rail (HSR) program. The RC was instructed that the 2012 costs needed to be treated as the “baseline” costs, and that no adjustments could be made without formal review to obtain Authority acceptance.

The full report is found on the Californians Advocating Responsible Rail Design’s site: The Authority begrudgingly provides them usually months beyond publication, most say in clear violation of the public records act. This report written in January by URS was not given to CARRD until April 1st.

Conclusion:

There are so many outcomes that could occur in the next couple of months.

If Cap-and-Trade dollars are not granted to the Governor to use for matching funds for federal dollars already spent, without another source of income and a match by sometime in July, the Feds could stop the project and begin pulling funds from other sources that California would have been entitled to.

If the Court says CEQA is out the window in the Atherton 2 case that doesn’t exclude National Environmental Policy Act (NEPA). Lawsuits can be filed under this law.

If the court reaffirms the Superior Court Ruling in the Prop 1A case, the Authority will be required to strike down their original funding plan and come up with a new one then the fun begins. The Authority will have to redo it’s funding plan and comply with Prop 1A. If they pick a route that can’t meet the requirements of Prop 1A, they’ll be back in court on the same issue again.

If the Authority keeps the same Initial Operating segment, they would have to complete environmental requirements for 4 segments of which 2 are incomplete including the expensive and long trek through the Tehachapi Mountains. Even if environmental work is finished they are lacking the funds to build it to the San Fernando Valley. And the clock ticks for the September 2017 completion date for the use of the ARRA funds.

Court decisions could take 90 days but most feel due to the expedited status of the appellate cases that a decision will come in 45 days or less. The next couple of months could tell the fate of California's High-Speed Rail Project.

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