The High-Speed Rail project was thrown a life preserver from the Court of Appeal. The court decided late Friday, February 14, 2014, that they would hear the plea of the rail authority. They were asking the court to intervene in two recent court rulings by Sacramento Superior Court Judge Michael J. Kenny. In the Attorney General’s original brief (p35) to the California Supreme Court, they pleaded,
“The high-speed rail project may have been able to tolerate a two-year delay in access to bond funds, but the delay it now faces as a result of the trial court's decisions risks the catastrophic, for two reasons. First, the federal grant funds, by their terms, must be matched by the State and must be spent by 2017. The kind of delays the Authority now faces puts those billions of dollars in jeopardy, because it is not clear that bond proceeds will be available in time to match. Second, opponents of the project have used the trial court's ruling to fuel political efforts to withhold the federal grants entirely. “
The California Supreme Court denied their request to be heard, but ordered the Appeals court to review briefs filed February 4th by the Tos/Fukuda/Kings County attorneys and was filed February 10th by the AG’s office.
In addition the Appeals Court agreed to “stay” (temporarily suspend) Judge Kenny’s ruling for the Tos/Fukuda/Kings County case while they reviewed the case. The Authority had been required to comply with Judge Kenny’s ruling by March 21, 2014 or risk contempt of court. The Court of Appeal gave the Tos litigants until March 17th to file a brief and the Attorney General’s office has 15 days after that to answer if they wish.
As a reminder, the Sacramento Superior court ruled in the favor of the Tos litigants in the first part of the case called the Writ case. This was the case was about the funding plan that the Authority issued November 2011. Judge Kenny ruled the Authority abused its discretion when it filed a funding plan with the legislature, which did not follow the plain language in the bond measure. All environmental work was to be completed and they were required to identify the funds needed to build the initial operating segment. The Authority complied with neither. Kenny ruled that the Authority had to rescind its funding plan. This is the decision that the Appeals Court agreed to put on temporary hold while they listen to the case.
The Appeals court did "stay" any bond validation decisions in their filing but may review it. Judge Michael Kenny ruled against validating bonds, which prevented the Authority from accessing state bond funds. The Rail Authority did not appeal that decision which they still could do. The Authority does not have any access to bonds immediately since the Treasurer’s office has reported they would not sell bonds until the legal cases were decided.
Despite the Appeals Court’s order to “stay” the Superior Court ruling, the Rail Authority is not in a position to begin construction since environmental clearance has not been completed nor do they have the capital to go forward unless the Federal Railroad Administration (FRA) agreed to grant them construction money. It’s highly unlikely this would happen because of the status of environmental work and permits. In addition, no master railroad agreements with Union Pacific Railroad and BNSF have been obtained. FRA grant agreements require those before construction can begin.
Another court matter heard
Coincidentally the same day, Sacramento Superior Court, Judge Michael Kenny heard arguments as to why or why not part 2 (526A) of the Tos/Fukuda/Kings County case should move forward. The second part of the case is about broken promises in the bond measure. The Tos plaintiffs will attempt to show that promises such as travel time requirements will not be met, thereby breaking their contract with the public. Even the Independent Peer Review Group stated in their July 2013 comments that San Francisco to San Jose produced non-stop run times of 37 and 39 minutes exceeding the maximum 30 minute time requirements in the bond measure. This letter was also part of the newest 2014 draft business plan filed at the very end of the document.
The Attorney General’s Sharon O’Grady, presented the state’s case. She argued it was too early to go to trial since they could change directions on the project. They needed a new funding plan and a second funding plan plus the legislature entrusted judgment to the quasi agency, the High-Speed Rail Authority, who had an extensive administrative record to rely on.
Stuart Flashman, co-counsel for Tos argued that it was about the Legislative appropriation that showed the Authority’s direction in the context of the blended system. He noted in the April 2012 business plan the Authority outlined the blended system between San Francisco to San Jose. Flashman told the court, the blended system will not comply with the law therefore you can’t build it with the bond funds. Flashman contended it wasn't too early based on these actions.
The peculiar thing was at the start of the hearings, the AG’s office agreed to the strategy of splitting the hearings by Writ claims and then 526A claims. They backtracked later, after they lost the first part of the case. Ray Carlson, Attorney for the Kings County Water District, who attended the hearing by conference call, summed it up.
“Money is being spent now. This phase of the case is not moot. The defendants could have brought this motion, many, many, many months ago and instead they decided to test the waters and they didn’t like the waters. They are bringing this motion now at the last minute in order to avoid consequences of the choice that was made by not proffering any evidence in support of an opposition to the 526A claims. We would submit, your honor that the motion should not be granted as an equitable matter for those reasons. “
A ruling was expected in a couple of weeks however due to the Appeals Court decision to hear the Authority’s appeal on the first part of the Tos case, it is unknown how this action will affect Friday’s hearing. The Judge officially has 90 days to rule.
The Appeal Court is a three-judge panel, the hearings will be fascinating to observe. This may boil down to a test of our judicial system to see if sheer political will win over the rule of law.
Most of the legal briefs are found on this site. http://transdef.org/HSR/HSR.html
Kathy Hamilton has written several recent articles on the current lawsuits and many other subjects concerning the High-Speed Rail Authority. See a brief synopsis by title on her site: http://www.examiner.com/transportation-policy-in-san-francisco/kathy-hamilton