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Tos, PLF, Howard Jarvis asks Appeals court to rehear the HSR case

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The High-Speed Authority’s case reversing Superior Court Michael Kenny decision requiring them to rescind their old funding plan and forbidding the appropriation of the bonds for the project was settled July 31st, 2014 at the Appellate Court level or so the Rail Authority thought.

The Tos litigants filed on August 14, 2014 what is known as a “Petition for Rehearing” because the Appellate Court made some crucial errors in deciding the case. This is different than an appeal.

Why a Petition for Rehearing?

The Tos Litigants contend there were errors in factual information as well as errors made by the Justices of the Appellate Court when they introduced new subjects as to justify why they were ruling the way they did. This information no doubt helped the Governor’s case against the litigants. The problem is they violated a Government code in doing so. It’s a due process issue since the Tos co-counsel did not have the opportunity to brief or address the new issues the court brought forward.

Government Code §68081 states:

“Before the Supreme Court, a court of appeal, or the appellate division of a superior court renders a decision in a proceeding other than a summary denial of a petition for an extraordinary writ, based upon an issue which was not proposed or briefed by any party to the proceeding, the court shall afford the parties an opportunity to present their views on the matter through supplemental briefing. If the court fails to afford that opportunity, a rehearing shall be ordered upon timely petition of any party.”

In essence, courts are supposed to judge cases on what was briefed; they are not supposed to help make the case for either side. The hearing held back on May 23, 2014 appeared to be slanted against Tos/Jarvis Taxpayers and Pacific Legal Foundation arguments in both cases. This is not uncommon to be able to predict which side the court is favoring by the questions asked. Many times they have made their mind up and just want to ask clarifying questions to test their decision.

The Tos co-counsels, Stuart Flashman and Mike Brady contend the court violated the government code when they introduced facts pertaining to the fact that in the appropriations bill, SB 1029, that passed in the State Legislature July 12, 2012, there were protections that environmental work would be done. That contention was brought up both at the time of hearing on May 23, 2014, by Associate Justice M. Kathleen Butz and mentioned that information again in the final decision issued on July 31, 2014.

In addition according to the request for rehearing, “the Court’s Decision herein asserted that the California High-Speed Rail Authority’s (“Authority”) pre-appropriation “preliminary” funding plan was only “an interlocutory and preliminary step in [a multistep] process,” (Decision at p. 41) and on that basis concluded it was not subject to judicial review. That issue and the associated theory and supporting case law were, however, neither proposed nor briefed by any party to the proceeding. Nor was the issue raised at oral argument. Instead, it emerged for the first time in the Court’s published Decision.”

Required Bond Measure Language:

The Tos co-counsel also challenged the court’s finding about rules around bond measures that will affect voters in California for future bond measures. Frankly, it’s more important than the high-speed rail project.

Mike Brady co-counsel on the Tos case said, “ We think the Appellate decision ignores 150 years of precedent which respects the intent and the protection of the voters who engage in the initiative process. Proposition 1A had various safeguards and protections which do apply to this case, and we question whether the court has properly interpreted those protections.”

In the Tos legal brief it read:

“In its Decision, the Court asserts that Proposition 1A did not affect the Legislature’s discretion in deciding whether to appropriate funds for the Authority’s high-speed rail project. (Decision at p. 44.) This is incorrect.

It has long been held that a bond measure is, in essence, a contract between the government and the voters”

Tos Co-counsel Stuart Flashman added that there is possibility for deception should the current ruling stand. He also said that, if this ruling stands, in the future someone with another bond could “intentionally mislead the public or even commit fraud” if the bond measure could easily be changed by the Legislature after voter approval.

Environmental Clearances:

The Tos briefing for re-hearing, it was explained that the Appellate Court stuck on the wrong reason for environmental clearances.

Regarding environmental clearances, it wasn’t about if they would get done, it was about when they were supposed to get done, at the time of the first funding plan. Here’s an excerpt of the brief sent to the court:

“As explained in the trial court opening brief (18 HSR 4753-4755) and acknowledged in the trial court’s order (1 HSR 44), the environmental clearances certification was intended to protect not only the environment, but, perhaps even more importantly, the public fisc [means treasury or emperor’s private purse]. In the absence of a proper certification, completion of the construction of the IOS could be delayed, and its cost greatly increased, by problems in obtaining environmental clearances after construction of a portion of the IOS had already been initiated.3 The purpose of the certification was to ensure that such delays, and increased costs, would not occur because the environmental clearances for the entire IOS had already been completed.”

The Validation Case: What is this about?

The Superior Court told the Authority’s attorney that they did not provide any evidence that would show that there was need or desirability showing why the bonds should be allocated. Note: Even if the Appellate court hadn’t overturned the Superior Court decision; the Rail Authority could not spend the bond dollars. The Treasurer would have decided when and how much to sell at a time and the Authority would not be allowed to spend the bonds if they hadn’t had their second funding plan approved. That second funding plan is necessary to vouch for the viability of the project the Authority was proposing to build. The overturning of the lower court decision still doesn’t allow the Authority to spend bond proceeds.

Validating the bonds merely tells investors their money is safe, they are backed up by the state and regardless of whatever happens to the high-speed rail project. These are general obligation bonds.

But the Appellate Court overruled the Superior Court decision, and said showing proof wasn’t necessary, the “ask” by the High-Speed Rail Authority was enough.

Harold Johnson from Pacific Legal Foundation (PLF) is counsel for the Free Will Baptist Church in Bakersfield. His organization and Howard Jarvis Taxpayers Association answered an Attorney General’s plea to come and bring claim as to why the bonds shouldn’t be validated and now is protesting the Appellate Court decision. See San Jose Mercury new account by Mike Rosenberg of how this all came about that is, when the Authority attempted to sue the world.

PLF and Howard Javis are requesting a “Petition for Rehearing” based the appellate court’s contention that it is premature to challenge the use of the bond proceeds, different grounds than the Tos attorneys. The Third District wrote in their opinion that the design of the project is so much in “flux” that it can’t be reviewed for consistency with Prop 1A.

Harold Johnson says, “We contend that, to the contrary, the legislative appropriation for the proceeds (SB 1029) in fact creates some clear outlines and requirements for the current version of the High Speed Rail project, so the current version can be measured against what was promised to voters.”

Also the Free Will Baptist Church litigants contend the Appellate Court did not address all the matters that were supposed to. The High Speed Passenger Train Finance Committee was charged to determine the amount of the appropriation. Johnson said, “ This is a substantive issue, with implications for the state budget and the obligations imposed on taxpayers, and we believe the committee was required to provide a record about how it arrived at its decision to propose the sale of $8.6 billion in bonds.”

The record for both cases must be challenged for errors before the case goes to a higher court.

Presently the Tos/Fukuda/Kings County, the Free Will Baptist Church represented by Pacific Legal Foundation and the Howard Jarvis Taxpayers Association plan to file a Petition for Review to the State Supreme Court on September 2, 2014 unless the Appellate Court makes a different decision.

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