CEQA Alert UPDATE: Petitions for Review Filed in Greenhouse Gas and ICCTA Preemption Cases

As previously reported, two decisions by California’s Fourth Appellate District in late 2014 highlighted CEQA compliance challenges facing local governments charged with implementing state and local greenhouse gas emissions reduction mandates.

Update: Petitions for review with the California Supreme Court were subsequently filed in both cases. On March 11, 2015, the California Supreme Court granted the petition for review filed by the San Diego Association of Governments and the San Diego Association of Governments Board of Directors in Cleveland National Forest Foundation v. San Diego Association of Governments. The issue to be briefed and argued is limited to the following question: Must the environmental impact report for a regional transportation plan include an analysis of the plan's consistency with the greenhouse gas emission reduction goals reflected in Executive Order No. S-3-05 to comply with the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.)? A petition for review in Sierra Club v. County of San Diego is pending, with the time allotted for the Supreme Court to grant or deny review extended until April 3, 2015.

We also previously reported on the Surface Transportation Board’s (STB’s) December 12, 2014 decision in which it found that the Interstate Commerce Commission Termination Act categorically preempts CEQA with respect to the 114-mile passenger rail line that the Authority is constructing between Fresno and Bakersfield as part of its High-Speed Train System.

Update:  On December 29 and December 30, 2014, two petitions for reconsideration of the STB’s December 12, 2014 decision were submitted to the STB - one by a California resident and the other by a group that included Kern and King Counties, the City of Shafter, and several organizations. The STB has not yet ruled on those petitions.

On February 9, 2015, two separate petitions for review of the STB’s December 12, 2014 decision were filed in the Ninth Circuit and D.C. Circuit Courts of Appeal. The D.C. Circuit challenge was filed by the California nonprofit corporation, Dignity Health, one of the parties that filed the December 29, 2014 petition for reconsideration with the STB. The Ninth Circuit challenge was filed by a subset of the other parties to the December 29, 2014 petition for review, including Kings County, Kern County, and several nonprofit corporations. The STB filed motions to dismiss for lack of jurisdiction in both of the federal court actions in early March. The STB argued that the federal courts lack jurisdiction because the STB’s decision is not a final order as it has not yet ruled on the petitions for reconsideration filed at the administrative level.

-- Don Sobelman and Nicole Martin

For more information, contact Don Sobelman at des@bcltlaw.com or (415) 228-5445, or Nicole Martin at nmm@bcltlaw.com or (415) 228-5435.

Surface Transportation Board Rules That ICCTA Preempts CEQA Review of California’s High-Speed Train System

On December 12, 2014, the Surface Transportation Board (STB) issued a decision, in response to a petition filed by the California High-Speed Rail Authority (Authority), finding that the Interstate Commerce Commission Termination Act (ICCTA) categorically preempts CEQA with respect to the 114-mile passenger rail line that the Authority is constructing between Fresno and Bakersfield (the “Line”) as part of its High-Speed Train (HST) System. This broadly worded decision should effectively preclude CEQA challenges to all lines that will be constructed as part of the HST System.

By the time the Authority filed its October 9, 2014 petition with the STB, the STB had asserted jurisdiction, completed environmental review under the National Environmental Policy Act, and authorized construction of the Line. The Authority had also voluntarily completed an environmental review of the Line pursuant to CEQA, while reserving its right to argue that CEQA is preempted with regard to the Line. Seven lawsuits were subsequently filed, challenging the adequacy of the Authority’s CEQA review and seeking injunctive relief that would delay, if not prevent altogether, construction of the Line. The Authority’s October 9, 2014 petition focused on the preemptive effect of Section 10501(b) of the ICCTA with respect to the injunctive relief sought in those CEQA lawsuits. Section 10501(b) provides:

The jurisdiction of the [STB] over -

(1) transportation by rail carriers, and the remedies provided in this part with respect to rates, classifications, rules (including car service, interchange, and other operating rules), practices, routes, services, and facilities of such carriers; and

(2) the construction, acquisition, operation, abandonment, or discontinuance of spur, industrial, team, switching, or side tracks, or facilities, even if the tracks are located, or intended to be located, entirely in one State,

is exclusive. Except as otherwise provided in this part, the remedies provided under this part [49 U.S.C. § 10101 et seq.] with respect to regulation of rail transportation are exclusive and preempt the remedies provided under Federal or State law.

49 U.S.C. § 10501(b).

Finding it difficult, as a practical matter, to separate the injunctive relief available in a CEQA lawsuit from other relief that could be granted by a state court in such litigation, the STB decided more broadly that CEQA was categorically preempted by Section 10501(b) with respect to the Line. Drawing on principles enunciated in prior STB opinions, as well as federal and state court decisions -- including the First Appellate District’s decision in Friends of the Eel River v. North Coast Rail Authority et al., which is now under review by the California Supreme Court -- the STB determined that CEQA was preempted for three reasons.

1. “CEQA is a state preclearance requirement that, by its very nature, could be used to deny or significantly delay an entity’s right to construct a line that the [STB] has specifically authorized, thus impinging upon the [STB’s] exclusive jurisdiction over rail transportation.”
2. “Because environmental review under CEQA attempts to regulate where, how, and under what conditions the Authority may construct the Line, the application of CEQA here would constitute an attempt by a state to regulate a matter directly regulated by the [STB].”
3. As the Friends of the Eel River court also determined, “the market participation doctrine does not apply in the context of a CEQA enforcement suit for a railroad project under [the STB’s] jurisdiction.” Accordingly, the Third Appellate District, in its recent decision addressing preemption of CEQA with regard to the HST System, Town of Atherton v. California High-Speed Rail Authority, “incorrectly applied [the doctrine] to bar federal preemption of CEQA.”

The STB’s decision will likely be a key focus of the briefing in Friends of the Eel River before the California Supreme Court, which granted review on the following issues: (1) Does the ICCTA preempt the application of CEQA to a state agency’s proprietary acts with respect to a state-owned and funded rail line or is CEQA not preempted in such circumstances under the market participant doctrine?; and (2) Does the ICCTA preempt a state agency’s voluntary commitments to comply with CEQA as a condition of receiving state funds for a state-owned rail line and/or leasing state-owned property? 

 

If the Supreme Court affirms the Friends of the Eel River decision and applies the broad preemption framework set forth by the STB, CEQA review of major rail projects in California (and the resulting CEQA litigation) will be significantly curtailed, if not eliminated, giving rail operators more freedom to construct new rail lines, rail yards, and other rail facilities in California that serve markets both within the state and across the country.

UPDATE - March 13, 2015: On December 29 and December 30, 2014, two petitions for reconsideration of the STB’s December 12, 2014 decision were submitted to the STB - one by a California resident and the other by a group that included Kern and King Counties, the City of Shafter, and several organizations. The STB has not yet ruled on those petitions.

On February 9, 2015, two separate petitions for review of the STB’s December 12, 2014 decision were filed in the Ninth Circuit and D.C. Circuit Courts of Appeal. The D.C. Circuit challenge was filed by the California nonprofit corporation, Dignity Health, one of the parties that filed the December 29, 2014 petition for reconsideration with the STB. The Ninth Circuit challenge was filed by a subset of the other parties to the December 29, 2014 petition for review, including Kings County, Kern County, and several nonprofit corporations. The STB filed motions to dismiss for lack of jurisdiction in both of the federal court actions in early March. The STB argued that the federal courts lack jurisdiction because the STB’s decision is not a final order as it has not yet ruled on the petitions for reconsideration filed at the administrative level.
 

--Don Sobelman and Nicole Martin

 

For more information, contact Don Sobelman at des@bcltlaw.com or (415) 228-5456, or Nicole Maritn at nmm@bcltlaw.com or (415) 228-5435.

CEQA Alert: Court of Appeal Blunts Latest CEQA Attack on California’s High-Speed Train System

On July 24, 2014, California’s Third Appellate District affirmed a trial court’s ruling that the California High-Speed Rail Authority’s (Authority’s) revised final program environmental impact report/environmental impact statement (PEIR/EIS) for the proposed California high-speed train (HST) system generally complied with CEQA, with the exception of a flawed traffic impact analysis.

The appellate decision arose from two separate challenges below. The “Atherton I” petitioners had secured a partial victory in their challenge to the Authority’s revised final PEIR, which was the product of a successful challenge to the “original” final PEIR: the trial court ruled that the revised final PEIR failed to adequately address the traffic impacts of narrowing and moving Monterey Highway to accommodate the Pacheco Pass alignment for the HST.
 

However, the trial court rejected the Atherton I petitioners’ other CEQA challenges, holding that it was proper for the Authority to defer analysis of certain vertical profile alignment impacts—relating to the elevation of track above ground level—until a later project-specific EIR. The court also held that petitioners’ challenge to information contained in the project description that was based on an allegedly flawed revenue and ridership model reflected a “classic disagreement among experts that often occurs in the CEQA context” and did not provide a basis for invalidating the PEIR.

 

With respect to the challenge brought by the “Atherton II” petitioners, the trial court found that the Authority’s alternatives analysis complied with CEQA and there was no abuse of discretion in its failure to consider alternatives submitted by petitioners’ expert consultant.

 

Due to the deficiencies in the traffic analysis with respect to the Monterey Highway impacts, the trial court denied the Authority’s motion for discharge of the writ in the underlying challenge to the original PEIR and issued a supplemental peremptory writ ordering the Authority to rescind and set aside the resolution certifying the revised final PEIR. The Atherton I and Atherton II petitioners then collectively appealed in light of their partial victory below.

 

On appeal, petitioners alleged that the Authority’s revised final PEIR violated CEQA because:

1. it provided an inadequate analysis of the “vertical profile options for alignment” along portions of the San Francisco Peninsula;
2. it used a flawed revenue and ridership model that improperly skewed the results in favor of the Pacheco Pass alternative for connecting the Central Valley to the San Francisco Bay Area, rather than the Altamont Pass alternative further to the north; and 
3. the range of alternatives analyzed was inadequate. 

As a preliminary matter, the court of appeal rejected the Authority’s argument that CEQA was preempted in this case by the Interstate Commerce Commission Termination Act (ICCTA).  The court held that application of the “market participation doctrine,” which generally distinguishes between a state’s role as regulator versus its role as a market participant, defeated the preemption claim.

 

On the merits of the CEQA claims, the court of appeal upheld the Authority’s use of a program EIR, deferring site-specific analysis of the vertical alignment of the HSP in the Belmont-San Carlos-Redwood City portion of the project area to a later project-level EIR. The fact that the project-specific analysis of an aerial viaduct for that portion of the route was proceeding concurrently with revisions to the PEIR did not necessitate inclusion of that project-specific discussion in the programmatic document. 

 

With respect to the allegedly flawed revenue and ridership model, the court held that the challenge amounted to a classic CEQA “battle of the experts” and, because substantial evidence supported the methodology of the Authority’s consultant, the PEIR could not be found deficient on that basis.

Finally, the court held that the Authority analyzed an adequate range of alternatives and was not required to evaluate additional alternatives proposed by petitioners, based on one of the following findings:

1. the claim was barred by collateral estoppel;
2. the alternative was substantially similar to one of those evaluated in the revised final PEIR;
3. the alternative would continue to be studied at the project level; or
4. the Authority’s infeasibility findings were supported by substantial evidence.

This will probably not be the last of the CEQA challenges facing the HST. A petition for review by the Supreme Court is likely. Also, because the court of appeal affirmed the trial court’s issuance of a supplemental peremptory writ and ordered the Authority to set aside its approval of the revised final PEIR to correct deficient traffic analyses, additional challenges may follow issuance of a (further) revised final PEIR with respect to that issue. Finally, any project-level EIRs prepared for the HST may also face CEQA challenges.

 

--Don Sobelman and Nicole Martin

 

For more information, contact Don Sobelman at (415) 228-5456 or des@bcltlaw.com; or Nicole Martin at (415) 228-5435 or nmm@bcltlaw.com.