Judge Grants Partial Victory to Foes of California Bullet Train

A Sacramento County judge has issued a pair of rulings that are likely slow down the California High-Speed Rail Authority's work on the first segment of the bullet train system, slated for the San Joaquin Valley.

Superior Court Judge Michael Kenny blocked the use of $8 billion in state bonds for the project, ruling that a state oversight committee did not have sufficient grounds to approve the funding. Kenny also confirmed an earlier ruling rejecting a 2011 funding plan from the high-speed rail agency because it did not comply with state environmental laws and other regulations.

But as the Sacramento Bee notes, Monday's decisions were not a complete loss for the state's bullet-train efforts:

Kenny denied a request by the plaintiffs’ lawyers to issue an injunction or a temporary restraining order that would block the Authority from spending the $3.4 billion in federal funds it has already obtained.

The Fresno Bee expands on that point:

Kenny's rulings, however, do not bar the state from selling the bonds. Nor did he order the rail authority to rescind its approval of contracts for work on the first 29-mile construction stretch from northeast Madera to the south edge of Fresno or block the state from spending federal stimulus or transportation money.

Together, the two rulings appear to hamstring the rail authority by severely limiting its available state funds and by delaying its spending efforts. The effect is likely to further stall efforts to start construction on the rail line in the central San Joaquin Valley.

"It's not everything we asked for, but it's a lot," said Stuart Flashman, an Oakland attorney representing the Kings County opponents in both cases.

In an October hearing in the Tos case, Flashman likened the authority's situation to a saying attributed to humorist Will Rogers: "When you find yourself in a hole, the first thing to do is stop digging."

With Monday's ruling, Flashman said that Kenny "hasn't ordered the authority to stop digging, but I think he's telling them they're in a hole."

Here's the text of Judge Kenny's Monday rulings, followed by the Associated Press writeup:

By Juliet Williams
Associated Press

Sacramento County judge on Monday tore up California's funding plans for what would be the nation's first bullet train, issuing separate orders that could force the state to spend months or years redrawing its plans for the $68 billion rail line.

Judge Michael Kenny rejected a request from the California High-Speed Rail Authority to sell $8 billion of the $10 billion in bonds approved by voters in 2008, saying there was no evidence it was "necessary and desirable" to start selling the bonds when a committee of state officials met last March.

He said the committee, which included state Treasurer Bill Lockyer, was supposed to act as "the ultimate 'keeper of the checkbook'" for taxpayers, but instead relied on a request from the California High-Speed Rail Authority to start selling bonds as sufficient evidence to proceed.

In a separate lawsuit, Kenny ordered the rail authority to redo its $68 billion funding plan before continuing construction, a process that could take months or years, although rail authority officials believe it can be done much more quickly than that. He had previously ruled that the authority abused its discretion by approving a funding plan that did not comply with the requirements of the law. The judge said the state failed to identify "sources of funds that were more than merely theoretically possible."

Proposition 1A, which voters approved in 2008, required the rail authority 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 from Madera to Fresno, about 30 miles.

The plaintiffs, a group of Central Valley residents and farmers, believe the requirement applies to the first 300 miles stretching as far as Bakersfield, and with a projected price tag of $31 billion. But the rail authority contends it applies only to the first "useable" segment of track in the Central Valley.

"The court said, look, you've only got 28 miles with completed environmental clearances. I order that you have to have 300 miles of environmental clearances," said Michael Brady, an attorney for residents who had sued to halt the project. "It's taken them 5 years to do 28 miles, so how long will it take them to do 300 miles?"

Still, Kenny stopped short of blocking the project altogether, and rail authority officials characterized Monday's rulings as a setback rather than a fatal blow.

In a statement, rail authority Chairman Dan Richard said:

“We are reviewing both decisions to chart our next steps, but it is important to stress that the court again declined the opposition’s request to stop the high-speed rail project from moving forward. Additionally, the judge did not invalidate the bonds as approved by the voters in Proposition 1A. 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.”

Rail authority Chief Executive Jeff Morales disagreed with claims by the opponents that the judge's rulings would send high-speed rail planners back to the drawing board, saying officials are confident they can address the judge's concerns quickly. When asked how much time it could take, he said, "Not long. We don't think that addressing that will have any material effect on the project."

The rail authority had argued that it has already updated its funding plan and that it intends to spend $3.2 billion in federal money before tapping the state bonds. It also argued that only the state Legislature could intervene to stop the project.

The plaintiffs had also asked Kenny to block spending of the federal funds and rescind construction contracts, including a $1 billion deal signed this fall, but the judge declined to do so on Monday, saying there was no evidence "that there has been any impropriety" in spending.

He also did not invalidate the bonds, merely saying that officials would need to present more evidence about why they need to be sold and when before the committee should approve the sales.

According to the state treasurer's office, California has already issued more than $705 million in Proposition 1A bonds, about $400 million for high-speed rail and about $305 million for related rail-improvement projects that could eventually be connected.

The plans have changed significantly since voters approved the project, along with the costs — from $45 billion in 2008 to more than $100 billion in 2011 and, now, $68 billion for a 520-mile line connecting San Francisco and greater Los Angeles through the Central Valley.

Political considerations and opposition by local residents around the state have also forced repeated changes. Jon Coupal, executive director of the Howard Jarvis Taxpayers Association, which had sued over the bonds, blamed the ever-changing plans for the judge's decisions Monday.

"The project now is so divergent from what the voters were told, that I don't think he had any other choice," Coupal said.