In a surprising decision, Surface Transportation Board Decision, Docket No. FD35861, December 12, 2014 (“Docket”), the Federal Surface Transportation Board (“Board”) ruled that the application of the California Environmental Quality Act (“CEQA”), Cal. Pub. Res. Code § 21000, et seq., to the 114 mile high-speed passenger rail line between Fresno and Bakersfield, California is preempted in its entirety by federal law.  The Board’s decision is not only surprising in the context of prevailing legal authority, but also potentially important in the context of other modes of transportation.  

The decision is surprising because it went far beyond the scope of the petition filed by the responsible State agency, the California High-Speed Rail Authority (“Authority”).  The Authority asked only that the Board find that injunctive relief as a remedy under CEQA is foreclosed as preempted by the Interstate Commerce Commission Termination Act (“ICCTA”), Pub.L. 104–88, 104th Congress, and is, thus, barred under 49 U.S.C. § 10501(b) which gives the Board jurisdiction over “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,” 49 U.S.C. § 10501(b)(2).  The Authority further argued that, as it had completed CEQA review in May 2014, the Board need not address whether CEQA is generally preempted, but need only address whether injunctive relief resulting in a work stoppage is available as a remedy in the lawsuits filed against the Authority.
 
Despite the Authority’s limited petition, the Board expanded its ruling to include a finding that § 10501(b) prevents the states and localities from intruding into matters that are “directly regulated by the Board (e.g., rail carrier rates, services, construction, and abandonment),” Docket, p. 8, and from “imposing requirements that, by their nature, could be used to deny a rail carrier’s ability to conduct rail operations.”  Id.  The Board employs the rationale that “Section 10501(b) [ ] is intended to prevent a patchwork of local regulation from unreasonably interfering with interstate commerce.”  Id.  
 
The Board recognizes, however, that “[n]ot all state and local regulations that affect rail carriers are preempted by § 10501(b).”  Id. at p. 9.  It acknowledges further that “State and local regulation is appropriate where it does not interfere with rail operations,” Id., and that “[l]ocalities retain their reserved police powers to protect the public health and safety so long as their actions do not unreasonably burden interstate commerce.”  Id.  
 
On that basis, and ignoring that “states and towns may exercise their traditional police powers . . . to the extent that the regulations ‘protect public health and safety, are settled and defined, can be obeyed with reasonable certainty, entail no extended or open-ended delays, and can be approved (or rejected) without the exercise of discretion on subjective questions,’” Id. citing Green Mountain v. Vermont, 404 F.3d 638, 643 (2nd Cir. 2005), the Board concluded that CEQA was categorically preempted as 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 Board has specifically authorized, thus impinging upon the Board’s exclusive jurisdiction over rail transportation,” Docket, p. 10, citing DesertXpress Enters., LLC-Pet. For Declaratory Order, slip op. at 5.  The Board further found that CEQA lawsuits “can regulate rail transportation just as effectively as a state statute or regulation.”  Id. at 14, citing, inter alia, Maynard v. CSX Transp., Inc., 360 F. Supp. 2d 836, 840 (E.D. Ky. 2004) [explaining that common law suits constitute regulations].  
 
The Board decision, however, appears to be based on two fundamental misconceptions. 
 

Continue Reading The Federal Surface Transportation Board Finds California Environmental Quality Act Preempted as Applied to High-Speed Rail Projects

Following in the footsteps of his colleagues, on January 6, 2012, Assemblyman Mike Feuer introduced legislation that would give rail projects the same type of relief from California Environmental Quality Act (“CEQA”) requirements that were received in the last session by the proposed NFL stadium in Los Angeles, and some renewable energy projects. Notably, the CEQA amendments enacted for the NFL stadium include a very short time frame of 175 days for resolution of CEQA issues. While current CEQA litigation may extend to two years or more, depending on the complexity of the project and workload of the court, it stands to reason that issues surrounding local projects such as the stadium, with local traffic, noise and air quality impacts, may potentially be resolved within the 175 day timeframe. Rail projects are of far different scope, geographic extent, and are subject to a different set of laws.

Continue Reading Legislature Asked to Grant CEQA Relief for Rail Projects

On September 27, 2011, Governor Jerry Brown signed into law Senate Bill 292 and Assembly Bill 900, both of which are aimed at expediting, or “fast-tracking,” the litigation of lawsuits brought under the California Environmental Quality Act, 42 U.S.C. § 4321 (“CEQA”). SB292 is basically an earmark that will “fast-track” CEQA challenges to the Farmer’s Field National Football League Stadium proposed for downtown Los Angeles, next to the Los Angeles Convention Center and Staples Center, by requiring that such challenges be brought directly in California Courts of Appeals and be heard within 175 days. AB900 reaches more widely, “fast-tracking” all projects costing $100 million or more.

The stated intentions of the Bills’ sponsors are, on their faces, noble ones — to provide more job opportunities, and spur increased spending and attendant tax revenue for the State, matters which seem urgent in light of the State of California’s economy. The problems raised by the Bills are less immediate, but no less important.
 

Continue Reading CEQA and the Law of Unintended Consequences

Proponents of California’s proposed high-speed rail project envision a high-speed rail network connecting Sacramento, San Francisco, Central Valley, Los Angeles, Orange County, the Inland Empire and San Diego. However, there are many obstacles, real or imagined, that could delay or derail the project. First, the House Subcommittee on Transportation voted to fund only $1.4 billion for high-speed rail in FY 2011, compared to the $4 billion they approved last year. The project appears to be plagued by unreliable cost, ridership and revenue projections, uncertainty about private investment and, given the State of California’s finances, the possibility that taxpayers may have to subsidize the project if revenue projections are not met. A high-speed rail system would reduce revenues for Metrolink and Amtrak. A number of cities and communities along the proposed routes oppose the project. Finally, the proposed project will require environmental review. Environmental review will include at least two alternatives (in addition to the mandatory “no-action” alternative) – a “shared track” alternative and a “dedicated track” alternative. Both present problems.

 

Continue Reading California High-Speed Rail Project Could Be Derailed

As recently as early June, 2010, another competitor entered the field for the right to provide rail service from Las Vegas to Southern California: Genesis High Speed Rail America, LLC. The critical question is starting to emerge as to whether anticipated ridership can support not one, or two, but three entrants into the field. Continue Reading The High Speed Rail Right of Way Gets Crowded

The House of Representatives Subcommittee on Highway and Transit is planning to start the transportation reauthorization process on June 24, 2009 at 11:00 a.m. EST by marking up the Surface Transportation Act of 2009 (“Act”). House Transportation and Infrastructure Chairman, James Oberstar, has made a proposal which would fundamentally overhaul surface transportation programs drawing on many of the recommendations by a federally mandated Surface Transportation Policy and Revenue Commission as well as on White House policy priorities. The Obama Administration, however, has a completely different political and legislative strategy in mind, causing a public disconnect between leaders of the legislative and executive branches.

First, on a negative note, the Act would consolidate or eliminate 75 existing Federal highway and transit programs including the “Indian Reservation Road Bridges Program,” and “The Public Transportation Participation Pilot Program.

On the positive side, the Act would create a new rail section to promote President Obama’s proposal of a high speed passenger rail network. Also, at the urging of the Administration, Oberstar would create an Office of Livability in the Transportation Department, to link transportation planning to housing and business development. The Act would also overhaul the Transportation Department’s inner workings by creating a position of Undersecretary of Intermodalism. That Undersecretary would help coordinate planning by agencies responsible for different methods of transportation, including the aviation, railroad, transit, highway and maritime administrations, along with Amtrak, the Coast Guard and the Army Corps of Engineers. “It’s an opportunity to restructure all of transportation,” Oberstar said at a briefing Wednesday. “Those modal administrators have not done so much as what we’re doing here – sat around a table, had coffee together – in 40 years. It’s time to do that.”

Continue Reading Trouble in Paradise – Dissension Surrounds the Surface Trasnportation Authorization Act of 2009