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

On October 24, 2014, the Environmental Protection Agency (“EPA”) published its final rule documenting the failure of the California Air Resources Board (“CARB”) to submit a State Implementation Plan (“SIP”) revision containing measures to control California’s significant contribution to the nonattainment, or interference with maintenance, of the 2006 24 hour fine particulate matter (“PM2.5”) National Ambient Air Quality Standards (“NAAQS”) in other states (“Interstate Transport SIP”).

More specifically, CARB’s failure to submit constitutes a violation of the general provisions of the Clean Air Act (“CAA”), § 110(a)(2)(D)(i)(I) which requires that CARB submit a SIP revision to comply with the implementation, maintenance and enforcement provisions related to new or revised NAAQS within three years after the promulgation of the revised NAAQS; and that such plan contain adequate provisions to prohibit emissions from the state that will contribute significantly to nonattainment of the NAAQS (“Prong 1”), or interference with maintenance of the NAAQS (“Prong 2”), in any other state.  The final rule implementing the “Finding of Failure” transfers to EPA the obligation to promulgate a Federal Implementation Plan (“FIP”) to address the interstate transport requirements, within 24 months.
 
The issue has come to prominence as a result of the federal/state partnership that is the foundation of the CAA, see 42 U.S.C. § 7401(a)(3) and (4), giving EPA the power of approval over locally developed plans.  

Continue Reading California Once Again Relinquishes Clean Air Act Enforcement Responsibility to the Federal Government

Predictably, Judge John Walter of the Los Angeles Federal District Court summarily dismissed a lawsuit brought by the City of Santa Monica (“Santa Monica”) aimed at closing the Santa Monica Airport, based on, among other things, unconstitutional taking of property without just compensation.  The court’s decision was made on the procedural grounds that, among other things, the lawsuit was brought too late and in the wrong court.

First, the court found that Santa Monica had brought the suit after the applicable 12 year statute of limitations had expired.  28 U.S.C. § 2409(a)(g).  The court’s rationale was that Santa Monica knew as long ago as 1948 that the Federal Aviation Administration (“FAA”) had a residual claim to the property arising from the Deed of Transfer of the federal government’s lease back to the City of Santa Monica.  That residual claim, therefore, required that Santa Monica’s suit be brought no later than the early 1960s. 

In addition, the court found that, even if a claim for unconstitutional taking could be sustained under the applicable statute of limitations, it was improperly brought in the District Court, as the Tucker Act, 28 U.S.C. § 1491(a)(1) vests exclusive subject matter jurisdiction over monetary claims against the federal government exceeding $10,000 with the Court of Federal Claims.  Santa Monica does not, of course, dispute that the value of the airport property that it wishes to recover and use for other purposes exceeds $10,000. 

Although the court chose the procedural route in making its decision, there appear to be relevant substantive grounds as well.
 

Continue Reading Judge Blocks City of Santa Monica’s Latest Effort to Close the Santa Monica Airport

On July 26, 2012, the Commonwealth Court of Pennsylvania overturned a Pennsylvania statute preempting the right of local jurisdictions to impose land use restrictions on hydraulic fracturing, or “fracking,” within their boundaries.  Unlike courts in the States of Ohio and Colorado, the court in Robinson Township v. Commonwealth of Pennsylvania, et al., 2012 WL 3030277 (2012) held that the Pennsylvania statute violates the “basic precept that ‘land use restrictions designate districts in which only compatible uses are allowed and incompatible uses are excluded.’”  Id. at 15, quoting City of Edmonds v. Oxford House, Inc., 514 U.S. 725, 732-33 (1995).  Fracking involves the high pressure injection of water and sand carrying certain chemicals into rocks in which is concealed deposits of oil and gas.  Residents near fracking sites have complained of, among other things, pollution of the underground water supply, and increasing instability and subsidence of structures undermined by the process.  Supporters of the Pennsylvania law claimed that it provides the uniformity of regulation necessary for the successful continuation of Pennsylvania’s relatively new and profitable fracking industry.  Critics, however, take the position that removing local restrictions on the fracking would be to undermine decades of rational development, and open the door to the “pig in the parlor” to which the Supreme Court referred in upholding local zoning originally in Euclid v. Ambler, 272 U.S. 365 (1926).

The implication of these differences ranges far beyond Pennsylvania, because, among other reasons, the positions taken over local regulation of fracking do not differ notably from those taken with respect to local regulation of airport impacts.
 

Continue Reading Local Land Use Restrictions on Hydraulic Fracturing Upheld in Pennsylvania