Enviro Legal Challenges to Rail Agency Head to CA Supreme Court

February, 2015

When the North Coast Railroad Authority (NCRA) refused to make good on its promises to conduct environmental review before rebuilding the failed, state-owned Northwest Pacific rail line from Humboldt Bay to the San Francisco Bay Area, Friends of the Eel River and Californians for Alternatives to Toxics sued in state court. Compliance with the California Environmental Quality Act (CEQA), was an explicit condition of tens of millions of dollars in state funding granted to the agency to rebuild the line.

The former Northwest Pacific rail line, completed a century ago (see page 14), runs along the mainstem Eel River for more than 150 miles, in what’s likely the most active zone of one of the world’s least stable landscapes. Highly erosive, unstable geology, intense rainfall, and seismic activity all combine to make the Eel River Canyon a very expensive place to keep a railroad running. When the mid-century timber boom was in full swing, old-growth redwood timber paid the freight to keep the tracks cleared and nailed to constantly shifting ground. But when the timber boom went bust, the Southern Pacific moved to abandon the line.

The state of California eventually bought the failed railroad, sticking the citizens of California with the collective liability for cleaning up dozens of toxic waste sites along the route, as well as removing the railroad—or rebuilding and operating it.

Millions of additional state taxpayer dollars were spent on a Draft Environmental Impact Report (DEIR), but it only analyzed rail operations on the southern end of the line. Even that half-vast document was ultimately withdrawn by the NCRA board, relying on their new theory that they need never comply with CEQA because they’re a railroad, and Congress has pre-empted state and local regulation of railroads. To our dismay, the would-be rail barons of the North Coast were rewarded for their obstinance by the district court, and then by a Court of Appeals panel all too willing to release the NCRA from any obligation to conduct meaningful environmental review. The appellate panel in our case ruled CEQA entirely preempted even where rail projects are owned and funded by the state.

But in a remarkably similar case brought against another California rail agency—the High Speed Rail Authority (HSRA)—a different Court of Appeals concluded that CEQA is not preempted by federal railroad law. Where California is acting not as a regulator, but as an owner, that appellate panel said, the state can contract for higher standards than it could impose as regulatory requirements.

Adding yet another layer of confusion, even though the HSRA court cleared that project to go forward (because the agency had in fact adequately complied with CEQA), the HSRA still appealed the decision to the federal Surface Transportation Board (STB), seeking a ruling that would bar injunctions from halting rail construction in any of the several additional CEQA cases the HSRA still faces.

The STB issued a ruling on that appeal in December, after the California Supreme Court had taken the Friends of the Eel River v. NCRA case under review. Though not surprising that the STB would seek to minimize environmental review, the board’s ruling was startling broad. Despite the STB’s utter lack of expertise or authority in the area, though, two of the three members of the board voted for a ruling that says CEQA is wholly, utterly and always preempted by federal law. 

Legal commentators called the STB ruling ‘surprising,’ pointing out that it contradicts well-settled law regarding the ability of state and local governments to protect public health and safety. The ruling also fundamentally, and seemingly deliberately, misreads CEQA—a law that requires analysis of risks and mitigation of harms—as a regulation. Finally, the STB opinion leans very heavily on the appellate ruling in Friends of the Eel River v. NCRA, even though that ruling is under review by the state Supreme Court and not a precedent any court will recognize. 

We are hopeful that the state’s highest court will recognize that the HSRA ruling succeeds where the appellate ruling in our case—and the STB’s ruling—do not. The HSRA opinion lays firmer ground for public policy. It explains how to effectively integrate environmental review and public planning—both practical necessities in our 21st century. The appellate opinion in our case, on the other hand, would leave California citizens stuck with the tab for rebuilding a failed railroad they already own, but deprived of their tools for making environmentally sound choices. 

What is likely to be more even compelling to the California Supreme Court is the fact that the logic of HSRA ruling is consistent with the lines of cases interpreting federal preemption, on the one hand, and CEQA as a planning tool on the other. Where the ruling in our case would open a chasm beneath a range of projects subject to both federal regulation and CEQA—airports, for example—the HSRA ruling shows how state environmental review can easily work within the consistent, overarching national framework of rules that federal preemption is meant to ensure. 

On the ground, the cases could result in the NCRA being held accountable for the environmental impacts it has sought to ignore, particularly to the fragile Eel River Canyon and its threatened salmon and steelhead. 

A resolution clarifying the NCRA’s responsibilities to the public might even result in long-overdue oversight from the legislature, to eventually fix, as one former NCRA board member told me, the most dysfunctional public agency in the state of California.