On May 21st, Governor Jay Inslee passed but partially vetoed ESHB 1160. The approved provisions of ESHB 1160 appropriates funds to the Washington State Department of Transportation (WSDOT) for the study of a new rail authority and high-speed rail governance structure. This potential rail authority would preside over development of a high-speed rail (HSR) system that includes Washington, Oregon, and British Columbia.

In particular, the study must encompass the development of the general powers, operating and governing structure, legal instrumentations, and contracting requirements for a Cascadian HSR authority. The study must also include an assessment of current laws in state and provincial jurisdictions and identification of any proposed changes to laws, regulations, and/or agreements that are needed to proceed with development. The appropriation also covers the development of recommendations for the development of the Pacific Northwest corridor.

A study for a rail authority and recommendation for an HSR system in the Pacific Northwest corridor would be incomplete without an examination of the struggles that the California High Speed Rail Authority (CHSRA) continues to experience.

Already years behind schedule, California’s HSR initiative’s scope has shrunk while popularity wanes, costs increase, and federal support is threatened. The reasons for this are numerous:

Project delays have affected the chain of contractors required for HSR completion, creating more legal disputes;

Slowdowns for land acquisition and construction originate from the California rail authority’s sluggish pace of eminent domain litigation and environmental challenges from rail opponents; and

Fighting litigation has added to project costs and even further delayed the process.

California plans to roll out high speed rail in stages, although it’s already running into delays and overruns. (Wikimedia Commons)

This article will focus on the legal issues that the CHSRA is undergoing and Washington state’s legal environment. Key areas explored in the article are land acquisition and environmental law.

Land Acquisition

In January of 2013, California’s Public Works Board gave the CHSRA approval to begin negotiations for land acquisition of an initial 209km segment known as the Initial Operating Section (IOS) Stage 1. The IOS stage is the HSR’s track between Merced and Fresno. The authority’s negotiators were sent to Fresno, Madera, and Merced counties, primarily rural agricultural California. The path of the HSR cuts through the counties’ dairies, orchards, and vineyards.

A rendering of California high speed rail station. (Credit: Paula Wallis / California High Speed Rail Authority)

CHSRA negotiators were swiftly met with resistance from property owners. Many property owners claimed that CHSRA offers were below what they believed the valuation to be and accusing the authority of not understanding the disruption caused by the HSR’s diagonal path through farm country. The Central Valley’s complex agricultural system, emotional value of land held by families for more than a century, and resistance from farmers made determining fair valuation of the land a difficult task.

After failed talks with property owners, the authority escalated to eminent domain litigation. As of late 2018, eminent domain battles are still being litigated. In Kings County, only 160 of 378 parcels had been acquired (as of November 2018).

Local politics has contributed to the sluggish progress in land acquisition litigation. Only a single outsider judge is hearing the disputes in Kings County; all of the county’s superior court judges have recused themselves for “personal reasons.” Locals cite a fear of the county’s farmers as the reason for the county judges’ recusals.

The authority also has no choice but to rely on scattered Caltrans lawyers since they do not have their own large legal staff. When those lawyers arrive in the Central Valley from all over California, they have little chance of making a sophisticated legal argument. Lawyers have to justify compensation for land seizures that would disrupt a fragile and complicated system of agriculture. Often they don’t have the agricultural expertise to immediately understand the farm technology and the farming business. Deals are being slowly forged, but often at high cost.

This prolonged process of land acquisition has driven up the cost estimates of land acquisition in the Central Valley to $1.5 billion from an initial estimate of $332 million. Land acquisition in the northern and southern sections of the project has yet to begin and resistance there is expected. So expect delays to further increase cost estimates for the project as land valuation increases and litigation continues.

Recent numbers show that the authority is still roughly 400 parcels of land short needed to complete construction in the Central Valley. Acquisition of noncontiguous land stalled rail construction of the 209km stretch between Merced and Fresno. A much delayed official groundbreaking took place on January 6, 2015.

Additionally, a state audit in the fall of 2018 criticized the authority for awarding construction contracts before it had the land needed to make meaningful progress. The fault in planning has manifested in lawsuits from the contractors themselves and their subcontractors.

Environmental Regulation

In California, the California Environmental Quality Act (CEQA) is the main avenue for opponents of an infrastructure project to stunt or stop projects. Critics of California’s environmental law have leveled charges of mission creep, highlighting usage of the law for reasons having nothing to do with environmental quality. Work on a BART light rail extension was delayed for months when unions sued a developer under CEQA over project labor agreements.

Likewise, opponents of the HSR initiative have been using CEQA to sue the CHSRA based on the law’s inclusion of economic endangerment. Threatened by the economic displacement posed by a completed HSR line, farmers in Madera and Merced counties began suing the authority in 2012. Construction and economic development in affected communities are their main grievances with the project.

At first, lawsuits against CHSRA ended in failure, or settlements that had the authority conceding extra environmental protections for the HSR line. The assumed preemption of the federal Interstate Commerce Commission Termination Act of 1995 (ICCTA) over CEQA for railroad operations assured the defeat of CEQA suits against CHSRA. For this reason, opponents were watching a preemption case making its way through California courts.

Friends of Eel River v. North Coast Railroad Authority, a case dealing with preemption, originates from the Northern California Rail Authority’s (NCRA) board adoption of a 2011 resolution. The resolution certified the final environmental impact review (EIR) for approval to repair a rail line and resumption of freight service on the Russian River division of the line. In response, Friends of Eel River filed a petition for writ of mandate. The group sought to prevent the NCRA and its agents from taking action on the project, and alleged that the project violated CEQA, challenged the adequacy of the EIR and of the mitigation measures and alternatives that had been considered and adopted, and the adoption of findings assuredly not supported by substantial evidence.

A trial court and an appeals court ruled that ICCTA was broadly preemptive of the CEQA. Friends of Eel River petitioned for further review and the Supreme Court of California (SCC) accepted the case. On July 27, 2017 the SCC ruled in Friends of Eel River v. North Coast Railroad Authority that the HSR initiative was subject to California environmental law and not just federal environmental laws. Specifically, the court decided that the “CEQA is preempted by federal law when the project to be approved involves railroad operations” and that the ICCTA is not so broadly preemptive.

The Friends of Eel River ruling now subjected the California HSR initiative to the jurisdiction of CEQA. Prior EIRs done for the project were now in jeopardy and three pending lawsuits resumed. In practice, CEQA application opens up the authority to more lawsuits, further increasing costs and delays.

Recently, there has been some positive environmental developments for the CHRA. On July 1st, the authority was given approval by the Federal Railroad Administration (FRA) to assume the federal agency’s role in evaluating compliance with the National Environmental Policy Act (NEPA). Before, the authority faced even more delays when the Trump Administration’s FRA began sluggishly approving environmental documents. The authority is now able to do some much needed catch-up on project deliver by conducting more efficient environmental reviews and approval of its required environmental documents for the advancement the high-speed rail program. In the past few weeks, Kings County has ended years of litigation with the authority and finally settled with the state after losing ruling are ruling.

What this means for the Cascadia HSR initiative

So, what do the CHSRA’s struggles with its HSR initiative means for the Pacific Northwest’s and Washington state’s foray into high-speed rail? While Washington state and California have different opponents and legal environments, lessons can be learned from the CHSRA.

To avoid CHSRA’s sluggish pace of land acquisition, the relevant authorities should be granted to resources to streamline the right-of-way acquisition process. Conducting a thorough appraisal process for required parcels of land for a determined HSR path would provide support for land procurement negotiations. Studies on the land and systems involved in relevant parcels and searching for past appraisals could enforce the validity of appraisal done for a Washington HSR authority. Proper land evaluations could also mitigate some and assist eminent domain litigation.

Widening the pipeline for land acquisition litigation will also help in avoiding the sluggish pace of land acquisition experienced by the CHSRA. Obtaining a well-staffed and dedicated legal team for land acquisition negotiations and eminent domain lawsuits could allow the Washington HSR authority to properly tackle time-consuming litigation. Ensuring that there are multiple impartial judges in affected counties could increase the pace of encumbrance relief.

When it comes to environmental law, a Washington HSR authority may be able to escape the fate of the CHSRA. In Washington’s case, the ICCTA maybe preempt state law. The state has already experienced a case settled about federal preemption when a federal appeals court resolved a case similar to Friends of Eel River. In this suit, the City of Auburn challenged a Surface Transportation Board (STB) ruling that federal law preempted state and local law, affirming Kings County’s inability to review the environmental impact of proposed operations on the Stampede Pass line.

In City of Auburn v. United States Government (2018), the Ninth Circuit United States Court of Appeals ruled that “State and local permitting laws regarding railroad operations are preempted by the plain language of the ICCTA, and the statutory framework surrounding it”. The ruling affirmed the STB determination that the City of Auburn had challenged.

If opponents of HSR do come out of the woodwork and sue with the Washington’s State Environmental Policy Act (SEPA), it is still possible that with precedent set by the California Supreme Court, state law could apply to the project. ESHB 1160 made its way through the state senate and the house with only two no votes. One of those votes was cast by a representative from Clark County. That county sits on an ideal path for a Cascadian HSR to exit Washington state and reach Oregon. Opponents would include those fearing displacement or economic change, including farmers and rural Washingtonians. A Cascadian HSR would bisect the land of many of those wary of a HSR’s effect on their communities.

Washington’s SEPA also does not succumb to the degree of mission creep that the CEQA does. However, SEPA has been used by anti-growth activists to slow urban development. Sightline has highlighted the environmental review framework’s weighing of only adverse environmental impacts and fixation on immediate and localized impacts, while ignoring long-term and far-reaching consequences. These flaws have often made SEPA a tool for obstruction.

Review of Washington law should scrutinize SEPA’s potential risk to a HSR rail effort. Seattle’s city council has recently brought up legislation to cut down on SEPA’s excessive red tape. Should a Pacific Northwest HSR initiative progress, the appropriate authorities should take state and region-wide effort to limit HSR opponents’ obstruction tool kit. They should also apply for NEPA assignment to assist in swift federal environmental approvals.

Review of the Californian HSR initiative informs onlookers that the CHSRA was unprepared, and under-resourced to limit and navigate eminent domain and environmental litigation in a timely manner. Hopefully, when WSDOT returns with their analysis for the governor and legislation, they have identified needed powers and legislative adjustments that allow for a potential Pacific Northwest HSR authority to avoid and the overcome obstacles faced in California.

Shaun Kuo is a recent graduate from the UW’s Jackson School. He is a Seattle native that has lived in Wallingford, Northgate, and Lake Forest Park. He enjoys exploring the city by bus and foot.

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