Litigation & Case Law Update

• Citation: Vol. 37 No. 4
• Publication year: 2014
• Author: Compiled by K. Scott Dickey*

Litigation & Case Law Update

Compiled by K. Scott Dickey*

CEQA/FEDERAL PREEMPTION

Friends of the Eel River v. North Coast Railroad Authority 230 Cal. App.4^th 85, 2014 WL 4809456 (September 29, 2014)

Federal Interstate Commerce Commission Termination Act preempts CEQA environmental review requirements for projects involving resumption of existing railway line.

The Northwest Pacific Railroad Line (the "line") is located on California's north coast, and is viewed as a single railroad extending from Arcata in Humboldt County in the north to Lombard in Napa County in the south. The city of Willits is the geographical middle of the line, and divides the line into the northern Eel River Division, and the southern Russian River Division.

In 1989, the California Legislature established the North Coast Railroad Authority ("NCRA"), vesting it with the power to operate railroads, acquire the rights to property necessary to operate and maintain railroads, issue bonds, accept loans and grants from other agencies, and select a private operator to run the railroad system within its area of jurisdiction. Upon its creation, the NCRA began to acquire title or easement rights over the entire line, and operated freight service on the line from 1992 to 1998. In 1999, the NCRA entered into a stipulated judgment and consent decree to resolve environmental and safety litigation brought against it. The judgment and decree required NCRA to remediate certain conditions.

As part of its remediation efforts, in 2006 NCRA sought funding from the Transportation Congestion Relief Program, established by the Legislature and operated by the California Department of Transportation. Receipt of funds under this program is predicated on the applicant's agreement to provide an Environmental Impact Report ("EIR") for the proposed project under the California Environmental Quality Act ("CEQA"). In anticipation of renewed operations, NCRA also hired a private rail operator - the Northwestern Pacific Railway Company ("NWPRC") - to run the railroad once the project was complete. The NCRA/NWPRC agreement also required NCRA to comply with CEQA. In 2009 NCRA ultimately certified a final EIR on the project.

Thirty days after certification, two environmental groups - Friends of the Eel River and Californians for Alternatives to Toxics - filed a petition for writ of mandate challenging the certification of the EIR. Petitioners claimed that the EIR was insufficient because it: (1) did not adequately describe the project, (2) failed to disclose all of the work needed to rehabilitate the line, (3) improperly segmented impacts of the Russian River Division from the Eel River Division, (4) did not identify existing environmental contamination, (5) did not disclose the project's cumulative impacts, and (6) failed to adequately discuss feasible alternatives to the project. NWPRC (joined by NCRA) demurred to the writ petition, claiming that CEQA was preempted by the Interstate Commerce Commission Termination Act ("ICCTA"). Petitioners opposed, alleging that NCRA had consented to the applicability of CEQA in the 1999 consent decree and by applying for funds predicated on compliance with CEQA, and was judicially estopped from claiming federal preemption based on its past actions. After multiple proceedings before different judges, the trial court ultimately denied the writ petition, on the grounds that the ICCTA preempted CEQA requirements with respect to railroads, and that petitioners' estoppel claims were unavailing because none of the acts took place in a judicial or quasi-judicial proceeding.

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In Friends of the Eel River v. North Coast Railroad Authority 230 Cal. App.4^th 85, 2014 WL 4809456 (September 29, 2014), the First District Court of Appeal affirmed in full. The Court explained that the ICCTA grants the Surface Transportation Board ("STB") exclusive jurisdiction over rail operations, even those that take...