Farmers, state settle last lawsuit over Merced-Fresno high-speed rail line

The Fresno BeeApril 18, 2013 

Farming interests in Madera and Merced counties dropped their environmental lawsuit challenging the first section of the statewide high-speed rail project.

The California High-Speed Rail Authority and representatives of several agricultural organizations announced the settlement Thursday afternoon after Sacramento County Superior Court Judge Timothy Frawley signed off on it, less than 24 hours before attorneys were to argue their points in Frawley's courtroom.

The settlement removes the last remaining legal challenge to the authority's approval last May of the 60-mile stretch of the proposed rail route between Merced and Fresno, and certification of the environmental-impact report that was the basis for the route approval.

Farm Bureaus in Madera and Merced counties were among the organizations suing the rail authority. Anja Raudabaugh, executive director of the Madera bureau, said the rail authority gave significant concessions: increased mitigation for agricultural impacts, and direct compensation for landowners affected by the project.

The lawsuit was filed 101/2 months ago by the Madera County Board of Supervisors, the two Farm Bureaus, Preserve Our Heritage (a Valley-based, grass-roots agriculture organization), Chowchilla Water District and the Fagundes farming family in Madera and Merced counties. They alleged that the rail authority used a "flawed process" to assess the environmental effects of the high-speed rail project on agriculture and that the agency illegally approved the Merced-Fresno section.

The Madera County Board of Supervisors voted earlier this month to withdraw from the case.

Two similar suits, one filed by the city of Chowchilla and another by companies that own property along the route in Madera and Fresno counties, were settled earlier this year.

Gov. Jerry Brown, who has placed the high-speed train project at the forefront of his legislative agenda, was pleased with the settlement. "This is a very positive development and I commend the High-Speed Rail Authority on working closely with California farmers and arriving at a very solid settlement," Brown said.

What farmers wanted

The lawsuit by the farm groups sought to halt -- or at least slow down -- work on the rail program. The rail authority is only weeks away from awarding a contract for construction to begin this summer on the first tangible stretch of the high-speed-train route in Fresno and Madera.

Thursday's announcement came less than three weeks after Farm Bureau representatives pledged to fight on after the Madera County Board of Supervisors opted out of the lawsuit.

The farm groups asserted that when the rail authority approved the Merced-Fresno route, the agency failed to adequately assess how agriculture and communities would be affected by the high-speed rail line; did not offer enough solutions to make up for those effects; and violated open-meeting laws that govern how the boards of state agencies conduct business.

Because of those problems and others, the suit asked the court to nullify the authority's May 3, 2012, environmental certification and approval of the Merced-Fresno section. It also sought a permanent injunction barring the rail authority from hiring contractors, starting construction, purchasing equipment or supplies or spending any money to develop the section "until it has fully complied" with CEQA and state open-meeting laws.

What farmers got

Key provisions of Thursday's settlement, according to court documents, include requiring the rail authority to:

* Make up for the loss of farmland for the railroad right of way by purchasing agricultural conservation easements on property of similar quality elsewhere in the region. Those easements would permanently preserve the farmland from future development for anything other than agriculture.

* Offer to buy any leftover parcels under 20 acres that are created when the rail line divides an owner's property.

* Pay their opponents' legal fees amounting to nearly $973,000.

* Create an "agricultural land mitigation fund" of $5 million to purchase additional conservation easements, beyond those already required to make up for farmland directly affected by the rail line.

* Consult with affected property owners in the area of the "Chowchilla Wye," a Y-shaped junction of the Merced-Fresno rail route and a line branching westward toward Los Banos, San Jose and the Bay Area.

Take measures to ensure that the Chowchilla Water District's irrigation ditches and other facilities are protected from or uninterrupted by the rail project.

The settlement is considered a judgment by the court, which means the judge will have the authority to enforce the agreement's provisions.

"Far from being perfect, I believe this settlement forces the authority to compensate and mitigate individual land owners for agricultural impacts this project will have on the farming community in Madera County," Madera County Farm Bureau president Tom Coleman said. "We were very concerned that even if we prevailed entirely in our CEQA case, we would not have been afforded these rigorous concessions."

Moving forward

Indeed, Frawley had already dealt the farm organizations a blow last fall, when he rejected their request for an injunction to bar the authority from doing any planning or contracting work until the case was decided. In November, Frawley said he did not believe the plaintiffs were likely to prevail in the case.

Barry Epstein, the lead attorney for the agricultural groups, acknowledged the limitations of the lawsuit Thursday. Environmental law "only goes so far, and a CEQA lawsuit is not a magic wand," he said.

"The settlement represents a real improvement, providing more ag mitigation and more protection for the directly affected ag properties," Epstein added. "This is one of those cases where litigation was needed to accomplish the core CEQA purpose of reducing impacts when public agencies chose to undertake environmentally harmful projects."

Putting the last lawsuit over the Merced-Fresno line behind it was a relief for the rail authority, but a new complication arose Thursday: The federal Surface Transportation Board ruled that it has authority over the California project, which could mean substantial delays and cost overruns if the state is forced to comply with federal railroad regulations.

Rob Wilcox, a spokesman for the rail authority, said the Surface Transportation Board is still considering the state's request for an exemption, "and we continue to move forward to begin construction this summer."

Dan Richard, the rail authority board's chairman, said he is confident the federal board will approve California's request next month, as it did recently for a Florida project.

The rail authority has about $6 billion available, including more than $3 billion in federal stimulus and transportation funds, to build what it calls the "backbone" of its route between Merced and Bakersfield. The federal money requires that it be spent, and the section largely completed, by Sept. 30, 2017.

Thursday's agreement clears the way on the Merced-Fresno route, but the rail authority still faces another -- and possibly more formidable -- legal challenge by Kings County, Hanford farmer John Tos and Hanford homeowner Aaron Fukuda. Their suit charges that the rail authority's plans are illegal under Proposition 1A, the $9.9 billion high-speed rail bond measure approved by California voters. That suit, which hopes to block the sale of bonds, will be tried May 31 in Sacramento.

A history of the HSR lawsuits over the Merced-Fresno portion

May 3, 2012: The California High-Speed Rail Authority certifies the environmental-impact report and approves a hybrid route for the Merced-Fresno portion of the proposed statewide high-speed train system. The approval comes after a two-day public hearing in Fresno.

June 1, 2012: The first of three separate lawsuits is filed against the rail authority in Sacramento County Superior Court to challenge the legality of the agency's May 3 actions under the California Environmental Quality Act (CEQA). The plaintiffs are Madera County, Madera County Farm Bureau, Merced County Farm Bureau, Preserve Our Heritage, Chowchilla Water District, and the Fagundes farming family in Madera and Merced counties. The suit asks the court to void the authority's Merced-Fresno route approval and seeks an injunction to prevent the agency from doing any planning, engineering, land acquisition or construction on the project. The case is assigned to Judge Lloyd Connelly.

June 1, 2012: The city of Chowchilla files a lawsuit in Sacramento County Superior Court challenging the rail authority's approval of the Merced-Fresno section. The case is assigned to Judge Timothy Frawley.

June 4, 2012: Timeless Investment Inc., Millennium Acquisitions Inc., Horizon Enterprises G.P. and Everspring Alliance L.P., all companies with land affected by the path of the approved rail line in Madera and Fresno counties, file a lawsuit against the rail authority challenging the agency's approval of the Merced-Fresno section. The case is assigned to Judge Connelly, who is also hearing the Madera County case.

June 12, 2012: The plaintiffs in the Madera County/Farm Bureaus lawsuit move to disqualify Judge Connelly from hearing the case because of alleged prejudice against the plaintiffs. The case is reassigned to Judge Frawley, who is hearing the Chowchilla case.

July 9, 2012: Judge Frawley orders that all three lawsuits be treated as related cases and heard in one combined court process. The lawsuit by Madera County and the Merced and Madera county Farm Bureaus is designated as the lead case.

Nov. 16, 2012: Judge Frawley denies the requests for an injunction to block the rail authority from continuing its work on the Merced-Fresno portion of the rail project.

Jan. 15, 2013: Attorneys for Timeless Investment Inc. and its co-plaintiffs file a motion to dismiss their lawsuit against the rail authority.

Jan. 25, 2013: A settlement with the city of Chowchilla effectively drops the city's lawsuit against the rail authority. The settlement calls for the rail authority to pay up to $300,000 of the city's legal fees in the case.

April 2, 2013: The Madera County Board of Supervisors votes 3-2 to withdraw from the one remaining lawsuit against the rail authority over the Merced-Fresno section. A court hearing in Sacramento remains on the calendar for April 19 for Judge Frawley to hear the case and make a decision.

April 18, 2013: Just one day before attorneys for the farm interests and the rail authority are to square off in court, the two sides agree on a settlement that ends the lawsuit.

The Associated Press contributed to this report. The reporter can be reached at (559) 441-6319, tsheehan@fresnobee.com or @tsheehan on Twitter.

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