Did changes to California high-speed rail spending break the law? Appeals court to decide
Opponents of California’s controversial and embattled high-speed rail project hope a state appeals court will put the brakes on using billions in bond funds for construction that’s now underway in Fresno County and the central San Joaquin Valley.
Stuart Flashman, an Oakland attorney representing Kings County farmer John Tos and others who are contesting the rail project, argued Monday afternoon to a three-judge panel of California’s 3rd District Court of Appeal that a key piece of legislation in 2016 represented a fundamental change to what the state’s voters approved when they passed Proposition 1A, a $9.9 billion high-speed rail bond act, in 2008.
Flashman’s presentation to the justices came more than two years after a Sacramento Superior Court judge ruled against his clients in a lawsuit over the use of the Proposition 1A funds for rail construction.
Flashman contended Monday the trial court judge, Richard Sueyoshi, erred when he ruled the legislation, Assembly Bill 1889, did not represent a change to the rail funding program that amounted to a violation of the California State Constitution.
The legislation allowed the California High Speed Rail Authority to be able to spend money on intermediate segments of the high-speed rail project, including portions now under construction in Fresno, Kings, Madera, Tulare and Kern counties.
Proposition 1A, Flashman argued, required that money could only be spent on a “usable segment” of the rail system.
Flashman said that by instead allowing incremental construction to occur on sections that would someday be “suitable and ready” for high-speed rail before all of the money was available for a section, AB 1889 effectively removed a “financial straitjacket” contained in Proposition 1A. That was enough of a change to what was approved by voters in 2008, he added, to require sending the entire program back to voters.
“They essentially emasculated a key term of Proposition 1A, but without voter approval,” Flashman said of the phrase “usable segment.”
“That was a major change, not part of the schema or design that induced voter approval of the measure,” he added, indicating his position that the change should have required going back to voters for approval.
Deputy Attorney General Sharon O’Grady, representing the state, countered that because the Tos lawsuit is essentially a challenge to a statute passed by the Legislature, “all presumptions must be to the constitutionality of the statute.”
O’Grady argued that Flashman and his clients “have not overcome that presumption.”
In numerous opinions, O’Grady said, “courts have recognized that in large public works project, substantial deviation (is) allowed between a bond and what can be built.”
“Here there is simply a definition of a previously undefined term; that is typical of large public works projects, …” she added. “Nothing in what was presented to the voters (in Proposition 1A) is inconsistent with the incrementalism represented in AB 1889.”
Presiding Justice Vance W. Raye noted hypothetical examples raised by Flashman that AB 1889 set the stage for construction of piece-meal components that may never coalesce into a cohesive segment that will be used by electric-powered high-speed trains.
“There’s a point at which incrementalism sort of erodes the basic meaning of terms in a constitutional provision,” Raye said to O’Grady. “Can we speculate at all on construction in this language?”
O’Grady replied that none of the funding plans allocating Proposition 1A money in 2012 have been challenged. “As a practical manner, that it won’t be built is not possible,” she said, arguing that there are other safeguards in the ballot measure to ensure the spending of the public funds.
Flashman, in a brief rebuttal, told the justices that “the way (the Legislature) left it, they don’t have the funds, and there’s absolutely no assurance to the public or to the voters from 2008 that any segment suitable and ready for high-speed rail will ever be built.”
Stakes high on both sides
After the hearing, Flashman said he feels hopeful about the appeal. That’s a contrast to two years ago, when he was disappointed by the trial court ruling. At that time, he described the case as “being on life support” pending an appeal.
“This is clearly a make or break” decision by the court, he said Monday. “They can either uphold the trial court decision, in which case we’re done. Or they can reverse the trial court, and the only way to reverse is to say that AB 1889 is unconstitutional.”
It’s unknown when the justices could issue an opinion on the appeal, but it could be as soon as a few weeks to as much as three months. Either way, the losing side has an opportunity to appeal the case to the California Supreme Court.
But the ramifications of a decision in favor of the rail foes could be momentous. “If we win, almost all the money the (California High-Speed Rail Authority) has spent on the Central Valley construction” as well as on improvements to commuter rail lines in the San Francisco Bay Area and the Los Angeles Basin “amounts to illegal expenditures of public funds,” Flashman said in written comments prior to Monday’s hearing.
That potentially could require the state to repay the money already spent from Proposition 1A, Flashman surmised.
It could also determine the fate of the remaining $4 billion still unspent from Proposition 1A, which is the crux of negotiations between Gov. Gavin Newsom and Democratic legislative leaders over extending current construction in the Valley into Bakersfield and Merced or making additional improvements to commuter rail lines in northern or southern California.
“If we win, the answer is neither,” Flashman said. “They either build a proper (high-speed rail) segment or they build nothing.”
The petitioners in the case include Tos, who has been involved in lawsuits over the rail project for about 10 years, as well as the town of Atherton along the San Francisco Peninsula, several Peninsula residents, former state senator and judge Quentin Kopp of San Francisco, and several nonprofit rail organizations: the California Rail Foundation, the Community Coalition on High-Speed Rail, and Transportation Solutions Defense and Education Fund (TRANSDEF).
Kings County, which was originally among the plaintiffs in the lawsuit, abandoned its role in the appeal in 2019.
Sueyoshi’s ruling was the second time that litigation over the project’s compliance with Proposition 1A has been decided in favor of the rail authority.
This story was originally published October 26, 2021 at 5:00 AM.
