Taxpayer Lawsuit
Alleges Legislature Violated the State Constitution to Fund
HSR Projects
On
December 13, 2016, the California High-Speed Rail
Authority, CHSRA, met and gave preliminary approval to
submit funding plans seeking $3.2 billion in HSR bond
funding for the San Francisco to San Jose Peninsula
Corridor project (the Caltrain Electrification project) and
Central Valley HSR project. The same day, four individuals,
three non-profit organizations, the Town of Atherton and
Kings County filed a lawsuit, seeking a ruling that the CHSRA’s
efforts to obtain construction funding not only failed
to meet the statutory requirements of Proposition 1A,
but were unconstitutional as well.
The case is the second Tos v. California High-Speed Rail
Authority,
or Tos
II and the
plaintiffs are John Tos, Town of Atherton, Kings County,
Morris Brown, Patricia Louise Hogan-Giorni, Anthony Wynne,
Community Coalition on High-Speed Rail, Transportation
Solutions Defense and Education Fund, and California Rail
Foundation.
The Third District Court of Appeal had previously ruled
that Prop. 1A, the 2008 $9.9 billion high-speed rail bond
measure, created a "financial straitjacket" restricting the
use of the bond funds. Many of the Plaintiffs had
written to the Legislature
and written to the Director of the Department of
Finance to
express concerns about the unconstitutionality of
AB 1889. Plaintiffs allege in their suit that
the Legislature's passage of AB 1889 created a tool that
attempts to evade the bond measure's restrictions.
However, because AB 1889 fundamentally alters that
voter-approved measure, plaintiffs allege it is
unconstitutional, as are the funding plans that rely on
it.
On January 3, 2017, CHSRA submitted a package of Funding Plans
to the Department of
Finance, thereby triggering the ripeness of a challenge
to the plans’ compliance with the requirements of
Proposition 1A. (See the last two paragraphs
here.)
On January 31, 2017, Plaintiffs filed their
First Amended Complaint
in response to the
threatened filing of a demurrer by CHSRA. Narrowing the
issues to a facial challenge to the constitutionality of
AB 1889 and CHSRA’s illegal use of public funds will
allow for a much speedier resolution of the claims.
Should this case not result in AB 1889 being found
unconstitutional, compliance claims can be raised in
later litigation. Newly added to the suit as a plaintiff
is retired judge and former CHSRA Chair Quentin Kopp,
who helped write Prop. 1A and has joined the case to
defend that measure as the voters approved it.
Plaintiff co-counsel Stuart Flashman said, “The High-Speed
Rail Authority has approved funding plans that rely on AB
1889 to undermine the clear voter-enacted restrictions
built into Proposition 1A.”
Injunction
on the Use of Bond Funds for
Construction
On March 15, Plaintiffs filed an Application for Temporary Restraining
Order and Order
to Show Cause. The Application is supported by a
Memorandum of Points and
Authorities,
a Request for Judicial
Notice,
Counsel’s Declaration, Expert’s Declaration, Notice Declaration and the Proposed Order. Counsel appeared ex parte
(informally) at 1:30 pm on Wednesday, March 22. CHSRA
filed this Opposition. A TRO would prevent CHSRA from
expending Prop. 1A funds for construction until a
hearing can be held on a preliminary injunction. CHSRA
provided documentation that no bonds would be sold prior
to April 20, 2017. On that basis, the court determined a
TRO was unnecessary, and set a hearing on a Preliminary
Injunction at 11:00 am on April 19 in Department 54.
The Court will deem the submitted TRO papers from
Plaintiffs as the filing for a Preliminary Injunction.
CHSRA filed an Opposition to Plaintiff’s
Motion, and the
following Declarations with Exhibits: O’Grady, Jarvis and Glen.
Plaintiffs in turn filed a Reply Brief, a Proposed Order, and an Objection to the Declaration of
O’Grady.
Demurrer
CHSRA filed a Demurrer, a Motion to Strike
Allegations,
and a Declaration in an effort to make this case
disappear.
Plaintiffs filed an Opposition to Demurrer, Opposition to Motion to
Strike, and
a Request for Judicial Notice
in support of both
Oppositions.
CHRA then filed a Reply in Support of
Demurrer,
a Reply in Support of Motion to
Strike,
a Request for Judicial
Notice, and
an Objection to Plaintiff’s
RJN
A hearing was held on April 26 on CHSRA’s Demurrer. The
Court’s tentative ruling denied the motion for preliminary injunction
and sustained the demurrer. At the hearing, the
Court adopted the ruling on the motion for preliminary
injunction, and took the demurrer under submission.
The final ruling adopted the tentative ruling
sustaining the demurrer, effectively knocking the case
out of court, but granted leave to amend the Petition.
Plaintiffs filed a Second Amended Petition
on May 25, 2017, in
response.