HSR Opponents Seek Supreme Court Review
09/02/14 Filed in: High-Speed Rail
Attorneys challenging the California High-Speed Rail Authority’s bond funding presented a press conference today to explain the petition they filed or will be filing with the California Supreme Court. The petitions ask the Supreme Court to review the Third District Court of Appeal decision overturning two trial rulings that had hamstrung Californiaʼs High-Speed Rail project. The Appellate Court had ruled that “The Legislature appropriated the bond proceeds based on the preliminary funding plan, however deficient, and there is no present duty to redo the plan.”
The Court also held that no evidence was needed to show that it was “necessary or desirable” to issue bonds, reversing the trial court ruling that had prevented the sale of bonds and effectively erasing that provision from the ballot measure.
Michael Brady, representing John Tos, Aaron Fukuda and Kings County, said “The Authority is now on life support; it has been granted a stay of execution by the Court of Appeal. Today’s filing seeks to lift that stay.”
Stuart Flashman, co-counsel added, “The Court of Appeal ruling overturns long-standing precedents in the interpretation of bond measures. If these decisions stand, voters will lose trust in future bond measures.”
Harold Johnson of the Pacific Legal Foundation, representing the First Free Will Baptist Church, said “The High Speed Rail project must be fully transparent and fully faithful to the law. Evading accountability can’t be allowed on one of the most expensive public works projects in U.S. history.” The Howard Jarvis Taxpayers Association will also be filing a Petition for Review.
The documents and related case materials are all available at the bottom of this page.
The Tos plaintiff’s lead counsel, Michael Brady, made this statement:
When the Legislature in 2008 was crafting Proposition 1A, prior to placing this initiative before the voters for their approval, they did something very unusual for a big public works project. In order to get the people’s approval, they inserted into the law numerous restrictions and prohibitions to protect the state and its taxpayers from cost overruns and financial risk. They knew that voters would be concerned about things like the Boston Big Dig (seven times higher than the estimate) and the Bay Bridge (six times higher than the estimate and a scandal in implementation).
Prop. 1A says that no segment can be started until all the money necessary to complete that segment as an electrified HSR segment is in the bank (this protects against uncompleted or abandoned projects when the money runs out; currently the HSR Authority has only 20% of the money required to complete the first segment that it picked).
Prop. 1A required that ALL environmental clearances be completed before submitting an appropriation request for any segment (to protect against the inevitable last minute discovery of a snail darter, a fish, or a plant that can hold up a project for years); currently, the HSR Authority has to complete 180 miles of environmental clearances, including going over the Tehachipis!. The Court of Appeal has failed to honor those restrictions, even though a voter-passed initiative trumps anything that a later legislature may do. The effect is to cause the voters to lose faith in the electoral process and in the integrity of voter-passed initiatives. They will lose faith that voter intent will be honored. That’s why we are asking the Supreme Court to overturn that ruling, and restore faith in democracy.
Mr. Brady’s co-counsel, Stuart Flashman, made this statement:
While this case arose out of litigation over California’s proposed high-speed rail system, the issues involved have grown much bigger than that; even though that project, costing well over $65 billion, would be the largest infrastructure project ever attempted by the state. What is at stake in this lawsuit is the public’s trust in measures place on the ballot by public agencies for approval by the voters. Of particular concern are bond measures – public agency’s requests to borrow public funds to finance capital projects. In this case, the Legislature placed Proposition 1A on the ballot. In doing so, it made specific promises to voters, not only about what would be built, but how it would be done; what the Court of Appeal itself called a “Financial Straitjacket.” Those provisions were clearly intended to protect the state from the financial risk this huge project could involve.
For almost 100 years, California courts have enforced a consistent rule: measures placed on the ballot and approved by the voters must be followed to the letter. The courts have even gone so far as to call bond measures contracts between the government and the voters. The Court of Appeal’s decision in this case upends that rule, allowing the High-Speed Rail Authority and the Bond Finance Committee created by Prop. 1A to violate specific provisions of the bond measure with impunity.
If this decision is allowed to stand, not only would billions of dollars of taxpayer funds be placed at risk in this project, but voters will lose confidence in promises made to them in future bond measures. They will justifiably fear that those promises will be tossed aside by the courts as unenforceable or meaningless. The repercussions in terms of the loss of voter trust cannot be overstated. In essence, this decision will make it enormously more difficult for public agencies to convince the public to approve bond measures, regardless of what promises are made in the measure placed on the ballot.
In essence, this decision of the Court of Appeal places the future of publicly funded capital projects at risk. It is for that reason, as well as the dangers the decision creates for reckless spending of $ 9 billion of Prop. 1A bonds, that we are asking the Supreme Court to review and reverse the decision.