Taxpayer Lawsuit Alleges State Cannot Legally Spend
Proposition 1A Bond Proceeds on Central Valley Project
In Part I of the Tos case, the court found that the California High-Speed Rail Authority’s Central Valley project was in violation of Proposition 1A. However, the Court of Appeal neutralized that decision, ruling that Plaintiffs did not have a remedy at that stage of the process. Part II of the case goes far beyond Part I. It had the potential to shut down the project.
Motion for Judgment on the Pleadings
In an attempt to end the litigation, Defendants filed a Motion for Judgment on the Pleadings on January 10, 2014. If successful, the second half of the Tos case would never go to trial, thus bringing the case to a close. Prior to the filing, the parties agreed to a Stipulation that identified the issues to be covered in Part II of the litigation.
The Court ruled on March 4, 2014 that the Authority must face a trial on the question of whether its HSR plan complies with Proposition 1A.
Motion for Order to Limit the Scope of Evidence
The Authority filed a Motion for Order to Limit the Scope of Evidence on July 2, 2014. Plaintiffs responded with an Opposition Brief and Request for Judicial Notice. The Authority then filed a Reply Brief.
A hearing was held in Sacramento on July 25th. The Court ruled that the evidence would be limited to the record in Tos Part I and the Authority’s Administrative Record for the adoption of the 2014 Business Plan, subject to the right to file a motion to augment the record.
On November 2, 2015, Plaintiffs filed their Opening Brief.
The brief argued four points:
1. The decision to proceed with a blended system, in which HSR trains would share tracks with Caltrain, violates Prop. 1A.
2. The route selected by the Authority cannot provide trips between the Los Angeles Union Station and San Francisco’s Transbay Transit Center in the 2 hour and 40 minute maximum travel time mandated by Prop. 1A.
3. No reasonable person could believe the Authority’s determination that the Initial Operating Segment of the system will be financially viable, a requirement of Prop. 1A.
4. If the Court finds any of these three violations of Prop. 1A, the Court should issue a permanent injunction blocking the High-Speed Rail Authority from spending not only high-speed rail bond funds, but also any other state or federal funds, on the project.
Plaintiffs attempted to bring into the case a document uncovered by the Los Angeles Times that shows major cost escalations for tunneling through the Tehachapis, as further proof of the non-viability of the project
After the Opening Brief was filed, the Los Angeles Times broke a story about a CHSRA document that showed a 31% increase in costs had been kept hidden from the public. The Times and the Tos legal team both sought the document from CHSRA, but were refused. Pressure from the State Assembly Republican Caucus and several Republican congressmen eventually forced the Authority to make it public. After the Authority capitulated, the court allowed the plaintiffs to file a supplemental brief to explain the legal significance of the formerly secret document. Plaintiffs asserted that there is no evidence that the 2014 Business Plan was based on valid cost estimates. They claimed it ignored the design work completed since the 2012 Business Plan, and merely adjusted the 2012 cost figures.
The Court’s Ruling
The Court ruled against the Plaintiffs in its Ruling on Submitted Matter, primarily because of finding the action premature. This is why the decision was not a substantive win for the Authority, but rather a procedural delay:
“While the Authority does not have sufficient evidence to prove the blended system can currently comply with all the Bond Act requirements, as they have not provided analysis of trip time to the San Francisco Transbay Terminal, and cannot yet achieve five-minute headways (even allowing for the definition of “train” to include non-HSR trains). … There is no evidence currently before the Court that the blended system will not comply with the Bond Act system requirements. Although Plaintiffs have raised compelling questions about potential future compliance, the Authority has not yet submitted a funding plan pursuant to section 2704.08, subsections (c) and (d) seeking to expend Bond Act funds. Thus, the issue of the project’s compliance with the Bond Act is not ripe for review.” (at 15-16.)
As a result of the Authority’s filing of a second funding plan January 3, 2017, the issue of compliance with the requirements of the Bond Act finally became ripe for review.