High-Speed Rail Opponents Take Fight to California Supreme Court

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SAN FRANCISCO — The legal saga of California's proposed $68 billion high-speed rail project continues as opponents of the plan took their case to the Supreme Court of California Tuesday.

A farmer, a rural homeowner, and Kings County were the named plaintiffs who filed a petition asking the Supreme Court to review a recent decision from the Third District Court of Appeal that gave the High-Speed Rail Authority the go-ahead to issue billions of dollars in bonds for the project.

That decision, which was finalized on Aug. 30, overturned a lower court decision that blocked the issuance of voter-approved state general obligation bonds for the project, which is to connect the San Francisco and Los Angeles areas with high-speed passenger trains on new tracks.

"The Court of Appeal ruling overturns long-standing precedents in the interpretation of bond measures," said Stuart Flashman, one of the attorneys representing the petitioners. "If these decisions stand, voters will lose trust in future bond measures."

The bond issuance would fail to meet requirements under the voter-approved ballot measure, Flashman and lead counsel Michael Brady said during a press conference Tuesday morning outside the court building in San Francisco.

Brady said that Proposition 1A, which was approved in 2008, requires that no segment of the rail project can be started until all the money necessary to complete that segment is in the bank. He added that the authority currently has only 20% of the money required to complete the first segment.

"The Court of Appeal has failed to honor these restrictions, even though a voter-passed initiative trumps anything that a later legislature may do," Brady said. "The effect is to cause the voters to lose faith in the electoral process and in the integrity of voter-passed initiatives."

In November 2013, a Sacramento Superior Court Judge ruled in favor of Central Valley residents, John Tos and Aaron Fukuda and Kings County. He found that the authority's funding plan failed to properly certify that all needed environmental clearances had been obtained and that sufficient funding was available to complete one segment of the project.

A three-judge panel of the Third District Court of Appeal in Sacramento recently overturned that decision, declaring that the authority could issue the $8.7 billion of bonds for the project.

Harold Johnson, an attorney with the Pacific Legal Foundation, said he also plans to file a similar petition on behalf of the First Free Will Baptist Church in Bakersfield. The rail line's route is to go along the north side of the church's property.

"The High Speed Rail project must be fully transparent and fully faithful to the law," Johnson said. "Evading accountability can't be allowed on one of the most expensive public works projects in U.S. history."

In additional to legal and geographic concerns, Thomas Rubin, an independent financial analyst, said during the press conference that allowing the ruling could have broader financial implications on the municipal bond market.

"If the rating agencies, based on uncertainty about what guarantees and prohibitions are valid and enforceable in California, find that the risk factors have changed, and agencies have freedom to ignore what they feel like ignoring, then bond interest rates will increase," Rubin said.

Flashman said that after filing a petition for review, the court generally has at least 60 days to decide whether to grant the review. If the review is denied, it's the end of the road for this particular case, he said.

Lisa Marie Alley, a spokeswoman for the rail authority, said it is pleased with the Appellate Court ruling, and that the authority remains committed to the program even though opponents "still hope to thwart the will of the people."

Other government officials, including San Francisco Mayor Ed Lee, announced their continued support of the rail project on Tuesday following the announcement of the Supreme Court filing.

Lee called the filing a "theatrical announcement" aimed at putting pressure on the California Supreme Court to review their legal losses.

"Such actions make it obvious that the opponents do not seek to resolve issues to improve the project but, rather, are determined to use any means possible to stop high-speed rail," the mayor said in a statement.

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