After surviving a major lawsuit, the bullet train will still be coming fully online years later than anticipated. “California’s high-speed train has just been delayed by three more years,” Gizmodo noted. “The first leg of the state’s high-speed rail is now set to finish by 2025, not 2022 as planned. This could mean that Hyperloop — the Golden State’s other, even more futuristic transit plan — could beat the bullet train to the station.”

Delays arose as a result of the dizzying challenge of navigating Los Angeles County’s mountains, which ring the city of L.A.’s basin. “The high-speed rail authority thought it could do it by 2022, but now they admit it will likely take three years longer,” The Verge observed. “The mountainous passage outside L.A. won’t be built until the end of the schedule, while the San Francisco leg of the project will be built first.”

Day in court

The train recently prevailed in Sacramento County Superior Court, where a judge “ruled that the allegations in the suit were ‘not ripe for review,’ finding that opponents of the project offered no evidence that the state rail authority would not comply at some point with the restrictions as it continues to plan the project,” the Los Angeles Times reported.

In theory at least, courts and ballot referenda are checks on legislative tyranny. A California appellate court has effectively done away with both by ruling that the legal requirements of a bond measure approved by voters for the state’s bullet train are merely “guidance.” … 

Six years ago voters approved a referendum authorizing $9 billion in bonds for high-speed rail construction, including language with stringent “taxpayer protections.” These stipulations were, among other things, that the state high-speed rail authority present a detailed preliminary plan to the legislature identifying funding sources and environmental clearances for the train’s first “usable segment” prior to a bond appropriation.

The legislature in 2012 green-lighted the bonds while ignoring these stipulations. The rail authority had pinpointed merely $6 billion of the estimated $31.5 billion necessary to complete the first 300-mile segment from Merced to San Fernando. Only 30 miles of environmental clearances had been certified. 

Last year Sacramento County Superior Court Judge Michael Kenny ruled that the authority “abused its discretion by approving a funding plan that did not comply with the requirements of the law.” But in July Sacramento’s Third Appellate District sanctioned the lawlessness with a decision as impressive for its cognitive dissonance as its legal afflatus.

On the one hand, the court opined that “voters clearly intended to place the Authority in a financial straitjacket by establishing a mandatory multistep process to ensure the financial viability of the project.” But then the judges ruled that the challenge to the legislature’s invalid bond appropriation and authority’s preliminary plan, “however deficient,” was in effect moot.

The court could require the authority to redo its plan, but the judges say that would be unnecessary since the Director of Finance must still approve a rigorous final plan before the authority can/spend/ the bond revenue. In other words, the law’s procedural requirements don’t matter. ….

California’s Supreme Court now has an opportunity to do what the appellate judges did not and order Sacramento to follow the bond language. At stake are the rule of law and democratic governance in the Golden State.

Key provisions of Prop 1A acknowledged by appeals court

I certainly agree that the appellate court ruling was strange in that it seemed to ignore the clear sentiment of Proposition 1A about the strength of taxpayer protections. But I don’t think the WSJ writers read the decision as closely as they should have. The appeals court ruling affirms Kenny’s basic theories about the project being unlawful — it just says he stepped in prematurely.

The appeals court that vacated Sacramento Superior Court Judge Michael Kenny’s ruling to block the project did not say that Kenny’s conclusion that the HSRA violated Proposition 1A was wrong. Instead, the decision held that a trial judge had no authority to block construction until the legislature and the High Speed Rail Authority approved a final business plan. “The scope of our decision is quite narrow,” the judges wrote in the first paragraph. The decision went on to reinforce two key protections contained in Proposition 1A—both meant to ensure that the state didn’t spend billions on initial construction only to run out of money before a financially viable train system could be built. Judge Kenny ruled that the state had to identify “sources of funds that were more than theoretically possible” in explaining how it would pay for the project’s $31 billion, 300-mile initial operating segment. He also said that the HSRA had to complete environmental reviews for the entire segment before construction could begin. The appeals court contradicted him on neither point.

The appellate court underscored that the law requires the state to establish “financial viability” for the bullet train’s first segment by adhering to a voter-approved “financial straitjacket.” It said that bond funds could only be spent after a funding plan gained approvals from the state finance department, the Joint Legislative Budget Committee, and an independent financial analyst who certified the plan’s soundness—specifically that if built as planned, the bullet train could operate without a taxpayer subsidy. The appeals court judges also agreed with Judge Kenny that the rail authority had to obtain “all the requisite environmental clearances before construction begins.”

These are shortcomings that Brown … cannot easily finesse. The state has less than $10 billion left from Proposition 1A and from federal stimulus funding. The prospect of obtaining additional federal funding from House majority leader Kevin McCarthy, a Bakersfield Republican and ferocious critic of the project, is virtually nil. And the HSRA reportedly has 10 percent of the necessary environmental clearances in hand—and a long list of lawyers lined up to fight future reviews.

Bullet train cheerleaders may be excited now, but Proposition 1A’s financial safeguards (and California’s budget problems) remain formidable obstacles.

That is from my piece last week for City Journal. The appellate ruling is now seen as a triumph for the bullet train. When the history of this fiasco is written, it will be seen as a devastating blow.

At a May hearing, judges signified their readiness to defer to the Legislature — at least so far — in determining whether state efforts were meeting the safeguards in Proposition 1A, the 2008 ballot measure providing $9.95 billion in bond seed money for the$68 billion project.

Below is the initial reaction of Michael Brady, one of the attorneys representing Kings County and other plaintiffs targeting the California High-Speed Rail Authority. In a nutshell, he says this isn’t a sweeping victory for the state — just a victory at a very early stage of years of court fights that is tempered by the appeals court’s acknowledgment of the project’s shortcomings:

1. We are disappointed in the decision in that we think it ignores  150 years of precedent which respects the intent and the protection of the voters who engage in the initiative process.  Proposition 1A had various safeguards and protections which do apply to this case, and we question whether the court has properly interpreted those protections; the court itself on several occasions even conceded that the initial funding plan was “deficient.”

2. However, the court was dealing with what is called the INITIAL funding plan procedures of Proposition 1A; it seems to be saying that those requirements were meant to provide notice to the legislature only and not to provide a measure of protection to the voters themselves (we disagree with that);

3. We still have (and the court so indicated) an opportunity to challenge the legality of the Authority’s actions when the Authority moves to the NEXT STEP and  actually tries to access the monies in the bond fund; they have to apply for that money through a different section of the law-a section which is actually much tougher on the Authority with respect to what it has to prove;

4. For example, when the Authority applies under the 2d/updated funding plan, they have to make a stronger showing that they have enough money in the bank or firmly committed  to be able to complete the usable segment that they picked-a segment costing, in today’s dollars, about $35 billion.  They only have $6 billion of that, or 20%; that will not suffice and they will not be allowed to access Proposition 1A for construction costs until they have the full $35 billion; that will be a heavy burden;

5. We also believe that the Authority when they apply for Proposition 1A bond funds will have o demonstrate that they have obtained all the environmental clearances for the entire 300 mile usable segment that THEY picked; they have at present nothing  beyond Bakersfield , nothing through the Tehachapi’s all the way to the Los Angeles Basin; those clearances  will take years to obtain and they have delayed doing this for years; these are both heavy burdens;

6. Finally, under the 2d/updated funding plan requirements they must show that the project will be successful financially and in other respects; actually the financial situation on funding, the increased costs, the lack of private investors, the likelihood  of government subsidies (forbidden by 1A) have all deteriorated in the last 2 years, making the prospects for success very remote; this project , state -wide, will cost well above $100 billion, and currently they have 6% of that available with no prospects for significant further financial help from the federal government or from private investors. Californians will bear this enormous cost by themselves and alone.  This was never intended and is a bleak prospect.

7. Therefore, we look forward to litigating these further issues where the burdens on the Authority to meet the requirements of 1A are even heavier;

8. We are also evaluating the possibility of going to the Supreme Court on issues such as respect for the protection of the voters in the initiative process when measures were specifically enacted for their protection and are then brushed aside, contrary to the intent of the initiative.

This is from the San Francisco Business Times of Feb. 28, 2013:

“This is an important ruling and is testament to the fact that the authority is committed to delivering the high-speed rail project in accordance with the law and in partnership with the public,” Jeff Morales, the authority’s CEO, said in a prepared statement. 

This is from Associated Press via the SJMN on Thursday:

“Today’s court ruling reaffirms our successful compliance with the California Environmental Quality Act,” Lisa Marie Alley, a spokeswoman for the California High-Speed Rail Authority, said in a written statement.

This praise for a lower-court judge is not the norm for the rail authority.

It’s been sharply — even comically — critical of Sacramento Superior Court Judge Michael Kenny for his November ruling that the state had inadequate funding and environmental approvals to begin construction of the project’s initial $31 bilion, 300-mile segment. Kenny cited strict rules in Proposition 1A, the 2008 measure that provided $9.95 billion in seed money for the bullet train network.

Ruling could block ‘access’ to financial markets

Lawyers for the rail authority say Kenny doesn’t understand state law and is making judgments on the soundness of the project’s finances and its compliance with state law that should be left to the Legislature. They also said the fact that the court fight could severely delay the project was somehow a legal argument against it:

Forcing the authority to litigate the validity of the trial court’s ruling in separate appellate proceedings … could be disastrous both for the high-speed rail project and others like it.

And this is pretty incredible: State lawyers warn that putting tight legal safeguards on a really controversial infrastructure project could make it more difficult for California to borrow money! The decision …

... would effect a substantial change to a public finance system that has been allowing the state to access financial markets for decades, without providing any real alternative.

But there’s a problem. Kenny is also the guy who issued the February 2013 ruling that state officials like.

He’s a genius when he agrees with the rail authority. He’s a bozo when he doesn’t.

What really matters? What CA high court thinks

The same appellate court that upheld Kenny’s February 2013 ruling has until Aug. 24 or so to decide on the state’s appeals of his November 2013 rulings. At a May hearing, the appeals panel appeared sympathetic to the rail agency’s arguments.

If that is how it rules, that sets up a potentially huge appeal to the California Supreme Court.

The Brown administration’s position on Proposition 1A is pretty radical. It holds the courts can’t get in the way of big state projects because they’re … big — and really important!

It goes against the long history in California of propositions being battled over, and sometimes thrown out or reshaped, by the courts.

Paging Rose Bird, paging Rose Bird

Why should the execution of a transportation project established by state law be governed by the governor’s and the Legislature’s interpretation of state law, not the courts? Where’s the precedent for the judiciary being shunted aside on questions about the legality of a very high-profile public project?

If we are talking about the intent of the drafters of Prop. 1A, starting with Quentin Kopp, it is obvious they wanted the measure’s protections to really be protections — not meaningless campaign rhetoric.

If the California Supreme Court upholds an appellate ruling that says courts should butt out of big infrastructure projects, that is mind-boggling. I bet it would become a national topic.

Rose Bird the Sequel?

Maybe. Such a decision would make direct democracy seem like a sham. Never forget that the Legislature’s handling of the ballot language for Prop. 1A was so outrageous that it was emasculated by the courts and banned from any future direct writing of ballot language:

Now some appellate judges apparently think the same lame Legislature should interpret what 1A means, not the courts.

Really?

This is Part 2 of a two-part series. Part 1 is here.

The first article in this series on the crucial May 23 hearing before the Third District Court of Appeal reported that questions asked by the justices seemed to lean in one direction: toward a reversal of a lower-court decision on March 4 by Superior Court Judge Michael Kenny that would delay the high-speed rail project from moving forward.

The lawsuit contended that the project’s funding plan did not comply with the requirements of Proposition 1A, the 2008 initiative that gave voter approval to the project. If the lawsuit eventually is upheld by the California Supreme Court, it would require the California High-Speed Rail Authority to rescind its Nov. 2011 funding plan.

California Attorney General Kamala Harris was represented by Deputy Attorney General Ross Moody. Arguing for the Kings County and two residents who have brought suit to stop the project was Stuart Flashman.

Two more groups also spoke up against the project. 

Howard Jarvis Taxpayers

Attorney Tim Biddle of the Howard Jarvis Taxpayers Association insisted that the project violated the California Constitution, which mandates that the project must comply with Prop. 1A.

Specifically, he said that instead of a “high-speed” system, as voters were promised, Senate Bill 1029, the legislation funding the project, would use a “blended” system involving some high-speed trains combined with slow-speed trains.

He said the California High-Speed Rail Authority was doing this because they knew they didn’t have the money to build the project as outlined in the bond act. Biddle claimed that, if his organization didn’t make the argument today that the project has changed, it would never have the opportunity to send this back to the voters to approve the changes.

Presiding Justice Vance W. Raye, who generally seemed resolute in arguments against the project, took notes about Biddle’s comment, and acknowledged Biddle’s point about the $1.1 billion in the appropriations bill for the blended system.

Biddle argued the sale of the bonds was very important and was covered under the constitution as well.

Raye asked if that couldn’t be addressed later.  He was under the impression that, if in fact the bonds were sold for the high-speed rail project — if the project didn’t go forward somehow — the California Treasurer could give back the money to the buyers.  Raye admitted he could not remember if that had been done, but that such a giveback could be an option.

Union Pacific Railroad

Union Pacific Railroad Attorney Blaine Green was the last to speak and had less than two minutes to make his points.

Green opened by saying UPRR was the only actual railroad involved in this case.  Green’s points were only about the bond validation part of the case, and not the part of the case involved with Kings County and two residents against the project. On Aug. 22, 2013, UPRR filed a response when Attorney General Harris asked the court to validate the bonds.

Union Pacific is concerned about the scope of a bond validation action, that it was too broad.  It feared that, if the wording of the bond validation was left as written, it would confirm that the CHSRA was compliant with all factors within Prop. 1A.

In court on May 23, Green said of the bond, “It’s far overbroad.”

He argued there were other issues concerning the bond measure that were still in question, such trip time being too slow; and that blended system operations on UPRR tracks would interfere with the operation of their freight railroad.

Flashman’s conclusion 

After the arguments were given, Flashman observed outside the court:

“The justices have been confronted with a stark dichotomy.  On the one hand they have Gov.  Brown demanding, by way of the Attorney General, that the court let him move ahead with building his ‘legacy’ high-speed rail project. 

“On the other hand, they are faced with having to emasculate the clear language of a bond measure that had been placed before and approved by the state’s voters.  If they do Brown’s bidding, I fear they will do long-term damage, not only to the court’s reputation as a fair arbiter of justice, but perhaps even more importantly to voters’ trust in the meaning of language placed before them on the ballot.  The potential damage to Californians’ confidence in state government could perhaps be compared to that done to the integrity of national elections by the U.S. Supreme Court’s 2000 Bush vs. Gore decision.” 

Conclusion 

It appears the number one thing the CHSRA wants to do is start construction in the hope that they can spend the $3.5 billion in federal funds in the Central Valley and not be required to return the money.  Moody said in the beginning of his arguments that it was important to overturn Kenny’s rulings because there is a pot of money that has to be spent by September 2017.

Unfortunately, there weren’t any inquiries from the justices questioning the importance of defending the protections of a voter-approved bond measure. The questions were about the Legislature’s role and the timing of the court cases.

According to court observers, judges usually have the opinion written before they go to the hearing. The questions they asked seemed to be clarifying and testing that opinion to make sure they are as accurate as possible in their ruling. So while the court officially has 90 days to decide, they very well might decide in a 30-45 day time frame because the state asked for the decision on an expedited basis.

The hearing can be heard in it’s entirety at:
https://www.youtube.com/watch?v=twdcDrKBBVY&feature=youtu.be

Kathy Hamilton is the Ralph Nader of high-speed rail, continually uncovering hidden aspects of the project and revealing them to the public.  She started writing in order to tell local communities how the project affects them and her reach grew statewide.  She has written more than 225 articles on high-speed rail and attended hundreds of state and local meetings. She is a board member of the Community Coalition on High-Speed Rail; has testified at government hearings; has provided public testimony and court declarations on public records act requests; has given public testimony; and has provided transcripts for the validation of court cases. 

Is a green light ahead for California’s high-speed rail project?

In a crucial hearing on May 23 before the Third District Court of Appeal, questions asked by the justices seemed to lean toward a reversal of a lower-court decision on March 4 by Superior Court Judge Michael Kenny that would delay the rail project from moving forward.

The lawsuit contended that the project’s funding plan did not comply with the requirements of Proposition 1A, the 2008 initiative that gave voter approval to the bonds for the project. If the lawsuit eventually is upheld by the California Supreme Court, it would require the California High-Speed Rail Authority to rescind its Nov. 2011 funding plan and start over.

At the latest hearing, California Attorney General Kamala Harris was represented by Deputy Attorney General Ross Moody. He argued that Kenny erred in interpreting Proposition 1A. Moody said the California Legislature had the right to change what was being done.

And he said what are called the “A-K requirements” for the funding plan from Prop. 1A, now listed in Section 2704.08 of the California Streets and Highway Code, were meant as informational reporting for the Legislature.

Arguing for Kings County and two residents who have brought suit to stop the project was Stuart Flashman. He said Kenny’s decision should stand because the CHSRA’s plan didn’t follow Prop. 1A.

Presiding Justice Vance W. Raye agreed with Moody that, if objections are to be made to the project, they ought to be made in the future when the CHSRA’s second funding plan comes out just prior to construction. But that could be some time.  The design for the smallest segment, Madera to Fresno, is not complete yet; nor is that for the second segment, Fresno to Bakersfield.

A proposed second funding plan also has to be studied by an independent financial company and prove it meets many other requirements.  Then the CHSRA sends it forward to the director of finance and the chairperson of the Joint Legislative Budget Committee. Next, the Surface Transportation Board must approve the Fresno-to-Bakersfield EIR for construction.  Another critical component is the CHSRA must have agreements in place with Union Pacific Railroad and BNSF railroad before construction begins.

All this could take many months, possibly until 2015 before construction can begin in earnest for the first leg of California’s high-speed rail project.  Although it’s also possible the CHSRA could approve this the second funding plan while other work is being done concurrently.

Legislature

Moody also insisted that it was the responsibility of the Legislature, not the courts, to accept or reject the plan, even with deficiencies. The Legislature conducted months of hearings listening to opinions from both sides.

Flashman responded that the Legislature is bound to follow its own law, Assembly Bill 3034 from 2008, which included the same information from Prop. 1A. He added that these fiscal protections were added as assurances to get votes in favor of Prop. 1A, and that the courts now were required to uphold the people’s will at the ballot box, not what the Legislature might do in the future.

AB3034 stipulated that each usable segment built by the CHSRA must, before construction, complete all environmental permits, identify all funding and be high-speed rail ready – including electrification.

Doing so would be a problem because the CHSRA has not even covered electrification in its Environmental Impact Report for the first segment of the project in the Central Valley.

Separation of Powers

Other discussions centered around the separation of the legislative and judicial branches of government. Flashman told the Appellate Court that Kenny did not require the Legislature to reverse its appropriation decision.

But Associate Justice Ronald Boyd Robie said the effect was the same. At one point Robie, who challenged many of Flashman’s points, said the lawyer “was trying too hard.”

Both sides were extensively questioned by the justices. But the tone of many of the questions or statements, particularly from Robie to Flashman, seemed argumentative. As a result, it seemed Flashman had less time to make his arguments than Moody. Flashman had to take extra time to answer the questions and to counter Robie’s statements.

In addition, Flashman had to share his time with others who were party to the case such as the Howard Jarvis group and Union Pacific Railroad. These other arguments will be covered in Part 2 of this series.

Moody also was asked many questions. But for the most part the exchanges carried a more cordial and conversational tone. At times some of those questions even helped his arguments.  Moody also had a full 30 minutes to present his side.

Aftermath

After the hearing, Flashman said:

“The justices have been confronted with a stark dichotomy.  On the one hand, they have Gov. Brown demanding, by way of the attorney general, that the court let him move ahead with building his ‘legacy’ high-speed rail project.

“On the other hand, they are faced with having to emasculate the clear language of a bond measure that had been placed before and approved by the state’s voters.  If they do Brown’s bidding, I fear they will do long-term damage, not only to the court’s reputation as a fair arbiter of justice, but perhaps even more importantly to voters’ trust in the meaning of language placed before them on the ballot.  The potential damage to Californian’s confidence in state government could perhaps be compared to that done to the integrity of national elections by the U.S. Supreme Court’s 2000 Bush vs. Gore decision.”

Legal scholars sometimes contend that what justices in appeals courts say from the bench doesn’t necessarily reflect what their decisions will be. But the tone from the Third District Court of Appeal certainly indicated flipping the green light on for the high-speed rail project.

The hearing can be heard in it’s entirety at https://www.youtube.com/watch?v=twdcDrKBBVY&feature=youtu.be

Kathy Hamilton is the Ralph Nader of high-speed rail, continually uncovering hidden aspects of the project and revealing them to the public.  She started writing in order to tell local communities how the project affects them and her reach grew statewide.  She has written more than 225 articles on high-speed rail and attended hundreds of state and local meetings. She is a board member of the Community Coalition on High-Speed Rail; has testified at government hearings; has provided public testimony and court declarations on public records act requests; has given public testimony; and has provided transcripts for the validation of court cases. 

The second trial, now expected to proceed this summer before Sacramento Superior Court Judge Michael Kenny, will focus on whether the project’s present plan complies with Proposition 1A, the 2008 bond measure providing it with $9.95 billion in seed money — in particular the guarantee that the train get from downtown Los Angeles to downtown San Francisco in no more than two hours and 40 minutes. Kings County’s attorneys say that’s impossible with the present plan to have actual high-speed rail cars only going from northern Los Angeles County to Fresno.

Attorney General Kamala Harris had asked the judges to block the trial with an “extraordinary writ” on these grounds:

“The trial court lost sight of the purpose of the Bond Act, which is to build a high-speed-rail system that will foster the future prosperity of the State. The Bond Act must be reasonably interpreted to achieve that purpose.”

The judges concluded that the true “reasonable interpretation” was that the plaintiffs had raised genuine issues that deserved full consideration at trial.

Argument that was summarily rejected also made in other appeal

The first trial, also before Judge Kenny, dealt with the legality of the project’s financing plan and the sufficiency of its environmental reviews.

Kenny said both were inadequate and blocked the use of state bond funds until the problems were remedied.

That ruling is now being considered on an expedited basis by a state appellate court at the direction of the California Supreme Court. And what is the argument the state is using to challenge those rulings? Essentially the same argument that was rejected last week. This is from the Sacramento Bee in January:

“The administration said in a request for expedited review that ‘the trial court’s approach to these issues cripples government’s ability to function’ and could have implications for other infrastructure projects.

“The state argues the normal appeals process could take years to resolve and is ‘not a real choice.’

“‘Since the project’s inception, opponents of high-speed rail have tried to block its construction,’ the filing said. ‘Now, two rulings of the Sacramento Superior Court — which are otherwise unreviewable as a practical matter — imperil the project by erecting obstacles found nowhere in the voter-approved bond act.”

A lawyer familiar with the case mocked this argument as amounting to, “Damn the legal niceties, this mean judge is getting in our way.”

It failed last week to persuade appellate judges to delay bullet train trial no. 2. It doesn’t seem likely to persuade appellate judges to discard the results of bullet train trial no. 1.

On Jan. 24, Gov. Jerry Brown and Attorney General Kamala Harris asked the California Supreme Court to conduct an expedited appeals process that considered the state’s newly filed challenges to a tentative ruling in August and a finalized opinion in November from Sacramento Superior Court Judge Michael Kenny.

The respected veteran judge concluded that the state High-Speed Rail Authority did not have a legal business plan because it had not identified reliable funding for the 300-mile “initial operating segment,” a cost the authority earlier pegged as $31 billion. Kenny also said the state had not completed adequate environmental reviews for the initial segment.

In a strategy that on its surface seems beyond peculiar, the office of Attorney General Kamala Harris did not challenge the core premise of Kenny’s tentative ruling — that the project didn’t have a legal business plan. Instead, the AG merely said the project could continue for now with the state using federal grants that were already in hand.

But after Kenny reacted by putting out a final judgment that found, yunno, the project still didn’t have a legal business plan, the sniping started from the governor’s office and state Democrats. After a month, it led Harris and Brown to seek an expedited review. In February, the state Supreme Court agreed to review their request — but assigned the chore to the 3rd District Court of Appeal. On Feb. 15, the appellate court said sufficient issues had been raised about Kenny’s ruling and the importance of timeliness to the project and that it would conduct an expedited review.

I thought and still think the most likely explanation for this shoddy legal work is that the governor — playing 3-D chess to the rest of the world’s checkers — wanted the dubious, controversial project killed off ASAP. Lawyers I talked to with no stake in the case expressed disbelief that Kenny would hold what’s known as a “remedies” hearing only to have the state provide no remedies to the legal deficiencies he cited in his tentative ruling.

An unexpectedly slow ‘expedited review’

Remember, in its first appeal — when it was supposed to make its full case — the state didn’t dispute that it was breaking the law. This alone prompted some observers to predict the appellate court would rule within weeks in favor of bullet-train opponents.

Nine weeks later, however, the appellate court still is taking testimony and reviewing evidence. A quick decision affirming Kenny didn’t happen. It sounds to me like this case will drag along — with nothing “expedited” about it.

In the big picture, nothing has changed. The bullet train has no funding options after it blows through its initial $13 billion or so in secured state and federal funding. No investors will come forward without the possibility of taxpayer subsidies to protect them if the project goes south, and such subsidies are against state law. In the sequester era of sharp limits of domestic discretionary spending, Congress certainly isn’t going to fund a hugely costly public works project just for one state.

But in the medium picture, if the appeals judges overturn Kenny or in other ways muck with his opinion, we could soon see the state spends billions of dollars on an initial segment of track for a project that will never be completed.

Stranger things have happened. Every day the “expedited review” drags on makes me worry more that the hoped-for summer 2014 denouement to the bullet-train insanity might not happen. Instead, we’ll have it to kick around for at least another year.

On the bright side, if the Brown administration really does start the initial segment in the middle of nowhere without future funding anywhere in sight, maybe then we’ll finally see the establishment ninnies stop proclaiming Jerry to be a good governor just because budgets pass on time.

A $13 billion abject debacle is pretty tough to ignore.

Remember, until January, Brown and rail authority board chairman Dan Richard had been dismissive of the huge court losses suffered by the state in August and November in Sacramento Superior Court.

In those decisions from Judge Michael Kenny — the first a tentative finding pending a state response, the second definitive — he held that the project would break state law if it used state funds on construction because it didn’t have enough money in hand to finish the 300-mile initial operating segment and because it had not completed adequate environmental reviews. Both requirements were laid out in the ballot language of the 2008 measure providing $9.95 billion in state bond money for the project.

CalWatchdog readers may have heard my theory that Brown has wanted to surreptitiously pull the plug on the troubled, almost-certainly doomed project since late last summer — just without getting any of the blame. Of late, the dean of the Sacramento press corps is offering up my theory, though typically without giving credit.

My theory tidily explains the bizarre actions of the rail authority’s legal team. Kenny’s August ruling identified the funding and enviro deficiencies with the state business plan, but in the state’s “remedies” brief, no remedies were offered to these deficiencies. This means the state didn’t challenge the fundamental finding of Kenny in August — that the state had an illegal business plan.

Without any challenge to his core findings, Kenny reaffirmed them in his November final decision. As noted above, Jerry pretended this was no big deal.

But then in January, the governor did his U-turn, demanding quick resolution to the project’s legal battles. The legal brief the AG’s office filed on behalf of the governor and the rail authority was strange, even insulting — essentially arguing that the courts had no standing to block a big state project.

Accelerating the legal ‘dominoes’

So why would Brown do this instead of just letting the doomed project play out — the course set in motion in the fall when the “remedies” brief offered by the state contained no remedies?

Here’s a theory that makes lots of sense: It wouldn’t hurt the gov’s strategy of trying to kill the project stealthily. But it would stymie a mini-revolt of Democratic elected officials who either have lost patience with the headache-riddled project or who perceived it as a political risk to keep backing the boondoggle.

“I heard … that there was about to be a revolt; but then the Gov. directed this writ to be filed and told everyone to shut up,” an insider told me in an email.

This didn’t stop Lt. Gov. Gavin Newsom from bailing on the project on Feb. 15. But it apparently held off the mini-revolt by showing the governor wanted a decisive resolution of the issue.

Checkers vs. chess vs. barking dogs

The people covering Sacramento who are playing checkers buy the nominal narrative that this isn’t strategery, it’s just a legal fight playing out with no hidden motives.

The people covering Sacramento who are playing chess absolutely can see that asking for a swift resolution of legal challenges was driven by the motive of protecting at-risk Dem electeds from having to defend an insane project.

But my god, I have to hope that the people covering Sacramento who pay attention to the dogs that didn’t bark will eventually look at October’s smoking gun.

In August, Judge Kenny said the state’s business plan (Jerry Brown’s business plan) for the bullet train broke the law. In October, the state (Jerry Brown) responded essentially by saying, “OK, you make a good point, we’ll just use federal money for now.”

Yet three months later, the state (Jerry Brown) said the judge was nuts.

Hellllllllooooooo!

Hellllllllllllllllllllllllooooooooooooooooooooooooo!!!!!

Sacramento media: Isn’t this, yunno, news?

Sheesh.

Dumb DE dumb dumb. Dumb de dumb dumb DUMB!

This is Part 2 of a three-part series on the Draft 2014 Business Plan of the California High-Speed Rail Authority. Part 1 is here.

On Friday, California’s 3rd District Court of Appeal kept California’s high-speed rail project chugging at least a little longer. The court stayed a November order by Sacramento County Superior Court Judge Michael Kenny to delay the project because of violations to Proposition 1A, the High Speed Rail Act, which voters approved in 2008.

Reported the Los Angeles Times, “The state is still restricted from issuing bonds. The appeals court asked the original plaintiffs, Kings County and two farmers, to file a brief by March 17 and the state to respond within 15 days.”

The stay effectively freezes Kenny’s ruling requiring the California High-Speed Rail Authority to rescind its funding plan by March 21. 

Despite the continued legal uncertainty, the CHRSA on Feb. 7 to issue its Draft 2014 Business Plan with few changes from its 2012 plan, as was reported in Part 1 of this series on the many  questions still being raised about the project.

By statute, the final version of the 2014 plan must be presented to the Legislature by May 1.

If the Court of Appeal does not make a ruling without a new bill in the Legislature extending the May 1 deadline, the CHRSA may have to proceed with its  current plan, plus any comments it receives from the public. And if Kenny’s ruling is upheld, significant changes later could call for a new funding plan and a revised business plan.

The 2014 Draft Business Plan does take into account litigation risks:

“In the normal course of business associated with implementing a complex transportation infrastructure project, public agencies typically address a range of litigation challenges and adjudicatory administrative processes related to project funding, environmental clearances, property acquisition and contract disputes. These litigation challenges have the potential to affect project schedules, costs and financing.”

Legal risk

So although the actions of  Kenny are not specified in the Draft 2014 Business Plan, the CHRSA clearly is taking into account the legal risk to the program.

The petition to the Court of Appeal to stay Kenny’s order came from the CHRSA, Gov. Jerry Brown, Treasurer Bill Lockyer and other state officials. It suggested a serious situation: 

“The high-speed rail project may have been able to tolerate a two-year delay in access to bond funds, but the delay it now faces as a result of the trial court’s decisions risks the catastrophic, for two reasons. First, the federal grant funds, by their terms, must be matched by the State and must be spent by 2017. The kind of delays the Authority now faces puts those billions of dollars in jeopardy, because it is not clear that bond proceeds will be available in time to match. Second, opponents of the project have used the trial court’s ruling to fuel political efforts to withhold the federal grants entirely.”

Yet just last December, the response to Kenny’s order was less alarming. CHSR Chairman Dan Richard insisted, “[N]othing in those rulings changes our ability to move forward. We’re ready to build this project.”

The Court of Appeal is a three-judge panel and  could be late spring at the earliest that it makes it makes a decision on this first part of the CHSRA court case.

Another court matter heard

Coincidentally, the same day in Sacramento Superior Court, Judge Kenny heard arguments on whether the second part of this complicated case should move forward.

According to AP, “Attorneys representing Central Valley landowners asked a Sacramento County Superior Court judge Friday to hear arguments about whether California’s high-speed trains would be able to travel as fast as voters were promised when they approved financing for the project.”

The landowners, whose property would be taken under eminent domain to build the train, insist that the failure to meet the speed requirements of Prop. 1A means breaking the project’s contract with voters.

Last August, the Independent Peer Review Group reviewing the train project wrote a letter to legislative leaders. The letter warned that the San Francisco-to-San Jose route produced non-stop run times of 37 and 39 minutes, exceeding the maximum 30 minutes mandated by the bond measure. The CHRSA’s new 2014 Draft Business Plan even included the peer letter, attached at the end.

State’s case

In court, Sharon O’Brady of the state Attorney General’s office presented the state’s case. She argued it was too early to go to trial since the CHSRA could change directions on the project. She said the judge’s ruling meant the CHRSA needed to come up replacement for the first funding plan and write a second funding plan before it can proceed to construction.

And she pointed out the Legislature entrusted judgment to the CHRSA, which has an extensive administrative record to rely on.

Stuart Flashman, co-counsel for the landowners, noted that the CHRSA’s Revised 2012 Business Plan from April that year outlined a “blended system” — including both high-speed and lower-speed segments — between San Francisco to San Jose. Flashman told the court the blended system did not comply with Prop. 1A, and therefore could not be paid for with its bond funds.

Judge Kenny has 90 days to rule on whether or not this second part of the case will move forward.