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A three-year legal battle over the environmental impact of freight rail on the North Coast is headed to the state Supreme Court.

The case involves two environmental groups who are pushing for more rigorous study of the effects of rail service in the ecologically sensitive Eel River Canyon in Mendocino and Humboldt counties. The groups are pitted against railroad operators who contend they are exempt from state law that mandates environmental studies for land-use projects.

The suit against the North Coast Railroad Authority is one of two state appellate court cases to weigh whether public rail agencies are subject to state environmental law or operate solely under federal jurisdiction. The other case involves the state’s high-speed rail project.

The Supreme Court agreed last week to take up an appeal from environmental groups in the NCRA case after the two appellate courts came to opposite conclusions on the central legal question.

Meanwhile, a separate ruling from a federal rail regulator on Monday could ensure that both cases end up in federal court.

“We don’t know where this is going to go. There’s a lot of potential for craziness,” said Patty Clary, executive director for Californians for Alternatives to Toxins, which, along with Friends of the Eel River, brought the suit against the NCRA.

The lawsuit challenged the railroad agency’s 2011 environmental impact report, prepared under provisions of the California Environmental Quality Act, or CEQA, and paid for by $3 million in state funds. The public agency manages the Northwestern Pacific Railroad tracks from Eureka to Schellville. Only a 62-mile section of rail, from Windsor to Schellville, is currently in operation with twice-weekly freight service.

The environmental groups contend that the agency should have studied impacts to the entire 316-mile rail line, all the way to Humboldt Bay, and not just the southern section up to Willits that the NCRA says it intends to open in the foreseeable future.

For its part, the railroad agency said it was never required to comply with state environmental law and did its environmental impact report voluntarily.

A Marin County Superior Court judge and the 1st District appellate court sided with the rail agency, ruling that federal law regulating interstate railroads trumps state law.

“Freight service, engaged in interstate commerce, is the exclusive domain of federal regulators and not subject to California law, including CEQA,” said Mitch Stogner, NCRA executive director. “We’ve already won two rounds in court.”

But the 3rd District appellate court ruled that the state agency building the bullet train from San Francisco to Los Angeles must comply with CEQA since it is financed by voter-approved bonds. The conflicting opinion paved the way for the Supreme Court review.

“The opinion of the court of appeals (in the high-speed rail case) was quite frank,” said Scott Greacen, executive director of Friends of the Eel River. “It said the facts (in the two cases) are parallel. The fundamental difference is in how you read the law.”

New developments just this week, however, could trump any state court decision.

On Monday, the U.S. Surface Transportation Board weighed in, stating that its authority over the high speed rail project preempts state law. The 2-1 ruling could open the door to federal lawsuits in both cases, said Clary, director of the anti-toxins group.

“The California Supreme Court is not ruled by the Surface Transportation Board,” Clary said. “If there is a clash, guess where this is going to end up? In federal court.”

The NCRA has said it has no plans to rebuild the tracks north of Willits, especially the section through the Eel River Canyon, which is prone to flooding and mudslides. Stogner said completing the rail line to Eureka would cost upwards of $1 billion. Northwestern Pacific’s freight service on NCRA’s tracks benefits air quality by taking trucks off the road, he said.

“NCRA is trying to take big rigs off Highway 101 and reduce greenhouse gases,” he said. “It’s ironic that environmental groups want to put an end to freight rail on the North Coast.”

Environmentalists say that NCRA has never officially abandoned plans to rebuild in the Eel River Canyon and continues to search for funds for the project. The agency should have to consider the impacts to the whole route, the groups say.

“There’s a real role for figuring out the environmental impacts so that you can mitigate them,” Greacen said. “If you rebuild the rail line, you’re going to have significant impacts on the river. Until we do an analysis, we don’t know what the impacts will be.”

You can reach Staff Writer Matt Brown at 521-5206 or matt.brown@pressdemo​crat.com. On Twitter @MattBrownPD.