California Supreme Court issues ruling in closely watched North Coast rail case

The California Supreme Court ruled Thursday that publicly owned railroads are not exempt from the state’s bedrock environmental law, a decision hailed by environmental watchdogs on the North Coast and opponents of California’s high-speed rail project.

Scott Greacen, executive director of Friends of the Eel River, called the court ruling “vindication.”

The Arcata-based group sued the North Coast Railroad Authority in a bid to force the state-chartered agency to study the environmental impacts of running freight along a 316-mile rail line that traverses Sonoma, Mendocino and Humboldt counties and runs through the Eel River canyon.

Greacen said as a result of the Supreme Court decision, NCRA won’t be able to rebuild the line through the canyon “without taking a hard look at the environmental impacts, which has been the goal all along.”

More broadly, the court ruling could have major implications for the state’s high-speed rail project. Several court cases are pending in state courts seeking to hold the California High-Speed Rail Authority accountable for construction and operation of the service.

“What this says is that the High Speed Rail Authority still has to follow” the California Environmental Quality Act, or CEQA, said Stuart Flashman, an Oakland attorney who is representing Kings County and several other plaintiffs in a related federal case currently before the 9th Circuit Court of Appeal.

Other legal observers said such review could potentially slow down construction of the high-speed rail line, possibly forcing state officials to move the line to other, less environmentally sensitive locations.

The high court ruling stems from a yearslong standoff between the North Coast Railroad Authority, which argued it was subject only to federal oversight, and environmental groups, who sought to make the public rail agency follow CEQA and the extensive environmental studies it requires for various projects.

A Marin County Superior Court judge and the 1st District appellate court sided with the rail agency. But the 3rd District appellate court ruled, in a separate case, that the state agency building the bullet train from San Francisco to Los Angeles must comply with CEQA because it is financed by voter-approved bonds. The conflicting opinion paved the way for the state Supreme Court review.

Thursday’s opinion, written by Chief Justice Tani Cantil-Sakauye and joined by five of the court’s six other justices, essentially concluded that application of state law to govern a “subdivision of the state” - in this instance, a public railroad - does not necessarily constitute regulation in violation of federal law governing interstate commerce, which seeks a national and unified system of railroad lines.

The court found no clear language in federal law “that would direct us to the surprising conclusion that a state must operate without its usual tools and guidelines when it becomes an owner-participant in the railroad industry.

NCRA was formed by the state Legislature in 1989 to ensure continued rail service along the Northwestern Pacific rail line.

At the same time, the court ruled CEQA does not apply to a private entity operating on a public rail line, and they denied the environmental groups’ effort to force Northwestern Pacific Railroad Company, the freight hauler, to abandon deliveries along portions of the line where such shipments already are occurring.

In her dissent, Justice Carol Corrigan stated she did not follow the logic of the court claiming that applying CEQA to a private entity - the freight operator - amounts to “regulation,” whereas applying the same standard to a public entity - NCRA - does not. Railroad officials interpreted the court’s ruling to mean Northwestern Pacific has the “absolute right to continue freight operations,” subject only to federal law, said Mitch Stogner, NCRA’s executive director.

Doug Bosco, a co-owner of Northwestern Pacific, said he viewed the court’s ruling “as a victory for the ability to operate the freight railroad. The court made it clear that can’t be touched.”

Bosco is an investor in Sonoma Media Investments, which owns The Press Democrat.

However, the court majority in its ruling stated that Northwestern Pacific’s right to carry on with service despite the application of CEQA to the public railroad “is a question that is beyond the scope of this case.”

The court also acknowledged that applying CEQA to the public railroad may impact the freight operator, “but this is merely derivative of the state’s efforts at self-governance in this marketplace.”

Environmental groups pressed for such things as toxic waste cleanup along the tracks and engines that run on cleaner fuel, while also posing questions about how extended freight operations - into the remote Eel River canyon, for example - might impact wildlife habitat.

The legal dispute now heads back to the Marin court, where Stogner said NCRA will continue to claim the public agency and Northwestern Pacific are exempt from CEQA.

“We would continue to argue that repairs to the tracks, bridges and tunnels within an existing right-of-way are preempted by federal law, and only the Surface Transportation Board would have a say on such repairs,” Stogner said.

He also reiterated that NCRA has no plans “in the foreseeable future” to rebuild the rail line north of Willits to accommodate freight service. The cost for that work has been estimated at $1 billion.

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