A three-judge panel of California’s 1st District appellate court ruled Monday that North Coast freight rail operators do not need to do a more rigorous study of the railroad’s environmental impacts.

The decision opens the door for the North Coast Railroad Authority and its partner Northwestern Pacific Railroad to expand freight service along the North Coast. Environmental groups Friends of the Eel River and Californians for Alternatives to Toxics, which sued the rail operators, have not decided whether to appeal the ruling to the state Supreme Court.

In siding with the defendants, the court upheld a May 2013 Marin County Superior Court ruling that said freight rail traffic is interstate commerce under the domain of federal regulators and is not subject to the California Environmental Quality Act. The act mandates that state and local agencies study and disclose environmental impacts of proposed projects and adopt measures to mitigate those impacts.

Rail officials said the ruling was a significant legal benchmark.

“This establishes an important principle, that freight rail is not subject to the whimsy of state and local laws,” said Mitch Stogner, NCRA’s executive director. “It’s federally regulated.”

Currently, freight trains run about twice a week between Napa and Windsor, but the NCRA said the three-year-old lawsuit had held back its effort to recruit new clients for the existing service and to raise the estimated $5 million to rehabilitate the tracks in the next section of line it hopes to open, between Windsor and Cloverdale.

“Now that this cloud has been lifted, it will be easier to get interest from shippers and funding for repairs,” Stogner said.

The two environmental groups had argued the agency’s 2011 environmental impact report, prepared under provisions of state law and paid for by $3 million in state funds, should have considered additional factors, including toxic substances that might be stirred up by construction and rail operations. They also said the agency should have examined all 316 miles of rail it controls, all the way to Humboldt Bay, not just the southern 142 miles from Napa to Willits.

The southern section is the only track NCRA says it intends to open in the foreseeable future. The northern stretch runs through the Eel River Canyon, an unstable region prone to flooding and landslides. Heavy rains have washed away portions of the tracks, and repairs could cost $500 million or more.

Patty Clary, executive director of Californians for Alternatives to Toxics, said it was too early to decide whether to pursue an appeal.

“We’re very disappointed with the decision,” she said.

The groups have until Oct. 14 to appeal the ruling.

You can reach Staff Writer Matt Brown at 521-5206 or matt.brown@pressdemocrat.com.

Editor’s note: Douglas Bosco, an investor and legal counsel for the Northwestern Pacific Railroad Company, is also the general counsel for Sonoma Media Investments, which owns The Press Democrat. The disclosure was missing in a story on published on page B1 of the newspaper Wednesday.