New litigation to derail California High Speed Rail bonds

california high-speed rail-bonds-litigationThe courts should not approve the sale of $8.6 billion in California High Speed Rail Bonds because the state has not complied with core legal and constitutional requirements designed to guarantee the project’s integrity.

So argues Pacific Legal Foundation (PLF) in a brief filed this week with the California Third District Court of Appeal, in litigation over whether the bonds should be “validated” by the courts so they can be sold without further hindrances. The Third District is considering the state’s petition for writ of mandate, which asks that a lower court be ordered to validate the bonds.

The case is High Speed Rail Authority v. All Persons Interested. PLF’s brief along with a podcast are available at PLF’s website: www.pacificlegal.org.

California High Speed Rail Bonds called into question

In opposing the state’s petition and calling for the bonds to be rejected, PLF attorneys represent, free of charge, the First Free Will Baptist Church of Bakersfield, which is designated as a “Real Party in Interest” in the case.  Because the church opposed the bonds when the issue of validation was before the trial court, the state named the church as an opposing party in the state’s petition for writ of mandate at the appellate level.

“The [California High Speed Rail Bonds] shouldn’t be approved, because the state is trying to speed this rail project past key checkpoints of accountability — statutory accountability, constitutional accountability, and basic governmental accountability to the public interest,” said PLF attorney Harold Johnson.

First, state officials want to be shielded from some elementary oversight,” Johnson continued. “They’re arguing against even the most lenient judicial review of the High Speed Rail Finance Committee, which gave the OK to moving forward with the bond-sale process. The state wants this committee’s decision-making to be rubber-stamped by the judiciary. That’s no way to ensure the propriety of the process — and no way to run a railroad.”

Indeed, Sacramento Superior Court Judge Michael Kenny declined to validate the bonds precisely for this reason — because the state did not provide information and evidence that would allow the court to review the Committee’s decision-making process, even in a deferential way.  The state’s petition for writ of mandate asks that the Third District vacate Judge Kenny’s ruling and order him to validate the bonds.

In addition to supporting Judge Kenny’s ruling on this evidence issue, PLF also argues that state officials haven’t complied with a fundamental requirement of the California Constitution. Specifically, PLF focuses on Article XVI, Section 1 — the “debt limit,” which requires voter approval for major state debt and for the specific project that the debt is intended to fund.

“The state is violating the California Constitution, because it has failed to show in its court pleadings that today’s High Speed Rail project is what voters approved six years ago,” said Johnson.

California voters approved billions of dollars in for California High Speed Rail bonds for the project, by enacting Proposition 1A in 2008. However, the plan has been significantly modified since then — including the introduction of what is called a “blended” design, which would use existing commuter tracks for some of the High Speed Rail project in some urban areas. Moreover, the Legislature authorized $1.1 billion in bond proceeds to be used on projects in conjunction with local transportation agencies in the Bay Area and Los Angeles County.

Funny Money: California High Speed Rail Bonds Bait and Switch

“Is the state pulling a bait and switch on California taxpayers?” asked Johnson. “For instance, are the local spending projects really about genuine high speed rail, or will they fund a grab bag of goodies for commuter transit agencies and their patrons in the Legislature?  In general, are the spending plans and project design of today the same as voters authorized in 2008?

“In their litigation to get the bonds validated by the courts, the state hasn’t even attempted to answer these questions,” said Johnson. “Under the California Constitution, mum cannot be the word on these crucial matters.  The bonds can’t be approved by the courts if it’s not clear that the proceeds will be used as originally advertised, so taxpayers won’t be taken for a ride.”

About Pacific Legal Foundation

Donor-supported Pacific Legal Foundation is a legal watchdog organization that litigates for limited government, property rights, and free enterprise in courts nationwide.  PLF represents all its clients without charge.

 

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