Jerry Brown Appeals HSR Bond Decision to CA Supreme Court
Governor Jerry Brown, the California High Speed Rail Authority, and Treasurer Bill Lockyer are appealing to the California Supreme Court to overturn Sacramento Superior Court Judge Michael Kenny’s ruling last year that the state cannot sell Prop 1A bonds because Congressional Republicans refuse to authorize new federal funding, throwing the earlier funding plan into question:
A petition filed late Friday seeks an expedited review and asks the court to overturn two decisions that prevented the state from selling $8.6 billion in voter-approved bonds. The lower-court rulings also require the high-speed rail authority to write a new financing plan.
The governor, the rail authority and the state treasurer argue that the rulings prevent California from quickly starting construction on the $68 billion project. They also say it could hurt California’s ability to finance other voter-approved projects.
The Sacramento Bee has more:
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.”
Here’s the actual filing, and some choice quotes are below the embed:
just by filing litigation and without having to prove a case, opponents can effectively block financing and shut down a project. If there are multiple issuances of bonds to fund the project in phases, serial litigation can subject government works to the equivalent of ‘death by a thousand cuts.’
Absolutely right. Those who filed the original lawsuit lost at the ballot box and lost in the Legislature. So they threw a Hail Mary pass and incredibly, the court ruled in their favor despite the fact that the funding plan did not violate statute or the state constitution:
Absent evidence that the Authority or the Committee violated statutory or constitutional requirements – and there is none – the trial court should have entered a validation judgment in favor of Petitioners. The fact that the Authority requested and the Committee approved issuance of bonds demonstrates its desirability as a matter of law.
Further, the filing points out that the judge’s proposed remedy is essentially pointless and moot:
The writ compels an idle act: the purpose of the first funding plan was to inform the Legislature’s decision to appropriate funds, the appropriation was made, and the appropriation cannot be changed by a new funding plan. Once the Legislature made its decision, the first funding plan was moot. Compelling the Authority to issue a new plan serves no useful purpose, but it does create confusion and opportunities for mischief….
…if the Tos challengers wanted to stop the Authority from using bond proceeds to build high-speed rail in the Central Valley, they had to allege and prove that the Authority had spent or committed bond proceeds in violation of the Bond Act. As the trial court held, this they failed to do. Accordingly, no writ should have issued….
…because there will not be another request for an initial appropriation to construct high-speed rail in the Central Valley, there is no need for another first funding plan. The writ orders the Authority to engage in a pointless exercise, and thus violates the maxim that the law cannot be used to compel and idle act.
In short, because the first funding plan was designed to inform the Legislature when they debated whether to release the bond funds – which they did in July 2012 – that funding plan doesn’t have to be revised since it’s no longer needed. The Authority is already updating its business plan, including the financing plan, for future purposes and that will likely address questions of future federal funding. But that shouldn’t invalidate bond sales because, as Judge Kenny found, the Legislature already authorized it, was free to do so, and that authorization is not rescinded.
The California Supreme Court should grant expedited review and should overturn Judge Kenny’s ruling.