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Friends of River v. North Coast Railroad Authority

California Court of Appeals, First District, Fifth Division

September 29, 2014

FRIENDS OF THE EEL RIVER, Plaintiff and Appellant,
NORTH COAST RAILROAD AUTHORITY et al., Defendants and Respondents NORTHWESTERN PACIFIC RAILROAD COMPANY, Real Party in Interest and Respondent. CALIFORNIANS FOR ALTERNATIVES TO TOXICS, Plaintiff and Appellant,
NORTH COAST RAILROAD AUTHORITY et al., Defendants and Respondents; NORTHWESTERN PACIFIC RAILROAD COMPANY, Real Party in Interest and Respondent.


[As modified Oct. 17, 2014]

Marin County Superior Court Case Nos. CIV1103591, CIV1103605, Faye D'Opal, Roy O. Chernus, Judges.

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Shute Mihaly & Weinberger, Ellison Folk, Amy J. Bricker, Edward T. Schexnayder and Laura D. Beaton for Plaintiff and Appellant Friends of the Eel River.

Law Offices of Sharon E. Duggan and Sharon E. Duggan for Plaintiff and Appellant Californians for Alternatives to Toxics.

Klamath Environmental Law Center and William Verick for Plaintiff and Appellant Californians for Alternatives to Toxics.

Helen H. Kang and Ashley Pellouchoud, Environmental Law and Justice Clinic at Golden Gate University School of Law for Plaintiff and Appellant Californians for Alternatives to Toxics.

Deborah A. Sivas, Environmental Law Clinic and Mills Legal Clinic at Stanford Law School for Plaintiff and Appellant Californians for Alternatives to Toxics.

Sean B. Hecht, Frank G. Wells Environmental Law Clinic at UCLA School of Law for Natural Resources Defense Council, Planning and Conservation League, and Sierra Club as Amici Curiae on behalf of Plaintiff and Appellant.

Fredric Evenson and Brian Acree for Ecological Rights Foundation as Amicus Curiae on behalf of Plaintiff and Appellant.

Neary & O'Brien and Christopher J. Neary for Defendants and Respondents North Coast Railroad Authority and Board of Directors of North Coast Railroad Authority.

Cox, Castle & Nicholson, R. Chad Hales and Andrew B. Sabey for Real Party in Interest and Respondent Northwestern Pacific Railroad Company.   

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Law Office of Douglas H. Bosco and Douglas H. Bosco for Real Party in Interest and Respondent Northwestern Pacific Railroad Company.



The North Coast Railroad Authority (NCRA), a public agency established by Government Code section 93000 et seq., entered into a contract with the Northwestern Pacific Railroad Company (NWPRC), allowing the latter to conduct freight rail service on tracks controlled by NCRA. Two environmental groups, Friends of the Eel River (FOER) and Californians for Alternatives to Toxics (CAT), filed petitions for writ of mandate under the California Environmental Quality Act (CEQA; Pub. Resources Code, §§ 21050 et seq., 21168.5) to challenge NCRA's certification of an environmental impact report (EIR) and approval of NWPRC's freight operations. The trial court denied the petitions, concluding CEQA review was preempted by the ICC Termination Act of 1995 (ICCTA; 49 U.S.C. § 10101 et seq.) and rejecting petitioners' claim that NCRA and NWPRC were estopped from arguing otherwise.

FOER and CAT (collectively, petitioners) appeal. They contend (1) the ICCTA preempts only the “regulation” of rail transportation, whereas NCRA agreed to conduct a CEQA review of the rail operations and related repair/maintenance activities as part of a contract allowing it to receive state funds; (2) NCRA and NWPRC are estopped from claiming no EIR was required, due to positions taken in previous proceedings; and (3) the EIR was insufficient because, among other things, it improperly “segmented” the project, given that additional rail operations were contemplated on other sections of the line. We affirm.[1]


A. The ICCTA and Federal Regulation of Railroad Service

“Congress has exercised ‘broad regulatory authority' over railroads for more than a century. [Citation.] The Interstate Commerce Commission, created by the Interstate Commerce Act (Feb. 4, 1887, ch. 104, 24 Stat. 379) in 1887, was abolished by the ICCTA in January 1996, and the Surface Transportation Board (STB) was created in its stead. [Citation.] The purpose

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of the ICCTA was to ‘eliminate many outdated, unnecessary, and burdensome regulatory requirements and restrictions on the rail industry.' [Citation.]” (People v. Burlington Northern Santa Fe Railroad (2012) 209 Cal.App.4th 1513, 1517 [148 Cal.Rptr.3d 243] (Burlington Northern).)

The ICCTA grants the STB (federal Surface Transportation Board) jurisdiction over rail operations, whether or not they take place entirely within a single state. This jurisdiction “is exclusive. Except as otherwise provided in this part, the remedies provided under this part... are exclusive and preempt the remedies provided under [f]ederal or [s]tate law.” (49 U.S.C. § 10501(b).)

Before a rail carrier can operate, it must obtain a certificate from the STB giving it permission to do so. (49 U.S.C. §§ 10901, 10902.) Depending on the nature of the proposed operation, the applicant may be required to perform an environmental review under federal law, including the National Environmental Policy Act of 1969 (NEPA). (42 U.S.C. § 4321 et seq.; 49 C.F.R. §§ 1105.6, 1105.7 (2014); see Missouri Mining, Inc. v. Interstate Commerce Commission (8th Cir. 1994) 33 F.3d 980, 983 (Missouri Mining).) The STB may exempt an applicant from normal certification requirements, including environmental review, under certain conditions. (49 U.S.C. § 10502; 49 C.F.R. §§ 1121.1 et seq. (2014), 1150.31 et seq.; Missouri Mining, at pp. 983-984.) An STB order is subject to judicial review in the federal court of appeals. (28 U.S.C. § 2321(a).)


CEQA is a comprehensive scheme under California state law designed to provide long-term protection to the environment. (Mountain Lion Foundation v. Fish & Game Com. (1997) 16 Cal.4th 105, 112 [65 Cal.Rptr.2d 580, 939 P.2d 1280].) It requires public agencies such as NCRA to analyze, disclose and mitigate the significant environmental effects of projects they carry out or approve and to prepare an EIR for any project that may have a significant effect on the environment. (Pub. Resources Code, §§ 21151, 21100, 21080, 21082.2; Muzzy Ranch Co. v. Solano County Airport Land Use Com. (2007) 41 Cal.4th 372, 379-381 [60 Cal.Rptr.3d 247, 160 P.3d 116].)

In determining what action is appropriate under CEQA, an agency must engage in a three-step process. (Tomlinson v. County of Alameda (2012) 54 Cal.4th 281, 286 [142 Cal.Rptr.3d 539, 278 P.3d 803] '(Tomlinson).) First, it determines whether an action undertaken, supported or approved by a public agency amounts to a “project, ” defined as “an activity which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.” (Pub. Resources Code, § 21065; see Tomlinson, at p. 286.) Second, the agency decides whether it is

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exempt from compliance with CEQA under a statutory exemption or a categorical exemption set forth in the applicable regulations. (Pub. Resources Code, §§ 21080, 21084, subd. (a); Cal. Code Regs., tit. 14, § 15300; Tomlinson, at p. 286.)

If the project is not exempt, the agency must engage in the third step and determine whether it may have a significant effect on the environment. If the answer is no, it must adopt a negative declaration or mitigated negative declaration to that effect; if the answer is yes, an EIR must be prepared before approval of the project. (Pub. Resources Code, §§ 21100, subd. (a), 21151, subd. (a); Tomlinson, supra, 54 Cal.4th at p. 286.) When economic, social, or other conditions make alternatives or mitigation measures infeasible, a project may be approved in spite of significant environmental damage if the agency adopts a statement of overriding considerations and finds the benefits of the project outweigh the potential environmental damage. (Pub. Resources Code, §§ 21002, 21002.1, subd. (c); Cal. Code Regs., tit. 14, § 15093.)

The decision to certify an EIR and approve a project may be judicially challenged by a petition for writ of mandate. (Pub. Resources Code, §§ 21168, 21168.5.) A petitioner with no direct beneficial interest in the proceeding has standing to proceed “ ‘where the question is one of public right and the object of the action is to enforce a public duty—in which case it is sufficient that the plaintiff be interested as a citizen in having the laws executed and the public duty enforced.' ” (Rialto Citizens for Responsible Growth v. City of Rialto (2012) 208 Cal.App.4th 899, 913-914 [146 Cal.Rptr.3d 12].)


A. The Line

The Northwest Pacific Railroad line (the line) is located on California's North Coast and is viewed as a single railroad extending from its northernmost point in the city of Arcata in Humboldt County to Lombard in Napa County in the south. Willits is the geographical center of the line, and the dividing point between the Northern or Eel River Division and the Southern or Russian River Division. An interchange in Lombard connects the line to the national railroad system.


In 1989, the California Legislature created NCRA to maintain rail service on the line. (Gov. Code, § 93000 et seq.) A government agency with a board

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composed in part of representatives from the counties and cities it serves (Gov. Code, § 93011), NCRA has the statutory authority to operate railroads, acquire the rights to property necessary to operate and maintain railroads, issue bonds, accept loans and grants from other agencies, and select a private operator to run the railroad system within its area of jurisdiction. (Gov. Code, § 93020.) Over the course of several years, NCRA acquired title or easement rights over the entire line, and it operated freight service on the line between 1992 and 1998. A portion of the track in the Russian River Division is owned by the Sonoma-Marin Area Rail Transit District (SMART), whose predecessor granted NCRA an easement.

C. Safety Issues, Environmental Issues and Closure of the Line

The line has a history of safety and maintenance issues, and sections were closed to passenger service as early as 1990. After the El Niño storms of 1998, the Federal Railroad Administration issued Emergency Order No. 21, closing the entire line. Limited operations eventually resumed over 41 miles of track near Petaluma, but track repairs, maintenance and upgrades were required before the line could reopen.

In 1999, after NCRA was sued by various state and local agencies regarding environmental and safety issues along the line, it entered into a consent decree and stipulated judgment requiring it to remediate certain conditions.

D. TCRP Funds

The California Legislature in 2000 adopted the Transportation Congestion Relief Program (TCRP), creating a state treasury fund for a number of specified projects designed “to relieve traffic congestion, provide additional funding for local street and road deferred maintenance, and provide additional transportation capacity in high growth areas of the state.” (Gov. Code, § 14556.6; see Gov. Code, §§ 14556, 14556.3, 14556.5, 14556.40.) To obtain TCRP funds, the “lead applicant agency” for a particular project must submit an application in accordance with guidelines adopted by California's Department of Transportation (Caltrans). (Gov. Code, § 14556.10; see § 14556.1, subd. (a).) A total of $60 million was allocated for the repair and upgrade of tracks on the line, with NCRA being the “lead applicant” for those funds. (See Gov. Code, § 14556.40, subd. (a)(32).)[2]

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NCRA and Caltrans executed a written master agreement, which governed the process for obtaining TCRP funds. Section O of the master agreement, entitled “Environmental Process, ” provides: “Completion of the environmental process (“clearance”) for PROJECT by RECIPIENT (and/or STATE if it affects a STATE facility within the meaning of the applicable statutes) is required prior to requesting PROJECT funds for right-of-way purchase or construction. No STATE agency shall request funds nor shall any STATE agency, board or commission authorize expenditures of funds for any PROJECT effort, except for feasibility or planning studies, which may have a significant effect on the environment unless such a request is accompanied by an environmental impact report per mandated by the California Environmental Quality Act (CEQA). California Public Resources Code Section 21080(b)(10), does provide an exemption for passenger rail PROJECT which institutes or increases passenger or commuter services on rail or highway rights-of-way already in use.” The master agreement also requires approval by the California Transportation Commission (CTC) before appropriated funds can be distributed.

In 2002, NCRA prepared a project funding plan, a strategic plan and a capital assessment report at the request of CTC. The capital assessment report discussed the environmental review contemplated in connection with repairs and improvements to the line, which included compliance with CEQA and the preparation of an EIR.


In January 2006, anticipating repairs would be made to the line, NCRA published a request for proposals seeking a private operator.[3] It selected NWPRC to become the operator for the line, and in September 2006, the two parties executed an operations agreement. The operations agreement was expressly conditioned on ...

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