Friends of Eel River v. North Coast Ry. Auth.
220 Cal. Rptr. 3d 812
| Cal. | 2017Background
- The State-created North Coast Railroad Authority (NCRA) acquired a decayed intrastate rail line and sought to restore limited freight service on the Russian River division; Northwestern Pacific Railroad Company (NWPCo) was contracted as the private operator.
- NCRA obtained state funding for repairs and repeatedly represented it would comply with CEQA; it prepared draft and final EIRs and certified an EIR in 2011 for resumption of limited freight service and some repairs.
- Plaintiffs (Friends of the Eel River; Californians for Alternatives to Toxics) sued in state court under CEQA challenging adequacy of the EIR and seeking writs and injunctive relief to halt project activities.
- NCRA/NWPCo argued federal preemption under the ICCTA (49 U.S.C. §10501(b)); the federal court remanded; state trial courts and the Court of Appeal held CEQA preempted as applied to railroad projects and denied relief.
- The California Supreme Court addressed whether the ICCTA preempts application of CEQA to a railroad project owned by a state entity (NCRA) and/or to injunctions halting operations by the private operator (NWPCo).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ICCTA preempts CEQA as applied to a state-owned railroad authority (NCRA) | CEQA governs how public agencies exercise development power; preemption should not displace state self-governance over its subdivisions | ICCTA preempts state law that would condition or delay rail operations; CEQA would function as impermissible preclearance/regulation of rail transportation | ICCTA does not categorically preempt CEQA as applied to a state owner acting in its proprietary/self-governance capacity; CEQA may apply to NCRA decisions (reversed Court of Appeal) |
| Whether ICCTA preempts CEQA as applied to private operator (NWPCo) (i.e., injunction halting operations) | Plaintiffs seek injunctive relief to stop operations pending CEQA compliance; enforcement against operator is permitted | Applying CEQA to halt a private rail carrier’s operations is preempted (would regulate rail transportation) | CEQA cannot be used to enjoin or impose preclearance conditions that would halt NWPCo’s operations; injunctive relief against operator is preempted |
| Role of presumptions (Gregory/Nixon) and market-participant doctrine in preemption analysis | Presumptions against federal intrusion on state sovereignty and market-participant analogies weigh against broad preemption of state self-governance | ICCTA language is broad and intended to unify/deregulate rail industry nationally; preemption applies regardless of owner status | Court applies the clear-statement presumption and market-participant analogies to conclude Congress did not unmistakably intend to strip states of self-governance tools (like CEQA) when acting as owner |
| Scope of ICCTA preemption—categorical vs. as-applied; environmental permitting/preclearance | CEQA as applied to state-owned projects is internal governance, not regulation of rail transportation | State/local permitting that can deny or delay railroad operations is categorically preempted; some environmental/state actions may be preempted as applied | ICCTA preempts state environmental preclearance that would prevent private carriers from operating; but as-applied analysis can permit CEQA over state-owned projects that fall into owners’ deregulated sphere (e.g., track repairs, levels of service) |
Key Cases Cited
- Gregory v. Ashcroft, 501 U.S. 452 (1991) (clear-statement rule: Congress must speak unmistakably to alter state-federal balance affecting state sovereignty)
- Nixon v. Missouri Mun. League, 541 U.S. 125 (2004) (preemption ambiguous as to public entities; warns against applying preemption in ways that upend state self-governance)
- Building & Constr. Trades Council v. Associated Builders & Contractors of Mass./R.I., 507 U.S. 218 (1993) (market-participant doctrine and limits on state power when acting as proprietor)
- Auburn v. United States (City of Auburn v. U.S. Government), 154 F.3d 1025 (9th Cir. 1998) (state/local environmental preclearance that can deny or delay rail operations is preempted)
- Green Mountain R.R. Corp. v. Vermont, 404 F.3d 638 (2d Cir. 2005) (state preconstruction permit imposing mitigation and delay preempted where it could deny railroad’s right to construct/operate)
- Lee's Summit v. Surface Transp. Bd., 231 F.3d 39 (D.C. Cir. 2000) (STB’s practice not to require federal review for certain restorations/repairs on existing lines)
- Chicago & N.W. Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311 (1981) (historical rule that unified federal regulation of railroads preempts conflicting state remedies)