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Judge Turns Down High Speed Rail Injunction

April 25,2016-

HSR 2015-07-02 at 1.03.39 PMSacramento Superior Court Judge Raymond Cadei turned down a request by Kings County and farmer John Tos and others to block expenditure of Prop 1A bonds, recently sold by the state to benefit construction of high speed rail.

In a preliminary ruling April 25 the judge said the legislature did not mislead voters as alleged, arguing the state promised the bond money would be for the ”construction of a high-speed train system” and they have done this. Furthermore, approving an injunction on bond expenditures would likely cause “significant harm”, he said.

“Basically the judge ruled against us almost across the board” said Plaintiff’s attorney Stuart Flashman. “He also said we would need to start over completely if we wanted to continue” the challenge.

”We strongly disagree and although I will talk to my clients first, we will seek to go up on appeal.”

Judge Cadei said voters were told monies would be used for various tasks when the approved Prop1A.

“The voters were informed that the bond funds may be used for a broad array of purposes including environmental studies, planning and engineering of the system, and for capital costs such as acquisition of rights-of-way, trains, and related equipment, and construction of tracks, structures, power systems, and stations ”the judge reasoned.

Importantly ” blocking the project from using state bond funds approved by voters would have significant harm” said the judge. “The court also finds that the balance of interim harms weigh greatly in favor of CHSRA.”

Citing the need to match federal funding as part of grant process, the judge argued California could be the big loser.

“Failure to timely match the federal ARRA funds as set forth in the schedule in the FCP could have disastrous consequences for the CHRSA and the State. Most damaging is the potential for FRA ( Federal Railroad Administration) to demand repayment of the federal grant monies already disbursed to the Authority, which the terms of the ARRA Cooperative Agreement would allow. The federal government can enforce that repayment requirement by withholding and redirecting back to the U.S. Treasury other federal funds that would otherwise be provided to California, such as highway funds.

Thus, a demand for repayment of the ARRA funds could result in a loss of $2.55 billion dollars to the State of California.”

Further, demand for repayment of ARRA monies expended also could lead the FRA to attempt to cancel the $928 million in 2010 appropriations granted but not yet spent, resulting in a potential total loss of $3.5 billion dollars. Lastly, the FRA also could prevent any further funding grants to the CHRSA, which could result in further losses to the State in the future, and which could be devastating to the development of the high-speed rail in California. None of this would be in the public interest.”

Meanwhile the judge argued Mr Tos already had his day in court as far as his land condemnation is concerned. ”As argued by CHSRA, this contention is unpersuasive since the Tos condemnation proceeding is already funded by a deposit of just compensation.”

“In weighing the competing potential harms at issue, the court finds that the potential harm to the State and CHSRA that could result from the issuance of a preliminary injunction in this matter would far exceed the potential harm if CHSRA made intervening expenditures of bond funds while proceeding with the currently approved plan.”

Denied

“The court is not persuaded that there is a likelihood that the Plaintiffs will prevail on the merits at trial, and the balance of any interim harm to the Plaintiffs if the injunction is substantially less than the harm to the Defendants if the requested injunction is issued. The petition for preliminary injunction is therefore denied.”

Last week the state treasurer sold $1.25 billion in taxable bonds to finance a $64 billion high-speed rail system. At the time Mr Flashman said the plaintiffs did not try to block the sale of Prop 1A  bonds itself, but did seek to stop any expenditure of the proceeds.

Now this week, that issue has been litigated and state monies will be spent to build the bullet train.

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