Almanac

News - April 21, 2010

Menlo Park men launch broad-based lawsuit against high-speed rail agency

by Sean Howell

Menlo Park resident Mike Brady is representing his friend Morris Brown in a broad-based lawsuit against the agency charged with carrying out the California high-speed-rail project.

The suit, filed in Sacramento County Superior Court on Thursday, April 15, asks the court to make several rulings about the way the California High-Speed Rail Authority can legally use bond funds, and funds from the federal government.

If successful, the suit would prevent the rail agency from beginning construction on the system, including the Bay Area section, until the agency secures more funding. It would also prevent the state from guaranteeing revenue to private investors in the rail system.

The suit touches on several of the men's longstanding allegations against the rail agency. Both have been outspoken opponents of the plan for high-speed rail since before California voters in 2008 passed a bond measure for $9.95 billion to fund the system. The men ran a Web site called Derail HSR prior to the election.

Mr. Brown has sent several letters to the rail agency, arguing that the agency cannot begin construction on any segment of the rail line until it has enough money to complete that segment. In stating that it intends to begin construction on several segments at once, despite the fact that it doesn't have the money to complete even one of them, the rail agency is violating the legislation that governs it, Mr. Brady asserts in the suit.

The state Legislature wrote the rail agency's governing legislation with the intent of avoiding "the risk that the project could be commenced in various areas with the funding running out and the project left in suspension, abandoned and uncompleted," Mr. Brady writes in the complaint.

Were the rail agency to begin construction on separate parts of the system with the funding currently in hand, it would "completely frustrate the legislature's intent to minimize the financial risk to the state from unfinished projects, and would constitute the waste of public funds/assets," Mr. Brady states.

In the complaint, the men also ask the court to declare that the state cannot yet release any of the bond funding approved by voters in the 2008 election, and to declare that the Peninsula Joint Powers Board, which operates Caltrain, cannot yet cede ownership of the rail corridor to the high-speed-rail agency.

California was awarded $2.34 billion through the federal stimulus bill to fund the high-speed rail project. The rail agency has stated that it intends to match that money with bond funding, and to apply it to several different segments of the rail system.

Jeff Barker, director of communications for the rail authority, said in an e-mail that the agency is aware of the suit, but has not yet reviewed it. The state is "committed to building this project right and in a way that is within the letter of the law," he wrote.

In the complaint, Mr. Brown and Mr. Brady also contend that the rail agency has vastly underestimated the cost of constructing the rail system, and that Gov. Arnold Schwarzenegger's promise to match any federal stimulus funds for the rail system was illegal.

"It may be appropriate for the federal government to reconsider the propriety of granting federal funding at all to the authority," Mr. Brady writes.

The men also take issue with a suggestion in a rail agency business plan that the state may have to guarantee a return on any private investment in the high-speed-rail system, saying that the language in the bond issuance prohibits the state from subsidizing the operation of the system. They ask the court to declare that the state cannot guarantee revenue to investors.

This is the second pro bono lawsuit Mr. Brady has filed against the rail agency. In the first suit, filed on behalf of Menlo Park resident Russ Peterson, he asked the court to state that the rail agency could not begin work on the Peninsula portion of the high-speed-rail project without the consent of Union Pacific, which has ownership rights over the Caltrain corridor. That suit is still pending.

Mr. Brown and Mr. Brady were profiled in the March 31 issue of the Almanac for their high-speed-rail advocacy efforts.

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