Elizabeth Lake is an Partner and Daniel R Golub is an Associate at our San Francisco office.
In Friends of the Eel River v. N. Coast R.R. Auth., __ Cal.5th __, No. S222472, 2017 WL 3185220 (Cal. July 27, 2017), the Supreme Court of California held that federal law does not categorically pre-empt the California Environmental Quality Act (CEQA) from applying to railroad projects owned by state or local government entities. Project proponents who operate in areas in which CEQA is generally pre-empted should conduct a careful review of the government's ownership interest in their projects to determine if CEQA nonetheless applies. The decision acknowledged that challengers may not be able to make use of all of CEQA's remedies to challenge railroad projects. The decision may also set up a showdown before the U.S. Supreme Court about whether federal law trumps California's environmental statutes. The California Environmental Quality Act (CEQA), Cal. Pub. Res. Code §21000 et seq., imposes significant procedural and substantive requirements on private and public projects throughout the state. However, even a state law as broad as CEQA is limited by federal law. In particular, the ICC Termination Act of 1995 (ICCTA), Pub.L. No. 104-88 (Dec. 29, 1995) 109 Stat. 803, which abolished the Interstate Commerce Commission, gives the federal Surface Transportation Board (STB) exclusive jurisdiction to regulate the rail industry and generally pre-empts state laws such as CEQA from imposing environmental preclearance requirements on private railway operations.
Rail opponents, however, have argued that CEQA does apply to railroad projects operated by California public entities. Specifically, opponents of a project that would resume rail freight service between Napa and Mendocino counties argued that CEQA should apply because the railroad is owned by a state public entity, the North Coast Railroad Authority. California's First District Court of Appeal rejected this claim, holding that, regardless of whether a public entity owns the railroad, "CEQA is preempted by federal law when the project to be approved involves railroad operations." Friends of the Eel River v. N. Coast R.R. Auth., 178 Cal. Rptr. 3d 752, 773 (2014).
The First District's decision in Eel River conflicted with a prior decision by the Third District Court of Appeal, which held that CEQA did apply to the California High-Speed Rail Authority's decision to approve a route for the state-owned,...