The opinion
Filed 9/29/14
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FIVE
FRIENDS OF THE EEL RIVER,
Plaintiff and Appellant, A139222
v. (Marin County Super. Ct.
NORTH COAST RAILROAD AUTHORITY et al., No. CIV1103605)
Defendants and Respondents;
NORTHWESTERN PACIFIC RAILROAD
COMPANY,
Real Party in Interest and Respondent.
CALIFORNIANS FOR ALTERNATIVES TO
TOXICS,
A139235
Plaintiff and Appellant,
v. (Marin County Super. Ct.
NORTH COAST RAILROAD AUTHORITY et al., No. CIV1103591)
Defendants and Respondents;
NORTHWESTERN PACIFIC RAILROAD
COMPANY,
Real Party in Interest and Respondent.
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,
1
§§ 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 Interstate Commerce
Commission Termination Act (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
I. STATUTORY OVERVIEW
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 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 (Burlington Northern).)
1
An amicus curiae brief has been filed on behalf of petitioners by the Ecological
Rights Foundation, and a joint amicus curiae brief has been filed on behalf of petitioners
by the Natural Resources Defense Council, the Planning and Conservation League and
the Sierra Club. We have read and considered those briefs in addition to those filed by
the parties to the appeal.
2
The ICCTA grants the STB 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; see Missouri Min., Inc. v. I.C.C.
(8th Cir. 1994) 33 F.3d 980, 983 (Missouri Min.).) 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., 1150.31 et seq.; Missouri
Min., at pp. 983-984.) An STB order is subject to judicial review in the federal court of
appeals. (28 U.S.C. § 2321(a).)
B. CEQA
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.) 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.)
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
(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
3
change in the environment.” (Pub. Resources Code, § 21065; Tomlinson, at p. 286.)
Second, the agency decides whether it is 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.)
II. FACTS AND PROCEDURAL HISTORY
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
4
Division and the Southern or Russian River Division. An interchange in Lombard
connects the line to the national railroad system.
B. NCRA
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 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
5
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 the California
Department of Transportation (Caltrans). (Gov. Code, §§ 14556.10, 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. (Gov. Code, § 14556.40, subd.
(a)(32).)2
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 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.
2
This amount includes $1 million to defray NCRA’s administrative costs,
$600,000 to fund completion of the rail line from Lombard to Willits, $1 million to fund
the completion of the line from Willits to Arcata, $5 million to upgrade the line to
Class II or III status, $4.1 million for environmental remediation projects, $10 million
for NCRA’s debt reduction, $1.8 million for local match funds, $5.5 million for
repayment of federal loan obligations and $31 million for “long-term stabilization
projects.” (Gov. Code, § 14556.50.)
6
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.
E. NWPRC
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 “NCRA having
complied with [CEQA] as it may apply to this transaction.”
NWPRC was approved as an operator after filing a notice of exemption under 49
Code of Federal Regulations section 1150.31, subdivision (a)(3), which allows the STB
to exempt a change in operators on a line from the certification that is otherwise required.
Two parties, Mendocino Railway and FOER, challenged the exemption and urged the
STB to conduct a full environmental review before approving the change in operators.
The STB rejected these challenges, a ruling apparently not challenged in an appeal to the
federal court of appeals.
F. Application for Release of TCRP Funds; Contemplated Environmental Review
In November 2006, NCRA filed an application with CTC seeking the release of
$31 million in TCRP funds for upgrades and repairs to the Russian River Division of the
line, which would enable the line to reopen between Lombard and Windsor. The
application stated, “Once an Initial Study is completed, appropriate CEQA and NEPA
documentation will be prepared,” and defined the project’s scope to include “a variety of
environmental studies, reviews, assessments and preparation of reports to support the
CEQA/NEPA review process.” The project description for purposes of CEQA and
3
NCRA had previously entered into an agreement with Northwestern Pacific
Railway Company, LLC (NWPC) to operate freight over the line. The STB approved
NWPC as the operator in 2001, but NWPC had financial problems and ceased operations
later that year.
7
NEPA was expected to be the reopening of the entire Russian River Division from
Lombard to Willits.
The state approved NCRA’s first “program supplement” in January 2007 and
released a total of $6,826,000, which included $2,129,000 for project approval and
environmental documents for the Russian River Division, $3,300,000 for an EIR on
impacts to the Eel River Canyon, and $1,397,000 for project specifications and estimates.
A subsequent allocation of $1,530,000 was approved in March 2007, under which the
scope of work was modified to eliminate NEPA review, the reason being that
environmental review would proceed under CEQA instead.
NCRA submitted a strategic plan update in February 2007, describing its plan for
the opening of the entire line as follows: “NCRA has adopted a policy of reopening the
entire Northwestern Pacific Railroad Line from Lombard to Arcata/Samoa. Reopening
the entire line is currently estimated to cost between $151 million and $500 million
depending on the volume of traffic and the level and timing of repair. [¶] The first phase
of construction has been identified as the Russian River Division Phase 1 from Lombard
to Windsor based on the market demand for rail service, the existing condition of the line,
the ability to team with SMART, and the ability to work within NCRA’s right-of-way to
restore a prior-existing service. [¶] Future construction phasing will be based on several
factors including market demand for rail, environmental clearance, and availability of
funding. However, the current plan, once the Russian River Division Phase 1 is
completed, is to move forward with the Russian River Division Phase 2 [to Willits], then
the [Eel River] Canyon [north of Willits], and finally the North-End.” The update stated
“the processing of the EIR/EIS document and associated preliminary engineering is the
critical path to reopening NCRA’s rail line from Willits north. Due primarily to the
nature of the project, the complexities of the processes, and the extent of public
disagreements as to the physical effects of the proposed project, NCRA, as lead agency,
proposes to prepare and process a combined document (CEQA/NEPA) that involves
facility upgrades, landslide stabilization and reopening of the line from Willits to South
Fork.” NCRA indicated it would be issuing a categorical exemption from CEQA for
8
repair work within the existing right-of-way in the Russian River Division, and would
begin an EIR under CEQA to review the impact of freight operations within the Russian
River Division.
G. Initial Study; Notices of Exemption
In May and July 2007, NCRA issued initial studies under CEQA concerning
freight operations in the Russian River Division, which concluded an EIR was required.
NCRA issued notices of exemption for rail line reconstruction work in the Russian River
Division regarding work NCRA believed to be categorically exempt from environmental
review under CEQA.4 (Cal. Code Regs., tit. 14, §§ 15301-15305, 15308, 15309, 15311,
15321, 15330.) One of the notices stated the proposed action would be “limited to the
repair, restoration, replacement-in-kind, or retrofitting, as well as the on-going
maintenance of existing railroad facilities. All of the identified repairs and maintenance
activities will be limited to within the existing NCRA right-of-[way], throughout the
project corridor, and will not involve any expansion of existing use and will not change
the purpose or capacity of the structures being repaired.”
H. Lawsuit with City of Novato; Consent Decree
NCRA’s notices of exemption were challenged by the City of Novato, which filed
a petition for writ of mandate alleging NCRA had failed to comply with CEQA and had
improperly segmented the reconstruction project to minimize its overall impacts. (City of
Novato v. North Coast Railroad Authority (Super. Ct. Marin County, 2007,
No. CV074645) (City of Novato).) The parties settled the case in November 2008, with
the court entering a consent decree and stipulated judgment requiring NCRA to perform
certain work and to comply with CEQA and/or NEPA with respect to that work.
4
NCRA noted the repairs to the tracks were subject to the exclusive jurisdiction of
the STB, but “this [categorical exemption] determination has been prepared to
demonstrate that the Proposed Action would be exempt from [CEQA] regardless of the
STB jurisdiction over the freight activities.”
9
I. Release of Additional TCRP Funds
In May 2010, the CTC approved NCRA’s request for an additional $7,495,000 in
TCRP funds. The CTC resolution approving the funds noted NCRA was producing an
EIR for operations in the Russian River Division to “evaluate[ ] the impact of using the
rail line for freight operations.”
J. Draft and Final EIR
In March 2009, NCRA issued a draft EIR for the resumption of freight rail
operations in the Russian River Division. After a period of public comment and the
preparation of a revised draft EIR in November 2009, NCRA issued a final EIR on March
23, 2011.
K. Resolution Certifying EIR and Approving Rail Operations
On June 20, 2011, NCRA adopted Resolution No. 2011-02, which certified the
EIR, adopted a statement of overriding considerations and approved a project “resuming
freight rail service from Willits to Lombard in the Russian River Division.” The
resolution contemplated the freight service would initially have three round-trip trains per
week with each one having an estimate of 15 cars, increasing to up to three round-trip
trains per day, six days a week, with an estimate of 25 cars on one round-trip and 60 cars
on the other two round-trips. It also contemplated rehabilitation, construction and repair
activities in four areas of the line.
Following the adoption of Resolution No. 2011-02, NCRA and NWPRC executed
an amendment to their operations agreement stating the condition relating to compliance
with CEQA had been deemed satisfied. The Federal Railroad Administration lifted
Emergency Order No. 21 in May 2011, and NWPRC has been operating on the line since
June 2011.
L. Petitions for Writ of Mandate
On July 20, 2011, FOER and CAT filed petitions for writ of mandate challenging
NCRA’s certification of the EIR and seeking to halt railroad operations pending
additional CEQA review. The petitions, which named NCRA as respondent and
10
NWPRC as a real party in interest,5 alleged the EIR was insufficient because, among
other things, (1) it did not adequately describe the project, (2) it failed to disclose all of
the work needed to rehabilitate the line, (3) it improperly segmented the impacts of
opening of the Russian River Division from the impacts on the Eel River Division, (4) it
did not identify existing environmental contamination, (5) it did not disclose the
cumulative impacts of the project, and (6) it failed to adequately discuss feasible
alternatives to the project.
M. Removal to Federal Court and Remand
NWPRC removed the cases to federal court, asserting the CEQA claims were
preempted by the ICCTA and thus presented a substantial federal question. The federal
court remanded the cases to state court, concluding they were not completely preempted
by the ICCTA because the ICCTA did not provide an exclusive substitute cause of action
for the CEQA claims. (See Fayard v. Northeast Vehicle Services, LLC (1st Cir. 2005)
533 F.3d 42, 47.) The remand order distinguished the “complete preemption” required
for federal question subject-matter jurisdiction from the claim that ICCTA preemption
was a defense to the CEQA claims, this so-called defense preemption being an issue “for
the state court to decide upon remand.”
N. Demurrer
NWPRC, joined by NCRA, filed demurrers to the petitions on the ground the
CEQA claims were preempted by the ICCTA. Petitioners opposed the demurrers,
arguing NCRA had voluntarily agreed to comply with CEQA as a part of the consent
decree in the City of Novato case and as a condition of receiving TCRP funds from the
State of California, and was estopped by its previous actions from asserting federal
preemption.
The trial court (Judge Faye D’Opal) overruled the demurrers. In its written ruling,
the court agreed the ICCTA preempted the application of CEQA to the reopening of rail
5
SMART was initially named as a real party in interest but was dismissed from
the action and is not a participant in this appeal.
11
service on the Russian River Division, and further concluded petitioners lacked standing
to assert any breach of contract by NCRA with respect to the consent decree or
agreements related to the receipt of TCRP funds. But it concluded NCRA and NWPRC
were judicially estopped from claiming federal preemption as a defense due to positions
previously taken.
O. Resolution Rescinding Certification of EIR
On April 10, 2013, NCRA passed a resolution rescinding Resolution No. 2011-02
“to clarify that the NCRA did not have before it a ‘project’ as that term is used in
[CEQA] and did not approve a project when it certified the EIR that was the subject of
the Resolution.” The recitations supporting the 2013 resolution explained NCRA had
“mistakenly, but in good faith, believe[d] that it needed to complete the environmental
impact report for resumed operations,” but that during the preparation of the
administrative record for the mandate petitions “NCRA staff reviewed and evaluated
NCRA’s statutory authority for conducting operations on the line, including NCRA’s
legislative mandate to operate the line, STB approvals and authority, the Federal Railroad
Administration’s imposition and lifting of Emergency Order No. 21, the ICCTA and its
express preemption of state regulation over railroad operations, and NCRA’s lease with
[NWPRC].”
The 2013 resolution stated in part, “After the STB approved [NWPRC]’s
operation of the line in August 24, 2007, and subsequently rejected Mendocino Railway’s
and [FOER]’s challenges to that approval, no further action or approval was required by
the STB as a condition to [NWPRC]’s right to operate the line,” and “NCRA’s
preparation of the EIR, and continuing through the EIR process from 2007 through June
2011 was a valuable effort in that it identified potential environmental impacts of railroad
operations, provided information to NCRA and the public about railroad operations, and
examined ways that potentially significant effects could be mitigated, but certification of
the EIR was not legally required as a condition to [NWPRC]’s legal right to operate the
line.” The 2013 resolution further provided, “It is in the best interests of NCRA,
12
[NWPRC], the shippers that depend upon the continued rail operations on the line, and is
consistent with the ICCTA’s preemption of state regulation over railroad operations, as
well as NCRA’s legislative mandate to ensure that ongoing railroad operations continue,
for NCRA to take whatever reasonable action will ensure the ongoing operation of the
line.”
P. Order Denying Petitions for Writ of Mandate
The case proceeded to a contested hearing before a different judge (Judge Roy O.
Chernus). NCRA filed a motion to dismiss the writ petitions as moot based on the 2013
resolution rescinding certification of the EIR.
On May 10, 2013, the court issued a written order denying the petitions for writ of
mandate. It concluded the petitions had not been mooted by the subsequent resolution
rescinding the certification of the EIR because NCRA had not abandoned the project and
had not rescinded “approval” of the project. But, on the merits, the ICCTA preempted
the CEQA claims asserted by petitioners. As nonparties to the consent decree or TCRP
master agreement, those parties lacked standing to enforce any voluntary agreement by
NCRA to comply with CEQA.
The court “reconsider[ed] and revers[ed]” the prior order overruling the demurrers
of NCRA and NWPRC based on the doctrine of judicial estoppel, because no admissible
evidence had been presented to show NCRA had taken a position inconsistent with its
preemption claim during a judicial or quasi-judicial proceeding. “Although the evidence
in the Administrative Record shows: CEQA compliance was made an express condition
of the Master Transportation Funding Agreement and Supplement[al] Funding
Applications between the [CTC] and NCRA, and the Operations Lease Agreement
between NCRA and [NWPRC]; and the fact NCRA received over $2 million from CTC
to prepare the EIRs that are the subject of this lawsuit, [NCRA’s and NWPRC’s] express
and tacit agreements to comply with CEQA as a condition of resuming freight rail service
in the Russian River Division was not a position that was adopted or approved by any
judicial or quasi-judicial tribunal. [¶] The principal purpose of the judicial estoppel
13
doctrine—i.e., to protect the integrity of the judicial process—is therefore not implicated
here.” The court rejected petitioners’ argument the consent decree in the City of Novato
litigation operated as judicial estoppel, reasoning it required CEQA compliance only with
respect to construction activities within Novato and was limited in effect to that prior
lawsuit.
Petitioners appeal, arguing their CEQA claims are not preempted by the ICCTA,
judicial estoppel precludes NCRA and NWPRC from asserting as much, and the EIR was
inadequate for reasons previously noted. NCRA and NWPRC repeat their claim this case
was mooted by the 2013 resolution, but argue that on the merits, federal law preempts
CEQA.
III. DISCUSSION
A. Mootness
A case becomes moot and must ordinarily be dismissed “when a court ruling can
have no practical impact or cannot provide the parties with effective relief.” (Simi Corp.
v. Garamendi (2003) 109 Cal.App.4th 1496, 1503; see Wilson & Wilson v. City Council
of Redwood City (2011) 191 Cal.App.4th 1559, 1573.) NCRA and NWPRC argue this
case is moot because the petitions for writ of mandate challenged the sufficiency of the
EIR certified by resolution in 2011, and NCRA has since rescinded that resolution. They
suggest that because the railroad line is operating, and because no further approval is
needed for those operations, this court lacks the ability to issue an order affecting railroad
operations or the environmental review for those operations. We disagree.
Though the resolution approving the EIR has been rescinded, there is no evidence
the project it approved has been abandoned. (Citizens for Open Government v. City of
Lodi (2006) 144 Cal.App.4th 865, 872-873 [writ of mandate challenging EIR not
rendered moot when city vacated approval of resolution certifying EIR, but there was no
evidence project was abandoned].) The mootness argument assumes CEQA is preempted
by federal law and cannot be the basis for enjoining railroad operations or requiring
further environmental review under its provisions. While we agree with this ultimate
14
conclusion, this does not obviate the need to address the preemption argument on its
merits. If, after all, CEQA were not preempted, we would surely be empowered to grant
the petitioners relief.
B. ICCTA Preempts CEQA As Applied to Railroad Operations
1. General Preemption Principles: ICCTA and CEQA
We first consider whether the ICCTA generally preempts CEQA’s application to a
project involving railroad operations. This is a pure question of law subject to de novo
review. (Farm Raised Salmon Cases (2008) 42 Cal.4th 1077, 1089, fn. 10.) Though it
appears to be an issue of first impression in California, we are guided by federal cases
and the administrative decisions of the STB itself, which have found preemption in
circumstances similar to those before us.
The doctrine of preemption gives force to the supremacy clause of the United
States Constitution. (U.S. Const., art. VI, cl. 2; Burlington Northern, supra, 209
Cal.App.4th at p. 1521.) Courts have recognized three types of preemption: express
preemption, conflict preemption and field preemption. (Burlington Northern, at p. 1521.)
When construing a federal provision that expressly preempts state law, we look first to its
plain language, but also consider its context to determine congressional intent. (See id. at
pp. 1521-1522.)
When Congress has legislated in a field the states have traditionally occupied, we
“ ‘start with the assumption that the historic police powers of the States were not to be
superseded by the Federal Act unless that was the clear and manifest purpose of
Congress.’ ” (Medtronic, Inc. v. Lohr (1996) 518 U.S. 470, 485; see People ex rel.
Harris v. Pac Anchor Transportation, Inc. (2014) 59 Cal.4th 772, 777-778.) This
“presumption against preemption” does not apply when the state regulates an area in
which there has been “ ‘a history of significant federal presence,’ ” such as rail
transportation. (Norfolk Southern Ry. Co. v. City of Alexandria (4th Cir. 2010) 608 F.3d
150, 160, fn. 12, citing United States v. Locke (2000) 529 U.S. 89, 108; CSX Transp., Inc.
v. Williams (D.C. Cir. 2005) 406 F.3d 667, 673 [“the case for preemption is particularly
15
strong” regarding rail transportation].) “ ‘Railroads have been subject to comprehensive
federal regulation for nearly a century. . . . There is no comparable history of
longstanding state regulation . . . of the railroad industry.’ ” (Scheiding v. General
Motors Corp. (2000) 22 Cal.4th 471, 481; see Frastaci v. Vapor Corp. (2007) 158
Cal.App.4th 1389, 1398-1399 [state tort claims against locomotive manufacturer by
survivors of railroad worker who died of asbestos-related mesothelioma were preempted
by federal Locomotive Boiler Inspection Act].) We apply no presumption for or against
preemption.
The ICCTA includes a “broadly worded express preemption provision”
(Burlington Northern, supra, 209 Cal.App.4th at p. 1517): “ ‘The jurisdiction of the
[STB] over—[¶] (1) transportation by rail carriers, and the remedies provided in this part
[(49 U.S.C. § 10101 et seq.)] with respect to rates, classifications, rules (including car
service, interchange, and other operating rules), practices, routes, services, and facilities
of such carriers; and [¶] (2) the construction, acquisition, operation, abandonment, or
discontinuance of spur, industrial, team, switching, or side tracks, or facilities, even if the
tracks are located, or intended to be located, entirely in one State, [¶] is exclusive. Except
as otherwise provided in this part, the remedies provided under this part [(49 U.S.C.
§ 10101 et seq.)] with respect to regulation of rail transportation are exclusive and
preempt the remedies provided under Federal or State law.’ (49 U.S.C. § 10501(b),
italics added.)”
In light of this expansive language, “[t]he ICCTA ‘preempts all “state laws that
may reasonably be said to have the effect of managing or governing rail
transportation.” ’ ” (Burlington Northern, supra, 209 Cal.App.4th at p. 1528.) Two
categories of state and local action are categorically preempted regardless of the context
of the action: (1) any form of permitting or preclearance that, by its nature, could be used
to deny a railroad the opportunity to conduct operations or proceed with other activities
the STB has authorized; and (2) state or local regulation of matters directly regulated by
the STB, such as the construction and operation of railroad lines. (Ibid.) Additionally,
state actions that do not fall within one of these categories may be preempted as applied
16
when they “would have the effect of preventing or unreasonably interfering with railroad
transportation.” (Adrian & Blissfield R. Co. v. Village of Blissfield (6th Cir. 2008) 550
F.3d 533, 540 (Adrian).)
On the other hand, state laws are not preempted by the ICCTA when they have
“ ‘ “a more remote or incidental effect on rail transportation.” ’ ” (Burlington Northern,
supra, 209 Cal.App.4th at p. 1528.) The ICCTA “does not preempt state or local laws if
they are laws of general applicability that do not unreasonably interfere with interstate
commerce. [Citations.] For instance, the STB has recognized that [the] ICCTA likely
would not preempt local laws that prohibit the dumping of harmful substances or wastes,
because such a generally applicable regulation would not constitute an unreasonable
burden on interstate commerce. [Citations.]” (Association of American Railroads v.
South Coast Air Quality Mgmt. Dist. (9th Cir. 2010) 622 F.3d 1094, 1097 (Association of
American Railroads).)
In City of Auburn v. U.S. Government (9th Cir. 1998) 154 F.3d 1025, 1027-1031
(Auburn), the court concluded the ICCTA preempted state and local environmental
permitting laws with respect to a railroad’s efforts to reacquire a portion of a line and
reestablish it as a main route in the Pacific Northwest. Rejecting a municipality’s
argument that the permitting requirements were “ ‘not economic regulations, but rather
“essential local police power required to protect the health and safety of citizens” ’ ” (id.
at p. 1029), the court reasoned: (1) Congress and the courts had long recognized the need
to regulate rail operations at the federal level; (2) the plain language of the ICCTA
granted the STB exclusive authority over projects like the one at issue; (3) nothing in the
case law supported the claim that only economic regulation was preempted; and (4) there
was no evidence Congress intended a state role in the regulation of railroads. (Id. at
pp. 1029-1031.) “[I]f local authorities have the ability to impose ‘environmental’
permitting regulations on the railroad, such power will in fact amount to ‘economic
regulation’ if the carrier is prevented from constructing, acquiring, operating,
abandoning, or discontinuing a line.” (Id. at p. 1031.)
17
Similarly, in Green Mountain R.R. Corp. v. Vermont (2d Cir 1995) 404 F.3d 638,
640, 644 (Green Mountain), the court held the ICCTA preempted a state’s efforts to
condition a railroad operator’s construction of new facilities on compliance with a state
environmental land use statute requiring preconstruction permits. Rejecting the state’s
proposed distinction between economic and environmental regulations, the court
concluded the permitting process “ ‘necessarily interfere[s]’ ” with the railroad operator’s
“ ‘ability to construct facilities and conduct economic activities.’ ” (Id. at p. 645; see
Association of American Railroads, supra, 622 F.3d at p. 1097 [local regulations limiting
permissible amount of emissions from idling trains and imposing reporting requirements
on rail yards were preempted by ICCTA because they “may reasonably be said to have
the effect of managing or governing rail transportation”]; Vill. of Ridgefield Park v. N.Y.,
Susquehanna & W. Ry. Corp. (2000) 163 N.J. 446, 750 A.2d 57, 64 [state and local
regulation “must not have the effect of foreclosing or restricting the railroad’s ability to
conduct its operations or otherwise unreasonably burdening interstate commerce”].)
The STB “has likewise ruled that ‘state and local permitting or preclearance
requirements (including environmental requirements) are preempted because by their
nature they unduly interfere with interstate commerce.’ ” (Green Mountain, supra, 404
F.3d at p. 642, and decisions cited therein; see Cities of Auburn and Kent, WA—Petition
for Declaratory Order—Burlington Northern Railroad Company—Stampede Pass Line
(STB, July 1, 1997, No. FD 33200) 1997 STB Lexis 143, pp. **5-6.) When considering
the environmental regulations applicable to a proposed high-speed rail project running
from Nevada to California, the STB ruled “state permitting and land use requirements
that would apply to non-rail projects, such as [CEQA], will be preempted.”
(DesertXpress Enterprises, LLC—Petition for Declaratory Order (STB, June 25, 2007,
No. FD 34914) 2007 STB Lexis 343, p. *3.)
The decisions of lower federal courts, though not binding on us, are persuasive
when they decide a question of federal law in a uniform way. (Landstar Global
Logistics, Inc. v. Robinson & Robinson, Inc. (2013) 216 Cal.App.4th 378, 389.) The
decisions of the STB regarding preemption, though not binding on this court, have been
18
accorded deference by the federal courts. (DHX, Inc. v. Surface Transp. Bd. (9th Cir.
2007) 501 F.3d 1080, 1086; Association of American Railroads, supra, 622 F.3d at
p. 1097; B & S Holdings, LLC v. BNSF Ry. Co. (E.D.Wash. 2012) 889 F.Supp.2d 1252,
1257; but see Franks Inv. Co. LLC v. Union Pacific R. Co. (5th Cir. 2010) 593 F.3d 404,
413, citing Wyeth v. Levine (2009) 555 U.S. 555, 577 [agency has ability to make
informed decision as to how state requirements impose obstacle to federal law it
interprets, but weight accorded to agency’s explanation of state law on federal scheme
depends on its thoroughness, consistency and persuasiveness].) The authorities cited ante
conclude a state statute requiring environmental review as a condition to railroad
operations is preempted by the ICCTA, and we have been directed to no federal appellate
or STB decision reaching a contrary conclusion. We find the decisions persuasive and
fully applicable to the case before us.
Subject to certain exceptions, CEQA requires a state or local agency to prepare
and certify an EIR before it carries out or approves a “project” that may have significant
direct or indirect environmental impacts. (Pub. Resources Code, §§ 21100, 21151.) The
preparation of an EIR is an “often lengthy and expensive process” (City of Santee v.
County of San Diego (2010) 186 Cal.App.4th 55, 63) designed to inform the public and
local agencies about the environmental consequences of a project so they may consider
those consequences before acting. (San Franciscans Upholding the Downtown Plan v.
City & County of San Francisco (2002) 102 Cal.App.4th 656, 695.) Though CEQA does
not mandate the disapproval of a project with significant environmental effects (ibid.), an
agency must mitigate or avoid the significant environmental effects of a project if it is
feasible to do so. (South County Citizens for Smart Growth v. County of Nevada (2013)
221 Cal.App.4th 316, 336.) An EIR’s disclosure of such effects could significantly delay
or even halt a project in some circumstances, and in the context of railroad operations,
CEQA is not simply a health and safety regulation imposing an incidental burden on
interstate commerce.
As the trial judge in this case aptly noted, “CEQA mandates a time consuming
review which may result in indefinite delays and unduly interfere with exclusive federal
19
jurisdiction over rail transportation by giving state or local officials the ability to
withhold approval for a [p]roject because the EIR and/or the lead agency’s findings fail to
comply with one or more of the CEQA conditions.” While CEQA serves a laudable and
important purpose, “ ‘[t]he relative importance to the State of its own law is not material
when there is a conflict with a valid federal law, for the Framers of our Constitution
provided that the federal law must prevail.’ [Citations.]” (Fidelity Federal Sav. & Loan
Assn. v. de la Cuesta (1982) 458 U.S. 141, 153.)
Petitioners suggest CEQA could not interfere with the STB’s authority under the
ICCTA because the work at issue in this case involved the rehabilitation, repair and
maintenance of existing tracks, and the STB “lacks jurisdiction” over those matters. In
the case on which they rely for this proposition, Lee’s Summit, Missouri v. Surface
Transportation Board (D.C. Cir. 2000) 231 F.3d 39, 40, 42, the court affirmed an STB
decision authorizing the restoration of existing but unused tracks and finding no
environmental review was required. That certain work is exempt from federal
environmental review and certification by the STB does not mean state environmental
review of such matters would not interfere with railroad operations. Petitioners’ CEQA
claims fall within the preemption clause of the ICCTA.
In concluding the ICCTA expressly preempts CEQA review of proposed railroad
operations, we acknowledge the recent decision in Town of Atherton v. California
High-Speed Rail Authority (2014) 228 Cal.App.4th 314 (Atherton), in which the Third
District Court of Appeal considered a similar issue: Did the ICCTA preempt CEQA
review by a state railroad authority for the purpose of determining which of two routes
would be utilized in one section of a high-speed rail system? The Atherton court
recognized a local government’s denial of a permit to operate a rail line would be
preempted because it could be “ ‘ “used to deny a railroad the ability to conduct some
part of its operations or to proceed with activities the [STB] has authorized,” ’ ” but
indicated it was “less clear and certainly subject to dispute whether requiring review
under CEQA before deciding on the alignment of [the rail line] has a comparable
20
potential effect to deny the railroad the ability to conduct its operations and activities.”
(Id. at p. 333.)
The Atherton court did not decide whether the ICCTA preempted CEQA because
it concluded the market participation doctrine operated as an exception to preemption
under the circumstances of that case. (Atherton, supra, 228 Cal.App.4th at pp. 333-334.)
We discuss Atherton and the market participation doctrine more fully post, but note for
now that requiring a CEQA analysis as part of the process for determining where to place
a rail line, which was at issue in Atherton, differs from requiring a CEQA analysis as a
condition of resuming rail operations, at issue in the present case.
2. Effect of NCRA’s “Agreement” to Prepare EIR
Petitioners argue their claims are not preempted because NCRA voluntarily agreed
to comply with CEQA as a condition of receiving TCRP funds for rehabilitating and
upgrading the line. Thus, they argue, even if the ICCTA would otherwise preempt
CEQA review of resumed operations in the Russian River Division, NCRA voluntarily
agreed to prepare an EIR in order to receive TCRP funds from the state. (See Service
Employees Internat. Union, Local 99 v. Options—A Child Care & Human Services
Agency (2011) 200 Cal.App.4th 869, 879 (SEIU) [private agency, though not otherwise
subject to the Ralph M. Brown Act (Brown Act; Gov. Code, § 54950 et seq.), agreed to
comply with that law as condition of receiving public funds].)
In PCS Phosphate Co., Inc. v. Norfolk Southern Corp. (4th Cir. 2009) 559 F.3d
212, 218-219, the court concluded a landowner’s lawsuit against a railroad for breach of
contract and breach of the covenants under an easement granted to the railroad were not
preempted by the ICCTA. “Voluntary agreements between private parties . . . are not
presumptively regulatory acts, and we are doubtful that most private contracts constitute
the sort of ‘regulation’ expressly preempted by the statute. If contracts were by definition
‘regulation,’ then enforcement of every contract with ‘rail transportation’ as its subject
would be preempted as a state law remedy ‘with respect to regulation of rail
transportation.’ 49 U.S.C. § 10501(b). . . . If enforcement of these agreements were
21
preempted, the contracting parties’ only recourse would be the ‘exclusive’ ICCTA
remedies. But the ICCTA does not include a general contract remedy. Such a broad
reading of the preemption clause would make it virtually impossible to conduct business,
and Congress surely would have spoken more clearly, and not used the word ‘regulation,’
if it intended that result.” (Ibid., fns. omitted.)
The master agreement between NCRA and Caltrans provides, in relevant part,
“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).” Additionally, NCRA stated it would
be preparing an EIR in its supplemental requests to CTC for TCRP funds.
This language does not unambiguously amount to a commitment to prepare an
EIR regarding the resumption of railroad operations on the Russian River Division. It
states that environmental clearance is required before funds may be requested for the
purchase or construction of rights-of-way, and that no TCRP funds will be authorized or
approved for a project that may have a significant effect on the environment unless an
EIR is prepared “per mandated by” CEQA. Here, the purchase or construction of a
right-of-way is not at issue, and the TCRP funds at issue were dispersed for repair work,
not rail operations per se. Moreover, in a case in which CEQA is preempted by federal
law, an EIR would not be “mandated by” CEQA, rendering the language of the master
agreement ambiguous if it is read to encompass railroad operations.
More fundamentally, even if the master agreement is viewed as a contract
requiring the preparation of an EIR regarding resumed railroad operations, a claim based
on a breach of that obligation may only be enforced by a party having standing. (See
Windham at Carmel Mountain Ranch Assn. v. Superior Court (2009) 109 Cal.App.4th
22
1162, 1173; Hatchwell v. Blue Shield of California (1988) 198 Cal.App.3d 1027, 1034.)
Subject to an exception not relevant here, “[i]n asserting a claim based upon a contract,
this generally requires the party to be a signatory to the contract, or to be an intended
third party beneficiary.” (Berclain America Latina v. Baan Co. (1999) 74 Cal.App.4th
401, 405; see Civ. Code, § 1559 [“A contract, made expressly for the benefit of a third
person, may be enforced by him at any time before the parties thereto rescind it”].)
Petitioners are not parties to NCRA’s agreement with Caltrans, but argue they qualify as
intended third party beneficiaries under the principles of SEIU, supra, 200 Cal.App.4th
869.
In SEIU, a nonprofit corporation entered into a contract with the state to provide
childcare and education services within Los Angeles County. (SEIU, supra, 200
Cal.App.4th at p. 873.) As a private entity rather than a legislative body or local agency,
it was not subject to the notice and open meeting requirements of the Brown Act, but it
agreed to comply with the Brown Act in a provision of its contract with the state. (Id. at
pp. 873, 879, 883-884.) Plaintiffs, who were members of the public, filed an action for
violation of the Brown Act and breach of contract, alleging the nonprofit corporation’s
board of directors had not followed appropriate Brown Act procedures in holding a board
meeting. (Id. at pp. 874-875.) In an appeal from an order granting summary judgment in
favor of the nonprofit corporation, the Court of Appeal concluded (1) the contractual
provision requiring compliance with the Brown Act was intended to benefit members of
the public; (2) the plaintiffs (a union and its employee) were members of the public suing
to enforce a public right and were, as such, intended beneficiaries under the contract
between the nonprofit corporation and the state; (3) the plaintiffs could therefore sue on
the contract as third party beneficiaries; however, (4) they could not sue directly under
the Brown Act because the corporation was not an entity otherwise subject to the Brown
Act. (Id. at pp. 878-884.)
Petitioners argue they have standing, analogizing their petitions for writ of
mandate under CEQA with the claim for breach of contract in SEIU. They note CEQA,
like the Brown Act, was designed to benefit members of the public, and compliance with
23
CEQA was a condition of NCRA’s contract with the state. The decision in SEIU is
distinguishable because in that case the plaintiffs had included a cause of action for
breach of contract. No such claim has been asserted by petitioners, who have not even
alleged the existence of a contractual agreement by NCRA to prepare an EIR. The SEIU
court concluded the direct cause of action under the Brown Act could not be sustained
because the defendant was a private corporation to which the Brown Act did not apply.
(SEIU, supra, 200 Cal.App.4th at pp. 883-884.) Similarly, the contract between the state
and NCRA does not confer a direct statutory right to sue under CEQA because CEQA is
preempted by federal law.6
Petitioners argue they do not need to rely on a third party beneficiary theory
because they have a statutory right as members of the public to challenge an EIR required
by CEQA, and a petition for writ of mandate is the appropriate procedural vehicle for
requiring a public agency to do what it is legally obligated to do. (See Bunnett v. Regents
of University of California (1995) 35 Cal.App.4th 843, 847 [contractually based civil
claims against public employer treated as action for ordinary mandamus for purposes of
appellate review because they were “no more than challenges to the administrative
decision of a state agency”].) We disagree. CEQA is preempted by federal law when the
project to be approved involves railroad operations. This means the remedies under
CEQA, including the right to petition for a writ of mandate, are preempted. Because it is
the contractual agreement with the state that purportedly obligates NCRA to comply with
CEQA, the only way petitioners can proceed is via an action to enforce that contract.
Petitioners have not brought an action to enforce the contract. (See Shaw v. Regents of
University of California (1997) 58 Cal.App.4th 44, 52 [“As a general proposition,
6
At oral argument, petitioners suggested for the first time on appeal that we
remand the case to allow them to amend their pleadings to include a third party
beneficiary theory. We decline to do so. In Aubry v. Tri-City Hospital Dist. (1992)
2 Cal.4th 962, 970-972, the decision on which petitioners rely in support of this request,
the state Supreme Court concluded a demurrer should have been sustained with leave to
amend so the cross-complainant could attempt to plead a breach of contract under a third
party beneficiary theory of liability. This case has proceeded well beyond the pleadings
stage.
24
mandamus is not an appropriate remedy for enforcing a contractual obligation against a
public entity”]; Wenzler v. Municipal Court (1965) 235 Cal.App.2d 128, 132 [same].)
The difference between a petition for writ of mandate under CEQA and a claim for
breach of contract under a third party beneficiary theory is not merely a semantic one. In
reviewing the adequacy of an EIR certified by an agency, courts apply a standard of
traditional mandamus and “the inquiry shall extend only to whether there was a
prejudicial abuse of discretion. Abuse of discretion is established if the agency has not
proceeded in a manner required by law or if the determination or decision is not
supported by substantial evidence.” (Pub. Resources Code, § 21168.5; Federation of
Hillside & Canyon Associations v. City of Los Angeles (2000) 83 Cal.App.4th 1252,
1259.) In a claim for specific performance of a contract under a third party beneficiary
theory, a plaintiff must prove both the existence of a contract and a breach of its terms.
(See Schauer v. Mandarin Gems of Cal., Inc. (2005) 125 Cal.App.4th 949, 959-960 [third
party beneficiary’s right to sue for specific performance]; Mansouri v. Superior Court
(2010) 181 Cal.App.4th 633, 642 [elements of specific performance].)
As already noted, the master agreement signed by NCRA and Caltrans does not
unambiguously require an EIR for railroad operations in cases where CEQA is
preempted. And, in any event, NCRA did prepare an EIR. A claim for breach of
contract would present a number of factual issues that simply have no role in the
litigation of a petition for writ of mandate under CEQA: Should the master agreement be
construed to require an EIR? Did NCRA’s preparation of an EIR satisfy this condition?
Petitioners ask us to assume the breach of contract, which would in turn confer standing
to proceed on the CEQA claim, when in actuality they have skipped the essential step of
alleging and proving a breach of contract by a preponderance of the evidence. (Cf.
Buxbom v. Smith (1944) 23 Cal.2d 535, 542-546 [pleadings and evidence supported
damages based on tortious interference with plaintiff’s business, though the only cause of
action alleged was for breach of contract].)
25
3. “Market Participation” Doctrine
“ ‘[W]hen government agencies are acting in their capacity as the owners of
property or purchasers of goods and services, they are not making policy or acting as
regulators and largely have the same freedom to protect their interests as do private
individuals and entities.’ ” (Associated General Contractors of America v. San Diego
Unified School Dist. (2011) 195 Cal.App.4th 748, 757 (Associated Contractors).)
Petitioners argue their CEQA claims are not preempted by the ICCTA because NCRA
was acting as a market participant rather than a regulator when it prepared the EIR.
Petitioners rely heavily on the recent decision in Atherton, which applied the market
participation doctrine to the preparation of an EIR by a state agency charged with
planning a high-speed rail system in California, and consequently rejected a claim by that
agency that CEQA review was preempted by the ICCTA. (Atherton, supra, 228
Cal.App.4th at pp. 333-334.) We are not persuaded the market participation doctrine
applies.
The market participation doctrine originated in a series of dormant Commerce
Clause cases. (Engine Manufacturers Assn. v. SCAQMD (9th Cir. 2007) 498 F.3d 1031,
1040 (Engine Manufacturers).) In Hughes v. Alexandria Scrap Corp. (1976) 426 U.S.
794, 805-806, the court rejected a Commerce Clause challenge to a Maryland law
imposing extra documentation requirements for out-of-state processors of scrap metal
participating in a program offering a “bounty” for every junk car converted into scrap,
concluding Maryland had not acted as regulator, but had “entered into the market itself to
bid up” the price of the junk cars. In Reeves, Inc. v. Stake (1980) 447 U.S. 429, 432-433
(Reeves), an out-of-state buyer challenged a policy of the state of South Dakota that gave
preference to residents seeking to purchase cement produced at a state-owned plant. The
court rejected a claim this policy violated the Commerce Clause, because the state was
acting as a market participant rather than a market regulator: “[S]tate proprietary
activities may be, and often are, burdened with the same restrictions imposed on private
market participants. Evenhandedness suggests that, when acting as proprietors, States
26
should similarly share existing freedoms from federal constraints, including the inherent
limits of the Commerce Clause.” (Id. at p. 439.)
The Supreme Court later extended the market participation doctrine to protect
proprietary state action from preemption under various federal statutes, recognizing that
federal preemption applies “only to state regulation.” (Building & Constr. Trades
Council v. Associated Builders & Contractors of Mass./R.I., Inc. (1993) 507 U.S. 218,
227 (Boston Harbor); see Engine Manufacturers, supra, 498 F.3d at p. 1040.) In Boston
Harbor, supra, 507 U.S. at pp. 222-223, a labor organization representing nonunion
construction industry workers sought to enjoin enforcement of a state agency’s bid
specification that required successful bidders on a construction project it owned to abide
by a collective bargaining agreement. The court rejected the argument the bid
specification was preempted by the National Labor Relations Act (NLRA): “A State
does not regulate, however, simply by acting within one of these protected areas. When a
state owns and manages property, for example, it must interact with private participants
in the marketplace. In so doing, the State is not subject to pre-emption by the NLRA,
because pre-emption doctrines apply only to state regulation.” (Id. at p. 227.)
“In distinguishing between proprietary action that is immune from preemption and
impermissible attempts to regulate through the spending power, the key under Boston
Harbor is to focus on two questions. First, does the challenged action essentially reflect
the entity’s own interest in its efficient procurement of needed goods and services, as
measured by comparison with the typical behavior of private parties in similar
circumstances? Second, does the narrow scope of the challenged action defeat an
inference that its primary goal was to encourage a general policy rather than address a
specific proprietary problem? Both questions seek to isolate a class of government
interactions with the market that are so narrowly focused, and so in keeping with the
ordinary behavior of private parties, that a regulatory impulse can be safely ruled out.”
(Cardinal Towing v. City of Bedford, Texas (5th Cir. 1999) 180 F.3d 686, 693 (Cardinal
Towing) [city’s bid specifications for tow truck company not preempted by Federal
Aviation Administration Authorization Act].)
27
While proprietary actions taken by a state generally will not be preempted by
federal law, “the market participation doctrine is not a wholly freestanding doctrine, but
rather a presumption about congressional intent.” (Engine Manufacturers, supra, 498
F.3d at p. 1042.) “Because congressional intent is the key to preemption analysis, we
must consider whether [a federal law] contains ‘any express or implied indication by
Congress’ that the presumption embodied by the market participant doctrine should not
apply to preemption under the Act.” (Ibid., citing Boston Harbor, supra, 507 U.S. at
p. 231.) In a market participation case, the court undertakes “a single inquiry: whether
the challenged ‘program constituted direct participation in the market.’ ” (Reeves, supra,
447 U.S. at p. 435, fn. 7.)
State action designed to protect the environment may be proprietary in nature and
thus exempt from preemption by a federal environmental statute. In Engine
Manufacturers, supra, 498 F.3d 1031, a state agency charged with air pollution control in
Southern California established fleet rules directing state and local governments to
choose vehicles that met certain emission standards or contained alternative-fuel engines.
(Id. at pp. 1037-1039.) A trade association representing manufacturers of diesel-fueled
engines challenged those rules as preempted by the federal Clean Air Act. (Id. at
pp. 1031, 1037-1039.) The court disagreed, concluding the acquisition of vehicles by
state and local governments amounted to proprietary action because they “ ‘essentially
reflect the [state] entity’s own interest in its efficient procurement of needed goods and
services, as measured by comparison with the typical behavior of private parties in
similar circumstances.’ ” (Id. at p. 1045.) Rejecting an argument that the fleet rules were
not concerned with the “efficient procurement” of services because their goal was to
reduce pollution, the court noted, “That a state . . . may have policy goals that it seeks to
further through its participation in the market does not preclude the doctrine’s
application, so long as the action in question is the state’s own market participation. . . .
[¶] . . . ‘Efficient’ does not merely mean ‘cheap.’ In context, ‘efficient procurement’
means procurement that serves the state’s purposes—which may include purposes other
28
than saving money—just as private entities serve their purposes by taking into account
factors other than price in their procurement decisions.” (Id. at p. 1046.)
In the case before us, NCRA, a political subdivision of the state, undertook a
project to reopen the Russian River Division of the line. As part of that project, it
prepared an EIR, which is now challenged by petitioners as inadequate. Even if the
project to reopen the line is viewed as “proprietary” and the initial decision to prepare the
EIR a component of this proprietary action, a writ proceeding by a private citizen’s group
challenging the adequacy of the review under CEQA is not a part of this proprietary
action.
As the cases cited ante make clear, the market participation doctrine gives
governmental entities the freedom to engage in conduct that would be allowed to private
market participants. (Associated Contractors, supra, 195 Cal.App.4th at p. 757.) It
accomplishes this end by allowing the governmental entity to avoid a charge by
aggrieved third parties that its actions are preempted by federal law. (E.g., Boston
Harbor, supra, 507 U.S. 218; Engine Manufacturers, supra, 498 F.3d 1031; Cardinal
Towing, supra, 180 F.3d 686.) Thus, governmental entities whose activities were
allegedly preempted used the market participation doctrine defensively against the
nonunion labor organization in Boston Harbor, the unsuccessful bidder in Cardinal
Towing, and the diesel-fuel engine manufacturers in Engine Manufacturers.
Petitioners seek to stand the market participation doctrine on its head and use it to
avoid the preemptive effect of a federal statute the state entity is seeking to invoke. None
of the cases involving market participation use the doctrine in this context, and such a use
would be antithetical to the purpose underlying the doctrine. A private railroad that
conducted a voluntary environmental review as part of a project would not be subjected
to a challenge to that review by a private citizen’s group. The aspect of CEQA that
allows a citizen’s group to challenge the adequacy of an EIR when CEQA compliance is
required is clearly regulatory in nature, as a lawsuit against a governmental entity cannot
be viewed as a part of its proprietary action, even if the lawsuit challenges that
proprietary action.
29
The situation before us is akin to the so-called Grupp cases, in which third parties
alleged a courier service had improperly billed state governments it had contracted with
to provide services. (State of New York ex rel. Grupp v. DHL Express (USA), Inc. (2012)
19 N.Y.3d 278 (Grupp III); State ex rel. Grupp v. DHL Express (USA), Inc. (2011) 922
N.Y.S.2d. 888 (Grupp II); DHL Express (USA), Inc. v. State ex rel. Grupp
(Fla.Dist.Ct.App. 2011) 60 So.3d 426 (Grupp I).) Although the third parties had standing
to bring actions under the states’ false claims acts, the claims were preempted by the
Federal Aviation Administration Authorization Act. (Grupp III, 19 N.Y.3d at pp. 283-
286; Grupp II, 922 N.Y.S.2d at pp. 890-891; Grupp I, 60 So.3d at pp. 427-429.) The
third parties could not assert the market participation doctrine to avoid federal preemption
because, while the state had procured the courier services in its proprietary capacity, the
state false claims acts “establishe[d] public policy goals and [were] thus regulatory in
nature.” (Grupp III, 19 N.Y.3d at p. 286; see Grupp II, 922 N.Y.S.2d at p. 891; Grupp I,
60 So.3d at p. 429.)7 “Although the State of Florida was a market participant when it
contracted with DHL, it acts as a regulator in authorizing suits under the False Claims
Act . . . . In the latter role, the state (and respondents on the state’s behalf) is not a market
participant.” (Grupp I, 60 So.3d at p. 429.) These cases are significant because they
recognize that when a party relies on a state law of general application to challenge a
state proprietary action, that challenge operates as a regulation, rather than a part of the
proprietary action being challenged.
We conclude the market participant doctrine may not be used to avoid federal
preemption by the ICCTA in this case. We acknowledge a contrary conclusion on
similar facts was reached by the court in Atherton, supra, 228 Cal.App.4th 314.
In Atherton, a state agency (the Authority) charged with planning a statewide
high-speed rail line (HST) was faced with the question of where to lay the tracks between
7
A similar suit was filed in California, and a Court of Appeal decision reaching
the same result was recently granted review, apparently on grounds not relating to the
market participation doctrine. (Grupp v. DHL Express (USA), Inc. (2014) 225
Cal.App.4th 510, review granted July 30, 2014, S218754.)
30
the Central Valley and the San Francisco Bay Area, the two choices being the Pacheco
Pass or farther north through the Altamont Pass. (Atherton, supra, 228 Cal.App.4th at
pp. 322-323.) The Authority prepared a number of CEQA documents in connection with
this decision, believing the STB lacked jurisdiction over the intrastate project and CEQA
applied. (Id. at pp. 324-326, 328.) After the Authority certified a final EIR and approved
the Pacheco Pass alternative, environmental groups and local governments filed mandate
petitions challenging the adequacy of the EIR. (Id. at pp. 324-327.) They received only a
partial victory and filed an appeal (id. at pp. 326-327), during which time the STB issued
a decision finding it did have jurisdiction over the line (id. at p. 328). After the Court of
Appeal had calendared the case for oral argument, the Authority was granted permission
to file supplemental briefs and asserted for the first time that CEQA review was
preempted by the ICCTA. (Id. at pp. 328-329.)
The court in Atherton rejected the preemption argument, concluding the Authority
had acted as a market participant and ICCTA preemption did not apply: “We are not
faced with a private railroad company seeking to construct a rail line without having to
comply with state regulations. Rather, it is the state that is constructing the rail line,
financed by bonds which were approved by the state’s electorate in Proposition 1A. (Sts.
& Hy. Code, § 2704 et seq.) Proposition 1A, as we discuss post, included compliance
with CEQA as a feature of the HST. The state created the Authority to direct
development and implementation of the HST. (Pub. Util. Code, § 185030.) From at least
2000 until the present, the Authority has complied with CEQA with respect to planning
the HST. It is these factors—state ownership of the HST, Proposition 1A, and years of
the Authority’s compliance with CEQA—that provide the basis for finding an exception
to preemption under the market participation doctrine.” (Atherton, supra, 228
Cal.App.4th at pp. 333-334.)
Although Atherton presents a situation factually and procedurally similar to the
one before us, we respectfully disagree with the court’s analysis, which overlooks the
genesis and purpose of the market participation doctrine and does not adequately answer
the question of how a third party’s challenge to an EIR under CEQA can reasonably be
31
viewed as part of the government’s proprietary activities. The Atherton court
characterizes the Authority’s compliance with CEQA as voluntary due to its longstanding
practice of CEQA compliance and its acceptance of funds from a bond measure that
contemplated such compliance, and concludes, “ ‘ “[V]oluntary agreements must be seen
as reflecting the carrier’s own determination and admission that the agreements would
not unreasonably interfere with interstate commerce.” [Citation.] ’ ” (Atherton, supra,
228 Cal.App.4th at p. 339.) Yet, elsewhere in the opinion, the court recognizes that when
a state action imposes a permitting or preclearance requirement that could be used to
deny a railroad the ability to conduct its operations, the governmental action is “ ‘ “per se
unreasonable interference with interstate commerce,” [and] “the preemption analysis is
addressed not to the reasonableness of the particular state or local action, but rather to the
act of regulation itself.” ’ ” (Id. at p. 330, citing Adrian, supra, 550 F.3d at p. 540.)
Additionally, characterizing a government agency’s preparation of CEQA
documents as “voluntary” does not answer the question of whether and when a third party
has standing to enforce CEQA compliance. The court in Atherton suggests the bond
measure funding the HST was akin to a contractual agreement between the public entity
and the electorate, citing Monette-Shaw v. San Francisco Board of Supervisors (2006)
139 Cal.App.4th 1210, 1215. Assuming a member of the electorate could bring a breach
of contract claim based on an entity’s failure to comply with a bond measure under the
circumstances of Atherton (see Associated Students of North Peralta Community College
v. Board of Trustees (1979) 92 Cal.App.3d 672, 676), NCRA’s alleged “voluntary”
agreement to comply with CEQA arises from its contract with the state, not from its
acceptance of funds from a bond measure. As we have previously explained, petitioners
do not have standing to enforce that contract.
4. Consent Decree
Petitioners argue the consent decree in the City of Novato litigation amounted to
an agreement by NCRA to produce an EIR. We disagree. The consent decree in this
case did not purport to resolve all issues pertaining to the resumption of railroad
32
operations in the Russian River Division, and the scope of the work under that decree is
not the same as that reviewed in the EIR prepared by NCRA. Though the consent decree
states the work to be performed “shall be subject to CEQA and/or [NEPA]” and, “[i]n
deciding whether to approve and undertake the performance of any and all components of
the Work, NCRA shall comply with CEQA and or NEPA,” the “Work” covered by the
agreement was limited to certain construction activities rather than the resumption of rail
operations. The consent decree cannot be read to confer a clear contractual obligation on
NCRA to prepare an EIR for the reopening of the Russian River Division. Even if it did,
petitioners, as nonparties, lack standing to enforce its provisions. (Blue Chip Stamps v.
Manor Drug Stores (1975) 421 U.S. 723, 750 [“a consent decree is not enforceable
directly or in collateral proceedings by those who are not parties to it even though they
were intended to be benefitted by it”].)
5. Tenth Amendment; State Sovereignty
Petitioners and amicus curiae Ecological Rights Foundation (ERF) assert the
application of CEQA in this case is a matter of self-governance by a political subdivision
of the state, meaning federal preemption would run afoul of the Tenth Amendment of the
federal Constitution. We assume, without deciding, that a private individual has standing
to raise this issue. (See Bond v. United States (2011) __ U.S. __ [131 S. Ct. 2355, 2365]
[individual may raise 10th Amendment claim in an appropriate case].)
The Tenth Amendment provides, “The powers not delegated to the United States
by the Constitution, nor prohibited by it to the States, are reserved to the States
respectively, or to the people.” It gives a state “near plenary authority to allocate
governmental responsibilities among its political subdivisions” (Bacon v. City of
Richmond, Virginia (4th Cir. 2007) 475 F.3d 633, 641), which may not be intruded upon
by the federal government absent “unmistakably clear” language in the federal statute.
(Gregory v. Ashcroft (1991) 501 U.S. 452, 467 [state law requiring state court judges to
retire at age 70 not subject to federal age discrimination law absent explicit provision to
the contrary].)
33
ERF asserts this case is controlled by Nixon v. Missouri Municipal League (2004)
541 U.S. 125 (Nixon), in which municipalities within Missouri challenged a state law
forbidding political subdivisions of the state from providing telecommunications services.
The municipalities argued the law was preempted by the federal Telecommunications Act
of 1996 (TCA; 47 U.S.C. § 253), which provided, “No State . . . may prohibit or have the
effect of prohibiting the ability of any entity to provide any interstate or intrastate
telecommunications service.” The court concluded the TCA did not preempt Missouri’s
governance of its own political subdivisions because a clear evidence of congressional
intent to do so was lacking, the phrase “ability of any entity” not being limited to a single
interpretation. (Id. at pp. 140-141.)8
The ICCTA, by contrast, expressly preempts all state laws “ ‘ “that may
reasonably be said to have the effect of managing or governing rail transportation.” ’ ”
(Burlington Northern, supra, 209 Cal.App.4th at p. 1528.) This preemption encompasses
state laws such as CEQA involving environmental preclearance requirements.
“[R]ailroads are instrumentalities of interstate commerce over which Congress’s
authority to regulate even purely intrastate matters under the Commerce Clause has not
been and cannot be doubted.” (CSX Transportation, Inc. v. Georgia Public Serv. Com.
(N.D.Ga. 1996) 944 F.Supp. 1573, 1586; see Auburn, supra, 154 F.3d at p. 1031
[“preemption of rail activity is a valid exercise of congressional power under the
Commerce Clause”].) If Congress has the authority under the Commerce Clause to act,
that action does not invade “the province of state sovereignty reserved by the Tenth
Amendment.” (New York v. United States (1992) 505 U.S. 144, 155-156; see Board of
County Comrs. v. U.S. E.E.O.C. (10th Cir. 2005) 405 F.3d 840, 847, 850.) The ICCTA’s
8
Much of the discussion in Nixon focused on the futility of interpreting the TCA
to preempt a restriction on utilities run by a government agency when that agency could
only obtain the funding necessary to operate through the political decisions of the state.
“Legal limits on what may be done by the government itself (including its subdivisions)
will often be indistinguishable from choices that express what the government wishes to
do with the authority and resources it can command.” (Nixon, supra, 541 U.S. at p. 134.)
34
preemption of CEQA as a preclearance requirement to railroad operations does not
violate the Tenth Amendment.
C. Judicial Estoppel
Petitioners argue NCRA and NWPRC are estopped from asserting CEQA is
preempted by the ICCTA, because this argument is contrary to positions previously taken
by those parties in judicial and quasi-judicial proceedings. We disagree.
“Judicial estoppel is an equitable doctrine designed to maintain the integrity of the
courts and to protect the parties from unfair strategies. [Citations.] The doctrine
prohibits a party from asserting a position in a legal proceeding that is contrary to a
position he or she successfully asserted in the same or some other earlier proceeding.”
(Owens v. County of Los Angeles (2013) 220 Cal.App.4th 107, 121 (Owens).) Judicial
estoppel may be found when “ ‘(1) the same party has taken two positions; (2) the
positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party
was successful in asserting the first position (i.e., the tribunal adopted the position or
accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position
was not taken as a result of ignorance, fraud, or mistake.’ ” (Ibid.)
Because judicial estoppel is an equitable doctrine, “its application, even where all
necessary elements are present, is discretionary.” (MW Erectors, Inc. v. Niederhauser
Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412, 422, and cases cited
therein.) “Moreover, because judicial estoppel is an extraordinary and equitable remedy
that can impinge on the truth-seeking function of the court and produce harsh
consequences, it must be ‘applied with caution and limited to egregious circumstances’
[citations], that is, ‘ “ ‘when a party’s inconsistent behavior will otherwise result in a
miscarriage of justice.’ ” ’ ” (Minish v. Hanuman Fellowship (2013) 214 Cal.App.4th
437, 449 (Minish).)
On appeal, we “review the findings of fact upon which the application of judicial
estoppel is based under the substantial evidence test. [Citation.] When the facts are
undisputed, we independently review whether the elements of judicial estoppel have been
35
satisfied. [Citation.]” (Owens, supra, 220 Cal.App.4th at p. 121.) If the trial court has
declined to apply the doctrine as an equitable matter, though the statutory elements were
technically met, we review that decision for abuse of discretion. (Ibid.; Miller v. Bank of
America, N.A. (2013) 213 Cal.App.4th 1, 9-10.)
Initially, we address petitioners’ claim that our review should focus on the order
overruling the demurrer, which concluded NCRA and NWPRC were judicially estopped
from arguing CEQA was preempted by federal law. Petitioners argue that the interim
order was binding and could not be revisited at the time of the hearing on the merits, lest
one judge of the superior court act as a “one-judge appellate court.” (People v.
Quarterman (2012) 202 Cal.App.4th 1280, 1293 (Quarterman).) We disagree. A ruling
on a demurrer is not final and, until entry of judgment, may be reconsidered and changed
by the trial court, including a different judge of the trial court. (Donohue v. State of
California (1986) 178 Cal.App.3d 795, 800-801; Valvo v. University of Southern
California (1977) 67 Cal.App.3d 887, 892, fn. 3; Collins v. Marvel Land Co. (1970) 13
Cal.App.3d 34, 45.)
Turning to the merits, petitioners argue that NCRA and NWPRC should be
judicially estopped from claiming the ICCTA preempts CEQA because (1) NCRA signed
a number of documents indicating it would comply with CEQA in exchange for TCRP
funds, (2) NWPRC’s business plan indicted it would fully participate in the steps
necessary to secure TCRP funding, and (3) both NCRA and NWPRC made
representations in the City of Novato case that CEQA would be followed with respect to
the work to be performed as a result of the consent decree.9 Because the doctrine of
judicial estoppel rests on the inconsistency of the positions taken, we examine whether
NCRA or NWPRC ever asserted in a prior judicial or quasi-judicial proceeding that the
ICCTA did not preempt CEQA.
As to statements or representations made to Caltrans or CTC, there is no judicial
or quasi-judicial administrative proceeding at issue, and no prior contrary position taken
9
Although CAT suggests both NCRA and NWPRC made additional
representations to the STB, the argument is not developed.
36
by NCRA or NWPRC. NCRA may have agreed as a contractual matter to comply with
CEQA to secure certain state funds for repairs of the line, but the parties have directed us
to no representations made by NCRA with respect to federal preemption and its
applicability to railroad operations. If the state believes NCRA has violated the terms of
its funding agreement, it is certainly free to pursue whatever remedies are available, but
no “contrary position” was taken by NCRA that would justify the extraordinary step of
utilizing judicial estoppel to decide the significant issue of federal preemption.
Though the City of Novato litigation was a proceeding to which the doctrine of
judicial estoppel might apply, petitioners have not demonstrated NCRA or NWPRC took
a contrary position with respect to federal preemption that was adopted by the court. The
consent decree that ended the litigation called for certain construction work to be
performed subject to CEQA within Novato, and stated that such activities “do not
constitute an unreasonable burden on interstate commerce.” But, like the documents
pertaining to TCRP funds, the consent decree did not address the federal preemption of
CEQA with respect to rail operations, or even with respect to construction and repair
work outside the scope of the decree.
Petitioners argue NCRA took a contrary position with respect to ICCTA
preemption because it indicated it would be preparing an EIR for railroad operations
when it opposed a preliminary injunction in the City of Novato litigation, “claiming that
an [EIR] was not necessary for the construction work itself, but was necessary only for
the planned operation of the railway.” In response to an amicus brief regarding the
injunction, NCRA noted that but for its acceptance of state funds, the CEQA review at
issue in that case would be totally preempted. NCRA was at that point assuming (at least
for the sake of argument) an EIR would be prepared as to operations, but this is different
than urging the court to rule that ICCTA did not preempt CEQA.
In any event, the trial court in City of Novato did not adopt any position with
respect to preemption when it ruled on the application for an injunction. Judicial estoppel
does not apply when the party stating an inconsistent position did not induce the tribunal
to adopt the earlier position or to accept it as true, because “[i]f the party did not succeed,
37
then a later inconsistent position poses little risk of inconsistent judicial determinations
and consequently introduces ‘ “little threat to judicial integrity.” ’ [Citation.]” (ABF
Capital Corp. v. Berglass (2005) 130 Cal.App.4th 825, 832.)10 Here, the court granted
the injunction in part, enjoining NCRA from commencing work that had not yet been
started, but it made no orders with respect to CEQA and its application to rail operations.
NCRA and NWPRC later filed a demurrer (overruled by the court) that asserted federal
preemption as a defense to the city’s CEQA challenge, a position consistent with the
preemption defense in the current proceedings.
Even if we assume the elements of judicial estoppel were satisfied, the trial court
declined to apply the doctrine due to policy reasons, stating in its order: “[A]pplication
of the doctrine of judicial estoppel in these proceedings would burden the STB’s
exclusive jurisdiction to regulate the freight rail operation at issue here without
interference from State remedies, and thereby defeat an important public regulatory
function granted to the STB under the [ICCTA].” The trial court had the discretion to
forgo the application of judicial estoppel for equitable reasons, and it did not abuse its
discretion here. (Owens, supra, 220 Cal.App.4th at p. 121.)
Petitioners analogize this case to People ex rel. Sneddon v. Torch Energy Services,
Inc. (2002) 102 Cal.App.4th 181 (Torch Energy), in which an oil company had agreed to
certain conditions so the county would issue an operating permit. (Id. at p. 184.) Its
successor in interest expressly agreed to the same conditions, and obtained additional
permits on the same basis, waiving any objection to those conditions. (Id. at pp. 184-
185.) A number of years passed without challenge to the permitting requirements on the
basis of federal preemption, and after an oil spill, the county sought civil fines and
penalties based on alleged violation of the permit conditions. (Ibid.) Though the area of
pipeline safety was preempted by federal law, the trial court decided the oil company was
estopped from claiming this defense (id. at p. 185), and the Court of Appeal “exercise[d]
10
A possible exception to the “success” element exists when the party has made
“ ‘an egregious attempt to manipulate the legal system.’ ” (Minish, supra, 214
Cal.App.4th at pp. 453-454.) No such attempt is at issue in this case.
38
[its] discretion and appl[ied] judicial estoppel to prevent Torch from escaping a long-
established commitment to comply with the County’s regulations” (id. at p. 195).
We question whether Torch Energy correctly extended the doctrine of judicial
estoppel to representations made to a county to obtain a permit. (See Embassy LLC v.
City of Santa Monica (2010) 185 Cal.App.4th 771, 778 [rejecting city’s argument that
landowner was judicially estopped by its failure to challenge permit conditions upon the
granting of a special permit: “We cannot see that the doctrine of judicial estoppel is
applicable. There was no tribunal to adopt a position or accept it as true, and the doctrine
simply makes no sense in this circumstance”].) In any event, the court in Torch Energy
was reviewing a discretionary call by the trial court and applying its own discretion to the
facts before it. It does not stand for the proposition it would have been an abuse of
discretion to decline to apply judicial estoppel in the situation presented. (Thompson v.
Automobile Club of Southern California (2013) 217 Cal.App.4th 719, 726-727 [that one
court might view facts or legal issues differently than another does not demonstrate abuse
of discretion].)
Nor does NCRA’s preparation of an EIR operate as an estoppel to its current
position no EIR was required. In Del Cerro Mobile Estates v. City of Placentia (2011)
197 Cal.App.4th 173, 180 (Del Cerro), the court held an agency that prepared an EIR for
a road grade separation project did not forfeit its right to argue no EIR was required
because a CEQA exemption applied. Quoting Santa Barbara County Flower and
Nursery Growers Association v. County of Santa Barbara (2004) 121 Cal.App.4th 864,
876, the court explained, “ ‘Under the doctrine of equitable estoppel, a party cannot deny
facts that it intentionally led another to believe if the party asserting estoppel is ignorant
of the true facts, and relied to its detriment. . . . Nothing in the record shows that the
[challenger] was unaware of the exemption, or that the County’s decision to prepare an
EIR prevented the [challenger] from ascertaining the applicable law.’ ” (Del Cerro, at
pp. 179-180.)
Finally, we reject FOER’s argument that the consent decree in the City of Novato
case operates as issue preclusion, or collateral estoppel, on the issue of federal
39
preemption. Collateral estoppel applies when (1) the issue to be decided is identical to
one decided in a previous proceeding; (2) the issue was actually litigated; (3) the issue
was necessarily decided in the previous proceeding; (4) the prior decision was final and
on the merits; and (5) the party against whom preclusion is sought is the same as, or in
privity with, the party in the previous proceeding. (Quarterman, supra, 202 Cal.App.4th
at p. 1288.)
The first prong necessary for collateral estoppel is not met. The parties in the City
of Novato case addressed the type of CEQA review to be applied to certain work to
rehabilitate the line, but that is a different issue than whether the ICCTA preempts CEQA
with respect to railroad operations. Though FOER asserts the court in City of Novato
“ruled that Respondents cannot rely on ICCTA preemption to shield the Project from
CEQA,” this ruling was part of an order overruling the demurrer in that case, not a part of
the consent decree and stipulated judgment itself. There was no final ruling on the merits
on the issue of federal preemption of CEQA with respect to railroad operations.
IV. DISPOSITION
The judgment (order denying the petitions for writ of mandate) is affirmed.
Respondents NCRA and NWPRC are entitled to ordinary costs on appeal.
40
NEEDHAM, J.
We concur.
JONES, P. J.
BRUINIERS, J.
(A139222, A139235)
41
Marin County Superior Court Case No. CIV1103591, Faye D’Opal, Judge.
Marin County Superior Court Case No. CIV1103605, Roy O. Chernus, Judge.
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, 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, 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.
Law Office of Douglas H. Bosco and Douglas H. Bosco for Real Party in Interest and
Respondent Northwestern Pacific Railroad Company.
(A139222, A139235)
42