CA: Review Ordered of Rulings Blocking State Access to HSR Funds

Jan. 30--With the state's bullet train project in a legal bind, the California Supreme Court on Wednesday ordered an appeals court to conduct a fast-track review of lower court rulings that have blocked the state's access to $9 billion in public funds needed for the Los Angeles-to-San Francisco line.

The order granted Gov. Jerry Brown's administration the expedited legal review it sought. But the high court declined to take up the matter on its own, potentially slowing down the resolution of crucial legal and financial issues for the $68-billion construction project, according to attorneys involved in the case.

The state's plan to begin building the 220-mph rail link between California's two largest cities this year is in jeopardy because of twin decisions by a Sacramento Superior Court judge, the state rail agency warned in court filings.

Judge Michael Kenny ruled last year that the state failed to comply with requirements of a 2008 voter-approved funding plan and, separately, that the high-speed rail agency committed technical legal errors in approving the issuance of bullet train bonds. Kenny followed up this month with an order requiring the state to rescind its funding plan.

The project has continued to move forward, drawing on $3.2 billion in federal grants. But the state is supposed to begin spending its own money by April 1, or risk losing the federal grants. Republican leaders in the House are pushing for the Obama administration to suspend funding for the project.

Against the backdrop of those pressures, the state unsuccessfully requested the Supreme Court set aside Kenny's rulings, arguing in a petition last week that he had exceeded his authority and made legal errors in the rulings.

In a brief order signed Wednesday by Chief Justice Tani Cantil-Sakauye, the high court transferred the request to an appellate court in Sacramento, and ordered written arguments to be completed by Feb. 10.

"The state wanted the court to hear this case quickly," said H.D. Palmer, deputy director for external affairs of the Department of Finance. "Today, the Supreme Court effectively granted that request by directing the Court of Appeals to consider our case in an expedited fashion."

But whether a decision comes in time for the state, which wanted Kenny's rulings blocked by March 1, is unclear.

Santa Clara University law professor Gerald Uelmen, an expert on the state Supreme Court, said it was impossible to predict how the appeals court might rule. The three-judge panel that will be assigned the case may hold a hearing -- "and in a case like this I imagine they would," Uelmen said. Rulings must be issued within 90 days of oral arguments.

Michael Brady, the attorney representing two farmers and Kings County in the lawsuits that prompted Kenny's rulings, said the Supreme Court order was a setback for the state and predicted the appeals court would turn down the state's request.

If the appeals court conducts a full review of Kenny's decisions, the schedule for filing written briefs and hearing arguments would likely delay a decision until after March 1, he said, and possibly even after April 1, the deadline for the state to begin spending its money on the project.

ralph.vartabedian@latimes.com

maura.dolan@latimes.com

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