Crude-by-Rail

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The extent to which the federal Interstate Commerce Commission Termination Act (ICCTA) preempts CEQA has been a topic of much scrutiny recently. Currently pending before the California Supreme Court is Friends of the Eel River v. North Coast Railroad Authority (Case No. S222472), which will address whether the ICCTA preempts CEQA review of a state agency’s proprietary acts with respect to a state-owned or funded rail line (which is at issue in both that case and in Town of Atherton v. California High Speed Rail Authority (2014) 228 Cal.App.4th 314). The case has been fully briefed since April 2015 and is awaiting oral argument.

In the meantime, a September 20 decision by the federal Surface Transportation Board (STB) has addressed ICCTA preemption in the context of a proposed crude-by-rail facility. These facilities have garnered much public attention in California and resulted in CEQA challenges to several proposed projects. In this decision, the STB denied Valero Refining Company’s petition, finding that the ICCTA did not preempt the City of Benicia’s decision to deny certification of an environmental impact report (EIR) and deny a conditional use permit (CUP) for a crude-by-rail offloading facility at Valero’s Benicia refinery. The decision provides insight into the federal government’s view of CEQA preemption, which will be of interest to the Supreme Court and the parties to the Friends of the Eel River case, as well as to lead agencies and project proponents contemplating crude-by-rail and other rail-related facilities in California.

Railroad Tank CarsOn July 19, the First District Court of Appeal published its opinion in Communities for a Better Environment v. Bay Area Air Quality Management District. In this case, Communities for a Better Environment (CBE) and a host of other environmental groups sought to challenge a rail-to-truck facility for the transloading of crude oil permitted by the Bay Area Air Quality Management District (BAAQMD). The appeals court affirmed the trial court’s ruling that CBE’s petition was time barred under Section 21167(d) of the Public Resources Code for failure to bring the claim within 180 days of BAAQMD’s approval of an Authority to Construct (ATC) that authorized the transloading of Bakken crude. In doing so, both courts rejected the argument by CBE that the “discovery rule” should apply in CEQA cases where, as here, there is no public notice of the approval.