Archive for the ‘High-Speed Rail Litigation and Public Utilities Code Section 185038’ Category

High-Speed Rail Litigation and Public Utilities Code Section 185038

Sunday, November 1st, 2009

There are times when I seriously wonder if the California State legislature has considered the ramifications of a specific bill that becomes law. California Public Utilities Code Section 185038 is one such statute.

In connection with Nova Law Group’s litigation practice, our firm represents plaintiffs Halstead Nursery Inc. and Russell Peterson in active litigation against the High-Speed Rail Authority and the Peninsula Corridor Joint Powers Board. Our lawsuit seeks to obtain a declaration of the rights and obligations of each of the parties to a Trackage Rights Agreement, signed in 1991 between the PCJPB and Southern Pacific Railroad (now owned by Union Pacific Railroad). It is our position that the Peninsula Corridor Joint Powers Board has no contractual right to grant the High-Speed Rail Authority any right of way to the track going up and down the SF peninsula, including the Santa Clara County Line and the Peninsula Main Line, among others. Our clients brought a declaratory relief action to define the rights of defendants in connection with the contract.

One of the foremost considerations made by an attorney when bringing a lawsuit is a decision of venue, or in other words, which court will hear the action. In the Peterson/Halstead Nursery v. HSR/PCJPB case, our firm brought suit for our clients in San Mateo County Superior Court, because this choice of venue would be most convenient for the vast majority of the parties to the case. All of the plaintiffs were San Mateo County residents. Half of the defendants were San Mateo County residents. A large portion of all of the contested land exists in San Mateo County. Most of the contracts were entered into in San Mateo County. In fact, basically all evidence, of every kind, was present in San Mateo County.

Given the overwhelming prevalence of parties and evidence regarding the litigation in San Mateo County, one would think that venue would appropriately be in San Mateo County as well. According to defendant HSR however, this is not the case.

Defendants claim that venue for any action against the California High Speed Rail Authority (HSR) must only be had in Sacramento County. They claim that Public Utilities Code Section 185038 mandates that all actions, regardless of whether or not HSR is the only defendant or one of many, must be had in Sacramento County. Instructions to obtain my legal response in connection with our opposition to Defendants’ Motion to Change Venue are posted at the end of this article, but I think it is interesting to consider the public policy ramifications of defendants’ interpretation of Public Utilities Code Section 185038.

If defendants’ interpretation of 185038 is correct, then the legislature would have intended all actions against the California High-Speed Rail Authority to be brought in Sacramento County, regardless of other considerations. This interpretation would stand in stark contrast to the normal venue rule, which can accurately be described as “venue proper to one defendant is proper to all,” or in other words, that plaintiff can choose a court where at least one defendant resides.

The public policy ramifications of this interpretation are startling. According to defendants HSR and PCJPB, if HSR is even one defendant of fifty defendants in an action, then venue must be had in Sacramento County. This is true even if the remaining 49 defendants live in San Diego, New York, Rome, Moscow, London, and Hong Kong. It is true even if there are 200 plaintiffs, who all live elsewhere in California, or across the globe. It is also true even if all property disputed in the action and all contracts giving rise to the litigation are made in counties, or countries, outside of Sacramento or even the United States. In essence, if defendants’ interpretation is followed, then the California High-Speed Rail Authority would be entitled to drag all plaintiffs, defendants, property, evidence, and all other materials hundreds, if not thousands of miles across the state, country, or globe to Sacramento County–simply for the convenience of HSR. Given that venue laws are designed to promote the convenience of the parties, this is an almost comically absurd result. Our clients (and our firm) find it incomprehensible that this could be what the legislature intended, and we are currently involved in active litigation to determine this issue. Whatever the outcome of the litigation, I recommend that the legislature modify the statute to make clear its intent regarding this issue, and to hopefully avoid the preposterous outcome that the California High Speed Rail Authority is currently advocating.

If you are interested in reading Nova Law Group’s legal response to Defendants’ Motion to Change Venue on this issue, it is available on the San Mateo County Superior Court’s website.