CITY OF VERNON, Petitioner,
PUBLIC UTILITIES COMMISSION, Respondent;
ATCHISON, TOPEKA & SANTA FE RAILWAY, Real Party in Interest.
Court of Appeal, Second District, Division 1, California.
Mar. 26, 2001. As modified Apr. 24, 2001.
In response to a city's complaint, the Public Utilities Commission (PUC) determined that a railroad's expansion of an intermodal facility, in which large shipping containers were transferred between railroad cars and trucks, did not require the preparation of an environmental impact report (EIR) under the California Environmental Quality Act (CEQA) (Pub. Resources Code, 21000 et seq.).
David B. Brearley, City Attorney, and Eduardo Olivo for
Peter Arth, Jr., Mary F. McKenzie, William N. Foley,
Geoffrey B. Dryvynsyde and Dale Holzschuh for Respondent.
Gresham, Savage, Nolan & Tilden, John C. Nolan and Robin
C. Cochran for Real Party in Interest.
Real party in interest Atchison, Topeka & Santa Fe Railway (Santa Fe) is a public utility that owns the Hobart Yard, an "intermodal" facility in which large shipping containers are transferred from railroad cars to trucks and vice versa. The facility is located partially within the city limits of petitioner City of Vernon (Vernon). Santa Fe has undertaken to expand *674 the size and capacity of the Hobart Yard, which will concomitantly increase the amount of truck traffic on adjacent streets. In proceedings before respondent California Public Utilities Commission (the Commission), Vernon asserted that the Hobart Yard expansion project required the preparation of an environmental impact report (EIR) within the meaning of the California Environmental Quality Act (CEQA). The Commission rejected Vernon's argument, ruling that an EIR was not required. We granted Vernon's petition for writ of review in order to give the matter plenary consideration. Having done so, we affirm the ruling of the Commission.
The case has a lengthy history. In 1994, Santa Fe submitted applications to Vernon for conditional use permits in connection with the expansion project. Vernon refused to process the applications, asserting that Santa Fe needed to obtain a permit for the entire Hobart Yard, not just the additions it wished to make. In 1995, Santa Fe filed a complaint in superior court for declaratory relief, contending that Vernon's actions were illegal. In January 1996, Vernon filed a complaint with the Commission. Vernon's complaint alleged, among other things, that Santa Fe had failed to comply with applicable local regulations and that the expansion project violated CEQA in that an EIR had not been prepared. In February 1996, the superior court ruled in favor of Santa Fe. (Atchison, Topeka & Santa Fe Railway v. City of Vernon (Super. Ct. L.A. County, 1986, No. BC123510).) On November 6, 1996, the Commission issued its ruling on Vernon's complaint. (City of Vernon v. Atchison, Topeka & Santa Fe Railroad (Cal. P.U.C., Nov. 6, 1996) No. 96-11-015 [1996 WL 754746] (hereafter Vernon v. Santa Fe I).)
FN1 Public Utilities Code section 762 provides, in part: "Whenever the commission, after a hearing, finds that additions, extensions, repairs, or improvements to, or changes in, the existing plant, equipment, apparatus, facilities, or other physical property of any public utility ... ought reasonably to be made, . . . the commission shall make and serve an order directing that such additions, extensions, repairs, improvements, or changes be made ...." (Italics added.)
Public Utilities Code section 762.5 provides, in part: "The commission, as a basis for making any order pursuant to the provisions of Section 762 relating to location of structures, shall give consideration to, and include in its order findings upon, the following factors:  (a) Community values.  (b) Recreational and park areas.  (c) Historical and aesthetic values.  (d) Influence on environment ...." (Italics added.)
FN2 Public Resources Code section 21082.2 provides: "(a) The lead agency shall determine whether a project may have a significant effect on the environment based on substantial evidence in light of the whole record.
"(b) The existence of public controversy over the environmental effects of a project shall not require preparation of an environmental impact report if there is no substantial evidence in light of the whole record before the lead agency that the project may have a significant effect on the environment.
"(c) Argument, speculation, unsubstantiated opinion or narrative, evidence which is clearly inaccurate or erroneous, or evidence of social or economic impacts which do not contribute to, or are not caused by, physical impacts on the environment, is not substantial evidence. Substantial evidence shall include facts, reasonable assumptions predicated upon facts, and expert opinion supported by facts.
"(d) If there is substantial evidence, in light of the whole record before
the lead agency, that a project may have a significant effect on the environment, an environmental impact report shall be prepared.
"(e) Statements in an environmental impact report and comments with respect to an environmental impact report shall not be deemed determinative of whether the project may have a significant effect on the environment."
On December 3, 1998, the Commission rendered its decision.
(City of Vernon v. Atchison Topeka & Santa Fe Railroad (Cal. P.U.C., Dec.
3, 1998) No. 98-12- 021 (hereafter Vernon v. Santa Fe II).) In prefatory
portions of Vernon v. Santa Fe II, the Commission posed the question presented
as whether Santa Fe's "plans of expansion creates adverse environmental
effects so as to make expansion of the Hobart Yard unreasonable." The
Commission also reiterated that it was being "guided by Public Resources
Code section 21082.2."
The opinion continued with the Commission noting that all of Vernon's evidence had been directed to the environmental impact of increased traffic at five specific intersections. (Vernon v. Santa Fe II, supra, 98-12-021.) The Commission held that the "incremental traffic conditions [did not] constitute [an] adverse environmental impact which requires mitigation." Indeed, "[t]he evidence show[ed], and Vernon's witness conceded, that traffic conditions in the vicinity of Hobart Yard will be sufficiently bad and the level-of-service classification will be identical, irrespective of the Hobart Yard expansion. " Thus, the Commission concluded, "the projected significant environmental effects are unavoidable. Vernon presented no evidence to show that Santa Fe could change the traffic effects of its expansion by selecting another location, by changing the arrangement of its site entrances or exits, or by adopting a plan of operations to shift traffic from peak hours to other hours. Vernon's only suggestion was that Santa Fe could mitigate *677 the traffic effects by contributing toward the funding of improvements to one of the five intersections. However, the evidence showed that those improvements would be constructed whether or not Santa Fe contributed to their cost or expanded Hobart Yard." (Ibid.) Accordingly, Vernon's complaint was dismissed.
FN3 Public Utilities Code section 761 grants the Commission authority to regulate by order following a finding of unjust, unreasonable, unsafe, improper, inadequate, or insufficient practices.
FN4 In its answer filed in this court, Santa Fe argues that Vernon v. Santa Fe II was not an adjudicatory proceeding and that Vernon was therefore required to request relief directly from the Supreme Court. The Commission in its answer states that Vernon v. Santa Fe II was adjudicatory and Vernon's petition for writ of review was properly filed in the Court of Appeal. Given our conclusion that Vernon did not meet its burden under Public Utilities Code sections 762 and 762.5, we see nothing to be gained by addressing this controversy and proceed to consider Vernon's petition on its merits.
Under the version of Public Utilities Code section 1757.1 that was in effect at the time of Vernon v. Santa Fe II and III, our review is limited to a determination, based on the entire administrative record, of whether (1) the Commission acted without or in excess of its jurisdiction, (2) the Commission did not proceed in the manner required by law, (3) the Commission's *678 decision was not supported by the findings, (4) the findings in the decision were not supported by the evidence in light of the whole record, (5) the decision was procured by fraud or was an abuse of discretion, and (6) the decision violates the state or federal Constitutions. (Stats. 1998, ch. 886, 14.)
Vernon's position is unsupported. In Vernon v. Santa Fe I,
the Commission merely offered to be "guided," not controlled, by CEQA
and Public Resources Code section 21082.2 in making its determination of
reasonableness under Public Utilities Code sections 762 and 762.5. (Vernon v.
Santa Fe I, supra, 1996 WL 754746 at p. *13.) Similarly, in H.B. Ranches, Inc.
v. Southern California Edison Co., supra, 11 Cal. P.U.C.2d at page 404, the
Commission noted that its staff had stated that Public Utilities Code sections
762 and 762.5 review "is essentially equivalent to CEQA review. "
Nonetheless, the Commission did not adopt that position in the H.B. Ranches
decision and has not on any occasion that has been brought to our attention
deemed itself to be generally bound by the requirements of CEQA. (See also *679 Marzolf v. Pacific Gas and Electric
Co. (1994) 53 Cal. P.U.C.2d 10 [at hearing under Pub. Util. Code, 762, 762.5,
Commission determined that CEQA did not apply].) In short, by no stretch of law
or logic may the requirements of CEQA be engrafted onto a determination of
reasonableness under Public Utilities Code sections 762 and 762.5.
That being said, Vernon's substantive contentions may be
dealt with in short order. As noted in Vernon v. Santa Fe I, unlike review
under CEQA where the burden of demonstrating the reasonableness of a project
lies with its proponent, the burden here was on Vernon as the opponent of the
Hobart Yard expansion to show that it was unreasonable. (Vernon v. Santa Fe I,
supra, 1996 WL 754746 at p. *13.) No doubt, the evidence supports Vernon's
assertion, with which the Commission agreed, that the project will cause an
increase in traffic at the five surrounding intersections. But Santa Fe never
disputed Vernon's assertion about an increase in traffic. Rather, the issue was
whether "the means by which Santa Fe has chosen to implement its plan of
expansion unnecessarily create avoidable adverse environmental effects of
sufficient magnitude so as to make the expansion unreasonable. [Citation.]
" (Ibid.; see also H.B. Ranches, Inc. v. Southern California Edison Co.,
supra, 11 Cal. P.U.C.2d at p. 406 [stating the issue as whether the project
" will have a significant adverse impact on the environment and that there
are economic alternatives to the [project] which would mitigate those adverse
We have reviewed the evidence on which the Commission based its decision. The record reveals that the parties differed on their projections of the extent by which the Hobart Yard expansion would increase traffic. Although these differences continue to be argued on appeal, we find nothing in the record that would compel us to conclude that Santa Fe's projections were not supported by substantial evidence. More important, Vernon offers nothing that would cause us to question the Commission's finding, apparently based on the concession of one of Vernon's witness, "that traffic conditions in the vicinity of Hobart Yard will be sufficiently bad and the level-of-service classification will be identical, irrespective of the Hobart Yard expansion." (Vernon v. Santa Fe II, supra, 98-12-021.) Nor has Vernon been able to identify any portion of the record that would undermine the Commission's findings that Vernon failed to meet its burden of proving that the traffic increase attributable to the Hobart Yard expansion project was reasonably avoidable or that the increase in traffic constituted an adverse environmental impact of such magnitude to make the expansion project unreasonable. Accordingly, Vernon's arguments must be rejected. *680
California Public Utilities Commission Decision No.
98-12-021, as modified in California Public Utilities Commission Decision No.
99-04-032, is affirmed.
CERTIFIED FOR PUBLICATION