Napa Valley Wine Train, Inc. v. Public Utilities Com., S007919

Decision Date19 March 1990
Docket NumberNo. S007919,S007919
Citation787 P.2d 976,267 Cal.Rptr. 569,50 Cal.3d 370
CourtCalifornia Supreme Court
Parties, 787 P.2d 976 NAPA VALLEY WINE TRAIN, INC., Petitioner, v. PUBLIC UTILITIES COMMISSION, Respondent; CITY OF ST. HELENA et al., Real Parties in Interest.

Heller, Ehrman, White & McAuliffe, Douglas P. Ley, Peter H. Goldsmith, Christopher M. Patti and Victor D. Ryerson, San Francisco, for petitioner.

Janice E. Kerr, Michael B. Day and Gretchen T. Dumas, San Francisco, for respondent.

Meyers, Nave, Riback & West, Michael S. Riback and Michael F. Rodriguez, San Leandro, for real parties in interest.

PANELLI, Justice.


In this case we consider whether the California Environmental Quality Act (Pub. Resources Code, §§ 21000 to 21177) (hereafter CEQA) 1 applies to a plan by the Napa Valley Wine Train, Inc. (Wine Train) to carry passengers on an existing 21-mile railroad line through California's Napa Valley. Believing that CEQA does apply, the Public Utilities Commission (PUC) ordered Wine Train not to begin passenger service until after submitting to an environmental review process. We hold, however, in accordance with an express statutory exemption, that CEQA does not apply to the institution of passenger service on rail rights-of-way already in use. 2 (§ 21080 subd. (b)(11) [hereafter the passenger-service exemption].)


This case involves a railroad line in California's Napa Valley, an increasingly popular destination for tourists who come to visit the many wineries along State Highway 29. Starting at the valley's southern end in Rocktram, the line travels 21 miles north to Krug, roughly paralleling the highway. Wine Train plans to offer tourists an alternative to driving, operating as many as six trains daily and stopping at wineries along the way.

The railroad was first built over a century ago to carry tourists who arrived in ferries from San Francisco to the mineral baths in Calistoga. For most of its history, the line belonged to the Southern Pacific Transportation Company (SP). According to the parties, SP stopped transporting passengers on the line about 50 years ago. Transportation of freight, primarily wine from the area's vintners, continued but declined over time. 3

In 1985, SP applied to the ICC for permission to abandon the line between Rocktram and Krug. However, Wine Train offered to purchase the line from SP later that same year. Because of Wine Train's offer, the ICC never granted SP's application to abandon. Under federal law, when "a carrier and a person offering to purchase a line enter into an agreement which will provide continued rail service" the ICC must dismiss the application to abandon and approve the proposed transaction. (49 U.S.C. § 10905(e).) 4 Acting under this statute the ICC dismissed SP's application to abandon and approved Wine Train's offer. The parties transferred ownership of the line in April 1987.

While its application to abandon was pending, SP stopped carrying freight on the line. SP's last delivery took place around the beginning of 1985. In purchasing the line, however, Wine Train became successor in interest to SP's license to operate and, as such, assumed federal statutory obligations not to discontinue service. 5 Accordingly, Wine Train reinstituted freight service on January 10, 1988, bringing two carloads of furniture from Utah and Illinois to a vintner in the Napa Valley. Later, in early February, the train carried six carloads of wine vats to another vintner.

These freight shipments evoked relatively little interest. Real parties have not asked the PUC to halt them. Wine Train's plan to institute passenger service, however, brought a storm of protest from residents of the Napa Valley, who feared that the train would bring additional tourists to their community. Local newspapers reported the debate. Opponents of the train feared that it would make the Napa Valley "an amusement park." Proponents argued that it would alleviate traffic congestion caused by tourists on State Highway 29.

On March 7, 1988, several Napa Valley cities and towns, the Napa Valley Vintners Association, and other interested persons (collectively real parties) filed a complaint with the PUC. In their complaint, real parties claimed that Wine Train was subject to the provisions of CEQA and that its proposed passenger service was subject to the PUC's regulatory jurisdiction. Real parties requested an order instituting investigation, "an order asserting the [PUC's] jurisdiction over [Wine Train's] passenger train service operations," 6 and "an order requiring [Wine Train] to cease and desist from its operations until all environmental review and analysis of [Wine Train's] proposed 'project' as required by CEQA and [the PUC's rules] has occurred."

On April 13, 1988, the PUC issued an order directing Wine Train "to show cause why it should not be required to submit to the jurisdiction of [the PUC] with respect to the proposed operation of a passenger train service...." At that time, however, the ICC was already considering a petition by Wine Train for an order declaring that its operations were not subject to the PUC's jurisdiction.

The PUC appeared in the ICC proceeding but also continued to claim jurisdiction for itself. Ultimately, the federal and state agencies issued conflicting orders on the same day, July 8, 1988. The ICC held that Wine Train was "immun[e] from [the PUC's] jurisdiction over the franchising, scheduling and pricing of freight or passenger operations." (ICC Decision, supra, at p. 5.) Interpreting California law, the ICC also held that CEQA did not apply, "since [the PUC] has no power to regulate Wine Train's operations and thus has no decision making role here...." (Id., at pp. 5-6.) In direct contradiction, the PUC ordered that "[t]he rail passenger service proposed by [Wine Train] is subject to the jurisdiction of [the PUC]" and ordered Wine Train not to "institute any passenger service until it complies with all applicable requirements of [CEQA]...." (City of St. Helena v. Napa Valley Wine Train (1988) Cal.P.U.C. Dec. No. 88-07-019, p. 12 [hereafter PUC Decision].) After the PUC denied Wine Train's application for rehearing, we issued a writ of review. 7 (Pub.Util.Code, § 1756.)

CEQA's Exemption for the Initiation of Passenger Service

The fundamental purpose of CEQA is to promote "[t]he maintenance of a quality environment for the people of this state now and in the future...." (§ 21000, subd. (a).) Since its enactment in 1970 we have acknowledged that the act's purpose is an important one. In Friends of Mammoth v. Board of Supervisors (1972) 8 Cal.3d 247, 104 Cal.Rptr. 761, 502 P.2d 1049, construing CEQA for the first time, we "conclude[d] that the Legislature intended [it] to be interpreted in such manner as to afford the fullest possible protection to the environment within the reasonable scope of the statutory language." (Id., at p. 259, 104 Cal.Rptr. 761, 502 P.2d 1049.)

However, in the 19 years since CEQA was enacted the Legislature has, for reasons of policy, expressly exempted several categories of projects from environmental review. (See § 21080, subd. (b)(1)-(16).) This court does not sit in review of the Legislature's wisdom in balancing these policies against the goal of environmental protection because, no matter how important its original purpose, CEQA remains a legislative act, subject to legislative limitation and legislative amendment.

In 1978, the Legislature amended CEQA to include the predecessor of the exemption at issue here. As originally enacted, the exemption provided that "[a] project for the institution or increase of passenger or commuter service on rail lines already in use, including the modernization of existing stations and parking facilities, shall be exempt from [CEQA]." (Stats.1978, ch. 791, § 1, pp. 2541-2542, formerly codified as § 21085.5.) 8

In 1982, the Legislature amended the exemption by deleting the term "rail lines" and substituting "rail or highway rights-of-way." (§ 21080, subd. (b)(11), as amended by Stats.1982, ch. 1553, § 3, p. 6077, emphasis added.) The amendment was part of a bill that sought in various ways to further the transportation of passengers by rail. Most of the bill concerned a mechanism for financing rapid rail transit systems. 9 Since that time, the Legislature has repealed those CEQA exemptions that were specifically intended to facilitate rapid rail projects. 10 However, the passenger-service exemption (§ 21080, subd. (b)(11)), whose broader language exempts a wider variety of projects, has not been repealed and still is in force today.

In order to apply the passenger-service exemption in this case, we must first determine what it means for a right-of-way to be "already in use." If the Rocktram-Krug right-of-way is already in use, then CEQA does not apply to Wine Train's "initiation of passenger ... services." 11 (§ 21080 subd. (b)(11).) The PUC, noting that "freight service had not been performed for three years prior to February 1988," held that Wine Train was not entitled to the benefit of the exemption because "the rail right-of-way used by [Wine Train] was not already in use prior to its acquisition of the line from SP...." (PUC Decision, supra, at p. 10.) This holding, which the PUC labeled a "finding of fact," in reality contains the implicit conclusion of law that the passenger-service exemption applies only when there has been uninterrupted rail traffic. In our view, the PUC misinterpreted the exemption, which refers to "rights-of-way" and not traffic statistics. 12 The existence of a railroad line on the Rocktram-Krug right-of-way suffices to demonstrate that the right-of-way is "already in use." (§ 21080, subd. (b)(11).)

We reach this conclusion based upon the Legislature's decision in 1982 to change the language of the passenger-service exemption from "rail lines" to "highway or rail rights-of-way." (§...

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