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TREVOR A. GRIMM, State Bar No. 34258 JONATHAN M. COUPAL, State Bar No. 107815 TIMOTHY A. BITTLE, State Bar No. 112300 Howard Jarvis Taxpayers Association 921 Eleventh Street, Suite 1201 Sacramento, CA 95814 (916) 444-9950 Attorneys for Petitioners

SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SACRAMENTO

HOWARD JARVIS TAXPAYERS ASSN.; ) and KRIS VOSBURGH, ) ) Petitioners, ) ) v. ) ) DEBRA BOWEN, Secretary of State, ) ) Respondent, ) __________________________________) ) GEOFF BRANDT, State Printer; the ) CALIFORNIA STATE LEGISLATURE; ) and EDMUND BROWN, JR., Attorney ) General, ) ) Real Parties in Interest ) __________________________________)

No.

PETITIONERS’ OPENING BRIEF

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STATEMENT OF FACTS In the waning hours of the 2008 legislative session, AB 3034 was gutted, amended, and jammed through an abbreviated hearing and concurrence process to place Proposition 1A on the November 4, 2008, ballot. It was signed by the Governor on August 26, 2008. See Bill History, AB 3034, Petitioners’ Exhibit 3 at 1. Proposition 1A is a proposed $9.95 billion bond issuance to provide seed money for the construction of high-speed rail lines on one or more optional routes listed in the measure. See AB 3034, Petitioners’ Exhibit 1 at 10:26, 30.1 Ordinarily, the Attorney General prepares an impartial Ballot Label, Ballot Title, and Ballot Summary for any measure presented to the voters by the Legislature. Elec. Code §§ 9051, 9086, 13280, 13281; Gov. Code § 88002. In the rare case where the Attorney General has a conflict of interest because he is the author of the measure, the Legislative Counsel assumes the responsibility of preparing the impartial Ballot Label, Title, and Summary. Elec. Code § 9003. In the bill placing Proposition 1A on the ballot, the Legislature took the unprecedented step of writing its own Ballot Label, Title, and Summary, requiring the Secretary of State to use them, and prohibiting the Attorney General from revising them. See Ex. 1 at 23:33, 24:12, 24:26, and 25:13. ISSUES PRESENTED Petitioners contend that the Legislature, as author and proponent of Proposition 1A, has a conflict of interest in preparing an impartial Ballot Label, Title, and Summary, and that the Label, Title, and Summary it prepared for Proposition 1A are, in fact, not impartial. Rather, they resemble campaign literature, containing nonfactual opinion and statements that are false or misleading. Petitioners’ first cause of action contends that the Legislature, by attempting to influence the election with its own one-sided Ballot Label, Title, and Summary is violating

AB 3034 appears in its last-amended bill form, rather than chapter form (which lacks line numbers), for ease of citation.

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article 2, section 4, of the California Constitution, which provides, “The Legislature shall prohibit improper practices that affect elections.” Petitioners second cause of action contends that two false or misleading statements should be stricken from the Ballot Label and Summary under Elections Code section 9092, which authorizes an amendment or deletion where “the copy in question is false, misleading, or inconsistent with the requirements of this code.” The first statement claims that a provision in the measure requires “at least 90% of these bond funds shall be spent for specific construction projects.” The second challenged statement asserts that “federal and private sector matching funds [are] required” by the measure. Ex. 1 at 25:5. ARGUMENT I THE LEGISLATURE, BY REQUIRING USE OF ITS OWN, BIASED BALLOT LABEL, TITLE AND SUMMARY, IS VIOLATING CALIFORNIA CONSTITUTION ARTICLE 2, SECTION 4 The right to vote is meaningless without the right to a fair election. “No right is more precious in a free country.” Canaan v. Abdelnour (1985) 40 Cal.3d 703, 714. “Other rights, even the most basic, are illusory if the right to vote is undermined.” Id.; Castro v. State of California (1970) 2 Cal.3d 223, 234. For this reason, courts have a solemn duty to “preserv[e] the integrity of the election process.” Fair v. Hernandez (1981) 116 Cal.App.3d 868, 881. A “fundamental precept” of the right to a fair election “is that the government may not ‘take sides’ in election contests.” Stanson v. Mott (1976) 17 Cal.3d 206, 218. Here, however, that is exactly what is taking place. The Legislature, in passing AB 3034 by more than a two-thirds vote (see Ex. 3), has clearly indicated its desire that Proposition 1A become law. As author, advocate, and now proponent of Proposition 1A, the Legislature has a conflict of interest affecting its partiality. Its admiration for Proposition 1A is reflected in the Ballot Label, Title, and Summary it prepared. The Ballot Label is a good illustration of the advocating tone of the materials the Legislature has prepared:

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“To provide Californians a safe, convenient, affordable, and reliable alternative to driving and high gas prices; to provide good-paying jobs and improve California’s economy while reducing air pollution, global warming greenhouse gases, and our dependence on foreign oil, shall $9.95 billion in bonds be issued to establish a clean, efficient high-speed train service linking Southern California, the Sacramento/San Joaquin Valley, and the San Francisco Bay Area, with at least 90 percent of bond funds spent for specific projects, with federal and private matching funds required, and all bond funds subject to independent audits?” Ex. 1 at 23:37. For every measure on the ballot, state law allows Arguments for and against the measure, and Rebuttals. Elec. Code §§ 9041, 9042, 9069. The Arguments and Rebuttals are expected to take sides. However, the ballot is also supposed to contain certain neutral components, consisting of an impartial Ballot Label, Title, and Summary prepared by the Attorney General. Elec. Code §§ 9051, 9086, 13280, 13281; Gov. Code § 88002. The responsibility for preparing the impartial portion of the ballot is entrusted to the Attorney General because, as the state’s top law enforcement officer and a sworn agent of the court, the Attorney General is trusted by the public to not take sides, but to be objective in describing the measure and the changes in law it proposes. That the law abhors the idea of an interested party preparing the impartial elements of the ballot is demonstrated by the fact that, in the rare case where the Attorney General has a conflict of interest because he himself is the author of the measure, the Legislative Counsel is required to assume the responsibility of preparing the impartial Ballot Label, Title, and Summary. Elec. Code § 9003. The very thing that Elections Code section 9003 was designed to guard against (an interested party preparing the impartial elements of the ballot) is happening here. The Legislature, as author and proponent of Proposition 1A, is clearly an interested party.

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Moreover, the very harm the law was designed to prevent, will occur unless this Court acts. That is, a Ballot Label, Title and Summary which are, in fact, the advocacy of an interested party, will appear on the November ballot masquerading as neutral voter guidance to the detriment of every voter who relies on them. The people of California, in article 2, section 4, of the California Constitution imposed the following duty on the Legislature: “The Legislature shall prohibit improper practices that affect elections.” While this provision of the state constitution has apparently never been litigated, its meaning is plain on its face. To protect their own right to fair elections, the people imposed a duty on the Legislature, declaring that any practice which could affect the outcome of an election is improper and shall be prohibited by the Legislature. In usurping the role of the Attorney General by writing its own Ballot Label, Title, and Summary, which are not impartial but attempt, by favorable descriptions and nonfactual statements of debatable opinion, to influence voters to vote for the measure, the Legislature has itself become guilty of one of those improper practices. The Legislature not only neglected, but betrayed its duty under article 2, section 4, of prohibiting improper practices that affect elections. One example of partiality in the Legislature’s Ballot Label, Title and Summary, is the way in which these supposedly objective elements of the ballot mirror the Argument in Favor of Proposition 1A filed by its supporters. See Yes on Proposition 1A, Petitioners’ Exhibit 4. The quoted Ballot Label set out earlier is recited nearly verbatim as the Argument in Favor of Proposition 1A: “Proposition 1A will bring Californians a safe, convenient, affordable and reliable alternative to soaring gasoline prices, freeway congestion, rising airfares, and fewer flights available. It will reduce California’s dependence on foreign oil and reduce greenhouse gases that cause global warming. ... Matching private and federal funding to be identified BEFORE state

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bond funds are spent. 90% of the bond funds to be spent on system construction, not more studies, plans and engineering activities.” Ex. 4 at 1, 3. As another illustration of partiality in the Legislature’s Ballot Label, Title and Summary, is the inclusion of nonfactual “puffery.” For example, the Ballot Label twice describes the high-speed train system that may be built with bond revenue and other funds as “reliable.” The Ballot Title contains the word “reliable” as well. The Ballot Summary states, “Provides long-distance commuters with a safe, convenient, affordable, and reliable alternative to driving and high gas prices.” The bond-funded rail system envisioned by this measure will have private investors provide and operate the trains. “Proceeds of bonds authorized pursuant to this chapter shall not be used for any operating or maintenance costs of trains or facilities.” Ex. 1 at 11:34. Before a route segment may be built with bond funds, the High-Speed Rail Authority must present a plan to the Governor and the Legislature certifying, among other things, that it will be a “usable segment.” That is, that “[o]ne or more passenger service providers can begin using the tracks or stations for passenger train service” and will “not require a local, state, or federal operating subsidy.” Ex. 1 at 13:26 and 29. The High-Speed Rail Authority has published a Request for Expressions of Interest for Private Participation, which states: “The Authority believes it will be necessary to rely on the private sector for many aspects of the Project’s development, including civil works, equipment supply, operations, maintenance, and financing.” See Request for Expressions of Interest, Petitioners’ Exhibit 2, at 6 (emphasis added). If state government will not be controlling the purchasing, operation or maintenance of the trains, there is no way it can impartially predict, much less guarantee, that they will be mechanically “reliable.” For-profit companies operating with no government subsidy may cut costs that affect reliability. They may even go out of business. Moreover, the 800 miles of track, much of it through desolate areas, could become a target of vandalism, sabotage, or even terrorism.

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Whether something that does not yet exist will be “reliable” is a matter of opinion, not fact. Opinions belong only in the Arguments for and against, and the Rebuttals that appear on the ballot. The Ballot Label, Title and Summary are supposed to be detached, factual descriptions of the measure and the changes in law it proposes. Many other opinionated claims make the Legislature’s Ballot Label, Title and Summary read more like campaign literature than neutral voter guidance. They do not say that sale of the bonds “may,” or “is intended to” accomplish certain goals, but rather will actually produce achievements that, in fact, are impossible to guarantee. For example, according to the Ballot Label, Title and Summary, sale of the bonds will “improve California’s economy.” Ex. 1 at 23:40. Sale of the bonds “reduces traffic congestion on the state’s highways.” Ex. 1 at 24:34. Whether California’s economy actually improves, and whether traffic congestion actually reduces, depends on many more factors than just high-speed rail. As to the economy, if the project fails to live up to its claims, its massive bond debt could seriously hurt the state’s economy. Removing from the ballot the only impartial descriptions and summary that voters generally see, and substituting advocacy in their place, written by the author and proponent of the measure, constitutes “improper practices that affect elections,” which the Legislature is constitutionally required to prohibit. For these reasons, petitioners contend that this Court’s best course of action would be to order real party Attorney General to prepare an impartial Ballot Label, Title and Summary for Proposition 1A, and order respondent Secretary of State to use them. II IN THE ALTERNATIVE, TWO STATEMENTS THAT ARE FALSE OR MISLEADING SHOULD BE STRICKEN FROM THE BALLOT LABEL AND SUMMARY Elections Code section 9092 authorizes any voter to “seek a writ of mandate requiring any copy to be amended or deleted from the ballot pamphlet.” The writ may issue upon proof that “the copy in question is false, misleading, or inconsistent with the requirements of this code.” Elec. Code § 9092.

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Besides not being impartial, the Ballot Label and Summary prepared by the Legislature contain two statements that are false or misleading. The Ballot Summary states that the measure, which proposes “a bond issue of $9.95 billion” (Ex. 1 at 25:2) “[p]rovides that at least 90% of these bond funds shall be spent for specific construction projects, with federal and private sector matching funds required.” Ex. 1 at 25:5. The Ballot Label makes the same claim, only condensed. Ex. 1 at 24:5. It is false or misleading to say that at least ninety percent of the bond funds shall be spent for specific construction projects. It is also false or misleading to say that federal and private sector matching funds are required. AB 3034 (the bill placing Proposition 1A on the ballot) nowhere requires that bond funds be spent on certain “specific construction projects.” The measure divides the proposed bond issuance into two parts: (1) a $9 billion dollar part (Ex. 1 at 10:20), and (2) a $950 million part (Ex. 1 at 17:5). Rather than identify “specific construction projects” that shall be built with the $950 million part, the measure states that its “net proceeds” (after issuance costs are deducted) “shall be allocated to eligible recipients” who operate local rail service such as BART (Ex. 1 at 17:7), who may use it for a variety of things, including “rehabilitation or modernization of, or safety improvements to ... rolling stock.” Ex. 1 at 18:34. Rather than identify “specific construction projects” that shall be built with the $9 billion part, the measure states that its “net proceeds” (after issuance costs are deducted) “upon appropriation by the Legislature in the annual Budget Act, shall be used for (A) planning and engineering for the high-speed train system and (B) capital costs, as described in subdivision (c).” Ex. 1 at 10:20. “Capital costs” include, but are not limited to, “acquisition of interests in real property and rights of way,” “mitigation of any direct or indirect environmental impacts of activities authorized by this chapter,” “relocation assistance for displaced property owners and occupants,” “and such other purposes ... as may be set forth in a statute hereafter enacted.” Ex. 1 at 11:19 et seq. As to the $9 billion part, the measure limits the percentage that may be expended for

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things other than construction. It states, “Not more than 10 percent of the proceeds of bonds ... shall be used for environmental studies, planning, and preliminary engineering activities.” Ex. 1 at 12:23. It also states that, notwithstanding this 10% cap: “(g) Nothing in this section shall limit use or expenditure of proceeds of bonds ... up to an amount equal to 7.5 percent of the aggregate principal amount of bonds ... for (1) acquisition of interests in real property and right-ofway and improvement thereof (A) for preservation for high-speed rail uses, (B) to add to third-party improvements to make them compatible with highspeed rail uses, or (C) to avoid or to mitigate incompatible improvements or uses; (2) mitigation of any direct or indirect environmental impacts resulting from the foregoing; and (3) relocation assistance for property owners and occupants who are displaced as a result of the foregoing. “(h) Not more than 2.5 percent of the proceeds of bonds ... shall be used for administrative purposes. The amount of bond proceeds available for administrative purposes shall be appropriated in the annual Budget Act. The Legislature may, by statute, adjust the percentage set forth in this subdivision, except that the Legislature shall not increase that percentage to more than 5 percent.” Ex. 1 at 15:20 et seq. Although the Argument in Favor of Proposition 1A, paraphrasing the Ballot Label and Summary, assures voters that “90% of the bond funds [will] be spent on system construction, not more studies, plans and engineering activities,” it is clear that the Ballot Label and Summary were not truthful in that regard. Bond issuance costs are not construction. Rehabilitation and modernization of other railways’ rolling stock is not construction. Environmental study is not construction. Environmental mitigation is not construction. Planning is not construction. Property acquisition is not construction. Relocation assistance is not construction. Administration is not construction. “Such other purposes ... as may be set forth in a statute hereafter enacted” may or may not be construction. The percentage that can be spent on these non-construction items totals at least

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30.5%, and may be increased to 33%. Thus, rather than guaranteeing that “at least 90% of these bond funds shall be spent for specific construction projects,” Proposition 1A identifies no specific construction projects and authorizes the expenditure of up to 33% of the “net proceeds” of the bonds for non-construction items. The statement in the Ballot Label and Summary that “at least 90% of these bond funds shall be spent for specific construction projects” is false or misleading. It is also false or misleading to state that “federal and private sector matching funds [are] required.” Ex. 1 at 25:5. The measure does state that the High-Speed Rail Authority “shall pursue and obtain other private and public funds, including, but not limited to, federal funds, funds from revenue bonds, and local funds, to augment the proceeds of this chapter.” Ex. 1 at 12:14. But on its face, this provision does not require additional funding that is “federal and private,” nor must it be “matching.” On the contrary, it contemplates that the funding supplementing these bonds might be more bonds, or other California government funds. And the amounts are unspecified. Although another section of the measure states, “Proceeds of bonds ... shall not be used for more than 50 percent of the total cost of construction of each corridor or usable segment thereof of the high-speed train system” (Ex. 1 at 12:18), this provision does not require federal and private matching funds either. The other 50% could come from the State’s General Fund. Nowhere in AB 3034 is there a provision that “federal and private sector matching funds [are] required.” That statement in the Ballot Label and Summary is false or misleading. CONCLUSION The Court should find that the Legislature has violated California Constitution article 2, section 4, and should order the Attorney General to prepare an impartial Ballot Label, Title and Summary for Proposition 1A. If the Court believes that is not feasible or not necessary, then at the very least the Court should order stricken from the Ballot Label and Summary the false or misleading

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statements identified above: that 90% of the bond funds will be used for specific construction projects, and that federal and private matching funds are required. DATED: September 2, 2008. Respectfully submitted, TREVOR A. GRIMM JONATHAN M. COUPAL TIMOTHY A. BITTLE __________________________ TIMOTHY A. BITTLE Counsel for Petitioners

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