New California Laws Will Ease Groundwater Right Battles, Yet Encourage More Litigation

On October 9, 2015 Governor Jerry Brown signed into law two bills aimed at making groundwater disputes easier and faster to resolve in court.

The new laws—companion bills AB 1390 (Alejo) and SB 226 (Pavley)—streamline California’s onerous groundwater adjudication process, which can drag on for decades. Such adjudications comprehensively establish groundwater right allocations for all users in a covered groundwater basin and, up to now, have been governed by common law principles. The new statutes focus primarily on procedures to speed up the groundwater adjudication process, but also ensure that courtroom adjudications do not interfere with California’s 2014 legislation promoting sustainable management of groundwater basins, known as the Sustainable Groundwater Management Act (“SGMA”).

There are at least 20 adjudicated basins in California, but the daunting, multi-year adjudication process  tends to discourage attempts to comprehensively establish groundwater rights. For example, the initial complaint in the Upper Los Angeles River Area adjudication was filed in 1955, but adjudication was not completed until 1979. Further, every affected groundwater right holder in a subject basin must receive notice, which results in huge numbers of named parties. The recently concluded Antelope Valley adjudication had over 70,000 parties.

With the potential for multi-decade litigation affecting thousands of parties, the adjudication process has not been used to its full potential. But with vastly increased groundwater pumping prompted by California’s historic drought, and a “wild west” chaos predominating in many of California’s groundwater aquifers, the new laws come at a key juncture. Building on SGMA, the new laws promise to provide further tools for effectively determining and managing groundwater resources throughout California. Once wielded, however, these powerful legal tools will have vast consequences in determining the scope of water rights across the State.

Key Changes to Lawsuits Determining Groundwater Rights

AB 1390 aims to streamline and speed up the judicial procedures for conducting comprehensive groundwater adjudications, targeting challenges related to providing notice, authorizing new agency intervention, phasing the litigation, setting disclosure deadlines, and providing injunctive power to the court to prevent a pumpers’ race to the bottom after the complaint is filed.

Specifically, AB 1390:

• Requires the plaintiff filing the complaint to also provide a draft notice and draft form answer at that time. The plaintiff then would need to send the notice to all tax assessor parcel numbers in the basin, so as to ensure all affected parties are provided with notice. The law deems such actions as sufficient to provide notice and establish jurisdiction over all affected parties.
  
• Authorizes groundwater sustainability agencies—the local agencies designated by SGMA as responsible for devising groundwater sustainability plans—to intervene in a comprehensive adjudication. This would ensure that even where such sustainability agencies do not hold water rights in the basin, they can still intervene in the litigation.
  
• Requires the court to convene an early case management conference aimed at speeding up the litigation, to address:  (1) identifying whether the basin boundaries should be adjusted, (2) appointing a special master, (3) scheduling a hearing on a preliminary injunction, (4) dividing the case into phases to resolve legal and factual issues, (5) limiting discovery to correspond to the phasing, (6) scheduling an early resolution of claims to prescriptive rights, and (7) forming classes of overlying groundwater rights holders to further speed adjudication.

• Mandates that all parties submit initial disclosures within six months of appearing in the action. In these disclosures—submitted under penalty of perjury—each party must identify the quantity of groundwater extracted from the basin for each of the previous 10 years, the location of each groundwater extraction well, and the use for which groundwater extracted has been applied.
  
• Authorizes the court to issue a preliminary injunction that could include a moratorium on new or increased groundwater extraction. This provision would help reduce the race to the pumps created by the filing of adjudication action.

Advancing SGMA Goals 

SB 226 adds provisions specific to groundwater basins that are undergoing a comprehensive adjudication and which are also subject to the SGMA. SGMA requires all groundwater basins designated as high- or medium-priority basins by the Department of Water Resources to have a groundwater sustainability plan in place by January 2022 (or 2020, if in a state of critical overdraft). Cal. Water Code § 10720.7(a).

SB 226 requires courts overseeing comprehensive groundwater adjudications to:

manage the proceedings in a manner that minimizes interference with the timely completion and implementation of a groundwater sustainability plan, avoid[ ] redundancy and unnecessary costs in the development of technical information and a physical solution, and [be] consistent with the attainment of sustainable groundwater management within the timeframes established by this part.

Cal. Water Code § 10737.2. In the context of adjudications, the legislation would also clarify how groundwater basin boundary adjustments should occur as well as how basins deemed “probationary” under SGMA would be covered by an adjudication.

This bill would also enable the California Attorney General to intervene in any adjudication action.

California Confronts the Drought Head-On

The new laws further demonstrate the California Legislature’s “all hands on deck” efforts to addressing the current water crisis. On the heels of authorizing $7.5 billion in Prop. 1 funding, the groundbreaking SGMA, the State Water Resources Control Board’s unprecedented curtailment notices to surface water rights holders, and recent developments in the courts, California continues the process of redefining the legal framework applicable to California’s vitally important groundwater resources.

-- Dave Metres

For more information, contact Dave Metres at dmm@bcltlaw.com or (415) 228-5488.

Irrigation District Sues, Says State Board Lacks Jurisdiction to Curtail Senior Water Rights

On June 26, the Byron-Bethany Irrigation District (BBID) filed a petition for writ of mandate in Contra Costa County Superior Court requesting that the Court set aside the State Water Resources Control Board’s June 12, 2015 “notice of curtailment,” requiring hundreds of senior water rights-holders to cease diverting water from the Sacramento-San Joaquin Delta.

The BBID website states that BBID is “ a multi-county special district serving parts of Alameda, Contra Costa, and San Joaquin Counties. The District serves a total area of 47 miles and 30,000 acres.” BBID’s service area includes the community of Mountain House, which relies exclusively on BBID for its water supply.

The Petition alleges that the State Board lacks jurisdiction to curtail pre-1914 water rights, that the curtailment notice violates the California Constitution with regard to beneficial use of water, and that BBID was denied constitutional due process. 

“Enough is enough,” said BBID Board President Russell Kagehiro in the District’s press release. He went on to refer to the State Board’s action as “irresponsible and unnecessary.”

Meanwhile, also on June 26, the State Board issued a second curtailment notice to senior rights-holders, including the City and County of San Francisco.

--Kathryn Oehlschlager

For more information, contact Kathryn Oehlschlager at klo@bcltlaw.com or (415) 228-5458.

State Water Board Approves Emergency Regulations Regarding Curtailment Orders

On July 2, the State Water Resources Control Board (“Water Board”) approved emergency regulations authorizing it to issue immediately enforceable curtailment orders to holders of surface water rights in California. 

The new regulation authorizes the Water Board, upon determining that “flows are sufficient to support some but not all diversions,” to issue curtailment orders to post-1914 appropriative (a.k.a., “junior”) water right holders in order of water right priority, beginning with the most junior water user.

The Water Board may also issue curtailment orders to senior--i.e., riparian and pre-1914 appropriative--water right holders if it receives: (i) a complaint alleging that a senior holder is interfering with a water right, or (ii) information that a senior holder is unlawfully diverting stored water.

Because curtailment orders issued under the emergency regulation are immediately enforceable, water right holders who violate an order are subject to penalties that begin to accrue from the date of violation. By contrast, prior to adoption of the regulation, the Water Board could only issue notices of curtailment, which were not themselves enforceable, but rather required case-by-case investigations of alleged violations followed by commencement of administrative proceedings against the violator before an enforcement order could issue.   

A water right holder who is subject to a curtailment order under the new regulation may petition the Water Board for reconsideration of the order. Within 30 days of receipt of the petition, the Water Board must conduct an initial review to determine if the petition raises “significant factual issues that are likely to merit reconsideration,” and if so, must immediately suspend the curtailment order until the petition is heard. Unless suspended by the Water Board, curtailment orders may remain in effect for up to 270 days.

The adopted emergency regulation will now be submitted to the Office of Administrative Law, and will likely take effect in mid-July. The proposed resolution adopting the regulation, as well as the final revisions to the resolution and regulation language, can be found here.

The Water Board makes information about its drought year water actions available on its website.

--Samir Abdelnour

For more information, contact Samir Abdelnour at (415) 228-5443 or sja@bcltlaw.com.

State Water Board Commences Curtailment Program in Response to Statewide Drought

In the past month, the State Water Resources Control Board (“Water Board”) has issued three curtailment notices to water rights holders pursuant to the Governor’s January 17, 2014 State of Emergency Proclamation addressing critical drought conditions across the State.

On May 27, the Water Board issued a “Notice of Unavailability of Water and Immediate Curtailment” for all holders of post-1914 appropriative water rights diverting from the Sacramento and San Joaquin River watersheds. The notice orders post-1914 rights holders to “immediately stop diverting” water under their rights, or face potential fines of $1,000 to $10,000 per day. The notice also advises holders of more senior water rights, including riparian rights and pre-1914 appropriative rights, that their water rights may be curtailed “in the near future” if drought conditions persist. The Water Board’s website indicates that curtailment of “junior pre-1914 water rights” (not defined) is projected to occur between June 1 and June 15, with curtailment of additional pre-1914 water rights projected to occur after June 16, on a basin-wide basis for the Sacramento-San Joaquin watershed.

Also on May 27, the Water Board issued a similar, but more limited, notice for the Russian River watershed, which applies only to post-1914 appropriative rights holders with a priority date of February 19, 1954, or later. The May 27 notices follow a May 16 notice of curtailment to “junior priority class” water rights holders diverting from the Scott River watershed.  Like the notice for the Sacramento-San Joaquin watershed, the notices covering the Russian River and Scott River watersheds also contain warnings to senior water rights holders that their diversions may be curtailed if drought conditions continue. However, the Water Board’s website does not contain information at this time projecting the timing of future basin-wide curtailments for the Russian River and Scott River watersheds.

Information about the Water Board’s actions responding to the drought, including information on curtailment of water diversions, is available here.

-- Samir Abdelnour

For more information, contact Samir Abdelnour at (415) 228-5443 or sja@bcltlaw.com.