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Superior Court Order Delineating Water Rights Trumps Local Water Management Agency Authority May 11, 2010 by Cassie N. Aw-yang cawyang@somachlaw.com |
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In a case arising from the 2007 adjudication of the Seaside Groundwater Basin in Monterey County, California, the Sixth District Court of Appeal (Court of Appeal) upheld the trial court’s decision disallowing a local water management agency from using its permitting authority in conflict with the adjudication judgment. The decision struck a balance by acknowledging that the Monterey Peninsula Water Management District (District) retains certain powers to regulate the Seaside Basin – provided those powers are not exercised in a manner inconsistent with the 2007 judgment. As a result, a development company with water rights confirmed in the 2007 judgment will be able to continue processing its project without environmental review of potential impacts to the Seaside Basin, and without the District imposing reductions in the company’s Seaside Basin water rights. The Controversy and Superior Court Proceedings The District was established by statute in 1977 to coordinate management of the ground and surface water resources in the Monterey Peninsula. The statute authorizes the District to store water, obtain water rights, control waste and exportation, and conduct proceedings to prevent interference with beneficial water use. The District’s authority extends to certain aspects of managing the waters of the Seaside Basin and Carmel River, including approval of new or expanded water distribution systems. In September 2008, the California American Water Company (Cal-Am) and Security National Guaranty, Inc. (SNG) applied to the District for a permit to allow Cal-Am to pump up to 90 acre-feet of Seaside Basin water for use at a new resort site. The District denied the permit application and issued findings that a new environmental impact report (EIR) was required under the California Environmental Quality Act (CEQA). The EIR would have to address the potential project impacts on the Carmel River in addition to the Seaside Basin and evaluate alternative water sources and mitigation measures. Cal-Am, SNG and the City of Sand City (which overlies the Seaside Basin) challenged the District’s denial of the permit. The parties claimed that the District exceeded its legal authority and impermissibly interfered with the physical solution originally established for the Seaside Basin in a February 2007 superior court judgment. The physical solution resulted from the adjudication of the rights of various parties to use water from the Seaside Basin. The 2007 judgment recognized that groundwater production consistently exceeded the Seaside Basin’s natural safe yield (i.e., the groundwater level that results solely from natural replenishment), threatening seawater intrusion. As a result, the superior court ordered a physical solution to reduce the drawdown of the aquifer to the natural safe yield, maximize the aquifer’s potential beneficial use, and provide a means to augment the Monterey Peninsula’s water supply. To oversee the process and implement regulations ensuring compliance with the physical solution, the superior court ordered the creation of a Watermaster consisting of 13 members. In addition, the superior court established rules for the parties to follow in extracting groundwater from the Seaside Basin. The superior court retained its jurisdiction over matters related to the physical solution and 2007 judgment. Exercising its retained jurisdiction, the superior court conducted proceedings over the challenged permit denial. The superior court found that although the District may issue water distribution permits, it may not interfere with the physical solution. The physical solution governs the environmental aspects of Seaside Basin groundwater usage. No party to the 2007 judgment may require CEQA review with regard to such usage. Accordingly, the superior court ordered the District to set aside its permit denial and rehear the matter. The superior court directed the District to revise any findings referring to a need for CEQA review of the permit’s potential impact on Seaside Basin production. The Court of Appeal’s Ruling The District appealed the superior court’s ruling on the challenged permit denial to the Court of Appeal. The primary issue on appeal was whether the 2007 judgment (including the physical solution) covered the matters addressed in the permit denial. The District argued that the superior court exceeded its jurisdiction by going beyond merely determining whether the permit denial was supported by substantial evidence. The Court of Appeal disagreed and affirmed the superior court’s ruling. The Court of Appeal confirmed the superior court’s “affirmative duty” to develop and enforce a physical solution for overly taxed water systems. The Court of Appeal described a “physical solution” as “an equitable remedy designed to alleviate overdrafts and the consequential depletion of water resources in a particular area, consistent with the constitutional mandate to prevent waste and unreasonable water use and to maximize the beneficial use of this state’s limited resource.” The opinion explains that, as a court of equity, the superior court had broad powers to see that justice was done and none of the valuable waters of the state went to waste. The superior court had to work out a fair and just solution based on the facts of the case. Further, the superior court had discretion to implement the physical solution within the bounds of the court’s authority without unreasonably or adversely affecting the parties’ existing legal rights and priorities. The Court of Appeal found that the District’s findings supporting denial of the permit conflict with the superior court’s physical solution to the extent they adjudicate water rights in the Seaside Basin. The District could not take on issues reserved in the 2007 judgment for the superior court or Watermaster. The Court of Appeal noted that Cal‑Am and SNG’s permit application was submitted to the Watermaster in addition to the District. The Watermaster determined that the proposed project was consistent with the 2007 judgment. The District’s water distribution permitting authority still allowed the District to examine other environmental effects of the project proposal. The District could require an accounting of water quantity to ensure that no Carmel River water is used in the project. However, the District cannot make environmental decisions based on the mere storage of water from two sources. Conclusions and Implications The Court of Appeal’s decision illustrates that superior courts enjoy broad discretion in fashioning groundwater adjudications and may effectively limit the groundwater management authority of local agencies. The case is noteworthy in how it strikes a balance between the power of the judiciary to adjudicate water rights, while leaving in place all powers of local agencies not directly in conflict with the court’s judgment. The decision should assist the parties in moving forward with efforts to effectively manage the limited water resources of the Monterey area. For more information on California American Water v. City of Seaside, et al. (2010) 183 Cal.App.4th 471, the adjudication of water rights or local water management authority, please contact Cassie Aw-yang at cawyang@somachlaw.com. Somach Simmons & Dunn provides the information in its Environmental Law & Policy Alerts and on its website for informational purposes only. This general information is not a substitute for legal advice, and users should consult with legal counsel for specific advice. In addition, using this information or sending electronic mail to Somach Simmons & Dunn or its attorneys does not create an attorney-client relationship with Somach Simmons & Dunn. |
