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July 17, 2014  |  Written by Nicholas A. Jacobs

First District Court of Appeal Upholds State Water Resources Control Board’s Frost Protection Regulation

On June 16, 2014, the First District Court of Appeal issued its opinion in Light v. State Water Resources Control Board (2014 Cal.App.Lexis 523) (referred to as the Light opinion or Court of Appeal ruling).  The Light opinion reverses, in its entirety, the Mendocino County Superior Court’s 2013 judgment invaliding section 862 of Title 23 of the California Code of Regulations (Section 862).  The following provides a summary of Section 862, both the Superior Court and Court of Appeal rulings, and the process to petition the California Supreme Court to take the case.

Section 862

Section 862 provides that diversions for frost protection purposes in the Russian River watershed “may contribute to a rapid decrease in stream stage that results in the mortality of salmonids due to stranding,” and that “stranding mortality can be avoided by coordinating or otherwise managing diversions to reduce instantaneous demand.”  As such, the regulation compels all frost protection diverters to submit “Water Demand Management Programs” (WDMPs) for approval by the State Water Resources Control Board (Water Board).

WDMPs must have five elements:  (1) an inventory of the frost diversion systems within the area subject to the WDMP; (2) a stream stage monitoring program; (3) an assessment of the potential risk of stranding mortality due to frost diversions (including required consultation with the state and federal fisheries agencies); (4) the identification and timelines for implementation of any corrective actions necessary to prevent stranding mortality caused by frost diversions; and (5) annual reporting of program data, activities, and results.  The WDMP must identify the diverters participating in the program and any known diverters within the area subject to the WDMP who decline to participate.  The WDMP also must include a schedule for conducting the frost inventory, developing and implementing the stream stage monitoring program, and conducting the risk assessment.

WDMPs may be submitted by an individual water user, or by a larger group.  Group WDMPs must have a “governing body,” which is supposed to consider water right priorities in assigning the “corrective actions.”  The Water Board must approve the WDMPs.

According to the Water Board’s own analysis, implementing a WDMP and complying with the various requirements is expected to initially cost a typical 160-acre vineyard owner between $9,600 and $352,000.  It will cost an additional $3,000 to $36,200 per year to keep that 160-acre vineyard in compliance.  It is expected to cost a typical 40-acre vineyard between $2,400 and $87,880 in order to initially comply with its mandates.  It will cost an additional $750 to $9,000 per year to keep that 40-acre vineyard in compliance.

Section 862 applies to diversions under the claim of any water right:  post-1914 appropriative rights, pre-1914 appropriative rights, riparian rights, and even “hydraulically connected” groundwater.  Any diversion of water not in compliance with Section 862 or a Water Board-approved WDMP is declared an unreasonable use of water under Article X, section 2 of the California Constitution, and Water Code section 100.

The Superior Court Judgment

The Light case involved separate lawsuits that were consolidated in the Mendocino County Superior Court.  Rudy and Linda Light, owners of a 23-acre vineyard, filed the first case in Mendocino County.  The second case was filed in Sacramento County Superior Court by a group of growers called the Russian River Water Users for the Environment (RRWUE), as well as several individual growers from both Mendocino and Sonoma Counties.  Judge Ann Moorman of the Mendocino County Superior Court invalidated Section 862 as unlawful on multiple grounds, and also ruled that the Water Board failed to comply with the California Environmental Quality Act (CEQA) in several regards.

Substantive Invalidity of Section 862

First, the Superior Court judgment provides that Section 862 violates Article X, section 2 of the California Constitution and exceeds the Water Board’s jurisdiction because it declares hundreds of vested water rights unreasonable uses without any case-by-case analysis.  In this regard, the judgment contains extensive analysis of case law relevant to the Water Board’s jurisdiction and the protections afforded vested water right holders.  The ruling holds that there must be specific findings to support an unreasonable use determination for riparian, pre-1914, and groundwater rights holders.

Second, the judgment found that Section 862 violates the fundamental rule of priority that governs all California water rights because it fails to establish procedures and protections for honoring senior water rights.  The ruling explains how and why the governing bodies and WDMPs lack the authority/ability to honor the seniority system when implementing corrective action plans and other coercive means of restricting frost protection water diversions.

Third, the judgment found that the Water Board improperly delegated its authority to adjudicate unreasonable use determinations to the governing bodies.

Finally, the judgment held that Section 862 was not “reasonably necessary” under Government Code section 11350(b)(1) because:  (1) the Water Board failed to ascertain what stream conditions are necessary to protect salmonids; and (2) the Water Board failed to do a case-by-case analysis of the unreasonableness of each diversion.  In this regard, the Superior Court ruling provides, “[t]he law requires the [Water Board] to draft a regulation when there is substantial evidence showing the necessity for it – not to draft a regulation mandating private individuals to gather the evidence necessary to support the regulation in the first place.”

CEQA Rulings

The Superior Court judgment found that the Water Board’s Environmental Impact Report (EIR) is flawed in four main ways.  First, the EIR failed to assess the risk of salmonid strandings caused by diversions other than for frost protection.  In particular, the Superior Court focused on the diversions to Lake Mendocino and Lake Sonoma by the Sonoma County Water Agency (SCWA).  Nowhere does the EIR quantify how much water is being diverted from the Russian River watershed by SCWA or by any other diverters.  In fact, nowhere does the EIR even quantify how much water the vineyard operators who use water for frost protection are diverting.  The Water Board argued that quantifying the SCWA and other diversions was not necessary, because the rapid drawdown in stream flows that allegedly impacts salmonids “is only a problem identified with frost protection diversions….”  The Superior Court indicated that this claim lacks any evidentiary support in the voluminous evidence that comprised the administrative record upon which the Water Board relied in adopting Section 862 and the EIR.  Instead, the Superior Court held that “[t]o conclude that the cumulative instantaneous drawdowns by farmers are the cause of salmonid strandings without also taking into account the effect of SCWA’s diversion of water upstream and the failure to release sufficient water during that same dry time, is not reasonable.”

This failure to identify and analyze the quantities of water being diverted by all water users in the watershed led to several flaws in the EIR.  The Superior Court found that the Water Board failed to abide by CEQA’s requirement that an EIR be responsive to significant questions presented (i.e., why aren’t impacts to salmonid habitat from all diversions considered in Section 862 – not just frost protection diversions?), and that an EIR explain the basis of its conclusions.  This lack of information regarding all diversions also resulted in a flawed alternatives analysis.  Specifically, there should have been an alternative that evaluated reduced diversions or increased releases by SCWA reservoirs in order to benefit salmonid habitat.  Similarly, the EIR’s cumulative impacts analysis was flawed because it failed to identify and assess the cumulative impacts to salmonid habitat caused by SCWA’s reservoir operations and other diversions.

Second, the EIR failed to identify what river flow levels are necessary to protect salmonids.  This was the central argument raised by the RRWUE.  The Water Board admitted that it neither identified nor analyzed what stream conditions are necessary to protect salmonids, but argued that this information would be developed later by the grape growers through the WDMPs.  The Superior Court stated that “[f]ailing to identify what constitutes a ‘safe’ flow simply eviscerates any possibility of understanding the full impacts of this regulation.”  Without providing this information, the Water Board was unable to “predict the scope or magnitude” of the various environmental impacts that would occur related to implementing Section 862.  The Superior Court found that this lack of information resulted in an EIR that “was not a reasoned and good faith effort to inform decision makers and the public about the impact of the regulation.”

Third, the EIR failed to adopt reasonable mitigation measures.  Again, this flaw ties back to the EIR’s failure to identify what stream conditions are necessary to protect salmonids.  If significant diversions must be curtailed in order to protect salmonids, then there will be more significant environmental impacts associated with alternative frost protection measures (e.g., building off-stream storage reservoirs or installing wind machines), or even in land conversions associated with vineyards going out of business.  But, if only modest diversions are necessary to protect salmonids, then there will be only modest environmental impacts associated with implementing alternative frost protection strategies.  Without knowing this information, however, the EIR inadequately addressed what mitigation measures are necessary to address the environmental impacts associated with implementing alternative frost protection measures.

Finally, the Superior Court found that the EIR presented a flawed analysis of potential impacts associated with farmland conversions caused by implementation of Section 862.  The EIR contained a cursory dismissal of the various comments and evidence submitted regarding the potential for environmental impacts from farmland conversions.  The Superior Court noted that neither the administrative record nor the EIR contained any evidence in support of its conclusion that farmland conversions were a less than significant environmental impact.

The Appellate Opinion

The First District Court of Appeal, in the recent Light opinion, reversed the Superior Court judgment in all regards.  The Superior Court interpreted Section 862 as declaring hundreds of frost protection diversions in Mendocino and Sonoma Counties “unreasonable,” and on that basis the Water Board imposed the WDMPs and other terms of Section 862.  In contrast, the Court of Appeals’ Light opinion holds that Section 862 does not declare any water uses unreasonable.  The Light opinion explains that the Water Board is empowered to regulate all surface water rights to prevent unreasonable use (the opinion fails to address “hydraulically connected” groundwater), and without first establishing the unreasonable use of water.

The Light opinion’s holding that the Water Board is empowered to regulate all surface water rights conflicts with an earlier decision in which the same First District Court of Appeal confirmed that the Water Board lacks jurisdiction to regulate riparian rights and only the courts may determine whether a riparian water use is unreasonable.  In fact, the Forni decision (People ex rel. State Water Resources Control Bd. v. Forni (1976) 54 Cal.App.3d 743) from the 1970’s chided the Water Board for even arguing that it had the jurisdiction to impose a frost protection regulation on the riparian water users of the Napa River.  The Light opinion acknowledges the limitations on the Water Board’s jurisdiction set forth in the Forni case, but reverses this key ruling by explaining “we conclude Forni construed the Board’s authority too narrowly.”

The Light opinion rejects arguments by RRWUE and the Lights that the WDMPs amount to ade facto permitting process, in violation of the longstanding prohibition against the Water Board requiring permits from pre-1914, riparian and groundwater users.  The Court of Appeal explains that, “[l]imited and particularized prohibitions designed to prevent unreasonable use are different from, and by no means legally equivalent to, the comprehensive regulation embodied in a water use permit….”  The Light opinion further states that broad reasonable use regulations are warranted because the only alternative is an inflexible court injunction.  Yet, for 160 years, California has dealt with reasonable use disputes through the judicial system, with injunctions the common form of remedy.

The Light opinion also dismisses arguments that Section 862 violates the rule of priority in water rights.  California case law holds that “every effort” must be made to honor the rule of priority when applying the rule of reasonableness, and RRWUE argued that Section 862 fails to honor the rule of priority:  both because it includes every frost diverter in two counties; and because it places the duty to determine the seniority of water rights on the “governing bodies” – essentially a board made up of the growers themselves.  The Light opinion rejects these arguments on the grounds that Section 862 does not declare any water uses unreasonable (yet) and that such concerns are premature.

On the issue of unlawful delegation of powers, the opinion disagrees with the Superior Court’s finding that Section 862 improperly delegates the authority to determine water right priorities to the “governing bodies” responsible for developing the WDMPs.  The opinion relies heavily on the Sun Pacific case (People ex rel. Lockyer v. Sun Pacific Farming Co. (2000) 77 Cal.App.4th 619) in which the plaintiff argued, unsuccessfully, that the state Legislature had unlawfully delegated power to a local citrus pest control district, which had a board comprised of local growers.  But the opinion fails to address the fact that the Sun Pacific case involved delegation from the state Legislature to a local agency – not from a state agency of limited jurisdiction to individuals.

The Court of Appeal also reversed the Superior Court’s finding that Section 862 was not “reasonably necessary,” as required by Government Code section 11350(b)(1).  The opinion acknowledges “the validity of some of plaintiffs’ observations about the shortcomings of the current level of scientific knowledge,” but ultimately concludes that the Water Board demonstrated the necessity for Section 862.  The opinion fails to address RRWUE’s central argument that the Water Board did not even identify what conditions are necessary to protect salmonids – a prerequisite to determining the necessity of a regulation or preparing an informed EIR.  Nor does the opinion mention or address the two key pieces of evidence presented by the plaintiffs:  (1) a map prepared by NOAA Fisheries and purporting to show that only very limited stretches of the streams/rivers in the Russian River Watershed are susceptible to salmonid strandings; and (2) evidence that the reductions in flows on the April 2008 night when NOAA Fisheries claims frost diversions resulted in salmonid strandings were well within the parameters authorized in the biological opinion issued to Sonoma County Water Agency by NOAA Fisheries, and for the same watershed.

Finally, the Light opinion reversed the Superior Court on all of the CEQA rulings.  The Court of Appeal finds that the EIR met the standards of CEQA, and left this portion of its opinion unpublished (meaning it is not citable as authoritative law).

The Supreme Court Petition Process

Petitions for review to the California Supreme Court are due July 28, 2014.  Both the Light and RRWUE petitioners filed “petitions for rehearing” with the Court of Appeal.  The petitions were largely rejected, although the Court of Appeal did clarify that Section 862 is to be applied in a phased approach, and that no enforcement actions may take place within the first two years following remand to the Superior Court.  Those petitions do not affect the timing on when petitions for review to the Supreme Court must be filed.  The Water Board has 20 days to file an answering brief to the petition for review, and the Light and RRWUE petitioners will have 10 days after that to file a reply brief.  The California Supreme Court will accept amicus curiaeletters (no formal briefs are allowed) in support of the petition for review.  The Court should receive the letters no later than 30 days from July 28, 2014 – which is August 22, 2014.  Parties wishing to submit letters should work with attorneys to ensure that the letters meet the Supreme Court’s procedural requirements, and are focused on key issues.  Form letters are probably not helpful, but a higher volume of letters could be beneficial.

If the California Supreme Court grants review, then an additional and more detailed briefing process will commence.  The dates for the briefs will depend on when the Court grants the petition for review.  Formal amicus curiae briefs may be filed at that time.  There will be oral argument at the conclusion of the briefing process.

For additional information please contact Nick Jacobs at njacobs@somachlaw.com.

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