Groundwater adjudication hearing, part 2: Case Study on the Antelope Valley Adjudication

Wikimedia Antelope Valley Poppies HeaderThe Antelope Valley groundwater adjudication case is the current poster child for how painfully long and expensive groundwater adjudications can be.  The enormous case involves a multitude of public agencies, farmers, cities, the federal government, and landowners, both large and small, some of whom pump water, but most who don’t but still hold groundwater rights that cannot be dismissed or ignored.  It has been winding its way through the court system for 15 years, with over 9,000 docket entries so far and more than a hundred lawyers listed on the case.

On November 20, the Senate Committee on Natural Resources and Water held an informational hearing on groundwater adjudications titled, “Resolving Disputes Regarding Groundwater Rights: Why Does It Take So Long and What Might Be Done to Accelerate the Process?”  In part 1 of coverage from the hearing, Justice Ronald Robie gave an overview of the adjudication process.  In this portion of coverage of the hearing, attorney Eric Garner, managing partner with the law firm Best, Best, & Krieger LLP, gave an overview of how the case has progressed to date.

Eric Garner, managing partner of Best, Best, & Krieger, LLP

Mr. Garner began by noting that he is not appearing on behalf of any client today, and the views he will be expressing are his own, based on his several decades of experience in groundwater adjudications.

Eric Garner 1Prior to this year, the law of California groundwater was pretty much pump until a judge tells you not to and generally the only way to limit pumping in a groundwater basin was to sue everyone and have an adjudication, which is simply litigation that involves everyone who has a claim to water in a groundwater basin, and get a resolution of that case,” he said.

There are two things to keep in mind, Mr. Garner said. “The first is that one reason adjudications take so long is that there are parties that benefit from the status quo, and that at the end of an adjudication, there will be certainty and management,” he said. “The court will generally have continuing jurisdiction, there will be a watermaster, and there will be management, and generally that management has been pretty successful over the past half century now that we’ve had adjudication management in place. But because that means if the basin is in overdraft, the parties are either going to have to reduce pumping or pay more for water and for some parties, it’s a better deal frankly to pay attorneys to delay that resolution, because although attorneys aren’t cheap, water is even less cheap, and often it’s cheaper to pay people in my profession to delay things then to get to that resolution. So I think that this body has an opportunity to change that. I don’t think adjudications have to take as long as they do.”

Palmdale_and_Mountains WikimediaThe second observation I wanted to make is that nothing will move a case to settlement faster than a trial date,” he said. “I agree with Justice Robie that mediation is important, but ultimately it’s a water rights holder knowing that they are going to have to come to court and prove their water rights, and especially if they know the basin is in overdraft, they might have some qualms about proving how much water they’ve been pumping and that motivates people to resolve cases, and that’s true in the Antelope Valley case.”

Mr. Garner said that this is why this legislation is important and complementary to the work already done on sustainable groundwater management. “There is the potential here, frankly, for some folks to wait the five or seven years until the sustainability plan is done, and if that sustainability plan calls for cutbacks in pumping, they will file a lawsuit, and say, wait a minute, you can’t cutback my pumping until you determine my rights and everyone else’s rights in the basin,” he said. “There are some arguments against that, and that lawsuit might fail, but even if it’s broad, it’s going to take several years. If it succeeds, then they probably not only bought themselves the five to seven years in the planning process, but another 15 to 20 years or however long it takes to resolve that adjudication, and I don’t think that’s anyone’s desire.”

Mr. Garner added that he felt that if there had been a trial date immediately after the mediation in the Antelope Valley case, Justice Robie would have settled it. “He spent 18 months working on this very hard, and he laid the groundwork for what will be the settlement, but I think that was really the one thing we didn’t have was that short term trial date that got everyone’s heart racing faster and had the urgency to settle.”

Shoemaker's_mountain_ranch,_Little_Rock,_Antelope_Valley,_California_(CHS-2047)Mr. Garner then turned to the Antelope Valley groundwater adjudication case, an adjudication which covers about 1300 square miles and involves over 75,000 parties. The Antelope Valley became a productive agricultural area in the early part of the last century, and from the 1920s to the 1950s, the historic record shows a significant increase in groundwater pumping. In the 1950s, over 400,000 acre-feet of water was being pumped out of the Antelope Valley on an annual basis, toughly 5 times what Judge Komar would later determine to be the safe yield, Mr. Garner said.  “Those are the best estimates that we have,” he said. “Obviously the historic record is what it is, but they seem to be pretty good. Right now it’s estimated that the current pumping is maybe in the 125,000 acre-feet range.”

As a result of the dramatic increase in pumping from the 20s to the 50s and 60s, groundwater levels started going down very quickly, in fact so rapidly that in the late 40s, the Los Angeles County Board of Supervisors took the extraordinary action of passing an ordinance to limit the drilling of wells in the Antelope Valley, Mr. Garner said. “There was such consternation and outcry when they did that that they rescinded the ordinance but of course, that didn’t rescind the problem and so the well levels kept dropping. Eventually, they dropped so substantially that it became non-economical to pump, so a lot of the agriculture went away, starting in the 60s and then particularly in the 70s.”

Palmdale and aqueduct #1 July 2010In the 1980s, State Water Project water became available, and even though there was a lot less agriculture, the basin remained in overdraft, but the well decline was much smaller. “Pumping technology had improved, and so agriculture came in again in the 1990s in the form of two very large carrot farming operations. And the water levels began to drop again, and that’s what created the critical overdraft situation in the 1990s.”

Mr. Garner said that prior to his involvement in the case, there had been some prior litigation and several years of discussion among farmers and public agencies on how to resolve the issue. “You have what’s typically the recipe for controversy: agriculture in close proximity to growing urban areas,” he said. “Palmdale and Lancaster were growing very quickly at that point in time, and there was rapid urbanization moving right in next to agriculture and that was creating the issue.”

Those discussions came to an end in 1999 when the two carrot operations, Bolthouse and Diamond Farming, filed quiet title actions against the public water suppliers,” he said. “Overlying rights have priorities over appropriative rights so their claim in the quiet title action was that simply in a time of shortage, they could pump the water they need under the common law overlying right before the municipal agencies could pump water as appropriators.”

Antelope Valley Agriculture Apr 2011 #2There is really only one way to change that common law right, and that’s to claim that you have a prescriptive right, an adverse possession idea, on behalf of the public agencies, and so that’s really an argument that’s available to a public agency in that situation,” he said.

Now this dispute could have played out with the parties that were involved. You just had the two farming operations and a half dozen public agencies at that point, so we had seven, maybe 10 parties, and you might say, why not stop there,” Mr. Garner said. “Because for the public agency or for the farming interest, if it’s only resolved as to ten parties, and you’ve got thousands of other parties out there pumping, and tens of thousands of overlying property owners who have never pumped but have an overlying correlative right to come on the basin anytime they want and start pumping, you have no certainty. As a public water supplier reliant on a groundwater basin for decades to come in terms of planning, you need that certainty, so you’re really left with no choice as a public agency but to bring everybody into a case and start an adjudication, and try and resolve the issues so the basin is managed and you have some level of certainty. Win or lose, at least you have a managed water supply.”

Edwards Air Force Base WikimediaAnother factor that makes the Antelope Valley case even more complex is that the largest property owner in the basin is Edwards Air Force Base. “Typically when you sue the United States, and you can’t really leave the largest property owner in the basin out, so when you sue them, you have to sue them in federal court,” Mr. Garner said. “However, water law is unusual in so many ways, and this is another one. There is something called the McCarran amendment, which is a federal law which allows you to bring the United States into state court in a groundwater or any kind of water adjudication, so long as its comprehensive. That comprehensiveness means that you have to bring in every user or every claimant to water in the area, so the United States was joined, and of course they insisted on the comprehensiveness requirement of McCarran, and so that set the stage for the Antelope Valley cases.”

He then turned to the timeline, noting that he would just hit some highlights, but there is a much more descriptive timeline submitted with the hearing materials. Mr. Garner said the complaint was first filed in 1999, not in Kern County or Los Angeles County where the real property involved is located, but in Riverside County, a neutral county. “That is an option under the code of civil procedure, but you can see it immediately raises an issue as there’s some forum shopping going on about where one would want to be heard,” he said. “Potentially you could say if you’re a farmer, you’d rather have it heard in Kern County which is a more agricultural county, and if you’re a public agency, you’d rather have an urban area. It definitely needs to be a place that can handle complex matters with dozens and dozens if not hundred-plus lawyers and often the technological facilities in this day in age to handle exhibits, so that’s a key thing.”

There were multiple complaints filed early on and a trial actually did begin about two and a half years after the case started, Mr. Garner said. There were a lot of settlement discussions and the parties were optimistic they could resolve it. The trial started, stopped, it was delayed, but eventually it was clear it wasn’t going to settle.

800px-Rosamond WikimediaThe second issue became who would decide the case. The commissioner handling the previous case had been reassigned, so another judge was assigned who was ‘170.6’, a code of civil procedure section which allows disqualification of a judge without cause; it’s just automatically filed, he said. “One of the risks in these cases is that it says per side, but it’s unclear what a side is in a groundwater adjudication, and with hundreds of parties, you can see what could happen,” he said. “In Santa Maria, we went through several judges, at least two were 170.6 and so that would be another issue is to try and get those challenges out of the way up front, or make clear who can challenge and what a side is in these cases because without a limit, that can be another delaying tactic.”

The case moved from judge to judge, and after an attempt at mediation, the mediator said that an adjudication was needed. “Los Angeles County Waterworks District, the client my firm was representing, did file a cross complaint for adjudication, so that is now nearly five years after the initial complaint was filed. There’s five years pretty much just figuring out who is going to handle the case and where it’s going to go and where it’s going to be decided. I think those are things that this body could shorten substantially.”

When the cross complaint was filed, the case was assigned to Judge Jack Komar from Santa Clara Superior Court. “At that point, he was handling the Santa Maria adjudication, so he was the most experienced judge in the state with groundwater adjudications,” Mr. Garner said. “At that point, we had to bring everyone into the case, because it was a cross complaint for adjudication.”

Palmdale and aqueduct #3 July 2010There’s not been another basin I’m aware of anywhere, where there have been so many parties who own land and aren’t pumping,” he said. “There are over 70,000 of those unexercised overlyers; there were another 3000-4000 small pumpers out there, and then a hundred to a few thousand large pumpers. If we had had to serve individually all the unexercised overlyers, the 70,000+, we’d probably still be serving parties because it’s not an easy thing to personally serve. The law requires efforts of personal service.

No one had ever used classes in a groundwater adjudication before, but it’s a legitimate way to do it,” Mr. Garner said. “There are class actions in lots of things, but groundwater is a little different than a tort lawsuit against an automobile company, so since we were doing it for the first time, it took years to get the class action right. A lot of parties objected to the way it was being done. It took two and a half to three years to get the classes worked out and the lawyers appointed to represent them and to get everyone in the case.”

The service issue would be another thing this body could look at, Mr. Garner said. “We created a pumper class and a non pumper class so we could provide them notice without having to personally serve all of them. It’s a due process issue in the constitution and it’s crucial to make sure everyone gets proper notice, but there’s a way to provide that notice without having to go through the class process, that would be a huge timesaver in these cases, because as you can see, we’re going from really 2006 to the end of 2009 just getting everyone in the case. All of a sudden, we’re ten years in the case and all we have done is figure out the judge who’s deciding it, where the judge is sitting who is going to decide it, the boundaries of the basin, we did have a trial at that point to determine who was in it, and then getting them all in the case, and that took a decade. I think those are all areas where there can be tweaks in the law that can make that move a whole lot faster.

Eric Garner 2Finally, in 2010, there was a trial in front of Judge Komar to determine if the basin was in overdraft.   “If there’s no overdraft, then there can’t be prescription and the water rights allocation is going to be different,” he said. “In this case, he did find there was an overdraft, so at that point in time he did send us to Justice Robie for mediation, and that process went on and off for about 18 months.

We couldn’t quite get it resolved so then the court started setting trial dates and then things started to move,” Mr. Garner said. “People had to produce pumping information, but the first pumping information produced was in May of 2013, some 14 years after the original action was filed. When the parties knew they had to come into court, offer pumping data and be prepared to back that up, they began to get very serious about resolving the matter. In this past year, we were going to have another phase of trial; we did have a part of that, but again that was largely stayed due to settlement talks. Since then, the parties have been in very serious settlement talks for most of this year, and I’m actually optimistic that we will resolve a large part of this case through settlement.”

So in summary, I don’t think adjudications need to take as long as they do,” said Mr. Garner. “I think there are a lot of procedural things that can be done to shorten the ten years of getting everyone in the case and determining the basin boundary that will really complement the work on the Sustainable Groundwater Management Act. I think that if adjudications can be expedited, that eliminates to some extent the safety valve of delay, of being to drag a case out forever in court, and so with that, I do want to thank you. You read a lot about water law reform in many contexts, and this body is actually doing something about it, the heavy lifting on it, which is much appreciated by all of us who work in the water business.”

Senator Pavley 3Senator Pavley asks Mr. Garner to articulate those three or four recommendations on procedurally in those ten years period that is causing the delay.

On venue, at least having the cases designated as complex means it would go towards a certain court,” Mr. Garner said. “I’m not suggesting you pick particular courts by any stretch, but as long as the cases are designated ‘complex’, that’s important.”

He said he’d leave the specific recommendations on notice issues to the next panel, but finding a way to notice everyone without having to form a class would be a substantial time saver. “I think making clear what one side is for the purpose of 170.6, the disqualification of judges. It’s a minor clarification I think really in the law, hopefully noncontroversial, I think that’s another key point.”

Senator Pavley asks about the determination of the boundaries of the basin.

Mr. Garner suggests that one could start with DWR’s Bulletin 118 boundaries as a default, and leave it to parties to come in and have to justify why it shouldn’t be that. “If you start with the Bulletin 118 boundaries as a starting point, you probably have 75 to 90% of the basin most of the time, and if someone has a strong argument that there should be a subarea, of course they should come in and make that. What we’ve found is that courts tend to be more inclusive than less inclusive, so I think it would make sense to start there. …

For more information …

Coming tomorrow …

Stefanie Morris, chief counsel of the State Water Contractors, Chris Scheuring, managing counsel with the California Farm Bureau Federation, and Gordon Burns, undersecretary with the California Environmental Protection Agency discuss options and possible solutions for moving forward.

 

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