Groundwater adjudications in the age of the Sustainable Groundwater Management Act
Panel of lawyers discuss the potential collision course of groundwater adjudications with the development of groundwater sustainability plans
Prior to the passage of the Sustainable Groundwater Management Act last fall, groundwater disputes were typically resolved through groundwater adjudications – a lengthy and expensive process by most accounts, but with the new legislation setting up a process for managing groundwater, the role of adjudications in the future is uncertain.
At the spring conference of the Association of California Water Agencies, attorneys Meredith Nikkel, Craig Parton, Kevin O’Brien, Ryan Bezerra, and Elizabeth Ewens discuss the history and basics of groundwater adjudications, and explore how adjudications and the groundwater legislation will interact and possibly conflict.
MEREDITH NIKKEL: Downey Brand (Moderator)
“I am happy to be here to present two worlds that are soon colliding and that is the world of groundwater adjudications that have been historically the place where groundwater suits are resolved, and the new world of the Sustainable Groundwater Management Act, which is the regulatory process and the political process that the legislature enacted last year to help manage groundwater basins in California,” began Meredith Nikkel.
Ms. Nikkel set the stage for the presentation by reviewing the basics of groundwater adjudications. “It’s a term used very loosely, but a groundwater adjudication is a very specific type of legal action,” she said. “It is a civil action that is filed in a county superior court (or it can be); it’s a civil complaint that involves the resolution of all groundwater and water right claims to a particular groundwater basin. It can also be a process that is initiated by the State Water Resources Control Board although there’s been very few of those, and never one that’s been completed.”
Groundwater adjudications often result in stipulated judgments (but not always) that describe the rights to the basin and allocate responsibilities for maintaining the safe yield of the basin; often the court will retain continuing jurisdiction and appoint a watermaster to manage the basin and ensure the terms of the judgment are being enforced, she explained.
There are several types of groundwater adjudications: One that is filed in a County Superior Court, a general adjudication that is filed in a superior court but then is referred to the State Water Resources Control Board, and then an adjudication that is initiated by the State Water Resources Control Board, she said.
“There have been approximately 20 adjudicated basins in California; they are mostly concentrated in Southern California,” said Ms. Nikkel, noting there is a list included in SGMA identifying all those basins. “Some of those recent adjudications include the Mojave Basin, and then a couple in Northern California – Seaside Basin and the Santa Maria basin. One ongoing adjudication is the Antelope Valley adjudication.”
CRAIG PARTON: Price, Postal & Parma
Procedural techniques for adjudications
Ms. Nikkel then handed the presentation over to Craig Parton to provide an overview of the procedural techniques and issues related to groundwater adjudication.
Mr. Parton began by noting that he’s been involved in a lot of groundwater adjudications, particularly the Santa Maria and the Seaside basin adjudications. “There are some things that are worth remembering when you think about adjudications,” he said. “Adjudications have a bad reputation because they take forever and an immense amount of money, but there’s a benefit to being in adjudication. A person in a robe tells you what the answer is to your question. You get a resolution, ultimately. I think that we need to reconsider very seriously some of the benefits and values of adjudications as they’ve been conducted in California in a variety of settings.”
He then discussed some specific issues that arise in adjudications:
Groundwater adjudications are really a species complex litigation: “There are pre-trial considerations; there are trial and discovery considerations, there are appellate issues that arise, also settlement issues. I approach it like complex litigation and how that is planned for.”
Count the cost of an adjudication at the front end to the extent reasonably possible: “I can tell you it will probably cost you more than is being estimated to you by your counsel, and take longer than probably estimated at the front end,” he said, noting that some lawyers have spent entire careers just on one groundwater adjudication. “So they have a long history of complexity that is not anticipated at the front end, so counting the cost is important.”
Streamline the litigation to the extent you can at the front end: “It might involve a third party, or agreeing to certain factual issues,” he said. “For example, if you can get an agreement of who is going to make a determination about basin boundaries. Good luck, but if you can, work out some situation where you go to a neutral third party to determine the safe yield of the basin as a possible way to try and expedite what really moves into being a highly complicated litigious situation.”
Consider pre-trial mediation: “Be careful who you use as a mediator,” Mr. Parton cautioned. “Some of them are a supreme waste of time, and some of them are very, very good, but to get to some kind of initial agreement at the front end of a case has a lot of value for you that you should at least look at. Look at early on, stipulating to a set of facts. I can’t tell you how often you get to the end of litigious situations particularly involving groundwater, and you realize that you could have probably agreed on some facts that you spent a lot of time litigating. So as trial lawyers, think about that. As people who retaining trial lawyers, think about what facts can you possibly stipulate to streamline the litigation.”
Think at the front end who you are going to align with: “This is very important at trial as these things can be very complex with multiple sides,” he said. “You won’t do anything more but irritate the judge if everybody has to have a separate presentation of all their points of law and fact to a trial judge. Remember, these are trial judges who before they’ve heard your water case, were doing a divorce, a contract dispute, a trade infringement argument and who knows what else. We don’t have water courts per se in California, so we’ve been fortunate in some cases to have experienced judicial officers … but anticipate that you need to streamline your case. And you need to figure out who your allies are at the beginning , who your adversaries are, and on what issues as they may change or vary depending upon what phase you happen to be in the case.”
Develop a joint defense agreement: “Develop an agreement, a template with other players that are aligned with you, whether it’s a purveyor group, an overlier group, a group that’s claiming prescription or has contractual rights to water,” he said. “Something you can align with to present a common voice to a court has much more power than a whiny single litigant amidst a sea of other voices out there. A joint defense agreement can keep things confidential.”
Retain good experts early on: “They go quickly when litigation gets moving,” he said. “One of the very first things I do is make sure the expert group is solid and retained as soon as possible. People say you don’t win cases with experts; I think that’s true generally in litigation, you only lose cases with crappy experts, but in water litigation, expert testimony can be absolutely fundamental and critical, so you want to get the stable of experts retained, particularly for those that are aligned on your side.”
Consider retaining a consultant along with an expert witness: “We’ve done that on several different occasions,” he said. “We confidentially retain a consultant, a hydrogeologist, or whatever it may be to tell us all the problems with our case. As most of you know, all communications with your expert are discoverable, in general. You should assume every single phone call, every communication with an expert retained for purposes of trial will be discoverable, and sometimes you cannot exactly air the family laundry with your expert. Think about retaining a competent consultant who you can go to depositions with. I have had them sit in the courtroom and hear testimony and at the end of the day say, ‘this is the problem with what so and so is saying,’ ‘this is what the problem with what our own expert just said,’ ‘you need to fix this, you need to fix that.’ A consulting expert does not need to be facile in testimony in court. Oftentimes they are younger folks that don’t present well particularly to a trial court, but are invaluable in helping you recognize the weaknesses in your case.”
“If nobody is telling you what the weaknesses are in a groundwater adjudication, you’re in trouble,” Mr. Parton said. “If you just have the people around you telling you’re doing great, you don’t have somebody who is telling you even the bad stuff that’s going on in trial, in development of the case, and the experts opinions that he’s given at deposition – you need that kind of objectivity.”
Parties and venue: These issues come up in groundwater adjudications and these are major disputes. What parties are parties to the litigation, who must be in the litigation, venue, where is the case going to be venued, he said. “Most of these cases don’t get tried in the counties in which the basin is located. … they get referred to the judicial council who sends them to some judicial officer in a neutral county, and that’s how Santa Maria ended up in San Clara Superior Court. We ended up with an assigned judge in Seaside who was from a different area. Excellent judicial officers, but again, venue can be an issue.”
Trier of fact: “These cases have been tried generally with the court only, with the thought being they are too complex and insanely boring to be in front of a jury,” Mr. Parton said. “I understand that, but also having tried multi-month jury trials before, I have a lot of confidence in juries in questions of fact, and I don’t think we should kneejerk assume we don’t want a jury in a groundwater adjudication and always go to the court as the best alternative. Something to think about.”
Mr. Parton then discussed some procedural issues faced in groundwater adjudications:
Bifurcation: Although it’s not really bifurcation, Mr. Parton acknowledged. The groundwater adjudications that he has been involved in have had multiple phases to them that addressed different topics. “In the Santa Maria case, the first and second phases were to determine basin boundaries. Those phases occurred in 1997; my client didn’t get brought into the case until 2003,” he said. “There had already been six years of litigation, but those are the kinds of preliminary questions that you need to know. What are the dimensions of the basin that you’re litigating? That can be one of the phases. You can have a phase on overdraft which was the third phase of Santa Maria, followed by the fourth phase which was the question of whether the purveyors had prescribed. In the third phase in Santa Maria, a determination was made the basin was not in overdraft; there was a stipulation and an agreement in phase three that the basin was not in overdraft, and an agreement amongst the parties, and as a result of that, a number of parties continued to litigate, and ended up having a reversal of the no overdraft decision when they continued in phase four.”
Discovery masters – pros and cons: “It’s sometimes good to get a designated discovery master – it can save money, you can have somebody who is up to speed on the case, and you get fast results,” he said. “The downside of them, they are often not willing to do anything but split the baby and they really know who pays them and they want to make everybody happy, which is really an irritating result when you want a decision and you think you’re in the right.”
Mr. Parton then gave some suggestions for the trial. “Make the complex simple and have a case theme involved,” he said. “Use experts the court can understand. This sounds obvious but if you can’t understand them, forget it. Try running your expert’s testimony by people; realize you have a court that is not necessarily sophisticated in water law matters. You need to be very plain vanilla in how you have an expert explain their position to them.” As for the use of hydrogeologic models, just make sure they are well vetted, Mr. Parton added.
“And rules of civil procedure still apply. It’s sometimes easy in these cases with the court being the trier of fact to get sloppy, to not enforce the rules of admissible evidence, make appropriate objections, and make your record for appeal,” he said.
As for judgment and post-judgment considerations, the court often retains continuing jurisdiction, Mr. Parton said. “It has retained jurisdiction in Santa Maria as there are continuing matters that the court has in front of it, post judgment and other considerations,” he said. “The stipulation in both Santa Maria and Seaside are to establish water master structures. It’s a way to help further the management of the basin and is something that has been followed at least in most of the groundwater adjudications I’ve been involved with.”
And finally, he turned to stipulating non-stipulating parties. “Generally oftentimes, these cases result partly through stipulation. People are worn out, they’ve finally gotten what they wanted through agreement, and the agree, they stipulate, and others go on to fight in eternity, which is happening in Santa Maria where there’s still people fighting and appealing.”
Mr. Parton then wrapped it up: “The take away message is that these are complex cases, but you need to approach them just like you approach any bit of complex litigation. Make your appellate record, make your record at trial, and above all things, win the case at trial, if you’re going to go to trial. Don’t say, we’re going to win it on appeal. Hogwash. You’re going to win the case at trial and preserve the victory at appeal.”
KEVIN O’BRIEN: Downey Brand
Outcomes of groundwater adjudications
Kevin O’Brien then gave a summary of outcomes of adjudications, but before he began his presentation, he gave some comments. “Less than a year ago, we passed a law which a number of lawyers have described as the most important piece of water legislation in the last 100 years; I’m not sure I completely agree with that, but it’s certainly close: SGMA,” he said. “I personally find it a little perverse that 6, 8, 10 months later we’re here talking about groundwater adjudications and there’s a bill, several bills winding their way through the legislature that would expedite and make groundwater adjudications easier.”
“So I think you have to take a couple steps back and say, well what’s going on?,” Mr. O’Brien continued. “And my answer to that question is, I don’t think there is unanimity that SGMA is going to be successful in all instances, and I think one of the big issues with SGMA in my mind is the provision in SGMA that says ‘none of this is intended to alter groundwater rights or surface water rights’; everything these Groundwater Sustainability Agencies are going to do supposedly is going to be consistent with groundwater rights and surface water rights. The problem with that of course is in an unadjudicated basin, you don’t know what the groundwater rights are. You may have prescriptive rights; you may have issues between overliers; you may have dormant overlier rights that you have to deal with. And so this idea that we’re just going to go in an adopt these Groundwater Sustainability Plans, which are going to respect rights in a situation where those rights in many cases haven’t been clearly defined or determined I think is potentially an important flaw.”
Mr. O’Brien said he wasn’t saying that SGMA is going to fail in all instances, “but I do think there’s going to be situations where as folks get farther into that process, and for example, a GSA issues an edict that everybody has to reduce pumping by 20% to get within the goal of sustainability, a senior overlier that’s been pumping for 120 years says, wait a minute. I’ve got the most senior right in this basin. Why am I being asked to reduce pro rata with everybody else? And I think that’s when we’re going to have people thinking about the alternative of commencing an adjudication. So stay tuned, that’s going to be an interesting process to sort out over the next 10 to 20 years.”
Mr. O’Brien then turned to the main subject of his presentation: the outcomes of adjudications. “Frankly they come in all shapes and sizes,” he said. “Probably many of you have looked at judgments from adjudications and none of them are the same. There are usually some certain general similarities, but there is a lot of variability in the form of the judgments that are the outcomes of the cases.”
Historically, most of these cases are resolved locally through stipulation. “San Fernando is an exception; there were some issues of first impression in that case about rights to imported water, pueblo rights, and some other issues that frankly had to get resolved by the California Supreme Court before that case could really resolve, but if you go back and look at the history of a lot of the Southern California adjudications, most of them were ultimately solved by stipulation,” he said, noting that there was a small group of lawyers who spent their careers doing adjudications.
The concept of a physical solution is important to understand in the context of an adjudication, he said. “A physical solution is essentially an equitable remedy under water law, and the concept is that if there’s a way to allow both senior water right holders and junior water right holders to have their supply but essentially force the juniors to pay proportionally more to make that supply available, we’re going to impose that,” he said. “In a lot of these adjudications, historically what happened was there was supplemental water available, and you have an overdrafted basin but there’s a supplemental source of supply such as State Water Project water, so they bring in SWP water, they make the junior pumpers pay proportionally more for that supplemental supply and everybody’s happy. That worked great for years and years.”
“Of course the problem we have now is there’s no more supplemental supply in most places and there’s probably not going to be any supplemental supply, so the recent trend that we have in these adjudications is the trend towards having to deal with the very, very difficult issue of curtailment,” Mr. O’Brien said. “No one wants to be curtailed on their groundwater pumping. … It’s a major issue in the Antelope Valley adjudication is how are we going to curtail pumping in this basin? It wasn’t an issue in Santa Maria because that basin, it turns out, isn’t currently in overdraft. So this issue of curtailment, which is also one of the key underpinnings of SGMA, is kind of the new wrinkle in all of this that we’re going to be grappling with going forward.”
A more recent trend is whereas historically, cases were resolved through settlement, now a lot of these cases get partially settled; a group of parties settle but another group that doesn’t want to settle continues to litigate, he said. “That happened in the Mojave case and it happened in the Santa Maria case, and I expect it’s going to happen in other cases,” he said.
There are essentially two basic types of final judgments that come out of these adjudications. “One is a judgment that actually determines individual water rights of all the pumpers with the Seaside judgment an example of one of those, and there are the judgments that don’t get to that level of granularity, that set up management structures, and watermasters or watermaster committees but don’t actually quantify individual rights,” he said.
“I’m not personally involved in Antelope but my understanding that they are in the process of trying to get to the level of determination of rights in that case,” Mr. O’Brien said.
“That’s correct … I like to describe that process as a hundred-sided knife fight,” quipped panelist Ryan Bezerra.
Mr. O’Brien then turned to the Santa Maria groundwater adjudication case, presenting a map of the Santa Maria Basin, noting it is near the coast along Highway 101, and includes the northern cities in Pismo and the surrounding area, the Nipomo Mesa, and Twitchell Reservoir. “This case was originally filed in 1997; it was originally filed as an action against three defendants brought by my client, the Santa Maria Valley Conservation District in what we thought was going to be a fairly narrow limited litigation about whether this basin was or wasn’t in overdraft,” he said. “It turned out to be a lawsuit involving about maybe 1000 parties, give or take. It started in 1997 and the final court of appeal decision came out in 2012, so a long process. Fortunately my client and (other clients) were able to settle out of the case at a fairly early stage, but as Craig said, these cases tend to go on a long time and they tend to be very expensive, and Santa Maria is a good example of that.”
He presented a slide of one of the trial exhibits used to depict groundwater conditions by showing hydrographs from different points around the basin. “You can see at different points in the valley, sometimes you have very flat groundwater levels, and in other areas, you have a very downward trend,” he said. “The big issue in Santa Maria or at least one of the big issues was whether the basin has historically been in overdraft and whether there was prescription occurring.”
He presented another trial exhibit which looked at the reports that had been done historically going back to the early 1900s. “You can see that there was a series of reports that basically said this basin is in overdraft, and if you look at the curve of the hydrograph, you can see there’s some support for that, but then what happened was in the 60s, Twitchell Reservoir was constructed, and from that point forward, you had what we thought was a fairly stable set of conditions and even an upward trend, really, in groundwater levels,” he said. “So we argued to the court and Judge Komar during the trial on the overdraft issue that if you look at this basin on a long term basis, it really is not in overdraft; he ultimately agreed with that position, and subsequently, the parties that were involved working together on the overdraft issue were able to settle their claims with the public water purveyors and another group of litigants, landowners, continue to litigate.”
Mr. O’Brien noted that for more details on the case, there is a recorded sixth district court of appeal decision that does a good job in terms of laying out the history, the background, and the physical part of it. “The case is probably most important for its discussion of rights to develop and salvage water, which included both imported State Water Project water and the rights to the Twitchell Project, which is essentially an in-basin project; I think probably made some new law or at least clarified existing law on some of those issues.”
He then put up a graph depicting groundwater levels, and noted that since the judgement, the basin has been fairly stable. “We do have a data point here that indicates that groundwater levels currently are kind of where they were in the drought in the early 90s and kind of where they were in the drought in 76-77, but generally I think the basin’s in pretty good shape,” he said. “I think the management structure that was put in place where basically there are three management areas: the main Santa Maria Valley, the Nipomo Basin, and the northern cities; they are managed separately but all under the supervision of the court and I think it’s worked frankly pretty well.”
He then spoke briefly about the Seaside Basin adjudication. “Seaside is kind of an unusual situation because it’s a very small basin – I think there were 17 pumpers involved in that case,” he said. “That case went to trial; Craig was involved in that as well. We had a judge, Judge Randall, who was a retired judge from Kern County who was I thought an excellent judge. I remember distinctly Craig turning to me after the first morning of trial and he said, ‘this is a federal judge in state judge robes,’ because Judge Randall really ran that courtroom and really ran that trial. I remember he forced us to start that trial on the day after Christmas, and we finished that trial in two weeks. He entered a decision and it was never appealed.”
“It’s a small basin, so it’s probably not representative of very much, but I think it does suggest that if you really want to get one of these things done and you have a judge that’s willing to push the lawyers, you can actually get them done fairly efficiently,” Mr. O’Brien said. “That’s what we did, and that’s another case where that has been a very durable resolution of those issues. There’s a watermaster committee that meets regularly under the supervision of the court and it did determine individual water rights.”
“And that’s just two examples of how these cases can play out.”
RYAN BEZZERA: Bartkjewicz, Kronick and Shanahan
Legislative proposals and policy issues
Ryan Bezzera then discussed the legislative proposals that are currently on the table for streamlining some of the procedures in groundwater adjudications.
(Maven note: The date of this panel is Wednesday, May 6th. Look for links at the end of this section for the latest versions of the bills discussed here.)
He began with disclosing that he represented private landowners in both the Santa Maria and the Antelope Valley adjudications, and he now represents a public water supplier in the Paso Robles litigation. “Paso Robles is not an adjudication exactly, but you don’t know what’s going to become of it,” he said.
“Other than Paso Robles, I wasn’t involved in the beginning of the other two, but my understanding of them is that each of them started because somebody didn’t like what somebody else was saying about how to manage the basin, and I know for a fact, that is why Paso Robles has started,” he said. “In that pre-SGMA management process, the County of San Luis Obispo was working towards a management process for the Paso Robles basin, and a group of landowners didn’t like it and filed a lawsuit, which now, as of the filing of the motion yesterday to add additional plaintiffs, has something like 400 or 500 plaintiffs in Paso Robles, all represented by two attorneys, but nonetheless, 400-500 plaintiffs.”
“I think the lesson there is that SGMA is going to force people to sit in a room together and try to figure out how to manage a basin, and that’s probably a good thing in some places, but our experience is that that is also a way to make people very angry at each other and then they file lawsuits,” he said.
“As of right now, a groundwater adjudication is handled strictly by the standard rules of civil procedure, which are built to handle two-party cases, so when you start having several hundreds to thousands of parties involved in a case, you have a very different animal there,” he said. “There are plenty of different types of complex litigation, but we’re now institutionally creating a dynamic where some people will probably be very interested in filing one of these lawsuits, so what do we do about that? The Governor put in his signing statement for SGMA that next we’re going to deal with adjudications, because I think there’s some acknowledgement that we may have a few more of them as a result of SGMA.”
There are two bills currently proposed right now (reminder: panel date is May 6, 2015): AB 1390 by Assemblyman Alejo which is a rather complex bill, and SB 226 by Senator Fran Pavley which is less detailed.
The pending legislation has three goals:
Presentation of evidence early on to determine whether an adjudication makes sense: “One is to set up a front loading of the process so that somebody who wants to pursue an adjudication has some hurdles to get over before they drag everybody into it,” he said. “The metaphor I like to think about with groundwater adjudications is of a nuclear reactor; you use a neutron and you split an atom and the atom splits and it sends neutrons all over the place and they start splitting other atoms and pretty soon you have a nuclear explosion. That’s pretty much what has gone on in groundwater adjudications, at least the ones that I have seen. Somebody files a complaint they think is relatively limited … so once you file that lawsuit, the person on the other side gets to do something back, and they tend to mushroom,. so this initial step to me is how do you insert a control rod into the nuclear reaction right off the bat to see if we really need to drag the whole basin into the adjudication.”
To accelerate the consideration of settlement and groundwater management: “If we’re going to have an adjudication, what do we know are the problem spots, the times sinks, the quagmires in the process that we can hopefully clean up some and make them move faster,” he said. “If we’re going to do this, let’s try to reduce the pain and get through it as rapidly as we can, and hopefully encourage people to settle and get to management as rapidly as we can.”
How do you integrate these with management: “The third point is how do you integrate these with management, even not necessarily SGMA, although it’s like to be SGMA now, but how to you integrate one of these things with SGMA.”
Mr. Bezerra then discussed AB 1390 in greater detailing, noting that it is largely sponsored by the Farm Bureau and agricultural community, and acknowledging that a lot of the ideas contained in the bill are things he tends to agree with.
As the bill is currently drafted, the public agencies in the basin who are likely to be involved in any case would be brought into the case early and an evidentiary hearing held within 180 days to determine whether or not there’s really a good reason to do this, Mr. Bezerra said. “The burden would be on the plaintiff – the party who wants to drag everybody into court, to prove that there’s some good reason, that the basin is really falling apart or some other good reason to drag everybody else in.”
If the case gets past that, then the next issue is service, which has been a significant difficult problem in adjudications. “When you have thousands of parties, and standard rule under the code of civil procedure is that you first have to try to personally serve someone with a lawsuit, you can very quickly imagine what process that is,” he said. “In the Antelope Valley, it’s an order of magnitude more significant of a problem because the United States is a party in that one, and they demand that everybody in the basin be joined in some way, so that’s been a huge process. … The proposed solution for that in AB 1390 is to serve landowners via the property tax bills, the assumption being if you owned property, you’re going to get a property tax bill and this is the best and easiest and quickest way to get to you, even if it’s a little different than what we do generally.”
So once you have proceeded to this stage and there is going to be an adjudication, there are still problem spots in the process, he said. “The first one is how do you manage discovery? Again, the rules are built for a two-person case which they basically say you can send discovery about whatever is involved in the case, but when you have 10,000 parties and 100 issues, that can get out of control pretty quickly, so AB 1390 proposes to require all parties to disclose right away ten years worth of pumping data and other related things, so that you can get your data on groundwater use on the table rapidly, and hopefully encourage people to try and settle relatively rapidly.”
There are also issues with phasing that need to be addressed, he said. “You have to bite off issues in pieces in these adjudications partly because some issues are contingent on the resolution of other issues, and some issues are just too big to be handled with other issues, but it’s been a problem in adjudications in that the rulings about what issues are in a phase have been kind of flexible and amorphous, and you end up with a lot of confusion potentially about it,” he said. “So AB 1390 would require written orders to say this phase of the case is going to deal with x, and that’s all it’s going to deal with, and you can’t send discovery outside of that scope, again to try and move these phases along.”
The legislation also requires that experts will produce a report that contains a complete statement of all opinions the expert witness will express, as opposed to just saying, ‘I’m ready for a deposition, come ask me questions so you can get my opinions,’ he said.
“And finally, court imposed settlements,” Mr. Bezerra said. “What do you do with the settlement at the end because this is a very tricky issue. If you have ten percent of the parties who don’t want to settle, what do you do with that? Can you impose it on them? The Mojave decision says you can’t unless you consider their water rights, but what if you do consider their water rights? What standard should a judge use?”
“What’s currently in AB 1390, and I’m not promising that this is magical in any way, is that if the court finds that 50% of the parties who represent 75% of the pumping in the last ten years have signed, then it goes to what’s effectively a prove-up trial, and the non-settling parties have the burden to essentially prove that the settlement is unfair,” he said. “So that’s how you try to get through this, at least under 1390, and again I won’t promise that there’s a lot of magic in those numbers.”
Another issue is how to navigate adjudications with SGMA, and there’s really two pieces to that, he said. “One is the procedure, so if you have a group of people who are trying to do the SGMA process, how do you deal with that when somebody else who has filed a lawsuit? What’s in 1390 is that the judge can stay the case in rolling one-year increments, giving essentially three years to try and get to the end of the SGMA process.”
“The much more significant issue is how do you integrate a potential adjudication with SGMA substantively, and to me, it is possible,” he said. “At these prove up trials, basically, you have to go in and show the judge that this solution is going to work for the basin, and so I think it’s possible to integrate that with SGMA because that’s essentially what SGMA is asking for, too, is what is the management plan for the basin. It should be possible to put them together but we haven’t reached that point just yet. So that’s where we are.”
Senator Pavley’s bill is somewhat similar to AB 1390 but less detailed, he said. “It has a few distinctions in it,” he said. “The most significant issue with Senator Pavley’s bill is that it doesn’t change the service process at all. And it also contains a statement that says that the bill doesn’t prevent anybody from using the common law process to adjudicate a basin. Well, if you’re not going to prevent someone from using the common law process, then why are you going to have a statute because someone will just go around it anyway.”
ELIZABETH EWENS: Ellison, Schneider & Harris
The intersection of adjudications and the Sustainable Groundwater Management Act
Ms. Ewens began by admitting that she has the easy part of the presentation because she gets to ask a lot of questions, but with SGMA being so new, we don’t have a lot of answers yet. “But what we do have are a whole lot of talented water lawyers and water purveyors in this state trying to work on solutions to prevent what would be in the worst case scenario a collision course, where you have adjudications proceeding on one track and SGMA implementation proceeding on another track, and coming up with contrary results, and frankly nobody wants that.”
There is a push and pull between SGMA implementation, whose goal is to make sure that our basins are sustainably managed, and the rights of individual water users and water purveyors to protect their rights, she said. “If you layer on top of SGMA an established history of using adjudications to determine people’s rights, you have at least a predisposition among folks to want to go to protect those rights and to make sure that nothing that’s happening on the SGMA track interferes with them, so this is new and uncharted territory.”
There really are three classes of litigation at issue, said Ms. Ewens. “You have existing adjudications that have been nicely handled in SGMA; they basically have a little bit of a carve out that’s explicit within SGMA and allows whatever the resulting judgment to be to be the defining document that governs things within that basin. Then you have a class of two different types of either pending litigation or possible future litigation that has at least the potential to be problematic: The first category is a full-blown adjudication, where like Santa Maria and Antelope Valley, you’re really bringing everybody in. The other are cases like the Paso Robles litigation, where it begins as a limited action, for example a quiet title action; in both instances, I think you still have some of the collision course parallel track issues that need to be addressed.”
She then turned to the developing questions about potential conflicts between pending or future judicial proceedings and management processes under SGMA.
Basin boundaries: “The biggest fundamental issue and it’s a threshold issue has to do with basin boundaries,” she said. “If you look at past adjudications, and it’s referenced earlier today, a lot of the first phases of adjudications tend to deal with basin boundaries. You have to know what the basin is that you’re dealing before you can make determinations as to safe yield and whether it’s in overdraft.” There are provisions within SGMA that provide that DWR will deal with basin boundary issues, so the question is, what happens when the court tries to determine basin boundaries, and DWR is trying to do the same thing, and they come up with contrary findings? “Then you’re going to have parties and groundwater sustainability agencies within that basin really not knowing what to do at that point. You have two different branches of government telling you to do two different things, potentially.”
This is the scenario playing out in the Paso Robles litigation right now. “There is a basin boundary phase 1 trial that is set for December, those who have been keeping track on their calendar know that the DWR is not set to issue its regulations for how it’s going to evaluate basin boundary until January 1st of 2016,” she said. “So you have a couple of options. You can try to get the court to slow its role and let the other process play out or you can try to think creatively either within the SGMA implementation plan or in litigation to try and get these processes aligned.”
The current legislation that is pending has two different tactics on how to deal with basin boundaries. “In Senator Pavley’s bill, there is a provision that would default to the basin 118 boundary determinations unless you go through the DWR process of modifying basin boundaries under SGMA. In AB 1390, you have explicit authorization for the court to refer, for example, basin boundary issues to the DWR; there’s also a provision in there that allows for a stay of the litigation to allow some of the SGMA implementation processes to play out.”
Overlapping technical work: Another potential pitfall is the development of overlapping technical work during parallel judicial and administrative processes, such as safe yield, water demand, and other technical data, she said. “It’s really going to involve the development of a lot of the same technical data in two different forums … you have potentially conflicting technical findings so if you have a phase of litigation that tries to sort out even threshold issues like whether or not the basin is in overdraft, in the worst case scenario, you could have technical findings that are in conflict. And I generally think that’s bad. The proposed legislative fix in AB 1390 would authorize the court to stay the adjudication to facilitate the development of the groundwater sustainability plan. The goal is to get this off of two tracks and into one track, and it is my personal opinion only that it should be encouraged.”
Dueling management plans: The other potential problem is dueling management plans, she said. “Historically, the result of the adjudications oftentimes involved the implementation of physical solution in addition to a determination of individual groundwater rights, so if you have judicially approved physical solution and the terms of that differ significantly from what is found in a groundwater sustainability plan, you have a basin full of individual water users who have two conflicting rulebooks, so what do you do?”
Will adjudications be used to delay or avoid SGMA?: “Right now, the hope is that folks will decide to get in a room, and collaborate on SGMA implementation, and get folks that may not always see eye to eye on management into the same room and figure it out,” she said. “I guarantee you that participating in that process is going to be a lot faster than at least based on the historical record, that it’s going to take you wind your way through the court system, so I think the goal in some of the bills that are winding their way through is to make sure that folks are predisposed to let the GSP process play out as opposed to rushing to the court.”
There is a bill right now calling for possible extensions of the compliance deadlines that are within SGMA, and recognizes the existence of litigation within the basin as good cause for that extension of time to comply, she said. “You can make arguments on both sides of it, but again, that could set up the scenario where litigation could be used to further delay SGMA implementation or put them more on the litigation path as opposed to the SGMA implementation path.”
It all goes back to the push and pull between individual rights and SGMA, she said. “Because you can’t legislate that no one will go to the courthouse and file an action to protect their rights, so in the context of that, you have to recognize that people will have the right to do it, but then build in, we hope, safeguards in the legislation that would either stay the litigation and somehow recognize that the SGMA process may be a better path to follow.”
Conflicts between negotiated settlements and Groundwater Sustainability Plans: With respect to negotiated settlements within adjudications, if you have a court approved settlement or if you have parties within adjudication who would like to resolve issues by way of settlement, what happens if what parties agree to differs from what is being worked out through development of the groundwater sustainability plan? “There’s a common theme here. You have a potential for conflicting agreements, conflicting understandings, and conflicting judgments eventually that would be governing the basin at the same time you have GSP that is supposed to be telling everyone how to manage the basin.”
“I wish I had answers; I really do,” said Ms. Ewens. “I think a lot of this is going to have to play out over time and Paso Robles is playing out in real time, but I don’t think that’s going to be the only basin where litigation is going to be initiated by individuals who want to protect their rights or are unhappy with how management is playing out within the basin.”
Meredith Nikkel then gave the opportunity for Craig Parton and Kevin O’Brien to respond, asking what gives them the most hope for improvement in both SGMA and the proposed streamlined adjudication procedure legislation?
Craig Parton noted that on the adjudications he has litigated, once the parties were brought into it in 2002-03, there was a stipulated judgment in 2005. “That motivation, that judicial pressure that you have to make a decision, you have to move this case forward, you have to find out what people’s rights are, you’re going to trial or you’re going to settle was the motivation to get things done. And so, I’m of the opinion that sometimes adjudications are the best things that can happen. You keep that pressure. When you just tell people to go into the room and agree, they can agree on a tremendous amount of things, and when it gets to curtailment, it hits the fan. Then it’s the real question, you mean I’m going to be able to pump less for my crops? No and hell no … the early determination of whether this is really worthy of being a full adjudication or not is a worthy thing to consider. Expediting the service issues is also, but I’m a big fan of the person in a robe putting pressure on people to get to reasonable solution.”
“I think that’s well stated,” added Kevin O’Brien. “I actually think 1390 does a pretty good job of coming up with a laundry list of items that will help speed up the process and make it less expensive, but I completely agree with Craig. I think the key variable in this is having judges who are saying to the parties, we are willing to try this case or you’re going to settle it by this date, because nothing moves things along like those kinds of deadlines.”
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