PANEL DISCUSSION: Water Quality & Allocation: State Water Board Overview & the Delta Water Quality Control Plan

Panel discussion touches on State Water Board’s authorities and the Bay Delta Water Quality Control Plan

The State Water Resources Control Board was formed in 1967 in order to integrate water quality and allocation in California. Structured as a merger between the previously-existing State Water Rights Board and the State Water Quality Control Board, the new Board was intended to broaden the scope of water quality regulation beyond point source discharge. In March of this year, the McGeorge School of Law held a symposium to mark the 50th anniversary of the State Water Board by reviewing the success of the 1967 integration and examining key regulatory issues faced by the State Water Board today.

The panel discussion, “Water Quality & Allocation: SWRCB Overview & the Delta Water Quality Control Plan,” reviewed some of the key areas in which the State Water Board integrates water quality into water allocation, and then discussed the Delta Water Quality Control Plan proposal, touching somewhat on the unimpaired vs functional flows debate.

The panelists:

  • Nicole Kuenzi, staff attorney with the State Water Board since 2012 where she advises the Division of Water Rights and the Board’s Groundwater Management Unit.
  • Professor Holly Doremus,  the James H. House and Hiram H. Hurd Professor of Environmental Regulation at Berkeley, Co-Faculty Director of the Center for Law, Energy, and the Environment, and a Faculty Director for The Law of the Sea Institute.
  • Meredith Nikkel with the law firm of Downey Brand in Sacramento.  Her practice involves working with the State Water Resources Control Board on a regular basis, and addressing complex legal issues in federal and state litigation.

Nicole Kuenzi began with the panel with a brief overview followed by a conversation amongst the panelists.  She began first with a disclaimer: “Everything I’m about to say is my own opinion, and my own views and not that of the Board, or the Board members, or the Governor, or anyone else except for me, and all of the errors are therefore entirely my own.”

INTRODUCTION: WATER RIGHTS AND COMMON LAW

Miss Kuenzi acknowledged that it was challenging to plan this presentation that couldn’t be better said by those who actually conceived of, created, and shaped the Board into what it is today.  “So I thought, ‘Let’s go back and look at the Board’s DNA. Let’s look at the historical intersection of water quality and water quantity in the common law of water rights,’” she said.  “As a result of looking at the common law, this presentation came out as a collection of cases, because that’s how the common law works.  For those of us who aren’t lawyers, the common law is a way that lawyers talk to each other in allegories.  I’m going to tell you a bunch of stories and try to communicate a principle that I think is common to all those stories.  I’m trying to illustrate the principle that water quantity and water rights are fundamentally interconnected with water quality; this has always been true, and it is true in the common law.”

RIPARIAN RIGHTS

Example 1:  A brewery constructs its facility on the banks of a channel that provides a water supply of adequate quantity and quality for brewing beer.  A copper mine commences its operations upstream, and its use of the water pollutes the water to a degree that is no longer fit for brewing.   “Our brewer has a cause of action against the copper mine,” Ms. Kuenzi said.  “It’s an English case from 1840, and although English, the fact pattern repeats itself. We have breweries; here we have the Coors Brewery. This is circa 1900, the Coors Brewery in Golden, Colorado, right on the banks of Clear Creek.”

Example 2.  A person owns the exclusive right to fish the river that runs through his property, or her property.  An upstream industrial facility that colors textiles releases pollutants into the stream, which harms the fish. No more fishery.Our fisherman has a cause of action against the dye house, and this is a case referenced in Aldreds Case in 1610, again in England,” she said.  “’He who has a several piscary in a water shall have an action on the case against him who erects a dye house.  So this is not new. These facts are not new.”

The principle in the common law is, ‘The proprietary interest in water includes the right to divert and use water of a quantity and quality necessary for the use.’  And this is true of all types of water rights. Riparian rights, appropriative rights – we see it in both.  A water right is usufructory, the right to use water for a particular use, and as a result an impairment in quality may infringe upon that right even if adequate quantity is available.  That applies to all water rights.”

Example 3: Irrigators divert water from a stream to irrigate alfalfa.  A copper mine commences operations upstream. Its use of water introduces sediment into the stream that is then deposited on the crop land. Although not chemically injurious to the crops, the sediment itself forms an impermeable layer or barrier on the land that prevents water from reaching the crop’s roots.  “That irrigator has a cause of action against the copper mine. This is Arizona Copper v. Gillespie, 1913.”

Example 4:  A riparian owner used water for irrigation, stock watering, and domestic purposes. The use of water upstream for power generation resulted in the stream water becoming ‘alive with bugs’ and green algae, and not suited for stock or domestic use.  The case was Joerger v. PG&E.  “That’s the principle as applied to riparian rights,” Ms. Keunzi said.  “These examples we just looked at had to do with riparian owners, where the right to the natural flow, undiminished in quantity or quality, is subject to the correlative rights of other riparian owners.  The difference between riparian and appropriative rights is that it’s not based on the historical uses, but there is still this relationship between other users and the right to a certain quality of water.”

Example 5:  A logging company constructs a sawmill and other structures on the banks of a river, including outhouses, a barn, stables, and a hog pen.  The stables and hog pen are located directly on the riverbank.  The quality of the water, as a result, is unfit for domestic use by the lower riparian owners.The maintenance of stables and hog pen is directly on the bank of a stream, and as the court said in 1895, that ‘Is an unreasonable use of such streams by a riparian owner as against lower riparian owners.’ So we see that very early on, this discussion of what is or is not a reasonable use, with respect not the quantity of water, but the quality.”

APPROPRIATIVE RIGHTS

An appropriator of water has a right to divert water of adequate quantity and quality so as not to defeat the purpose of its appropriation, but an appropriative system is subject to the Rule of Priority, she said.  “But keep in mind that the Rule of Priority is not absolute. So if a senior appropriator wants to change an element of his or her diversion, for example, a change in place of use, a place of diversion, a purpose of use, a junior appropriator, in a sense, has priority against that change. So if a change in these uses, the place of use, the diversion, the purpose, alters the water quality and not just quantity, then the junior appropriator may have a cause of action and may be able to prevent that change.”

Example 6:  A miner constructs a ditch to convey water for mining. Other miners locate upstream, digging a ditch and conducting mining operations in a manner that deteriorates the quality of the water for the first, Miner Number 1. The water in the stream is rendered unfit for mining use. Miner Number 1 has a cause of action against those subsequent miners.  “The court said in Hill v. Smith in 1865 was what diminution in quantity or what deterioration in quality will injuriously affect the use of the water by the plaintiff may be safely left to the determination of the jury, because it’s a fact-based determination. The question must be determined in view of the use to which the water is applied, and the other circumstances developed by the testimony. It’s a fact-based consideration, if you look at all the factors and weigh them.”

Example 7:  A miner constructs a ditch to convey water for mining purposes.  A sawmill locates upstream using the water to run the mill and throwing sawdust and bark into the stream. The water in the stream is rendered unfit for mining use. The miner has a cause of action,” said Ms. Kuenzi.  “’The prior appropriator is clearly entitled to protection against acts which materially,’ … and that’s important … ‘ materially deteriorate the water’s quality for the uses to which he wishes to apply it.’  Phoenix Water Company, v. Fletcher, 1863.”

Ms. Kuenzi said she could find examples of case law regarding riparians and appropriative water users, but she couldn’t find any for case law regarding groundwater or other water rights.  “There is a pending case addressing whether the right to ground water includes the right to a particular quality. This pending case is trifurcated, so we’re in Phase 1.  Phase 2 promises to lead to this question of whether a right to ground water includes the right to a particular quality, but I don’t see any reason why that would be different than surface water rights. Our ground water rights are analogous to riparian and appropriative rights, and there seems no reason that a diminution in quality that materially affects the use of ground water shouldn’t also be protected.”

Example 8:  Ms. Kuenzi had found a case from another jurisdiction other than California where owners of wells used for irrigation wanted to change the location and place of use of their groundwater extractions, but neighboring well owners who extracted water for irrigation were concerned about increases in the salinity of the groundwater that would affect crop yield.  “My understanding of the fact pattern here is that there was a certain migration of salt water that was  occurring either naturally or because of a larger historical effect, but the concern by these particular well owners was that the change in the place of extraction was going to increase the rate at which the salt water intrusion would occur,” she said.

The court in that case made a factual determination to lead to the case’s outcome, stating that, ‘The protestants have not shown that the proposed move will cause a significant change in the rate of deterioration.’  That’s a fact-based consideration based on the evidence, but underlying this determination presumes that had the facts been different and the evidence been different, that there may have been a cause of action or a reason to prevent them the change in place of use, given the status of the neighboring well owners as water right holders.”

Ms. Kuenzi then explained how this relates to the State Water Board.  “The State Water Board is an interesting agency because it is an administrative agency that administers a property rights system.  It does a lot of other things too, but it administers a property rights system. That to me is really unusual. And so, inherent in administering that property rights system, the State Water Board makes determinations based on the common law.   Some ways in which the common law fits into the Board’s determination is in the consideration of water availability and permitting decisions, injury to legal users when considering change petitions and those types of things; waste and unreasonable use is also part of the common law and also the Public Trust Doctrine.”

Ms. Kuenzi said she finds it interesting that the agency functions somewhat like a common law judge in administering the common law, somewhat like a common-law judge.  “They have that function. But they also have the functions and tools of an administrative agency, and they’re all brought together in one. That’s another way to look at the combination that’s occurred here between water rights and water quality; that these tools are all brought together in one agency, but to the extent the Board is administering the common law, this is an ongoing process. There’s going to be evolution.”

The Board is weaving its own tapestry, if you will, as to where water law is going because the common law evolves,” she continued.  “That’s how it works, and as we add to these stories that I’m telling you, the story will change.”

The State Water Board has statutory functions, but Ms. Kuenzi said she saw those statutory functions as overlaying the core of the common law.  “The statute really builds on the same concepts that water rights, water quantity and water quality are intertwined; they’re really inseparable. You have statutory authority granted to the Board related to water availability determinations and injury to legal users.  Waste and unreasonable use, unreasonable effects on fish, wildlife, and other instream beneficial uses are all from common law.  Then there is the element of the Endangered Species Act that imposes certain obligations and authorities, and also the Clean Water Act and consideration of water quality control plans.”

The State Board has a whole suite of enforcement and implementation authorities; they range from traditional remedies from a court of law in a common law context to administrative remedies such as permitting and licensing terms.  “It really is in some ways both,” she said.  “It’s defining the property right but it is also a regulatory-type function, a police power regulatory-type function. Administrative civil liability, cease and desist orders – it’s like an injunction. You have forfeiture proceedings for water rights. You have the ability of the Agency to issue regulations. That’s an administrative Agency function; a court can’t do that. You have the adjudication-type functions, just like a court, and really where the Board has a shared jurisdiction.”

With respect to salt water intrusion, is this different from other types of water quality problems? And if it is, why do we treat it differently? Ms. Kuenzi read a statement from the Racanelli case: ‘While the common law clearly affords water rights holders relief from pollution, it is debatable whether such protection included the right to require upstream subsequent appropriators to curtail their use of water solely to permit a sufficient flow to resist natural salt water intrusion.’   Ms. Kuenzi explained it using the Antioch case.  Antioch is located on the edge of the Delta and the San Francisco Bay.  In 1922, salt water intruded into the Delta to such a point that the water supply for the city was unfit for domestic use.

The court distinguished this case from the general rule that an upstream appropriator may not impair the quality of water to the injury of a downstream user, but why?,” she said.  “Because this doesn’t follow the common law that we were just looking at.  And the court gave several justifications. First, the court reasoned, ‘Here the upstream appropriators are not adding pollutants. That’s different.’  Well, that doesn’t seem different to me. Why should that matter if water quality and water quantity inhere in the same water rights, what does the addition of pollutants have to do with it? So I’m not convinced.”

The second issue the court raised was that the appropriator, the City of Antioch, was on notice of the conditions that they were located somewhere between the Delta and the Bay, and that salt water comes in and out, and probably at certain times of the year under natural order unimpaired flow conditions they would have salt water intrusion that would affect their water supply. Well, I’m not convinced either.  We looked at those copper cases, the copper-mining cases. A lot of those cases involve mines that were already there. The downstream users kind of came to the nuisance, if you will, and that didn’t seem to affect the court’s decisions, which were made on other bases of water rights, so I’m not convinced by this either.”

I think the real issue we’re looking at here is waste and unreasonable use and the principle of maximum beneficial use of the waters of the state,” Ms. Kuenzi continued.  “That so much water would be required to flush to the ocean to maintain a water supply for the City of Antioch that was of sufficient quality for domestic use, but the court found that to be unreasonable in those particular circumstances.  So the Antioch case does not stand for the proposition that upstream users cannot be curtailed solely to permit sufficient flow to resist salt water intrusion, but rather that there must be a balancing of the competing interests and a consideration of the principle of maximum beneficial use of water and the other values at issue.  Then this principle is one that can evolve over time based on changing needs, based on changing values, based on changing science, and that this consideration will be different in a different case. Because that’s how the common law works; the common law evolves.”

THE DISCUSSION

Ms. Kuenzi then set the stage for the discussion.  The State Water Resources Control Board is in the process of a phased review and update of the 2006 water-quality control plan for the Bay Delta. The Bay Delta plan identifies beneficial uses of water in the Bay Delta, water quality objectives for the reasonable protection of those beneficial uses, and program of implementation for achieving the water-quality objectives.  Phase 1 of the update is updating the San Joaquin River flow and southern Delta water-quality requirements included in the Bay Delta plan. Phase 2 involves other comprehensive changes to the Bay Delta plan to protect beneficial uses not addressed in Phase 1, such as Delta outflows, Sacramento River inflows, the Suisun Marsh salinity, Delta cross-channel gate closure, export limits reverse flows.   Phase 3 involves changes to water rights and other measures to implement changes to the Bay Delta plan from Phases 1 and 2. Phase 4 involves developing and implementing flow objectives for priority Delta tributaries outside of the Bay Delta plan updates.

Ms. Kuenzi then turned to the panelists and asked, “What is the extent of the State Water Board’s authority to set water quality standards even if they result in altering existing water rights? And what is the source of that authority?”

HOLLY DOREMUS

As we talk about the revisions to the Bay Delta Water Quality Control Plan and their potential impact on water rights, I think it’s important to separate out what are really two different issues, but which do become conflated,” said Holly Doremus.  “The first issue is setting the water quality objectives, which is really what the Board is doing in Phase 2 of its process.  And the other issue is who is going to bear the pain if the water quality objectives require cutbacks in deliveries of water, or in existing uses of water in any way. And that’s Phase 3.”

Unspecified involves changes to water rights and other measures to implement the revised water quality control plan – and that’s the hard part,” she continued.  “The question of allocating among different people and among different interests, to me, that’s the really hard part.  What should be the easier part is the question of setting these water quality objectives.  I think the Board’s authority, and indeed duty, to set water quality objectives as necessary to revise water rights in order to achieve those objectives is clear, and in fact they have a history of doing it.”

The source of that authority is a combination of things: The Clean Water Act, the Porter-Cologne Act, the provisions of the water code that created the modern Board, the Mono Lake decision and its interpretation of the public trust, and the Racanelli decision and its interpretation of reasonable use.  Under the Clean Water Act, the states have to develop water quality standards, which protect the beneficial uses of their waters.   The Clean Water Act has been amended to specify that the Clean Water Act doesn’t abrogate state authority over water rights and over water allocation.  Under the Porter-Cologne Act, the state law which precedes but also now implements the Federal Clean Water Act, the State Water Board has the authority to do set standards and has historically developed water quality objectives for the Delta that reasonably protect beneficial uses.

Now, this is one of the areas of uncertainty because the Clean Water Act says you have to protect beneficial uses and the Porter-Cologne says you have to reasonably protect beneficial uses, so there’s some uncertainty about the degree of protection that’s actually required,” Ms. Doremus said.  “Given that I think EPA is going to withdraw from the field, ‘reasonably protect’ is likely to be the standard that matters in the near future; of course, this includes beneficial uses include fish and wildlife protection.  Going beyond what’s required in the Clean Water Act about water quality standards, the Porter-Cologne requires that the plans include an implementing program, so there has to be something pretty specific about what we are going to do to put these things into effect. And there are these questions about the scope of what’s required under federal and state law.”

California has long included flow objectives in its water quality plans, Ms. Doremus noted.  “Although the EPA has sometimes said they have the right to compel flow objectives, the state has said, ‘No, you don’t, but we’re going to provide them anyway.’  The state has continuing supervisory authority over water rights and permits, and we know that clearly per the Mono Lake decision, which declared that they had that authority and indeed the duty to exercise it with respect to the Public Trust Doctrine.”

There is a history in the Delta of doing exactly this,” she continued.  “There’s been a lot of years of kicking the can of Delta water quality down the road, in part because of questions about the exact extent of state authority with respect to the CVP until the late ’70s, and also because it’s just politically difficult.  But D-1485 in 1978 after the California v. U.S. decision conditioned the Center Valley Project’s permits on meeting water quality standards for the Delta; D-1641 in 2000 does the same thing. And the Racanelli decision says that, ‘Yes, you have the authority to condition water rights permits on meeting water quality standards.’  And in that case the court looks both to the terms of the project permits themselves, which explicitly said that the Board has continuing jurisdiction and can revise these things. And of course, that’s a standard condition of permits since 1978.”

But Racanelli also looks to the Mono Lake case and the reasonable use provision of the California Constitution to say, ‘Even without that being explicitly in the permits, all water rights permits in California are subject to the continuing jurisdiction of the Board for compliance with the Public Trust Doctrine, and for compliance with water quality control plans.’

The revision of water rights is supposed to be not the first thing you go to to implement water-quality control plans,” Ms. Doremus said.  “You’re only supposed to get to revision of water rights if discharge requirements can’t get you there, but in the case of salt water intrusion and the Delta, the salinity standard has been in many ways the key to operation of the projects and to the water quality problem in the Delta. You can’t comply with that one based on discharge requirements alone, so you’re going to have to go to the water quality standards. So in my view there is clear authority to do this. It’s a political problem, it’s a legal problem to do it, and it’s a practical problem. How to do it is very unclear, and at whose cost to do it is even more unclear.”

MEREDITH NIKKEL

After first saying that the views she would be expressing are entirely her own, Meredith Nikkel began by agreeing with the two key issues that Holly Doremus just laid out, the first being, what is the scope of the authority to set water quality objectives; the second is how do those objectives interact with water rights and whether or not water rights can be changed in order to meet those objectives.

I agree with what most of what Holly said on the first question, that the scope of the Board’s authority under the Clean Water Act to set water quality objectives is quite broad, and the Racanelli decision then confirmed that for the state long ago,” Ms. Nikkel said.  “So I’m going to focus a little more on the second question, which is, given that authority to set water quality objectives, how does the Board, or what is the extent of the Board’s authority, to then use those objectives in a manner that may affect water rights?   The Clean Water Act clearly says that the authority to set water quality objectives does not abrogate state water rights and water allocation laws.”

The important way to frame this is that once you’ve set a water quality objective, then the state must operate within its existing roles of water right allocation and water rights,” she said.  “It’s that arena in the common law that the Board then operates.   Water rights in California are a form of property rights, and therefore the articles and the aspects of the Constitution relating to due process come into play, and so there is notice and a hearing opportunity before a water right, which is a form of a property right can be taken away. I think the Board is very well practiced in doing that, and will certainly do that. That’s a procedural question.”

Perhaps the harder question is the requirement of the Constitution that all use of water in California be reasonable and beneficial, and not to be wasted,” she said.  “It’s those questions that require a very fact-specific and tailored analysis that looks at each use of water, and it’s that analysis that I think limits the ability of the Board to impose directly a water quality objective on any particular water right, because that constitutional analysis must be done first.”

The Supreme Court has declared that the water right priority system is an essential principle in California water law, but that principle of priority is not unbounded.  “That principle is limited by the application of the constitutional requirement of reasonable and beneficial use; it is also limited by the consideration of the public trust,” said Ms. Nikkel.  “The Legislature has also codified these requirements into the water code, along with guidance on the types of priorities of beneficial uses, and has identified that the highest use of water in California is domestic use, and irrigation is the next highest use.”

Ms. Nikkel acknowledged that not every irrigation use or domestic use could be considered reasonable, depending on the circumstances.  “I think the last couple of years of our drought conditions in California have really showed us ways that irrigation and other consumptive uses must be made reasonable in light of the conditions and water supply scarcity,” she said.

Ms. Nikkel agreed that water quality and water quantity are one and the same; they cannot be stripped apart.  “So I think it is important to recognize that in the Board’s authority to regulate water quality the word reasonableness comes up again,” she said.  “The duty of the Board is to set reasonable water quality objectives that take into consideration beneficial uses of water. So again, there is a balancing even on the water quality objective-setting side.  I think that now the challenge is … there’s both a procedural question about how to implement water quality objectives and attain this balancing that is required under California’s water rights system, both from a constitutional perspective as well as a statutory and common law perspective.”

Nicole Keunzi then noted that the Phase 1 of the Bay Delta Plan includes San Joaquin River flows, phase 2 involves Sacramento River flows, and both contribute to the Delta.  “What are the policy choices that you see involved in using a fraction of unimpaired flows as a water quality standard in the Bay Delta Plan?”

HOLLY DOREMUS

Holly Doremus began by acknowledging she may not be the right person to defend the choice of the unimpaired flow standard.  “Based on what I understand to be the core of the argument here, it’s that the upstream diverters are contending that instead of basing the plan on unimpaired flows, or flows in the absence of reservoirs and dams, that they should base their water quality control plan on functional flows, flows that achieve particular outcomes or particular results,” she said.  “I would characterize this as, with all due respect, smoke and mirrors.”

Ms. Doremus noted that there has been delay after delay in updating the Delta’s water quality control plan to get to water quality objectives that actually do protect the beneficial uses of the Delta, especially the fish and wildlife uses, and by going to functional flows could introduce a lot more delay, because the Board is used to thinking about and talking about these unimpaired flows.

The flow report that was issued in 2010 looks at the unimpaired flows,” she said.  “The Board has been thinking about flows in the absence of the project since the ’70s, and this is an attempt for the unimpaired flows to go a little bit broader than that. So unless there is really high value to switching to functional flows, it seems to me the delays that that would introduce would probably be not worth it.”

The other thing is, I think that the interpretation of functional flows that’s being offered may be leaving out quite a few functions that are important,” she said.  “One of the things about the unimpaired flows as the starting point, especially the way that the Board has been looking at it, is that it looks at flows in the tribs and not just in the mainstem and not just at a particular point.  Unless you think the functions of tributaries don’t matter, that actually is important.  I would have thought that both the Clean Water Act, whose goal is to restore and maintain the physical, biological, and chemical integrity of the waters of the United States, and the Public Trust Doctrine would suggest that the tributaries themselves have and support important uses.  There’s also things like natural floodplain functions.”

Frankly, I worry about things like surrogate habitat,” she said.  “We’re only talking about 30 to 50% of unimpaired flows according to the Board, so it doesn’t approach the natural hydrograph, but at least it’s based on the natural hydrograph.  That seems to me more likely to protect functions that we’re not as aware of and that we’re not prepared to produce elsewhere. Before buying into the idea of surrogate habitat and of functional flows as a good substitute for something based on the natural hydrograph, I think we should keep in mind the experience with things like hatcheries, which of course are surrogate breeding habitat that hasn’t necessarily turned out to provide everything that we thought it would.”

MEREDITH NIKKEL

Meredith Nikkel said the she sees the unimpaired flow concept as a very flow-centric policy choice.  “Of course flow is certainly going to be one aspect of water quality and water rights, and setting water quality objectives, but it’s not the only objective or the only element,” she said.  “The flow-centric approach would focus on flow, allocation, and water rights, without consideration to other factors or other knobs that could be turned to address water quality.  And so, I think that in light of the requirement on the water rights side that there be a balancing of reasonable uses to determine what the appropriate use of water would be, the flow-centric approach puts a lot of pressure on that balancing approach.”

One of the policy choices I think we need to make from the outset is whether we want to focus on flow-centric approaches and setting water quality objectives without requiring a really hard look at some other approaches that could attain the same goals,” she said.  “Incorporating those non-flow measures to implement the objectives could accomplish the water quality goals without unnecessarily impeding upon vested property rights and water rights.”

Ms. Nikkel said she agreed with Holly that the concept of a functional flow or other types of non-flow measures would certainly add complexity, but not necessarily delay.  “I think there is already going to be delay caused by other things, so it’s just one part of the conversation. But I think it actually is an important part of the conversation because of the complicated finance behind the water quality and ecosystem issues in the Bay Delta. … We’re in a scenario and a condition where the Bay Delta has been highly engineered or manufactured in many ways over the years of building dams and operating federal water and federal and state water projects, and I don’t think that the scientific literature will allow us to just simply ignore that and return to a natural flow scenario without understanding how that natural flow scenario could fit within the existing conditions in the Delta.”

I think that there’s a way to look at the science behind what’s going on in the Delta and come up with a multifaceted management approach that is not solely flow-centric, it’s not solely focused on unimpaired flows, but rather combines the use of functional flows with other types of management, including temperature control, and habitat, and hatcheries, and sort of bringing it all together in a more holistic management style.”

Nicole Keunzi then asked, “What are the pros and cons of incorporating water rights matters in the Delta Water Quality Control Plan Update in Phase 3 of that Update and how might the State Water Board affect existing water rights? What are some different approaches? What are pros and cons of the various approaches?”

MEREDITH NIKKEL

I think we all agree we have to do something,” said Ms. Nikkel.  “There’s a set of procedural issues about how you address this, but this goes back to this balancing – the intersection between the setting of a water quality objective and allocating the responsibility, and identifying how to meet those objectives in a water rights context.  The courts and the Legislature have already recognized that there is limited direct authority by the State Water Board to take a water quality objective and directly apply it to water rights, and there needs to be a process and that’s what Phase 3 is going to look like.”

She then listed some of the tools that the Water Board has to affect water rights.   “The Water Code specifically allows the Board to condition new water rights in order to achieve water quality objectives, although there’s a question about whether or not that authority extends to conditioning existing water rights instead of the issuance of new water rights permits,” she said.  “However, the Board does exercise continuing jurisdiction and in that context can reopen a water right under the appropriate procedures.”

The Water Code and the regulations that allow for this type of continuing jurisdiction includes an important purview, though, before doing so, she said.   “Some continuing jurisdiction must be exercised with a recognition of the public interest, as well as a finding regarding physical and financial feasibility,” she said.  “Feasibility is a word we haven’t quite talked about.  It comes up in the context of the continuing jurisdiction for a public trust. The public trust must be implemented where it’s feasible to do so. Feasible, just like reasonableness, is a difficult word to apply generally. It’s something that has to be applied in a specific set of conditions and facts.”

Other tools the Water Board has available include enforcements, cease and desist orders, or curtailment.  “I think the Board learned an important lesson about curtailment in the drought years and learned that it’s really hard, and that there’s limited ability to generally apply regulatory curtailment and enforcement.  I commend the Board and the Board’s staff for trying to remedy those problems by better data collection and better data analysis.  I think we all in the water community can help support the Board to have better information.”

Another area that the Board could implement water quality objectives is by incentivizing voluntary efforts to meet water quality objectives, Ms. Nikkel said.  “I think recognizing that the Board does have limitations and how to implement water quality objectives, it’s important to think about ways to encourage water users and environmental interests and others to come to the table to collectively come up with solutions, and enter into arrangements that will allow for the water quality objectives to be met, absent just pure force from the Board. I think that’s an important part of the conversation. In thinking about the cons, each of these approaches is hard and time-consuming, and so I think that there is a lot of work that we all have to do to help the Board through this process over the next several years.”

HOLLY DOREMUS

I think it’s important to separate the questions of what are the water quality objectives and then who bears the pain, but I have to concede that it’s quite awkward to try to do so and to leave this to Phase 3, because as Meredith mentioned, we have two potential standards,” Ms. Doremus said.  “One is what’s reasonable in terms of achieving the water quality objectives.  I don’t think the EPA is going to be coming in there hard and saying, “You don’t have a choice. You have to achieve those objectives.” So there is this question of reasonableness … and the Public Trust Doctrine has the standard of what’s feasible for water rights holders to do. And of course you can’t really answer those questions without knowing what’s at stake, and who has rights that they might be able to live with less from.”

I think it’s very complicated to figure out what order to do this in and how,” Ms. Doremus continued.  “I think that the Racanelli decision makes it clear. You can’t look just to the projects, you have to look to everybody involved in the watershed there, but who ought to be bearing the pain? I think that’s the really tough question, both as a legal matter and as a political matter.  The extent to which priority governs, the extent to which what governs its reasonable use (which can vary priority), the extent to which the Public Trust Doctrine can or should vary priority, the extent to which the human right to water says something about priorities – all of those are things that are going to have to be answered in the course of a proceeding, which will have to be adjudicative with respect to any water right holder whose rights might be modified.”

Question:  With respect to domestic uses coming first and then agriculture, does the Board have a right to set a hierarchy?  Will one agricultural crop have priority over another?  Will walnuts have priority over rice, and where will marijuana fit in?  What is going to be a reasonable and beneficial use?

I think the answer is, it depends,” said Meredith Nikkel.  “It goes back to the requirement that a water use be reasonable.  I’ll stick with your example about walnuts versus rice. I think that you can’t just compare walnuts versus rice without looking at the actual farm and the actual use of the water.  Is the walnut orchard being flood irrigated unnecessarily, versus a rice field that is being flood irrigated but also providing additional habitat for other species and other benefits?  I think it requires looking at more than just the type of crop, but how that water is actually being used and compared to how that water could be used in other areas.”

Holly Doremus noted that during the drought, the Water Board had asserted the authority to say that some uses of water are unreasonable.  “It’s been looking at urban water use and in particular the watering of lawns in certain situations.  So I would say that the Board believes it has the authority to determine that some uses, within the category that’s generally thought to be a beneficial use of fairly high priority, may be unreasonable. And how that might be applied to crops I think is not clear at this point.”

I think it’s been done at least to the extent of frost protection in the Russian River Valley,” added Meredith Nikkel.  “The Board has issued regulations defining unreasonable use with respect to that particular use of water, but again it’s specific to a specific practice in the geographic region, and so I think there’s a really fact-specific analysis that needs to take place even in that context.”

Question: An audience member brought up the question of whether the State Board’s water rights proceeding could be considered a taking.

I think that when you’re talking about property rights, there is due process, but right along with that is the Takings Doctrine,” Meredith Nikkel said.  “I think it really depends on how the Board goes about affecting a water right. If it’s done in a regulatory fashion then you have the concern about unconstitutional conditions and takings in that forum. If it’s done after a noticed hearing, the due process concern is minimized but you’d still have the question of whether there is an unfair taking of a property. So I think it depends on the process that the Board takes, and again will be fact-specific, but I certainly expect folks to raise that argument.”

Holly Doremus agreed.  “It certainly is true that the fundamental theme of the Federal Takings Law is this idea of fairness. Is an individual being forced to bear what are really public burdens? But I would also note that the Federal Court of Claims has seemed quite willing to look at reductions of water deliveries as physical takings … this is still a very much unsettled law, but it’s certainly tempting for people to raise that claim.”

Nicole Kuenzi added, “The point I was trying to make is that there are certain limitations on water rights that inherent in the rights themselves, and so there’s a distinction. The question will come down in part to what elements of the limitations inherent in the right themselves, and what elements are actually a matter of regulation and limitation on those property rights? And sorting those out I think it is unsettled, but that was one of the features I was trying to illustrate. It’s that to some extent there certainly are inherent limitations on a property right having to do with quality and impacts on others.

For more from the McGeorge School of Law Symposium …

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