CALIFORNIA WATER POLICY CONFERENCE: Reasonable Use or Waste: A Developing Dichotomy

Panel discussion explores the evolution of the doctrine of reasonable use and considers how the doctrine will, or will not, be applied in the future

Could ornamental lawns in California be one day considered an unreasonable use?  How about evapotranspiration rates of some crops? Instream flows?  And if a use is found to be unreasonable, is the conserved water up for grabs? At the 28th annual California Water Policy Conference held in San Diego in April of 2019, a panel of lawyers discussed these and other possible applications of the reasonable use doctrine.

Seated on the panel:

The moderator was Greg Zlotnick, Water Resources and Strategic Affairs at the San Juan Water District, and a graduate of UC Hastings College of Law.  He began with some opening remarks.

Variability, scarcity, uncertainty – these realities are central to water management in California, and they will all be exacerbated as climate change increasingly impacts hydrology,” Mr. Zlotnick began.   “Already today, except in all but record wet years, the allocation of water for cities, farms, and the environment generates fierce regulatory battles and political debates.”

Author David Owen in 2017 book about water policy suggested a somewhat Shakesperian approach to moving behind these logger jams.  He wrote, ‘Water problems in the Western United States can seem tantalizingly easy to solve.  All we need to do is turn off the fountains at Bellagio, stop selling hay to China, ban golf, cut down all the trees, and kill all the lawyers.’  Considering all of the panelists and I are members of the bar, the last recommendation is rather Draconian to say the least.”

We’re going to have a conversation about how notions about what is reasonable or wasteful when it comes to water use and management are changing, and how some of the legal constructs relating to water management in California are shaping or being shaped by these changes,” continued Mr. Zlotnick.

In fact, the reasonable use doctrine was itself a response to changing dynamics of California about 90 years ago.  In 1926, the California Supreme Court upheld an expansive and profligate water claim that had been challenged as unreasonable.  This outcome prompted the state’s voters to repudiate that situation by adopting the constitutional amendment in 1928.  That amendment, Article 10, Section 2 of our constitution states in part, ‘the right to water or to the use of flow or water in or from any natural stream or watercourse in this state is and shall be limited to such water that shall be reasonably required for the beneficial use to be served, and such right does not and shall not extend to the waste and unreasonable use or unreasonable method or use or unreasonable method of diversion of water.’

Notably what is often forgotten and omitted from discussions of this prohibition of waste and unreasonable use is that this constitutional provision actually begins with the charge, ‘It is hereby declared that because of the conditions prevailing in this state, the general welfare requires that the water resources of the state be put to beneficial use to the fullest extent of which they are capable, in the interest of the people and for the public welfare,’” Mr. Zlotnick noted.

Today there is a growing tension between the two commands articulated in Article 10 Section 2, what is unreasonable or wasteful when determining what is the interest of the people and the public welfare.  It’s been well established in California’s jurisprudence that notions of reasonableness are temporal and may change as technology, information, and societal interests evolve.  California’s water rights system is the primary mechanism intended to provide order and certainty when it comes to allocating the state’s water supply.  However, no water right exists to the unreasonable or wasteful use of water.”

Integral to our discussion this morning is the interplay of water rights and Article 10, Section 2, which dominoes into environmental management and consequentially another key relationship with the common law and public trust doctrine,” Mr. Zlotnick continued.  “This precept has its origins not in environmental stewardship actually, but in seeking to preserve for the sovereign the navigability of waterways for commerce.  Nevertheless it is expanded and made applicable to California’s environment through the California Supreme Court’s landmark 1983 Audubon decision relating to preserving Mono Lake.  Key findings in that case included one, harm to public trust resources should be avoided and minimized if feasible.  Two, the public interests served by water diversion may outweigh considerations of harm to public trust resources, and three, not to forget Article 10, Section 2, ‘All uses of water, including public trust uses, must conform to the standard of reasonable use.’”

Today, there’s no question that regulatory requirements, like all uses of water, must be reasonable and not wasteful.  Such determinations are not self-evident, however.  Did Audubon establish feasibility as the key criterion by which to determine the legitimacy of the public trust obligation?  If it can be done, does that make it feasible?  Or is the public interest the cornerstone of such calculations?  And what’s that, anyway?  And in either case, who decides?

As appellate justice and former Department of Water Resources Director Ron Robie stated in his 2006 Consolidated State Water Board cases decision, he said, ‘In determining whether it is feasible to protect public trust values like Fish and Wildlife in this particular instance, the water board must determine whether protection of those values or what level of protection is consistent with the public interest.’  But how should the Board do that?

A related component of reasonableness is where scientific uncertainty and the interplay of water costs and environmental benefits come to bear on an issue,” said Mr. Zlotnick.  “This is often rife for controversy too since drawing a direct line in the reallocation or reservation of more water for the environment to a measurable environmental benefit can be, shall we say, ambiguous, and provide serious risk for what some call combat science.  Unfortunately, this usually provides a lot of heat but not much light.”

“Another developing issue related to these concepts and water rights is the linkage of reasonableness and waste considerations as an apparent justification for the uniform statewide application of mandated water efficiency regulations, such as the 20×2020 mandate in 2009, and the long-term indoor and outdoor conservation scheme adopted by the legislature last year.”

Where does the reasonable use doctrine come into play today?

With the stage thus set, Mr. Zlotnick then gave the first question.  “Considering that Audubon was decided 35 years ago, and Judge Robie weighed in a little over 12 years ago, where do you see issues of reasonable use and waste come into play today, if at all?

Dave Owen noted that both reasonable use doctrine and public trust doctrine have been part of California water law at this point for a long time, albeit relatively quiet for a long time.  There haven’t been many reasonable use cases brought and although there was some public trust cases following the Mono Lake decision, it hasn’t been as much as might have been expected, and from a plaintiff’s perspective, it has been consistently ineffective.

What’s interesting is that during the drought, both doctrines became much more important to the State Water Resources Control Board’s activities,” Mr. Owen said.  “So the State Board started citing both doctrines more often and also citing them in decisions that actually have real consequences for existing water users.  We’re at a point right now where both of these doctrines look like they might mean a lot more in the present and in the future than they have in the past.”

Paul Kibel pointed out that both the reasonable use doctrine and the public trust doctrine can be used in two different ways, either as a shield or as a sword.  “When those doctrines are used as a shield, it’s where state agencies, often the State Water Board, rely on those doctrines to take actions often related to, for example, leaving water in the stream.  I think the reasonable use doctrine and the public trust doctrine have been used extensively for the last 20 or 30 years as a shield and have been very successful in having that reliance upheld.”

Paul Kibel pointed out that the reasonable use doctrine and the public trust doctrine can be used as either a shield or a sword.  Referring to state agencies, “I think the reasonable use doctrine and the public trust doctrine have been used extensively for the last 20 or 30 years as a shield and have been very successful in having that reliance upheld. … When environmental groups have tried to use those two doctrines as a swordthere has been considerably less success.”

“When environmental groups have tried to use those two doctrines as a sword, essentially using litigation to try to persuade a court to order an agency to take actions that it has not, there has been considerably less success,” said Mr. Kibel.  “So as we think about reasonable use and the public trust might be used going forward, I think it’s useful to keep those sword and shield distinctions in mind.”

Eric Garner noted that Article 10 Section 2 was passed in 1928 in direct response to the Herminghouse decision in 1926; that was followed by three Supreme Court cases in the 1930s that addressed reasonable use and really decided what that doctrine was.  “The courts interpreted it, and their interpretations were actually in some instances dramatically different from what the people who wrote Article 10, Section 2 thought it would mean,” he said.  “But it basically resulted in power users and cities and other public agencies being able to erect dams and stop flows of water and hold them without lower riparians who have priority rights being able to stop them.  Once that was decided in those three cases, which were all decided totally opposite of Herminghouse – which in the legal world, it’s very unusual to have a Supreme Court reverse itself so dramatically within a decade – but once those were decided, they were decided; then things got quiet again.”

We just went through the drought and while we’re blessed with great snowfall this year, we know there will be more droughts and there’s climate change, and so with the supplies as strained as they are, I think we can expect to see a lot of reasonable use cases in the next ten years,” said Mr. Garner.

Valerie Kincaid added that from a practitioners perspective who represents folks often at the tip of the sword, what she has seen is the doctrines being used in a regulatory context rather than an individual context, as it historically has been used.  “Historically the unreasonable doctrine would be looking at one person’s specific use of water and determining, given all the facts around that very specific use, if its unreasonable,” she said.  “Today, we have moved on to using it as a regulatory tool and from my perspective, and it might be biased by who I represent, it’s a very scary tool.  It’s a little bit of a shortcut and it worries me to use it in a categorical context, rather than an individual specific context.”

Long-term conservation legislation and unreasonable use: Who owns conserved water?

Moderator Greg Zlotnick then turned to the long-term conservation legislation recently passed by the legislature.  “The idea is there are uniform standards around the state, and the question is whether or not that gets to the notion of weakening or ignoring the water rights system where traditionally determinations of waste and unreasonable use were very fact specific on an individual case.  Now we sort of have this categorical approach that is applicable statewide, indoor and outdoor, no matter where you are.  It does take into account evapotranspiration for the outdoor irrigation, but generally it doesn’t account for what your supply situation is or your water rights situation is.”

Valerie Kincaid noted that everyone likes conservation and it’s generally a good thing, but the unspoken part of the conservation regulations is what happens to the conserved water.  “Who owns it?,” she said.  “If you have a water right holder and you force conservation on them, it doesn’t amend their water right.  They still own the right to use that entire portfolio of water; they can sell it, they can increase their beneficial uses, they can do other things.  The troubling thing for me with the conservation regulations was there was this unstated and therefore untested thought that when you conserve, you just don’t use that water and it goes back into some sort of unappropriated pool, and from a legal perspective, I do not think that is defensible.  I think that’s a big problem, and I think the conservation regs didn’t address that, but it’s certainly an issue that we’re going to have to take head on in the future.”

Dave Owen said, “The premise of the reasonable use doctrine is that you never have a right and do not have a right to use water in an unreasonable manner, so that means if 75% of your current use is reasonable and 25% of it is not, you do not have a right to that 25%.  I think then it is appropriate that that water go to the next person in line or into the general pool.”

Eric Garner said water law and case law isn’t clear on many things, but one of the things it is clear on is that reasonable use requires considering all the facts and circumstances of users in whatever the watershed is.  “I think there are ways you could accomplish that,” he said.  “I think you could make findings that having a lawn in certain parts of the state is unreasonable, I think you could make findings that growing certain crops in certain places are unreasonable, and you could make findings that certain releases for fish are unreasonable.  But I think trying to do it in this fashion is legally problematic.  During the drought, there was one challenge but basically no one was going to challenge them, everyone wanted to conserve and to the right thing, but I think in a long-term perspective, you have to look at all the facts and circumstances, all the uses, and how people are using water.”

Paul Kibel pointed out that there’s an important distinction between law and policy.  “Policy is an area where you have some discretion as a regulatory agency over whether to regulate and how to regulate,” he said.  “The law, kind of like maybe the goal posts on a soccer field, tells you what you must do or you can’t do.  There was a challenge before the California Court of Appeal a couple years ago related to a frost protection ordinance adopted by the State Water Board.  It was a case called Light v. State Water Board, and it’s a very important holding on this point, because the California Court of Appeal held very clearly that the reasonable use provisions of California law are an appropriate basis for creating regulatory programs and not just case by case enforcement.”

So as I read that case, I think the question of whether or not California reasonable use can be used programmatically has been answered from a legal standpoint,” Mr. Kibel continued.  “The question as to whether from a policy standpoint, it’s appropriate, fair, advisable, wise, unwise I think remains very much in play so I’m just sort of separating out the legal basis for it from sort of a policy decision making basis.

Dave Owen said he does agree with Paul Kibel that the issue of legal authority to use reasonable use doctrine in a programmatic way has been addressed by the California Court of Appeal, which wasn’t really surprising to a lot of people.  “The reality of governments is that you have to make programmatic decisions sometimes, and it wasn’t surprising that the reasonable use doctrine would allow that,” he said.  “In fact, from a regulated entity standpoint, there is a lot of advantages to programmatic decisions, not necessarily from a regulated entity lawyer’s perspective, because you want to be able to litigate each individual case, but if you want predictability and efficiency, programmatic decision making is often the way to go.  So I think, obviously you can go too far, you can lump things too much, but the fact that some programmatic decision making is occurring pursuant to reasonable use doctrine I think is legally authorized and appropriate as policy as well.”

With respect to the issue of being told you are using water unreasonably and you cut back your use, that there is a pool of water created, the question is who owns that pool of water.  “One way of looking at it is to say, you still do and you just have to change your use,” Mr. Owen continued.  “But the premise of the reasonable use doctrine is that you never have a right and do not have a right to use water in an unreasonable manner, so that means if 75% of your current use is reasonable and 25% of it is not, you do not have a right to that 25%.  And I think then it is appropriate that that water go to the next person in line or into the general pool.”

Eric Garner noted that last year, there was an appellate case where Channelkeeper had sued the City of Ventura regarding unreasonable uses of water on the Ventura River.  “The City of Ventura argued that all other users had to be considered and the appellate court did agree with that and reversed the trial court decision, so it’s now back down, there’s going to be a full basin adjudication and reasonable use will get sorted out.  I just don’t see how you have two users next to each other, and without comparing their uses or multiple uses on a programmatic level, conclude that a percentage reduction is unreasonable.  I can agree on use. I can agree you can say in a place in California and in the state of California, this use is unreasonable, that’s been done.  I don’t understand how you get there on a percentage basis if you’re not comparing uses.  I struggle with that under case law.”

Valerie Kincaid said that she disagreed on a couple of things.  “The Light case that was a very scary case in the fact that the court got very close to okaying a categorical unreasonable use, but the facts of that case are that the actual unreasonable use distinction only happened later in the program where you actually were doing the comparable uses on the ground,” she said.  “It was not the Deer Creek situation, which was all uses that don’t keep water in the river are unreasonable.  It was different.  The facts were different.  You had to have a group look at your use before it was determined to be unreasonable and it was that delayed on the ground drill down to the factual circumstances that I think doesn’t make Light go as far as maybe others at the table think it went.”

Valerie Kincaid said, “Historically how the doctrine has been used it that it looks at the specific use.  If you have a specific use that is unreasonable, it does not amend or adjudicate or otherwise affect your right; it just says you can’t use water in that manner.  To say that your right is somehow adjudicated or there is a public trust result coming out of an unreasonable use determination – I hope we’re not there.”

To the ownership issue, one of the very powerful pieces of the unreasonable use doctrine is that it says you have absolutely no right to divert water if it’s unreasonable,” she continued.  “But historically how the doctrine has been used it that it looks at the specific use.  If you have a specific use that is unreasonable, it does not amend or adjudicate or otherwise affect your right; it just says you can’t use water in that manner.  We all know that the transfer of water and other water uses are reasonable uses of water and beneficial uses.  So I think that to say that your right is somehow adjudicated or there is a public trust result coming out of an unreasonable use determination – I hope we’re not there.  That would be a real erosion of any water right that any one has and invests in.  I don’t think we’re there.

Moderator Greg Zlotnick pointed out that Section 1011 of the Water Code specifically states that the water conserved is retained to either use or transfer, and that was specifically written into both the 2009 20×2020 legislation and the long-term conservation legislation.  “The question to the panel is, because I’m hearing from one side that that doesn’t mean anything because of if you are told that to continue to use water in the way you were using it is wasteful, so you don’t own it, and on the other hand, is it really something that you retain ownership to or not?

Paul Kibel said that it’s a bit like comparing apples and oranges.  “The apple is the finding by a court an agency that particular use is unreasonable, and what flows from that in terms of water rights,” he said.  “Some of the sections of the Water Code that you’re talking about really relate to incentivizing greater water efficiency in the absence of a finding of unreasonableness; there are provisions in the water code that say, we would like to encourage people to improve water conservation and efficiency and we’re going to include a mechanism so that when they do that, they don’t lose their underlying water rights.  It’s an orange when they do it voluntarily, but if you don’t do that, and a court or agency finds that your use is unreasonable, you might lose it.  To me, that distinction is important and they are actually complementary, rather than in conflict, as a way of incentivizing people to avoid practices that might be vulnerable to a reasonable use determination by moving proactively towards better conservation and efficiency.

Valerie Kincaid said there are definitely win-win situations.  “In the IID case of unreasonable use, when IID was forced to line their canals and do a lot of improvements and reduce losses, what IID did was sell that water that was determined to be unreasonable to Met.  Met paid for the conservation, but it was because of this recognition that even though they were conserving water, they could still market it.  There you had a win-win.  They conserved water, someone else got to use it, and they were reimbursed for that.  There was a recognition of an existing right and frankly a recognition that conservation costs money.  Conservation is very expensive for districts to do and undertake, so I think maybe there’s a time where we could talk about those win-win scenarios where you do not decimate the water rights system that we have and we do promote conservation.  I think those are good situations and we should all be for that.”

Could ornamental lawns be considered unreasonable use?

Moderator Greg Zlotnick noted that the State Water Board recently finalized some waste regulations for thing such as spigots being left open while washing a car, things that would be hard to argue weren’t wasteful and on a relatively small scale.  “In the past, an individual staffer at the State Board has been quoted as saying they would like to see the elimination of all ornamental lawn in California.  Could the State Board, as a policy matter, make that determination?  Considering the Constitution and the what’s in the public interest and the State Board members are charged with making public interest decisions, as long as it’s on a reasonable basis.  Is that something that the State Board could do under this policy side?  And would there be implications for the water rights side that might come to bear?

I think the State Board has the authority to make a categorical determination that a type of use is unreasonable,” said Dave Owen.  “So then I think the question is would that determination be justifiable for all lawns in the state?  That just seems like a factual stretch.  A categorial determination that every lawn in the state is unreasonable … it seems to me there is an extreme political unlikelihood of making a statewide determination like that.  There would be easier low hanging fruit to pluck.  With that said, I think if a water district in a particularly arid part of the state wanted to follow what Las Vegas has done and say, given our regional circumstances, lawns are categorically unreasonable, I think that would be defensible.”

Valerie Kincaid agreed that there is a difference between law and a policy statement.  “Having a policy statement is different than saying a use is unreasonable which we have learned has dramatic legal implications.  The State Water Board can come out and say ‘as a policy, we think ornamental lawns should be limited or not occur at all or what have you,’ but if they’re coming out and saying that equates to an unreasonable use of water, we very quickly leave policy in our rear view mirror and we’ve now affected water right holders, so I think the distinction is important.  I would like to personally see the State Water Board do more policy and less regulation with unreasonable use.”

In making the distinction between policy and law, I wasn’t suggesting that policy is sort of a wishful aspirational statement that’s not enforceable and law is,” clarified Paul Kibel.  “I was actually trying to say something different.  This is the way I explain it to my class.  You imagine a soccer football field with goal posts.  The goal posts tell you things that you must do as an agency, and things that you can do and that’s sort of the legal goal posts.  In between there are things that an agency, let’s say the State Water Board, has discretion but would have full authority to do.  If a local agency or the State Water Board wanted to go there with ornamental lawns, it may very well on the rights and the facts be within their zone of discretion of policy where it would be lawful for them to do it.  Whether they think it’s a good idea, whether it’s politically likely, is just a very different question.”

Eric Garner said he generally agreed with Dave.  “However a key point is that during the drought when the issue came to me about challenging the regulations, I thought the challenge under the existing regulations was actually easier than if the board had made a finding that watering lawn during the drought was an unreasonable use of water.  I think that would have been a very hard thing to attack legally because we know from the Joslyn case and other things that certain uses in this state can be per se unreasonable.”

That said, I agree with Dave completely and I think there are parts of the state in the north where rain probably sustains the lawn, so thinking it’s unreasonable to supplementally water that at all, that’s tough,” continued Mr. Garner.  “I think that gets back to my previous concern about why you have to look at on the ground and compare all the uses to get to those conclusions and not do it programmatically.”

What about reasonable use and evapotranspiration rates of crops?

Paul Kibel agreed that it’s rather remote that ornamental lawns would be banned at the statewide level, but he sees a greater likelihood of state action on reasonable use relating to evapotranspiration rates and agriculture.  “We have data out there showing that in certain areas of the state with certain crops and practices, there are extremely high evapotranspiration rates where the water is not actually getting either to the soil or the plant, it’s going up as steam and being lost to the watershed,” he said.  “If the State Water Board were to adopt a policy of escalating surcharges or fees based on evapotranspiration rates as a way to incentivize people to move towards practices that lower evapotranspiration rates, I think there are a number of reasons why legally, if that were challenged, that would be extremely defensible and would be upheld.  The Light decision that talked about programmatic policies being within reasonable use would support it and there’s an earlier Court of Appeal called Erickson where they actually held that high evaporation rates can provide a basis for reasonable use, so I think that would support it.”

Mr. Kibel recalled that in 2001, the Delta Watermaster issued a report about reasonable use and irrigation practices.  “In that report, the Delta Watermaster, a ranking state official, specifically flagged evapotranspiration as a potential area to consider for use of the reasonable use doctrine, so where I think the ornamental lawns one is an outlier in terms of likelihood, I think a focus on evapotranspiration rates for a regulatory program is quite forseeable.”

Moderator Greg Zlotnick noted that there was a recent article about Saudi Arabia purchasing some 16,000 acres in Palo Verde Irrigation District along the Colorado River to grow alfalfa to ship back to Saudi Arabia to serve their dairy industry.  “Alfalfa is one of those high ET crops and grows multiple cuts year around.  So are we potentially looking down the road to some sort of state mandate, you can grow this here and you can grow this there? Or is that something that legally could be done but it will never happen?

Paul Kibel said it isn’t likely for political reasons, but there’s an appetite for making certain specified crops unlawful.  “I think a sliding scale of surcharges and fees based on evapotranspiration would send the right signals, such as can you take your irrigation hoses and put them underground to get to the roots so there’s less evapotranspiration or can you irrigate at night when air temperatures are lower.  That type of program around evapotranspiration seems to me quite viable politically and would provide the flexibility and incentives that would stop short of you can’t grow alfalfa or you can’t grow rice.”

I think it’s pretty unlikely,” said Eric Garner.  “You have to look at the use amount.  Is it legal?  It’s tough.  Just like the Saudi example, it seems like a clear cut, we shouldn’t be exporting our water through hay but nothing is obvious in the water world.  I remember have these discussions with ag economists when a lot of that alfalfa was going to China and it was cheaper to ship it to China in empty containers than it was to Fresno and I was surprised.  There are so many factors to consider in the reasonableness aspect.”

One thing that is clearly not legal is a limitation based on where the crop goes,” said Dave Owen.  “There’s a doctrine called the open commerce law which basically prevents states from regulating discriminatory regulation of interstate or international commerce, so that clearly is off the table.  The federal government can make that decision; it can be as protectionist as it wants as long as it’s not violating treaty obligations under NAFTA or some other treaty deal.

“And that’s unlikely under this administration,” pointed out Paul Kibel.

Could instream flows be considered an unreasonable use?

Moderator Greg Zlotnick then turned to the Water Quality Control Plan update, noting that the State Water Board put out a framework for the Sacramento River and adopted a decision on the San Joaquin River that essentially is seeking a certain percentage of additional flow on the rivers for environmental benefit among other things.  “Over the years in the Delta, more flow and things have been meant to improve the environment but we still don’t seem to see recovery.  So the question is, is there a connection between waste and unreasonable use and environmental flow mandates, or not?

That will be learned soon,” said Valerie Kinkaid, noting that a number of lawsuits were filed after the State Water Board’s Phase 1 Water Quality Control Plan amendments.  “Four of those included an unreasonable use cause of action saying because it was not tied closely any sort of fish benefit or a very large fish benefit, the 40% was a huge amount of water for such a small return and that was a regulation that amounted to an unreasonable use of water.  So that allegation is out there and it’s in multiple complaints.”

I think it’s a strong allegation, but the State Water Board has used the unreasonable use doctrine in new and burgeoning ways,” continued Ms. Kinkaid.  “This challenge is clearly probably in that as well.  I think it’s worthy but I don’t know of any cases previously that have struck down a regulation because the State Water Board was mandating an unreasonable use.”

Dave Owen agreed with the general principle that a requirement to leave water in a stream could potentially be unreasonable.  “The reason I think that is possible is because this is a flexible doctrine that the California courts have said changes with changing contexts and changing cultural expectations,” he said.  “So we as a culture, decided to go back to the 1950s when the United States Supreme Court castigated the San Joaquin and Sacramento Rivers for dissipating their waters into the Pacific tides.  If that’s where we are, then yes we can say an environment uses are unreasonable, and I think the doctrine has enough flexibility that it could go there.”

“What the State Board is doing by trying to restore environmental conditions by putting more water back in rivers is consistent with a lot of science,” said David Own.  “The fact that we haven’t seen payoffs yet honestly may just reflect the fact that water flows through the Delta and through a lot of rivers are still very, very low, and the environmental requirements so far haven’t put that much more back in.”

However, in practice, I think it’s exceedingly unlikely that a claim like this will win now for a couple of reasons,” continued Mr. Owen.  “The first is that one thing we’ve learned from efforts to restore and protect rivers is that when you let a river act like a river, the environment generally tends to be better.  So putting more flows, taking out obstructions, and letting the river access the floodplain and actually intersect with the landscape – those things as a general matter tend to benefit watersheds.  So what the State Board is doing by trying to restore environmental conditions by putting more water back in rivers is consistent with a lot of science.  The fact that we haven’t seen payoffs yet honestly may just reflect the fact that water flows through the Delta and through a lot of rivers are still very, very low, and the environmental requirements so far haven’t put that much more back in.”

The other thing is if this is a good claim, the argument is that these flows are so unreasonable that they just don’t make sense, because they are not going to achieve the goals, there are other essentially administrative law pathways for making those arguments that are good arguments and are more likely to succeed on a traditional administrative law challenge,” said Mr. Owen.  “Arguing that an agency took an unreasonable, by this I mean unreasonable and unreasonably explained position rather than by going to the deeper issue of whether it is unreasonable as a matter of water law, to let a river try to be a little bit more of a river.

Eric Garner pointed out that instream flows are a use like any other use and subject to the reasonable use doctrine.  “The Audubon case made it clear the public trust doctrine is subject to the reasonable use doctrine.  As a policy point, the challenge on all the flow issues is we don’t fully understand how much we’ve impacted our ecosystems and in what ways we’ve impacted our ecosystems, and flow is certainly one part of it, but there are also upstream obstructions to spawning for fish and pollutants that we probably aren’t even yet aware of that are impacting them as well as a whole host of things, and so all of that enters into the reasonableness determination.  When you’re looking at a watershed, how have any of those other things been addressed, how much have they been addressed, what’s the other water being used for, and what’s the benefit going to be for the fish.  All those things have to be looked at to reach a determination as to what reasonable flows are.

Paul Kibel said that the claims that the State Water Board’s adoption of the flows for the San Joaquin tributaries violates the reasonable use doctrine are likely not to prevail in that litigation for at least three reasons that he can think of.  “The first relates to my point about shield versus sword.  Essentially the parties arguing that the water users are asking the court to second guess and reverse the agency’s determination about reasonable use, so they are looking to use it as a sword, not to uphold.  There’s a long line of cases where mostly environmentalists have tried to do that and have lost.  The courts tend to be very highly deferential to the agencies.

The second reason I would not put a lot of money on it is that we don’t really have any judicial precedent out there where this has been embraced by the court before,” continued Mr. Kibel.  “The use of the reasonable use doctrine to argue that leaving water in the streams for fisheries restoration violates the reasonable use doctrine is possible but we don’t precedent to support it.  On the other side, we have a large precedent from frost protection to salinity to points of diversion, lots of decisions by the California Courts of Appeal where they have found that the purpose of law of the reasonable use doctrine is to keep water in the stream, so that’s the reason why I think the odds of that argument succeeding are low.”

The last one has to do with scientific consensus,” Mr. Kibel said.  “Certainly the argument has been made, more by lawyers than by scientists, that the link between flow amounts of water and fisheries health is not established or is weak, and many of us have seen these arguments raised in a lot of different regulatory contexts.  What I can say is that argument that has been consistently rejected by agencies.  It’s been rejected by the US Fish and Wildlife Service and NMFS in their biological opinions for salmon and smelt.  It’s been rejected by the State Water Board in its public trust flow criteria, and it was most recently rejected with some pretty good scientific backup in setting the flow standards for the tributaries to the San Joaquin.”

In particular, the environmental documentation talked about water temperature, 60 degrees essentially being a kill point for salmon and steelhead,” said Mr. Kibel.  “I think they presented a pretty good substantial evidence record as to why the flow standards they had would increase the number of days that would drop the water temperatures below those kill points.  I think if I were sitting there as the Water Board’s attorney, I wouldn’t really be too worried about being able to defend that document from that type of a reasonable use argument.

“Certainly the argument has been made that the link between flow amounts of water and fisheries health is not established or is weak … ” said Paul Kibel.  “That argument that has been consistently rejected by agencies.  It’s been rejected by the US Fish and Wildlife Service and NMFS in their biological opinions for salmon and smelt.  It’s been rejected by the State Water Board in its public trust flow criteria, and it was most recently rejected with some pretty good scientific backup in setting the flow standards for the tributaries to the San Joaquin.”

Valerie Kincaid pointed out that both the water users and the environmental community are making the argument.  “The water user argument is not just that flow in general, or reducing diversions to keep flow in the river is just by definition unreasonable; their position is that there is no nexus, there is no demonstrable benefit, and of course the arbitrary and capricious argument will be made … it’s a different way to get at that argument.”

Ms. Kincaid noted that the environmental community is also arguing reasonable use, that when you’re putting water down in a managed system that doesn’t really look anything like a natural system and you’re not putting enough flow down to recreate a natural system, that’s unreasonable as well.  “So it’s coming from two different perspectives,” she said.  “One is saying we’re not getting any bang for our buck, and one is saying you’re not putting enough down, but both people are making an unreasonable use claim, so it will be interesting.”

Moderator Greg Zlotnick explained that there is a doctrine where the standard is that agency decisions have to be deferred to by challengers as long as they weren’t arbitrary and capricious.  It’s hard to reach that standard, and there has been litigation in federal court over the biological opinions for Delta smelt and salmon.  “Judge Wanger, a federal court judge, determined that based on what he was presented with, that the agencies had acted in bad faith, which is another standard.  He was overturned and the appellate court basically said that part of the problem was a timeline that couldn’t be met, but even the appellate court said that the biological opinion was a ‘mess’, that was their word, but it didn’t mean it was disqualified because of this very high standard of deference.”

He pointed out that many of us have been involved for decades now, and have heard similar arguments made over and over and yet the fish aren’t getting better.  “Part of the issue with agency deference is that you have people in agencies who have careers built on certain theories, and that’s hard for them to look away from.  I’m not saying they are wrong, but it’s just, that’s part of the issue that’s been the context.”

How does science factor into this?

Moderator Greg Zlotnick then turned to the topic of science and how science plays into this.  “On the Sacramento side, a lot of work has been done on functional flows which was referenced in documents by the State Board as something worthy of looking at where the water use is more targeted.  And on the San Joaquin River, I believe a study indicated that at some point, you have diminishing returns in terms of the benefit of flow.  How do you work through these scientific arguments and disagreements, or does it really just become a battle of experts in the courts?

That’s combat science as people call it, and just like any statistic, you can really probably in all fairness twist it to any position you want to have it reflect,said Valerie Kincaid. Having said that, there is a huge amount of data and science that you have to consider in this unreasonable use context.  If you release all the water in the reservoir and the science shows that the temperatures still won’t meet the temperature issue, is it reasonable to do it?  That would be hard to say yes to, but with the science, from my perspective, it’s difficult to get ahold of it because there’s so much competing science.”

The agencies have still gone with flow, but a lot of times, they don’t have jurisdiction over these other things,” said Eric Garner.  “There really is no entity that has jurisdiction over everything to control pollutants in the river or deal with deforestation that’s occurred along the river or the erosion going into it, but they can get ahold of the flow.  That’s what they can do and so they do it. … For regulators, if, say, there were two large projects diverting water and you’re faced with putting conditions on them versus 10,000 users that you can’t find, it’s a legal procedural nightmare to try and do that.  Where are you going to wind up going, so I think it’s pretty clear, there are all those practical things that come into consideration in these determinations that make them really difficult.

“The agencies have still gone with flow, but a lot of times, they don’t have jurisdiction over these other things,” said Eric Garner.  “There really is no entity that has jurisdiction over everything to control pollutants in the river or deal with deforestation that’s occurred along the river or the erosion going into it, but they can get ahold of the flow.  That’s what they can do and so they do it.”

The concept that is missing from this that’s helpful is the concept of non-flow stressors,” said Paul Kibel.  “Flow may be a prerequisite for fisheries health, but there are many other non-flow issues out there that are adversely impacting fisheries as well.  Issues of water pollution, issues of lack of dam passage to reach higher elevations, issues of logging in areas where fish are spawning, and the State Water Board doesn’t regulate logging, the State Water Board doesn’t license dams, and it doesn’t have primary authority or some authority over some of the water pollution; there are other agencies involved.”

To me, the fact that there are non-flow stressors out there on fisheries that really require attention to achieve the results is absolutely true and it’s a complex, scientific issue,” continued Mr. Kibel.  “To me it’s quite separate whether the claims against the State Water Board challenging the tributary flows are likely to fail.  It doesn’t matter like a court ruling; I think they are separate questions.”

To answer the question about how does your science become relevant in our world, one way is set through litigation and combat science, but the reality is agency science is usually upheld by courts for reasons of deference because courts are reluctant to overturn agencies,” said Dave Owen.  “A lot of the way that science moves through the process is through supplying scientific results and information to agencies prior to the decisions that they make, and so that from a scientist’s perspective is a much more viable pathway towards influence than trying to get your science into a courtroom now. …  You may have the sense that in water nothing changes, everybody talks about the same old things, but different scientific findings can move the needle and can get people talking about things like invasive species in the Delta, or how stability in salinity might be good for drinking water but it might not actually be good for some of the other parts of the ecosystem.  Maybe floodplains are really more important than we thought, so I think there are pathways for influence that you should keep in mind, even if you get discouraged by what you see happen in litigation.”

What about climate change and reasonable use?

Moderator Greg Zlotnik noted that climate change modeling is projecting the potential loss of 40% of our snowpack by 2050-2060.  “How do you see that playing into this dynamic of reasonable use and environmental issues where with climate change, the way our current regulatory structure is, we’re trying to preserve the status quo, we’ve been trying to recover the past and yet we have a changing dynamic in front of us?

“The hydrology we’ve seen in the 20th century is not necessarily typical and likely not what we’re going to see going forward, so things are going to have to shift and evolve,” said Eric Garner.  “We don’t really know what’s going to happen so we’re going to have to do it as we go along.”

You really need to look at the changing circumstances, and as circumstances change, so does the unreasonable use evaluation, and I think that includes climate change,” said Valerie Kinkaid.  “As climate change begins to influence water use and water resources, you’re going to have to factor that in, and look at whether a specific use is reasonable with that new climate change filter on.  I would still advocate that you really have to do that on a localized fact-specific basis, but certainly you can’t ignore that, and it might change the equation.”

Paul Kibel noted that the firm he works for does a lot of representation around FERC relicensing of non-federal dams.  “Climate change is really interesting in that respect because particularly when you’re dealing with salmon and steelhead, as ambient air temperatures are increasing, it seems like one of the ways to counteract that for fisheries is to help them get up to the higher elevations where the air temperatures are lower and where the spawning will have a higher survival rate.  We have dams that are up for relicensing before FERC and the issue of whether or not we should install fish passage.  I’m thinking particularly on the Tuolumne right now with Don Pedro and La Grange, that’s going to be a real test case.  With climate change coming, maybe we should really be weighing the costs and appropriateness of putting fish passage on those dams so that salmon and steelhead can get to the upper reaches of the watershed so they are in a better position to survive ambient air temperatures.”

I think Article 10 Section 2 provides a great mechanism to deal with climate change because California’s always had hydrologic cycles,said Mr. Garner.  “I can remember when I moved to this state and started practicing reading about these tree ring studies that showed there had been some incredibly long droughts.  50 years, 100 years, whatever longer.  The hydrology we’ve seen in the 20th century is not necessarily typical and likely not what we’re going to see going forward, so things are going to have to shift and evolve.  We don’t really know what’s going to happen so we’re going to have to do it as we go along.  You can see the general trends, but we have enough trouble successfully modeling a groundwater basin or a watershed, let alone a whole globe to predict exactly what’s going to happen in a certain spot, that’s a fruitless task, but you can see the big picture trends and we’re going to have adapt to those.”

“When you have a powerful doctrine and you give it to an agency to implement, one way that in the legal system we reconcile ourselves to the reality of agencies doing powerful things is we have procedures that are designed to lead to good decisions and lots of participation and careful planning,” said Dave Owen.  “We don’t really have that built up yet around reasonable use doctrine and we’re going to need it in part because of climate change ensures that these issues will keep coming up.”

Mr. Garner said we should all feel lucky we’re in California.  “The issues seem intractable, but when you think of the technology we have here, the money we have here, the brain power we have here …  I do work a lot in other countries; we are much better situated than most places to deal with our water issues and to deal with climate change.  We have the luxury of debating this at a very high level, compared to most places.  While it may seem like nothing ever happens, a lot is happening right now, and everyone can contribute to what’s going to happen in the future.”

Dave Owen pointed out that both climate change and groundwater will put pressure on every one of our doctrines, but reasonable use in particular.  “I think one important task for the State Board and other agencies is going to be to try to come up with more robust and regularized and predictable procedures around reasonable use doctrine,” he said.  “As you’ve heard from this panel, this is a potentially very powerful doctrine.  We have different opinions about it … but I do think when you have a powerful doctrine and you give it to an agency to implement, one way that in the legal system we reconcile ourselves to the reality of agencies doing powerful things is we have procedures that are designed to lead to good decisions and lots of participation and careful planning.  We don’t really have that built up yet around reasonable use doctrine and I think we’re going to need it and we’re going to need it in part because of climate change ensures that these issues will keep coming up.”

SGMA and reasonable use

Eric Garner pointed out that reasonable use applies to groundwater use same as surface water use.  “SGMA says it does not affect water rights, it says it in multiple places, but it does allow agencies to restrict pumping, so you have water rights and restricted pumping,” he said.  “What does that exactly mean?  Anyone touching the drafting of the legislation knew that was inconsistent but it was the only way to get it through, so now it’s through and we’re going to have to figure it out.  Where the reasonable use doctrine is going to come into play is when a GSP is issued, if there are cutbacks and someone’s water rights haven’t been determined and they don’t like them, they’re going to say, ‘this violates my water rights.’  Then the immediate issue before the ultimate adjudication determination is going to be, is that cutback reasonable at this point, in light of all the facts and circumstances and all the uses and everything else, is that unreasonable until your water rights are determined?  I think that’s exactly how it’s going to get teed up sooner rather than later.

If a sustainability plan is meeting the standard of SGMA which is to ensure sustainability, would that be a defense to an argument that the plan was unreasonable because the state had already set out the standards?,” asked Moderator Greg Zlotnick.

I think that’s a great question and the answer is, we don’t know,said Paul Kibel.  “I think it would be a good argument because the preamble to the Sustainable Groundwater Management Act actually references reasonable use.  One way to look at SGMA is that the architecture of SGMA is designed to avoid unreasonable pumping of groundwater to avoid the six undesirable results, so I think they are very much connected.  SGMA is just a grand exercise in trying to avoid unreasonable use of groundwater pumping through a somewhat elaborate regime that lends some predictability, participation, and fairness to it, so I think it’s a very interesting example.  In fact, the preamble to the law specifically references the constitutional provision shows that they did this intentionally.

Part of the reason that was put in there was because in the Mojave groundwater case, the argument was actually made at the lower court level that all pumping from an overdrafted groundwater basin was unreasonable,said Eric Garner.That gets shorthanded in the Supreme Court’s opinion as just incomplete disregard of water rights; those of us who were involved in the that physical solution didn’t think it was a complete disregard of water rights, but that argument was made.  If the court had adopted that, you would have gotten away from all the subsequent litigation; instead they handed us work for the rest of our lifetimes, but so be it.  That was in there for that particular reason, is reasonableness is the cardinal principle of California water.  Everything has to be reasonable.

AUDIENCE QUESTIONS

Question: I’m interested in this idea that you brought up about potentially having surcharges on excessive amounts of evapotranspiration.  You mentioned the Delta Watermaster report, but has there ever been any precedent for this?  And does this also risk de facto prohibiting flood irrigation or certain crops like rice where there’s naturally high evapotranspiration?

In terms of precedent being used in the agricultural sector, I’m not aware of any, but it certainly is identified as something for consideration in the Delta Watermaster report,” said Paul Kibel.  “I think there are some examples of this coming more from municipal use.  There are a number of urban water districts, where if you go over what they think is a reasonable amount given the number of people that live there, you are charged a certain rate, but as your excess goes up, your actual rate goes up as well.  I know there’s been litigation about that, but that example of excess pricing from urban agencies is a bit of a template.”

As to your second question, I don’t know if it would make it unlawful as it depends on the pricing scheme,” continued Mr. Kibel.  “If the pricing scheme was so steep and the evapotranspiration rates were so high, would the additional surcharge or rate make it economically unfeasible to do certain types of practices?  It would be a question of really getting into the details of how you’d do the pricing.  You want to send the right signals, but not have it be so draconian that it decimates certain practices.  That would be the difficult work of doing that kind of scheme.”

A couple years ago, I did a paper on taxation and water rights, and part of the research involved looking at what’s been done out there in the world,” added Dave Owen.  “There have been a few places, the Dutch implemented groundwater tax but it was a generally applicable tax and wasn’t specific to agriculture, but I didn’t see any example of ag focused water charges with a sort of progressive block purchase, so it’s urban generally a little bit more innovative in this realm.  So whether it’s a very gentle economic signal or a pretty strong one that ends up in a lot of taxes, it’s what the rate is, and what are you trying to accomplish.  Is this to raise revenue to fund water projects or are you using it along the lines of a carbon tax where the basic goal is to change behavior?  And if that is your goal, then sending signals so powerful that it induces change might be exactly what you’re trying to achieve.”

Paul Kibel pointed out that there could be certain exemptions.  “Just to give another example, if you’re dealing with citrus and nut tree orchards, the issues are different from flood irrigation” he said.  “The issues are really about the additional cost of subbing the irrigation and maybe trying to arrange it so you’re not irrigating at times of the day when the temperature is the highest.  That’s a very different set of incentives that you’re trying to focus on than you would be with flood irrigation for alfalfa or rice, so to how broad or narrow, or how fine tuned it would be, I think those are all policy issues that would be on the table.”

What we just heard here sounds to me like a very fact-intense and sophisticated approach, but bringing back to the topic of this parcel, what I don’t like and what scares me is not that it can be sophisticated, but a very blunt bludgeoning tool, like unreasonable use, which has drastic impacts to achieve these things,” said Valerie Kincaid.  “I think going forward, not only will you have an entrenched stakeholder base that will not talk to you about these interesting and better ways to go about it, but I think using the wrong tools in this circumstance which in my opinion would be unreasonable use to require this, it’s just going to create a lot of entrenched litigation.  I personally think there’s a lot of things you can do to have win-wins and talk about this kind of structure, but if you’re using unreasonable use to do it, it just frankly seems like the wrong tool.”

Question: With respect to the public trust doctrine, I was curious why you think it hasn’t been effective?

The basic reason why they have not been effective is because the claims have generally not been brought by sophisticated well-funded litigants,” said Dave Owen.  “Sophisticated well-funded litigants have not brought these claims because they are really expensive to bring.  If you are NRDC, and you have some of the top environmental litigation shops in California, and you’re looking at a choice between bringing an ESA claim where the evidentiary record has been built by the agency itself and a public trust or reasonable use claim where you’re going to have depose thousands of litigants, you’re going to have to spend thousands and thousands of dollars putting a claim together.  ESA claims are a whole lot more economical, you can actually afford to do it.

What I found working on another project looking at all these public trust claims is that they were generally tacked on poorly developed Hail Marys, basically attached to briefs primarily on CEQA issues,” continued Mr. Owen.  “Judges didn’t think much of them for understandable reasons and so they lost over and over again.  I don’t think that’s going to change.  Those evidentiary issues remain present and alternative legal folks also remain present, so going back to swords and shields; I think that’s why these general state doctrines do so much more as shields then they do as swords.

Eric Garner agreed with Dave Owen, but noted that it was in the 1970s when it got attention as potentially being an environmental sword when the TVA v. Hill Supreme Court decision on the ESA came out in the late 70s.  “Then in the 80s, the ESA arose as a real weapon, and with ESA under Section 9, it’s ‘you’re killing a fish, you have to stop,’ where under the public trust doctrine, it’s subject to reasonableness, so you can kill some fish, how many can you kill?  That’s much, much tougher.”

Part of the Bay Delta issue that is in essence is this issue,” said Valerie Kincaid.  “The fact that we’re putting a lot of very expensive water down the tributary systems for the benefit of fish and it’s going out to the ocean, that is part of this unreasonable claim.  We need to see a nexus of benefit if we’re going to cost water right holders this much money and this much funding.  From my perspective, we’ve talked about it a little bit but not in that context, but that’s part of this claim is that a regulation that requires you to flush the system and have the water not have a delineated or more defined benefit is unreasonable, and that will be litigated.”

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