The California Water Law Symposium is on my short list of not-to-be-missed events on my yearly calendar. The symposium is a collaborative student-run event where students from each law school organize a panel which bring together a variety of interesting speakers to discuss some of California’s most critical water issues. Led this year by Golden Gate University School of Law, participant schools include USF School of Law; UC Hastings College of the Law; UC Berkeley School of Law; UC Davis School of Law; Stanford University Law School; and University of the Pacific, McGeorge School of Law.
The theme of this year’s symposium, ‘Federalism & Water: Shifts in State/Federal Roles and Relations,’ is particularly salient given the Trump administration’s changed stance of the federal government in California water rights matters. The keynote speaker was Clifford Lee, who recently retired from the California Attorney General’s office where for the past three decades, he has played a lead role in litigation on behalf of the state of California and has been directly involved in most of the cases that have shaped the relationship between federal government and the state of California as it relates to water management issues. In his keynote speech, he discussed some of the history surrounding federal-state relations with respect to California water rights issues and gave his insights for how the state could forward.
To set the stage for Mr. Lee’s keynote, Paul Kibel, Professor of Law at Golden Gate University, gave introductory remarks which focused on four issues with respect to the theme of federalism and water: the concept of shared regulatory space amongst agencies, the concept of state self-governance and how that relates, the distinction with federal preemption between floors and ceilings, and the recent calls for ‘new progressive federalism’.
INTRODUCTORY REMARKS: PROFESSOR PAUL KIBEL
What follows are Professor Kibel’s remarks, edited only for clarity.
Shared regulatory space
In 2012, environmental law professor of Harvard Law School, Jody Freeman coauthored an article for the Harvard Law Review titled, ‘Agency Coordination in Shared Regulatory Space.’ It’s a very interesting piece, and in this article, Professor Freeman and her coauthor observed, “Many areas of regulation in administrative law are characterized by fragmented and overlapping delegations of power to administrative agencies,” and then often there are “delegations requiring concurrence where all agencies must agree in order for an activity to occur, such as when several agencies must approve a permit or license.”
She’s not making a point here; it’s more of an observational than an advocacy point that she’s making, but in the context of water in California, I think this concept of shared regulatory space applies both in the horizontal sense and in the vertical sense.
In the horizontal sense, when it comes to issues regarding California water, we have multiple different agencies that are involved at the federal level, and we have multiple different agencies that are involved at the California state level. At the federal level, the main agencies involved in California water are the United States Bureau of Reclamation which operates both the Central Valley Project and the Colorado River storage project; the US Fish and Wildlife Service and the National Marine Fisheries Service which are involved in implementation of the Endangered Species Act; the US Environmental Protection Agency which is dealing with water quality issues; and the US Attorney General and the Justice Department which at least in litigation are charged with somehow representing all of these agencies that might have somewhat different mandates and primary concerns.
Similarly, at the state level, there is the California Department of Water Resources which operates the State Water Project the California Department of Fish and Wildlife which has its agenda around fisheries protection; the California State Water Resources Control Board which somehow is supposed to reconcile all beneficial uses of water in California – even when they are conflicting; and then the California Attorney General’s Office which is tasked with representing all of these different agencies, even with their competing and somewhat contradictory agendas. The Attorney General’s Office is sometimes representing directly the people of the state of California and is not directly answerable to the Governor; they have some autonomy to decide about those issues. That’s the horizontal sense of shared regulatory space.
If you turn that on its side, you have vertical shared regulatory space where all those different federal agencies which are sometimes in conflict amongst themselves are trying to operate and make decisions about policies and with all those different state agencies, so the shared regulatory space in California water is very thick and very dense – it’s very interesting. That’s the first concept that I wanted to put out there.
In 2017, the California Supreme Court issued a decision in the case of Friends of the Eel River versus North Coast Railroad Authority which involved the question of federal preemption in the environmental field. Although that case involved some water resources, the legal issues that were involved in preemption did not involve water law; they involved the relationship between a federal law, the Interstate Commerce Commission Termination Act (ICCTA), which deals with rail lines, and the California Environmental Quality Act (CEQA).
There was the North Coast Railroad Authority, a state agency created in 1989, that was proposing to rehabilitate a dilapidated out-of-use rail line that ran along the Eel River, and enter into a contract with a private company. CEQA required that that state agency was required to perform an environmental impact assessment before approving the rehabilitation and entering into the contract with the private company. They prepared an EIR for restarting that line, and after certifying the EIR, they were sued by a number of nonprofit organizations, including Friends of the Eel River, who argued that the EIR that was prepared was somehow legally inadequate. What is interesting is that the private entity in that lawsuit, Northern Pacific Railroad Company, argued that the CEQA claim was federally preempted by the approvals that were needed under the ICCTA, the federal law relating to rail lines.
I wanted to share a little bit of the California Supreme Court’s insights into that case because it may have some relevance to what we’re talking about today. In considering the preemption question in its decision in Friends of the Eel River, the California Supreme Court began by noting “when a project is owned by the state, the question rises whether an act of self-governance on the part of the state actually constitutes regulation at all within the terms of the ICCTA. In our view, the application of state law to govern the function of the subdivision of the state does not necessarily constitute regulation. To determine the reach of federal law preempting state regulation of a state owned railroad, we must consider the presumption that in the absence of unmistakably clear language, Congress does not intend to deprive the state of sovereignty over its own subdivisions to the point of upsetting the usual constitutional balance of state and federal powers.”
In its decision in Friends of the Eel River, the California Supreme Court continued, “CEQA prescribes how governmental decisions will be made when public entities including the state itself are charged with approving funding or themselves undertaking a project with significant effects on the environment. The legislature in enacting CEQA imposed certain principles of self-government on public entities.”
The California Supreme Court then went on to hold that the ICCTA in this situation did not preempt CEQA’s application, and this is the rationale that the California Supreme Court gave. “CEQA operates as a form of self-government when a state or subdivision of the state is itself the owner of the property and proposes to develop it. Application of CEQA to the public entity charged with developing state property is not classic regulatory behavior; rather application of CEQA in this context constitutes self-governance on the part of a sovereign state and at the same time on the part of the owner.”
What I’m highlighting is that when you’re dealing with projects or property that are in fact owned by the state, at least the California Supreme Court has said the notion of federal preemption needs to take into account that there’s an element of self-regulation of the state’s own projects or property that is different from regulating wholly third parties.
In terms of our theme today, federalism and state water, I think there’s two points where this might come into play, or I would ask you to consider how it might come into play. The first obviously relates to the State Water Project.
The State Water Project is a project that is owned and operated by the California Department of Water Resources. It is owned and operated by the state. That holding in Friends of the Eel River seems particularly on point to the State Water Project if you’re looking at federal preemption in terms of federal water law, we’re dealing with a project that is in fact owned and operated by the state of California, so to take the position that California water law doesn’t apply to a project that is owned and operated by the state of California – I’m not going to try to resolve it, I’m just going to say it implicates some of those issues that were touched upon in Friends of the Eel River.
A broader potential application and much more controversial one is that in terms of certainly surface waters and arguably groundwater, but surface waters in California, the parties that use, divert, and store surface water may have some form of a property interest in that water, but they don’t own it. The surface waters, at least as we’ve defined it in most of our statutes for the state of California, are owned by the state of California for the benefit of the state of California. I’m mentioning that because if part of this holding about self-governance is that it deals with property that is owned by the state, depending upon how you view our resources, if you’re dealing with water resources and your conception of that is that there are in fact owned by the state, that also implicates this concept of self-governance potentially as well.
Floors and ceilings
There’s a well-developed body of scholarship both in the environmental and the constitutional realm that focuses on the distinction when we’re dealing with federal laws and preemption between federal laws that create floors but allow for more stringent environmental protection by state law, and federal laws that create ceilings which actually sort of act to prohibit states from adopting laws that are more protective of environmental quality or natural resource protections.
There’s an aspect of preemption that’s involved with both floors and ceilings but they work somewhat differently. Environmental law professor at Georgetown Law School, William Buzbee, wrote a very interesting paper in 2007 called ‘Asymmetrical Regulation: Risk preemption in the floor ceiling distinction.’
Professor Buzbee writes, “Typically the debate focused on federal standards setting where federal law allows states to increase the stringency of regulation but prohibits states from more lenient regulation.” That’s like a floor. “Elimination of state and local authority to regulate risks may have been a rarity, but several recent legislative and regulatory actions purport or propose to impose a federal ceiling where the federal action would displace any additional regulation by other actors, be they states or the common law.”
Professor Buzbee continues, “Is there a principled rationale for distinguish between federal setting that sets a federal floor or a ceiling? At first blush, the two appear to be merely flip sides of the same federal power, only distinguished by their different regulatory preferences for a world of minimized risk with floors, or higher levels of risk with ceilings. However, these two central regulatory choices are fundamentally different. Floors embrace additional and more stringent environmental and common law actions, while ceilings are actually better labeled as ‘unitary federal choice.’”
So to the extent we have federal law, either as its interpreted or legislative changes that sought to actually displace California water law or prohibit its application, that would be an example of federal preemption being used as a ceiling rather than a floor. Phrased another way in the words of Professor Buzbee, it would constitute unitary federal choice as to the regulation. I’m merely pointing out that at least as federal preemption has been used in the environmental field traditionally, that doesn’t mean it can’t change. It’s usually been used more as a floor than as a ceiling, so the use of federal law as a ceiling to impose unitary federal choice would be, Professor Buzbee described it as a rarity, but it would be a different deployment than we’ve seen in the past.
New progressive federalism
Since the election in November 2016, there has been increasing policy discussions of what is sometimes been referred to as proposals for ‘new progressive federalism.’ A leading scholar on this topic is Yale Law Professor Heather Gerkin who two years ago was named dean of the Yale Law School. In a January 2017 article, Professor Gerkin observed, “Progressives have long thought of federalism as a tool for entrenching the worst in our politics, but it is also a tool for changing our politics. Social movements have long used state and local policy making as an organizing tool, a rallying cry, a testing ground for their ideas.”
Similarly, an August 2017 article in New York Magazine, ‘A New Romance: Trump has made progressives fall in love with federalism,’ noted, “In the aftermath of the November 2016 election, Professor Gurkin coauthored a user’s guide in the Journal of Democracy on how localities can best harness the power of federalism to serve progressive ends. That’s not to say that Democratic enclaves will necessarily carry this flag for the long haul. In an interview, Gerkin told me that people on both sides of the political spectrum tend to opportunistically wield federalism for their own partisan ends, and not because of some high minded constitutional commitment. She said, ‘Both sides are fair-weather federalists. Both sides use it instrumentally to achieve their goals.‘”
So I would ask you to think about how some of the material we’re covering for today and the themes around federalism and water, in what ways to they or don’t they relate to this larger policy debate regarding new progressive federalism.
And with that, Professor Kibel turned the dais over to Clifford Lee.
KEYNOTE SPEECH: CLIFFORD LEE
What follows are Clifford Lee’s remarks, edited only for clarity.
I retired from the California Department of Justice after 40 years working on water resource litigation at the end of last year, so I want to offer the disclaimer that I’m here on my own behalf and not on behalf of any agency of the state of California or the California Department of Justice.
I would like to take some issue with Professor Kibel at the outset. California and water has not been a fair-weather federalist. I think if you fairly look at the history of California and water, we have taken the consistent principle that state law in fact applies to operations of federal facilities.
I would like to go over that history today, and discuss four significant points. First, I will speak to the history of section 8 of the Reclamation Act of 1902 and the principle of deference to state water law. Second, I will discuss that principle’s neglect during most of the 20th century. Third, I will talk about the principles resurrection in 1978 with the US Supreme Court’s issuance of California versus US and the long peace on federal and state conflict in water that occurred for almost four decades after that decision. Finally, I will talk about the potential threat to that long peace raised by the Trump Administration’s recent actions and the potential responses from the state of California.
Section 8 of the Reclamation Act of 1902 and the principle of deference to state water law
The principle of deference to state water law actually had its origins in the very beginning of the republic. As was noted by the US Supreme Court in an 1845 decision, when states entered the union, they entered on equal footing with the original states that created the nation. What that meant is that the people of each state, based on principles of sovereignty, have the absolute right to all of their navigable waters and soils under them. This equal footing doctrine principle, in 1907, in the decision of Kansas versus Colorado meant that the Supreme Court determined that each state had the ability to determine the nature of their water rights. They could accept the common law rule of riparian rights or the western rule of appropriation. So very early in the history of water in the West, the notion of deference to states’ determinations of how water should be used was affirmed by the US Supreme Court.
In 1877, Congress in the Desert Land Act again reaffirmed this principle. The Desert Land Act allowed for the sale of federal land to settlers who had received land patents, but importantly, this 1877 statute said that on the public lands, water was to be held free for appropriation and use of the public. In 1935 in an important decision, California Oregon Power Company versus Beaver Portland Cement Company, the Supreme Court looked at this provision and said that the effect of this provision severed water rights from public land and that the states were delegated the responsibility to allocate these resources from public lands.
So with this background of the equal footing doctrine and the severance doctrine, Congress in 1902 decided to address the issue of federal participation in the construction of water storage facilities in the West and adopted the historic Reclamation Act of 1902. Now it’s hard for us to realize today when the word infrastructure rolls so easily across our tongues that the idea of the federal government going into the states and building infrastructure projects like water storage reservoirs was a new thing. In the West, there was a deep concern that the federal government would come in and federalize the watersheds of the seventeen Western states, so a critical component of the Reclamation Act of 1902 was a provision insisted by Western legislators which is in Section 8 of the Reclamation Act.
I’m going to read that provision because the precise language of Section 8 of the Reclamation Act of 1902 is extremely important. Section 8 says, “Nothing in this act shall be construed as affecting or intended to affect or to in any way interfere with the laws of any state or territory relating to the control, appropriation, use, or distribution of water. And the Secretary of the Interior, in carrying out the provisions of this Act shall proceed in conformity with such laws.”
The legislative history of the 1902 Act made it clear that Section 8 applied not just simply to the application of water rights, but to its subsequent distribution.
Neglect of Section 8 during most of the 20th century
Now the interesting thing about Section 8 of the Reclamation Act of 1902 is after its adoption, it was neglected and ignored. Possibly because the controversies never surfaced, there was little reported case law on what Section 8 of the Reclamation Act of 1902 actually meant.
However, by the mid twentieth century, a series of cases came down that diminished the power of Section 8 of the Reclamation Act of 1902. In particular, the US Supreme Court decision in Ivanhoe Irrigation District versus McCracken held that ‘we read nothing in Section 8 that compels the United States to deliver water on conditions imposed by the state.’ You have to do a double take when you read that language in the Ivanhoe decision, because literally it cannot be reconciled with the actual language in Section 8 of the Reclamation Act. But the Supreme Court reached that decision, and then in two subsequent cases, City of Fresno versus California, and Arizona versus California, the US Supreme Court affirmed the language that the states cannot impose conditions upon the operation of federal reclamation projects.
This was not simply an academic question. It in fact had real world consequences here in California to our natural resources. And the prime example of the diminishment of Section 8 and the rise of federal dominion in water in the West is the Friant Dam project in the San Joaquin Valley. Friant Dam is a Reclamation project authorized by Congress in 1937. It is located in the headwaters of the San Joaquin River in the southern San Joaquin Valley. Reclamation commenced construction of the Friant Dam in 1939. It’s ancillary canals, the Madera Canal and the Friant-Kern canal were built in 1940 and 1945 respectively, and water deliveries commenced in 1944.
However, the Bureau of Reclamation did not receive any water rights for this project from the State Water Resource Control Board’s predecessor, the State Water Rights Board, until 1959 and Decision 935. By that time, the spring run chinook salmon on the San Joaquin River, a run that totaled perhaps 500,000 salmon had been extinguished. Even as late as 1946, there were roughly 100,000 spring run salmon returning to the San Joaquin River, but after the construction of Friant Dam, that salmon run stopped.
In 1959, the water board conducted a hearing on whether it was to issue permits for the Friant Dam project – roughly a decade after the project had been constructed. A valiant lawyer from the Department of Fish and Game stood up and said, ‘Wait! Wait! You can’t issue this water right permit because’ – speaking about the predecessor to Section 5937 of the Fish and Game Code, he said, ‘this dam does not keep fish in good condition below the dam.’ Patiently, the water board heard the Department of Fish and Game’s representative, and in essence they said, ‘we’re sorry, it’s too late,’ and in the words of Decision 935, the evidence is overwhelming that the salmon fishery on the San Joaquin River upstream from the junction with the Merced River is now virtually extinct, so we have no choice but to issue these water right permits.
This was the consequence of the neglect to Section 8 that occurred for most of the 20th century. A state agency, the State Water Rights Board, entrusted with the responsibility of protecting the state’s resources and the use of water in the public interest, was effectively neutered by the delayed implementation of the water right process until the project had been completed.
Now, in the defense of what was happening, at the time, federal water projects were very popular. Progressive thought was public works would take us out of the recession and make the economy bloom. Little thought at the time was given to the kind of environmental consequences we think of today. But nonetheless, to issue the water rights permits over ten years after the project is completed even then had to be considered a little backwards.
The resurrection of Section 8
That was the state of affairs until the mid-1970s when a new water project came to fore in the Central Valley which was the New Melones project on the Stanislaus River. This time, the water board in Decision 1422 said, ‘we’re going to require you to secure water rights before you complete your construction and operation of the dam.’
Decision 1422 had a modest, one might even say a benign condition on it. The condition said, ‘you’re a water project, New Melones Dam. You’re supposed to be for beneficial purposes including irrigation. We understand that the construction of the New Melones Dam would inundate canyons that had value as whitewater rafting. We’re not going to deny you the opportunity to build your dam, but we’re going to say that you cannot build and operate the facility until you show us, the State Water Resources Control Board, that you have firm contractual commitments to sell the water.’
‘We can’t do that,’ said the United States, again relying on the Ivanhoe decision that said the State Water Resources Control Board cannot impose terms and conditions on federal reclamation projects, and Section 8 does not change that consequence. The US Supreme Court in a decision authored by Justice William Rehnquist then took a second look at Ivanhoe, City of Fresno, and Arizona versus California, and said, ‘You know that language where we said, the state cannot impose terms and conditions on federal projects? That’s really dicta. We didn’t really mean that. What we really mean instead is that state law under Section 8 of the Reclamation Act does in fact apply to federal reclamation projects unless federal law is directly inconsistent with clear Congressional directives.’ Upon on remand to the 9th Circuit, the 9th Circuit said, what that means is not just some vague concept of Congressional intent; but there has to be a direct inconsistency with a federal statute.
This was in 1978. For 40 years, the holding in California versus the United States has provided the basis for what I would choose to call, ‘the long peace’ in the federalism wars here in California. The Central Valley Project Improvement Act of 1992 echoed the language of Section 8 of the Reclamation Act, and more recently, in the Water Infrastructure Improvement for the Nation Act of 2016, otherwise known as the WIIN Act, Congress said, ‘nothing in this Act preempts or modifies any obligation of the United States to act in conformist with applicable state law, including applicable state water law.’
In reliance on the holding of California versus US, the federal Central Valley Project and the State Water Project adopted a coordinated operations agreement in 1986 that assumed federal compliance with state law. The judiciary also took notice of this paradigm shift in federalism in California water. In the US versus State Water Resources Control Board, a 1986 California Court of Appeal decision rejected arguments from the Bureau of Reclamation that states salinity requirements were inconsistent with Congressional directives regarding the federal Central Valley Project .
Then in 1998, the 9th Circuit in NRDC versus Houston said not only does Section 8 require federal projects to comply with California water rights law, it also requires federal projects to comply with Section 5937 of the Fish and Game code, which requires owners and operators of dams to keep fish in good condition below the dam.
The threat to the long peace
So, for the 40 year period after the 1978 decision in California versus US, the folks who operate and manage the two water projects understood the operating principle for those projects which is that state law applies to both the federal and state projects unless state law is directly inconsistent with a clear Congressional directive. This was extremely important as we moved into the 60s and 70s and 80s, because during that time, the state of California constructed and operated a State Water Project which was the second largest project here in California, delivering water from Northern California to Southern California, and it became apparent and clear that the two projects had to operate under the same operating criteria, not different sets of criteria, given the common watersheds that they diverted and stored water from.
Under the Trump Administration, we have seen a potential threat to this long peace, and I want to talk about how that has arisen in three separate contexts. First, in December of 2018, the State Water Resources Control Board adopted new water quality objectives under the Porter Cologne Water Quality Control Act for tributaries to the San Joaquin River and the south Delta. This is not a new process. At least twice before, the Water Board has adopted water quality control objectives for the protection of Delta values and had them implemented through follow-on water right decisions.
However, on July 27, 2018, Reclamation Commissioner Brenda Burman sent a letter to the chair of the State Water Resources Control Board informing the chair that they had deep concerns that the federal government did not have to comply with these new water quality objectives. They noted that the Secretary of Interior would make a determination as to whether those water quality objectives for the tributaries to the San Joaquin River and to the South Delta were not inconsistent with clear Congressional directives. And then pointedly, the July 27th letter said, ‘should the Secretary of the Interior so determine, then the Secretary shall promptly request the Attorney General to bring an action in Court of proper jurisdiction for the purpose of determining the applicability of such standards to the projects.’
Subsequent to that letter, the federal government sued the state of California and the State Water Board over those water quality standards. However, to date, that lawsuit has been brought on other matters and not on the federal preemption issue. However, to the extent that the Water Board moves forward with new water quality objectives the potential threat of a new preemption decision raising into doubt and into question the applicability of California versus the United States remains extant. So a shot across the bow.
That was followed late this year with what I’m going to call the 2019 Fall X2 episode. I’m going to descend into water jargon … X2 stands for the salinity level within the Western Delta at 2 parts per 1000; it’s generally perceived that west of X2, you have salt water coming in from San Francisco Bay and east of X2, you have the fresh water from the Sacramento and San Joaquin Rivers. This is critically important because the size and scope of the low salinity area in the Delta affects the habitat of the Delta smelt.
The 2008 biological opinion for the Delta smelt set a specific fall X2 measure at a point near Suisun Bay. Now, on September 4, 2019 the US Bureau of Reclamation said, ‘We don’t like this fall X2. We don’t like it at this location and we want to change it’ and they sent a letter to the US Fish and Wildlife Service to that affect. The US FWS took the letter, reviewed it, and said, ‘We’re going to agree. We’re going to modify this fall X2 and we’re going to reduce the low salinity zone habitat area for the Delta smelt.’ The letter actually admits that the habitat for the Delta smelt would in fact be reduced.
On September 24, 2019, the California Department of Fish and Wildlife sent a letter to the Bureau of Reclamation that said, ‘We don’t agree with this at all. In fact, we don’t think this protects the habitat of the Delta smelt.’ Now I have been litigating against the federal government and with state agencies, the Department Fish and Wildlife for about 40 years. When I saw the Department of Fish and Wildlife’s letter saying, indeed demanding, ‘Bureau of Reclamation, US of America, you stop this. You withdraw your proposal to reduce the fall X2 protections!’ My immediate reaction was, ‘well, good luck with that!’ But remarkably, on October 1st, 2019, the US Bureau of Reclamation responded to the California Department of Fish and Wildlife letter and said, ‘We disagree with the Department of Fish and Wildlife’s biological assessment of the effects of the Fall X2 modification; however, as a matter of comity, and in response to your request, Reclamation no longer intends to implement its proposed change to fall X2.’ Another shot across the bow.
Lastly, on October 21st, 2019, the National Marine Fisheries Service and the US Fish and Wildlife Service adopted new biological opinions for the long-term operation of the federal Central Valley Project and the State Water Project. The two projects have to get what’s called incidental take coverage under the federal Endangered Species Act to operate, because the two projects concededly take ESA listed species. The path through which this incidental take coverage occurs is through Section 7 consultation with the relevant federal fisheries agencies, the US Fish and Wildlife Service and the National Marine Fisheries Service, and the end product is something called a biological opinion. The most recent until the October 21st biological opinions were released were the biological opinions issued by the US Fish and Wildlife Service in 2008 and the National Marine Fisheries Service in 2009.
Now, the new biological opinions issued by the Trump Administration on October 21st, 2019 contained materially-reduced fishery protections for the ESA listed species. One can argue whether those reductions were necessary or protective, but I don’t think you can argue that they weren’t materially-reduced protections for the listed species.
The federal ESA biological opinion requirements, therefore for the first time, raised questions as to whether compliance with the federal Endangered Species Act would also constitute compliance with the California ESA. Historically, the standards for the two acts have been identical. With the issuance of the October 21st biological opinions, we saw a divergence. This has material consequences because the California State Water Project has to comply with the California Endangered Species Act. If the federal Bureau of Reclamation, Central Valley Project does not, then the California Project has to make up for the fishery protection deficit due to the federal backsliding.
Two potential responses
Now, in light of these developments under the Trump Administration, the question becomes how should California respond? I’m a litigator, and I think of response in litigation. I understand that’s not the world view. But let me suggest two potential legal responses that California has.
The first is that under Supreme Court decisions that were issued starting in 1992, there is a resurgence of the doctrine of state sovereignty under the 10th amendment. Starting with Justice O’Connor’s decision in New York versus the United States, the subsequent decision in Printz versus the United States, and the most recent decision in Murphy versus National Collegiate Athletic Association, the US Supreme Court has said that the 10th amendment and ancillary provisions prohibit the federal government from commandeering state government activity to implement federal policies, subject to certain exceptions that don’t normally apply here. Moreover, this prohibition is not balanced against federal interests. As Justice Alito said in Printz, ‘when federal law offends the very principle of separate state sovereignty, then no comparative assessment of various interests can overcome that fundamental defect.’
With regard to water projects, the federal Central Valley Project on occasion uses State Water Project facilities. It does so through a provision in Water Right Decision 1641 which provides for joint point of diversion – that is the federal project can divert water from the State Water Project pumps near Tracy, and the State Water Project can divert water from the federal pumps. Now, because the pumping capacity of the State Water Project and the delivery ability is larger, typically it is the federal project that uses State Water Project pumps to deliver water under the joint point provisions in Decision 1641. Because of these recent 10th amendment rulings, the federal government cannot commandeer the state facilities to serve federal ends, so to the extent the federal government wishes to use state facilities, it has to do so consistent with state law, including the California Endangered Species Act.
I haven’t heard from the federal government on this particular point. I think the 10th amendment law is unquestionably clear that no use of state facilities by the federal project is allowed unless the state authorizes and the state must comply with its own statutes. But this doesn’t really solve the problem because the federal Central Valley Project’s use of state facilities is an episodic periodic event; it does not happen all the time.
A broader response would be to reach back again to Section 8 of the Reclamation Act of 1902, and include within it not just simply California water rights law but the California Endangered Species Act. Now how can we include an act that is designed to protect butterflies as a state law relating to the control, appropriation, use, or distribution of water? I say it’s consistent with the plain language of the statute. First of all, it is clear that Section 8 is not limited to state water rights law. Clear from the plain language. Why is it clear? Because Section 8 talks about control, appropriation, use, or distribution of water. Now if the authors of Section 8 in 1902 wanted to limit Section 8 to what was understood as state water rights law, they would not have had to use the words ‘control, use, or distribution’. Why? Because the law of appropriation was the water rights law of the west. All western states had an appropriation doctrine.
Now some might ask, what about riparian rights? It doesn’t matter. You cannot use riparian rights for storage purposes. They are only for direct diversion from the stream. No storage in the west under western doctrine can be developed under the riparian doctrine, so if in fact Congress intended to limit Section 8 solely to water rights law, then the words control, use, or appropriation would become surplusage.
I might add that this notion that Section 8 is broader than just water rights law is reaffirmed in the Central Valley Project Act of 1992 where the section 3406B says, ‘the Central Valley Project must meet all obligations under state and federal law, including but not limited to the decisions of the State Water Resources Control Board.’
But how can the California Endangered Species Act (CESA) be a state law relating to the control, distribution or use of water? I might add that we have two California Court of Appeal decisions that so suggest. You should look at the 1992 decision, Department of Fish and Game versus Anderson Cottonwood Irrigation District and Watershed Enforcers versus Department of Water Resources. Those cases apply CESA to the diversion of water. Keep in mind Section 8 does not say state law exclusively related to the control, appropriation, use, or distribution of water, but state law relating to the control, appropriation, use, or distribution of water. In light of the California Court of Appeal decisions applying CESA to the diversion of water for irrigation purposes, a credible argument exists that CESA is encompassed within Section 8 of the Reclamation Act of 1902.
Now I know the naysayers out there and there are plenty of them. ‘Oh you can’t do that, Cliff. You can’t argue that CESA applies. We’re in the middle of difficult negotiations over voluntary agreements which we intend to resolve the water issues relating to the Delta, and if you raise this issue, credible but aggressive, as a litigation tool, then negotiations will stop, very important people will walk out of the negotiating session, and our efforts to work out voluntary resolution of this problem will end.’
To this I have to say, the rule of law even when you’re negotiating outcomes in environmental law can’t be put into a box or placed into a cabinet while you’re sitting at a negotiating table, trying to hammer out a deal. Whatever deal gets hammered out through the voluntary agreement process is going to have to comport with California environmental statutes, including CESA. If a deal does not comport with CESA, and is then implemented, it would likely be overturned and all that negotiating time would be wasted. If a deal is adopted that creates disparate standards, one for the state project because it has to meet CESA and one for the federal project because it does not, that outcome will also likely be judicially challenged and overturned.
So I would like to end by saying, as laudable as that negotiation process is, it cannot be a process that sidesteps the rule of law and the rule of law requires federal projects to comply with state law relating to the control, appropriation, use, and distribution of water.
Thank you very much.
QUESTIONS AND ANSWERS
Question: You’ve mentioned the voluntary agreements which are negotiations to try to come to An agreement on a voluntary approach to meet the requirements of the water quality control plan that reasonably protect fish and wildlife. In your career, you’ve seen a lot of negotiated agreements, you’ve seen CalFed, the Yuba Accord and others, what are the lessons we’ve learned about how we negotiate these things?
Clifford Lee: I want to begin by saying although many of the agencies I used to represent are involved in these negotiations, when I was at the attorney general’s office, I was not involved in any of them. I watched them from afar as an interested observer, but I have no personal knowledge of the dynamics of those negotiations; that has been left to others.
That said, I want to say something that every lawyer in this room knows and that is if you want a successful negotiation, the parties involved in the negotiation have to uniformly recognize that the price to them of not reaching an agreement is higher than the price of reaching an agreement. No negotiation will succeed without that set of dynamics. In fact, negotiations that don’t have this dynamics tend to lead to dither and delay.
I’d like to explain that with one story. In the early 1990s, the National Resources Defense Council brought an action against the United States Bureau of Reclamation over the operation of Friant Dam, alleging that Friant Dam had to comply with state law and state law included Section 5937 of the Fish and Game Code. That matter went up to the 9th Circuit, where the 9th Circuit affirmed that facially, Section 5937 of the Fish and Game Code was not inconsistent with any clear Congressional directives, and a facial challenge to its application to the Bureau of Reclamation was not sustainable.
Back on remand, the matter then was heard by the late Judge Lawrence Karlton. I don’t know if anyone here has appeared in front of Lawrence Karlton, but curmudgeon doesn’t even begin to describe Lawrence Karlton. Judge Karlton divided the case between liability and remedy: liability being, is the federal government for noncompliance with Section 5937 of the Fish and Game Code? And remedy, assuming that it is, what kind of flows should the court order to keep fish in good condition below Friant Dam?
In 2004, the District Court through Judge Carlton issued a ruling holding the federal government liable for noncompliance with Section 5937 of the Fish and Game Code. Judge Carlton then noticed a status conference to address how the trial would then proceed. So I’m sitting in this courtroom as I was representing the Water Resources Control Board in an amicus capacity at the time, and it was filled with lawyers – lawyers representing the United States, lawyers representing the NGOs, lawyers representing the Friant Water Users Association, and lots of farmers.
Judge Karlton looks out to the crowd, specifically looks out to the United States, and says, ‘I want you to know that as a federal judge, I have very blunt tools to create a remedy. My tools are very, very blunt; in fact,’ looking straight at the US Attorney, ‘I have meat cleavers. Now if you want me to use my meat cleaver and fashion a remedy, I will do that; in fact, I’m obligated to do that as a federal judge. But I would strongly suggest that the parties here go off in a room and try to negotiate the remedy stage of this trial. And to ‘encourage’ that, I’m setting a trial date a year from today for a six week trial on determining on what flows are necessary to keep fish in good condition below the dam.’
It took a couple of extensions, but unsurprisingly, the parties reached a historic agreement on the restoration of the San Joaquin River. I mention this story to note that no settlement occurs in water unless some Damocles’ sword is hanging over the heads of the parties. Now I have not been involved in the voluntary agreement process, I cannot attest to its efficacy or the dynamics that are going on, but I think we should ask, if we’re going to put all our eggs in the basket of voluntary agreements, what is the Damocles’ sword? What’s hanging over the head of the parties? Why would it be worse for the parties to not negotiate an agreement?
Question: The recent veto by Governor Gavin Newsom of SB1 which would have addressed the issue you were talking about, whether CESA applies to the Central Valley Project , was accompanied by the comment that it was unnecessary, and I was wondering how you would interpret that.
Clifford Lee: SB 1 was an effort by the California legislature to attempt to designate the California Endangered Species Act as part of the state law related to the control, appropriation, use, or distribution of water. I want to concede at the outset, it’s not definitive. That wouldn’t of course resolve what is clearly a federal law question. However, there at least is some federal case law on the issue of when one is interpreting what is called an anti-preemption clause in a federal statute, that some federal courts have looked to how the states interpret, apply, and read their own statutes in determining the scope of an anti-preemption statute. So I think it would have aided in the argument. I think the argument is strong, credible, and available even without it.
Question: I was intrigued by your comments about the 10th amendment, and I was wondering first whether if such a challenge in water rights in the federal context got to the currently constituted US Supreme Court, whether you would be confident that the court would continue its string of state victories in applying the 10th amendment in favor of state sovereignty? Second question, if it’s as rumored that the Trump Administration is formulating a test case to revisit California versus US Supreme Court case and Section 8, how confident are you that the currently constituted US Supreme Court would reiterate and follow that 1978 precedent?
Clifford Lee: I don’t purport to be a US Supreme Court lawyer. Very frankly, I’ve had one case go up to the US Supreme Court and we lost 8-0, so I’m more comfortable in the trail court pits than I am in front of the US Supreme Court.
That said, I think the case law on the 10th amendment is pretty strong. The 10th amendment case law is authored by I believe Justice O’Connor, Justice Alito, and Justice Roberts. It would take some considerable gymnastics for the court to disregard that settled commandeering authority. Now as to a reversal or modification of California versus US, it’s hard to say. It would depend upon the facts on which the appeal was taken, and the scope and extent to which the federal purposes have or have not been obstructed. I won’t gander a guess but I would hope that the current Supreme Court would sustain the vision of Justice Rehnquist and continue the deference to state water law.
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Featured Image credit: Shasta Dam by Don DeBold via Flickr, 2016.