Press release from attorneys Roger Moore and Thomas Keeling
Following its failed attempt to obtain judicial approval of its first Delta Tunnel bond financing plan, the California Department of Water Resources (DWR) has now dismissed its second “Validation Action,” by which it had sought judicial approval of its second Tunnel financing scheme.
DWR’s first attempt began with its 2020 bond resolutions and a Validation Action to secure judicial approval for those resolutions. Delta Counties, cities, and public agencies, as well as public interest groups, opposed DWR’s first Validation Action, warning of major adverse economic and environmental consequences should the financing scheme be validated.
Ruling against DWR in the first Validation Action, the trial court found that DWR had exceeded its delegated authority. DWR and its allies among the State Water Contractors appealed. In a unanimous Decision, the Court of Appeal later affirmed the judgment against DWR. (Department of Water Resources v. Metropolitan Water District of So. Calif., et al. (2025) 117 Cal.App.5th 751.)
DWR then petitioned the California Supreme Court in an effort to overturn the Court of Appeal’s Decision. Last month, the Supreme Court, sitting en banc, denied DWR’s petition for review and its alternative request for depublication of the Decision.
On May 19, 2026, DWR dismissed its second Validation Action, which had been filed during DWR’s appeal in its first Validation Action.
DWR did not give a reason for dismissing the second Validation Action, but attorneys for prevailing counties and public agencies in the first Validation Action think the reason is clear. According to Thomas Keeling and Roger Moore, counsel for many of the Counties and agencies challenging DWR: “Dismissal of the second Validation Action reflects a recognition that the Court of Appeal’s Decision in the first Validation Action is most likely fatal to the second action. Dismissing the second action at this early juncture makes sense and, we hope, will avoid a further waste of public monies.”
Keeling and Moore added: “Failure to validate its bond financing schemes is just the latest in a long line of setbacks for the ill-fated proposed Delta Tunnel project – perhaps the largest rate-payer boondoggle in California history. We hope proponents of this project, the cost of which some studies show will approach $100 billion and which would not be operational until at least the mid-2040s if all goes to plan, will now seriously consider more readily available and less costly solutions to California’s water supply challenges.”
For more information about this legal update, please contact:
Roger Moore rbm@landwater.com
Thomas Keeling tkeeling@freemanfirm.com
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Prior posts on Court of Appeal’s decision rejecting DWR’s proposed bond financing:
https://mavensnotebook.com/tag/bond-validation-action/?term_group=3&term_id=96722
Economic Analyses of Delta Tunnel:
Cost Benchmarking and Risk Analysis of the Delta Tunnel Project: Project Analysis and Evaluation, July 2025
