California Ag Network: Irrigation Districts’ Court Victory Reestablishes Certainty for Irrigation Water

From California Ag Network on April 11th, 2018:

By Lauren D. Bernadett & Michael E. Vergara

California’s recent drought challenged practically everyone in the state, and those challenges were most acutely felt by farmers and the agricultural industry. While the state and local districts made several significant law and policy changes during the drought, one decision that caused great concern and had significant effects for water providers and users was the State Water Resources Control Board’s (Water Board) issuance of curtailment notices to many water right holders. A recent court victory for several irrigation districts and water agencies (Public Agencies) helped maintain future certainty for water users and right holders.

The Water Board is the state administrative agency tasked with managing the state’s water resources and regulating its tiered water rights. Although the Water Board disputed the nature of the curtailment notices it issued to water right holders in 2015, the notices clearly instructed right holders to stop diverting water immediately and report to the Water Board when diversions ceased.

Many of the Public Agencies who received the curtailment notices were initially baffled by the notices. They essentially gave Public Agencies two choices: (1) accept, without a hearing, the Water Board’s stated basis for the directive to stop diverting water, which would harm residential, commercial and agricultural customers; or (2) defy the notice and risk substantial administrative penalties for every day of diversion. Some Public Agencies decided to continue diverting. Some stopped diverting and purchased water from other sources, if available. Others complied and ceased diversions entirely.

Neither the Public Agencies, nor the water users to whom they supply water, were given the opportunity to conduct a hearing and review the Water Board’s determinations or findings allegedly supporting the directive to cease diverting water immediately. Public input, including the opportunity for the public and regulated community to be heard regarding administrative decisions, is a fundamental tenant of American due process and was completely lacking in the Water Board’s decision to issue the curtailment notices. Instead, the putative evidence supporting the notices was untested, even though the curtailments greatly affected businesses and livelihoods throughout the state.

Responding to the notices, several Public Agencies filed separate civil lawsuits against the Water Board in different state courts. Shortly after the lawsuits were filed, however, the Water Board initiated administrative enforcement proceedings against two Public Agencies that were pursuing litigation against the Water Board for issuing the curtailment notices—Byron-Bethany Irrigation District (BBID) and the West Side Irrigation District (WSID).

In the administrative proceedings, several Public Agencies joined BBID and WSID to defend against the Water Board’s allegations that they illegally diverted water after the curtailment notices were issued. In support of the Public Agencies, several farmers from districts that had been curtailed attended the administrative hearing at the Water Board’s office in Sacramento, and they provided heartfelt testimony regarding the devastating impact of the curtailments on their operations, their employees and the communities they serve. After three days, the State Board’s Enforcement Team completed their case in chief, and BBID and WSID moved to dismiss the enforcement action. After considering the motion to dismiss, the Water Board determined that its own staff members failed to present sufficient evidence to carry its prosecutorial burden of proof and dismissed the administrative proceedings.

This dismissal (an exceedingly rare event before the Water Board) was a tremendous victory for the Public Agencies. Had the Public Agencies lost at this administrative proceeding, BBID would have been subject to a fine of approximately $1.5 million (which was reduced from the $5 million threatened in the Water Board’s Administrative Civil Liability Complaint), and WSID would have been subject to a cease and desist order regarding their water diversions. Prevailing at the administrative level helped maintain some certainty for the water community, but several issues remained for litigation, including whether the Water Board could issue the same curtailments in the future. If so, did it have to give the recipient of the notice an opportunity to be heard?

To answer these questions, the Public Agencies’ lawsuits against the Water Board were consolidated into one case and were set for trial in January 2018. The allegations against the Water Board were numerous and some were dependent on the outcome of others, so the parties agreed to separate the trial into three phases.

To date, only the first phase has been tried, but it addressed the most immediate issues impacting water users and right holders.

The threshold issue in the case is whether the Water Board has jurisdiction under a specific state statute to issue curtailment notices to riparian and pre-1914 appropriative water right holders, the most senior water right holders in the state. The court decided that the Water Board does not have that authority under the circumstances of the case. As a state agency, the Water Board’s actions must be within the scope of authority granted to it by the Legislature. Because the Water Board’s issuance of the curtailment notice was not supported by any state law, it did not have the authority to curtail riparian and pre-1914 water right holders.

This portion of the decision is crucial to maintaining certainty in the water world. Most, if not all, senior water right holders depend on the predictability and consistency that comes with their senior water rights. Prior to the issuance of the curtailment notices, riparian and pre-1914 water right holders believed they understood the relationship between them, their rights and the Water Board. The issuance of the curtailment notices upset that predictability and undermined trust in the Water Board’s ability to manage water thoughtfully and in accordance with long-standing state law. The part of the court’s decision relating to the Water Board’s jurisdiction confirms for water users and right holders that the state’s actions during the 2015 curtailments were not in conformity with existing law.

The second primary issue in the Public Agencies’ lawsuit is rooted in due process and questions whether the Water Board improperly deprived the Public Agencies of their opportunity to be heard prior to issuance of the curtailment notices directing immediate cessation of diversions. Again, the court sided with the Public Agencies and determined that the Water Board violated due process requirements and is required to provide those who receive curtailment notices with an opportunity to challenge the notices before imposing curtailments and issuing fines.

Reinforcing fundamental due process rights is critical because these rights ensure that the government is responsive to its citizens first and foremost, rather than to an overreaching government agenda.

Because only the first phase of the trial is complete, a final decision will not be issued until the remaining phases are complete. However, this early decision preserving established water rights law provides that, if the Water Board decides to curtail in the future, it must find a different method for implementing curtailments and must provide due process opportunities to water right holders.

Lauren D. Bernadett is an associate with Somach Simmons & Dunn in Sacramento, CA. Bernadett is a natural resources lawyer who has counseled private and public clients through administrative processes and litigation in state and federal courts. She can be reached at lbernadett@somachlaw.com.

Michael E. Vergara is a shareholder with Somach Simmons & Dunn in Sacramento. Vergara serves as outside litigation and general counsel to businesses and public entities that have environmental law issues. He can be reached at mvergara@somachlaw.com.

Link: http://www.californiaagnet.com/2018/04/11/irrigation-districts-court-victory-reestablishes-certainty-for-irrigation-water/

BBID featured in Tracy Press article: Irrigation Starts Early in Dry Local Orchards

From the Tracy Press (Feb. 9th): The latest recorded rainfall in Tracy was on Jan. 26, and it wasn’t much — two-hundredths of an inch — and there’s no rainfall expected in the next two weeks at least. More and more people are beginning to say, “It’s feeling a lot like a drought — again.”

Evidence of that is unfolding in rural Tracy farmland, where irrigation water is starting to flow out of canals and into fields — a month earlier than “normal.”

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Byron-Bethany Irrigation District is referenced in the article. Read more below!

2.9.18 Irrigation starts early in dry local orchards - Golden State Newspapers: Tracy Press News

Byron-Bethany Irrigation District Commends Hertzberg Senate Committee Appointment

Byron, CA (December 22, 2016) – Byron-Bethany Irrigation District General Manager Rick Gilmore issued the following statement:

“Byron-Bethany Irrigation District applauds the selection of Senator Bob Hertzberg (D-Los Angeles) as chair of the Senate Natural Resources and Water Committee. Senator Hertzberg has spent more than 40 years studying the complexities of California water policy, and is an ideal candidate to help the state’s water community seek solutions in a great time of change.”

“We collectively face unprecedented challenges, from the sixth year of our historic drought, to renewed focus on water efficiency and storage, to the critical balancing of the needs of our cities, agriculture and the environment. Senator Hertzberg has already pushed pilot programs for capturing more stormwater and recycled water, as well as introduced legislation to stop wasteful dumping of treated water into the ocean. We look forward to partnering with him on California water solutions.”

State Water Board Curtailment Notice Threatens Thousands of Acres, Jobs

Byron, CA (June 7, 2016) – Byron-Bethany Irrigation District General Manager Rick Gilmore issued the following statement in response to the State Water Resources Control Board’s Curtailment Notice of June 12, 2015:

“In addition to the Byron-Bethany Irrigation District (BBID) suffering back to back years of “zero water supply” from the Bureau of Reclamation for BBID’s Central Valley Project Service Area, the State Water Resources Control Board’s (SWRCB) curtailment notice received today will have a devastating impact on the remaining customers of BBID, which holds water rights dating from over a century ago. As a steward of our great state’s resources, we understand the seriousness of the historic drought that is affecting California. However, this curtailment order will be extremely destructive to the customers we serve including nearly 160 farmers, 15,000 residents of the Mountain House community, and the energy projects in the area, all of which are essential to our community’s vitality.

The additional loss of water will destroy thousands of acres of crops and eliminate thousands of jobs, which will likely result in the irreparable loss of vibrant communities. Without water, our area will lose nearly 10,000 acres of almonds, cherries, sweet corn, grapes, tomatoes, walnuts, alfalfa and more. By this action, the SWRCB is taking away our ability to provide our customers with a safe, reliable water supply – a resource essential to life; particularly to the agricultural communities we serve.

In order to protect our customers and the crops in our service area, we will pursue relief from the SWRCB’s curtailment notice in Superior Court. We will vigorously defend our rights and will insist on due process and full consideration of factors that have not been adequately taken into account. We are optimistic that the Court will uphold our Constitutional rights, and the restriction on our diversion of water will be lifted before it has had a shattering impact on the communities we serve.”

Byron-Bethany Irrigation District Applauds Court Ruling Negating Curtailment Notices

Byron, CA (July 11, 2015) – The Byron-Bethany Irrigation District (BBID) continues to battle over a “notice of curtailment” sent by the California State Water Resources Control Board (SWRCB), given with the intent to strip century-old water rights from family farms and farming based communities. In a recent court decision Friday, July 10, in Sacramento County, curtailment notices sent to West Side Irrigation District were ruled unconstitutional by Judge Shelleyanne W. L. Chang. This ruling demonstrates that the State’s dramatic, over-reaching curtailment actions for all impacted districts, including BBID, are not only inappropriate and dangerous, but also illegal.

On Friday, Judge Chang issued a temporary restraining order (TRO) that blocks the enforcement of the curtailment notice, citing that the notices “result in a taking of petitioners’ property rights without a pre-deprivation hearing.” While the order is specific to the West Side Irrigation District, the Superior Court ruling and TRO have significant relevance to the court action waged by BBID to halt similar curtailment notices.

“The water right holders are absolutely vindicated by this ruling, which soundly rejects the coercive attempts by the SWRCB to curtail senior rights without a sound basis for doing so. The Court appropriately rejected the Attorney General’s failed attempts to backtrack on the Notices,” says Daniel Kelly, General Counsel for BBID. Attorneys in the West Side Irrigation District case stated that as a result of the ruling, “all curtailments sent to water users are now equally unconstitutional.” A total of 9,329 water rights have been cut off so far this year, according to the state.

“The implication of the Sacramento ruling is clear as it pertains to our case,” says Russell Kagehiro, BBID Board President. “Our position all along is that these curtailment notices were illegal, and sent without due process for water rights holders. We are very encouraged by the ruling and what it might mean in our continuing legal action.”

Access to water diversion for farming purposes in the BBID service area was established in the early 1900s and has been the lifeblood of the community and family farms here. The curtailment notice is nothing short of catastrophic. If enforced, the curtailment notice will strangle family farms, kill vital crops, compromise livestock, raise consumer prices, eliminate thousands of jobs, and ultimately destroy the ability to farm the land.

The deleterious effects of the illegal notices could have a significant impact on California’s recovering economy.

“We serve 160-plus farming families through our service area,” says Rick Gilmore, General Manager of BBID. “The crops they grow feed not only California, but truly the entire nation. If enforced, the curtailment notice would devastate these families, and raise prices on all sorts of produce throughout the country. Hopefully we will see similar rulings in our case, the law is clear: these notices are simply unconstitutional.”

BBID provides water for literally thousands of acres of rich farmland that provide an abundant harvest of corn, tomatoes, alfalfa, grapes, cherries, walnuts and more, plus ample ranch land. Farmers and ranchers are some of the best defenders of natural resources here in California, and should not be targeted by the state Water Board as a group to be punished.

BBID continues to assess the issue of water availability and is currently not diverting water under its pre-1914 appropriative water rights. This most recent court ruling echoes BBID’s position and the Board feels confident a similar conclusion will result from current legal action initiated by BBID.

“Whatever the ultimate decision with respect to diversions of water for BBID, we will vigorously defend our water rights for our customers and will seek damages from the SWRCB and State of California, not only for the coercive actions of the SWRCB, but also for the unlawful taking of BBID’s water rights through the issuance of the Notice and threats of enforcement,” added Kelly.