Cent. Delta Water Agency v. Dep't of Water Res. - 69 Cal. App. 5th 170, 284 Cal. Rptr. 3d 212 (2021)

Rule:

The California Environmental Quality Act (CEQA), Pub. Resources Code, § 21000 et seq., allows a trial court to leave project approvals in place. After a court finds a CEQA error, the court has three options: void a decision in whole or part; suspend certain project activities; or take other specified actions. Pub. Resources Code, § 21168.9, subd. (a). CEQA does not require the court, on finding CEQA error, to void all project approvals. The plain language of § 21168.9 grants the trial court the discretion to leave project approvals in place. 

Facts:

The State Water Project (SWP) and the Central Valley Water Project comprise California's two great water projects aimed at addressing the state's “fundamental water problem.” The SWP is one of the largest water projects in the world, consisting of dams, reservoirs, storage tanks, pumping plants, aqueducts, pipelines, and canals designed to capture, store, and deliver water throughout the state. Each year, the SWP delivers water to about 25 million residents from Napa Valley to San Diego and irrigates about 750,000 acres of farmland. The Department of Water Resources (DWR) is charged with operating and managing the SWP. During the 1960s, DWR entered into long-term contracts with local and regional water contractors, known as the State Water Project contractors (SWP contractors). Under the contracts, the SWP contractors received entitlements to an amount of SWP water. Each contract included a “Table A,” which specified the maximum amount of SWP water provided to each SWP contractor from the available water during the year. The amount of water available depends on rainfall, snowpack, runoff, reservoir capacity, pumping capacity, and regulatory and environmental restrictions. In return for their entitlements, the SWP contractors committed to pay a proportional share of the costs of developing, operating, and maintaining the SWP. The SWP contractors agreed to make this proportional payment regardless of the amount of available water. In negotiating the long-term contracts, DWR and the SWP contractors anticipated possible future shortages. During the 1980s, DWR was able to satisfy Table A requests because demands by urban SWP contractors increased more slowly than expected. DWR regularly had surplus water to deliver. However, in the late 1980s, SWP contractors were requesting Table A amounts at levels higher than available water such that there was no surplus water to schedule. Since then, DWR has only delivered “unscheduled surplus” water, which is water that unexpectedly becomes available over what is required to meet Table A demands. Many of the facilities originally designated to make up the SWP were not completed. During the drought, DWR relied on article 18, subdivision (a) of the water contracts to reduce significantly amounts delivered to agricultural SWP contractors. However, under article 22, agricultural SWP contractors were required to pay DWR for SWP costs even when they received little or no water. Many agricultural SWP contractors experienced severe financial hardships.

In 1994, DWR and SWP contractor representatives engaged in mediated negotiations in an effort to settle allocation disputes under the long-term water supply contracts. The negotiations soon went beyond articles 18 and 21 into a discussion of revisions to the long-term water supply contracts. In December 1994, in Monterey, the parties reached a comprehensive agreement known as the Monterey Agreement. The Monterey Agreement established 14 principles designed to resolve water allocation disputes and operational issues of the SWP. These principles can be distilled to three general goals: increase the reliability of existing water supplies, provide stronger financial management of the SWP, and increase water management flexibility. In addition, the Monterey Amendment transferred the 20,000 acres of farmland, the Kern Fan Element, previously considered as the location of the Kern Water Bank, to local Kern County entities so that they could develop the groundwater bank. To accomplish this, the Monterey Amendment added articles 52 and 53 to the long-term water contracts. In December 1995, a group of plaintiffs, including the Planning and Conservation League (PCL), filed suit challenging the sufficiency of the Monterey Agreement EIR. Among many objections, the PCL plaintiffs argued the Monterey Agreement EIR violated the California Environmental Quality Act (CEQA; Pub. Resources Code, § 21000 et seq.) and the contracts were an invalid transfer in violation of the Water Code. They also alleged DWR, not the two SWP contractors, should have served as the lead agency for purposes of preparing the Monterey Agreement EIR. The trial court entered a final judgment denying the plaintiffs‘ application for a writ of mandate to set aside the Monterey Agreement EIR. The court concluded the two SWP contractors were not the proper lead agency under CEQA, but upheld the adequacy of the environmental impact report. In 2000, the appellate court reversed, holding that Monterey Agreement EIR invalid because it was prepared by the wrong lead agency and because it failed to discuss implementation of article 18, subdivision (b) as a “no project” alternative.”

The parties engaged in extensive mediated settlement discussions, which led to a comprehensive settlement agreement. Among other things, the settlement agreement provided that the Kern Water Bank Authority, the public entity created to operate the Kern Water Bank, would retain title to the Kern Water Bank and DWR would study its impacts in the Monterey Plus EIR. On February 1, 2010, DWR certified the Monterey Plus EIR. Central Delta filed a first amended petition for writ of mandate and complaint for declaratory and injunctive relief. The first cause of action challenged the sufficiency of the Monterey Plus EIR. The second and third causes of action challenged the validity of the Monterey Plus Amendment. Two Kern County water districts, Rosedale-Rio Bravo Water Storage District and Buena Vista Water Storage District (collectively, Rosedale), also filed suit alleging CEQA violations. The court issued a ruling on the appropriate remedy and a limited writ of mandate (the 2014 Writ). The 2014 Writ severed the Kern Water Bank operations from DWR operations, ordered DWR to decertify the Monterey Plus EIR, and directed DWR to revise the report only as necessary to address the Kern Water Bank issue.

DWR prepared the Revised EIR in compliance with the 2014 Writ. In April 2016, DWR released the draft Revised EIR. The draft Revised EIR identified measures to mitigate the potential impacts to local groundwater wells due to Kern Water Bank's groundwater extraction with the Kern Water Bank Authority adopted in a long-term operations plan. In September 2016, DWR certified the Revised EIR, made findings and determinations, adopted a mitigation monitoring and report program and, as required by the 2014 Writ, directed DWR to carry out the proposed project by continuing the use and operation of the Kern Water Bank by the Kern Water Bank Authority. Thereafter, DWR filed its return to the 2014 Writ. The Central Delta plaintiffs did not object to the discharge of the 2014 Writ, but stated their intent, along with other parties including Food Safety, to file a new suit challenging the Revised EIR. Subsequently, Food Safety and other parties filed a petition for writ of mandate. Following a hearing, in October 2017 the court issued an order discharging the 2014 Writ and denying Food Safety's petition challenging the Revised EIR.

Issue:

Did the trial court err in granting a limited CEQA remedy in the form of the 2014 Writ?

Answer:

No.

Conclusion:

The trial court found that the CEQA error was limited to the potential impacts from the Kern Water Bank operations and determined that portion of the environmental impact report could be severed from the rest of the SWP. The court ordered DWR to revise the Monterey Plus EIR to correct the deficiency and to “make a new determination regarding whether to continue the use and operation of the Kern Water Bank by [Kern Water Bank Authority].” In addition, the court allowed DWR to continue operating the SWP pursuant to the contracts and allowed the authority to continue operating the Kern Water Bank while DWR revised the Monterey Plus EIR. Central Delta argued the trial court did not have discretion to leave project approvals in place after finding the Monterey Plus EIR was deficient in its analysis of the transfer, use, and operation of the Kern Water Bank. According to Central Delta, a writ must void any approvals that commit an agency to a definite course of action that has not been subject to proper environmental review, citing Save Tara v. City of West Hollywood. However, in Save Tara the lead agency approved an agreement allowing private development without preparing an environmental impact report. The Supreme Court held a report was required and under these circumstances ordered the underlying project approvals voided. The court did not consider the trial court's discretion to leave project approvals in place after an environmental impact report is prepared and the court finds some defects in the report. Here, the trial court exercised its discretion under Public Resources Code section 21168.9 and the appellate court did not find any abuse of that discretion.