Abatti v. Imperial Irrigation Dist.

Citation52 Cal.App.5th 236,266 Cal.Rptr.3d 26
Decision Date16 July 2020
Docket NumberD072850
CourtCalifornia Court of Appeals
Parties Michael ABATTI, as Trustee, etc., et al., Plaintiffs and Appellants, v. IMPERIAL IRRIGATION DISTRICT, Defendant and Appellant.

52 Cal.App.5th 236
266 Cal.Rptr.3d 26

Michael ABATTI, as Trustee, etc., et al., Plaintiffs and Appellants,
v.
IMPERIAL IRRIGATION DISTRICT, Defendant and Appellant.

D072850

Court of Appeal, Fourth District, Division 1, California.

Filed July 16, 2020
As Modified on Denial of Rehearing August 5, 2020


Musick, Peeler & Garrett, Theodore A. Chester, Jr., Cheryl A. Orr, Los Angeles; Caldarelli Hejmanowski Page & Leer, Lee E. Hejmanowski and Marisa Janine-Page, San Diego, for Plaintiffs and Appellants.

Sutherland & Gerber and Lowell F. Sutherland for Imperial County Farm Bureau, Imperial Valley Vegetable Growers Association, and Imperial Valley Water as Amici Curiae on behalf of Plaintiffs and Appellants.

Nossaman, Frederic A. Fudacz, Jennifer L. Meeker, Gina R. Nicholls and Tara E. Paul, Los Angeles, for Defendant and Appellant.

O'Laughlin & Paris, Tim O'Laughlin, Chico, Valerie C. Kincaid and Ryan E. Stager for San Joaquin Tributaries Authority as Amicus Curiae on behalf of Defendant and Appellant.

Allen Matkins Leck Gamble Mallory & Natsis and David L. Osias, San Diego, for Imperial Valley Coalition for the Fair Sharing of Water as Amicus Curiae on behalf of Defendant and Appellant.

Somach Simmons & Dunn, Andrew M. Hitchings, Sacramento, and Alyson E. Ackerman for Association of California Water Agencies as Amicus Curiae on behalf of Defendant and Appellant.

Xavier Becerra, Attorney General, Robert W. Byrne, Assistant Attorney General, Tracy L. Winsor and Daniel M. Fuchs, Deputy Attorneys General, for State Water Resources Control Board as Amicus Curiae on behalf of Defendant and Appellant.

AARON, J.

52 Cal.App.5th 245

INTRODUCTION

The Imperial Irrigation District (District) supplies water from the Colorado River system to California's Imperial Valley. As an irrigation district, the

52 Cal.App.5th 246

District holds its water rights in trust for the benefit of its users, is responsible for managing the water supply for irrigation and other beneficial uses, and is empowered by California law to do so. District water users include municipal, industrial, and agricultural users, or farmers.1

In 2013, the District implemented an equitable distribution plan with an annual water apportionment for each category of users (2013 EDP). Michael Abatti presently owns and farms land in the Imperial Valley. Abatti, as trustee of the Michael and Kerri Abatti Family Trust, and Mike Abatti Farms, LLC (collectively, Abatti) filed a petition for writ of mandate to invalidate the 2013 EDP on the grounds that, among other things, the farmers possess water rights that entitle them to receive water sufficient to meet their reasonable irrigation needs—and the plan unlawfully and inequitably takes away these rights. Abatti's position, fairly construed, is that farmers are entitled to receive the amounts of water that they have historically used to irrigate their crops.2

266 Cal.Rptr.3d 36

The District contended that the farmers possess a right to water service, but not to specific amounts of water; that the District is required to distribute water equitably to all users, not just to farmers; and that the 2013 EDP allows the District to do so, while fulfilling the District's other obligations, such as conservation.

The superior court granted the petition. The court found that farmers "own the equitable and beneficial interest" in the District's water rights, which is appurtenant to their lands and "is a constitutionally protected property right." The court found that the District abused its discretion in prioritizing other users over farmers, taking water rights away from farmers and transferring those rights to other users, and failing to use historical apportionment to determine the quantities of water that farmers would receive under the plan. The court entered a declaratory judgment that prohibits the District from distributing water in the manner set forth in the 2013 EDP, and requires the District to use a historical method for any apportionment of water to farmers.

The District appeals from the judgment and writ of mandate. The District maintains that the farmers' interest is a right to water service, only, and

52 Cal.App.5th 247

contends that it did not abuse its discretion in setting the annual apportionment of water among its various categories of users or in adopting its agricultural allocation. The District further contends that the superior court erred by declaring that the District is required to distribute water to farmers based on historical use. Abatti cross-appeals from an earlier order sustaining the District's demurrer to his claims that the District's adoption of the 2013 EDP constitutes a breach of its fiduciary duty to farmers and a taking. The parties also raise procedural arguments.

We conclude that the farmers within the District possess an equitable and beneficial interest in the District's water rights, which is appurtenant to their lands, and that this interest consists of a right to water service; the District retains discretion to modify service consistent with its duties to manage and distribute water equitably for all categories of users served by the District. Although the superior court acknowledged certain of these principles, its rulings reflect that it took an unduly narrow view of the District's purposes, thus failing to account for the District's broader obligations, and took an overly expansive view of the rights of farmers.

We further conclude that although the court correctly found that the District abused its discretion in the manner in which it prioritizes water users in the 2013 EDP, the court erred to the extent that it found any other abuse of discretion on the part of the District in its adoption of the 2013 EDP. The court also erred by granting declaratory relief that usurps the District's authority, and that is based in part on flawed findings. The court properly dismissed Abatti's breach of fiduciary duty and taking claims. Finally, we conclude that the parties' procedural arguments lack merit.

We emphasize that our conclusions are limited in scope. In order to resolve the issues raised by Abatti's challenge to the

266 Cal.Rptr.3d 37

2013 EDP, we must first determine the nature of the farmers' interest in the District's water rights. But we focus solely on the District, and take no position on other irrigation districts or the rights of their users. We analyze only the discretion exercised by the District in adopting the 2013 EDP, do not dictate the District's future exercise of that discretion—including as to any action taken in response to this opinion, and reject the superior court's attempt to do so. And we offer no opinion as to potential claims that a user might bring based upon such future actions by the District.

We affirm the judgment and writ of mandate as to the superior court's ruling that the District abused its discretion in how it prioritizes apportionment among categories of water users in the 2013 EDP, and affirm the dismissal of the breach of fiduciary duty and taking claims. We reverse the judgment and writ of mandate in all other respects, and remand with directions.

52 Cal.App.5th 248

FACTUAL AND PROCEDURAL BACKGROUND3

The District "is the sole source of fresh water for the Imperial Valley, and all of that water comes from the Colorado River." ( Quantification Settlement Agreement Cases (2011) 201 Cal.App.4th 758, 784, 134 Cal.Rptr.3d 274 ( QSA Cases ).) Approximately 97 percent of the water that the District distributes is used for agriculture. Pursuant to the Quantification Settlement Agreement (QSA), a set of agreements reached in 2003 among the District, other Southern California water entities, and the government, which resolved long-standing water rights disputes, the District's entitlement was capped at 3.1 million acre-feet, subject to an overrun policy.4 ( Id. at p. 789, 134 Cal.Rptr.3d 274 ) Following the QSA, the District instituted fallowing and efficiency-based conservation measures, retained experts to assess distribution in shortage situations, and eventually adopted an equitable distribution plan (EDP) for water shortage conditions, which apportioned water by category of user and was revised multiple times. In October 2013, the District's Board adopted the 2013 EDP, which unlike previous EDPs, provides for an annual apportionment that does not require a shortage as a precondition to its implementation and is thus intended to be permanent. Pursuant to the 2013 EDP, water would be apportioned first to non-agricultural users, with remaining amounts apportioned among farmers using either a straight line method or another method chosen by the District. Farmers would be able to share water within farm units, and buy and sell water in a clearinghouse. At the same meeting, the Board approved a hybrid historical/straight line agricultural apportionment for 2014. As we discuss post , this meant that half the apportionment would be based on historical use, while the other half was a set amount of water per acre.

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