City of Santa Maria v. Adam

• Decision Date: 21 November 2012
• Docket Number: H034362,No. H032750,H033544,H035056.,H032750
• Citation: 211 Cal.App.4th 266,149 Cal.Rptr.3d 491
• Parties: CITY OF SANTA MARIA et al., Cross-complainants, Cross-defendants and Respondents, v. Richard E. ADAM et al., Cross-defendants, Cross-complainants and Appellants; Golden State Water Company et al., Cross-defendants, Cross-complainants and Respondents; Nipomo Community Services District et al., Cross-defendants and Respondents. [And three other cases.].
• Court: California Court of Appeals Court of Appeals

211 Cal.App.4th 266

149 Cal.Rptr.3d 491

2012 Daily Journal D.A.R. 15,791

CITY OF SANTA MARIA et al., Cross-complainants, Cross-defendants and Respondents,

v. Richard E. ADAM et al., Cross-defendants, Cross-complainants and Appellants;Golden State Water Company et al., Cross-defendants, Cross-complainants and Respondents;Nipomo Community Services District et al., Cross-defendants and Respondents.[And three other cases.^*].

No. H032750, H033544, H034362, H035056.

Court of Appeal, Sixth District, California.

Nov. 21, 2012.

Clifford & Brown, Richard G. Zimmer, Bakersfield, E. Stewart Johnston, for Cross-defendant, Cross-complainant and Appellant: Richard E. Adam et al. (Landowner Group Parties).

Frame & Matsumoto, Ted R. Frame, Coalinga, for Cross-defendant, Cross-complainant and Appellant: Edward Wineman et al. (The Wineman Parties).

Best Best & Krieger, Jeffrey V. Dunn, Irvine, Eric L. Garner, Riverside, Jill N. Willis, Los Angeles, for Cross-complainant, Cross-defendant and Respondent: City of Santa Maria et al.

Brownstein Hyatt Farber Schreck, Robert J. Saperstein, Santa Barbara, for Cross-defendant, Cross-complainant and Respondent: Golden State Water Company et al.

Arnold Bleuel et al., Robert S. Krimmer, Oxnard, Brownstein Hyatt Farber Schreck, Robert J. Saperstein, Santa Barbara, for Cross-defendant, and Respondent: Rural Water Company.

Richards Watson & Gershon, James L. Markman, Brea, for Cross-defendant, and Respondent: Nipomo Community Services District et al.

Baker Manock & Jensen, Christopher L. Campbell, Grace I. Liu, Amanda M. Neal, Fresno, Nossaman, Guthner et al., Henry S. Weinstock, Los Angeles, for Cross-defendant, and Respondent: City of Guadalupe, City of Pismo Beach et al.

Baker Manock & Jensen, Christopher L. Campbell, Fresno, Burke Williams & Sorensen, Mark J. Mulkerin, Santa Ana, for Cross-defendant, and Respondent: City of Guadalupe.

Kronick, Moskovitz, Tiedemann & Girard, Janet K. Goldsmith, Sacramento, for Cross-defendant, and Respondent: County of San Benito et al.

County Counsel, Kevin E. Ready, Sr., Santa Barbara, Stephen D. Underwood, Santa Maria, for Cross-defendant, and Respondent: County of Santa Barbara et al.

Nossaman, Guthner et al., Henry S. Weinstock, Los Angeles, for Cross-defendants, and Respondents: City of Grover Beach, City of Arroyo Grande, Oceano Community Services District.

PREMO, Acting P.J.

This appeal concerns rights to groundwater contained in the Santa Maria Valley Groundwater Basin (Basin). The Basin suffered severe water shortages beginning around the 1930's but the importation of water from outside the watershed and the local construction of dams and reservoirs relieved the historical water shortage. As a result, groundwater levels have been relatively stable for the last 30 years or so. Nevertheless, there is concern that aging reclamation facilities and growing population could lead to more shortages in the future. This litigation was commenced to identify and prioritize the water rights held by the many users of Basin groundwater. Most of the case was resolved by an agreement (Stipulation) among the Santa Maria Valley Water Conservation District (District), local cities and water companies (public water producers), and most of the owners of land overlying the Basin. The Stipulation contains a plan, referred to as a physical solution, which resolves conflicting water rights claims and allocates the various components of the groundwater (native groundwater, return flows of imported water, and salvaged water) among the stipulating parties. It also sets up a comprehensive Basin-wide groundwater management program that calls for continuing judicial oversight.

Appellants are two groups of landowners, mostly farmers, identified as the Landowner Group (the LOG parties) and the Wineman parties, who extract groundwater for agricultural use upon their lands. Respondents are public water producers that pump groundwater for municipal and industrial use by their citizens and customers.¹ Appellants did not join the Stipulation and went to trial against respondents in an effort to quiet title to their prior rights to water in the Basin. Appellants also objected to terms in the Stipulation that they claim affected them.

The trial court approved the Stipulation and made it part of the final judgment. The court rejected appellants' quiet title claims, finding that two of the public water producers had perfected prescriptive rights in the Basin's native groundwater. The court recognized that appellants might have preserved a prior right to some volume of groundwater by continuing to pump during the prescriptive period but, because appellants had been unable to prove the amount of water they had pumped in the past, the court concluded that the quiet title remedy was not available.

On appeal, appellants challenge the trial court's approval of the Stipulation, arguing that the physical solution was unnecessary because there is no present water shortage. They attack the sufficiency of the evidence in support of the award of prescriptive rights and argue, in the alternative, that any prescriptive rights acquired years ago have been lost by nonuse. Appellants also maintain that the trial court erred in refusing to declare their overlying rights to be paramount and in its allocation of return flows and salvaged water to respondents. We will conclude as follows:

(1) The trial court properly exercised its equitable powers to approve the physical solution proposed by the stipulating parties. The present existence of a water shortage is not a prerequisite to imposition of a physical solution.

(2) The evidence is sufficient to support the trial court's finding that Santa Maria and GSWC have perfected prescriptive rights, giving these public water producers a prior right to a specified volume of groundwater in the event of a future water shortage. Although recent water surpluses make it unnecessary to assert that priority, the prescriptive rights have not been extinguished by nonuse. (Civ.Code, § 811, subd. 4.) The right is the right to take groundwater; disuse occurs only when the holder of the right stops taking the water.

(3) Because there is no present need to allocate the native groundwater, it is unnecessary to quantify appellants' overlying rights. Appellants are entitled to a judgment declaring their overlying rights to be prior to all appropriative rights in the native groundwater, less the volume to which Santa Maria and GSWC are entitled pursuant to their prescriptive rights.

(4) The trial court did not err in approving the stipulating parties' allocation of return flows and salvaged water. Appellants have no claim to either. We do find, however, that the judgment must be clarified to insure that respondents' priority right to the salvaged water does not exceed the amount of water actually saved.

We reject the remainder of appellants' arguments, reverse the judgment, and remand with directions as specified below.

I. Water Law Principles

The California Constitution sets general state water policy. The 1928 amendment to the California Constitution, now article X, section 2 (article X, section 2),² limits all water rights in this state “to reasonable and beneficial uses.” ( City of Barstow v. Mojave Water Agency (2000) 23 Cal.4th 1224, 1241, 99 Cal.Rptr.2d 294, 5 P.3d 853( Mojave ); see also Wat.Code, § 100.) Individuals may have a right to use water but “[a]t least since 1928 when the predecessor to article X section 2 of the California Constitution was adopted, there [has been] no private ownership of groundwater. ( State of California v. Superior Court (2000) 78 Cal.App.4th 1019, 1023, 1025 .) The State of California owns all of the groundwater in California, not as a proprietary owner, but in a manner that empowers it to supervise and regulate water use. ( Id. at pp. 1022, 1026 .) Water rights holders have the right to ‘take and use water,’ but they do not own the water and cannot waste it. ( Id. at p. 1025 .)” ( Central and West Basin Water Replenishment Dist. v. Southern Cal. Water Co. (2003) 109 Cal.App.4th 891, 905, 135 Cal.Rptr.2d 486( Central and West Basin ); see also, Wat.Code, § 102.)

Other water policy is contained in the Water Code. Pertinent here is Water Code section 106, which provides that it is “the established policy of this State that the use of water for domestic purposes is the highest use of water and that the next highest use is for irrigation.” Municipalities are granted special legislative protection by Water Code section 106.5, which states that it is “the established policy of this State that the right of a municipality to acquire and hold rights to the use of water should be protected to the fullest extent necessary for existing and future uses....” Surface water is subject to a statutory system of permits and licenses regulating its appropriation. (Wat.Code, § 1200.) There is no statewide system for allocating rights in groundwater. The Legislature has left that to local government or, as here, to adjudication by the courts. ( O.W.L. Foundation v. City of Rohnert Park (2008) 168 Cal.App.4th 568, 587–588, 86 Cal.Rptr.3d 1.)

“Courts typically classify water rights in an underground basin as overlying, appropriative, or prescriptive.” ( Mojave, supra, 23 Cal.4th at p. 1240, 99 Cal.Rptr.2d 294, 5 P.3d 853.) The overlying right, like the riparian right, is associated with the ownership of land. “Overlying rights are special rights to use groundwater under the owner's property.” ( Id. at p. 1237, fn. 7, 99 Cal.Rptr.2d 294, 5 P.3d 853.) Appropriative rights, on the other hand, are not derived from land ownership but depend upon the actual taking of water. “Public interest requires that there be the greatest number of beneficial users which the supply can yield, and water may be appropriated for beneficial use subject to the rights of those who have a lawful priority [citation]. Any water not needed for the reasonable beneficial use of those...