Planning and Conservation League v. Department of Water Resources
| Citation | 100 Cal.Rptr.2d 173,83 Cal.App.4th 892 |
| Decision Date | 15 September 2000 |
| Docket Number | No. C024576.,C024576. |
| Court | California Court of Appeals |
| Parties | PLANNING AND CONSERVATION LEAGUE et al., Plaintiffs and Appellants, v. DEPARTMENT OF WATER RESOURCES, Defendant and Appellant. Central Coast Water Authority, Defendant and Respondent. |
Antonio Rossmann, San Francisco, and Roger B. Moore, for Plaintiffs and Appellants.
Thomas J. Graff, for Environmental Defense Fund as Amicus Curiae on behalf of Plaintiffs and Appellants.
Daniel E. Lungren and Bill Lockyer, Attorneys General, Roderick E. Walston, Chief Assistant Attorney General, Charles W. Getz IV and Richard M. Frank, Senior Assistant Attorneys General, Marian E. Moe, Deputy Attorney General for Defendant and Appellant.
Hatch & Parent, Susan F. Petrovich, Santa Barbara, for Defendant and Respondent.
In this case we consider the sufficiency of the environmental review of the Monterey Agreement, a statement of principles to be incorporated into an omnibus revision of the long-term contracts between the Department of Water Resources (DWR) and local water contractors governing the supply of water under the State Water Project (SWP). The Monterey Agreement was the culmination of negotiations among DWR and six local water contractors to settle disputes arising under article 18 of the long-term contracts. The agreement contemplated revisions in the methodology of allocating water among contractors and changes in the operation of certain SWP facilities, including the transfer of the Kern Fan Element, one of eight elements comprising a subsurface reservoir, the Kern Water Bank, from DWR to designated contractors. The contractors agreed to have one of their own, the Central Coast Water Authority (CCWA), serve as the lead agency under the California Environmental Quality Act (CEQA). (Pub. Resources Code, § 21000 et seq.)
In the underlying mandamus and validation proceedings, two citizens groups and a public agency challenged the selection of CCWA as the lead agency and the sufficiency of the EIR (environmental impact report) it prepared, and challenged the transfer of the Kern Fan Element.1 Plaintiffs' amended complaint sought declaratory and injunctive relief against DWR and CCWA with regard to the Monterey Agreement, which, when implemented in December 1995, altered DWR's allocation of water from the SWP to various local water agencies.
We agree with the trial court that DWR, not CCWA, has the statutory duty to serve as lead agency in assessing the environmental consequences of projects involving the SWP. We conclude the trial court erred by finding CCWA's EIR sufficient despite its failure under CEQA to discuss implementation of article 18, subdivision (b), as a "no project" alternative. The error mandates preparation of a new EIR under the direction of DWR. Finally, we conclude the trial court erroneously dismissed the challenge to DWR's transfer of title to a storage facility (the validation cause of action) and execution of amended contracts for failure to name and serve indispensable parties.
In 1951 the California Legislature authorized construction of a state water storage and delivery system. (Cal. Dept. Water Resources, Management of the California State Water Project, Bulletin 132-95 (Nov.1996) p. xxiii.)2 Eight years later, the Legislature authorized the submission for voter approval of a $1.75 billion general obligation bond issue to build the SWP. The voters subsequently approved the measure and construction thereafter commenced. (WatCode, § 12930 et seq.; DWR, Bulletin 132-93 (Sept.1994) p. 15.)
The SWP was designed to become a complex system of reservoirs, dams, power plants, pumping plants, canals, and aqueducts to deliver 4.23 million acre-feet (maf) of water annually.3 (DWR, Bulletin 132-93, supra, p. 52.) The initial facilities, consisting of 22 dams and reservoirs, 14 pumping plants, four hydroelectric power plants, three pumping-generating plants, and 550 miles of aqueducts and pipelines, delivered about one-half of the forecast goal. (Id., pp. 17, 18.)
DWR is a major developer of water resources in the state. (DWR, Bulletin 132-93, supra, p. 15.) DWR builds and operates the facilities and manages the SWP. (Ibid.) At the inception of the project, DWR entered into individual contracts with 29 agricultural and urban water suppliers throughout the state. These contractors received entitlements to an annual amount of water in return for which they repay a proportionate share of the financing and maintenance of the SWP facilities. Under the SWP, water contractors "are obligated to pay for their contractual entitlements of water" from the project, "whether the water is delivered or not." (Pending Federal Actions 8 Cal. Wat. L. & Policy Reporter 144 (April 1998).)
Key provisions in the initial long-term contracts are substantially the same. DWR committed to build those facilities that, when completed, would enable it to deliver to all contractors the total entitlements of over four maf of water. Nevertheless, the parties anticipated a possible shortage in the water supply. Article 18 of the contracts outlines the reallocation of water among contractors in years of temporary shortage and also addresses the prospect of long-term shortfalls. Because these provisions play a central role in this case, we quote the relevant portions of subsections (a) and (b) at length.
"(a) In any year in which there may occur a shortage due to drought or other temporary cause in the supply of project water available for delivery to the contractors, with the result that such supply is less than the total of the annual entitlements of all contractors for that year, the State shall, before reducing deliveries of project water to all contractors, reduce the delivery of project water to each contractor using such water for agricultural purposes by a percentage, not to exceed fifty percent (50%) in any one year or a total of one hundred percent (100%) in any series of seven consecutive years, of that portion of the contractor's annual entitlement for the respective year which is to be put to agricultural use as determined by the State...." Subdivision (a) is referred to as "the agriculture first deficiency." Although agricultural contractors suffer first during a temporary shortage under subdivision (a), they are entitled to make-up water first in times of surplus.
Subdivision (b) contemplates a more serious threat to the long term water supply. It states in relevant part: "In the event that the State is unable to construct sufficient additional conservation facilities to prevent a reduction in the minimum project yield, or if for any other reason there is a reduction in the minimum project yield, which, notwithstanding preventive or remedial measures taken or to be taken by the State, threatens a permanent shortage in the supply of project water to be made available to the contractors: [11] (1) The annual entitlements and the maximum annual entitlements of all contractors, except to the extent such entitlements may reflect established rights under the area of origin statutes,4 shall, by amendment of Table A included in Article 6(b), and of Article 7(b), respectively, be reduced proportionately by the State to the extent necessary so that the sum of the revised maximum annual entitlements of all contractors will then equal such reduced minimum project yield...."
By the late 1980's and early 1990's, the pressures on the SWP grew acute. Supplies were severely diminished as a result of a seven-year drought. Laws and regulations designed to protect the environment also limited the supply of water. Disputes arose among agricultural and urban contractors and DWR about how the limited amount of water should be distributed.
In its search for additional water supplies, DWR investigated the plausibility of establishing a water bank in Kern County. The Kern Water Bank is a subsurface reservoir designed to store surplus water from the Sacramento-San Joaquin Delta (the Delta) in the groundwater basin during wet years for extraction during dry years. (DWR, Bulletin 132-93, supra, p. 11.) One of eight elements comprising the Kern Water Bank is the Kern Fan Element. (Id., p. 170.) In 1986 DWR purchased the Kern Fan Element, planning to construct recharge basins, extraction wells, and conveyance facilities. The improvements were expected to increase storage capacity to about one maf. (Id., p. 11.) After completion of a supplemental environmental impact report, however, DWR halted all design work, preparation of contracts and feasibility work because of problems in the Delta and the adverse environmental impacts of the Kern projects. (Id., pp. 11-12.)
In 1991, as California entered a fifth year of drought, DWR organized a drought water bank allowing for large scale water transfers to ameliorate the overall water shortage. DWR prepared an extensive EIR to meet its CEQA charge. In spite of the lengthy drought, DWR was able to meet contractors' requests for delivery in each year except 1994.
Nevertheless, urban and agricultural contractors disputed DWR's implementation of article 18 of their long-term contracts. The agricultural contractors contended the shortages were not due to the drought, but rather to DWR's failure to complete the facilities originally envisioned as the SWP. The urban contractors held secret negotiations concerning article 18. Each urban contractor was obligated to execute a confidentiality agreement before participating in the meetings held to discuss revision of article 18. The threat of litigation loomed.
The warring factions agreed to negotiate a settlement of the article 18 controversy. The primary objective was to avoid litigation. Agricultural and urban contractors met with DWR in Monterey in the fall of 1994 to "search for an answer to a single— but critical—problem in managing the SWP: How to...
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