Willis v. L. A. Cnty. Waterworks Dist. No. 40 (In re Antelope Valley Groundwater Cases)

• Decision Date: 16 March 2021
• Docket Number: F082469
• Citation: 277 Cal.Rptr.3d 333,62 Cal.App.5th 992
• Court: California Court of Appeals Court of Appeals
• Parties: ANTELOPE VALLEY GROUNDWATER CASES Rebecca Lee Willis et al., Plaintiffs and Appellants, v. Los Angeles County Waterworks District No. 40 et al., Defendants, Cross-complainants and Respondents; City of Los Angeles et al., Defendants, Cross-defendants and Respondents; Antelope Valley–east Kern Water Agency, Cross-defendant, Cross-complainant and Respondent; U. S. Borax Inc. et al., Cross-defendants and Respondents.

62 Cal.App.5th 992

277 Cal.Rptr.3d 333

ANTELOPE VALLEY GROUNDWATER CASES^*

Rebecca Lee Willis et al., Plaintiffs and Appellants,

v.Los Angeles County Waterworks District No. 40 et al., Defendants, Cross-complainants and Respondents;

City of Los Angeles et al., Defendants, Cross-defendants and Respondents;

Antelope Valley–east Kern Water Agency, Cross-defendant, Cross-complainant and Respondent;

U. S. Borax Inc. et al., Cross-defendants and Respondents.

F082469

Court of Appeal, Fifth District, California.

Filed March 16, 2021

Rehearing Denied April 6, 2021

Niddrie Addams Fuller Singh, David A. Niddrie, San Diego, Victoria E. Fuller ; The Kalfayan Law Firm, Ralph B. Kalfayan ; and Gregory L. James, Independence, for Plaintiffs and Appellants.

Mary Wickham, County Counsel, Warren R. Wellen, Deputy County Counsel; Best & Krieger, Eric L. Garner, Los Angeles, Jeffrey V. Dunn, Irvine, Wendy Y. Wang, Los Angeles; Lagerlof, Thomas Bunn III, Pasadena; Murphy & Evertz, Douglas J. Evertz, Costa Mesa; Olivarez Madruga Lemieux O'Neill, W. Keith Lemieux ; and Lynne Patrice McGhee, San Jose, for Defendants, Cross-complainants and Respondents.

Michael N. Feuer, City Attorney; Joseph Brajevich ; Raymond Ilgunas, Los Angeles; Kronick, Moskovitz, Tiedemann & Girard, Eric N. Robinson, and Stanley C. Powell, Sacramento, for Defendants, Cross-defendants and Respondents.

Richards, Watson & Gershon, James L. Markman, Brea, and B. Tilden Kim, Los Angeles, for Cross-defendant, Cross-complainant and Respondent.

Venable, William M. Sloan, Tyler G. Welti, San Francisco; Kuhs & Parker, Robert G. Kuhs, Bakersfield, Bernard C. Barmann, Jr. ; Ellison, Schneider, Harris & Donlan, Christopher M. Sanders, Sacramento; Zimmer & Melton, Richard Zimmer ; Law Office of LeBeau Thelen, Bob H. Joyce ; Lesnick Prince & Pappas, Michael E. Pappas, Santa Monica, Debra E. Cardarelli, Los Angeles; Air Force Legal Operations Agency, Edwin Oyarzo; Jeffrey Bossert Clark, Assistant Attorney General, Eric Grant, Deputy Assistant Attorney General, and John L. Smeltzer for Cross-defendants and Respondents.

OPINION

PEÑA, Acting P.J.

Our Supreme Court recognized over 40 years ago that " ‘[t]he scope and technical complexity of issues concerning water resource management are unequalled by virtually any other type of activity presented to the courts. What constitutes reasonable water use is dependent upon not only the entire circumstances presented but varies as the current situation changes ... "[and the] inquiry cannot be resolved in vacuo from statewide considerations of transcendent importance." ’ " ( Environmental Defense Fund, Inc. v. East Bay Mun. Utility Dist. (1980) 26 Cal.3d 183, 194, 161 Cal.Rptr. 466, 605 P.2d 1, quoting Joslin v. Marin Mun. Water Dist. (1967) 67 Cal.2d 132, 140, 60 Cal.Rptr. 377, 429 P.2d 889.) The legal and technical complexities inherent in any water rights adjudication grows exponentially when a court is called upon to craft a comprehensive resolution that must accommodate the legally cognizable water rights claims of thousands of users who are all competing for access to an overburdened source of supply that is insufficient to meet all of the demands placed upon it. This is such a case.

Over 20 years ago, the first lawsuits were filed that ultimately evolved into this proceeding known as the Antelope Valley Groundwater Cases (AVGC). Numerous parties asserted that, without a comprehensive adjudication of all competing parties' rights to produce water from and a physical solution for the aquifer, the continuing overdraft¹ of the basin would negatively impact the health of the aquifer. After the Judicial Council ordered all then-pending lawsuits coordinated into this single adjudication proceeding, the trial court embarked on an 11-year process, employing phased proceedings, to adjudicate how to accommodate the rights and needs of competing users while protecting the threatened alluvial basin. The parties asserting competing usufructuary claims to pump water from the alluvial basin included numerous entities or agencies that pumped water to supply their thousands of customers (for largely domestic use) within the Antelope Valley Adjudication Area (AVAA), the federal government, and scores of owners of overlying lands who pumped water primarily to use for agricultural, industrial, commercial and domestic uses on their overlying properties.

The individual overlying landowners who extracted water for their farming or other operations within the AVAA included individual entities (such as Bolthouse Properties LLC and Diamond Farming Co.), medium and smaller landowners, and also included a group of 16 "mutual water companies" formed by owners of overlying lands who transferred their water rights to the company in exchange for stock in that company; those companies own, operate and maintain infrastructure to produce and deliver water from the aquifer solely to their shareholders.

Two other large groups participated in the litigation. The first group, known as the "Willis Class" (hereafter Willis), was formed by the court to represent the interests of a large group of persons who owned overlying land in the AVAA but who had not pumped water from the aquifer for any purposes. Another smaller class, known as the "Wood Class" (hereafter Wood) or the "Small Pumper Class," was formed by the court to represent the interests of another large group of overlying landowners who historically had pumped not more than 25 acre-feet per year (afy) from the aquifer during the relevant period.

Willis was named for the original class representative, Rebecca Lee Willis, who alleged she owned a 10-acre parcel with the intent to develop it in the future for a home and nursery, but which was not currently within a water district's service area, and therefore would need to use groundwater to develop her land. When Rebecca Lee Willis sold her land in 2012, the class sought and received permission to substitute David Estrada as class representative. He similarly asserted he owned land within the AVAA that he intended to develop for future uses but lacked water sources apart from groundwater. For ease of reference, we will use the original nomenclature appended to the class.

By 2009, the litigation had evolved into a complex array of dozens of separately filed actions and cross-actions, with thousands of Doe and Roe defendants. The litigation was eventually tried in six separate phases. The third phase of trial had bifurcated and scheduled for decision the issues of the basin-wide annual safe yield and whether the aquifer was in overdraft. Shortly before the "Phase 3" trial, the court consolidated all the then-pending actions. They all involved the primary core common issue—the competing claims to draw groundwater from the aquifer—which required an inter se adjudication of all claims by all parties to the available groundwater. The consolidation order specified that, while consolidation would not preclude individual parties from entering bilateral or multilateral settlements of their separate actions or claims against each other, any such settlement would be required to expressly retain the court's jurisdiction over them to enter a judgment resolving all claims to produce groundwater and to create a physical solution as necessary, and that any such bilateral or multilateral settlement would be merged into a comprehensive single judgment declaring the extent of production rights and creating a physical solution.

Prior to the Phase 3 trial, Willis settled their action against the agencies or entities named in their original complaint, as well as the other public water suppliers or agencies who were not originally named as defendants in Willis's action.² It is the import and impact of this settlement agreement (the Settlement) that forms the basis for many of Willis's claims in the present appeal. The court ultimately approved the Settlement.

After the Settlement, the court heard and decided the remaining phases of the proceedings. In Phase 3, the court determined the AVAA's basin-wide annual safe yield and found the basin was in a state of chronic overdraft because annual extractions exceeded that safe yield by a considerable margin.

In "Phase 4," the court quantified how much water was currently being pumped by each of the major competing water rights claimants, and this quantification confirmed that annual current extractions (even without considering the amounts extracted by the Small Pumper Class) were in excess of the safe yield for the AVAA basin.

The next phase, which contemplated trial of the issues of federal reserved water rights and imported water return flow rights, was interrupted by settlement discussions. Those discussions ultimately produced an agreement among the vast majority of parties in which they settled their respective groundwater claims and agreed to support the contours of a proposed plan (the "Physical Solution") designed to bring the AVAA basin into hydrological balance.

Willis and a few others did not join in support of the proposed Physical Solution. Accordingly, the court ultimately held a trial on the rationale for and efficacy of the proposed Physical Solution. Willis raised numerous objections to the proposed Physical Solution, but the court found the proposed Physical Solution was reasonable, fair and beneficial as to all parties, served the public interest, and was consistent with the Settlement, and ultimately approved the Physical Solution.

On appeal, Willis argues the judgment approving the Physical Solution must be reversed because it violates California's water rights priorities structure and California's mandate that available water be reasonably and beneficially used. Willis alternatively asserts that, even if the Physical Solution does not transgress California's guiding water law principles, the approved Physical Solution violated the separate requirement of the Settlement that any final judgment be consistent with the Settlement. Third, Willis...