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Environmental & Natural Resources Legal Alert
September 17, 2018              
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Groundwater Pumpers Beware: The Public Trust Doctrine is Lurking

The Third District Appellate Court recently issued a long-awaited decision in Environmental Law Foundation vs. State Water Resources Control Board (ELF v. SWRCB). The decision confirms the expansive scope of California's public trust doctrine by ruling that the doctrine applies to the extraction of groundwater if the extraction will adversely impact a navigable waterway. The court also determined that the 2014 enactment of the Sustainable Groundwater Management Act (SGMA) did not displace the common law duty to consider public trust interests before allowing groundwater extractions that could potentially harm a navigable waterway. The case arose in the context of a lawsuit over Siskiyou County's (the County) obligations in administering groundwater well permit and management programs with respect to the Scott River, a navigable waterway tributary to the Klamath River. The Scott River is a public trust resource.

In a case where there was no dispute that groundwater and surface water are connected, the court narrowly tailored its ruling to two questions: (1) whether the public trust doctrine is relevant to extractions of groundwater that adversely impact a navigable waterway; and if so, (2) whether the County and the State Water Resources Control Board (SWRCB) are obligated to consider the doctrine, irrespective of the enactment of SGMA. The court answered both questions in the affirmative.

The Public Trust Doctrine Applies to Groundwater Extractions Adversely Impacting a Navigable Waterway

To support its determination that the public trust doctrine applies to groundwater extractions that adversely affect navigable waterways, the court relied heavily on the seminal case on California's public trust doctrine, National Audubon Society vs. Superior Court (1983) 33 Cal.3d 419. The court cited it as "binding precedent, factually analogous, precisely on point, and indeed dispositive of the threshold question in this appeal… ." National Audubon – often referred to as the Mono Lake Case – involved a challenge to diversions of water (pursuant to appropriative water rights issued by the SWRCB) from nonnavigable creeks that would otherwise have flowed into Mono Lake, causing the lake level to drop and thereby threatening the lake's beauty and ecological value. 

The court proclaimed that the physical distinction between the diversions involved in National Audubon and the extractions involved in this case were irrelevant, and instead found the determinative factor to be the impact of the challenged activity on the public trust resource. The court determined the government's duty is to protect the public trust uses of the Scott River at risk of being impaired by groundwater pumping. While the court did not directly address the issue of whether the public trust doctrine applies to groundwater itself, the court was careful to emphasize that the trial court defined the public trust duty not as a duty to regulate groundwater but as a duty to consider the impact on the public trust resource and, where feasible, to preserve the public interest in that resource.

SGMA Did Not Eliminate the County's and SWRCB's Common Law Duty to Consider the Public Trust

After determining that the public trust doctrine applied, the court turned next to the question of whether SGMA (which authorizes groundwater management by local groundwater sustainability agencies) absolved the County and SWRCB of their duty to consider the public trust. 

Again relying on National Audubon, the court found that National Audubon's analysis of the relationship between California's appropriative water rights system and the public trust doctrine is equally applicable to the relationship between the public trust doctrine and SGMA. Since the National Audubon court concluded that the appropriative water rights system did not occupy the field to the exclusion of the public trust doctrine, and SGMA is not nearly as comprehensive as the appropriative water rights system, the appellate court rejected the County's argument that SGMA occupies the field and supplants the common law public trust duty. The court added that even if SGMA was deemed comprehensive, National Audubon instructs that the two systems can live in harmony, which is supported by language in SGMA itself, reflecting a legislative desire not to interfere with existing law. 

Why You Should Care – More Uncertainty and Greater Risk 

This decision continues a trend – developed by previous legislative and judicial actions – of treating groundwater more like surface water, moving the regulation of California's groundwater into the realm of more modern surface water right doctrines. That trend started with SGMA's enactment in late 2014, which increased regulation of groundwater and gave the state an oversight role where it had none before. Then in early 2017, the U.S. Ninth Circuit Court of Appeals issued a landmark decision in Agua Caliente Band of Cahuilla Indians vs. Coachella Valley Water District, 849 F.3d 1262 (March 7, 2017), declaring that groundwater can be subject to a federal reserved right, a concept that had previously only been applied to surface water. The ELF v. SWRCB case has furthered the trend by extending, under certain circumstances, the application of the public trust doctrine to groundwater. 

In practical terms, this decision likely creates more questions than it answers. While the decision establishes that both the County (in this case, the local agency with regulatory authority) and the SWRCB have roles to play in applying the public trust doctrine, it does not define those roles and how they interrelate, nor does it clarify the process by which the necessary predicate factual determinations can be made. In this instance, there was no dispute about whether the groundwater and surface water were connected; however, elsewhere such disputes are very likely, and a determination on that issue will be necessary to assess whether consideration of the public trust doctrine is warranted. The process by which that determination is made has the potential to generate disputes in at least three areas: (1) what constitutes a sufficient connection between groundwater and a surface stream in order to require the application of the public trust doctrine to groundwater extractions; (2) who makes that determination, who acts first, and how much deference is owed to that party in any subsequent review by the later-acting agency; and (3) if the public trust doctrine is deemed to apply based on a sufficient connection between groundwater and a surface stream, does the document that is used to comply with the California Environmental Quality Act (CEQA) need to address this issue. 

These disputes are most likely to crop up in geographical areas where it is commonly accepted (or there is strong reason to suspect) that groundwater extractions measurably impact surface water flows. Counties with responsibility for issuing well permits in these areas may feel compelled to adopt discretionary well-permitting regulations (which are at present predominantly ministerial) for wells proposed to be situated in areas where a connection between groundwater and nearby navigable surface water is known or suspected. This may, in turn, generate litigation directed at a local regulator's action (or inaction) with respect to adopting such regulations or challenges to the issuance of well permits. The decision may also result in the issuance of fewer well permits, and/or the imposition of additional conditions on the permits that are issued.

In light of the appellate court's ruling, and despite the lingering questions as to applicability, it is advisable that groundwater sustainability agencies with known conditions of connected groundwater and navigable surface water within their boundaries be careful to ensure their groundwater sustainability plans are designed to take into account public trust considerations.

Courtney A. Davis | Allen Matkins Courtney A. Davis
Senior Counsel
Environmental & Natural Resources | Land Use & Development | Real Estate | Industrial & Logistics | Infrastructure | Energy & Utilities | Real Estate Transactions
San Francisco
(415) 273-7474
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Osias David L David L. Osias
Managing Partner
Environmental & Natural Resources | Receiverships, Lenders & Special Creditor Remedies | Restructuring, Insolvency & Bankruptcy
San Diego
(619) 235-1526
(619) 233-1158 (fax)
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