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Federal Reserved Groundwater and California

On November 27, 2017, the United States Supreme Court denied certiorari regarding the Ninth Circuit’s decision in Agua Caliente Band of Cahuilla Indians v. Coachella Valley Water District, 849 F.3d 1262 (March 7, 2017). Thus, the Supreme Court left in place the appellate decision, which was the first to hold that an Indian tribe may claim reserved rights in groundwater resources.

The United States formed the Agua Caliente Reservation through executive orders in 1876 and 1877, with the purpose of providing a sustainable home in the Coachella Valley for the Agua Caliente Band of Cahuilla Indians. Surface water in the area is limited to relatively small quantities in the Whitewater River System, so that the vast majority of local water supplies are derived from groundwater. Production and use of groundwater by local cities and agriculture have resulted in cumulative overdraft of the Coachella Valley Basin by approximately 5.5 million acre-feet since the 1980s. Historically, the Agua Caliente Tribe has not produced groundwater directly from the Basin, but has purchased water (including groundwater, surface water and imported water supplies) from the Coachella Valley Water District (CVWD) to meet its needs.

In 2013, the Tribe filed an action for declaratory and injunctive relief against the two largest producers of groundwater from the Basin, CVWD and Desert Water Agency (DWA). The parties and court divided the litigation into three phases, the first of which concerned whether the Tribe holds reserved groundwater rights and resulted in the decisions of the Ninth Circuit and Supreme Court.

As recognized in a long line of cases, when the United States reserves lands from the public domain for specific purposes, that reservation impliedly includes water resources that are necessary to accomplish its purposes. See United States v. New Mexico, 438 U.S. 696, 701 (1978); Cappaert v. United States, 426 U.S. 128, 138 (1976); Arizona v. California, 373 U.S. 546, 600 (1963); Winters v. United States, 207 U.S. 564, 575-78 (1908). The reservation of land and water rights for federal purposes may be for Indian, military, forestry or other purposes. Importantly for the development of water resources in the western states, reserved rights vest on the date of the reservation and are superior to the rights of subsequent appropriators under state law.

Although the doctrine of federal reserved water rights has been established for over 100 years, no federal appellate court had ever directly considered whether the United States could reserve rights in groundwater as well as surface water. The Ninth Circuit held that there is no meaningful distinction between the two sources of water when considering the achievement of federal purposes, and so extended the possibility of reserved rights to groundwater. CVWD and DWA argued that it was unnecessary for the court to recognize federal reserved rights for the Tribe in the Basin, because California law would provide correlative, overlying groundwater rights for the Tribe. The Ninth Circuit disagreed, noting that reserved rights are a creature of federal law and thus preempt conflicting state laws.

With the denial of review by the Supreme Court, the decision of the Ninth Circuit effectively ends the question of whether federal reserved rights may extend to groundwater resources in the affirmative. While it is possible that another appellate circuit could disagree and force resolution by the Supreme Court, that appears unlikely. Thus, the decision represents a significant victory for Indian and other federal reservations across the United States.

Within California, the decision means that CVWD and DWA may have less groundwater to allocate between themselves and other users in the Coachella Valley Basin. As those agencies seek to comply with the Sustainable Groundwater Management Act of 2014, they will need to decrease their use of groundwater from the Basin, increase recharge with imported supplies or both. While the Tribe’s reserved rights will be quantified in a future phase of the litigation, the decision of the Ninth Circuit can be expected to result in greater need for imported water supplies by CVWD and DWA. That will increase demands for water from the state’s water conveyance infrastructures, including those which transport water from the Colorado and Sacramento Rivers. Thus, it was not surprising that CVWD approved its participation in the California WaterFix by a board action on October 10, 2017.

Given the interconnected nature of California’s water system, pressures in one Basin often create ripple effects across the state. Those effects can be negative, in that deficits in one area can lead to higher prices in other areas or, if prices are not allowed to operate effectively, shortages. Those effects can also be positive, in that the state can resolve local water deficits on a statewide level, especially during wetter years.

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H2O4 Texas and Jackson Walker LLP

My firm Jackson Walker LLP was a member of the H2O4 Texas Coalition that helped support implementation of the Texas State Water Plan through creation of SWIFT. Administered by the Texas Water Development Board, that fund provides low-interest loans to local and regional governments for the development of water resources and infrastructure. H2O4 Texas made a series of videos about their efforts and were kind enough to mention our involvement.

 

 

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Temperance Flat Reservoir Update

Supporters of Temperance Flat Reservoir have published a new video promoting this water storage project on the San Joaquin River. In August 2017, the San Joaquin Valley Water Infrastructure Authority filed an application with the California Department of Water Resources (DWR) for $1.3 billion in funding from Proposition 1. DWR is expected to issue a decision in the second quarter of 2018 regarding which water storage projects will receive funding. In the meantime, the video offers a summary of, and advocacy for, the project.

Note: The author of this blog has no opinion on Temperance Flat Reservoir.

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Mutual Water Companies in the California Legislature 2016

I am happy to report that the California Legislature did no harm to mutual water companies in 2016. Given the past few sessions, that should be considered a positive outcome.

The only bill specifically naming mutual water companies that was passed by the Legislature, Senate Bill 1328, was vetoed by Governor Brown on September 24, 2016. That bill would have allowed the State Water Resources Control Board (SWRCB) to provide grants from the Greenhouse Gas Reduction Fund to implement drinking water, wastewater, water reuse and stormwater projects that were intended to decrease demand for fossil fuels needed to pump, transport and treat water. Named beneficiaries were public agencies, nonprofit organizations, public utilities and mutual water companies. It was good that mutuals and public utilities would have qualified for grant funding along with public agencies, and that the Legislature recognized the important role private water companies play in delivering water and wastewater services in California.

Governor Brown’s veto statement referenced a desire to prevent duplicative programs. He directed the Resources Agency to work with the SWRCB to include stormwater projects in the Urban Greening Program. Since SB 1328 was unlikely to provide a significant source of funds for private water companies, the veto can be considered neutral in its effect.

The Legislature did pass a number of bills which will affect the water supplies used by mutual water companies, but since those bills will impact all water organizations and users, I will address them in future posts.

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GAO Report Finds USEPA Violated Law in Promoting Clean Water Rule

The U.S. Government Accountability Office released a report today finding that two social media campaigns operated by the U.S. Environmental Protection Agency violated federal laws against publicity, propaganda and grassroots lobbying by the agency. The violations occurred as part of USEPA’s efforts to adopt the Clean Water Rule defining the scope of “waters of the United States” under the federal Clean Water Act.

For a more detailed analysis of the report, you can see my article contained in the December 2015 issue of Global Water Intelligence, which will be published later this week.