BILL ANALYSIS Ó
AB 1390
Page 1
Date of Hearing: April 28, 2015
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
AB 1390
(Alejo) - As Amended March 26, 2015
As Proposed to be Amended
SUBJECT: Groundwater: adjudication
KEY ISSUES:
1)How many lawyers does it take to adjudicate a groundwater
basin?
2)Should procedures for SEEKING AND obtaining a basin-wide
groundwater ADJUDICATION BE streamined, so song as the new
procedures respect due process rights of all affected persons?
SYNOPSIS
According to the author, this bill will "streamline" the
procedures for adjudicating a groundwater basin. Last year's
Sustainable Groundwater Management Act (SGMA) requires local
agencies to develop sustainable basin-wide groundwater plans by
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2020 (or 2022 in some cases). If the local agencies fail to
develop a plan, one will be developed by the State Water
Resources Control Board. During last year's Senate Natural
Resources Committee hearings on groundwater management,
California Court of Appeal Judge Ronald Robie suggested that
even with comprehensive sustainable management plans, the state
would still need to streamline its groundwater adjudication
procedures. Governor Brown made the same point when he signed
the SGMA legislation. In that spirit, this bill would make
several changes in the manner in which basin-wide adjudications
are initiated, noticed, and conducted. Specifically, the bill
hopes to make the process more efficient by, among other things,
changing notice requirements, requiring a preliminary hearings,
making greater and earlier use of case management conferences,
limiting motions to change venue or disqualify a judge,
maximizing the use of electronic service, appointing special
masters, and having all adjudications presumptively designated
as "complex litigation." The bill in print includes a provision
that would exempt a basin adjudicated under this bill from SGMA.
However, because the bill's purpose is to streamline the
adjudication process without impacting SGMA, the author will
amend the bill in this Committee to remove that provision. The
analysis reflects the bill as proposed to be amended. The bill
is sponsored by the California Farm Bureau Federation and
supported by a coalition of business and farm organizations.
The Sierra Club, Clean Water Action, and the Community Water
Center, and other organizations either oppose or express deep
concerns about the bill. The proposed amendment appears to
address most, but not all, of those concerns. This bill passed
out of the Assembly Water, Parks, and Wildlife Committee on a
14-0 vote.
SUMMARY: Streamlines procedures used in a legal action to
obtain a basin-wide adjudication of groundwater rights.
Specifically, this bill:
1)Makes findings and declarations on the need for a more
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streamlined groundwater adjudication process and states
legislative intent to ensure that the judicial process is not
used to unnecessarily delay or thwart the goal of managing
groundwater in a sustainable manner.
2)Defines "adjudication action" to mean an action filed in
superior court to determine the rights to extract groundwater
within a basin, including, but not limited to, actions to
quiet title or an action brought to impose a physical
solution.
3)Establishes special procedures that govern all groundwater
adjudication actions and generally allows a court to do the
following: determine all rights in a groundwater basin;
declare the priority, amount, purpose of use, extraction
location, and place of use of the groundwater; impose a
"physical solution" to conflicts; expedite resolution; and
encouraging parties to use a Groundwater Sustainability Plan
(GSP) developed pursuant to SGMA as the basis of a stipulated
judgment.
4)Requires a plaintiff bringing a basin adjudication action to
name and serve as defendants all counties, special districts,
public water systems, and small water systems within the
basin; publish a specified notice; and personally appear at a
meeting of the relevant boards of supervisors to announce
filing of the action. Specifies that, together with the
filing of the complaint, the plaintiff shall draft a specified
notice and form answer to be served upon all property owners
within the basin and, after the court authorizes the action to
proceed, the plaintiff shall have the assessor send the notice
and form answer to the owners with their property tax
statements.
5)Requires the court to hold a preliminary hearing to determine
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if the case should proceed. After the preliminary hearing the
court shall either issue an order declaring that the case is
an adjudication action subject to the provisions of this bill
or dismiss the action without prejudice. Specifies that the
court may hear expert or lay testimony and allow expedited
discovery.
6)Requires the court, upon motion of any party, to transfer the
adjudication to a neutral county if a local agency is a party.
7)Limits judge disqualifications for the adjudication.
8)Defines groundwater adjudications as complex civil matters.
9)Encourages electronic service of pleadings.
10)Allows the court to convene a case management conference, as
specified, and take actions to organize the case, including by
dividing it into discrete phases.
11) Specifies that the initial basin boundaries for purposes of
the groundwater adjudication shall be the same as those found
in the Department of Water Resources publication Bulletin 118,
but allows the court to adjust the boundaries.
12)Requires parties to early and expeditiously disclose, among
other things, information regarding their preceding 10 years
of groundwater use and any other relevant, associated, water
use.
13) Sets forth requirements for expert witness identification,
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qualifications, subject matter, and reporting and allows a
court to require witnesses submit written testimony, as
specified.
14)Allows the court to appoint a special master in the
adjudication and sets forth the special master's duties,
including fact-finding, conducting mediation and settlement,
and providing draft reports to all parties.
15) Provides that if a party, or group of parties, submit a
settlement that is supported by more than 50% of the named
parties and those holding title to at least 75% of groundwater
production within the last 10 years, then the court shall
approve and give effect to the settlement.
EXISTING LAW:
1)Declares that because of the conditions prevailing in this
State the general welfare requires that the water resources of
the state shall be put to beneficial use to the fullest extent
to which they are capable, and that the waste or unreasonable
use of water be prevented, and that the conservation of such
waters is to be exercised with a view to the reasonable and
beneficial use thereof and in the interest of the people and
the public welfare. (California Constitution, Article X
Section 2.)
2)Requires local agencies, under the Sustainable Groundwater
Management Act (SGMA), to form Groundwater Sustainability
Agencies (GSAs) by June 30, 2017, in all high and medium
priority basins that have not been adjudicated. Requires GSAs
in all high and medium priority basins, as defined, to develop
and adopt Groundwater Sustainability Plans (GSPs) that provide
for the sustainable management of the groundwater basin by
January 31, 2020, or January 31, 2022, as specified. Allows
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the State Water Resources Control Board to impose an interim
plan for groundwater management if no GSA is formed by the
deadline, no GSP is adopted by the appropriate deadline, or a
GSP is adopted which the Department of Water Resources deems
insufficient. (California Water Code Section 10720 et seq.)
FISCAL EFFECT: As currently in print this bill is keyed fiscal.
COMMENTS: How many lawyers does it take to adjudicate a
groundwater basin? This is not the start of a joke. For
example, efforts to adjudicate groundwater rights in the
Antelope Valley groundwater basin have dragged on for fifteen
years. The case involves multiple cities, public agencies, and
85,000 property owners who potentially hold groundwater rights
in the basin. And, of course, more than 100 lawyers have been
listed on the case. This last statistic may hearten young
lawyers facing a bleak job market, but it is probably not the
most efficient way to make policy in a state with too little
water, too many people, and unpredictable yet inevitable periods
of drought.
According to the author, this bill will "streamline" procedures
for adjudicating water rights in a groundwater basin. Among
other things, the bill changes notice requirements, requires a
preliminary hearings, encourages initial disclosures to avoid
drawn out discovery, makes greater and earlier use of case
management conferences, limits motions to change venue or
disqualify a judge, maximizes the use of electronic service,
appoints special masters, and makes all basin-wide adjudications
presumptively designated as "complex litigation."
Sustainable Groundwater Management Act (SGMA): For the past 100
years California has had a water commission (currently called
the State Water Resources Control Board) that uses a permit
system to regulate surface waters, but it lacked a comprehensive
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regulatory approach for groundwater regulation until the passage
of SGMA last year. Instead of creating a state board or
commission, as the Legislature did in 1913 to regulate surface
waters, SGMA requires local agencies to develop "groundwater
sustainability agencies" (GSAs) that conform with state
standards, with the additional caveat that if the locals fail to
develop a groundwater plan the State Water Resources Control
Board (SWRCB) will do if for them. SGMA applies to those water
basins designated as either "high" or "medium" priority basins
subject to a chronic overdraft. As such, SGMA only applies to
127 of the state's 515 water basins. Under the timeline
established by SGMA, designated local entities in a given basin
must create Groundwater Sustainability Agencies (GSAs) by June
30 of 2017, and the GSAs in turn must develop Groundwater
Sustainability Plans (GSPs) by January 31. 2020, or January 31,
2022, depending upon the severity of overdraft. If the local
agencies fail to form a GSA, if the GSA fails to adopt a GSP, or
if the state does not approve the plan, then SWRCB will step in
and develop and implement an interim plan. The primary purpose
of the GSP is to ensure groundwater sustainability, whether by
limiting pumping or requiring more efficient uses, so that the
amount of water pumped out of the basin is less than or equal to
the rate of water returned by natural or artificial recharge.
Existing Adjudication Procedures: Prior to SGMA groundwater
rights were regulated, if at all, by "Watermasters" appointed by
the courts to oversee a court-ordered adjudication. According
to the testimony offered last year by Court of Appeal Judge
Ronald Robie during the Senate Natural Resource hearings, an
adjudication begins when a person brings a court action, often
to quite title in his or her groundwater rights and ask the
court to either limit pumping or impose a "physical solution"
that will allocate and manage water uses in order to prevent
overdraft. As Judge Robie noted, bringing a lawsuit can be a
long and complicated process because there may be thousands of
rights holders within a basin, each if with different kinds of
rights. Under California groundwater law, a person can have
"overlying rights" (by virtue of owning land over the
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groundwater), "appropriative rights" (by appropriating surplus
groundwater and transferring it to non-overlying lands), or
"prescriptive rights" (by adversely appropriating non-surplus
water for a specified period of time without a rights holder
seeking to stop it). Regardless of the type of right claimed,
the amount of water is generally based upon the right holder's
historic usage. Determining such rights depends upon any number
of factual questions, which may or may not be well-documented,
such as how much water a person put to reasonable and beneficial
use in past years, the timing of an appropriation, whether the
water appropriated was surplus or non-surplus, and whether one
claiming a prescriptive right actually appropriated the water
"adversely" and met the statutory time period. To help the
court determine these rights, the parties must usually engage in
extensive pleading and discovery.
In addition to determining complex claims to individual water
rights, the court must also resolve questions that involve
highly technical matters, such as defining the boundaries of the
basin or determining the "annual safe yield" of the basin, all
of which may require examination of extensive government and
scientific reports. Once these questions have been resolved,
the court must then develop a plan to manage the adjudicated
basin. Implementing the plan often entails appointment of a
Watermaster to manage the basin and allowing the court to retain
continuing jurisdiction. Another possibility is that the
parties will settle before any court order. The court-approved
settlement similarly sets out a management plan and, if
necessary, imposes a physical solution.
Streamlining the Existing Adjudication Process: Echoing the
concerns of Judge Robie, the author and sponsor of this bill
point to a similar list of problems and then some: the need to
determine basin boundaries; the need to serve each individual
owner in the basin; the ability of a party to delay the action
by endless motions; delay in production of evidence during
discovery, especially historical groundwater pumping data and
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historical use; and the cost in time and money that these delays
entail.
The author argues that this bill makes three changes that are
especially significant. First, the bill requires a preliminary
hearing to determine if a comprehensive adjudication is
appropriate. Second, the bill eliminates the requirement for
personal service to every property owner within the basin (which
can run to the thousands) and instead requires the plaintiff to
name as defendants the counties, special districts, public water
systems, and small water systems within the basin. Notice to
others would be provided by appearance at relevant boards of
supervisors and mailing notices (instead of personal service) to
all landowners in the basin. These notices would be included as
an enclosure in the property owner's next property tax statement
and would include a "form answer" for parties wishing to
participate. Third, the bill will require initial disclosures
of groundwater use data, thereby eliminating the need for
extensive discovery. Other significant changes include making
designating all water adjudications as "complex litigation" and
the appointment of a special master to initiate joint
fact-finding, conduct mediation and settlement, and provide
draft reports to all parties. Other reforms seek to avoid
delays by limiting the number of motions, encouraging earlier
case management conferences and stipulated judgments, and using
electronic service and filing to the maximum extent possible.
Some But Not All Concerns Addressed by Recent Amendments: Most
of the letters of opposition and concern sent to the Committee
relate to the relationship between this bill and SGMA,
especially suspicion that the sponsors seek to speed up the
adjudication process so that basins will be adjudicated before
the GSA plans are implemented. SGMA expressly exempted those
basins that were already adjudicated at the time that SGMA
became operative. (Between 22 and 24 basins have already been
adjudicated, depending upon which source one consults.) Even
though those adjudicated basins were among the 127 "high" or
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"medium" priority basins covered by SGMA, they are not subject
to SGMA or the GSA plans. As introduced, this bill would also
have additionally exempted from SGMA any basin adjudicated
between now and 2020, when the first GSA plans must be
implemented. Because SGMA only intended to exempt those basins
adjudicated at the time that SGMA was enacted, and left all
other high and medium priority basins subject to the GSA plans,
this provision in the bill would have altered SGMA. Both the
author and sponsor insist that the purpose of the bill is to
improve adjudication procedures and not change SGMA. Therefore
the author will amend the bill in this Committee to remove that
provision.
Possible Issues to be addressed if the Bill Moves Forward: Not
all of the concerns that have been raised, however, deal with
the bill's relationship with SGMA. As noted below, some
opponents criticize the bill for not adequately protecting the
interests of disadvantaged communities; for example, these
opponents support awarding attorney's fees and costs for those
who qualify as having a significant financial hardship so that
all can participate. Other concerns include the bill's failure
to provide notices in multiple languages and the requirement
that notices be sent with property tax statements, which are
only sent twice per year and are sometimes sent to escrow
companies that send the taxes, and not to the property-owning
taxpayer. Others contend that a provision in the bill allowing
a stipulated judgment if supported by 50% of parties with 75% of
groundwater production will harm smaller landowners. Groups
representing local government express concern that the bill will
impose new burdens on cities and counties, especially the
requirement that the plaintiff name cities and counties as
defendants whether the cities and counties have an interest in
the adjudication or not. The author has communicated to the
Committee that he is aware these issues and that he will
continue to work with all stakeholders to address remaining
concerns if the bill moves forward.
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ARGUMENTS IN SUPPORT: According to the author, the "goal of AB
1390 is to address the time sinks that occur in current
groundwater adjudications by clarifying the processes that must
be followed. Streamlining the process will ease the burden on
the courts, provide the parties with the most efficient
resolution possible, [and] protect individual rights, all while
appropriately integrating adjudication actions with SGMA."
The sponsor, the California Farm Bureau Federation, writes on
behalf of a coalition of business and farm organizations that
"the goal of AB 1390 is to address the time sinks that occur in
current groundwater adjudications by clarifying the processes
that must be followed." The supporter points in particular to
challenges regarding the "determination of venue, identification
of basin boundaries, disqualification of judges, notice and
service of parties, discovery and ability of the parties to
reach settlement." Supporters believe that this measure will
"reform procedural rules to improve the functioning of each of
these areas by providing tools to the court and claimants to
move more efficiently through the adjudication process, such as
trial phasing, deadlines for disclosures of water usage and
submission of written testimony and expert disclosures."
Finally, supporters contend that this bill will "facilitate and
encourage the early settlement of groundwater adjudications by
providing tools and opportunities for courts, claimants, and
local groundwater management entities to develop solutions in a
[timelier] manner."
Finally the author and supporters note that when "Governor Brown
signed the Sustainable Groundwater Management Act bill package
last year, interest in improving the groundwater adjudication
process was expressed by the Administration and authors of the
bill package. In basins impacted by the Sustainable Groundwater
Management Act, AB 1390 will work in conjunction with the Act to
clarify groundwater rights in a basin, which may be important to
the planning process, and allow the court to encourage the
parties to cooperatively develop a groundwater sustainability
plan pursuant to the Act to serve as the basis of a stipulated
judgment setting forth a physical solution for management of the
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basin."
ARGUMENTS IN OPPOSITION: The Sierra Club opposes AB 1391 in
part because it believes that the bill may undermine the efforts
of SGMA. Although the proposed amendments may address some the
Sierra Club's concerns, it does not address all of them. For
example the Sierra Club argues that provisions that permit a
stipulated judgment and settlement based on an agreement of only
50% of parties with 75% of water production for the past 10
years will adversely affect smaller landowners and leave them
without a voice in a settlement.
The California League of Conservation Voters, Clean Water
Action, and Community Water Center criticize the bill for not
adequately protecting the interests of disadvantaged
communities, failing to provide attorney's fees and costs for
those with a significant financial hardship, failing to provide
notices in multiple languages, and requiring notices to be sent
with property tax statements, which are only sent twice per year
and are sometimes sent to escrow companies that send the taxes,
and not to the property-owning taxpayer.
The California State Association of Counties and the Rural
County Representatives do not officially oppose the bill at this
time, but they write to express their considerable concern that
the bill will impose new burdens on cities and counties,
especially by requiring that the plaintiff to name cities and
counties as defendants whether the cities and counties have an
interest in the adjudication or not.
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Proposed Author Amendments: The amendments below remove
proposed Section 848, which would exempt SGMA any basins
adjudicated under the provisions of this bill.
- On page 22 delete lines 17 to 39 and on page 23 delete
lines 1-9
REGISTERED SUPPORT / OPPOSITION:
Support
Agricultural Council of California
Almond Hullers and Processors Association
Association of California Egg Farmers
California Association of Wheat Growers
California Bean Shippers Association
California Cattlemen's Association
California Chamber of Commerce
California Citrus Mutual
California Cotton Ginners Association
California Cotton Growers Association
California Dairies Inc.
California Farm Bureau Federation
California Fresh Fruit Association
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California Grain and Feed Association
California Pear Growers Association
California Seed Association
California Tomato Growers Association
Pacific Egg and Poultry Association
Western Agricultural Processors Association
Western Growers Association
Concern
California State Association of Counties
Rural County Representatives of California
Opposition (To pre-amended version)
California League of Conservation Voters (unless amended)
Clean Water Action (unless amended)
Community Water Center (unless amended)
Sierra Club
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Analysis Prepared by:Thomas Clark / JUD. / (916) 319-2334