BILL ANALYSIS                                                                                                                                                                                                    





                             SENATE JUDICIARY COMMITTEE
                         Senator Hannah-Beth Jackson, Chair
                             2015-2016  Regular  Session


          AB 2446 (Gordon)
          Version: May 10, 2016
          Hearing Date: June 28, 2016
          Fiscal: Yes
          Urgency: No
          NR   


                                        SUBJECT
                                           
                State Water Resources Control Board:  judicial review

                                      DESCRIPTION 

          This bill would expand the authority of the State Water  
          Resources Control Board (SWRCB), and to a lesser extent regional  
          boards, to issue or not issue a stay pending board proceedings,  
          prohibit certain judicial challenges to water board decisions  
          until after the administrative process has run its course, and  
          clarifies two specified evidentiary requirements.

                                      BACKGROUND  

          Under the Porter-Cologne Water Quality Control Act, the SWRCB  
          has ultimate authority to regulate water quality in the state.   
          Porter-Cologne also established nine regional water boards to  
          oversee water quality on a day-to-day and regional basis.  Among  
          the key tools available to the state and regional water boards  
          are the power to issue or deny water discharge permits, issue  
          clean-up and cease and desist orders to polluters, and issue  
          stays against harmful conduct and discharges while a matter is  
          pending before the board.   

          Existing law sets out prescribed procedures and timelines that  
          the state and regional water boards must conform to, including  
          noticing hearings, making decisions, and issuing orders designed  
          to protect water quality.  Existing law also sets forth  
          procedures and timelines that persons aggrieved by an order or  
          decision must conform to when challenging those orders and  
          decisions.   The author and sponsor argue that ambiguities in  








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          some provisions of current law have resulted in the Water Boards  
          receiving, and having to defend against, premature or  
          unnecessary lawsuits. In these cases, the Water Boards expend  
          limited resources to defend against these lawsuits. 

          This bill, sponsored by the SWRCB, seeks to ensure that the  
          Water Boards are able to act in a timely fashion to protect  
          water supplies and prevent or mitigate environmental damage, by  
          clarifying that parties must exhaust administrative remedies  
          prior to seeking judicial relief.  

          This bill was heard by the Senate Environmental Quality  
          Committee on June 15, 2016, and passed out with a vote of 5-2. 

                                CHANGES TO EXISTING LAW
           
           Existing law  , the Porter-Cologne Water Quality Control Act,  
          provides that within 30 days of any action or failure to act by  
          a regional water board, an aggrieved person may petition the  
          State Water Board to review that action or failure to act.   
          Authorizes the State Water Board, in the case of such review and  
          upon notice and hearing, if hearing is requested, to stay in  
          whole or in part the effect of the decision and order of a  
          regional board of the State Water Board.  (Wat. Code Secs. 13320  
          and 13321.)

           Existing law  authorizes an aggrieved party, not later than 30  
          days from service of a copy of a decision or order issued by the  
          State Water Board, to file in superior court a petition for a  
          writ of mandate for review of the decision or order.  Specifies  
          that an aggrieved party must file a petition for reconsideration  
          with the State Water Board to exhaust that party's  
          administrative remedies only if the initial decision or order is  
          issued under authority delegated to an officer or employee of  
          the State Water Board and the State Water Board by regulation  
          has authorized a petition for reconsideration.  Specifies that  
          the party aggrieved by the decision of the State Water Board may  
          obtain a review of the decision or order of a regional water  
          board by filing in superior court a petition for writ of mandate  
          not later than 30 days from the date on which the State Water  
          Board denies review.  (Wat. Code Sec. 13330 (a)-(b).)
           
          Existing law  provides that if no aggrieved party petitions for a  
          writ of mandate within the time provided above, a decision or  
          order of the state board shall not be subject to review by any  







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          court.  (Wat. Code Sec. 13330 (d).) 

           Existing law  provides that every civil action brought under the  
          provisions of the Porter-Cologne Water Quality Control Act at  
          the request of the regional board or the state board shall be  
          brought by the Attorney General in the name of the people of the  
          State of California and any of those actions relating to the  
          same discharge may be joined or consolidated.  (Wat. Code Sec.  
          13361 (a).)

           Existing law  provides that in any civil action brought under the  
          provisions of the Porter-Cologne Water Quality Control Act, for  
          an injunction or temporary restraining order, it shall not be  
          necessary to allege or prove that irreparable harm will occur if  
          the injunction or restraining order is issued.  (Wat. Code Sec.  
          13361 (c).)  

           Existing law  requires the State Water Board, under the  
          California Safe Water Drinking Act, to administer provisions in  
          the Health & Safety Code that regulate drinking water.  To carry  
          out this responsibility, existing law requires the State Water  
          Board to appoint a deputy director to oversee issuance and  
          enforcement of public water system permits and authorizes the  
          deputy director to issue orders directing corrective actions if  
          the conditions of any permit, regulation, or standard is  
          violated.  Authorizes a party aggrieved by any order, within 30  
          days after service of a copy of the order, to file in superior  
          court a petition for a writ of mandate to review the order.   
          Specifies, however, that failure to file an action shall not  
          preclude a party from challenging the reasonableness or validity  
          of a decision or order in any judicial proceeding brought to  
          enforce the decision or order.  (Health & Saf. Code Sec. 116700  
          (a).) 

           Existing law  provides that in any action challenging an order or  
          decision, the evidence before the court shall consist of all  
          relevant evidence that, in the judgment of the court, should be  
          considered to effectuate and implement the provisions of the  
          Safe Drinking Water Act.  In every case, the court shall  
          exercise its independent judgment on the evidence.  (Health &  
          Saf. Code Sec. 116700 (b).)
          
          This bill  would extend a provision of existing law authorizing  
          the SWRCB-in response to a petition to review an order of a  
          regional water board, to stay the effect of a decision or order  







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          of the state or regional water board-to additionally allow the  
          SWRCB to stay an order or decision issued under authority  
          delegated to an officer or employee of the SWRCB. 

           This bill  would require the SWRCB to issue or deny the stay  
          within 90 days, or within 45 days if the request for a stay  
          relates to a water quality certification associated with a  
          hydroelectric facility requiring a license issue by the Federal  
          Energy Regulatory Commission. If the board fails to meet these  
          deadlines, the request for a stay is deemed denied.

           This bill  would authorize an aggrieved party, within 30 days of  
          any order of the SWRCB issuing or denying a stay or within 30  
          days of the board failing to issue or deny a stay, to file with  
          the superior court a petition for writ of mandate for review of  
          the board's order or lack thereof.

           This bill  would specify that in any civil action brought  
          pursuant to the Porter-Cologne Act in which a regional water  
          board or the SWRCB seeks an injunction or restraining order, it  
          shall not be necessary to allege or prove that irreparable harm  
          will occur should the temporary restraining order, preliminary  
          injunction, or permanent injunction not be issued.  

           This bill  would provide that for any order or decision of the  
          SWRCB under the Safe Drinking Water Act, if no aggrieved party  
          petitions for a writ of mandate within the 30-day period  
          authorized by the Act, the decision or order of the board is not  
          subject to review by any court.
           
                                       COMMENT
           
           1.Stated need for the bill
           
          According to the author:

            The State Water Board has identified ambiguities in some  
            provisions of current law that have resulted in the Water  
            Boards receiving, and having to defend against, premature  
            and/or unnecessary lawsuits. In these cases, the Water Boards  
            expend limited resources to defend against these lawsuits.  
            Unfortunately, some of these lawsuits are brought for the  
            purpose of delay, rather than on the merits of any Water Board  
            action. This bill seeks to ensure that the Water Boards are  
            able to act in a timely fashion to protect water supplies and  







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            prevent or mitigate environmental damage.

          According to the sponsor: 

            AB 2446 would result in increased program efficiency by  
            reducing ambiguities in statute that result in premature legal  
            challenges and substantial delays in the Water Boards'  
            abilities to take necessary and appropriate actions to protect  
            water quality.  AB 2446 would enhance the Water Boards'  
            abilities to protect public health and the environment. 

           2.Exhaustion of administrative remedies
            
           Under existing law, a state or regional water board has the  
          authority to issue or deny waste discharge permits and to take  
          actions against those who violate the conditions of the permit  
          or other laws or regulations.  For example, if a regional water  
          board issues an order to halt a permittee from discharging  
          waste, the person aggrieved - the person subject to the order -  
          may file a petition with the State Water Board for  
          "reconsideration" of a board's decision.  Only after the  
          administrative process is complete, would the aggrieved party be  
          permitted to seek a court order.  The State Water Board contends  
          that some dischargers have exploited "ambiguities" in existing  
          law to seek injunctions that delay board proceedings or seek  
          judicial review to overturn a board decision.  

          As a general rule, administrative remedies must be exhausted  
          before a party may seek judicial review.  Thus, a party who is  
          unhappy with a board decision must typically wait for the board  
          to actually take action before attempting to challenge the  
          board's decision.  Challenging a board's decision and seeking  
          remedy must first be attempted through the administrative  
          process, such as a petition for review, reconsideration, a  
          hearing, or another form of administrative adjudication, prior  
          to petitioning a court for relief.  For the author and sponsor,  
          these administrative procedures were established for a reason:  
          to seek a resolution before resorting to the courts and to  
          ensure that any potentially harmful conduct is stayed during the  
          administrative process.  This bill, consistent with the general  
          principles of administrative law, would clarify that all  
          administrative remedies must be exhausted before a party may  
          turn to the courts.  

           3.Evidentiary changes 







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           This bill would provide two clarifications with regard to SWRCB  
          actions before the court.   First, under an existing provision  
          of the Safe Drinking Water Act, when a review of the SWRCB  
          action comes before the court, "the evidence before the court  
          shall consist of all relevant evidence that, in the judgment of  
          the court, should be considered to effectuate and implement the  
          provisions [of the Safe Drinking Water Act].  In every case, the  
          court shall exercise its independent judgment on the evidence."   
          (Health & Saf. Code Sec. 116700 (b).)  This bill would delete  
          everything except the final sentence: "In every case, the court  
          shall exercise its independent judgment on the evidence."  

          The "independent judgment" standard of review, which is both the  
          existing standard and the standard proposed by this bill, is  
          usually contrasted with the "substantial evidence" standard of  
          judicial review when a court considers a petition for a writ of  
          administrative mandate.  Generally speaking, under the  
          "substantial evidence" rule, the court is more deferential to  
          the findings of the agency, asking only if the decision was  
          reasonable in light of the evidence before it.  However, the  
          "independent judgment" rule is much less deferential to the  
          agency, allowing the court to use its "independent judgement on  
          the evidence."  (See e.g. Code Civ. Proc. 1094.5 (c).)  This  
          bill would make it clear that the independent judgment rule is  
          the appropriate standard with a clear simple statement. 

          Second, this bill would clarify when a party seeking an  
          injunction needs to show "irreparable harm." As a general rule,  
          a key requirement for obtaining an injunction is to show that  
          without the injunction, the party seeking the injunction will  
          suffer "irreparable harm."  However, the Porter-Cologne Act  
          creates an exception to this rule, providing that in any civil  
          action brought under the Act in which a temporary restraining  
          order or an injunction is sought, "it shall not be necessary to  
          allege or prove at any stage of the proceeding that irreparable  
          damage will occur should the temporary restraining order,  
          preliminary injunction, or permanent injunction not be issued."  
          (Wat. Code Sec. 13361 (c).)  

          The sponsor argues that this section was intended to ensure that  
          the water boards do not need to show irreparable harm before  
          enjoining a harmful or potentially harmful contamination of the  
          water supply.  To ensure that the section will not be  
          interpreted to relieve a party seeking an injunction against the  







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          water board from showing irreparable harm,  this bill would  
          clarify that only when "a regional board or the state water  
          board" seeks an injunction is a showing of irreparable harm not  
          required.  This clarification is consistent with existing law  
          which charges the boards with protecting the state's water from  
          harm by preventing contamination.  Thus, to require the boards  
          to prove irreparable harm before it could issue an injunction to  
          prevent harm would be unreasonable.  

           4.Concerns raised to a prior version of this bill
           
          A coalition of farm groups opposed an earlier version of this  
          bill arguing that it "would significantly expand the [State  
          Water Board's] authority and discretion by circumscribing  
          judicial review of that authority."  Amendments taken on May 10,  
          2016, addressed these concerns and the coalition, save for one  
          group, removed their opposition. 

          The Turlock Irrigation District, in its letter of opposition  
          from April 18, 2016, wrote: 

            Under the federal Clean Water Act Section 401, a federal  
            agency such as Federal Energy Regulation Commission cannot  
            issue a new permit or license until a state's water quality  
            agency issues a certificate - called a 401 certificate -  
            stating that the new permit or license will comply with the  
            applicable water quality requirements.  In California, the  
            SWRCB issues 401 certificates for hydroelectric projects.  The  
            SWRCB has delegated the author to issue these certificates to  
            its Executive Director, who can issue certificates without any  
            public process.  These certificates may cost tens of millions  
            of dollars, including fish passage and increased river flows.   
            Project owners [?] can seek reconsideration by the SWRCB  
            itself of a 401 certificate issued by its Executive Director,  
            but there is no deadline for the SWRCB to complete  
            reconsideration. [?] In its current form, AB 2446 would  
            require a hydroelectric project owner to wait until the SWRCB  
            itself completes its reconsideration before going to court.  

          It appears as though the hydroelectric permitting process falls  
          under Division 2 of the Water Code, while this bill would apply  
          to proceedings under Division 7 of the Water Code.  Thus, this  
          bill would arguably not have any effect on the Turlock  
          Irrigation District's ability to enjoin the water right  
          adjudicatory proceedings noted in its letter.  







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           Support  :  Sierra Club California

           Opposition  :  The Turlock Irrigation District  
           

                                        HISTORY
           
           Source  :  State Water Resources Control Board

           Related Pending Legislation  : None Known

           Prior Legislation  : None Known

           Prior Vote  :

          Senate Environmental Quality Committee (Ayes 5, Noes 2)
          Assembly Floor (Ayes 50, Noes 23)
          Assembly Appropriations Committee (Ayes 14, Noes 5)
          Assembly Judiciary Committee (Ayes 6, Noes 2)

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