Planning & Conservation League v. Department of Water Resources (2024) 98 Cal.App.5th 726
In Planning & Conservation League v. Department of Water Resources (2024) 98 Cal.App.5th 726, the Third District Court of Appeal upheld the Department of Water Resources’ (“Department”) approval of amendments to existing water supply contracts under the State Water Project (“SWP”), finding (1) the amendments complied with the California Environmental Quality Act (“CEQA”); (2) the amendments were not a covered action under the Sacramento-San Joaquin Delta Reform Act (“Delta Reform Act”); and (3) the Department had no duty to weigh the public trust interests.
In the 1960’s the Department entered into long-term contracts with government contractors for the sale, delivery or use of water made available by the SWP (“Contracts”). The Contracts contained initial terms of seventy-five years, but included a provision known as “the evergreen clause” which allows contractors to elect to continue to receive service following the expiration of the contracts. Years before expiration, contractors began to preemptively exercise the evergreen clause.
Prompted by the notices given under the evergreen clause, the Department drafted amendments which proposed extending the Contracts to 2085 and changing certain financial provisions. After determining the amendments would have no environmental impact, the Department certified a final environmental impact report, approved the amendments under CEQA, and filed a validation action to ratify the amendments.
Following the validation action multiple lawsuits were filed against the Department alleging violation of, and failure to comply with, state law. Following a merits hearing, the trial court entered judgment for the Department in all cases. Appellants timely appealed. On appeal appellants contended the amendments violated three laws: (1) CEQA; (2) the Delta Reform Act; and (3) the California public trust doctrine. The Court of Appeals addressed each of these alleged violations in turn.
The Amendments Did Not Violate CEQA
Before dealing with the appellants’ specific arguments as to how the amendments violated CEQA, the court explained that under CEQA an appellate court’s inquiry extends only to whether there was an abuse of discretion on the part of the agency. So long as an agency did not fail to proceed in a manner required by law, and its decision is supported by substantial evidence, the court will defer to the agency’s decision. This largely puts the burden on the challenger to show the court why the agency’s decision does not warrant deference.
The appellants’ contentions fall into two broad categories: (1) the Department must analyze the impact of the amendments relative to a no project alternative where the contracts were allowed to expire and utilize a baseline for environmental review where the Contracts never existed; and (2) the Department should have considered the impact of additional projects that may be funded by revenue generated through the amendments. However, each of the appellants’ CEQA claims were rejected by the court for lacking specificity or analysis as to what the appellants’ contended the department should have done, and why failure to do so was an abuse of discretion, or because there was sufficient evidence to support the department’s determinations.
The court held that CEQA did not require the Department to consider a no project alternative in which the existing contracts were allowed to expire, because it was reasonably foreseeable that the contractors would extend the terms of their contracts through the evergreen clause, and an agency is not required to examine “every conceivable variation” of the no project alternative. Likewise, the court held the Department appropriately utilized the environmental setting under the Contracts as the baseline, because under CEQA a baseline must reflect the “physical conditions existing at the time [the] environmental analysis” begins. Further, the court determined the additional projects which may be funded by revenue from the amendments were all too tenuous, uncertain, or distantly related to require analysis as part of the amendments’ environmental analysis under CEQA. To require otherwise would stretch the definition of “project” under CEQA too far. Accordingly, the court held the Department’s certification of the amendments did not violate CEQA.
The Amendments Were Not a Covered Action Under the Delta Reform Act
A state agency that proposes to undertake a “covered action” under the Delta Reform Act must prepare a written certification of consistency with the Delta Plan. The Department determined that the amendments were not a covered action, and so did not prepare a certificate of consistency. The appellants challenged this determination, but the court disagreed, explaining the Legislature’s clear intent in defining a covered action was to exempt the existing SWP. The amendments merely continued the existing state of affairs of the SWP, so the Department properly concluded the amendments were not a covered action.
The Department Had No Duty Under the Public Trust Doctrine
The appellants contended the Department violated its duty to consider the impacts on public trust interests in approving the amendments. This duty requires that before agencies approve diversions of waters held in the public trust, they consider the impact on public trust interests, including navigable waters, wildlife and recreation. The court reasoned that the Department’s water rights, or diversions, subject to the Contracts were granted by the State Water Resources Control Board in 1967 and because the amendments did not include new diversions of water, the record supported the Department’s conclusion that the amendments do not impact a public trust resource and, therefore, no duty arose to weigh the public trust interests or consider additional protections for those interests.
Conclusion
Throughout the court’s analysis, it reasoned that the deference owed to the Department regarding its actions created a hefty burden requiring the appellants to explain with specificity why the Department violated the law. Despite the numerous theories upon which the appellants challenged the Department’s approval of the amendments, the court found that appellants failed to carry their burden and rejected many of their arguments for lack of specificity or analysis supporting their claims. Finding that appellants failed to carry their burden, the court refused to second guess the Department’s decisions, upholding validation of the amendments.
Diane Kindermann is Owner of, Gage Marchini is an Associate Attorney, and Jack Sandage is a Law Clerk at Abbott & Kindermann, Inc. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.
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