(20W SUPERIOR COURT . COUNTY OFIMPERIAEW, .- . EHART, INTERIM CLERK . - DEPUTY SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF IMPERIAL MICHAEL ABATTI, TRUSTEE OF THE MICHAEL AND KERRI ABATTI FAMILY TRUST and MIKE ABATTI FARMS, LLC, a California limited liability company, Plaintiffs and Petitioners, VS. IMPERIAL IRRIGATION DISTRICT and DOES 1?10, Defendants and Respondents. Case No. ECUO7980 STATEMENT OF DECISION This matter came on regularly for hearing on April 17, 2017 in Department 9 of the above?entitled court, Hon. L. Brooks Anderholt presiding. Lee Hejmanowski, Esq. of CALDARELLI HEJMANOWSKI PAGE LEER LLP appeared on behalf of Plaintiffs and Petitioners MICHAEL ABATTI, TRUSTEE OF THE MICHAEL AND KERRI ABATTI FAMILY TRUST and MIKE ABATTI FARMS, LLC, a California limited liability company (?Petitioners?) and Frederic Fudacz, Esq. and Benjamin Rubin, Esq. of NOSSAMAN LLP and Joanna Smith Hoff, Esq. appeared on behalf of Defendant and Respondent IMPERIAL IRRIGATION DISTRICT (?Respondent District?). The court, having considered the contents of the file, the documents filed by the parties, the evidence presented at the hearing and the parties? stipulated administrative record, having 1 ECU07980 STATEMENT OF DECISION heard the arguments of counsel and taken the matter under submission, now propounds its tentative decision. BACKGROUND This action arises out of a dispute between Petitioners and Respondent District regarding the Equitable Distribution Plan adopted in October 2013 (?the 2013 Petitioners brought this challenge as an ordinary mandamus action pursuant to Code of Civil Procedure section 1085 to force Respondent District to repeal the 2013 EDP and institute a different distribution plan, and for declaratory relief as to validity of the 2013 EDP and the appropriate criteria that should be used in the creation of future distribution plans. PRINCIPAL ISSUES TO BE DETERMINED BY THE COURT 1. Whether the Petitioners? claims are barred by statutes of limitation and/or the decision in Morgan v. Imperial Irrigation District (2014) 223 CaI.App.4th 892. 2. The ownership of, and rights to, the water managed by Respondent District. 3. Whether Petitioners? challenge extends to the 2013 EDP in toto or only changes from the prior equitable distribution plan promulgated in May 2013. 4. Whether the 2013 EDP is unfair or inequitable: A. If it prioritizes other water users over agricultural water users; B. If it fails to apportion water based upon historical water usage; C. If it fails to apportion water among farmers based on soil types and crops grown; and/or D. If it uses a straight line basis as the default method of apportioning water among farmers. CONCLUSIONS OF LAW Because Petitioners brought the mandamus aspect of this action pursuant to Code of Civil Procedure section 1085, the scope ofjudicial review of Respondent District?s decision is limited to the administrative record, and the court determines on the record and matters subject to judicial notice whether the decision of the agency was ?arbitrary, capricious, entirely lacking 2 ECU07980 STATEMENT OF DECISION in evidentiary support, or unlawfully or procedurally unfair. (Carrancho v. California Air Resources Board (2003) 111 CalApp/ith 1255, 1255.) Code of Civil Procedure section 1060 provides that when an actual controversy exists regarding the legal rights and duties of the parties with respect to each other, or in respect to, in, over or upon property, the court may make a binding declaration with the force of a final judgment regarding such interested persons? rights and duties. As an irrigation district formed underthe lrrigation District Act, Respondent District holds the title to all property it acquires, including any water it manages, in trust for its use and purposes. (Water Code, 22437.) it holds appropriatlve rights to Colorado River water which are subject to an annual cap under the Quantification Settlement Agreement of three million one hundred thousand (3,100,000) acre feet, which is based on historical use. (Quantification Settlement Cases (2011) 201 Cal.App.4th 758, 784.) Water Code section 22252 requires that Respondent District establish equitable rules for the distribution of water. A trust exists under which Respondent District holds mere legal title to the water rights and the users own the equitable and beneficial interest in the water rights. The farmers? equitable and beneficial interest in the water rights is appurtenant to their lands and is a constitutionally protected property right. (Bryant v. Ye/Ien (1980) 447 US. 352, 371, fn. 23.) The ?no injury? rule bars the transfer of water or water rights that causes injury to an existing legal water user. (Kidd V. Laird(1860) 15 Cal. 161, 179?81; North Kern Water Storage District v. Kern Delta Water District (2007) 147 Cal.App.4th 555, 559.) Respondent District?s agricultural water users are among the class of legal water users to which the ?no injury? rule applies. (State Water Resources Control Board Cases, supra, 136 at 738~88.) As trustee thereof, Respondent District cannot take perfected water rights from the present owner of the lands to which they are appurtenant and transfer those rights or the appurtenances to other beneficiaries without appropriate consideration. (Bryant v. Ye/len, supra, 447 US. 352, 371, in. 23.) Article X, Section 2 of the California Constitution provides that the right to water is ?ilmited to such water as shall be reasonably required for the beneficial use to be served,? and 3 ECU07980 STATEMENT OF Water Code section 106 provides, ?it is hereby declared to be the established policy of this State that the use of water for domestic purposes is the highest use of water and that the next highest use is for irrigation,? but the Water Code does not prioritize industrial, environmental, or any other water use other than domestic use over agricultural use. To apportion irrigation water equitably, an irrigation district must examine the irrigated land, considering the soil type and crops grown. (Tehachapi?Cummings County Water District V. (1975) 49 992, 1001?02 [in apportioning water, which in that case was subject to riparian and overlying rights, factors that must be considered for agricultural water users are ?the area sought to be irrigated, the character ofthe soil, the practicability of irrigation, the expense thereof, the comparative profit of the different crops which could be made of the water on the land . . Simon Newman Co. v. Sanchez (1945) 69 Cal.App.2d 432, 438 [apportionment ?should depend upon an accurate estimate of the actual number of acres in each parcel subject to similar irrigation and that all ofthe land in each tract is susceptible of producing the same variety of crops . . . . Otherwise the apportionment may not be deemed to be No California law prevents the subjecting of all classes of water users to apportionment or reduction in times of drought or water shortage. The court finds that there is no statute of limitations impediment to the prosecution of these proceedings by Petitioners, as although there were prior equitable distribution plans, the 2013 EDP was not merely piecemeal revisions or amendments to such previous plans, and was adopted in October 2013 as a new, complete, fully integrated plan which did not require resort to older plans for interpretation. This is because the 2013 EDP contained substantial changes from the prior equitable distribution plans, including changes to the operational definitions of terms in the plan, addition of new provisions impacting agricultural users, and, most particularly, the provision that farmers would have the lowest priority among municipal users, industrial users, environmental resources and other water users. Because ofthis, the court finds Petitioners? challenge to the entirety ofthe 2013 EDP by the instant proceeding, filed within one month of its adoption, was timely. 4 ECUO7980 STATEMENT OF DECISION The decision in Morgan v. Imperial Irrigation District (2014) 223 Cal.App.4th 892 does not bar Petitioners? claims in this action because it was a California Environmental Quality Act case, the challenges to Respondent District's prior equitable distribution plans had been dismissed and therefore not adjudicated in that case, and the 2013 EDP did not exist at the time of resolution of the case. FINDINGS OF FACT The beneficial use of Colorado River water in the Imperial Valley in the early 1900s by farmers, including Michael Abatti?s familial ancestors, perfected water rights Respondent District holds in trust. Respondent District managed water appropriation and delivery from its water supply for nearly 100 years without an equitable distribution plan. Farmers in Respondent District do not pay for water, but pay water service charges to Respondent District for the delivery of water. Municipalities that receive water from Respondent District receive it at a gate, just like farmers receive water for irrigation. As of the date this action was filed, Respondent District viewed the 2013 EDP as a water budget that is being applied and would continue to be applied every year to help the Respondent District manage the water it receives annually from the Colorado River, even when it receives the full 3,100,000 acre~feet available under the cap imposed by the OSA. An equitable distribution plan could be structured to ensure that every class of users has its water reduced equally, with each class of user bearing the same proportionate shortfall in water appropriation when demand exceeds supply. The court finds that the 2013 EDP prioritizes other groups of water users, in addition to domestic water users, over farmers. More specifically, the 2013 EDP apportions water to municipal users, industrial users, feed lots, dairies, fish farms, and environmental water users before farmers. 534 at Contracts for water delivery between Respondent District and industrial water users could be written to state that the water delivered under such contracts is subject to proportionate reductions in apportionment commensurate with the apportionments to all other classes of water users. However, the 2013 EDP places no limits on the volume of water that 1Hereinafter, all references to the Administrative Record wilt by AR[number] followed by AR[page number]. 5 ECU07980 STATEMENT OF Respondent District is required to provide under such contracts. The 2013 EDP similarly does not limit the amounts of water that can be consumed by municipal users, feed lots, dairies, fish farms, and environmental water users. at The only source of water from which Respondent District supplies its users is that derived from the water rights acquired through the agricultural interests in the imperial Valley. The 2013 EDP allows water to be provided to new water users, such as new industrial and environmental users, which, in a period of shortfall, would disproportionately affect existing farmers. Because this prioritization puts those other water users ahead of farmers, the 2013 EDP violates both the ?no injury? rule and the ?appurtenancy rule? and is contrary to law. The court therefore finds that by adopting the 2013 EDP, Respondent District abused its discretion by violating such rules. The court also finds that the 2013 EDP is not equitable because it disadvantages farmers, who should not be treated differently and with a lesser priority than other, non?domestic, classes of water users, such that Respondent District abused its discretion in adop?ngit The court finds and acknowledges that different parcels of farmland require different amounts of water because soil types and conditions, and crop water requirements vary. The decision to grow different types of crops at different times of the year can also affect the water needs of a given parcel. The court finds that apportioning water among farmers using average historical use data measured at field dates over a 25 to 30 year period would take into account such variables, including soil type, crop selection and rotation, and single and double cropping, would minimize any disadvantage to farmers who have invested in on?farm conservation measures and would resolve all of Petitioners? objections to the 2013 measures for apportionment among farmers. The court finds that Respondent District has records of historical water usage on farmland, measures at the gate to each field, dating back to 1987, based on the acknowledgement of such by counsel for Respondent District at the hearing. 6 ECU07980 STATEMENT OF The court notes that to the extent Respondent District has opted to use as part of the 2013 EDP a straight-line apportionment method, which allocates the same volume of water to each acre of farmland regardless of soil type or crop, such apportionment method is not equitable. This is because standing alone, it potentially allocates more water to some users than they need, increasing the potential for waste, and concomitantly risks shorting other farmers who need higher volumes of water because of soil type and/or crop requirements. To the exent it encourages waste, straight?line apportionment violates Article X, Section 2 of the California Constitution. The court recognizes that directors ofthe Board of Respondent District, in the process of creating and implementing equitable distribution plans leading up to the 2013 EDP, recognized that historical use was a better basis upon which to apportion water than straight?line apportionment, atAR0025176?78] and that one reason Respondent District resorted to the straight?line method was ease of implementation and administration by staff. at The court also notes that while the 2013 EDP specifies straight?line apportionment as the default method, at subsequent to adoption of the 2013 EDP in its current form, in 2014 the Board of Respondent District adopted a ?hybrid? method of apportionment which places a 50% weight on historical usage and a 50% weight on the straight?line method. The court views this change as an acknowledgement of the lnappropriateness of the use of the straight?line method as a component of the apportionment process. RULINGS Based upon the foregoing conclusions of law and findings of fact, the court grants the petition for writ of mandamus. Petitioners shall prepare a proposed peremptory writ for the court?s issuance, which will command Respondent lmperial lrrigation District to repeal the 2013 EDP. With respect to Petitioners? claim for declaratory relief, the court declares that Respondent lmperial lrrigation District lacks authority to further implement the 2013 EDP or to adopt any other equitable distribution plan that prioritizes certain classes of water users, other 7 ECUO7980 STATEMENT OF than domestic, ahead of farmers and other agricultural users, or otherwise favors the water needs of other water users, other than domestic, over those of farmers and other agricultural users. The court also declares that any apportionment of water among farmers must not use a straight-line apportionment method or hybrid method incorporating a straight-line component, which is not equitable. The court further declares an equitable apportionment of water must take into consideration factors including the area to be irrigated, the character of the soil, the crops to be grown, and the practicability of irrigation. Therefore, the court declares that historical use, which reflects these factors, is the equitable and acceptable means of apportionment. The court also declares that effective the date of this decision, Respondent Imperial Irrigation District is not empowered to enter into any new contracts committing to the provision of water to any non-domestic or non-agricultural user which guarantees the supply of water during times of shortage in a manner that is inconsistent with the court?s findings herein. Any claim by any party of entitlement to attorney fees or cs- . by timely noticed motion after entry ofjudgment. DATED: AUG 1 5 201? 8 ECUG7980 STATEMENT OF