No. D072850 IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION 1 __________________________ MICHAEL ABATTI, AS TRUSTEE, ETC., ET AL., Plaintiffs/Respondents/Cross-Appellants, vs. IMPERIAL IRRIGATION DISTRICT, Defendant/Appellant/Cross-Respondent. ____________________________ On Appeal from the Imperial Superior Court, Case No. ECU07980, Dept. 9, Honorable L. Brooks Anderholt, Judge Presiding Telephone: (760) 482-2200 ____________________________ APPELLANT’S OPENING BRIEF Declaratory Judgment Entered August 25, 2017 Writ of Mandate Entered August 31, 2017 ____________________________ NOSSAMAN LLP *Frederic A. Fudacz, SBN 50546 ffudacz@nossaman.com Jennifer L. Meeker, SBN 260138 jmeeker@nossaman.com Gina R. Nicholls, SBN 270174 gnicholls@nossaman.com Tara E. Paul, SBN 305366 tpaul@nossaman.com 777 S. Figueroa Street, 34th Floor Los Angeles, California 90017 Telephone: (213) 612-7800 Facsimile: (213) 612-7801 Attorneys for Defendant, Appellant and Cross-Respondent IMPERIAL IRRIGATION DISTRICT 56502848.v5 TO BE FILED IN THE COURT OF APPEAL APP-008 COURT OF APPEAL CASE NUMBER: COURT OF APPEAL Fourth APPELLATE DISTRICT, DIVISION One STATE BAR NUMBER: ATTORNEY OR PARTY WITHOUT ATTORNEY: Frederic A. Fudacz FIRM NAME: NOSSAMAN LLP STREET ADDRESS: 777 S. Figueroa Street, 34th Floor crrY. Los Angeles TELEPHONE NO: 213.612.7800 D072850 50546 SUPERIOR COURT CASE NUMBER: ECU07980 NAME STATE: CA ZIP CODE: 90017 FAX NO: 213.612.7801 E-MAIL ADDRESS: ffudacz@nossaman.com Defendant / Imperial Irrigation District APPELLANT/ IMPERIAL IRRIGATION DISTRICT PETITIONER: MICHAEL ABATTI, et al. RESPONDENT/ REAL PARTY IN INTEREST: ATTORNEY FOR (name): CERTIFICATE OF INTERESTED ENTITIES OR PERSONS (Check one): Fir INITIAL CERTIFICATE SUPPLEMENTAL CERTIFICATE Notice: Please read rules 8.208 and 8.488 before completing this form. You may use this form for the initial certificate in an appeal when you file your brief or a prebriefing motion, application, or opposition to such a motion or application in the Court of Appeal, and when you file a petition for an extraordinary writ. You may also use this form as a supplemental certificate when you learn of changed or additional information that must be disclosed. 1. This form is being submitted on behalf of the following party (name ): IMPERIAL IRRIGATION DISTRICT 2. a. I x 1 There are no interested entities or persons that must be listed in this certificate under rule 8.208. b. I- 1 Interested entities or persons required to be listed under rule 8.208 are as follows: Nature of interest (Explain): Full name of interested entity or person Continued on attachment 2. The undersigned certifies that the above-listed persons or entities (corporations, partnerships, firms, or any other association, but not including government entities or their agencies) have either (1) an ownership interest of 10 percent or more in the party if it is an entity; or (2) a financial or other interest in the outcome of the proceeding that the justices should consider in determining whether to disqualify themselves, as defined in rule 8.208(e)(2). Date: June 29, 2018 Frederic A. Fudacz (TYPE OR PRINT NAME) (SIGNATURE OF APPELLANT OR ATTORNEY) Page 1 of 1 Form Approved for Optional Use Judicial Council of California APP-008 [Rev. January 1, 2017] CERTIFICATE OF INTERESTED ENTITIES OR PERSONS 2 Cal Rules of Court, rules 8:208, 8 488 www.courts.ca.gov TABLE OF CONTENTS INTRODUCTION ....................................................................................... 11 STATEMENT OF FACTS .......................................................................... 12 I. IID’S WATER RIGHTS. .............................................................. 12 II. IID IS GOVERNED BY THE IRRIGATION DISTRICT LAW. .......................................................................... 13 III. THE NEED FOR AN EQUITABLE DISTRIBUTION PLAN. ............................................................... 14 IV. ADOPTION AND REVISIONS OF THE EDP............................ 16 V. FEATURES OF THE EDP SINCE 2007. ..................................... 18 RELEVANT PROCEDURAL HISTORY .................................................. 19 STATEMENT OF APPEALABILITY ....................................................... 21 STANDARD OF REVIEW......................................................................... 21 ARGUMENT .............................................................................................. 23 I. II. THE EDP IS LAWFUL AND CONSISTENT WITH IID’S WATER RIGHTS. .............................................................. 23 A. IID Holds the Water Rights in Trust for Public Use. ..................................................................................... 23 B. The “No Injury” Rule Does Not Apply. ............................. 28 IID’S BOARD DID NOT ACT ARBITRARILY OR CAPRICIOUSLY OR WITHOUT SUBSTANTIAL EVIDENCE WHEN IT ADOPTED THE EDP. ........................... 31 A. IID’s Board Acted within Its Scope of Authority Delegated under Water Code Section 22252. .................................................................... 32 B. The Adoption Of The EDP Is Supported By Substantial Evidence. ......................................................... 35 3 C. The Board Properly Exercised Its Discretion When It Adopted The Straight-Line Apportionment Method. ..................................................... 38 D. The Adoption Of The Municipal Apportionment Method Was A Proper Exercise Of The Board’s Discretion. ................................. 42 III. THE TRIAL COURT’S DECLARATION THAT APPORTIONING WATER CAN ONLY BE BASED ON HISTORICAL WATER USE IS UNCONSTITUTIONAL. .............................................................. 45 IV. RESPONDENTS’ CHALLENGES TO THE FEATURES OF THE EDP INVALIDATED BY THE TRIAL COURT ARE BARRED BY THE STATUTE OF LIMITATIONS AND THE MORGAN VALIDATION ACTION. ............................................................. 50 A. Respondents’ Challenges to the Common Features of the EDP Are Time-Barred. .............................. 51 B. Respondents’ Challenges to the Common Features of the EDP Are Also Barred by the Morgan Validation Action. ................................................ 54 CONCLUSION ........................................................................................... 56 CERTIFICATION OF WORD COUNT ..................................................... 57 4 TABLE OF AUTHORITIES Page(s) Cases Arcadia Dev. Co. v. City of Morgan Hill (2008) 169 Cal.App.4th 253 .................................................................. 51 Arizona v. California (1979) 439 U.S. 419 ......................................................................... 13, 23 Association of Irritated Residents v. California Air Resources Bd. (2012) 206 Cal.App.4th 1487 ................................................................ 22 Baldwin Park Cnty. Water Dist. v. Cnty. of Los Angeles (1962) 208 Cal.App.2d 87 ..................................................................... 34 Barstow v. Mojave Water Agency (2000) 23 Cal.4th 1224 .......................................................................... 49 Bryant v. Yellen (1980) 447 U.S. 352 ......................................................................... 23, 24 Brydon v. East Bay Mun. Utility Dist. (1994) 24 Cal.App.4th 178 .................................................................... 33 Buena Park Motel Assn. v. City of Buena Park (2003) 109 Cal.App.4th 302 ............................................................ 50, 52 California Trout, Inc. v. SWRCB (1989) 207 Cal.App.3d 585 ................................................................... 28 Carrancho v. California Air Res. Bd. (2003) 111 Cal.App.4th 1255 .............................................. 22, 31, 32, 34 City of Arcadia v. SWRCB (2010) 191 Cal.App.4th 156 .................................................................. 51 City of San Buenaventura v. United Water Conservation Dist. (2017) 3 Cal.5th 1191 ............................................................................ 55 Clough v. Compton-Delevan Irrigation District (1938) 12 Cal.2d 385 ............................................................................. 27 5 Colonies Partners, L.P. v. Superior Court (2015) 239 Cal.App.4th 689 ............................................................ 50, 55 Coulter v. Sausalito Bay Water Co. (1932) 122 Cal.App. 480 ....................................................................... 25 De Anza Properties X, Ltd. v. Cnty. of Santa Cruz (9th Cir. 1991) 936 F.2d 1084 ............................................................... 52 Eiskamp v. Pajaro Valley Water Mgmt. Agency (2012) 203 Cal.App.4th 97 .................................................................... 55 El Camino Irr. Dist. v. El Camino Land Corp. (1938) 12 Cal.2d 378 ................................................................. 14, 23, 26 Empire West Side Irrigation Dist. v. Lovelace (1970) 5 Cal.App.3d 911 ....................................................................... 43 Friedland v. City of Long Beach (1998) 62 Cal.App.4th 835 .............................................................. 54, 56 Glenn Colusa Irrigation District v. Paulson (1925) 75 Cal.App. 57 ........................................................................... 25 Griffith v. Pajaro Valley Water Mgmt. Agency (2013) 220 Cal.4th 586 .......................................................................... 55 Helena F. v. West Contra Costa Unified School Dist. (1996) 49 Cal.App.4th 1793 .................................................................. 22 Hildreth v. Montecito Creek Water Co. (1903) 139 Cal. 22 ................................................................................. 25 IID v. SWRCB (1990) 225 Cal.App.3d 548 ............................................................. 13, 47 Jenison v. Redfield (1906) 149 Cal. 500 ............................................................................... 27 Kaatz v. City of Seaside (2006) 143 Cal.App.4th 13 .................................................................... 55 Kidd v. Laird (1860) 15 Cal. 161 ................................................................................. 30 6 Klajic v. Castaic Lake Water Agency (2001) 90 Cal.App.4th 987 .................................................................... 34 Lewin v. St. Joseph Hospital of Orange (1978) 82 Cal.App.3d 368 ..................................................................... 31 Madera Irrigation District v. All Persons, Etc. (1957) 47 Cal.2d 681 ............................................................................. 26 In re Marriage of Oliverez (2015) 238 Cal.App.4th 1242 ................................................................ 52 Miller v. Railroad Comm’n (1937) 9 Cal.2d 190 ............................................................................... 25 Morgan v. IID, supra, 223 Cal.App.4th at p. 924 ..................................................... 54, 55 Morgan v. Imperial Irrigation District, Case No. ECU04936 ....................................................................... passim Napa Citizens for Honest Govt. v. Napa Cnty. Bd. of Supervisors (2001) 91 Cal.App.4th 342 .................................................................... 52 North Kern Water Storage Dist. v. Kern Delta Water Dist. (2007) 147 Cal.App.4th 555 .................................................................. 31 Oakdale Irr. Dist. v. County of Calaveras (1955) 133 Cal.App.2d 127 ................................................................... 26 In Re Quantification Settlement Agreement Cases (2011) 201 Cal.App.4th 758 ...................................................... 13, 15, 23 Rancho Santa Margarita v. Vail (1938) 11 Cal.2d 501 ............................................................................. 49 State ex rel. Reynolds v. Niccum (1985) 102 N.M. 330 ............................................................................. 40 Salton Bay Marina, Inc. v. IID (1985) 172 Cal.App.3d 914 ............................................................. 38, 46 Simon Newman Co. v. Sanches (1945) 69 Cal.App.2d 432 ............................................................... 48, 49 7 SWRCB Cases (2006) 136 Cal.App.4th 674, 739-741 .......................... 29, 30 Tehachapi-Cummings County Water Dist. v. Armstrong (1975) 49 Cal.App.3d 992 ..................................................................... 48 Tulare Irr. Dist. v. Lindsay-Strathmore Irr. Dist. (1935) 3 Cal.2d 489 ......................................................................... 38, 48 Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (2007) 40 Cal.4th 412 ............................................................................ 21 Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559 ........................................................................ 31, 32 Willard v. Glenn-Colusa Irrigation Dist. (1927) 201 Cal. 726 ......................................................................... 22, 46 Wood v. IID (1932) 216 Cal. 748 ............................................................................... 14 Wores v. IID (1924) 193 Cal. 609 ......................................................................... 22, 33 Statutes 1887 Cal. Stat., ch. 34.................................................................................. 12 Boulder Canyon Project Act (43 U.S.C. §§ 617 et. seq.) ...................... 13, 23 Cal. Code Regs., tit. 23, § 83 et seq. ........................................................... 43 Civ. Code, § 1636 ........................................................................................ 43 Code Civ. Proc., § 338........................................................................... 50, 51 Code Civ. Proc., § 860 et seq. ............................................................... 43, 54 Code Civ. Proc., § 870, subd. (a) ................................................................ 54 Code Civ. Proc., § 1085................................................................... 20, 21, 22 Code Civ. Proc., § 1094.5............................................................................ 19 Gov. Code, § 17700 ..................................................................................... 43 8 Irrigation District Law (Wat. Code, §§ 20500 et. seq.) ........................ passim Wat. Code, § 100 ......................................................................................... 46 Wat. Code, § 1702 ....................................................................................... 29 Wat. Code, § 1706 ................................................................................. 29, 31 Wat. Code, § 1725 ....................................................................................... 29 Wat. Code, § 1736 ....................................................................................... 29 Water Conservation Act of 2009 (Codified at Wat. Code, § 10608.18 et seq). .................................................................................... 42 Wat. Code, § 22075 ......................................................................... 12, 14, 26 Wat. Code, § 22076 ............................................................................... 14, 38 Wat. Code, § 22078 ..................................................................................... 38 Wat. Code, § 22225 ..................................................................................... 14 Wat. Code, § 22250 ..................................................................................... 14 Wat. Code, § 22252 .............................................................................. passim Wat. Code, § 22262 ................................................................... 14, 23, 25, 47 Wat. Code, § 22425 ..................................................................................... 14 Wat. Code, § 22437 .............................................................................. passim Wright Irrigation Act ................................................................................... 12 Other Authorities Cal. Rule Ct. 8.204(a)(2)(B) ........................................................................ 21 California Constitution .......................................................................... 37, 45 California Constitution, Article X, Section 2 ....................................... passim Executive Order B-37-16 ............................................................................ 43 Frank J. Trelease, Government Ownership and Trusteeship of Water (1957) 45 Cal.L.Rev. 638, 649.................................................... 27 9 SWRCB Water Right Decision No. D 935, 1959 Cal. Env. Lexis 19, 124-125 (1959)....................................................................... 27 Water Rights Decision No. 1641 ................................................................. 29 10 INTRODUCTION This case concerns the validity of an irrigation district’s water distribution plan duly crafted after many years of investigation and analysis, based on consultations with an outside consultant, with input from public meetings, and designed to balance competing interests of all water users in the district. At the behest of one agricultural water user, the trial court swept aside the district’s plan in a decision that strips the discretion afforded to irrigation districts throughout California to distribute water supplies using methods that encourage conservation. If left intact, the statement of decision will replace longstanding water laws and a water rights structure relied upon by not only California, but the seven states within the Colorado River Basin. The ruling should be reversed and the plan reinstated. Facing the threat posed by the longest drought in a century for the Colorado River basin, Appellant Imperial Irrigation District (“IID”) adopted the Equitable Distribution Plan (“EDP”) to manage its Colorado River water supply—its sole source of water for the entire Imperial Valley—in accordance with IID’s duty under Water Code section 22252 to distribute water “equitably as determined by the board.” (Wat. Code, § 22252, emphasis added). The IID Board of Directors (“Board”) undertook extensive study and analysis beginning in 2004, eventually adopting an EDP in 2007, which was revised several times, most recently in October 2013. Not satisfied with the EDP, respondents Michael Abatti, trustee of the Michael and Kerri Abatti Family Trust, a landowner within the water service area of IID, and Mike Abatti Farms, LLC, an agricultural water customer of IID (collectively, “Respondents”) sought a writ of mandamus and declaratory relief. Respondents claim they hold constitutionally protected water rights and that the EDP is unlawful, asserting that it 11 violates a doctrine known as the “no-injury” rule. (10 RT 379:17-380:10.) The trial court accepted Respondents’ arguments (2 AA 1348:16-17) and found the EDP unlawful. (2 AA 1351:8-11.) That was reversible error. The trial court unlawfully rejected the Board’s determination of the equitable distribution of water, substituting its own judgment that the only equitable method of apportioning water is historical use based on the past 25 to 30 years. (2 AA 1351:19-24 and 1353:6-10.) The trial court’s errors of law are clearly the product of the court’s fundamental misunderstanding of the nature of the water rights held by IID. Not only is it IID, and not the agricultural landowners or water users, that holds the water rights to the Colorado River supply for the Imperial Valley, but under the law those water rights are held “in trust for its uses and purposes,” acting as “necessary to furnish sufficient water in the district for any beneficial use.” (Wat. Code, §§ 22437, 22075.) For the foregoing reasons and as described in further detail below, the trial court’s statement of decision improperly impairs IID’s ability to carry out its responsibilities, and must be vacated. STATEMENT OF FACTS I. IID’S WATER RIGHTS. California enacted the nation’s first irrigation district legislation, the Wright Act, on March 7, 1887. (1887 Cal. Stat. ch. 34.) IID was formed under the Wright Act on July 25, 1911. (The Wright Irrigation Act in California, R. M. Gidney (1912).) Following its formation, IID acquired assets, including water rights to the Colorado River, from the Southern Pacific Company in 1916. (AR 0000197-251; AR 0000321-338.) Previously, the assets and water rights—having been developed between 1895 and 1899—were held by the California Development Company1 and 1 Water rights were also acquired by individuals, but those were 12 certain Mexican companies. (Ibid.; see also AR 0000134-154; AR 0001586.) Between 1922 and 1923, IID also purchased all mutual water companies in its area and acquired their assets, properties and water rights. (AR 0000612-1244; AR 0001251.) IID holds pre-1914 “present perfected rights” of 2.6 million acre-feet (“MAF”) per year from the Colorado River, which can be applied to both irrigation and domestic uses. (AR 0006784, citing Arizona v. California (1979) 439 U.S. 419, 429.) IID’s water rights are, in total, up to 3.85 MAF annually pursuant to the Boulder Canyon Project Act (43 U.S.C. §§ 617 et. seq.), the California Seven-Party Water Agreement (AR 0001260-1264), IID’s agreement with the Department of Interior for the diversion and delivery of water (AR 0001530-1585) and IID’s California State Water Resources Control Board Permit (“SWRCB”) 7643 for irrigation, domestic, municipal and environmental protection uses. (AR 0001487; AR 00068206827.) Only IID holds title to the water rights of the Colorado River water delivered to the Imperial Valley. IID is also the only contractor with the federal government for the diversion of Colorado River water for delivery to the Imperial Valley. (Arizona v. California, supra, 439 U.S. at p. 429; In Re Quantification Settlement Agreement Cases (2011) 201 Cal.App.4th 758, 773, 784.) II. IID IS GOVERNED BY THE IRRIGATION DISTRICT LAW. IID continues to be organized under and governed by the Irrigation District Law (Wat. Code, §§ 20500 et. seq.). An irrigation district is an illustration of a type of district which has “many express powers and also broad general powers.” (IID v. SWRCB (1990) 225 Cal.App.3d 548, 566, 570, quoting 25 Ops.Cal.Atty.Gen. 164, 165 (1955); see also Wat. Code, §§ transferred to the California Development Company prior to acquisition by IID. (AR 0000001-32; AR 0000035-37; AR 0000057-80; AR 0000115113.) 13 22075, 22076, 22225, 22425.) IID’s powers are “broad and comprehensive, even exceeding in some respects the powers of an ordinary municipal corporation.” (Wood v. IID (1932) 216 Cal. 748, 762.) Under the Irrigation District Law, the water rights acquired by IID are “held in trust for its uses and purposes.” (Wat. Code, § 22437.) The water is dedicated to public use (El Camino Irr. Dist. v. El Camino Land Corp. (1938) 12 Cal.2d 378, 383-385), and water users such as Respondents are prevented from acquiring any private interest in the water rights through their use of the water. (Wat. Code, § 22262.) IID charges fixed water rates based on the type of water service customer and the amount of water delivered. (AR 0015834-15842; AR 0017710-0017714; AR 0019642-19646.) Under this method of operation, the Legislature conferred on IID’s Board, and other irrigation districts throughout California, the discretion to distribute water within its service area “equitably as determined by the board.”2 (Wat. Code, § 22252, emphasis added.) III. THE NEED FOR AN EQUITABLE DISTRIBUTION PLAN. Through a series of historical contracts, federal laws and court decisions collectively known as the “Law of the River,” Colorado River water is allocated among seven U.S. states and Mexico. (See e.g., AR 0001245-1250.) Under the Law of the River, California is entitled to 4.4 MAF annually of Colorado River water, with rights to additional water under certain circumstances. (AR 0001590.) 2 Although IID initially functioned as an assessment-based district, which is required under Water Code section 22250 to apportion water ratably among assessment-paying landowners, today IID operates based on service charges. (See AR 0015834; see also 1 AA 730:10-13.) As a service charge-based district, IID properly exercises its discretion to distribute water equitably to all of its customers pursuant to Water Code section 22252. 14 California historically diverted more water than its 4.4 MAF annual entitlement because Arizona and Nevada used less than their full apportionment. (In Re Quantification Settlement Agreement Cases, supra, 201 Cal.App.4th at pp. 773, 785.) When Arizona and Nevada began to use their full apportionment, California developed the “4.4 Plan” to reduce its annual water diversions to operate within its entitlement. (AR 00067506751.) The 4.4 Plan was used as the framework for the Quantification Settlement Agreement (“QSA”), which is a complex multi-party series of agreements that include the quantification of entitlements to Colorado River water within California. (In Re Quantification Settlement Agreement Cases, supra, 201 Cal.App.4th at p. 788.) IID’s consumptive use entitlement of Colorado River water under the QSA is capped at 3.1 MAF annually for the term of the QSA. (AR 0007331.) In 2003, in conjunction with the QSA, the U.S. Department of the Interior approved an Inadvertent Overrun and Payback Policy (“IOPP”). (AR 0007288.) The QSA and IOPP allow IID to inadvertently exceed its annual entitlement by up to 10 percent under certain circumstances – termed an “inadvertent overrun.” (AR 0007304-7305.) However, IID must pay back inadvertent overruns by implementing extraordinary water conservation measures that reduce diversions in subsequent years. (AR 007305-7306.) Payback is to occur within three years when the elevation of Lake Mead is greater than 1,125 feet above mean sea level (“msl”) on January 1 of the following year and shortened to one year if the water elevation in Lake Mead is below 1,125 feet above msl. (AR 0007305.) IID is not permitted to exceed its 3.1 MAF annual entitlement in any year in which it is paying back a previous overrun. (AR 0007305-7306.) If the Secretary of the Interior declares a shortage on the Colorado River when Lake Mead’s water elevation is at or below 1,125 feet above msl, all existing overruns 15 must be paid back in the following year and new inadvertent overruns are suspended while there is a shortage. (AR 0007305.) IID’s management of its water and its conservation of water within the bounds of the QSA and the IOPP are integral to the operations of the entire Colorado River Basin. The Colorado River Basin is experiencing ongoing drought conditions and low reservoir elevations in Lake Mead. (See AR 0027719; AR 0012193.) IID has the ability to impact the river system through water management that avoids inadvertent overruns and facilitates the conservation of water, which can result in stored water in Lake Mead. (See e.g. AR 0027719; AR 0007296; AR 0012192-12251.) Conversely, unlawful restraints on IID’s discretion to decide how best to equitably distribute and conserve water could result in inadvertent overruns, which would adversely affect all seven basin states that depend on the Colorado River for water. (See AR 0027719.) IV. ADOPTION AND REVISIONS OF THE EDP. Due to the QSA and IOPP, IID had a need to implement a workable water management plan to simultaneously conserve water and meet the needs of all of its users. In 2004, IID’s publicly elected Board began to evaluate different methods for equitably distributing water within its water service area. (AR 00084444; 4 AA 2581 [¶ 11].) IID’s Board undertook many years of intensive fact-finding, held public workshops and deliberations, and retained Dr. Michael Hanemann, U.C. Berkeley Chancellor’s Professor and Professor of Environmental and Resource Economics, to prepare a detailed expert report. In 2006, IID’s Board approved development of a policy known as the “Equitable Distribution Plan” or “EDP.” (4 AA 2581 [¶ 12].) The EDP was the culmination of a number of policy decisions addressing and balancing sometimes competing interests. (See e.g. AR 0010218-10436.) IID adopted the original EDP in 2007. (See e.g. AR 0012342.) The EDP was revised four times before the 16 October 2013 version, which is in dispute here.3 In 2011 and 2012, IID experienced back-to-back overruns totaling approximately 240,000 acre-feet. (AR 0023886-23887; AR 0027719.) The estimated cost of creating conserved water for payback through extraordinary conservation measures exceeded $22 million. (Ibid.) The United States Bureau of Reclamation (“Reclamation”) formally notified IID that, as of August 1, 2013, forecasts indicated that it would exceed its entitlement for 2013, and if that occurred enforcement proceedings by Reclamation against IID would be initiated. (Ibid.) In 2013, prolonged drought, declining water levels in Lake Mead, and the back-to-back overruns with onerous payback terms and Reclamation’s threat of an enforcement action required immediate action by the Board. Recognizing these precarious conditions and in keeping with its duty to reasonably and beneficially use water under article X, section 2 of the California Constitution, IID’s Board unanimously adopted the October 2013 revised EDP. The EDP facilitates conservation and the management of water use in an equitable manner while addressing the wide range of agricultural water needs based on varying crops, soil types and acreage, and does so without reducing agricultural productivity. (See e.g. AR 0027340-27406; AR 0027468-27528; AR 0027329-27339.) IID did not overrun its 3.1 MAF annual entitlement in any of the four years of implementation of the October 2013 EDP. (4 AA 2584 [¶ 26].) 3 The EDP was revised in 2008, 2009, and April, May, and October of 2013. (AR 0012419-12426; AR 0015806-15812; AR 0017205-17211; AR 0025227-25234; AR 0025585-25592; AR 0027534-27542.) As a member of the Board, Mr. Abatti voted to approve the 2007 and 2009 versions of the EDP, which included the same features that he challenges in this lawsuit. (AR 0012514, AR 0017189; 4 AA 2581 [¶ 13].) 17 V. FEATURES OF THE EDP SINCE 2007. Since the original EDP in 2007, there have been several features that were carried forward through all versions, including the October 2013 EDP, which are crucial to the legal issues to be determined by the Court in this case: First, each version of the EDP has included the same apportionment structure for non-agricultural uses: municipal users, industrial users, feedlots, dairies and fish farms and environmental resources. The apportionment to all of these non-agricultural uses, which is referred to as the “Municipal Apportionment,” allocates in aggregate approximately 3 percent of IID’s water supply4 based on methodologies tailored to each use. (AR 0012421-12422; AR 0015808-15810; AR 0017207-17209; AR 0025230-25232; AR 0025588-25590; AR 0027537-27539.) Second, each version of the EDP has utilized the straight-line method of apportionment for agricultural lands, which is a per-acre flat amount calculated by subtracting the non-agricultural apportionment (3 percent) from the total available water supply and then dividing the remaining 97 percent by the total number of eligible agricultural acres to calculate a per-acre apportionment.5 (AR 0012422; AR 0015810; AR 4 See AR 0010926; 10 RT 401:6-10. 5 The May 2013 version of the EDP expanded the agricultural apportionment to include “other methods of apportionment in addition to a straight-line method of apportionment, including historical, soil type and hybrids of a combination of these methods, which the method of apportionment would be determined at the time [of] implementation . . . .” (AR 0025573.) While the May 2013 version of the EDP did not include the express statement that agricultural apportionment is calculated after apportionment to the four categories of non-agricultural water use or identify the calculation of the straight-line apportionment for agricultural lands, as in the prior versions of the EDP, apportionment methods for the non-agricultural categories remained consistent and straight-line 18 0017209; AR 0025231; AR 0025588; AR 0027538.) Third, each version of the EDP includes the Agricultural Water Clearinghouse (“Clearinghouse”), formerly called the “District Water Exchange,”6 which is a market mechanism designed to transfer water from agricultural water users that have employed conservation measures or otherwise do not need the full apportionment offered to other agricultural water users with greater needs. (4 AA 2585 [¶ 29].) The October 2013 EDP, which is consistent with the features of all prior versions of the EDP discussed above and herein,7 is being challenged by Respondents. RELEVANT PROCEDURAL HISTORY On November 27, 2013, Respondents filed a Verified Petition for Writ of Mandate and Complaint. (1 AA 35-56.) The case was assigned to the Honorable Diane B. Altamirano. (1 AA 78.) Respondents filed a Verified Amended Petition asserting five causes of action on February 20, 2014 (1 AA 84-106), to which IID demurred on March 27, 2014. (1 AA 115-139.) Respondents dismissed a cause of action for a Writ of Mandamus pursuant to Code of Civil Procedure section 1094.5 on April 17, 2014. (1 AA 231.) On June 9, 2014, Respondents filed a Verified Second Amended Petition for Writ of Mandate and Complaint asserting four causes of action for declaratory relief, mandamus under Code of Civil Procedure section apportionment was always identified for agricultural land. (See AR 0025589.) Thus, this feature of the EDP remained essentially the same through all versions of the EDP, including the October 2013 version. 6 AR 0015807; AR 0015810; AR 0017206; AR 0017210; AR 0025228; AR 0025232; AR 0025586; AR 0025590; AR 0027535; AR 0027541; AR 0012421-12422. 7 Hereinafter, all references to the “EDP” are to the October 2013 version of the EDP unless otherwise specified. 19 1085, taking without compensation and breach of fiduciary duty. (1 AA 392-424.) On July 28, 2014, IID filed a Demurrer challenging Respondents’ claims for taking without compensation and breach of fiduciary duty. (1 AA 425-436.) IID also filed a Motion to Strike Respondents’ allegations challenging aspects of the October 2013 EDP that were contained within the earlier versions of the EDP. (1 AA 437-463.) On November 12, 2014, the court issued an order sustaining the demurrer without leave to amend, and granting the motion to strike directing Respondents to re-plead the claims for declaratory relief and mandamus under Code of Civil Procedure section 1085 “deleting the matter as to which the motion to strike [was] granted.” (1 AA 731:9-12 [1 AA 727-733 order generally].) The court found that Respondents “can only attack the October 2013 EDP with respect to any change that it contains from the May 2013 EDP, as to which, along with all prior EDP’s, attack is barred by the passage of time.” (1 AA 729:15-18.) The court also rejected Respondents’ “claim that they have property rights in allocations of water on a specific basis such that they can claim damages for changes in such allocations, if such changes in fact occur.” (1 AA 730:7-10.) On November 25, 2014, Respondents filed a Third Amended Petition for Writ of Mandate, which is the operative petition in this case. (1 AA 735-757.) The matter was reassigned to the Honorable L. Brooks Anderholt on December 26, 2014. (2 AA 879-880.) IID filed its answer on March 18, 2015. (2 AA 979-994.) Judge Anderholt heard this matter on April 17, 2017. (2 AA 12001201.) On August 15, 2017, the court issued a statement of decision holding the EDP to be unlawful supported by indisputably erroneous conclusions of law and substituting its judgment for that of the Board because, in the court’s view, the EDP was not equitable. (2 AA 13461354.) The court granted Respondents a writ of mandamus and declaratory 20 relief. (2 AA 1352:22-1353:14.) On August 25, 2017, the court issued a declaratory judgment instructing how the Board should apportion water: [IID] lacks authority to further implement its [EDP] or to adopt any other equitable distribution plan that prioritizes certain classes of water users, other than domestic, ahead of farmers and other agricultural users, or otherwise favors the water needs of other users, other than domestic, over those of farmers and other agricultural users. 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. 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. Historical use, which reflects these factors, is the equitable and acceptable means of apportionment. (2 AA 1355-1356.) On August 31, 2017, the court issued the Writ of Mandate commanding the repeal of the EDP. (2 AA 1373-1374.) STATEMENT OF APPEALABILITY This is an appeal from a final judgment entered by the court on August 25, 2017 and writ of mandate on August 31, 2017. (2 AA 13551356; 2 AA 1373-1374.) September 26, 2017. IID timely filed its Notice of Appeal on (2 AA 1425.) Accordingly, this Court has jurisdiction over the appeal. (Cal. Rule Ct. 8.204(a)(2)(B).) STANDARD OF REVIEW In a mandamus case under Code of Civil Procedure section 1085, “the appellate court reviews the agency’s action, not the trial court’s decision; in that sense appellate judicial review . . . is de novo.” (Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (2007) 40 Cal.4th 412, 427.) 21 A writ of mandate under section 1085 may be issued, “but only if the action taken is so palpably unreasonable and arbitrary as to show an abuse of discretion as a matter of law,” which requires the court to determine only whether “the decision of the agency was arbitrary, capricious, entirely lacking in evidentiary support, or unlawfully or procedurally unfair.” (Carrancho v. California Air Res. Bd. (2003) 111 Cal.App.4th 1255, 1265, italics in original, emphasis added; Association of Irritated Residents v. California Air Resources Bd. (2012) 206 Cal.App.4th 1487, 1494; 2 AA 1347:24-1348:2; 2 AA 1026:7-9; 2 AA 1062:8-19.) Abuse of discretion is a “highly deferential” standard, as it must be when a court is asked to intervene after a governmental body has exercised discretion. (Carrancho, supra, 111 Cal.App.4th at p. 1265.) Thus, “[i]n determining whether an agency has abused its discretion, the court may not substitute its judgment for that of the agency, and if reasonable minds may disagree as to the wisdom of the agency’s action, its determination must be upheld.” (Helena F. v. West Contra Costa Unified School Dist. (1996) 49 Cal.App.4th 1793, 1799.) In light of IID’s broad discretion to make policy determinations, the appropriate standard of review is “a clear showing of an abuse of that discretion.”8 (Willard v. Glenn-Colusa Irrigation Dist. (1927) 201 Cal. 726, 740 [“Willard”], quoting Wores v. IID (1924) 193 Cal. 609, 632–633 [“Wores”].) 8 Wores confirms that IID’s Board has great discretion in performing complex functions such as the distribution of water. (Wores, supra, 193 Cal. at pp. 632-633) 22 ARGUMENT I. THE EDP IS LAWFUL AND CONSISTENT WITH IID’S WATER RIGHTS. The trial court’s core error in invalidating the EDP is based on its fundamental misunderstanding of the nature of IID’s water rights. The court found the EDP to be “contrary to law” for violating laws that would only apply if the farmers or agricultural water users held a constitutionally protected water right, which they do not. (2 AA 1351:8-11.) Instead, under the Irrigation District Law, the water rights acquired by IID are “held in trust for its uses and purposes.” (Wat. Code, § 22437.) The water is dedicated to public use (El Camino Irr. Dist., supra, 12 Cal.2d at pp. 383385), and water users such as Respondents are prevented from acquiring any private interest in the water rights through their use of the water. (Wat. Code, § 22262.) But the court ignored this law, and incorrectly concluded instead that “[a] trust exists under which [IID] 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.” (2 AA 1348:14-17.) The trial court’s decision is so legally unsound that it must be reversed and vacated. A. IID Holds the Water Rights in Trust for Public Use. It is well established that IID, not the farmers or agricultural water users, holds the water rights to the Colorado River water delivered to the Imperial Valley water users. (Arizona v. California, supra, 439 U.S. at p. 429; In Re Quantification Settlement Agreement Cases, supra, 201 Cal.App.4th at pp. 773, 784; 43 U.S.C. §§ 617 et seq.; see also AR 0006738; AR 0001261; AR 0001487; AR 0006738; AR 0000197-251; AR 0000321-338; AR 0000612-848; AR 0001177-1244; AR 0001251.) Moreover, Respondents merely have a right to water service. (Bryant v. 23 Yellen (1980) 447 U.S. 352, 371 fn. 23 [“As beneficiaries of the trust, the landowners have a legally enforceable right, appurtenant to their lands, to continued service by the District.” (Emphasis added)].) Respondents argued that the Supreme Court in Bryant v. Yellen extended more than a mere right to water service to them. The court not only erroneously accepted this argument, but went even further to find that Respondents have an “equitable and beneficial interest in the water rights [that] is appurtenant to their lands and is a constitutionally protected property right.” (2 AA 1348:15-17, citing Bryant v. Yellen at p. 371, fn. 23.) The natural corollary to this property right was the finding that IID, “[a]s trustee…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.” (2 AA 1348:23-26.) Yet, the court’s cited support for these conclusions, Bryant v. Yellen, says no such thing and cannot possibly be construed to do so. Nothing in the Bryant v. Yellen indicated the Supreme Court’s intention to displace longstanding California law that recognizes IID as the single water rights holder—Bryant v. Yellen in fact recognizes that IID is the water rights holder. (Bryant v. Yellen, supra, at p. 371 [“It may be true, as the Court of Appeals said, that no individual farm in the District has a permanent right to any specific proportion of the water held in trust by the District.”]; id. at p. 372 [“These were important characteristics of the District’s water right as of the effective date of the Project Act.” (Emphasis added)].) Moreover, the Court specifically found that IID: “is empowered to distribute and otherwise administer water for the beneficial use of its inhabitants.” (Id. at p. 356, fn. 1, emphasis added.) 24 The trial court’s conclusion that Respondents have a constitutionally protected property right—as opposed to continued service of water—is inconsistent with statutory and extensive case law. Under California law, “[t]he title to all property acquired by a district is held in trust for its uses and purposes” and ongoing use of IID’s water does not create any private right or interest in the water rights held by IID. (Wat. Code, § 22437, emphasis added; Wat. Code, § 22262.) As the California Supreme Court held in Miller v. Railroad Comm’n (1937) 9 Cal.2d 190, 198: “No private estate can be created in property devoted to a public use, and a consumer of water cannot have a water right in the sense of a private freehold interest in the real estate of the distributing company; that his right is simply a right of service.” (Internal quotation marks omitted).)9 In Glenn Colusa Irrigation District v. Paulson (1925) 75 Cal.App. 57, 69, the court concluded that a water delivery such as that being made by the carrier company constitutes a public use, and it is the company, not the landowner, who holds the water right, because “no private estate can be created in property devoted to a public use.” (See also Hildreth v. Montecito Creek Water Co. (1903) 139 Cal. 22, 29 [“In the case of a public use, the beneficiaries do not possess rights to the waters which are, in the ordinary sense, private property.”]; Coulter v. Sausalito Bay Water Co. (1932) 122 Cal.App. 480, 497 [“the right of a consumer is not a water right in the sense of a private freehold interest in the real estate of the 9 At oral argument before the trial court, counsel for Respondents conceded that they are only entitled to service and not any specific amount. (10 RT 354:25-28 [“The Court: Would petitioner agree they are guaranteed service but not a specific guarantee to amount per acre? Counsel for Respondent: Yes.”]) When coupled with the fact that the Legislature gave IID’S Board discretion to apportion water within the District’s boundaries, this concession from counsel undermines Respondents’ entire theory of this case. 25 distributing company, but simply a right of service so long as the utility controls the instrumentality rendering the service”]; El Camino Irr. Dist., supra, 12 Cal.2d at p. 384 [noting that “property acquired by the district shall be held ‘in trust for, and is hereby dedicated and set apart to the uses and purposes set forth in this act.’”].)10 A persuasive illustration of this point can be found in Madera Irrigation District v. All Persons, Etc. (1957) 47 Cal.2d 681, 691-693. There, the California Supreme Court held that lands once part of Madera Irrigation District “comprising some 19,500 acres” were subsequently “excluded from the district” and lost their right to any claim to district water. “[I]t does not appear that they have individual rights which may be asserted…to any of the property or rights held by the district.” (Id. at p. 691.) The Court further held that “a landowner within an irrigation district does not possess as a part of his freehold estate a proportionate ownership in assets of the district” and nothing in the law “justifies the conclusion that the owners of properly excluded lands were possessed of rights which attached to their lands.” (Id. at pp. 692-693.) The Court thus made it clear that the individuals receiving water had no ownership interest, but only the right to receive water service as determined by the parameters of state law. Moreover, the Irrigation District Law does not create a trust in the classic probate sense, as boldly contended by Respondents and mistakenly affirmed by the trial court. The term “trust,” as used in Water Code section 22437, and as it applies to the water rights owned by IID, is considered a trust only “in a limited sense.” (Oakdale Irr. Dist. v. County of Calaveras 10 Water Code section 22075 states that an irrigation district may “do any act necessary to furnish sufficient water in the district for any beneficial use.” 26 (1955) 133 Cal.App.2d 127, 135.)11 “California lawyers and judges must be on their guard…and should not jump to too many conclusions by trying to apply trust principles to water cases.” (Frank J. Trelease, Government Ownership and Trusteeship of Water (1957) 45 Cal.L.Rev. 638, 649.) The subordinate nature of the rights of landowners who hold land within an irrigation district has been unchanged law for over a century. Starting with Jenison v. Redfield (1906) 149 Cal. 500: [T]o sustain the claim of plaintiff, it must be held that the effect of our statutes relative to irrigation districts, is to make each owner of land within a district the absolute owner of the proportionate share of the water of the district to which his land entitles him, to do with as he sees fit, even to the extent of diverting all thereof from the irrigation of lands within the district. It seems very clear that such a conclusion would be opposed to the whole plan or scheme of the legislation for irrigation districts . . . . The right of a landowner of the district to the use of the water acquired by the district is a right to be exercised in consonance with and in furtherance of such ultimate purpose, viz., for the improvement by irrigation of lands within the district, and in no other way. His right is always subordinate to the ultimate purpose of the trust. (Id. at p. 502, emphasis added.) In Clough v. Compton-Delevan Irrigation District (1938) 12 Cal.2d 385, the California Supreme Court further explained that: The property is by this language impressed with the public use, and the trust is for all the purposes of the act. [I]t is futile to attempt to discover the ‘beneficiaries’ of the statutory 11 In SWRCB Water Right Decision No. D 935, 1959 Cal. Env. Lexis 19, 124-125 (1959), the SWRCB similarly stated: “It is fundamental in our form of government, State and Federal, that every public statute delegating functions to any individual officer or body, is a trust, and has often been referred to as a sacred trust. Yet it would be absurd to contend that it would necessarily follow that all the ramifications of the laws concerning trusts, trustees, and beneficiaries must be applied.” 27 trust. . . . It is enough to point out that it is an active trust for public uses and purposes. (Id. at pp. 388-389, emphasis added.) In California Trout, Inc. v. SWRCB (1989) 207 Cal.App.3d 585, the court explained: [T]he Supreme Court called the relationship of the state to all of its waters a form of trusteeship rather than ownership. However, this did not mean that all of the technical consequences of the law of trusts were to be imported to displace the law of water rights. (Id. at p. 630, emphasis added.) The above case law demonstrates that the Irrigation District Law did not create a trust in the classic sense and the trial court’s holding to this effect rejects an unbroken line of appellate cases since 1906. The trial court’s decision that the EDP is unlawful based upon a clearly erroneous conclusion of law that Respondents hold a constitutionally protected property right in the water rights held by IID cannot stand. It disregards over a century of law. If allowed to stand, this ruling would create uncertainty for all California irrigation districts. The writ of mandamus and declaratory judgment must be vacated and Respondents’ petition should be denied. B. The “No Injury” Rule Does Not Apply. Based on its legally incorrect conclusion that Respondents’ hold the water rights, the trial court next found that the “agricultural water users are among the class of legal water users to which the ‘no injury’ rule applies.” (2 AA 1348:20-22.) The court then ruled that the EDP is unlawful because it violates the “no injury” rule by allowing “water to be provided to new water users, such as new industrial and environmental uses, which in a period of shortfall, would disproportionally affect existing farmers” and “this prioritization puts those other water users ahead of farmers.” (2 AA 28 1351:6-8.) This ruling by the trial court reflects a profound misapplication of the “no injury” rule to protect a property right that Respondents don’t have. It constitutes legal error and requires reversal by this Court. The “no injury” rule in California water law originated in case law and was later generally codified into Water Code sections 1702, 1706, 1725 and 1736. The purpose of the “no injury” rule is to protect legal holders of water rights from injury if other legal water rights holders change their point of diversion, place of use or purpose of use in a manner that reduces the quality or quantity of water relied upon. (SWRCB Cases (2006) 136 Cal.App.4th 674, 739-741.) The “no injury” rule thus only applies when there is a proposed change in the point of diversion, place of use or purpose of use of a water right. (Id. at p. 743 [finding that since “Delta riparians and appropriators have no right to water stored by the irrigation districts, the Board properly concluded they cannot be injured”].) The “no injury” rule does not apply in the present case. As discussed above, Respondents have only a right to water service and the “no injury” rule does not apply to this right because it is not a water right. As stated in SWRCB Cases, supra, “the ‘no injury’ rule . . . does not protect those users of water ‘whose contractual entitlements are dependent on the water rights of the water right holder.’” (136 Cal.App.4th at p. 798, quoting SWRCB (December 29, 1990) Water Rights Decision No. 1641.) The Court of Appeal continued: Application of the “no injury” rule is not the proper basis for determining contractual or other claims between a water service contractor and the water right holder who supplies water under contract where those claims are not based on the proprietary water rights of the water service contractor. (Ibid.) As with the contractors in SWRCB Cases, Respondents are not the water right holder and so the application of the “no injury” rule is improper. 29 The cases cited by the trial court to support its erroneous application of the “no injury” rule in this case are inapposite. The trial court cited Kidd v. Laird (1860) 15 Cal. 161, 179-181, for the general statement that the “‘no injury rule’ bars the transfer of water or water rights that causes injury to an existing legal water user.” (2 AA 1348:18-19.) In Kidd, the California Supreme Court was faced with riparian rights holders seeking to enforce different claims of priority. Each held an independent riparian water right, there was no trust and there was no common set of works through which water was distributed to all users. In discussing the Supreme Court’s decision in Kidd, the Court of Appeal in SWRCB Cases specifically said: What is most significant about Kidd is its statement that “in all cases the effect of the change upon the rights of others is the controlling consideration.” Under Kidd’s articulation of the “no injury” rule, only those “others” who had “rights” to the water involved could claim “injury,” and they could show “injury” only by showing an injurious effect on their “rights” to the water involved in the change. (SWRCB Cases, supra, 136 Cal.App.4th at p. 740, emphasis in the original, internal citation omitted.) Because Respondents hold only a right to service like all other water users within IID, there cannot be a “prioritization” of water users within it that causes injury to a water rights holder. Moreover, there cannot be a “transfer” or a “taking” of water rights from one category of water users to another when IID is the only holder of the water rights and those rights are held in trust for all of the water users within its service area. The trial court erred in determining that Respondents were injured under the “no injury” rule because, as farmers, landowners or agricultural water users, Respondents do not hold the water rights, but instead only a 30 right to the continued service of water delivery on the same terms as all others similarly situated.12 The trial court’s interpretation of the water rights at issue here is contrary to law and must be reversed and vacated. II. IID’S BOARD DID NOT ACT ARBITRARILY OR CAPRICIOUSLY OR WITHOUT SUBSTANTIAL EVIDENCE WHEN IT ADOPTED THE EDP. Because the EDP was lawful, the trial court’s review of the EDP should have been limited to whether it was arbitrary, capricious, entirely lacking in evidentiary support or procedurally unfair. In applying this standard, a court “‘must ensure that an agency has adequately considered all relevant factors, and has demonstrated a rational connection between those factors, the choice made, and the purposes of the enabling statute.’ ” (Carrancho, supra, 111 Cal.App.4th at p. 1265, quoting Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 577.) Moreover, “the determination whether the decision was arbitrary, capricious or entirely lacking in evidentiary support must be based on the ‘evidence’ considered by the administrative agency.” (Lewin v. St. Joseph Hospital of Orange (1978) 82 Cal.App.3d 368, 387, fn. 13, citing Brock v. 12 Respondents claimed in the trial court that North Kern Water Storage Dist. v. Kern Delta Water Dist. (2007) 147 Cal.App.4th 555, provided a basis for a claim of injury to their water rights. Though referencing Water Code section 1706, the water district did not provide any discussion on the applicability of the section to an irrigation district and the landowners within the district. (Id. at p. 581.) Instead, the court focused on whether forfeiture had occurred. (Id. at p. 582.) Specifically, the plaintiff in the case, the junior appropriative water right holder, was seeking to establish that defendant, the senior appropriative water rights holder, had forfeited a portion of its water rights. (Id. at pp. 558-559.) Here, not only is forfeiture not an issue, but Respondents are not junior appropriative water right holders with respect to IID. Respondents, in fact, are not water right holders at all, but, rather, hold only a right to continued water service. 31 Superior Court (1952) 109 Cal.App.2d 594, 607-608.) A trial court judge cannot bring in extra-record evidence and rely on his general knowledge of the Imperial Valley to usurp the legislative power of a public entity; such an action violates the basic principles of the separation of powers. (See Western States Petroleum, supra, 9 Cal.4th at pp. 572-573.) Here, the Board appropriately exercised its broad statutory discretion to equitably distribute water through the adoption of the EDP. The trial court’s determination the EDP was “inequitable” must be reversed. A. IID’s Board Acted within Its Scope of Authority Delegated under Water Code Section 22252. Water Code section 22252 specifically grants IID’s Board the discretion to decide how to distribute its water: When any charges for the use of water are fixed by a district the water for the use of which the charges have been fixed shall be distributed equitably as determined by the board among those offering to make the required payment. (Wat. Code, § 22252, emphasis added.) The statutory discretion granted to IID’s Board to adopt the EDP could not be clearer, and the Board’s adoption of the EDP can only be invalidated if the Board abused its discretion. (Carrancho, supra, 111 Cal.App.4th at p. 1265.) Relying on its fundamental misunderstanding of the legal nature of the water rights, the trial court made no finding that the IID Board’s decision to adopt the EDP was arbitrary, capricious, entirely lacking in evidentiary support or procedurally unfair. Instead, the court improperly formulated the issue as “whether the [October] 2013 EDP is ‘unfair and inequitable,’” and declared the EDP to be inequitable because it does not apportion water based on historical use. (2 AA 1353:9-10; 2 AA 1347:16.) But the trial court’s dissatisfaction with IID’s choices is not relevant to the question of whether the EDP was arbitrary, capricious, entirely lacking in 32 evidentiary support, or procedurally unfair. To invalidate the EDP, the trial court interfered with the Board’s authority to equitably distribute its water and substituted its own anecdotal experience: COUNSEL FOR IID: …’equitable’ is something for the Board to decide. THE COURT: Well, no. Actually, today I think it’s for me to decide. (10 RT 341:20-23.) The trial court may not substitute its judgment in place of the Board’s discretion to determine what is equitable.13 There may be—and, in fact, are—multiple water distribution schemes that are equitable and IID’s Board is empowered to choose from among them. The trial court is not. The “board of directors of the district is invested with a very large discretion by the general terms of the law giving that power, and which the courts ought not to interfere with in the absence of a clear showing of an abuse of that discretion.” (Wores, supra, 193 Cal. at pp. 632–633 [Noting that “[t]he remedy of the landowner or water user…is that of effecting a change in the directory of the district by the means provided in the acts relative to the selection of those who are from time to time entrusted with the conduct of the affairs of the district.”].) Indeed, it is well-settled that courts are to be especially deferential to public agencies that are tasked with administering a “vital, finite resource” such as water. (Brydon v. East Bay Mun. Utility Dist. (1994) 24 Cal.App.4th 178, 198, 204, superseded on other grounds by Proposition 218.) “[T]he Legislature has given broad powers to irrigation districts with respect to the control and distribution of 13 In discussing the reliability of field-specific historical water use data, Judge Anderholt disagreed with IID’s counsel based on his personal experience. (See 10 RT 364:25-365:15 [“This Court is quite familiar with the Valley and it’s [sic] irrigation system. I’ve driven from one end to the other numerous times. I disagree, Counsel.”].) 33 water in the districts; [and] has provided that the management of the affairs of the district shall be in the [B]oard . . . .” (Baldwin Park Cnty. Water Dist. v. Cnty. of Los Angeles (1962) 208 Cal.App.2d 87, 90.) The exclusivity of the trial court’s substituted judgment also attacks the separation of powers doctrine. (Carrancho, supra, 111 Cal.App.4th at at p. 1265, quoting California Hotel & Motel Assn. v. Industrial Welfare Com. (1979) 25 Cal.3d 200, 212 [Courts exercise this limited review “out of deference to the separation of powers between the Legislature and the judiciary, to the legislative delegation of administrative authority to the agency, and to the presumed expertise of the agency within its scope of authority.”].) Mandamus cannot be used to compel an agency such as IID to exercise its discretion in a particular manner or to reach a particular result. (See e.g. Carrancho, supra, 111 Cal.App.4th at pp. 1268-1269; Klajic v. Castaic Lake Water Agency (2001) 90 Cal.App.4th 987, 995.) But that is precisely what the trial court did here. Under the trial court’s approach, all California irrigation districts would be unable to elect the method of apportioning water within their own service areas and would be required to apportion water on the basis of each field’s past 25-30 years of historical water use. The over 120-year old statutory scheme providing discretion to irrigation districts to manage their water supplies in California will be decimated. Further, this method of apportioning water ignores the real possibility of increasing future demands or declining water supplies. If left to stand, the trial court’s decision will have severe consequences for irrigation districts throughout the state by stripping them of the ability to manage their water resources. This appeal, accordingly, also seeks a reversal in order to preserve the statutory discretion expressly provided to irrigation districts to manage their water resources. 34 B. The Adoption Of The EDP Is Supported By Substantial Evidence. Overwhelming evidence in the record—and ignored by the trial court—supports IID’s adoption of the EDP. The EDP was unanimously adopted by IID’s Board after it identified and considered all relevant factors, and demonstrated a rational connection between those factors, the EDP and the purpose of Water Code section 22252. The Board did not act arbitrarily or capriciously, or without substantial evidence, or procedurally unfairly. In developing methodologies for the distribution of water, IID was guided by objectives highlighting the propriety of the ultimate adoption of the EDP: A. The method of apportionment must be equitable to all water users. It must provide appropriate safeguards that prevent water users from ‘gaming’ the apportionment. B. The method of apportionment must predictability and certainty of water supply. C. The method of apportionment must also provide flexibility to water users who have different water needs, different methods of using water and different constraints. To the maximum extent possible given the cap on water availability a farmer must be able to ‘finish the crop,’ and industrial and other users must have a similar certainty of supply. D. A crucial objective is to keep the Imperial Valley’s economic base vibrant –both for the current residents and businesses and for future generations. A reliable and flexible water supply is vital if the community is to continue to thrive. (AR 0010235.) IID’s Board was further guided by the following constraints that “the method of apportionment should:  provide be feasible and practical 35  be reasonably inexpensive for IID to administer  financially and in terms of staff resources  require minimum intrusion by IID into water users’ affairs  support IID’s position as a senior water rights holder on the Colorado River.” (Ibid.) The record shows that IID consulted with its staff and managers and commissioned an expert study by Dr. Hanemann, to evaluate how best to equitably distribute water to its users, and necessarily considered numerous studies and reports regarding the various methods of apportioning water. (AR 0010218-10436; 4 AA 2581 [¶¶ 11, 12]; see also AR 0009351-9362; AR 0009404-9420; AR 0009422-9427; AR 0009505-9510; AR 00095669571; AR 0009599-9601; AR 0009602-9645; AR 0009751-9763; AR 0009796-9800; AR 0009896-9900; AR 0009991-10001; AR 001003810041; AR 0010161-10163.) IID also held extensive public hearings and workshops soliciting public comments regarding how to best apportion water. (AR 00084448496 [July 19, 2004 Allocation Workshop]; AR 0009363-9403 [October 5, 2005 Equitable Distribution of Water Public Workshop]; AR 00098019860 [May 9, 2006 Equitable Distribution of Water Public Workshop]; AR 0010042-10104, AR 0010158-10160 [July 18-19, 2006 Equitable Distribution of Water Public Workshop]; AR 0010924 [November 16, 2006 Equitable Distribution Workshop]; AR 0012192-12251 [December 10, 2007 Workshop on Regulations for Equitable Distribution Program]; AR 0015198-15225 [October 6, 2008 Equitable Distribution Workshop Presentation]; AR 0015652-15662 [November 18, 2008 Workshop on Equitable Distribution of Water].) 36 IID comprehensively analyzed other methods for the apportionment of water, including by farming unit, by straight-line, crop water use, permanent crops and for non-agricultural uses. (AR 0010238-10250.) According to Dr. Hanemann, apportioning water based on historical use on individual fields would be challenging from an administrative perspective: According to the District’s computerized records there are 6,982 fields in the Imperial Valley which have received at least one delivery of water between 1987 and 2005. Of these 4,981 fields have received one delivery of water in every year between 1987 and 2005. If IID is to apportion water based on the average historical use of each field within the District then depending on the baseline period selected it would be dealing with something between about 5,000 and 7,000 individual histories. (AR 0010240.) The reasons for the adoption of the EDP amply demonstrate that IID’s Board did not act arbitrarily or capriciously, without substantial evidence, or procedurally unfairly because it had a real and immediate need for a water management tool. As discussed above, following the implementation of the QSA and IOPP, IID needed to implement the EDP to simultaneously conserve water and meet the needs of all of its users within its 3.1 MAF annual entitlement cap. That need became urgent as a result of prolonged drought, declining water levels in Lake Mead, two consecutive overruns in 2011 and 2012 costing over $22 million and the realistic threat of federal enforcement action. (AR 0023832; AR 0027719.) In 2013, IID was faced with possible enforcement proceedings by the United States Bureau of Reclamation pursuant to the IOPP if it exceeded its entitlement for calendar year 2013 while IID was paying back its 2011 and 2012 overruns. (AR 0026468.) Also looming on the horizon was a projected shortage in 2016. (AR 0027719.) Recognizing these precarious conditions and in keeping with its duty under the California 37 Constitution, IID worked within its powers to adopt an EDP that apportioned water in a manner that encouraged water conservation, while addressing the wide range of agricultural water needs based on varying crops, soil types and acreage, and also providing agricultural water users maximum flexibility to retain their crop production. (See e.g. AR 002734027406; AR 0027468-27528; AR 0027329-27339.) Under the EDP, the water under IID’s control would be put to reasonable and beneficial use by agricultural water users who used the most cutting-edge conservation technology available. This was a win for IID, a win for the agricultural water users, and a win for the Colorado River. (Wat. Code, §§ 22076, 22078; see also Tulare Irr. Dist. v. Lindsay-Strathmore Irr. Dist. (1935) 3 Cal.2d 489, 567; Salton Bay Marina, Inc. v. IID (1985) 172 Cal.App.3d 914, 940; AR 0027557.) In short, IID’s need for an effective and implementable EDP continues in order to meet these challenges in the future. Therefore, as the record shows, the Board properly exercised its broad statutory discretion to balance many competing interests to determine the equitable method of apportioning water in its service area. This Court should reverse the trial court, and uphold the EDP as a proper exercise of the discretion vested in IID’s Board by the Legislature. C. The Board Properly Exercised Its Discretion When It Adopted The Straight-Line Apportionment Method. The first feature of the EDP that Respondents challenged and the court invalidated involves the EDP’s agricultural apportionment. But IID did not abuse its discretion by adopting the EDP with the straight-line apportionment method as one of several allowable methodologies and the default for agricultural apportionment. Substantively, the EDP provides for apportionment of water to agricultural land as follows: 38 “2.18 Method of Apportionment. The method used to determine the Apportionment for Agricultural Water Users during a Water Year. Apportionment models understood and discussed to date are historical, straight line, soil type, and hybrids of a combination of these methods. The default Method of Apportionment is Straight Line Apportionment which may be changed for any Water Year prior to the notification period set forth in Section 3.3 herein at the discretion of the IID Board of Directors.” (AR 0027537, emphasis added; see also AR 0011103-11105; AR 001234212358; AR 0015813-15824; AR 0017213-17226; AR 0025310-25315; AR 0025570-25584.) The EDP’s default straight-line method of apportionment effectively creates a water budget for each eligible agricultural acre of land. (AR 0025590-25591.) An expert report commissioned by IID recommended straight-line as a common and appropriate method of apportionment. (AR 0010222, AR 0010244-10245.) The report concludes that, after careful analysis, IID lacks sufficient reliable historical data and, therefore, apportionment methods based on field history would be impractical, unfair and inequitable.14 (AR 0010223-10224, AR 0010239-10242; see also 10 RT 364:12-365:4, 371:13-25.) IID lacks reliable field-specific histories older than 2003 based on existing records. (10 RT 364:25-365:4.) Apportionment based on pure historical use would also run afoul of concerns that it would be unfair to those who have already invested in water efficiency measures and conservation technology. (AR 002519125192, AR 0025195.) Thus, the trial court had no basis to find that historical water use of the past 25 to 30 years is the only “equitable and acceptable means of apportionment.” (2 AA 1353:9-10.) 14 During the hearing, the trial court also acknowledged that water history by field is not available for all properties. (10 RT 317:13-25.) 39 Contrary to the trial court’s determination that a straight-line apportionment method or a hybrid method incorporating a straight-line component “is not equitable” (2 AA 1353:6, emphasis added), the adoption of a straight-line method was well within the Board’s discretion. Straightline methods of agricultural apportionment are common throughout California and the West. (AR 0009440 [identifying straight-line as the “most common method of allocation in other parts of California and in several other western states.”]; AR 0009577.) For example, Sausalito Irrigation District and Lindmore Irrigation District in California both use straight-line apportionments. (Ibid.) Additionally, New Mexico’s Supreme Court upheld an approach that uses “average[] . . . water duties . . . along a particular source stream” as “an appropriate and reasonable procedure for determining” water apportionment to users. (State ex rel. Reynolds v. Niccum (1985) 102 N.M. 330, 331-332.) Moreover, the trial court’s decision ignores that straight-line apportionment is only a default methodology for agricultural apportionment in the EDP and does not preclude historical use as a basis for the period of time that IID has reliable field-specific data. (AR 0027537.) In fact, in response to concerns about straight-line apportionment voiced by higher water users such as Respondents (AR 0027494-27495), IID implemented a hybrid methodology of agricultural apportionment with the adoption of the October 2013 version of the EDP. (AR 0027466-27467; AR 0027557.) The hybrid method of apportionment allows each eligible agricultural acre to receive half of its average historical use, calculated as one-half of the average amount of water used between 2003 to 2012, excluding the highest and lowest years, up to a maximum amount of 10 acre-feet per acre. (AR 0027557.) The other portion of each acre’s apportionment is a straight-line fixed amount, calculated by dividing the remaining water supply available by all eligible agricultural acreage, with every agricultural acre receiving 40 2.86 acre-feet in 2014. (Ibid.) Under this hybrid method, each eligible agricultural acre was thus offered an apportionment of water between 2.86 and 7.86 acre-feet in 2014. (Id.) This hybrid method was implemented from 2014 through 2017. (Ibid.) If pure straight-line apportionment ever went into effect as the default methodology of apportionment under the EDP, the reasonable needs of agricultural water users could still be met because the EDP includes the Clearinghouse, which increases flexibility by allowing for conservation and the movement of water to the higher water needs. (AR0027535.) The water apportioned to agricultural water users is on a take-or-pay basis at IID’s associated service rate. Those who have conserved will likely need less water. Therefore, the Clearinghouse serves as a water bank where agricultural water users can offer and request water depending on their needs. (AR 0027557; AR 0027541-27542.) It encourages conservation while providing a supply of water to those agricultural water users who need additional supplies over their apportionment. Because of this system, no agricultural water user has ever been denied the water requested. (10 RT 360:1-14.) The propriety of IID’s adoption of the EDP with a straight-line component is further demonstrated by the “farm unit,” which allows for multiple fields to act as a single unit by the aggregation of the water apportioned to all the eligible acreage and the distribution of that water within the farm unit acreage as the water user sees fit. (AR 0027536, AR 0027540-27541; see generally 2 AA 1346-1353; see also AR 0027557; 4 AA 2584-2585 [¶¶ 27, 29].) The farm unit allows water users to move water around within the farm unit acreage to where it is most needed without needing to go to the Clearinghouse to transfer water. Inexplicably, the trial court ignored the existence of the Clearinghouse and the farm unit in its decision invalidating the EDP. 41 In short, the EDP with a default straight-line apportionment method for agricultural land is equitable and, as such, a proper exercise of the IID Board’s discretion. D. The Adoption Of The Municipal Apportionment Method Was A Proper Exercise Of The Board’s Discretion. The second challenged feature of the EDP invalidated by the trial court as “inequitable” involves the Municipal Apportionment, i.e., the apportionment to the following non-agricultural uses: municipal; industrial; feed lots, dairies and fish farms; and environmental resources water. Approximately 97 percent of IID’s 3.1 MAF annual entitlement of water is delivered to agricultural water users. (AR 0010926.) Thus, the Municipal Apportionment accounts for only 3 percent. Abundant evidence supports the Board’s adoption of the method of apportionment to non-agricultural water uses. Under the Irrigation District Law, IID is required to serve water to all its customers, including municipal and industrial users. (Wat. Code, § 22252.) Each category of non- agricultural use has fundamentally different water needs. Furthermore, each category is subject to different laws, regulations and contracts. Because there are important differences among the categories of use in terms of applicable laws and their respective abilities to conserve water, the EDP subjects each category to limitations that are specifically tailored to that category: Municipal Use. Municipal users are apportioned water based on 2006 usage, adjusting for population increases. (AR 0027538.) Per capita water consumption has been declining and it will continue to decline in light of state conservation laws and regulations. For example, municipal water use is subject to statewide water conservation laws and regulations that do not apply to agricultural and other types of use. (See e.g. Water Conservation Act of 2009, codified at Wat. Code, § 10608.18 et seq.; 42 Executive Order B-37-16.) The state’s 20 x 2020 Water Conservation Plan requires a 20-percent reduction in urban per capita water usage by 2020 from a 1995 to 2005 baseline. (Ibid.; AR 0021539-21540.) In recent years the state has mandated additional reductions under emergency urban water conservation regulations (Cal. Code Regs., tit. 23, § 83 et seq.), and urban water suppliers will be required to meet new permanent water use targets in the future. (Executive Order B-37-16.) Industrial Use. Industrial users are apportioned water according to existing water supply contracts, which contain not-to-exceed limitations and other contractual protections, including provisions requiring best management practices for water use, prohibiting unreasonable depletion of the supply to other users, and requiring a proportionate reduction of water to a governmental order reducing the total volume of Colorado River water available to IID. (See e.g. AR 0001739-1748; AR 0001749-1754; AR 0001758-1767; AR 0002084-2095; AR 0004055-4064; AR 001551115526). These contract provisions prevent unchecked growth in water demand, protect against overuse and ensure that, in the event of a shortage declared for the Colorado River Basin, industrial water use would be proportionally reduced to keep this category of use within any limits placed on IID. (See e.g. AR 0001739-01748; AR 0001749-01754; AR 000175801767; AR 0002084-02095; AR 0004055-04064; AR 0015511-15526.) IID has no power or authority to unilaterally modify its existing contracts to impose further limitations (Civ. Code, § 1636), and the limitations period to challenge the validity of the contracts has expired. (Code Civ. Proc., § 860 et seq.; Gov. Code, § 17700; see also Empire West Side Irrigation Dist. v. Lovelace (1970) 5 Cal.App.3d 911, 916 [concluding that if the court affirmed summary judgment ruling on the district’s validation action, defendants would be barred from presenting their challenge to the validation action at a trial].) For new and renewed contracts, IID has 43 implemented additional safeguards. For example, the EDP requires that the apportionment of water for use under such contracts is “estimated based on anticipated use, not to exceed contract amount and contract terms, taking into consideration the Integrated Water Resources Management Plan (“IRWMP”).” (AR 0027538.) The IRWMP estimates future demand based on an assumed 20-percent conservation savings to meet the state’s 20 x 2020 goal. (AR 0021392; AR 0021395.) Moreover, contracts for industrial uses, which use far less than 3 percent of the available total water supply, provides stability and viability necessary to get funding for these uses. (See 4 AA 2363-2365.) There is no basis to find as a matter of law that it is not equitable for IID to honor its existing contracts while looking to best management practices under the state Water Conservation Act to set target reductions for new and renewed industrial contracts. Feed Lots, Dairies, and Fish Farms. Feed lots, dairies and fish farms are apportioned water based on past use and consideration of any changes. (AR 0027538.) Farmers in this category communicated the importance of treating this category differently from other agricultural users to IID’s Board during deliberations leading up to the EDP. For example, aquaculture farmers explained that if they were to receive the same type of apportionment as agricultural users, they would not receive enough water to sustain their fish. (AR 0016345-16346.) Because of the unique characteristics of this category, which involves raising live animals, there is no basis to find as a matter of law that it is not equitable to treat it differently than other categories under the EDP. Environmental Resources Water. Environmental uses are apportioned water based on “amounts reasonably necessary to achieve” IID’s legal commitments. (AR 0027538.) This water use category is extremely limited to allow IID to meet current and future environmental legal obligations within its water service area. It is not open to any and all 44 uses that could be categorized as an environmental water use. In summary, the EDP’s non-agricultural apportionment is within the IID Board’s statutory discretion to equitably distribute water to all of its customers because it helps to prevent unsustainable overruns and promotes water conservation in a manner that is tailored to each category of water user. The record is clear: IID’s Board acted well within its discretion to determine an equitable means of distributing water—and did not act arbitrarily or capriciously or without substantial evidence or procedurally unfairly—when it adopted the EDP. The trial court’s writ of mandamus and declaratory judgment should be reversed. III. THE TRIAL COURT’S DECLARATION THAT APPORTIONING WATER CAN ONLY BE BASED ON HISTORICAL WATER USE IS UNCONSTITUTIONAL. In declaring that “historical use . . . is the equitable and acceptable means of apportionment” (2 AA 1353:9-10, emphasis added; see also 10 RT 367:13-368:2.),15 the court not only usurped the Board’s discretion, but also singled out the method of apportionment that most discourages conservation and fails to ensure that the apportionment of water will be consistent with the reasonable and beneficial use doctrine established by the California Constitution. Article X, section 2 of the California Constitution states: It is hereby declared that because of the conditions prevailing in this State the general welfare requires that the water resources of the State be put to beneficial use to the fullest extent of which they are capable, and that the waste or 15 Incredibly, Respondents were not seeking a declaration that historical use was the exclusive method of apportioning water. (10 RT 356:20-25 [“As a matter of fact, we don’t get so granular as to say the entitlement is to historical or any other particular basis for allocation.”]) 45 unreasonable use or unreasonable method of use of water be prevented, and the conservation of such waters is to be exercised with a view to the reasonable and beneficial use thereof in the interest of the people and for the public welfare. (Cal. Const. Art. X § 2, emphasis added; see also Wat. Code, § 100.) The trial court reserved for itself the determination of what would be an equitable method of apportionment. (10 RT 341:20-23.) Then the trial court went even further to find that to be “equitable,” historical water use must be based on “average historical use data measured at field gates over a 25 to 30 year period,” which would “take into account such variables, including soil type, crop selection and rotation, and single and double cropping.” (2 AA 1351:19-21, emphasis added; see also 10 RT 373:24374:13.) An apportionment method based on purely historical water use for the past 25 to 30 years is absolutely contrary to the fundamental basis of the reasonable and beneficial use doctrine. Historical water use is not the only equitable method of apportioning water and there are certainly other methods that are not only equitable, but are also consistent with the reasonable and beneficial use doctrine. The straight-line apportionment method discussed above and adopted in the EDP, in particular, is consistent with the reasonable and beneficial use doctrine because it encourages conservation and the close management of water use to stay within a water budget less than what may be the historical use of water on that land. IID’s Board has a duty, consistent with the reasonable use doctrine, “to adopt all reasonable measures to prevent the excessive use and waste of water.” (Willard, supra, 201 Cal. at p. 745.) Indeed, in Salton Bay Marina, Inc., supra, 172 Cal.App.3d at pp. 939-940, the Court of Appeal reviewed agreements releasing IID from flood liabilities, and, citing the California Constitution, article X, section 2 and Water Code section 100, the court stated bluntly that: “[IID] has a mandatory duty to avoid wasting water,” 46 and that any attempts to circumvent what “the policy of the law forbids is contrary to public policy . . . .” A vested right is only for the “reasonable” use of water. (IID v. SWRCB, supra, 225 Cal.App.3d at pp. 563, 570.) Ironically, the trial court’s decision, unless vacated, would mean that IID is being directed to do the opposite of what it was directed to do in IID v. SWRCB, which was to conserve water. Furthermore, Water Code section 22262 specifically prohibits any water user within IID from acquiring any “right in any water or water right owned by the district . . . by use permitted under [the Irrigation District Law],” underscoring the fact that the historical uses of water, which may be unreasonable, cannot ripen into water rights or a right to a specific amount of water. As discussed above, the EDP thus allows IID to distribute water for reasonable use and avoid waste,16 thereby ensuring that IID will not run afoul of article X, section 2 of the California Constitution. The trial court’s reference to article X, section 2 turns the constitutional reasonable and beneficial use doctrine on its head. The trial court expressed the concern that the current EDP could “potentially allocate[ ] more water to some users than they need, increasing the potential for waste.” (2 AA 1352:4-5.) In fact, the opposite is true. The historical use apportionment method from the past 25 to 30 years mandated by the trial court would reward water users who have conserved the least. (2 AA 1351:19-24.) Those users with the highest water use over the past 25 to 30 years will be apportioned the most water, while those who have conserved water all along will be apportioned less and thus effectively punished. The 16 This was acknowledged by the trial court at the hearing, but disregarded in its ultimate ruling. (10 RT 372:1-5 [“The Court: That’s one of the reasons they put the EDP in place, to make sure in the end we’re using water reasonably for beneficial uses so we don’t have the State and others looking at us down here cross-eyed.”].) 47 unintended consequence of the trial court’s micromanagement of water distribution in the Valley is that there will be no incentive for currently conserving water users to do so in the future; their future apportionment will be reduced in proportion to their conservation efforts. Furthermore, there will be no obligation for those who have not conserved to date to begin; the more water they use, the greater their future water apportionment will be. The trial court ignored the possibility that a pure historical water use method of apportionment may result in water users receiving more water than is reasonably needed under current conditions in violation of the reasonable and beneficial use doctrine. (See Tulare Irr. Dist. v. LindsayStrathmore Irrigation Dist., supra, 3 Cal.2d at p. 567 [even a wellestablished beneficial use can become unreasonable at a later time as a result of changed circumstances].) Unlike the pure historical water use apportionment method mandated by the trial court, the straight-line and hybrid methods adopted in the EDP are consistent with article X, section 2 of the California Constitution. The cases cited by the trial court in its Statement of Decision to make the finding that an equitable apportionment is based on historical use are inapposite. In Tehachapi-Cummings County Water Dist. v. Armstrong (1975) 49 Cal.App.3d 992, 997-998, the court reviewed the overlying rights to groundwater in a particular basin. These were water rights held by overlying landowners, analogous to riparian rights, which are independent water rights held proportionally by landowners—not rights to water service on an equal basis with all others similarly situated, with the underlying water right being held by an irrigation district under the Irrigation District Law. (Ibid.) Simon Newman Co. v. Sanches (1945) 69 Cal.App.2d 432, 434, 436, 440, similarly discussed correlative rights to water in an irrigation ditch between the parties owning lands contiguous to the ditch. Again, the trial court failed to appreciate the distinction between the underlying water 48 rights held by landowners in Simon Newman Co. and the right to water service at issue in this case. Barstow v. Mojave Water Agency (2000) 23 Cal.4th 1224 is also irrelevant. There, the Court evaluated a proposed equitable apportionment involving owners of correlative rights or rights established by mutual prescription. The California Supreme Court found that the trial court, in upholding the equitable apportionment, failed to give effect to the underlying water rights at issue in that case. (Id. at p. 1251.) And the Court in Rancho Santa Margarita v. Vail (1938) 11 Cal.2d 501 analyzed what land is considered riparian, and the limitation of riparian right holders to reasonable use. (Id. at pp. 528-529, 558.) Here, on the other hand, Respondents are not overlying rights holders, riparian right holders or appropriative right holders, nor are their “rights” correlative to those held by IID. Instead, Respondents have only the right to the service of water from IID on the same terms and conditions as others similarly situated as discussed above. In summary, the EDP allows IID to ensure compliance with article X, section 2 of the California Constitution by incentivizing conservation and encouraging the reasonable and beneficial use of water within certain equitable limits, thereby avoiding the waste of water. The trial court’s declaration that IID may not implement the straight-line or hybrid methods of apportionment that include a straight-line component is contrary to the reasonable and beneficial use doctrine and should be reversed as being in violation of article X, section 2 of the California Constitution. 49 IV. RESPONDENTS’ CHALLENGES TO THE FEATURES OF THE EDP INVALIDATED BY THE TRIAL COURT ARE BARRED BY THE STATUTE OF LIMITATIONS AND THE MORGAN VALIDATION ACTION. Respondents challenged the EDP as inequitable due to specific features that existed in all versions, including versions that have previously withstood legal challenge. Contrary to the law, the trial court’s statement of decision found that Respondents’ challenge to the EDP is not barred by any statute of limitations or by an earlier validation action, Morgan v. Imperial Irrigation District, Case No. ECU04936 (“Morgan”). 1349:18-1350:5.) (2 AA The specific features of the EDP challenged by Respondents, (i) straight-line apportionment, (ii) Municipal Apportionment, and (iii) the operation of the Clearinghouse, have remained constant features throughout all versions of the EDP, as established above. Because it has been more than three years17 since the adoption of the December 2007, November 2008 or April 2009 versions of the EDP, Respondents are time-barred from challenging the EDP based upon those common features. (Buena Park Motel Assn. v. City of Buena Park (2003) 109 Cal.App.4th 302, 307-308.) Alternatively, because the 2008 version of the EDP was validated in Morgan, which contained all of the same features contained in the October 2013 EDP challenged by Respondents, their petition should have been denied. (Colonies Partners, L.P. v. Superior Court (2015) 239 Cal.App.4th 689, 694.) In either case, Respondents’ petition should have been denied entirely because the basis for the challenge to the EDP rested solely on those common features being 17 In this case, the longest potentially applicable statute of limitations is three years. (Code Civ. Proc., § 338.) 50 inequitable in relation to the water rights the trial court erroneously bestowed on Respondents. A. Respondents’ Challenges to the Common Features of the EDP Are Time-Barred. “Where the pertinent facts are undisputed, it is a question of law whether a case is barred by the statute of limitations.” (Arcadia Dev. Co. v. City of Morgan Hill, (2008) 169 Cal.App.4th 253, 260.) Thus, this court’s review of whether Respondents’ challenge to the EDP based on features that were present in earlier plans is time-barred must be reviewed de novo. Here, the pertinent facts are undisputed, and the most generous, relevant statute of limitations is three years. (Code Civ. Proc., § 338; City of Arcadia v. SWRCB (2010) 191 Cal.App.4th 156, 171 [three-year statute of limitations applies to facial challenge when based upon a liability created by statute].) IID challenged Respondents’ Verified Second Amended Petition arguing that Respondents’ challenge to the EDP was barred by collateral estoppel and/or the statute of limitations because the challenge was based on features that had been included in the earlier versions of the EDP. (2 AA 1077-1097; see also 1 AA 455-458.) The Honorable Diane B. Altamirano agreed, finding: “Petitioners/Plaintiffs can only attack the October 2013 EDP with respect to any change that it contains from the May 2013 EDP, as to which, along with all prior EDP’s, attack is barred by the passage of time.” (1 AA 729:15-18.) Regardless, Respondents continued to challenge features that were present in earlier iterations of the EDP. Judge Anderholt disagreed with Judge Altamirano’s prior ruling and erroneously determined that Respondents’ challenge to the EDP was not barred by any statute of limitations or the Morgan validation action. (2 AA 1349:18-1350:5.) 51 Judge Anderholt exceeded his authority. With exceptions not relevant here, one trial judge has no authority to act, in effect, as a oneperson appellate panel by overruling a different judge’s interim ruling in the same case. (In re Marriage of Oliverez (2015) 238 Cal.App.4th 1242, 1248.) “Mere disagreement . . . with the prior trial judge's ruling . . . is not enough to overturn that ruling.” (Id. at p. 1249.) Contrary to Judge Anderholt’s ruling that Respondents timely asserted their challenges to the EDP, it was intended as a revision of the existing plan, and not “a new, complete, fully integrated plan.” (2 AA 1349:21.) The cover page of the EDP states that it is “Revised October 28, 2013” and also lists all prior versions since the original EDP was adopted in 2007—plainly showing that the October 2013 EDP was the fifth such revision. (AR 0027534.) Moreover, the resolution adopting the EDP states that the Board “has considered proposed modifications to the revised 2013 [EDP]” and “hereby approves and adopts the modifications to the revised 2013 [EDP].” (AR 0027546.) As a matter of law, for purposes of calculating the statutory limitations periods, IID’s EDP must be considered a revision to an existing plan, which starts a new limitations period only as to the portion of the plan that was revised or amended. (Buena Park Motel Assn. v. City of Buena Park (2003) 109 Cal.App.4th 302, 308 [“plaintiffs are precluded from challenging ordinance No. 1340 and those portions of the related city code provisions which were not altered by the later ordinance”]; Napa Citizens for Honest Govt. v. Napa Cnty. Bd. of Supervisors (2001) 91 Cal.App.4th 342, 387-389 [the occurrence of a general plan amendment cannot be used to challenge the adequacy of any longstanding portions of that plan]; De Anza Properties X, Ltd. v. Cnty. of Santa Cruz (9th Cir. 1991) 936 F.2d 1084, 1086 [challenge barred because “provision of the ordinance which [plaintiffs] challenge has remained exactly the same since 52 1982”].) The California law cited above, allowing only the litigation of the portion of the EDP that was revised or amended within the limitations period, should have been applied by the trial court here. As shown above, in October 2013, IID adopted only a handful of revisions or amendments to an existing plan. It did not replace or substantively amend the specific features of the EDP that are challenged by Respondents in this case. The challenged common features of the EDP (i.e. (i) straight-line apportionment, (ii) Municipal Apportionment and (iii) Clearinghouse) have remained constant elements throughout the plan’s revisions since 2007. (AR 0012419-12426 [2007 EDP]; AR 0015806-15812 [2008 EDP]; AR 0017205-17211 [2009 EDP]; AR 0025227-25272 [April 2013 EDP]; AR 0025585-25592 [May 2013 EDP]; AR 0027534-27542 [October 2013 EDP].) Indeed, each plan, whether explicit as in the 2007, 2008, 2009, and April and October 2013 versions of the EDP, or implicit, as in the May 2013 version of the EDP, includes these common features as previously described. (Ibid.) If Respondents can subject IID to a legal challenge attacking policies that have been in place for a decade (and which include Respondents’ participation),18 the discretion of IID’s duly elected Board to implement needed policy changes would be unjustifiably and improperly hamstrung. Indeed, to allow such an attack here would open virtually every public agency tasked with adopting and implementing plans, policies or quasilegislative acts of any kind to ongoing litigation every time they adopted revisions or modifications. Faced with such a risk, public agencies and their boards will undoubtedly be hesitant to issue needed minor 18 As a member of the Board, Respondent Abatti voted to approve the 2007 and 2009 versions of the EDP. (AR 0012514; AR 0017189.) 53 modifications or revisions. The trial court relied on these common features of the EDP, which are time-barred from challenge, to find that the EDP was inequitable. The trial court’s decision must be vacated. B. Respondents’ Challenges to the Common Features of the EDP Are Also Barred by the Morgan Validation Action. Alternatively, because all the elements challenged by Respondents were included in the 2008 version of the EDP, which was validated in Morgan, supra, Case No. ECU04936, their petition should have been denied. The petitioners in Morgan filed a reverse validation action under Code of Civil Procedure section 860 et seq. challenging the adoption of the November 2008 EDP (including the straight-line apportionment), water rate-setting regulations, and increased water rates in July 2009. (Morgan v. Imperial Irrigation District (2014) 223 Cal.App.4th 892, 924.) While the Morgan petitioner and defendant eventually dismissed the causes of action challenging the November 2008 EDP, in its statement of decision the trial court validated the EDP, reasoning that “in adopting an EDP, the IID was discharging its obligation to establish equitable rules for the distribution of water” in conformance with Water Code section 22252. (Ibid.) But, although the trial court’s decision was appealed, the trial court’s validation of the November 2008 EDP was not challenged on appeal. Thus, the trial court’s validation is conclusive and binding on all individuals.19 19 Under the validation statutes (Code Civ. Proc., § 860 et seq.), all matters that are or could be adjudicated in a validation action, including constitutional challenges, must be raised in the validation action, or they are waived and forever barred. (Code Civ. Proc., § 870, subd. (a) [“the judgment shall permanently enjoin the institution by any person of any action or proceeding raising any issue”]; Friedland v. City of Long Beach (1998) 62 Cal.App.4th 835, 843 [“As an in rem proceeding, a validation action differs from traditional actions challenging a public agency decision; 54 (Friedland v. City of Long Beach (1998) 62 Cal.App.4th 835, 844.) The trial court here failed to follow the law, finding that “[Morgan] does not bar [Respondents’] claims in this action because it was a California Environmental Quality Act case, the challenges to [IID’s] prior equitable distribution plans had been dismissed and therefore not adjudicated in that case … .” (2 AA 1350:1-4.) Clearly, the trial court ignored the Morgan decision validating the EDP despite the dismissal of the claims and, thereby, missed the point of a validation action and the legal effect of the validation statutes. Because Respondents challenged here features of the EDP that were present in the November 2008 version of the EDP—straight-line apportionment, the Municipal Apportionment and the Clearinghouse—Respondents have undertaken an impermissible collateral attack on the trial court’s validation of those features of the EDP in Morgan. (Colonies Partners, L.P., supra, 239 Cal.App.4th at p. 694.) While such an argument could have been raised on direct appeal (Kaatz v. City of Seaside (2006) 143 Cal.App.4th 13), it was not. (See Morgan, supra, 223 Cal.App.4th 892.) The Morgan validation action is perpetually binding on all parties as to all matters that were, or could have been litigated. (See ante, note 19.) A challenge to IID’s authority to adopt the EDP based on the common features of the 2008 EDP included in the October 2013 EDP could have its effect binds the agency and all other persons.”]; Griffith v. Pajaro Valley Water Mgmt. Agency (2013) 220 Cal.4th 586, 605, disapproved on other grounds by City of San Buenaventura v. United Water Conservation Dist. (2017) 3 Cal.5th 1191 [“That ordinance . . . was not technically under attack at the time of the judgment does not detract from that the pending litigation was a validation proceeding that comprehensively extinguished all claims that had been made, or could have been made”]; Eiskamp v. Pajaro Valley Water Mgmt. Agency (2012) 203 Cal.App.4th 97, 105 [validation statute precludes the world from raising any issue that could have been litigated].) 55 been litigated in the Morgan suit, but was not. "The validating statutes should be construed so as to uphold their purpose, i.e., the acting agency's need to settle promptly all questions about the validity of its action." (Friedland v. City of Long Beach, supra, 62 Cal.App.4th at p. 842.) Because Respondents' challenge to the EDP rested solely on these common features of the EDP, the petition should have been denied. CONCLUSION For all these reasons, the trial court's decision must be vacated and judgment entered denying Respondents' petition in its entirety. To do less would be to sanction the creation of law entirely devoid of any legal foundation and imposing on the IID, and other California irrigation districts, a new and deleterious regimen of resource management in which all water users are not created equal. It is up to this Court now to protect the sanctity of law and the legislative process. Dated: June 29, 2018 NOSSAMAN LLP FREDERIC A. FUDACZ JENNIFER L. MEEKER GINA R. NICHOLLS TARA E. PAUL By: FREDERIC A. FUDACZ Attorneys for Appellant and CrossRespondent IMPERIAL IRRIGATION DISTRICT 56 CERTIFICATION OF WORD COUNT (Cal. Rules of Court, Rule 8.204(c)(1)) The text of this brief consists of 13,859 words as counted by the Windows Word Count Tools feature of the Microsoft Word wordprocessing program used to prepare this brief. Dated: June 29, 2018 NOSSAMAN LLP FREDERIC A. FUDACZ JENNIFER L. MEEKER GINA R. NICHOLLS TARA E. PAUL Attorneys for Appellant and CrossRespondent IMPERIAL IRRIGATION DISTRICT 57 CERTIFICATE OF SERVICE I certify that on June 29, 2018, I electronically filed the following document(s) APPELLANT'S OPENING BRIEF with the Clerk of the California Court of Appeal, Fourth Appellate District, Division One, by using the Court's electronic filing service, TrueFiling. The participants listed below are registered with TrueFiling, and electronic service will be accomplished by TrueFiling as follows: Cheryl A. Orr MUSICK, PEELER & GARRETT LLP 624 South Grand Avenue, Suite 2000 Los Angeles, CA 90017 Telephone: (213) 629-7881 Fax: (213) 624-1376 c.orr@mpglaw.com Lee E. Hejmanowski Marisa Janine-Page CALDARELLI HEJMANOWSKI & PAGE LLP 12340 El Camino Real, Suite 430 San Diego, CA 92130 Telephone: (858) 720-8080 Facsimile: (858) 720-6680 leh@chpllaw.com mjp@chpllaw.com On June 29, 2018, I also served this APPELLANT'S OPENING BRIEF by first class mail as follows: Hon. L. Brooks Anderholt Imperial County Superior Court Department 9 939 West Main Street El Centro, CA 92243 My business address is NOSSAMAN LLP, 777 S. Figueroa Street, 34th Floor, Los Angeles, California 90017. I declare under penalty of perjury that the foregoing is true and correct. Mitchi Shibata 58