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California Court of Appeal Invalidates Local Ordinance Imposing Groundwater Extraction Limits

On May 14, 2019, the California Court of Appeal for the First Judicial District concluded that the Mendocino Community Services District was authorized to impose groundwater extraction limits, but nevertheless invalidated the ordinance at issue because it was not adopted with the proper statutory procedure. [Gomes v. Mendocino City Community Services District, ___Cal.App.5th___, Case No. A153078 (1st Dist. May 14, 2019).]

Statutory Background

The Mendocino Community Services District (District) was created for the purpose of regulating wastewater, not groundwater. In 1987, the California Legislature amended the Water Code to allow the District to, by ordinance, establish programs for the management of groundwater resources (Act). To do so, the District is subject to a multi-step process, which involves two public hearings—the first to consider the groundwater management program and the second hearing to consider any objections to the implementation of the program. If more than 50 percent of voters file protests, the proposed groundwater management program must be abandoned and the District may not consider a new program for at least one year.

Factual and Procedural Background   

In 1990, the District implemented a program, requiring property owners to obtain a groundwater extraction permit in certain circumstances generally involving new development, a new well, or a change in use. Extraction exceeding the permitted amount would be subject to daily fines. This program was adopted and implemented in compliance with the procedures specified in the Water Code.

In 2007, the District implemented a water shortage contingency plan. The plan describes four levels of water shortage criteria and corresponding measures to be taken for each level. Stage 4 is considered a water shortage emergency during which all property owners of developed parcels must obtain a groundwater extraction permit with allotment. While the water shortage contingency plan was the subject of a number of public hearings, the District acknowledges that it did not comply with the procedures set forth in Water Code in implementing the plan.

In February 2014, the District declared a Stage 4 water shortage emergency. In April 2014, the District sent petitioner a letter requiring him to obtain a permit. Petitioner appealed and, following a public hearing, the District concluded petitioner was required to acquire a permit. Subsequently, the District sent petitioner a notice of violation imposing a $100 per day fine, if he did not get a permit.

The District lowered the water shortage level to Stage 1 in December 2014, and to no water shortage condition in February 2015. Nevertheless, because of the Stage 4 declaration, the District found petitioner remained subject to the permit and extraction limits—and continued sending petitioner notices of violation. After issuing these notices, the District began imposing fines which eventually totaled more than $35,000.

Petitioner filed this action seeking to invalidate the ordinance implementing the water shortage contingency plan on the basis that the District lacked the authority to impose groundwater extraction limits and alleging violations of state and federal constitutional requirements. Petitioner later amended his petition to allege that the District did not follow the proper notice and hearing procedures set forth in the Water Code. The trial court upheld the plan finding that the District had provided appropriate notice and opportunities for citizen participation and that the District’s decision to require all property owners to abide by groundwater extraction limits was rationally related to a legitimate governmental purpose.

The Court of Appeal’s Decision

The First District Court of Appeal rejected petitioner’s argument that in the absence of express authorization to impose extraction limits, the District was prohibited from doing so. Instead, the court agreed with the District’s position that the authority to manage groundwater granted by the Act inherently includes the ability to limit the quantity of groundwater that an individual user may extract. The court reasoned that the Act did not enumerate many of the powers that other groundwater management statutes include, such as, conferring powers to require conservation practices; regulate, limit or suspend extractions; impose spacing requirements on new extraction facilities; or impose reasonable operating regulations. The fact that the Act did not specifically provide for the power to limit groundwater extraction did not indicate that the District lacked the power to use other management tools articulated elsewhere with respect to groundwater management. Nor did petitioner cite any legal authority in support of his claim. The court therefore concluded that the District’s authority to manage groundwater resources included the authority to impose groundwater extraction limits.

Nevertheless, the court held the water contingency plan to be invalid because the District had failed to comply with the specific procedures in the Act. The District argued, and the trial court agreed, that the notice and hearing requirements found in the Act applied only to the initial water management program, adopted in 1990, and that subsequent actions, such as the plan at issue, were amendments to the original program. The court found that the trial court’s ruling disregarded the text of the Act. Relying on the plain language of the statute, the court reasoned that the Act authorizes the District to establish programs, plural, indicating that the District may establish more than one program and that each is not considered an amendment of the initial program. References to procedures for adopting agroundwater program, rather than thegroundwater program indicated that each program must comply with the specified procedures.

The court further reasoned that the underlying policy of the Act was to permit property owners to participate meaningfully in the development of any groundwater management program and for the District to reject any proposed program unless more than half of the voters approved. The court noted that had the District followed the required procedures before implementing the water contingency plan at issue, changes to the plan may have been made or the plan may have been altogether abandoned. The court held that the measures were therefore invalid and void. The District, however, is not precluded from re-adopting such a program in accordance with the statutorily mandated procedures.

Conclusion and Implications

The court concluded that because the District failed to follow the proper statutorily mandated procedures, the water shortage program was void. The court reasoned that the underlying policy of the Act was to permit property owners to participate meaningfully in the development of any groundwater management program and for the District to reject any proposed program unless more than half of the voters approved. Had the proper procedures been followed, changes to the plan may have been made or the plan may have been altogether abandoned. The court, however, held that the District is not precluded from re-adopting the program in accordance with the mandated procedural requirements.

While the Water Code provisions at issue in this matter are specific to the Mendocino City Community Services District, the case provides an example of application of the rules of statutory interpretation. Moreover, the court’s finding that management of groundwater necessarily implies the authorization to use a wide range of management techniques may serve to broaden other entities’ statutory authority to manage groundwater.

The opinion is available at: https://www.courts.ca.gov/opinions/documents/A153078.PDF

(Christina Berglund)