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Triggering the Statute of Limitations: What Counts as the State Water Resources Control Board’s ‘Final Action’?

In Millview County Water District v. State Water Resources Control Board, the Court of Appeal for the First Judicial District held that the final action of the State Water Resources Control Board (SWRCB) for purposes of triggering the 30-day statute of limitations under Water Code § 1126(b) “is not necessarily the last action” taken by the SWRCB, “but rather it is [the State Water Board’s] substantive decision.” Millview, No. A146605, 2019 Cal.App. LEXIS 152, at *12 (Cal. Ct. App. Feb. 22, 2019). Accordingly, Millview’s petition for a writ of administrative mandamuschallenging the SWRCB’s revocation of Millview’s water rights was time-barred because the petition was filed more than 30 days after the SWRCB adopted its order, despite later a modification of the order. Id.at *2, *13-*14. [Millview County Water District v. State Water Resources Control Board, ___Cal.App.5th___, Case No. A146605 (1st Dist. Feb. 22, 2019).]

 

Background

Millview County Water District acquired a license to divert water from the Russian River. Approximately two years later, the SWRCB’s Division of Water Rights “issued a notice of proposed revocation to Millview regarding the water rights in [Millview’s license].” Id. Millview requested a hearing. After the hearing, the SWRCB issued a draft order revoking Millview’s license. On May 20, 2014, the SWRCB held a public meeting to review the draft order. Id. It:

 

  • . . .found the water at issue had not been put to beneficial use for a period of five years or more and formally adopted the draft proposed order. Id.at *3.

On May 30, 2014, the SWRCB emailed a copy of the May 20, 2014, order (Order) to Millview. The cover letter stated that the SWRCB had adopted the Order on May 20, 2014, and that the statute of limitations to request reconsideration ran from that date.

On June 2, 2014, the SWRCB emailed a Corrected Order to Millview that stated that the Order was corrected to reflect that the chairperson was not present when the SWRCB adopted the Order. The cover letter “stated: ‘Enclosed is corrected Order WR 2014-0021, which was adopted by the [Board] on May 20, 2014 … .” Id.

 

Procedural History

Millview filed a petition for writ of administrative mandamus challenging the adequacy of the public hearing and the Corrected Order on June 30, 2014. Millview requested that the court set aside the “order,” without specifying which order it was referring to. The “Board filed a demurrer asserting Millview failed to file the petition within the applicable 30-day statute of limitations” as provided in Water Code § 1126(b). The trial court overruled the demurrer, and the SWRCB appealed.

 

The Court of Appeal’s Decision

 

Statute of Limitations Runs from Adoption of Decision or Order

Millview and the SWRCB agreed that the 30-day statute of limitations set by Water Code § 1126(b) applied. They disagreed, however, over what constituted the “final action by the board” that triggered the start of the limitations period. Water Code § 1126(b) provides, in part:

 

  • Any party aggrieved by any decision or order may, not later than 30 days from the date of final action by the board, file a petition for a writ of mandate for review of the decision or order. Id.

The SWRCB contended that its Order adopted May 20, 2014, was the “final action” because “that adoption ‘completed and finalized the decision-making process.’” Id.It  argued that the email notice on May 30, 2014, and the Corrected Order sent June 2, 2014, were only ministerial tasks. Millview countered that the SWRCB’s “final action” was the Corrected Order or, in the alternative, when the board served the Order on May 30, 2014. The Court of Appeal concluded that the Order adopted May 20, 2014, was the “final action” for statute of limitations purposes. Id.at *13.

The court compared Water Code §§ 1122 and 1126(b) to determine what “final action” meant within § 1126(b). Section 1122 requires that a petition for reconsideration be filed “not later than 30 days from the date the board adopts a decision or order.” Id.at *7-*8. Section 1126(b) provides that if a party seeks reconsideration, “that petition extends the time period to file a writ petition.” Id. The court reasoned that §§ 1122 and 1126 indicate that the SWRCB’s “final action” in § 1126(b):

 

  • . . .is dependent on whether there is a timely petition for reconsideration. If no such petition is filed, then the Board’s order or decision, as it was adopted, is the Board’s ‘final action’ in the matter. Id.

In Millview, the SWRCB’s letters stated that the Order and Corrected Order were adopted on May 20, 2014, “and the petition for reconsideration began to run on that date.” Id.at *9. Millview did not request reconsideration and the court concluded that “the Board’s May 20, 2014 Order was, and remained, its ‘final action’ on the matter.” Id.

The court also canvassed the case law, and concluded that “final action” is “not necessarily the last action taken by an agency, but rather is that agency’s substantive decision.” Id.at *12. The court determined that the SWRCB’s “final action” was its May 20, 2014, adoption of the Order. Id.at *13. Millview did not “identify any outstanding issues that remained pending or otherwise unresolved following that hearing.” Id. Further, Millview did not argue that “it anticipated any further substantive decision-making by the Board following the hearing.” Id. Additionally, Millview did not “dispute that the Order gave rise to legal consequences—i.e., the revocation of Millview’s license.” Id.

[The court also canvassed the case law, and concluded that “final action” is “not necessarily the last action taken by an agency, but rather is that agency’s substantive decision.”  Id. at *12.  The court determined that the State Water Board’s “final action” was its May 20, 2014, adoption of the Order.  Id. at *13.  Millview did not “identify any outstanding issues that remained pending or otherwise unresolved following that hearing.” Id.  While Millview argued that “the Board could have modified the draft order at a subsequent closed session,” the court noted that the record did not suggest that the closed meeting occurred after the Board adopted the draft order.  Id. *13 n.6.  Additionally, Millview did not “dispute that the Order gave rise to legal consequences—i.e., the revocation of Millview’s license.”  Id. at *13.  ]

 

Limitations Period Not Restarted by Non-substantive Amendment of Order

The court concluded that the Corrected Order did not negate the Order’s finality for purposes of restarting the limitations period:

 

  • Whether a modification to a final decision or judgment restarts the statute of limitations for an appeal depends on whether the modification was substantial. Id.

The standard is whether “the modification ‘materially affected’ the appealing party’s rights.” Id.at *15. Millview did not argue that the Corrected Order made substantial modifications. Accordingly, the Corrected Order did not restart the statute of limitations period.

 

Limitations Period Not Triggered by Date of Service of the Order

Millview argued that the statute of limitations should be triggered by the date of service of the Order because service was part of the “final action”; that the California Legislature “intended a uniform statute of limitations period running from the date of service”; and that “practical considerations required the limitations period to being only after service.” Id.at *17. The court rejected all three arguments because the Legislature could have specified that the statute of limitations ran from the date of service if it wanted to, and nothing in the legislative history indicted an intent “to create a uniform statute of limitations running from the date of service.” Id.at *17-*20.

 

Equitable Estoppel Did Not Apply

The trial court found that the SWRCB was estopped from relying on a statute of limitations defense because the cover letter accompanying the Corrected Order induced Millview to consider the Corrected Order as the “final order.” Id.at *22. The Court of Appeal disagreed.

The court concluded the Corrected Order was not:

 

  • . . .intended to induce Millview to believe the statute of limitations would begin running from the date of the letter” because the cover letter was “entirely silent as to the limitations period for seeking judicial review. Id.at *23.

Accordingly, the court reversed the trial court’s ruling, and directed that it vacate its writ.

 

Conclusion and Implications

Millviewis instructive as to what constitutes a “final action” by the SWRCB that will trigger the 30-day limitations period for challenging a water rights decision or order. The “final action” is not the last procedural or “ministerial” step that the SWRCB takes, but rather is its final “substantive” action. Determining what is the final “substantive” action when the SWRCB later modifies an order or decision may not always be clear. Practitioners will want to review Millview when bringing a writ petition under Water Code § 1126(b), and err on the side of caution before relying on a change in an order or decision as having restarted the 30-day limitations period. Notably, the Millviewcase did not involve a petition for reconsideration, which extends the period for filing a writ petition. The published opinion is available online at https://www.courts.ca.gov/opinions/documents/A146605.PDF

(Jenifer Gee, Dan O’Hanlon)