By Cori Badgley and Kate J. Hart

Water supply issues continue to plague California, and adequate water supply and analysis has become one of the main litigated issues when challenges are brought to development projects. The courts have already shown that water supply is not an issue to be ignored, whether it’s short-term supply or long-term. (See “California Supreme Court Weighs in Once Again on CEQA Compliance” for an analysis of the leading Supreme Court case on water supply.) More recently, petitioners have started to focus on the required water supply assessment under SB 610 (Water Code, §§ 10910, 10912), instead of only challenging the environmental impact report under the California Environmental Quality Act (“CEQA”).

In O.W.L. Foundation v. City of Rohnert Park (2008) 168 Cal.App.4th 568, petitioner O.W.L. Foundation brought suit against the City of Rohnert Park (“City”) on the grounds that the SB 610 water supply assessment (“WSA”) for one of the City’s specific plan areas was inadequate.[1] Pursuant to SB 610, the City drafted and approved the WSA to accompany the EIR for the specific plan area, which included approximately 300 acres. The trial court found that the WSA was inadequate because the study area used in the WSA did not entirely cover the relevant groundwater subbasin and it failed to analyze how much water is being consumed by existing users or projects. In disagreeing with the trial court, the Court of Appeal, First Appellate District held that SB 610 does not mandate that a WSA cover all existing users or a specific methodology for determining sufficiency. According to the court of appeal, a WSA is sufficient as long as the methodology and study area applied are not arbitrary, capricious or completely lacking in evidentiary support. Each case must be decided on its specific facts.

Before beginning its analysis of the WSA, the court described the applicable standard of review. Petitioner argued that the case falls under Code of Civil Procedure, section 1094.5, which requires that the agency’s decision is supported by substantial evidence.[2] Section 1094.5 applies to administrative mandamus actions, in which a petitioner is challenging a quasi-judicial decision of the agency. The court pointed out that a quasi-judicial decision occurs when a hearing is required. In this case, no hearing was required, although one was held. Therefore, the court found that the standard of review under traditional mandamus (Code of Civil Procedure, § 1085) applied. This standard states that the agency’s decision must be overturned if it was arbitrary, capricious or entirely lacking in evidentiary support. Throughout the opinion, the court kept reiterating this standard to re-emphasize the discretion given to agencies in these matters.

After announcing the proper standard of review, the appellate court framed the issue before it as follows: how much discretion does section 10910(f)(5) afford to a water supplier in analyzing groundwater sufficiency. Under SB 610, if one of the sources of water supply is groundwater, additional analysis must be done. Under subdivision (f)(5),

The WSA must include ‘an analysis of the sufficiency of the groundwater from the basin or basins from which the proposed project will be supplied to meet the projected water demand associated with the proposed project.’

First, the court pointed out that the statute only requires “an analysis of the sufficiency….” Nowhere does the statute define sufficiency as a basin-wide study of existing and future pumping, as proposed by petitioner and adopted by the trial court. 

Second, the court of appeal examined the statutory scheme. It found that if subdivision (f)(5) required data on groundwater pumping by all users, other requirements providing for data on the project’s groundwater pumping would be superfluous since the project would be included in “all users.”

Third, the appellate court looked at the legislative history to see what the legislative intent behind (f)(5) might be. The original version of SB 610 included a requirement that the WSA identify and describe “the other users of the groundwater basin and the historical water use patterns of those other users during normal, single-dry, and multiple-dry years.” This language was stricken from the adopted version of SB 610, and the court inferred from the absence of this requirement that the legislature intended to reject it.

After studying the language in the statute, the appellate court ended its analysis by pointing out the “enormous if not impossible” burden that would be placed on the City or water supplier if the pumping of all users in the entire basin or subbasin had to be evaluated. The court emphasized that a WSA is not meant to be a water supply planning tool for the region. Rather, it is supposed to evaluate whether there is a sufficient water supply for the project at issue.

Along with dismissing the need to evaluate the pumping of all users, the appellate court also rejected the argument that the WSA must evaluate a specific study area and that study area could not include areas outside of the subbasin. The court stated that substantial discretion is given to administrative agencies, and there is not a specific methodology designated by the statute. As with most agency decisions, the legality of the decision is based on the reasonableness of the decision, not whether the methodology used is the “best.”

The court of appeal then went on to evaluate the specific facts in this case to determine whether the WSA was sufficient under SB 610. The court found that the study area and methodology chosen by the City had a logical connection to a previous study done of the same area. Although “it is not enough to assert that an expert’s ‘independent review’ confirms the propriety of the study area,” the City in this case went on to support the expert’s view with adequate evidence. Additionally, the court found that even if the choice of study area was inadequate, the WSA still satisfied the requirements of SB 610 because the analysis was based on two different empirical analyses and the second methodology (i.e., an examination of the correlation between pumping and groundwater levels) independently supported the City’s approval of the WSA. In other words, the City’s decision was rational and not arbitrary and capricious. Therefore, the writ of mandate was denied and the WSA upheld.

This case was a triumphant victory for the City along with other water suppliers that seek to study and approve development projects. WSAs need not evaluate an entire subbasin or basin and need not look at the pumping rates of all users in the study area. Instead, each case will be evaluated on whether there was a rational basis for the methodology used in the WSA, ensuring that the agency’s approval of the WSA was not arbitrary and capricious.  

Kate Hart is a senior associate with Abbott & Kindermann, LLP, and Cori Badgley is an associate with the firm. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

[1] In a case decided earlier in 2008, the appellate court held that a petitioner could not bring suit based on a SB 610 water supply assessment before the EIR was certified, for which the assessment was completed. (California Water Impact Network v. Newhall County Water Dist. (2008) Cal.App.LEXIS 554 (“C-WIN”); see “District’s Water Supply Assessment is Not Subject to Third Party Lawsuit Except in a Legal Challenge to the EIR” for an analysis of the case.) In this case, petitioner brought suit before certification of the EIR, but then the EIR was certified prior to the appeal. After analyzing C-WIN, the court held that C-WIN did not apply to this case on the narrow grounds that the EIR had been certified prior to the appeal, and it would be a waste of the court’s and the parties’ time to dismiss the case at this point. The court emphasized that this is the only reason C-WIN did not apply.

[2] If petitioner had brought the challenge under CEQA, instead of under SB 610, the substantial evidence standard of review would have applied.