By William W. Abbott

Land use and California Environmental Quality Act (“CEQA”) litigation frequently involves a petitioner asking the court to second guess agency decision makers by reweighing the evidence, and to expansively interpret the statutory duties imposed by a particular statute. As illustrated in a recent appellate court decision upholding an urban water management plan, neither approach is appropriate. (Sonoma County Water Coalition v. Sonoma County Water Agency (2010) 189 Cal.App.4th 33.)

The facts involve the urban water management plan (“UWMP”) adopted by the Sonoma County Water Agency (“SCWA”). The agency is a water wholesaler, whose service area includes a population of approximately 600,000. SCWA adopted the plan in 2006, and was challenged on five general grounds: (1) lack of coordination with required agencies, (2) lack of the required detail within the plan, (3) failure to consider certain environmental factors, (4) failure to address the effect of recycled water on the future water supply, and (5) failure to provide reasonable specificity with respect to water demand measures identified to address potential future water shortfalls. The trial court ruled favorably for the opponents. SCWA appealed, and the appellate court reversed, in large part by concluding that the trial court failed to apply the required level of deference to the agency’s decision.

A number of the opponent’s challenges were constructed around the “possibility” argument. That is, the legal challenge is formulated by ignoring the evidence in the administrative record, then assaulting the decision on the possibility that one or more assumptions may not bear out. As an example, the challenged water management plan made certain key assumptions including future approval by the State Water Resources Control Board of additional diversions. Petitioner successfully argued to the trial court that as this approval was not assured, the possibility existed that the future diversions might be denied. This argument is frequently raised in land use or CEQA challenges because often, the challenged project involves other agencies with independent regulatory control that influence future project implementation. With respect to the future diversion and other future regulatory issues by other agencies, the appellate court determined that the trial court committed error in setting aside SCWA’s decision as there was substantial evidence in the record to support the agency’s decision. In other words, an agency may rely upon a reasonable set of assumptions, if the assumptions are supported by substantial evidence. While the scope of the administrative record is not stated in the appellate decision, from a practitioner’s perspective it is clear that SCWA had done its homework in terms of having supporting evidence for its key assumptions. The appellate court also rejected petitioners statutory interpretation of the language requiring discussion of alternative water sources when a water source "may not be available at a consistent level of use." Petitioner argued that "may not be available" equated to any "bare possibility."  The court disagreed. In recognizing the deference owed to the adopting agency, the appellate court noted that the issue was not whether or not another planning assumption was more reasonable, but whether or not there was substantial evidence to support the assumption adopted by SCWA.

Another example of the possibility claim was the opponent’s argument that there existed the potential for future groundwater contamination as a result of potential future discharges by the City of Santa Rosa. This possibility was raised as a result of the City of Santa Rosa circulating a request for CEQA scoping for its waste-water project. According to the petitioners, this rendered the UWMP invalid as it failed to account for this risk. The appellate court noted that the record before SCWA did not support the conclusion that this risk existed. No specific discharge project had been defined and the project was speculative, but perhaps more importantly, the record included evidence supporting SCWA’s conclusion that its water treatment and natural filtration systems would reasonably assure adequate water quality. “Although others might well assess the significance of the risk presented” by the City’s future discharge project “differently, it was again error for the court to substitute its judgment for that of the Agency.”

With respect to the coordination claim, the Water Coalition argued that SCWA was required to coordinate not only with all agencies who shared the same supply, but also all agencies whose regulatory authority potentially impacted future supplies such as the Army Corps of Engineers and Federal Agency Regulatory Commission. In a matter of statutory interpretation, the appellate court concluded that none of the agencies identified by the opponents meet the statutory criteria of agencies “in the area” which shared the same water source or otherwise qualified as water management agencies. The fact that these other agencies’ regulatory authority might impact future water supply did not bring them within the scope of the statute for purposes of coordination. The appellate court applied an abuse of discretion standard in reviewing the agency’s decision not to “coordinate” with these other agencies.

This decision restates and highlights the role of substantial evidence in guiding a reviewing court as it reviews challenged agency actions. Under the separation of powers doctrine, the court does not sit in place of agency decision makers, but reviews challenged decisions, recognizing the expertise of the decision makers and applying the statute as drafted. While this case only involves an urban water management plan, the appellate court decision should act as important guidance in the CEQA and land use context as well.

William W. Abbott is a partner at Abbott & Kindermann, LLP. 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.