In re BAY-DELTA PROGRAMMATIC ENVIRONMENTAL IMPACT REPORT COORDINATED PROCEEDINGS.DON LAUB et al., Plaintiffs and Appellants, v. JOSEPH GRAHAM (GRAY) DAVIS et al., Defendants and Respondents.  REGIONAL COUNCIL OF RURAL COUNTIES et al., Plaintiffs and Appellants, v. STATE OF CALIFORNIA et al., Defendants and Respondents; DEPARTMENT OF WATER RESOURCES et al., Real Parties in Interest and Respondents; SAN JOAQUIN RIVER GROUP AUTHORITY et al., Interveners and Respondents.

 

JCCP No. 4152

 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

(Fresno & Sacramento)

 

Filed 10/7/05

 

 

            APPEAL from the Superior Court of the County of Sacramento, Patricia C. Esgro, Judge.  Reversed in part and affirmed in part.

 

            Brenda J. Southwick and Rebecca Dell Sheehan for Plaintiffs and Appellants Laub, Jacobsen, Sheely and California Farm Bureau Federation.

 

            Gibson, Dunn & Crutcher and Alan Neal Bick; Gibson, Dunn & Crutcher and Christopher H. Buckley, Jr., as pro hac vice, for Plaintiff and Appellant California Farm Bureau Federation.

 

            Nomellini, Grilli & McDaniel, Dante John Nomellini, Sr., Daniel A. McDaniel, Dante John Nomellini, Jr.; Thomas M. Zuckerman and John Herrick for Plaintiffs and Appellants Central Delta Water Agency, R.C. Farms, Inc., Zuckerman-Mandeville, Inc., Mussi, and South Delta Water Agency.

 

            Kerr & Wagstaffe, James M. Wagstaffe and Keith K. Fong for Plaintiff and Appellant Regional Council of Rural Counties.

 

            Bill Lockyer, Attorney General, Tom Greene, Chief Assistant Attorney General, J. Matthew Rodriquez, Senior Assistant Attorney General, Daniel L. Siegel, Danae J. Aitchison, Gordon B. Burns, Virginia A. Cahill, and Peter Southworth, Deputy Attorneys General for Defendants and Respondents State of California, Davis, California Resources Agency, Nichols, California Environmental Protection Agency, Hickox, Department of Water Resources, Hannigan, Wright, CALFED Bay-Delta Program, and Department of Fish and Game.

 

            Heller Ehrman White & McAuliffe, Nicholas W. van Aelstyn, Patricia K. Oliver, and Alissa B. Kolek for The Nature Conservancy as Amicus Curiae on behalf of Defendants and Respondents State of California, Davis, California Resources Agency, Nichols, California Environmental Protection Agency, Hickox, Department of Water Resources, Hannigan, Wright, CALFED Bay-Delta Program, and Department of Fish and Game.

 

            Kronick, Moskovitz, Tiedemann & Girard, Clifford W. Schulz, and Eric N. Robinson for Real Parties in Interest and Respondents State Water Contractors, Kern County Water Agency, and Tulare Lake Basin Water Storage District.

 

 

            Sonnenschein Nath & Rosenthal and Kevin T. Haroff; Squire, Sanders & Dempsey, Kevin T. Haroff, and Olive Lee Thaler for Real Party in Interest and Respondent Santa Clara Valley Water District.

 

            Jeffrey Kightlinger, Linus S. Masouredis, and Adam C. Kear for Real Party in Interest and Respondent The Metropolital Water District of Southern California.

 

            Kronick, Moskovitz, Tiedemann & Girard, Daniel J. O’Hanlon, and Jon D. Rubin for Real Party in Interest and Respondent Westlands Water District.

 

            Somach, Simmons & Dunn, Stuart L. Somach, Andrew M. Hitchings, and Nicholas A. Jacobs for Real Party in Interest and Respondent Glenn-Colusa Irrigation District.

 

            O’Laughlin & Paris and Tim O’Laughlin for Interveners and Respondents.

 

 

 

            In response to concerns over the decline of water quality and the ecology of the San Francisco Bay and the Sacramento-San Joaquin Delta (Delta) and concerns over recurrent shortages of water for beneficial uses, 18 state and federal agencies with management or regulatory responsibility over the Bay-Delta formed CALFED to devise a long-range plan to address those concerns.  After many years of study and analysis, including significant public participation, CALFED adopted a program (the CALFED Program or Program) to be administered over the next 30 years, which includes measures for improving the Bay-Delta ecosystem, water quality and quantity, and Delta levee stability.  On August 28, 2000, the Secretary of the California Resources Agency certified the final Programmatic Environmental Impact Statement/Environmental Impact Report (PEIS/R) and CALFED adopted the Record of Decision (ROD) for the Program in accordance with the National Environmental Policy Act (42 U.S.C. § 4321 et seq.) and the California Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.). 

            Appellants, who include the California Farm Bureau Federation (Farm Bureau), the Central Delta Water Agency (CDWA) and the Regional Council of Rural Counties (RCRC), filed petitions for writ of mandate challenging the PEIS/R under CEQA and asserting various non-CEQA claims based on actions taken or anticipated under the Program.  The trial court found the PEIS/R satisfactory under CEQA and dismissed the non-CEQA claims as either premature or not properly stated. 

            Appellants challenge the trial court’s rulings on a number of grounds.  Among other things, they contend the PEIS/R does not contain a sufficient discussion of adverse environmental impacts, mitigation measures or alternatives.  They also argue CALFED provided inadequate responses to public comments and the PEIS/R should have been re-circulated when new information about the Program was revealed late in the proceedings.  Finally, appellants contend they have stated viable non-CEQA claims arising from conduct associated with implementation of the Program.

            Following a summary of the facts and proceedings relevant to this matter, we first address appellants’ CEQA issues.  We reject appellants’ challenges to the adequacy of the PEIS/R’s analysis of Program impacts on the environment and, in particular, agriculture.  With one exception, we also reject appellants’ challenges to the adequacy of the PEIS/R’s treatment of mitigation measures and alternatives.  We also disagree with appellants’ arguments regarding CALFED’s responses to public comments and conclude there was no need for CALFED to re-circulate the PEIS/R due to CALFED’s responses to public comments regarding the Environmental Water Account (EWA). 

            As to three matters, we agree with appellants the PEIS/R is legally insufficient.  First, we conclude the PEIS/R improperly fails to discuss an alternative to the Program that requires reduced exports of water from the Delta.  Second, we conclude the PEIS/R fails to include an adequate discussion of the environmental impacts of diverting water from various potential sources to meet the Program’s goals.  Third, we conclude certain significant information relating to the EWA should have been included in the PEIS/R.

            Finally, we reject certain non-CEQA claims raised by appellants as either not properly stated or not adequately preserved for appeal.

            We reverse the judgment in part.

Facts and Proceedings

I

Introduction

            Although the central focus of the CALFED Program is the environmental health of the Bay-Delta estuary, the problems that exist in that area cannot be divorced from the more generalized problems of water quality, quantity, and allocation that have long been a fact of life in the State of California (State). 

            California is blessed with many lakes and streams, abundant winter snows and ample rains, but it is also plagued by a ‘water problem.’  The problem of water supply is critical in California and made more so by the State’s expanding population.  Unfortunately, from a water supply point of view, population rarely seems to grow in the areas most endowed with domestic water supplies.  The State water problem stems not only from the unprecedented recent growth of population, but also from the concurrent growth of industry and agriculture.  California suffers in addition because for many years construction of water conservation works has not kept pace with the increasing need for water.”  (1 Rogers & Nichols, Water for California (Bancroft-Whitney 1967) § 1, p. 20 (hereafter Rogers & Nichols).) 

            Although the foregoing was written nearly 40 years ago, the problems recognized at that time continue in some form or another today.  Added to the mix is a growing concern for the preservation and restoration of the State’s natural resources and environment for the sake of endangered or threatened plant and animal species.  Methods for solving water shortage and allocation problems in the past have become less palatable in today’s more environmentally sensitive political climate, making the search for solutions ever more difficult. 

            The CALFED Program is the latest attempt to break the impasse among the various interest groups competing for water in California.  One of the intractable problems the Program seeks to address is the disparity between the amount of water needed to satisfy the demands and desires of the State’s various beneficial users and the amount of water available for such use.  “Historically, the resolution of the physical fact of water scarcity in California has focused almost exclusively on the development and augmentation of water supplies.  In the best tradition of the old West, water scarcity was viewed as something to be conquered rather than managed.  Substantial amounts of public resources were invested in the construction and operation of vast storage and conveyance facilities.”  (Howitt et al., Competition for California Water:  Alternative Resolutions (U. Cal. Press 1982) The Economics of Water Allocation, at p. 137.) 

            Those days are over.  Limits of the developed water supply in the State are being reached, and there is fierce competition for what remains.  (Gardner et al., Competition for California Water:  Alternative Resolutions (U. Cal. Press 1982) Agriculture, at pp. 11, 14.)  It is now recognized that each new project to harness greater amounts of water comes at a price beyond the cost of construction and maintenance.  A new water reservoir or conveyance facility may mean the destruction of many acres of farmland or wildlife habitat.  Water diverted from a stream or other watercourse to some beneficial use may mean less water passing to the sea through which fish migrate or a reduction in the natural barrier to saltwater intrusion.  Water allocated to one area of the State may mean less water available for another area. 

            Another problem the Program seeks to resolve is the inequality between water availability and water demand in the different regions of the State.  At the risk of oversimplification, this problem is primarily one of supply exceeding demand in the northern regions coupled with the opposite condition in the central and southern regions.  This is not just a matter of reallocation.  Water taken from one area to convert a desert in another area into a productive agricultural community may retard development in the area of origin. 

            To aid in our examination of the CALFED Program and the issues raised in these coordinated proceedings, we first place the Program in its proper geographic and historic context.  The Program is not an isolated effort to restore the ecological health of the Bay-Delta or to resolve conflicts among the State’s water users.  The problems giving rise to CALFED have lasted for decades, and the Program is the latest, and certainly the most comprehensive and ambitious, attempt to provide relief to those dependent on this State’s limited water resources.

II

Geographic Setting

            The Delta is a maze of tributaries, sloughs, and islands covering over 738,000 acres in five counties.  The legal boundary of the Delta is roughly triangular, with the three vertices being Sacramento in the north, Vernalis in the south and Pittsburg in the west.  (United States v. State Water Resources Control Bd. (1986) 182 Cal.App.3d 82, 107.)  The Bay-Delta estuary includes California’s two largest rivers, the Sacramento, which flows into the Delta from the north, and the San Joaquin, which flows into the Delta from the south.  Water that accumulates in these rivers flows through the Delta and, if not diverted elsewhere, into Suisun Bay.  From there it continues to the San Francisco Bay and on to the Pacific Ocean.  (Rogers & Nichols, supra, § 26, p. 42.) 

            The Delta originally consisted of overflow and seasonally inundated land.  Today, this area is crisscrossed by the Sacramento and San Joaquin Rivers and many meandering sloughs, creating over 50 islands protected by levees that, along with the adjacent mainland, contain highly productive farmland.  (Littleworth & Garner, California Water (Solano Press Books 1995) p. 126 (hereafter Littleworth & Garner); Hundley, The Great Thirst (U. Cal. Press 2001) pp. 393-394 (hereafter Hundley).)  The Delta also contains major transportation networks, towns, homes and businesses.  Because this area is drying out due to exposure to sun and wind by farming, it has been sinking at an annual rate of two to five inches, faster than any other place on earth.  Islands that were at sea level a century ago are now as much as twenty to thirty feet below sea level and protected by old and increasingly precarious levees.”  (Hundley, supra, at p. 394.) 

            The Delta is the hub for distribution of water emptying into the Bay-Delta estuary to other regions in the State, including the Central Valley and Southern California.  Average annual precipitation in California is approximately 24 inches.  However, this amount varies from area to area, with a low of almost nothing in the southern desert regions and a high of 100 inches in the mountainous north coast regions.  (Littleworth & Garner, supra, at p. 2.)  Sixty percent of the precipitation that falls over the State eventually evaporates or is transpired by trees and other vegetation.  The rest, approximately 71 million acre-feet, ends up as runoff that gathers in streams and other watercourses.  Half of this runoff flows through the Delta.  (Rieke, The Bay-Delta Accord:  A Stride Toward Sustainability (1996) 67 U.Colo. L.Rev. 341, 343 (hereafter Rieke)). 

            California’s Central Valley stretches nearly 500 miles from Redding in the north to Bakersfield in the south, and more than a hundred miles from the Sierra Nevada in the east to the coastal ranges in the west.  (Rogers & Nichols, supra, § 26, p. 42.)  Average annual precipitation in the Central Valley ranges from five inches in the south to more than 30 inches in the north, with more than three-fourths of this precipitation occurring between December and April.  (Id., § 27, pp. 43-46.)  The water flow of the Sacramento and San Joaquin Rivers is also seasonal, with rains and melting snow creating high flow in the spring and early summer.  (See Rank v. Krug (D.C. Cal. 1950) 90 F.Supp. 773, 784.) 

            The Central Valley has been described as “[a] phenomenally rich and broad alluvial plain” watered by streams draining the Sierra Nevada in the east and the coastal ranges in the west.  (Hundley, supra, at p. 235.)  However, precipitation in the area comes mostly after the end of the crop-growing season.  (Ibid.)  Originally, the Central Valley floor had approximately 922,000 acres of riparian vegetation supported by a watershed of more than 40,000 square miles.  The Sacramento River alone was bordered by up to 500,000 acres of riparian forest.  But transformation of the Central Valley into the nation’s leading agricultural area has resulted in the loss of 99 percent of native grasses, 89 percent of riparian woodlands, and 95 percent of wetlands in this area.  (Carle, Drowning the Dream:  California’s Water Choices at the Millennium (Praeger 2000) p. 144 (hereafter Carle).) 

            The overall amount of water runoff in the State varies from year to year.  In 1977, total runoff was 15 million acre-feet; in 1983, it was 135 million acre-feet.  (Littleworth & Garner, supra, at p. 2.) 

            The State has 450 groundwater basins capable of storing approximately 850 million acre-feet of water.  However, only half of this water is close enough to the surface to be pumped economically.  (Littleworth & Garner, supra, at p. 2.)  Because the amount of water used in the State has consistently exceeded the amount of developed water available, groundwater reserves have been shrinking at a rate of over a million acre-feet per year.  (Hundley, supra, at p. 2; Littleworth & Garner, supra, at p. 3.)  Most of this groundwater overdraft has been in the Central Valley.  (Coppock et al., Competition for California Water:  Alternative Resolutions (U. Cal. Press 1982) The Problem, The Resource, The Competition, at p. 3.)

III

Population Growth and Water Projects

            The first settlers to the San Francisco area encountered scant fresh water supplies, and these proved inadequate to meet the boom of the later gold rush era.  (Hundley, supra, at p. 172.)  After some early efforts to enlist private enterprise to meet the city’s water needs, the city turned its attention to public water projects and distant water supplies.  The city eventually settled on the Tuolumne River--which drains a large portion of the Sierra Nevada, including the Hetch Hetchy Valley 170 miles to the east--for its water.  (Id. at pp. 172-173.)  In 1901, San Francisco filed for rights to Tuolumne River water. (Id. at p. 174.)  However, due to intense opposition, the project did not move forward until 1913.  (Id. at pp. 175-186.)  Eventually, a dam was built, creating the Hetch Hetchy Reservoir.  San Francisco began importing water from the Tuolumne River in 1923 (Carle, supra, at p. 140) and a similar project was undertaken later to import water from the Mokulumne River to areas on the east side of the San Francisco Bay.  This water began flowing in 1930.  (Ibid.) 

            Early residents of Southern California struggled with problems of drought and limited water supply.  When available above-ground sources were exhausted, wells were drilled to tap groundwater sources.  (Rogers & Nichols, supra, § 91, p. 122.)  By 1905, the population of Los Angeles had grown to 220,000.  By 1920, the population was 576,000 and, during the next decade, it doubled to over a million.  (Carle, supra, at p. 74.)  During this period, groundwater use in Southern California reduced artesian wells from 2,500 to 22.  (Littleworth & Garner, supra, at p. 11.) 

            Faced with the necessity of importing water to the area to meet the needs of its growing population, Los Angeles began searching for new water sources.  Shortly after 1900, it began acquiring land in the Owens Valley, 238 miles north on the eastern slope of the Sierra Nevada, in order to gain control of the water supply in the area.  The city eventually acquired 97 percent of the available privately held land in Inyo and Mono Counties.  (County of Inyo v. Yorty (1973) 32 Cal.App.3d 795, 799.)  In 1908, Los Angeles commenced construction of an aqueduct to bring Owens Valley water to Southern California.  This project was completed and water began flowing in 1913.  (Rogers & Nichols, supra, § 91, p. 122; Hundley, supra, at p. 155.) 

Soon thereafter, Los Angeles began looking further north to Mono Lake as a source of additional water to meet its growing needs.  (Rogers & Nichols, supra, § 7, p. 23.)  Mono Lake is the second largest lake in the State and sits at the base of the Sierra Nevada near the east entrance to Yosemite National Park.  (National Audubon Society v. Superior Court (1983) 33 Cal.3d 419, 424.)  In 1940, the Division of Water Resources, the predecessor of the State Water Resources Control Board (SWRCB), granted Los Angeles a permit to appropriate water from four fresh water streams that emptied into Mono Lake.  The city constructed facilities to divert about half of this flow into the existing Owens Valley aqueduct.  In 1970, the city completed a second aqueduct from Owens Valley and thereafter began diverting nearly the entire flow of these four streams.  (Ibid.)  Until these diversions were curtailed by court action (discussed infra), the level of Mono Lake had dropped considerably and the surface area had receded by one-third.  (Ibid.) 

            Not long after completion of the first phase of the Owens Valley project, Los Angeles explored the feasibility of importing water from the Colorado River.  (Rogers & Nichols, supra, § 7, pp. 23-24.)  In 1928, the Metropolitan Water District of Southern California (Metropolitan) was created for the purpose of combining the financial resources of cities and communities in Southern California to bring water to the area.  (Metropolitan Water Dist. v. Imperial Irrigation Dist. (2000) 80 Cal.App.4th 1403, 1415.)  Metropolitan constructed the Colorado River Aqueduct to bring in water from the Colorado River.  This water began flowing in 1941.  An offshoot of the Colorado River Aqueduct, the San Diego Aqueduct, was also constructed to supply Colorado River water to San Diego County.  (Rogers & Nichols, supra, § 7, pp. 23-24; Hundley, supra, at pp. 230-231.) 

            Because of the interstate and international nature of the Colorado River, California’s rights to its water, as well as those of several other states and Mexico, are governed by a series of agreements, treaties, laws, and court decisions.  Under these legal constraints, California is limited in a normal year to 4.4 million acre-feet of Colorado River water plus no more than half of any surplus water available.  Of this amount, agricultural users receive 3.8 million acre-feet, with the balance going to urban users.  (Hundley, supra, at p. 221.) 

            Historically, California has used more than its normal-year entitlement of Colorado River water.  This has been made possible through under-use by Arizona and Nevada and the availability of surplus water.  However, because both Arizona and Nevada are approaching full use of their respective apportionments, the United States Secretary of the Interior has directed California to devise a plan to live within its 4.4 million acre-feet entitlement. 

            The Central Valley has undergone dramatic change since the first settlement of California.  During those early years, winter rains and spring runoff brought annual floods that soaked half a million acres of tule swamps in the valley.  (Carle, supra, at p. 143.)  Seasonal flooding caused serious damage to farms and cities along the Sacramento and San Joaquin Rivers.  (Hundley, supra, at pp. 235-237.)  Early attempts at coordinated flood control in this area began in 1911.  In that year, the Legislature created a State Reclamation Board and vested it with all authority over protective works in the Sacramento River Valley.  (Id. at pp. 237-239.)  In conjunction with the U.S. Army Corp of Engineers, the Reclamation Board implemented a valley-wide plan, the Sacramento Flood Control Project, to establish a network of levees and bypasses to prevent flooding.  (Id. at p. 239.) 

Later efforts were made to adopt a comprehensive plan for the entire Central Valley.  (Hundley, supra, at pp. 242-247.)  These efforts culminated in the Central Valley Project (CVP), which was approved by the State Legislature in 1933.  (Stats. 1933, ch. 1042, p. 2643; Wat. Code, § 11100 et seq.)  The CVP is the nation’s largest water reclamation project (County of San Joaquin v. State Water Resources Control Bd. (1997) 54 Cal.App.4th 1144, 1147), with total reservoir capacity of more than 8.5 million acre-feet in its principal dams (Rogers & Nichols, supra, § 53, p. 61).  The CVP is also the State’s largest water supplier, delivering approximately 7.3 million acre-feet of water to over 250 water contractors, primarily for agricultural use.  (Littleworth & Garner, supra, at pp. 5, 18.) 

            Operation of the CVP involves impounding the natural flow of the San Joaquin River at Friant Dam and diverting the water through the Friant-Kern Canal to the southern reaches of the San Joaquin Valley.  (United States v. State Water Resources Control Bd., supra, 182 Cal.App.3d at p. 99.)  The other major aspect of the CVP involves impounding the waters of the Sacramento River at Shasta Dam.  The water allowed to flow past Shasta Dam in the Sacramento River is augmented by water brought through a tunnel from the Trinity River and from reservoirs formed by Folsom and Nimbus Dams on the American River.  This water eventually flows into the Delta.  About 30 miles south of Sacramento, the Delta Cross Channel regulates the flow of water through the Delta to the Tracy Pumping Plant.  There, it is lifted into the Delta Mendota Canal through which it flows to the Mendota Pool and eventually replaces the natural flow of the San Joaquin River.  (Ibid.) 

Although the CVP was originally a State project, the lingering effects of the Great Depression made it impossible for the State to sell bonds for it and the federal government took control of the project.  (Littleworth & Garner, supra, at p. 18; Hundley, supra, at pp. 252-257; see United States v. Gerlach Live Stock Co. (1950) 339 U.S. 725, 728 [94 L.Ed. 1231, 1237].)  The United States Bureau of Reclamation (USBOR) operates the CVP pursuant to appropriative water rights granted by the SWRCB.  (United States v. State Water Resources Control Bd., supra, 182 Cal.App.3d at p. 97.)  Construction of the CVP began in 1937, with first water delivery in 1940.  (Rogers & Nichols, supra, § 52, p. 60.) 

Operation of the CVP helped to transform agriculture in the Central Valley.  Agriculture is one of the foundations of this State’s prosperity, providing employment for one in 10 Californians and a variety and quantity of foodstuffs that both feed the nation and provide a significant source of exports.  In 1889, the State’s 14,000 farmers irrigated approximately one million acres of farmland between Stockton and Bakersfield.  (Hundley, supra, at pp. 101-102.)  By 1981, the number of acres in agricultural production had risen to 9.7 million.  (Littleworth & Garner, supra, at p. 5.)  More recently, the amount of agricultural land in the State has declined.  From 1982 to 1992, more than a million acres of farmland were lost to other uses.  Between 1994 and 1996, another 65,827 acres of irrigated farmland were lost (Carle, supra, at p. 176), and this trend is expected to continue.  (Hundley, supra, at p. 525; Bruvold et al., Competition for California Water:  Alternative Resolutions (U. Cal. Press 1982) Municipal and Domestic Use, at pp. 37, 38) 

            Despite recent reductions in farmland, agriculture remains by far the largest user of the State’s developed water supply (Littleworth & Garner, supra, at pp. 5-6), with the CVP supplying 30 percent of the amount used by agriculture. 

            At the time of the PEIS/R, approximately 641,000 acres in the Bay-Delta were classified as “prime farmland, farmland of statewide importance, and unique farmland, or land with high statewide significance for agricultural production.”  In 1996, the San Joaquin River region of the Bay-Delta estuary contained 3,751,089 acres of important farmland, and the Sacramento River region contained 2,442,276 acres.  Approximately 493,000 acres of important farmland were mapped for the Bay Region of Contra Costa, Solano, Napa, and Sonoma Counties, and in other regions, including Southern California, important farmland amounted to approximately 2.1 million acres. 

            From 1940 to 1970, the population of Los Angeles doubled to 3 million, and the populations of Los Angeles, Orange, Ventura and San Diego Counties increased two and one-half times, to 10 million.  When Colorado River water began flowing into the State in 1941, the amount of water available to Southern California exceeded local needs.  The member communities of Metropolitan did not begin using all of the water brought into the State from the Colorado River until the 1960’s.  (Hundley, supra, at pp. 230-231.) 

            In 1951, the SWRCB reported that “‘[t]he greatest challenge’ facing the state . . . was ‘redistribution of the water supply from areas of surplus to areas of deficiency.’”  (Hundley, supra, at p. 279.)  That year, the Legislature authorized construction of the State Water Project (SWP), another large water storage and delivery system.  However, it was not until 1959, when the Legislature passed the California Water Resources Development Bond Act (the Burns-Porter Act) (Wat. Code, § 12930 et seq.) authorizing $1.75 billion in bonds, and the electorate approved the bonds the following year, that construction of the SWP began.  (Planning & Conservation League v. Department of Water Resources (2000) 83 Cal.App.4th 892, 898; Goodman v. County of Riverside (1983) 140 Cal.App.3d 900, 903.) 

            The SWP consists of a series of 21 dams and reservoirs, five power plants and 16 pumping plants stretching from Lake Oroville in Butte County to Lake Perris in Riverside County.  (Goodman v. County of Riverside, supra, 140 Cal.App.3d at p. 903.)  Under the SWP, water from the Feather River is stored behind Oroville Dam, from which it is released to flow into the Sacramento River as needed.  That water flows through the Delta to the Clifton Court Forebay, where a portion enters the South Bay Aqueduct for delivery to the Santa Clara Valley.  The greater portion of this water is lifted into the California Aqueduct for transport through the San Joaquin Valley and into the southern part of the State.  (United States v. State Water Resources Control Bd., supra, 182 Cal.App.3d at p. 100.) 

            Discussions leading to approval of the SWP were marked by a good deal of acrimony between northern and southern California interests.  (Rogers & Nichols, supra, § 87, p. 115.)  Southern Californians objected to the project because of area-of-origin laws that were enacted in the early 1930’s in conjunction with the CVP.  Those laws protect the future water needs of users in areas where water originates.  (See discussion infra.)  Southern Californians did not want to pay for the SWP without assurances that northern Californians would not later prevent delivery of water based on superior water rights.  (Hundley, supra, at pp. 245, 281.)  Northern Californians objected to the project because they did not want to give up water that might someday be needed for future development.  (Rogers & Nichols, supra, § 87, p. 115.)  Northern Californians argued that people should come to the water, not vice versa.  (Hundley, supra, at p. 286.) 

            The Burns-Porter Act was approved despite nearly unanimous opposition by legislators from the northern part of the state.  (Hundley, supra, at pp. 285-286.)  To satisfy northern concerns, the Legislature enacted the Delta Protection Act (Wat. Code, §§ 12200-12220), which recognizes the unique “salinity intrusion” problems of the Delta and provides “for the protection, conservation, development, control and use of the waters in the Delta for the public good.”  (Wat. Code, § 12200; see United States v. State Water Resources Control Bd., supra, 182 Cal.App.3d at p. 139.)  To placate the south, area-of-origin laws were amended to provide that water supply contracts entered into pursuant to the SWP could not be abrogated while bonds to pay for the project are outstanding.  Some of those bonds are not scheduled to be paid off until 2029.  (Hundley, supra, at p. 284.) 

            The Department of Water Resources (DWR) obtained appropriative rights from the SWRCB for operation of the SWP.  (United States v. State Water Resources Control Bd., supra, 182 Cal.App.3d at p. 106.)  Under the Burns-Porter Act, the DWR was directed to enter into contracts for the sale of SWP water, with the proceeds used to repay the cost of the project.  (Antelope Valley-East Kern Water Agency v. Local Agency Formation Com. (1988) 204 Cal.App.3d 990, 993.)  The DWR entered into contracts with 29 agricultural or urban water suppliers throughout the State.  “These contractors received entitlements to an annual amount of water in return for which they repay a proportionate share of the financing and maintenance of the SWP facilities.  Under the SWP, water contractors ‘are obligated to pay for their contractual entitlements of water’ from the project, ‘whether the water is delivered or not.’”  (Planning & Conservation League v. Department of Water Resources, supra, 83 Cal.App.4th at p. 899.) 

            The SWP originally contracted to provide 4.2 million acre-feet of water per year.  (Littleworth & Garner, supra, at p. 5.)  However, because of the environmental movement of the 1970’s, construction of the entire project has never been completed.  (See Santa Clarita Organization for Planning the Environment v. County of Los Angeles (2003) 106 Cal.App.4th 715, 721-722; Hundley, supra, at pp. 312-313.)  The facilities that have been completed deliver only about half of the forecasted amount of water.  (Ibid.) 

            Delivery of SWP water began in 1971.  (Carle, supra, at p. 150.)  The SWP supplies water to users from San Francisco to Southern California, serving approximately two-thirds of all Californians.  (Metropolitan Water Dist. v. Imperial Irrigation Dist., supra, 80 Cal.App.4th at p. 1411, fn. 8.)  Metropolitan is by far the SWP’s largest contractor, receiving about half of all water delivered.  (Id. at p. 1418.)  Seventy percent of SWP urban water users are in Southern California.  (Carle, supra, at p. 150.)  However, because of the various other sources of water available to Southern California, including Owens Valley and the Colorado River, Southern California water requirements did not catch up with available SWP water until 1988.  (Hundley, supra, at p. 299.) 

            As growth, and hence water consumption, has increased in the northern parts of the State in recent years, less water has been flowing into the Delta and, consequently, saltwater intrusion from the San Francisco Bay has increased.  During periods of low flow and drought, saltwater advanced far enough inland to be drawn into pumps sending water to the south.  (Hundley, supra, at p. 314.)  In 1965, the Interagency Delta Committee released a plan for a 43-mile-long “Peripheral Canal” beginning on the Sacramento River 15 miles below Sacramento, running along the eastern edge of the Delta, and ending at State and federal pumping plants near Tracy.  This canal was designed to allow water diversion into the Delta for salinity control while permitting delivery of higher quality water to the south.  (Id. at p. 315.) 

            Battle raged over the peripheral canal until 1980, when the Legislature passed a bill to authorize construction.  Voting on the bill was generally along north-south lines, with northern legislators opposed.  Voters also approved Proposition 8, providing added protection to the Delta.  (Hundley, supra, at pp. 317, 324-325.)  However, in 1982, the voters approved a referendum reversing the canal and the Delta protection legislation.  (Id. at pp. 328, 331-332.)  Subsequent attempts to resurrect the canal project have failed.  (Id. at pp. 332-333.) 

The availability of sufficient water to meet the State’s growing needs continued to be a problem in the 1980’s and 1990’s.  This problem was exacerbated by a persistent drought that occurred between 1987 and 1992.  (Hundley, supra, at pp. 557, 559.)  In 1991, DWR organized a drought water bank to allow for large-scale water transfers to relieve shortages.  (Planning & Conservation League v. Department of Water Resources, supra, 83 Cal.App.4th at pp. 900-901.) 

Article 18 of the basic contracts entered into between DWR and water contractors for SWP water provides for the reallocation of water among the contractors during years of temporary shortage.  When there are water shortages due to drought or other temporary causes, allocation to agricultural users is reduced by up to 50 percent in a given year or a total of 100 percent in any series of seven years before there is any reduction in municipal or industrial supplies.  Any necessary further reductions are allocated among all users. 

In 1990, the DWR implemented article 18 to reduce agricultural deliveries by 50 percent.  Allocations to all users were reduced in 1991 and 1992.  Disputes arose among agricultural and urban users and DWR over the proper application of article 18.  Agricultural contractors argued that shortages were not due to the drought, and hence not subject to article 18, but rather were due to the failure to complete construction of the entire SWP.  After months of negotiations, these parties agreed on a statement of 14 principles that came to be known as the Monterey Agreement.  (Planning & Conservation League v. Department of Water Resources, supra, 83 Cal.App.4th at pp. 900-901.)  The Monterey Agreement, which was first implemented in 1995, altered DWR’s allocation of water to the SWP contractors.  (Id. at p. 897.)

IV

Ecological Conditions

            The expansion of agriculture, population increases and the side effects of the various water projects have taken a toll on the State’s natural environment.  The State has been called an “‘epicenter of extinction,’” with at least 73 native species lost forever.  (Carle, supra, at p. 144.)  Transformation of the Central Valley has resulted in the loss of nearly all native grasses, riparian woodlands, and wetlands.  (Ibid.)  Only about 18 percent of the Central Valley’s original salmon spawning habitat remains.  (Id. at p. 146.)  “Upstream water development, depletion of natural flows and the export of water from the Delta have changed seasonal patterns of inflow, reduced annual outflow and muted the natural variability of flows into and through the Delta.” 

            Seven hundred thousand acres of overflow and seasonally inundated land in the Delta have been converted to agricultural or urban uses.  As discussed earlier, flood control activities and land development in the late 1800’s and early 1900’s created leveed Delta islands and the loss of wetlands, thereby reducing habitat for wetland wildlife species.  Wetland losses in the Delta have also reduced the available area for biological conversion of nutrients necessary for wetland wildlife.  Many of the remaining Delta stream sections “have been dredged or channelized to improve navigation, increase stream conveyance during periods of flood, and facilitate water export.” 

            The construction of levees in the Delta has also resulted in the loss of sloughs, which “provide warmer, highly productive habitat for seasonal spawning, rearing, and foraging for many aquatic organisms, as well as important organic carbon productivity for all habitats of the Bay-Delta.”  Floodplains that once provided seasonal habitat for fish and wildlife as well as sediment and nutrients for flooded lands have been all but eliminated. 

            In addition to the conversion of natural habitat to agricultural, urban or flood control uses, the pumping of water from the Delta for use elsewhere has had a significant negative impact on ecological functions.  Tidal aquatic habitats that link wetlands with open-water habitats are used as foraging and resting places for shorebirds, wading birds, and waterfowl.  Resident and migratory fish use such habitats for spawning, rearing, foraging, and escape cover.  However, when natural freshwater outflows through the Bay-Delta decrease due to water exports, the tidal aquatic habitats are compressed and move upstream into areas unsuitable for nursery habitat and the creation of new tidal marshes.  (Rieke, supra, at pp. 344-345.)  The diversion of Bay-Delta water also harms the ecosystem by drawing fish into the pumps or into the vicinity of predators.  (Fullerton, Principles for Agreement on Bay/Delta Standards Between the State of California and the Federal Government (1995) 2 Hastings West-Northwest J. of Environmental Law and Policy 103, 106-107 (hereafter Fullerton).)  The Resources Agency has reported that more than 300 unscreened diversions on the upper Sacramento River alone cause up to 10 million juvenile salmonids to be pulled into the pumps annually, resulting in the loss of 100,000 adult fish. 

            Tests conducted during the 1980’s and early 1990’s revealed high levels of selenium, bromide salts, Diazinon (a popular residential pesticide), and other wastes that have been added to the Delta by industrial discharge, drainage runoff, and saltwater intrusion.  “On a single day enough mercury for 31,000 thermometers washes down the Sacramento River into the [B]ay and [D]elta.”  (Hundley, supra, at pp. 398-399.) 

            Although agriculture sometimes provides important habitat for birds and other animals, it can also cause considerable environmental harm.  (Ruhl, Farms, Their Environmental Harms, and Environmental Law (2000) 27 Ecology L.Q. 263, 275 (hereafter Ruhl).)  Farms often pollute ground and surface water, replace wildlife habitat, erode soils, contribute sediment to lakes and rivers, and deplete water resources.  (Id. at p. 266.)  The Central Valley is home to two-thirds of the State’s dairies, and their cows create a considerable amount of waste.  Creeks in the Central Valley often contain 200 times more ammonia than the level poisonous for fish.  And cows are not the only source of farming waste.  Chicken manure contains twice as much phosphorous as human waste.  (Id. at p. 286; see also Hundley, supra, at pp. 425-438.)  “Overall, runoff of topsoil, silt, sediment, manure, nutrients, chemicals, and other pollutants from agricultural nonpoint sources is the leading source of impairment in the Nation’s rivers, affecting 60% of the impaired river miles.”  (Ruhl, supra, at p. 290, fn. omitted.)  In 1991, the SWRCB identified agriculture as the contributor of over 58 percent of the pollution in the State’s rivers. 

            Due to the many adverse environmental impacts described above, two fish species, the winter run salmon and the Delta smelt, had been listed under the Endangered Species Act by the spring of 1993.  Petitions to list other species had also been filed.  These listings soon resulted in the imposition of restrictions on the operations of the CVP and SWP, thereby significantly affecting the amount of water exported from the Delta.  (Rieke, supra, at p. 345; Fullerton, supra, at p. 105; Carle, supra, at p. 188; Hundley, supra, at pp. 406-407.)

V

Related SWRCB Water Quality Proceedings

            For many years, the SWRCB failed to adopt a water-quality plan adequate to stem the tide of declining fish populations in the Bay-Delta and its tributaries.  The federal Environmental Protection Agency warned California officials that protective measures were required to satisfy federal Clean Water Act mandates.  (Rieke, supra, at p. 345.)  Disputes arose over impacts to the quality of Bay-Delta water caused by water transfers under the CVP and SWP.  (Id. at pp. 345-346.) 

In 1978, the SWRCB adopted a Water Quality Control Plan for the Delta and Suisun Marsh (Water Right Decision 1485 or D-1485), which was intended to take into account the effects of the water projects.  (United States v. State Water Resources Control Bd., supra, 182 Cal.App.3d at pp. 97-98.)  In D-1485, the SWRCB established water quality standards for salinity control to protect beneficial uses and for the protection of fish and wildlife.  In adopting standards to protect beneficial uses, the SWRCB employed a so-called “without project” level of protection, whereby water quality would be restored to the level that would have existed had the water projects never been constructed.  (Id. at p. 115.) 

D-1485 also modified the permits held by the USBOR and the DWR regarding the CVP and SWP respectively so as to compel the release of enough water into the Delta or the reduction in exports from the Delta to maintain the water quality standards set in the water quality control plan.  (United States v. State Water Resources Control Bd., supra, 182 Cal.App.3d at p. 119.) 

            D-1485 led to years of litigation that ended when the Court of Appeal decided that, while the use of a “without project” standard was appropriate, the SWRCB erred in failing to consider the impacts on environmental degradation from upstream diverters and polluters.  (United States v. State Water Resources Control Bd., supra, 182 Cal.App.3d at pp. 119-120.)  The court explained:  “[W]e think the imposition of without project standards upon the projects represents one reasonable method of achieving water quality control in the Delta.  But in order to fulfill adequately its water quality planning obligations, we believe the Board cannot ignore other actions which could be taken to achieve Delta water quality, such as remedial actions to curtail excess diversions and pollution by other water users.”  (Id. at p. 120, italics omitted.)  However, in light of scheduled SWRCB hearings to adopt new standards, the court concluded it was unnecessary to remand for revision of the earlier standards.  (Ibid.) 

In 1987, the SWRCB began hearings on the revision of water quality standards for the Bay-Delta estuary.  (Littleworth & Garner, supra, at p. 131.)  The next year, the SWRCB issued a report calling for a reduction in water exports from 6 or 7 million acre-feet to 5.5 million acre-feet and the adoption of stringent conservation measures.  Northern California interests criticized the plan for failing to guarantee a specific volume of water for flushing the Bay-Delta of pollutants.  (Hundley, supra, at pp. 404-405.)  San Joaquin Valley farmers and Southern California water agencies found fault with the report insisting that it was based on a false premise, that is, that water quality problems in the Bay-Delta are caused by a shortage of fresh water rather than the polluting practices of those in the areas surrounding the Delta.  Based on this criticism, the SWRCB dropped any mention of limiting water exports from the report.  However, when the SWRCB issued its final report in 1991, the Environmental Protection Agency rejected it as failing to provide enough water for the Bay-Delta.  (Id. at pp. 405-406.) 

            In 1992, Congress passed the Central Valley Project Improvement Act (CVPIA), which elevated fish and wildlife protection and restoration to the status of a primary purpose of the CVP.  The CVPIA set aside 800,000 acre-feet of CVP agricultural water for environmental and wildlife protection purposes, created a $50 million annual fund for fish and wildlife protection, and prohibited new water contracts.  (Hundley, supra, at p. 406.)  The CVPIA also authorized marketing of conserved water to the highest bidder.  (Carle, supra, at pp. 160-161.)  According to a later report of a senate select committee evaluating CALFED, “[e]nvironmentalists considered the [CVPIA] a victory,” while “agricultural leaders considered it a disaster.” 

            That same year, more than 100 State water agencies and 50 public interest groups signed a Memorandum of Understanding (MOU) regarding urban water conservation in California.  The MOU identified 16 Best Management Practices for urban water use and committed the signatories to certain implementation efforts between 1991 and 2001.  The MOU established the California Urban Water Conservation C