The environmental impact report for a water transfer from a Kern County irrigation district to an urban water supplier in the Santa Clarita Valley has been upheld by the Second District Court of Appeal.

The unanimous three-judge panel overturned a trial court judge,who had struck down the EIR because it did not adequately address a State Water Project framework and ongoing environmental review. The Second District ruled that the EIR did address the State Water Project issues and said the water transfer is a separate matter anyway.

The ruling is a victory for water providers and developers in Los Angeles County's Santa Clarita Valley, and a setback for environmentalists and slow-growth activists. The rapidly growing Santa Clarita Valley has been at the center of numerous legal and political battles over water plans and water supply assessments. A transfer of 41,000 acre-feet of State Water Project (SWP) water to the Castaic Lake Water Agency has been a major point of contention. In 1999, the agency signed a contract under which the Wheeler Ridge-Maricopa Water Storage District (which receives SWP deliveries via the Kern County Water Agency) would permanently transfer the rights to 41,000 acre-feet of SWP water to Castaic. That transfer was based on the "Monterey Agreement," a 1995 plan that modified how the State Water Project allocated water during dry years and which authorized the transfer of 130,000 acre-feet of water from agricultural use to urban suppliers.

In 2000, an appellate court struck down the Monterey Agreement EIR because a Monterey County water agency – and not the Department of Water Resources (DWR) – served as the "lead agency" that certified the EIR (Planning & Conservation League v. Department of Water Resources, (2000) 83 Cal.App.4th 892). The Second District followed up by invalidating the EIR for the Kern-Castaic water transfer because the environmental document tiered off the Monterey Agreement EIR. In Friends of the Santa Clara River v. Castaic Lake Water Agency, (2002) Cal.App.4th 1373, the court ruled that an EIR that tiers off a program EIR is not valid if the program EIR is no longer in place (see CP&DR Legal Digest, March 2002). Importantly, though, the court rejected Friends' request for an injunction halting the water transfer. Castaic has continued to have access to the SWP water since 1999.

In late 2004, Castaic certified a second EIR and approved the water transfer again. The new EIR did not tier off any other document and analyzed the impacts of the transfer under three different scenarios: (1) a transfer based on 2003 amendments to the Monterey Agreement (known as Monterey Plus), (2) a transfer without Monterey Plus or a reallocation of water in dry years, (3) a transfer without Monterey Plus but with other SWP permanent cutbacks. The EIR also included five alternatives to the transfer.

Although the EIR had to go back to Los Angeles County Superior Court because of the 2002 Friends ruling, Friends dismissed its action because the group lacked money to continue litigating. However, the Planning and Conservation League (PCL) and the California Water Impact Network (CWIN) filed a new suit over the second EIR. Superior Court Judge James Chalfant rejected most of PCL and CWIN's arguments. Still, he concluded the EIR was flawed because it did not adequately explain the relevance of the pending Monterey Agreement EIR to the scenarios in the Castaic EIR. Parties on both sides appealed, and the Second District ruled entirely for Castaic.

The appellate panel overturned Chalfant on the issue of the scenarios for two reasons. First, the court ruled, PCL and CWIN never specifically objected to the discussion of the scenarios during the administrative process and, therefore, should not be able to raise the argument in court. Second, the court determined, "[T]he 2004 EIR adequately explains why the three scenarios discussed in connection with the transfers are possible outcomes of DWR's pending Monterey Agreement EIR."

"[T]he 2004 EIR describes the relationship between the pre- and post-Monterey Agreement contractual requirements and the three water supply scenarios in considerable detail," Justice Nora Manella wrote for the appellate panel. "Although we agree with the trial court that the 2004 EIR's discussion could have been clearer,  ‘absolute perfection' is not required of an EIR."

The primary contention of PCL and CWIN was that the Department of Water Resources should have prepared the EIR for the Kern-Castaic water transfer because the Monterey Agreement enabled the transfer. Castaic could serve as the lead agency only after a new Monterey Agreement EIR is complete, they argued. Both the trial court and the appellate court disagreed.

"[N]othing before us suggests that the Monterey Agreement, viewed as a CEQA project, included the Kern-Castaic transfer when the original Monterey Agreement was prepared and certified in 1995," Manella wrote. "As the Kern-Castaic transfer was no more than ‘a gleam in a planner's eye' at the time of the Monterey Agreement, the transfer fell outside the original Monterey Agreement EIR, and was properly considered in a separate EIR.

"We also conclude that the decertification of the 1995 Monterey Agreement EIR and its aftermath have not brought the transfer within the compass of the new Monterey Agreement," Manella continued.

The water transfer opponents pointed to the 2000 decision in Planning & Conservation League, in which the court ruled that DWR's statewide perspective made the agency the logical choice to complete the Monterey Agreement EIR. But the Monterey Agreement, the Second District noted, involves the entire State Water Project. "In contrast, Castaic's preeminent role regarding the water transfer renders it the logical choice for lead agency, in view of the transfer's confined scope" Manella wrote.

The opponents further argued that the EIR represented the water transfer as fait accompli and that a "no project" alternative that involved both no Kern-Castaic transfer and the state's abandonment of the Monterey Agreement should have been studied. The court rejected both arguments and accepted Castaic's arguments that the water transfer could go forward with or without the Monterey Agreement, and that the transfer and the Monterey Agreement "constitute different projects under CEQA, and only the transfer is subject to Castaic's approval."

The Case:
Planning and Conservation League v. Castaic Lake Water Agency, No. B200673, 2009 DJDAR 17603. Filed December 17, 2009.
The Lawyers:
For PCL: Roger Moore, Rossmann & Moore, (415) 861-1401.
For Castaic: William Hancock, Eisenberg & Hancock, (415) 984-0650.
For Kern County Water Agency: Amelia Minaberrigarai, Kronick, Moskovitz, Tiedemann & Girard, (661) 634-1400.
For Wheeler Ridge-Maricopa Water Storage District: Steven Torigiani, Young Wooldridge, (661) 327-9661.
For the Department of Water Resources: Deborah Wordham, attorney general's office, (916) 323-3549.