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Will Your Basin Adjudicate, and if so, How Will That Relate to Basin Management under SGMA?

This article was originally published as an advertorial in the November/December 2017 print issue of Western Grower & Shipper, a publication of Western Growers.

Groundwater Sustainability Agencies (GSAs) throughout California’s medium- and high-priority basins are now beginning to develop Groundwater Sustainability Plans (GSPs) pursuant to the Sustainable Groundwater Management Act (SGMA). Sustainable groundwater management is defined by the avoidance of six “undesirable results” such as chronic lowering of groundwater levels, subsidence, and seawater intrusion—requiring GSAs to curtail overdraft in many basins through reduction of groundwater pumping, artificial basin replenishment, or both. These decisions may be highly controversial and may lead to a groundwater basin adjudication.

Growers should understand the role of a groundwater basin adjudication and the effect on groundwater use and management under SGMA. An adjudication is a lawsuit to determine groundwater rights that also typically establishes a basin-wide groundwater management plan, often referred to as a “physical solution.” Traditionally, adjudications have been used—mostly in Southern California—to determine the basin’s “safe yield,” limit cumulative groundwater production to the safe yield, establish programs to enhance the basin’s yield, comprehensively adjudicate groundwater rights, and assign individual pumping allocations. Adjudication judgments also typically allow for voluntary transfers of pumping allocations and maintain the court’s continuing jurisdiction to oversee the management plan, adapt the plan over time, and resolve future disputes.

In the SGMA era, adjudications will likely assume an expanded and slightly different role. In 2015, as a complement to SGMA, the state adopted legislation to establish a new procedure to process adjudications in a more efficient manner, ensure that litigants don’t obstruct or delay SGMA, and harmonize future adjudications with groundwater management under SGMA. This new “adjudication reform law” is intended to work in concert with SGMA to bring about sustainable groundwater management.

SGMA charges GSAs with the obligation to develop GSPs to comprehensively manage their respective basins and grants to GSAs substantial regulatory powers, including the authority to establish pumping allocations, restrict pumping, assess pumping fees, and undertake basin replenishment and other physical activities. Importantly, however, SGMA states that the act does not alter water rights and that pumping limitations by a GSA shall not be construed to be a determination of groundwater rights. This may appear paradoxical; SGMA does not alter water rights, but it allows a GSA to limit pumping and assess pumping fees, which are fundamental contours of a water right. The apparent paradox is resolved by understanding that an adjudication serves as a potential check on groundwater restrictions or extraction fees imposed by a GSA that run afoul of common law water rights. In practical effect, the GSP development process should be viewed as a stakeholder negotiation to seek agreement on management terms to either avoid litigation or narrow the issues to be litigated. If stakeholders are unable to agree, particularly on significant issues like pumping allocations and fee structures, an adjudication is likely.

It is important to understand that an adjudication will not preclude sustainable basin management. Indeed, the new adjudication reform law directs the courts to manage adjudications to minimize interference with the timely completion and implementation of GSPs, consistent with the attainment of sustainable groundwater management. Thus, adjudications are not tools to avoid groundwater management, but are a means to ensure that basin management is undertaken in a manner consistent with water law priorities and principles. Where a GSA proceeds in a manner inconsistent with settled legal principles, the courts can order modifications to render GSPs lawful and mandate that GSAs correct errant decisions.

We recommend that growers seek to participate collaboratively in the GSP development process. At the same time, they should understand the likely effects of an adjudication and develop a strategy if negotiations break down and adjudication becomes necessary. Where a GSA is proceeding fairly with due regard for both water right underpinnings and science-based management decisions, it will typically be best to avoid or postpone an adjudication. But, where a GSA or other basin stakeholders are not proceeding in an equitable, lawful, and science-based manner, growers may consider an adjudication to right the process and should assess the pros and cons of an earlier than later filing as there could be adverse effects of delay.

For more on the likely impacts of SGMA on agricultural water rights and considerations for development of a SGMA strategy, click here.

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