The board rules against Fish and Game, saying the salmon industry as a whole has not suffered. The board approves renewing water permits for farmers, setting the stage for an ill-fated Fish and Game lawsuit. Just before it is filed asking a federal judge to order water releases, Brown, now governor, stops it. The government agrees to a small flow of water from the dam to Gravelly Ford, west of Fresno. State rights get a boost when the water board allows some modest requirements for the federal New Melones Reservoir on the Stanislaus River.
Federal officials sue, claiming the state has no power to impose conditions on federal projects.
The lawsuit backfires. The U.S. Supreme Court rules that federal agencies must follow state laws unless they are directly inconsistent with congressional intent. Upstream, federal law requires the environment be considered when renewing licenses for power plants. Edison and others stop building along the river when it becomes too expensive to overcome environmental regulations. The Natural Resources Defense Council and 14 other environmental and fishing groups sue the federal government, claiming it illegally approved water contract renewals to farmers without studying the consequences to river wildlife and habitat.