Opinion ID: 2590136
Heading Depth: 2
Heading Rank: 2

Heading: Equitable Apportionment

Text: In previous cases resolving regional water uses, courts allocated water according to preexisting legal rights and relationships. For example, in Fleming v. Bennett (1941) 18 Cal.2d 518, 520, 116 P.2d 442, over 200 parties asserted rights to the Susan River's waters. The trial court referred the matter to the State Water Commission, which prepared a comprehensive report with individual findings regarding 259 claimed rights of users affecting the watershed. ( Id. at pp. 525, 527, 116 P.2d 442.) We affirmed the trial court's decree, based on the report and additional evidence introduced at an open court hearing. ( Id, at pp. 526-527, 530, 116 P.2d 442.) As noted ante, 99 Cal.Rptr.2d at pages 305-306, 5 P.3d at pages 863-864, in Tulare, we outlined a water allocation method in a case in which the plaintiffs' water rights had different priorities. We also observed that [t]he trial court ... must fix the quantity required by each [right holder] for his actual reasonable beneficial uses, the same as it would do in the case of an appropriator. ( Tulare, supra, 3 Cal.2d at p. 525, 45 P.2d 972.) This court determined that [w]hat is a beneficial use at one time may, because of changed conditions, become a waste of water at a later time. ( Id. at p. 567, 45 P.2d 972.) Because the court cannot fix or absolutely ascertain the quantity of water required for future use at any given time, a trial court should declare prospective uses paramount to the appropriator's rights, so the appropriator cannot gain prescriptive rights in the use. Until the paramount right holder needs it, the appropriator may continue to take water. ( Ibid. ) Thus, water right priority has long been the central principle in California water law. The corollary of this rule is that an equitable physical solution must preserve water right priorities to the extent those priorities do not lead to unreasonable use. In the case of an overdraft, riparian and overlying use is paramount, and the rights of the appropriator must yield to the rights of the riparian or overlying owner. ( Burr v. Maclay Rancho Water Co. (1908) 154 Cal. 428, 435, 98 P. 260; Katz v. Walkinshaw (1903) 141 Cal. 116, 135, 74 P. 766.)
Respondents rely on two cases to support their contention that article X, section 2 of the California Constitution requires the courts to apportion all water rights equitably, regardless of preexisting priorities: City of Pasadena v. City of Alhambra (1949) 33 Cal.2d 908, 207 P.2d 17 ( City of Pasadena ), and City of Los Angeles v. City of San Fernando (1975) 14 Cal.3d 199, 123 Cal.Rptr. 1, 537 P.2d 1250 ( City of San Fernando ). We conclude these cases support the Cardozo appellants' position. In City of Pasadena, extractors had been taking nonsurplus groundwater for over 30 years, creating an overdraft condition in the basin on which Pasadena relied as a water source. ( City of Pasadena, supra, 33 Cal.2d at pp. 921-922, 207 P.2d 17.) Even after the overdraft occurred, all parties continued to pump the groundwater, creating a greater overdraft and interfering with everyone's ability to pump in the future. ( Id. at p. 922, 207 P.2d 17.) The plaintiff city and its chief water producer sued to determine the groundwater rights in the area and to enjoin the alleged overdraft to prevent the water supply's depletion. ( City of Pasadena, supra, 33 Cal.2d at p. 916, 207 P.2d 17.) The trial court referred the action to the Division of Water Resources of the Department of Public Works, which produced a report on area-wide water rights. ( Ibid. ) All parties except the defendant water company, a public utility, stipulated to a judgment that allocated water and restricted total production to achieve safe yield in the basin. Because the stipulation was not binding on the utility, the issue in this court was how to determine its rights in relation to the stipulating producers in the same manner as if there had been no agreement. ( Id. at pp. 916, 924, 207 P.2d 17.) Without mentioning equitable apportionment, Chief Justice Gibson's majority opinion affirmed the trial court's judgment, enforcing the stipulation's terms against all parties, including the utility. ( City of Pasadena, supra, 33 Cal.2d at pp. 916, 933, 207 P.2d 17.) This court discussed the nature of prescriptive groundwater rights in which rights of adverse users do not completely overtake owners' rights. It concluded that the pumpers had established prescriptive rights in part of the water supply. The court observed that such rights were acquired against both overlying owners and prior appropriators, [and] that the overlying owners and prior appropriators also obtained, or preserved, rights by reason of the water which they pumped.... ( Id. at p. 933, 207 P.2d 17.) Applying the mutual prescription doctrine, this court concluded that all claimants had equal priority and agreed the trial court had appropriately reduced each party's production to achieve safe yield. ( Ibid. ) In reaching its conclusion, City of Pasadena observed: Although the law at one time was otherwise, it is now clear that an overlying owner or any other person having a legal right to surface or ground water may take only such amount as he reasonably needs for beneficial purposes. [Citations.] Public interest requires that there be the greatest number of beneficial uses which the supply can yield, and water may be appropriated for beneficial uses subject to the rights of those who have a lawful priority. [Citation.] Any water not needed for the reasonable beneficial uses of those having prior rights is excess or surplus water. In California surplus water may rightfully be appropriated on privately owned land for nonoverlying uses, such as devotion to a public use or exportation beyond the basin or watershed. [Citations.] It is the policy of the state to foster the beneficial use of water and discourage waste, and when there is a surplus, whether of surface or ground water, the holder of prior rights may not enjoin its appropriation. [Citations.] Proper overlying use, however, is paramount, and the right of an appropriator, being limited to the amount of the surplus, must yield to that of the overlying owner in the event of a shortage, unless the appropriator has gained prescriptive rights through the taking of nonsurplus waters. ( City of Pasadena, supra, 33 Cal.2d at pp. 925-926, 207 P.2d 17.) Several decades later, Los Angeles sued to establish a prior right to groundwater in the upper Los Angeles River area in City of San Fernando, supra, 14 Cal.3d at page 207, 123 Cal.Rptr. 1, 537 P.2d 1250. The plaintiff city relied on its historic pueblo water rights, [11] while the defendants argued that City of Pasadena supported their mutual prescriptive rights claim to a proportionate share of the groundwater supply. ( City of San Fernando, supra, 14 Cal.3d at pp. 210-211, 214, 123 Cal.Rptr. 1, 537 P.2d 1250.) This court upheld the plaintiffs pueblo rights and overturned the trial court's award of prescriptive rights against the plaintiff. This court held that Civil Code section 1007 precluded the defendants from obtaining prescriptive water rights against the plaintiff. ( City of San Fernando, supra, 14 Cal.3d at pp. 274-277, 123 Cal.Rptr. 1, 537 P.2d 1250.) This court reasoned: The pueblo right gives the city holding it a paramount claim to particular waters only to the extent that they are required for satisfying its municipal needs and those of its inhabitants. `It thus insures a water supply for an expanding city [citation] with a minimum of waste by leaving the water accessible to others until such time as the city needs it' [Citation.] ( City of San Fernando, supra, 14 Cal.3d at p. 252, 123 Cal.Rptr. 1, 537 P.2d 1250, italics added by City of San Fernando. ) This court rejected the defendants' contention that the mutual prescription doctrine developed in City of Pasadena was a beneficent instrument for conservation and equitable apportionment of water in ground basins which are subjected to extractions in excess of the replenishment supply. ( City of San Fernando, supra, 14 Cal.3d at p. 265, 123 Cal.Rptr. 1, 537 P.2d 1250.) In so doing, this court stated: [T]he allocation of water in accordance with prescriptive rights mechanically based on the amounts beneficially used by each party for a continuous five-year period after commencement of the prescriptive period and before the filing of the complaint, does not necessarily result in the most equitable apportionment of water according to need. A true equitable apportionment would take into account many more factors. ( Ibid. ) In a footnote accompanying this sentence, this court observed: The principles by which the United States Supreme Court equitably apportions water among states are illustrated in Nebraska v. Wyoming (1945) 325 U.S. 589, 618 [65 S.Ct. 1332, 1350, 89 L.Ed. 1815, 1831-1832]. [12] After observing that apportionment between states whose laws base water rights on priority of appropriation should primarily accord with that principle, the court said: `But if an allocation between appropriation States is to be just and equitable, strict adherence to the priority rule may not be possible. For example, the economy of a region may have been established on the basis of junior appropriations. So far as possible those established uses should be protected[,] though strict application of the priority rule might jeopardize them. Apportionment calls for the exercise of an informed judgment on a consideration of many factors. Priority of appropriation is the guiding principle. But physical and climatic conditions, the consumptive use of water in the several sections of the river, the character and rate of return flows, the extent of established uses, the availability of storage water, the practical effect of wasteful uses on downstream areas, the damage to upstream areas as compared to the benefits to downstream areas if a limitation is imposed on the formerthese are all relevant factors. They are merely illustrative, not an exhaustive catalogue. They indicate the nature of the problem of apportionment and the delicate adjustment of interests which must be made.' ( City of San Fernando, supra, 14 Cal.3d at pp. 265-266, fn. 61, 123 Cal.Rptr. 1, 537 P.2d 1250.) Respondents claim this footnote provides the basis for the trial court's use of equitable apportionment to allocate water in an overdraft basin without regard to the owners' water priorities. (See Hi-Desert County Water Dist, supra, 23 Cal.App.4th at p. 1734, fn. 11, 28 Cal.Rptr.2d 909; Wright v. Goleta Water Dist. (1985) 174 Cal.App.3d 74, 93, 219 Cal.Rptr. 740 ( Wright ).) Respondents further assert that by ignoring equitable considerations, the Court of Appeal's opinion conflicts with City of San Fernando, and that it leads to an unjust result by which the Cardozo appellants are free to produce any amount of water on a priority basis, while all others pay to import water to protect the resource. We find no conflict. City of San Fernando distinguished City of Pasadena, supra, 33 Cal.2d 908, 207 P.2d 17, where a restriction to safe yield on a strict priority basis might have deprived parties who had been using substantial quantities of ground water for many years of all further access to such water. ( City of San Fernando, supra, 14 Cal.3d at p. 266, 123 Cal.Rptr. 1, 537 P.2d 1250.) By contrast, City of San Fernando correctly found that the same condition was not present in the Los Angeles River basin, and the effect of the trial court's judgment in the present case was to eliminate [the] plaintiffs priorities based not on the timing of its appropriations but on its importation of ... water and on its pueblo right. ( Id. at p. 267, 123 Cal.Rptr. 1, 537 P.2d 1250.) In other words, in City of San Fernando, applying the mutual prescription doctrine would still have led to completely eliminating appropriative rights stemming from recent uses in favor of earlier uses, because the defendants began pumping while there was still a surplus. ( Id. at pp. 266-267, 123 Cal.Rptr. 1, 537 P.2d 1250.) In contrast, appropriative rights were protected through the doctrine's application in City of Pasadena. As the City of San Fernando court itself observed, [P]rinciples governing appropriative and prescriptive water rights will be relevant to the determination on remand of the conflicting interests of the parties in the water of the [overdrafted] Sylmar basin. ( City of San Fernando, supra, 14 Cal.3d at p. 278, 123 Cal.Rptr. 1, 537 P.2d 1250.) This court then observed that because the defendants' rights were subordinate to the plaintiffs rights, the plaintiff was entitled to have the private defendants' extractions enjoined insofar as they would constitute an overdraft on the basin supply. ( Id. at p. 291, 123 Cal.Rptr. 1, 537 P.2d 1250.) This court also noted that on remand the private defendants could show overlying rights to native ground water for reasonable beneficial uses on their overlying land, subject to any prescriptive rights of another party. ( Id. at p. 293, 123 Cal.Rptr. 1, 537 P.2d 1250.) This court reiterated: Overlying rights take priority over appropriative rights in that if the amounts of water devoted to overlying uses were to consume all the basin's native supply, the overlying rights would supersede any appropriative claims by any party to the basin's native ground water [citation] except insofar as the appropriative claims ripened into prescriptive rights [citation]. Such prescriptive rights would not necessarily impair the private defendants' rights to ground water for new overlying uses for which the need had not yet come into existence during the prescriptive period. [Citation.] ( Id. at p. 293, fn. 100, 123 Cal.Rptr. 1, 537 P.2d 1250.) Accordingly, overlying defendants should be awarded the full amount of their overlying rights, less any amounts of such rights lost by prescription, from the part of the supply shown to constitute native ground water. ( Id. at p. 294, 123 Cal.Rptr. 1, 537 P.2d 1250.) Thus, one could read footnote 61 in City of San Fernando to suggest that if prioritization of rights results in denying recent appropriative users the right to produce water, some type of equitable appropriation may be implemented in intrastate water matters. But the case is not precedent for wholly disregarding the priorities of existing water rights in favor of equitable apportionment in this state, where water allocation has been based on an initial consideration of owners' legal water rights. Case law simply does not support applying an equitable apportionment to water use claims unless all claimants have correlative rights; for example, when parties establish mutual prescription. Otherwise, cases like City of San Fernando require that courts making water allocations adequately consider and reflect the priority of water rights in the basin. ( City of San Fernando, supra, 14 Cal.3d at p. 293, fn. 100, 123 Cal.Rptr. 1, 537 P.2d 1250.) The Court of Appeal's reasoning is consistent with this principle. As the Court of Appeal aptly observed, we have never endorsed a pure equitable apportionment that completely disregards overlying owners' existing legal rights. Thus, to the extent footnote 61 in City of San Fernando, supra, 14 Cal.3d at pp. 265-266, 123 Cal.Rptr. 1, 537 P.2d 1250, could be understood to allow a court to completely disregard California landowners' water priorities, we disapprove it.
Respondents claim that after City of San Fernando, supra, 14 Cal.3d 199, 123 Cal.Rptr. 1, 537 P.2d 1250, and relying on the dicta stated in footnote 61 on pages 265-266 of that case, courts approved the use of equitable apportionment as the basis to allocate water among users in an overdraft basin. But the cases on which respondents rely do not support the contention. For example, in Hi-Desert County Water Dist, the Court of Appeal stated: Left unresolved in [ City of ] Pasadena, however, was whether by continuing to pump, an overlying user in an overdrafted basin retained its original overlying rights or obtained new ones by prescription. [Citations.] In 1975, in its most comprehensive statement of water law, our Supreme Court in [ City of San Fernando, supra, 14 Cal.3d 199, 123 Cal.Rptr. 1, 537 P.2d 1250] finally clarified the proposition that overlying owners `retain their rights [to nonsurplus water without judicial assistance] by using them.' [Citation.] ( Hi-Desert County Water Dist, supra, 23 Cal.App.4th at p. 1731, 28 Cal.Rptr.2d 909.) As against potential appropriators, the court noted that the five-year period for establishing prescriptive rights to nonsurplus water may be interrupted by the overlying owners' pumping of their nonsurplus water. ( Ibid. ) The court also observed that City of San Fernando rejected a mechanical application of the mutual prescription doctrine after noting it often fails to lead to an equitable water apportionment according to need. ( Hi-Desert County Water Dist, supra, 23 Cal.App.4th at p. 1734, 28 Cal. Rptr.2d 909.) As Hi-Desert County Water Dist observed, City of San Fernando required courts to consider many more factors than the amount the parties pumped during the prescriptive period in order to make a truly equitable apportionment. ( Hi-Desert County Water Dist, supra, 23 Cal.App.4th at p. 1734, fn. 11, 28 Cal.Rptr.2d 909.) In Wright, overlying owners in a groundwater basin sued to determine relative water rights in that basin. The Court of Appeal found the trial court erred in holding that a water district's appropriative rights had a higher priority than the overlying owners' unexercised rights. ( Wright, supra, 174 Cal.App.3d at pp. 78, 82, 219 Cal.Rptr. 740.) The court also held that the trial court could not define or otherwise limit an overlying owner's future unexercised groundwater rights, in contrast to this court's limitation of unexercised riparian rights. ( In re Waters of Long Valley Creek Stream System (1979) 25 Cal.3d 339, 358-359, 158 Cal.Rptr. 350, 599 P.2d 656 ( Long Valley ). [13] (The Wright court remanded the matter for reconsideration in light of Tulare, supra, 3 Cal.2d at page 525, 45 P.2d 972, which held that former article XIV, section 3 [now article X, section 2] of the California Constitution protected the reasonable beneficial uses of the riparian or overlying owner, whose water could be used by an appropriator only when that owner elected not to use it.) Contrary to respondents' contention, no appellate court has endorsed an equitable apportionment solution that disregards overlying owners' existing rights.