Siskiyou County Farm Bureau v. California Department of Fish & Game, Siskiyou County Superior Court Case No. SC SC CV 11-00418.

On December 24, 2012, the Siskiyou County Superior Court issued an opinion granting declaratory relief for the Siskiyou County Farm Bureau in a case challenging the California Department of Fish and Game’s (“DFG”) attempt to require farmers to obtain streambed alteration permits for all agricultural water diversions.  The court found that Fish and Game Code section 1602 (“Section 1602”) does not require notification to DFG for the act of diverting water pursuant to a valid water right where there is no alteration to the bed, bank, or stream.  The ruling is a significant decision for water users statewide because it confirms that DFG cannot supplant the State Water Resources Control Board’s (“SWRCB”) authority over water rights.

Background

Plaintiff Siskiyou County Farm Bureau includes members of the farming and ranching community, the majority of which operate family farms.  Plaintiff’s members have validly perfected water rights, including riparian and appropriative rights.  Historically, Plaintiff’s members followed the requirements of Section 1602 whenever they sought to undertake activities in streams or affecting the streambed or bank, including the construction of new irrigation facilities.  Section 1602 requires a party seeking to undertake such an activity to notify DFG, after which DFG and the party enter into a Lake and Streambed Alteration Agreement (“LSAA”).  The LSAA includes terms to alleviate the impacts of the party’s activity.  Before 2005, Plaintiff was not informed by DFG that they needed to provide notice before exercising their water rights.  

In response to a declining Coho salmon population, DFG Region 1 (which includes Siskiyou County), developed enforcement criteria (“Enforcement Criteria”) for Section 1602.  The Enforcement Criteria included the presumption that any diversion of unappropriated water, including a riparian diversion, was substantial and subject to Section 1602’s notification requirement.  The court noted that the Enforcement Criteria were an unprecedented use of Section 1602 in both Region 1 and throughout California.  

DFG first sent letters to Siskiyou water diverters in 2005.  The letters stated that DFG considered agricultural diversions to be subject to Section 1602, requiring LSAA, California Environmental Quality Act (“CEQA”) and California Endangered Species Act (“ESA”) compliance.  Two subsequent letters, including threats of criminal sanctions for the failure to comply, followed the initial letter.  In the meantime, DFG headquarters was still considering the Enforcement Criteria, and DFG’s General Counsel had reservations about the policy.  Although DFG did not use the Enforcement Criteria for actual enforcement, it maintained that the exercise of any water right was subject to regulation under Section 1602.  Plaintiff brought this suit seeking a declaratory judgment that they need not notify DFG under Section 1602 in the exercise of their water rights.

Plaintiff’s primary contention was that DFG’s requirement of Section 1602 notification for every agricultural water diversion was in excess of DFG’s authority.  To assess this claim, the court compared the authority of the Department of Water Resources and the SWRCB with DFG in the context of the regulation of water rights.

Department of Water Resources and SWRCB

The SWRCB exercises the adjudicatory and regulatory functions of the State of California in the area of water resources.  Pursuant to this authority, the SWRCB has the exclusive authority to determine and grant appropriations of the state’s unappropriated water.  In adjudicating water rights, the SWRCB is required to consider the cumulative impacts of granting a water right permit, including impacts on other natural resources and the public trust.  With consultation, DFG is required to assess fish preservation and enhancement and to notify the SWRCB of its findings. The SWRCB maintains the authority to ensure that an established water right continues to be reasonable in light of changing conditions.  

DFG

Among other responsibilities, DFG administers and enforces the Fish and Game Code.  Section 1602, the basis of this case, provides that “[a]n entity may not substantially divert or obstruct the natural flow of, or substantially change or use any material from the bed, channel, or bank of, any river, stream, or lake, or deposit or dispose of debris, waste, or other material containing crumbled, flaked, or ground pavement where it may pass into any river, stream, or lake, unless” a variety of procedures are met.  (Section 1602(a).)

As applied to this case, the court assessed whether Section 1602 was ambiguous.  In the context of the entire system of preservation and conservation of fish and wildlife enacted in the Fish and Game Code, the court held that “it is clear that the Legislative intent was to use [Section 1602] as a means of enforcement in specific situations to protect fish and wildlife.”

The court assessed the meaning of “substantially divert” in Section 1602 which is not defined directly in the statute.  Guided by related definitions, the court defined “divert” as a “means to take water by gravity or pumping from a surface stream or subterranean stream flowing through a known and definite channel, or other body of surface water, into a canal, pipeline, or other conduit, and includes impoundment of water in a reservoir.”

The court then considered the meaning of “substantially” and “substantial.”  In a 1973 California Attorney General (“AG”) Opinion, the AG indicated that it was not possible to create a general rule defining “substantial diversion” because pump diversions vary case-by-case.  Assessing the AG Opinion and other case law, the court defined “substantially divert” as “taking an amount of water that is considerable, taking into account the surrounding circumstances, and that the taking of water is accomplished by gravity or pumping from a surface stream or subterranean stream flowing through a known and definite channel or other body of surface water, into a canal, pipeline or other conduit, and includes impoundment of water in a reservoir.”  The court explained that based on the plain meaning, the act of diverting water under a water right is within the scope of Section 1602 if the diversion would substantially adversely impact the fish and wildlife of the stream.  This definition would require case-by-case analysis of each diversion, an analysis that DFG did not undertake. 

The court next analyzed the practical result of DFG’s interpretation of its Section 1602, and its authority flowing from Section 1602.  Under the Enforcement Criteria, DFG would have authority to actually regulate a water right.  This authority could practically nullify a decision by the SWRCB to grant a water right, where DFG could limit or entirely eliminate the right.  This would give DFG authority far beyond its statutory scope.  In addition, it could guarantee a minimum appropriation for in-stream flow for fish and wildlife purposes, which the court concluded was contrary to California law.  DFG’s interpretation would, in effect, eliminate the SWRCB’s ability to regulate for future and overriding uses.

The court also held that DFG incorrectly assumed that of the beneficial uses of water, water for the benefit of fish and wildlife somehow holds a higher value than water used for other beneficial purposes.  The court explained that it was the SWRCB, not DFG, that has the authority to weigh the value of competing beneficial uses of water.  The court further noted that Water Code section 106 provides that the two highest and best uses of water are for domestic and agricultural purposes, not for fish and wildlife.  The court stated that it is the job of the Legislature, not DFG, to prioritize water uses.

The court’s analysis included the recognition that the right to divert and use water is a real property right.  Under DFG’s interpretation of Section 1602, DFG would negatively impact Plaintiff’s exercise of those real property rights which would raise serious constitutional questions.  The court also recognized that DFG’s improper expansion of Section 1602 would have a devastating “effect on the agricultural industry in California” and “the resultant loss to the state economy would be disastrous.”  

Conclusions and Implications

The court found that Section 1602 does not require notification to DFG when a water user extracts water pursuant to a valid water right when there is no streambed, stream bank, or other stream alteration.  Although a Superior Court case, this opinion has important potential statewide implications.  Had DFG been permitted to move forward with its interpretation of Section 1602, it likely would have created similar notification requirements and regulations throughout the state.  This would create an additional administrative and financial burden and possible significant new criteria for water users in the exercise of their rights.  It remains to be seen whether DFG will appeal this decision.

For more information regarding this case, please contact Richard S. Deitchman at (916) 446-7979 or rdeitchman@somachlaw.com.

* Effective January 1, 2013, the California Department of Fish and Game became the California Department of Fish and Wildlife.

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