Trial Court Rejects the Fish and Wildlife Department’s Novel Expansion of Streambed Alteration Regulations to Existing Water Rights

January 2013
Water Law

On Christmas eve, the Siskiyou County Superior Court enjoined the California Department of Fish and Game (as of January 1, the Department of Fish and Wildlife) from bringing enforcement actions against longtime agricultural water users for continuing to divert surface waters from watercourses within the County without obtaining a streambed alteration agreement pursuant to Fish and Game Code section 1602. Siskiyou County Farm Bureau v. California Department of Fish and Game, Case No. SC SC CV 11-00418.  The ruling, which will come as welcome news to water users, concludes that the Legislature did not intend to “include the act of diverting water pursuant to a water right to be within the regulatory scope of [section] 1602,” absent a modification to the bed, bank, or stream of the relevant water course.

Factual and Regulatory Background

In response to concerns that industrial and other activities were causing adverse effects on anadromous fish and other wildlife dependent on instream resources, the California Legislature enacted Fish and Game Code section 1600.  Under section 1602, any person contemplating activity that substantially diverts or obstructs the natural flow of—or substantially changes or uses material from the bed, channel, or bank of—a water course is required to give prior notice to the Department of Fish and Game (DFG).  DFG must then determine whether the planned activity could adversely affect the fish and wildlife that depend on that water course.  If so, DFG and the property owner enter into a streambed alteration agreement (SAA) that includes terms to mitigate the planned activity’s potentially adverse consequences on fish and wildlife.  If the property owner does not agree, the matter can be submitted to arbitration with DFG.

Following the coho salmon’s listing under the California Endangered Species Act (CESA) in 2005, DFG developed enforcement criteria that presumed that any diversion of water pursuant to a water right was “substantial” and therefore subject to notification requirements under Fish and Game Code section 1602.  This policy represented a significant departure from DFG’s historical approach to enforcement, which until then had primarily targeted new or modified diversions that physically altered the bed or bank of the water course.  In 2005, DFG sent letters to diverters within Siskiyou County—including diverters taking water under 100-year old water rights—informing them of their new notice obligations under section 1602.  In addition, the letters stated that:

·         DFG considered agricultural diversions to be subject to section 1602.

·         Recipients had two options for compliance: participate in a watershed-wide agreement through Siskiyou Resource Conservation District or obtain an SAA individually.

·         Either compliance option required compliance with all applicable code provisions, including CESA and the California Environmental Quality Act (CEQA).

·         The recipient would be required to obtain an incidental take permit if the diversion, either individually or in conjunction with other diversions, could take (i.e., capture or kill) coho salmon.

Siskiyou County Farm Bureau Files Suit

The Siskiyou County Farm Bureau (the Farm Bureau) filed a declaratory relief action on behalf of agricultural water users, challenging DFG’s expansive interpretation of Fish and Game Code section 1602.  The suit alleged that the Legislature never intended section 1602—which was enacted long after some of the plaintiffs’ water rights were established—to apply to the mere act of exercising a water right; rather, the provision was enacted to address activities that physically altered the water course.  Plaintiffs alleged further that DFG’s broad interpretation would fundamentally alter the administration of water rights in California, imposing significant new burdens and uncertainties on longtime water users.  (By the time the Farm Bureau filed suit, two previous cases involving this same program had already been litigated.  Klamath Riverkeeper v. California Department of Fish and Game, Case No. CPF-09-509915; California Farm Bureau Federation v. California Department of Fish and Game, Case No. SCCVCV 10-0671. However, both resolved without ever reaching the issue raised here—namely, whether DFG could regulate water rights under Fish and Game Code section 1602.)

The Court Agrees With the Farm Bureau

The court agreed with the Farm Bureau that the purpose of Fish and Game Code section 1602 was to require notice to DFG for activities that physically alter the water course, not for the mere continuing exercise of a water right.  Section 1602’s legislative history showed that concern over the statute’s economic impacts was limited to the mining and aggregate industries.  Had the Legislature intended section 1602 to apply to all existing agricultural diversions, the court reasoned, surely there also would have been ample concern for the impacts to that industry.  Additionally, the court noted that the statute contemplates case-by-case determinations by DFG as to whether a particular activity may harm fish and wildlife dependent on the stream.  Here, in contrast, DFG had determined as a matter of policy that all diversions pursuant to water rights were categorically “substantial,” requiring notice.  Accordingly, the court found that DFG’s interpretation of section 1602  was contrary to the purposes of the statute.

More significantly, the court reasoned that DFG’s interpretation would upend the State’s administration of water rights.  It is the State Water Resources Control Board—not DFG—that exercises the State’s administrative authority over water rights in California.  In deciding between competing beneficial uses, the State Board has the unique responsibility to balance economic factors against public trust values such as fish and wildlife.  In contrast, the court noted that DFG’s sole regulatory focus under section 1602 is the effect of a diversion on the fish and wildlife in the subject stream.  DFG’s role in the State Board’s consideration of public trust values, on the other hand, is already codified.  Under Public Resources Code sections 10001 and 10002, the State Board is required to consider minimum streamflow requirements for fish and wildlife purposes developed by DFG.  But DFG’s proposed interpretation of Fish and Game Code section 1602 could lead to a situation in which, after [the State Board] considered all factors, a water right granted by the [State Board] could be nullified by the later regulation of the DFG.  The DFG would be pre-empting the [State Board’s] exclusive authority in granting and regulating water rights.

The court found that the Legislature could not possibly have intended such a result.

Additional consequences of DFG’s expansive interpretation of section 1602 would include allowing DFG to prioritize public trust uses above domestic or agricultural uses and allowing DFG to effectively appropriate water to maintain minimum in-stream flows.  The court found that such results would be repugnant to well-established water right precedent and to legislative determinations that domestic and agricultural uses are the highest and second-highest beneficial uses, respectively.

Implications

Over time, the various regional offices of DFG have interpreted the reach of section 1602 differently, creating uncertainty across the State for when an SAA is required.  The Siskiyou Court’s judgment is the first to determine whether section 1602 applies to the diversion of water without a concurrent modification to the bed or bank of the water course.  Although not binding in other counties, there is a strong chance the ruling will be appealed and lead to more definitive guidance on compliance with this statute.  In the meantime, water users will doubtlessly welcome the ruling as a step toward a more efficient, less burdensome administration of water rights.


Please note that the information contained in this article is not intended to provide legal advice. You should consult with an attorney and not rely on any information contained herein regarding your specific situation.

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