Second District Court of Appeal Affirms Judgment in California’s First Comprehensive Groundwater Adjudication
March 9, 2026
On March 5, 2026, the Second District Court of Appeal issued an opinion in Las Posas Valley Water Rights Coalition v. Ventura County Water Works District No. 1, et al., Case No. B330837, affirming the trial court’s judgment in California’s first comprehensive groundwater adjudication since the adoption of the Sustainable Groundwater Management Act (SGMA).
Downey Brand represents the Las Posas Valley Water Rights Coalition, a plaintiff group of landowners in the 40,000-acre Las Posas Valley, located in Ventura County. Groundwater from the Las Posas Groundwater Basin is the primary source of irrigation water for the various high-value crops grown in the Valley, including lemons, avocados, and berries. In 2018, the Coalition filed a complaint to initiate a comprehensive adjudication of the Basin following Fox Canyon Groundwater Management Agency’s (“Fox Canyon”) imposition of measures to drastically curtail groundwater pumping.
Post-SGMA Efforts to Streamline Groundwater Adjudications
Over twenty groundwater basins in California had been adjudicated before the initiation of this case, but the Las Posas adjudication is unique in several respects. It was the first comprehensive groundwater adjudication filed after the passage of SGMA in 2014 and the streamlined adjudication statutes (Assembly Bill 1390 and Senate Bill 226) in 2015. (Code Civ. Proc., §§ 830 et seq.) The adjudication statutes enabled the Coalition to file a comprehensive adjudication of all of the Basin’s groundwater rights after service of process on the interested parties within the Basin boundaries. The adjudication statute also streamlined trial court proceedings, resulting in a (relatively) swift conclusion to the complicated, hotly contested adjudication within five years.
Trial Court Proceedings
Judge Thomas Anderle of the Santa Barbara County Superior Court presided over the trial, which was divided into three phases. The first phase determined the Basin’s total safe yield—the amount of water that can be extracted annually without causing undesirable results—and quantified the allocations for Ventura County Waterworks Districts Nos. 1 and 19. The parties resolved Phase 1 by stipulation in 2020.
Phase 2 established individual groundwater right allocations. A majority of the landowner and mutual water company parties, including the Coalition, reached settlement on an allocation approach and related implementation provisions. The settlement included a novel hybrid allocation approach, in which each overlying agricultural user is allocated a minimum base allocation of 1.3 acre-feet per irrigated acre, and additional supplemental allocations are assigned to landowners based on their current reasonable and beneficial needs (determined based on historical use and relevant equitable considerations), up to a maximum of 3.1 acre-feet per acre. By assigning each user a minimum allocation that cannot be reduced until all supplemental allocations have been exhausted, users facing potential reductions retain some economic certainty. Several opposing landowners sought alternative allocations based solely on historical use. Del Norte Water Company argued that mutual water companies owned the groundwater rights of its shareholders and thus it, not its shareholders, should receive an allocation. Fox Canyon, Calleguas Municipal Water District, and Ventura County Waterworks Districts Nos. 1 and 19 resisted the breadth of the Phase 2 settlement, arguing that it went beyond the court’s mandate to allocate groundwater rights among landowners and verged into basin governance that they argued was reserved for Phase 3. Following a lengthy trial, Judge Anderle ruled in favor of the settling parties and adopted the settlement.
The settling landowners and mutual water companies then settled with the public agencies (including Fox Canyon) on Phase 3 regarding the governance of the Basin and the physical solution. A physical solution is an equitable management plan whereby the court retains jurisdiction to supervise the Basin’s ongoing health and viability. Because total allocations exceed the total safe yield, the settlement requires allocation holders to pay an annual assessment to fund projects that support the operating yield and allow users to maintain current uses without drastic reductions. The judgment appoints Fox Canyon, which is already responsible for managing the Basin under its organic statute and as the region’s Groundwater Sustainability Agency, to serve as the Basin’s watermaster with court supervision and input from experts and stakeholders. Several landowners and two mutual water companies opposed the Phase 3 settlement on various grounds, but none offered an alternate comprehensive plan for Basin management. After trial, Judge Anderle again ruled in favor of the settling parties and adopted the Phase 3 settlement.
Final Judgment and Appeal
On July 23, 2023, Judge Anderle entered a stipulated judgment pursuant to a new feature of the streamlined adjudication statutes that permits the trial court to enter a stipulated judgment over the objections of non-stipulating parties if: (i) the judgment is supported by more than 50 percent of extractors in the basin who represent more than 75 percent of extractions; and (ii) the judgment is consistent with the water right priorities of the non-stipulating parties. (Code Civ. Proc., § 850, subd. (a).) Opposing landowners and mutual water companies filed an appeal to challenge the stipulated judgment. Oral argument was held on January 14, 2026, and the Court of Appeal issued its opinion on March 5, 2026, affirming Judge Anderle’s judgment in full.
In affirming the judgment, the Court of Appeal rejected the argument that minimum base allocations of 1.3 acre-fee per acre would “permit waste and hoarding of water.” The Court of Appeal agreed with the trial court’s determination that the base allocation approach, designed to protect lower water users from ramp down, was reasonable. Likewise, the Court of Appeal affirmed the methodology for assigning supplemental allocations based on historical use and variances to account for unique circumstances, such as the replanting of immature permanent crops, fire damage, or well failure during the historical base period.
The Court of Appeal rejected Del Norte Water Company’s claim to its shareholders’ groundwater rights, finding the company was merely exercising its shareholders rights on their behalf. While the company can apportion service costs among its shareholders and prioritize service based on share ownership during times of shortage, the landowners retain ownership of their overlying rights. The Court of Appeal also rejected arguments that long-dormant overlying rights of another mutual water company should not be subordinated, where substantial evidence demonstrated that the company had allowed those rights to go dormant and that the judgment allowed the company to revive them. The appellants have until April 14, 2026, to petition for review by the California Supreme Court.
Since the adjudication of the Las Posas Basin commenced in 2018, five other basins have entered adjudications. The involved parties quickly resolved the adjudication of the Borrego Springs Basin by stipulated judgment, while the adjudications of the Cuyama Basin, Indian Wells Basin, the Oxnard Basin, and the Pleasant Valley Basin remain ongoing. Although each basin is unique and every adjudication may present novel challenges, the decision in Las Posas Valley Water Rights Coalition v. Ventura County Water Works District No. 1, et al. will provide clarity and guidance for current and future cases.