Applying Principles from the California Supreme Court’s 2007 Decision in Vineyard Area Citizens, Court of Appeals Upholds EIR Against Challenge to Water Supply Analysis

September 2007

On September 25, 2007, the Second Appellate District Court of Appeal issued an opinion in Santa Clarita Organization for Planning the Environment v. County of Los Angeles (2007) __ Cal.App.4th __ (SCOPE v. Los Angeles), upholding the water supply analysis in Los Angeles County's Environmental Impact Report (EIR) for the West Creek residential subdivision project. Applying principles explained by the California Supreme Court in the February 2007 decision Vineyard Area Citizens for Responsible Growth v. City of Rancho Cordova, 40 Cal.4th 412, the Court of Appeal found that a transfer of State Water Project water made under the terms of the Monterey Agreement provides a sufficiently reliable project supply even though the EIR for the Monterey Agreement itself is not final and subject to litigation. The decision suggests that, despite some uncertainty in supply, an agency can satisfy its duty under the California Environmental Quality Act (CEQA) by providing a thorough, reasoned analysis of why any uncertainty in its supply is insubstantial.

Background
The water service contracts issued by the Department of Water Resources (DWR) authorize delivery of more water than is actually available from the State Water Project (SWP). The 2002 Monterey Agreement among DWR and the SWP contractors addresses this shortfall by, among other things, allocating the SWP's limited supply and providing a mechanism for permanent sale of water entitlements. Under the terms of the Monterey Agreement, the Castaic Lake Water Agency (“Castaic”) purchased 41,000 acre-feet per year (afy) of SWP water from the Kern County Water Agency. The CEQA process for the Monterey Agreement, however, is incomplete. An initial EIR was ordered decertified by the Court of Appeal, and DWR is still preparing the successor document. In its 2002 decision in Friends of Santa Clara River v. Castaic Lake Water Agency, 95 Cal.App.4th 1373, the Court of Appeal also decertified the EIR for the Kern-Castaic transfer because it tiered off the decertified Monterey Agreement EIR. In 2004, Castaic issued a revised EIR that does not tier off the decertified EIR, but that EIR is currently being challenged in L.A. County Superior Court. With this background, in its EIR for the impending West Creek residential subdivision, L.A. County cites the Kern–Castaic transfer as the primary source of water for the project. Plaintiffs filed a lawsuit challenging the adequacy of the West Creek EIR water supply analysis.

The Decision
In 2007 in Vineyard Area Citizens for Responsible Growth v. City of Rancho Cordova, 40 Cal.4th 412, the California Supreme Court cited four principles that govern whether a water supply analysis complies with the California Environmental Quality Act: (1) the document must evaluate the pros and cons of supplying the water and provide sufficient factual support, (2) the discussion must include a meaningful analysis of the reasonably foreseeable supplies and their impacts, with only limited details to be deferred, (3) the water supplies for the project must be “likely” to prove available, and (4) for any supply that is uncertain, the analysis must include “some discussion” of possible replacement sources.

The challenge in SCOPE v. Los Angeles focused on whether the Kern–Castaic water transfer deal is certain enough to satisfy the third principle in the Vineyard case, i.e., whether the supply is likely to “actually prov[e] available.” The challenged EIR concedes that the ongoing Monterey Agreement litigation could affect the water transfer, but also concludes that, practically speaking, the litigation is unlikely to “unwind” the transfer agreement. The parties intend the transfer to be permanent, and even though the transfer was made pursuant to the Monterey Agreement, there is independent, statutory authority for transferring the water. Moreover, although a DWR comment letter says the EIR could have relied on a more refined new model for its analysis that the transferred supply will in fact be available, the letter also concluded that using the new model “may” cause only “slight changes” in the results. Accordingly, the Court of Appeal found there was substantial evidence to support the conclusion that the transferred water supply is sufficiently likely to prove available. Moreover, despite some uncertainty in the transferred supply, the court held that the EIR properly omitted a discussion of alternative supplies, particularly given that Castaic has used the transferred water for years. In sum, “the degree of uncertainty is insubstantial. ‘Some uncertainty' is not the same as any conceivable certainty.” (Slp. Op. p. 15.) The court also addressed the fact that local groundwater would supply part of the project water, while 6 of the 67 supply wells are contaminated with perchlorate, a rocket fuel ingredient linked to thyroid complications. Plaintiffs argued that reliance on this source was improper because the EIR failed to cite a source of funds for the required cleanup. The court, however, accepted the EIR's explanation that the high value of the resource has made funding the cleanup a priority for the water purveyors.

The SCORE v. Los Angeles decision gives some breathing room for water suppliers and planners. Although water supply analysis have become an increasing focus of judicial scrutiny, this case suggests that, with proper deference to the factual determinations of the decision-making agency, the CEQA document for a project does not need to provide ironclad proof of a future water supply.