Court of Appeal Upholds County of Monterey’s Management of Groundwater in Landmark SGMA Case

November 20, 2023

On November 13, 2023, the Sixth District Court of Appeal issued the first published decision interpreting California’s Sustainable Groundwater Management Act (“SGMA”) in City of Marina et al., v. County of Monterey et al., Case No. H049575. The case arose after the County of Monterey elected to form a groundwater sustainability agency (“GSA”) to resolve overlapping claims to manage groundwater in a small area of the Salinas Valley Groundwater Basin known as the CEMEX Area, a seaside parcel on which CEMEX previously operated a sand-mining facility and is now proposed to house a desalination plant to provide fresh water to residents of Monterey County. The Court upheld the trial court’s determination that the County of Monterey Groundwater Sustainability Agency, rather than the City of Marina, has the authority to manage groundwater in the CEMEX Area. The Court’s decision signals judicial support for the California legislature’s preference for local management of groundwater under SGMA.  Downey Brand successfully represented Monterey County before both the trial and appellate courts.

Background of the Case

SGMA, enacted in 2014, sets forth the state’s framework for sustainable groundwater management by providing procedures for local agencies to form GSAs, which serve as managers of various areas of groundwater basins throughout California. These GSAs must develop and implement groundwater sustainability plans to ensure the sustainable use of groundwater in the area.

In 2017, the Salinas Valley Basin GSA submitted a notice to the Department of Water Resources to manage the CEMEX Area. Almost one year later, the City of Marina formed the City of Marina GSA and attempted to assert its authority over this same area, claiming that, due to a small overlap in a different area of the Subbasin, the Salinas Valley Basin GSA’s notice to manage never went into effect under SGMA’s procedural rules. After the two agencies failed to work out their dispute over the CEMEX Area, the County of Monterey stepped in under Water Code section 10724 form the County of Monterey GSA to manage the groundwater in the CEMEX Area and preserve local control of groundwater management.

The trial court rejected the City of Marina’s effort to invalidate the County’s decision, concluding that the City of Marina’s notice for the CEMEX Area was untimely and thus never went into effect because it was filed more than 90 days after the Salinas Valley Basin GSA first filed its notice of intent to manage groundwater in the Subbasin. The trial court also determined that even though the Salinas Valley Basin GSA eventually became the exclusive GSA for the CEMEX Area, it later relinquished its claim when it removed the CEMEX Area from its boundaries on the Department of Water Resources’ website.  The court also found that the County both properly invoked its authority under Section 10724 of the SGMA to form a GSA for the CEMEX Area and adopted the Salinas Valley Basin GSA’s Groundwater Sustainability Plan for the CEMEX Area. Thus, the trial court rejected the City of Marina’s claims, preserved the status quo, and ensured that the entire 180/400-Foot Aquifer Subbasin would be sustainably managed under a plan approved by the Department of Water Resources.

Court of Appeal’s Decision

The Court of Appeal rejected all of the City’s arguments on appeal and affirmed the trial court’s ruling that the County of Monterey properly became, and still remains, the GSA for the CEMEX Area.  The Court of Appeal also held that the County correctly adopted the Salinas Valley Basin GSA’s GSP for the CEMEX Area. This Plan, the same as the Salinas Valley Basin’s plan for the rest of the Subbasin, means the entire Subbasin is now managed consistently under one Plan.

The court’s reasoning centered on the statutory interpretation of SGMA’s Section 10724, which governs the process by which a county can step in and take control of groundwater management in an unmanaged area. Doing so prevents the Subbasin from being designated as probationary and allowing the state to take over groundwater management.  Under the City of Marina’s interpretation, Section 10724 only allows a county to intervene when no other local agency has formed a GSA in a particular area. The Court rejected this interpretation, siding instead with the County’s construction of the statute that an area is considered “unmanaged” when an overlap exists between two or more GSAs. This interpretation of SGMA, the Court noted, is consistent with the Legislature’s stated intent in enacting SGMA to strengthen local control and minimize state intervention of groundwater management. This interpretation affirms that counties can take control of groundwater management in unmanaged areas regardless of the reason why an area is unmanaged. It also emphasizes the California Legislature’s intent for groundwater to be managed at the local level to the greatest extent possible.

The court declined to decide the issue of whether the Salinas Valley Basin GSA ultimately became the exclusive GSA in the CEMEX Area before the County stepped in, but rejected the City’s argument that the City of Marina GSA became the exclusive GSA for the CEMEX area when the Salinas Valley Basin GSA purportedly excluded the CEMEX area from its claimed jurisdiction. Noting that the Salinas Valley Basin entered into a valid coordination agreement with the County, the Court again emphasized that SGMA encourages local agencies to cooperate in order to minimize state intervention.

Lastly, the Court upheld the trial court’s finding that the County properly adopted, and the Department of Water Resources then posted, the Salinas Valley Basin GSA’s Groundwater Sustainability Plan for the entire Subbasin area. The court concluded there was no evidence that SGMA prevented these two agencies from coordinating to adopt a groundwater sustainability plan.

Overall, the court’s decision retains the status quo for Monterey County and affirms the Legislature’s intent to allow local agencies to manage groundwater resources to the greatest extent possible.