HILL, P. J. —
Appellant Restore Hetch Hetchy appeals from the trial court's judgment sustaining appellees' City and County of San Francisco, San Francisco Public Utilities Commission, Bay Area Water Supply and Conservation Agency, Turlock Irrigation District, and Modesto Irrigation District, demurrer. Restore Hetch Hetchy petitioned the trial court for a writ of mandate to declare the Hetch Hetchy Reservoir and O'Shaughnessy Dam unreasonable methods of diverting water under article X, section 2 of the California Constitution (hereafter, art. X, § 2). The trial court concluded Restore Hetch Hetchy's position was preempted by the Raker Act (see Pub.L. No. 63-41 (Dec. 19, 1913) 38 Stat. 242; hereafter, Raker Act or the Act), federal legislation granting certain rights-of-way to San Francisco subject to various conditions, and that actions brought under article X, section 2 are subject to a four-year statute of limitations that began running when article X, section 2 became effective in 1928. For the reasons set forth below, we affirm.
The Hetch Hetchy Valley is a long, narrow, and granite-cliff bordered valley through which a portion of the Tuolumne River flows. It is in the northwest portion of the federally controlled Yosemite National Park. Prior to the 1920's, Hetch Hetchy Valley was a well-known and beloved natural resource with views said to rival those of Yosemite Valley itself. As early as 1901, however, the valley was also an area of contention, with San Francisco seeking to use the valley for long-term water storage and power generation needs.
In 1913, after several earlier attempts by San Francisco to create a dam in the Hetch Hetchy Valley had stalled, the House of Representatives took up the issue through what became known as the Raker Act. Despite strong
Restore Hetch Hetchy's petition alleges that the use of the O'Shaughnessy Dam to divert water into the Hetch Hetchy Reservoir is an unreasonable method of diversion under article X, section 2.
The trial court sustained the demurrer filed in this case on two grounds. In the first, the court concluded appellant's application of article X, section 2, asserting that the O'Shaughnessy Dam and Hetch Hetchy Reservoir constituted an unreasonable diversion of water under modern considerations, was preempted by the Raker Act. In the second, the court determined that actions for relief under article X, section 2 are subject to the state's catchall four-year statute of limitations and that appellant's allegations showed their claim arose at approximately the time the O'Shaughnessy Dam was completed. When Restore Hetch Hetchy opted not to file an amended petition, the trial court entered a judgment of dismissal.
This appeal timely followed.
Restore Hetch Hetchy raises two issues.
Upon San Francisco's demurrer, the trial court concluded that the claims brought by Restore Hetch Hetchy were preempted by the Raker Act. Restore Hetch Hetchy argues this determination was improper on the general contention that section 11 of the Raker Act, known colloquially as a savings clause, precludes any finding that the Raker Act conflicts with California's water laws. We do not agree with this position. Congress's relevant intent, as readily discerned from the text of the Raker Act, was to flood the Hetch Hetchy Valley through the permanent creation of a dam on federal lands. Although a broad savings clause was then utilized to preserve the applicability of California's water laws, relevant principles of the preemption analysis confirm that broad preemption protections for state laws may not eviscerate those components of a law purposefully enacted by Congress. In this instance, Congress specifically ordered the creation and operation of a dam, intending for the continued operation of this structure. Accordingly, as detailed below, the savings clause contained in the Raker Act does not preclude a finding of conflict between the asserted claims of this case and the express determination by Congress to divert water on a permanent basis at the site of the O'Shaughnessy Dam.
"A demurrer tests the legal sufficiency of the factual allegations in a complaint." (Regents of University of California v. Superior Court (2013) 220 Cal.App.4th 549, 558 [163 Cal.Rptr.3d 205].) "When a demurrer is sustained, appellate courts conduct a de novo review to determine whether the pleading alleges facts sufficient to state a cause of action under any possible legal theory." (Gutierrez v. Carmax Auto Superstores California (2018) 19
In relevant part to the issues arising in this case, article X, section 2 provides: "It is hereby declared that because of the conditions prevailing in this State the general welfare requires that the water resources of the State be put to beneficial use to the fullest extent of which they are capable, and that the waste or unreasonable use or unreasonable method of use of water be prevented, and that the conservation of such waters is to be exercised with a view to the reasonable and beneficial use thereof in the interest of the people and for the public welfare. The right to water or to the use or flow of water in or from any natural stream or water course in this State is and shall be limited to such water as shall be reasonably required for the beneficial use to be served, and such right does not and shall not extend to the waste or unreasonable use or unreasonable method of use or unreasonable method of diversion of water."
The Raker Act has been broadly summarized in several prior cases. As the United States Supreme Court described it, the Act "granted the City and County of San Francisco, subject to express conditions, certain lands and rights-of-way in the public domain in Yosemite National Park and Stanislaus National Forest. The Act in terms declared that this, known as the `Hetch-Hetchy' grant, was intended for use by the City both in constructing and maintaining a means of supplying water for the domestic purposes of the City and other public bodies, and in establishing a system `for generation and sale and distribution of electric energy.'" (U. S. v. San Francisco (1940) 310 U.S. 16, 18 [84 S.Ct. 1050, 60 S.Ct. 749], fn. omitted.) In terms more relevant to the issues raised here, the Act has been described as something "passed to provide needed water for San Francisco by authorizing the flooding of Hetch Hetchy Valley and the creation of the Hetch Hetchy Reservoir in Yosemite National Park." (Sierra Club v. FERC (1985) 754 F.2d 1506, 1510 (Sierra Club).)
The Act has been described as "much like a contract. It carefully specifies the obligations of the grantee and the grantor." (U.S. v. City & County of San Francisco (E.D.Cal. 2006) 446 F.Supp.2d 1140, 1143.)
At the same time, the Act has always been somewhat controversial. "The Act met with strong opposition from environmental groups who objected to the destruction of the pristine splendor of the Hetch Hetchy Valley. Instrumental in the defeat of the environmental viewpoint was the demonstrated need for a cheap and abundant supply of water to accommodate the growing power and water demands of the Bay Area. The legislative debates are replete with discussion of the projected population growth of the Bay Cities[
This controversy, though, was overcome by a political agreement and recognition that building a dam at the Hetch Hetchy site was a fundamental need for San Francisco and the surrounding areas. As the legislative analysis of the bill shows, whether or not to build a dam at Hetch Hetchy had been hotly disputed for around 12 years. Plans to build a dam to supply water to the Bay Area began in 1900 and were contested by not only environmental interests but also by farming and irrigation interests. However, a dire need for water in the San Francisco area and the ability to ensure the Tuolumne river did not run dry in low water years or summer and fall months led all but the environmentally concerned parties to eventually support building the dam. From the federal side, the Secretary of the Interior noted that both "the private engineers and the War engineers have reached the conclusion that this dam site must eventually be used" and that other California interests would push for the dam in short time if not approved immediately. (See H.R. No. 7207, 63d Cong., 1st Sess. (1913).) The Secretary concluded, "My judgment is unequivocally in favor of the use of the floor of the valley. If San Francisco does not get it, some one else must; it is too precious a reservoir site to remain unused." (Ibid.) Thus, to ensure all interests were fairly treated, the legislative history shows the United States entered into the grant in the structure chosen because "the United States, having sole jurisdiction over the national park, has the right to refuse the grant and also has the right in making the grant to impose certain conditions upon the grantee." (Ibid.)
Thus, in section 4, the grant requires San Francisco to "conform to all regulations adopted and prescribed by the Secretary of the Interior governing the Yosemite National Park" while limiting the use of timber cut from the lands, requiring the construction of trails, and mandating the erection of permanent structures, including dams, "be sightly and of suitable exterior design and finish so as to harmonize with the surrounding landscape and its use as a park." (Raker Act, § 4.) Section 5 requires that "construction of the aforesaid works shall be prosecuted diligently, and no cessation of such construction shall continue for a period of three consecutive years" on the penalty of potential forfeiture of the grant, while again confirming that "in the exercise of the rights granted by this act, the grantee shall at all times comply with the regulations herein authorized." (Id., § 5.) Related to this requirement, in section 9, subdivision (k), the statute provides that "when the said grantee begins the development of the Hetch Hetchy Reservoir site, it shall undertake and vigorously prosecute to completion a dam at least two hundred feet high, with a foundation capable of supporting said dam when built to its greatest economic and safe height." (Id., § 9, subd. (k).)
Section 6 provides that "the grantee is prohibited from ever selling or letting to any corporation or individual, except a municipality or a municipal water district or irrigation district, the right to sell or sublet the water or the electric energy sold or given to it or him by the said grantee," again on the potential penalty of forfeiting the right-of-way. (Raker Act, § 6.) Section 9 of the Raker Act then provides a substantial number of regulations and provisos related to water usage and water rights attending to the grant. Thus, in section 9, subdivision (a), the Act requires five specific "sanitary regulations" including the exclusion of refuse from within 300 feet of any reservoir, the filtration of sewage from permanent camps and hotels in the watershed, and bathing or
The remainder of the Act contains additional restrictions and relevant sections. These include substantial requirements related to capacity, resale, and the provision of electricity required to be generated through the agreement, along with building requirements San Francisco must pay for, water that must be sold to the United States, and water that must be provided to authorized occupants within a mile of the planned reservoirs. (Raker Act, § 9, subds. (i)-(u).) Following these additional provisos, section 11 consists of a savings clause, providing "this act is a grant upon certain express conditions specifically set forth herein, and nothing herein contained shall be construed as affecting or intending to affect or in any way to interfere with the laws of the State of California relating to the control, appropriation, use, or distribution of water used in irrigation or for municipal or other uses, or any vested right acquired thereunder, and the Secretary of the Interior, in carrying out the provisions of this act, shall proceed in conformity with the laws of said State." (Id., § 11.)
In line with these principles, we begin by considering the purpose of the Raker Act. From our summary of the law, above, we can reach several conclusions about Congress's intent when enacting the Raker Act. First, although styled in the form of a right-of-way grant, the Raker Act's provisions show that Congress contemplated a much more complex arrangement with San Francisco than simply granting a right-of-way. Rather, the Act appears to be part of a comprehensive resolution to a major need for water and electrical power in a burgeoning metropolitan area that both resolves that problem and provides the federal government with benefits it would otherwise lack absent the planned use for the land at issue. Thus, San Francisco was provided with both the land needed to support, and directions to implement, a massive undertaking with respect to water storage, transportation, and electrical generation. In exchange, the federal government was able to establish some control over the construction and operation of the facilities, preserve senior water rights that it would not otherwise have control over, ensure specific amounts of electrical power would be generated, set how portions of both the water diverted and power generated could be sold, secure water rights for the War Department, limit San Francisco's ability to remove water from the Tuolumne watershed, and obtain land and building commitments designed to preserve as much of the scenic beauty of the area as possible given the grants provided.
Second, the many provisions concerning the authority of the federal government to control aspects of the completed project, ensure timely creation of the planned construction sites, and obtain either full control over the lands should such provisions not be followed or substantial continuing enforcement rights or payments upon completion shows Congress intended much of the construction allowed on its lands to be permanent. Thus, Congress retained control over exactly where the rights-of-way would be through the requirement that maps be authorized by the federal government, set rules for how the future water source must be managed in the form of pollution restrictions, insisted on permanent payments to maintain trails and other features, limited the ability for San Francisco to sell diverted water while allowing the city and county to recoup the costs of the dam, and authorized the enforcement of these provisions, among others.
Third, and most pertinent to this appeal, the Raker Act shows Congress intended for a dam to be built in the Hetch Hetchy Valley that would flood the area and create the Hetch Hetchy Reservoir. This is most readily shown through section 9, subdivision (k) of the Raker Act, which requires vigorous construction of a dam at least 200 feet high when development of the Hetch Hetchy Reservoir begins. However, it is further supported by section 9,
Having considered the purposes of the Raker Act, we next turn to those aspects of article X, section 2 invoked in this case. Restore Hetch Hetchy's complaint is focused upon a core allegation, that San Francisco is "employing an unreasonable method of diverting municipal water supplies from the Tuolumne River by drowning the Hetch Hetchy Valley of Yosemite National Park with a reservoir" in violation of article X, section 2. Restore Hetch Hetchy provides a substantial number of factual assertions, all directed to this general point. These include a long list of beneficial uses the Hetch Hetchy Valley could be put towards were the O'Shaughnessy Dam not present. Restore Hetch Hetchy claims these uses outweigh the beneficial use of providing municipal water supplies via the reservoir. Included in these factual assertions are substantial financial comparisons between the value of an unencumbered valley and the cost necessary to preserve the currently existing water reserves and electrical power generated from the Raker Act projects. Such comparisons also attempt to demonstrate that the O'Shaughnessy Dam is no longer needed because equivalent and greater water reserves have since been added to the overall system. Our review of the factual assertions made reveals no other supportable legal theory under article X, section 2 and we have been pointed to none supported by the record.
Restore Hetch Hetchy contests this conclusion by pointing to section 11 of the Raker Act, the so-called savings clause. According to Restore Hetch Hetchy, the phrase "nothing herein contained shall be construed as affecting or intending to affect or in any way to interfere with the laws of the State of California relating to the control, appropriation, use, or distribution of water ..." is so broad that it "preserves California's water appropriation and distribution laws for all of the features for which Congress granted San Francisco a right-of-way, including the O'Shaughnessy Dam and Hetch Hetchy Reservoir." Rejecting comparisons to similar language in the earlier enacted Reclamation Act (June 17, 1902, ch. 1093, 32 Stat. 388), which has been interpreted not to save state laws inconsistent with specific directives in the federal legislation from exemption, and focusing on the legislative history of the Raker Act, Restore Hetch Hetchy argues that all aspects of article X, section 2 are applicable to the continued operation of the O'Shaughnessy Dam through the express language of the savings clause.
Contrary to Restore Hetch Hetchy's position, we find Ivanhoe Irrig. Dist. v. McCracken (1958) 357 U.S. 275, 291-292 [2 L.Ed.2d 1313, 78 S.Ct. 1174], Fresno v. California (1963) 372 U.S. 627, 629-630 [10 L.Ed.2d 28, 83 S.Ct. 996], and California v. United States (1978) 438 U.S. 645, 673-674 [57 L.Ed.2d 1018, 98 S.Ct. 2985], instructive in our analysis. While those cases dealt with similar savings clause language contained in the Reclamation Act, their usefulness comes not from the similarities in the language with the Raker Act but from the key components of the analysis utilized to determine when federal law preempts state. As explained in California, "Ivanhoe and City of Fresno involved conflicts between § 8 [the savings clause of the Reclamation Act], requiring the Secretary to follow state law as to water rights, and other provisions of Reclamation Acts that placed specific limitations on how the water was to be distributed," while California itself dealt with the argument that state law is preempted "even if no explicit congressional directive conflicts with the conditions imposed." (California, at p. 673.) In that later context, the Supreme Court disavowed prior language limiting its interpretation of the Reclamation Act's savings clause, "to the extent that it would prevent petitioners from imposing conditions on the permit granted to the United States which are not inconsistent with congressional provisions authorizing the project in question," but made no general overhaul of the conclusions in Ivanhoe and City of Fresno that directly conflicting requirements in state laws are preempted, regardless of the breadth of the savings clause. (California, at pp. 674-675.)
This clarification of the nature of the preemption analysis was shortly thereafter applied by our California Supreme Court in the case of Environmental Defense Fund, Inc. v. East Bay Mun. Utility Dist. (1980) 26 Cal.3d 183, 191-193 [161 Cal.Rptr. 466, 605 P.2d 1]. There, our high court found a federal statute that specifically authorized the construction of a dam and canal, but expressly created a process for determining from where water should be diverted that required "due consideration" of the California Water Plan and "consult[ation] with local interests through public hearings," resulted in preemption of any challenges to the construction of the dam and canal but not to restrictions placed on the diversion point. (Environmental Defense Fund, at p. 193.) Consistent with Ivanhoe, City of Fresno, and California, this analysis applied preemption in instances where direct conflicts existed with express provisions while avoiding preemption where no direct conflict was created.
Having concluded appellant's claims fail under preemption principles, we need not reach the trial court's alternative holding that the claims are time-barred. We take no position on that conclusion.
The judgment is affirmed. Costs are awarded to respondents.
Poochigian, J., and Meehan, J., concurred.