For the better part of 100 years, citizens of the American Southwest have been fighting over the right to water from the Colorado River. While the United States Supreme Court largely settled the interstate conflict over that water nearly 50 years ago, in Arizona v. California (1963) 373 U.S. 546 [10 L.Ed.2d 542, 83 S.Ct. 1468], the court's resolution of the dispute between the states—which limited California's share of the river to far less than the state can use—ensured the fight would continue within the state for years to come.
As will be shown, for years after the United States Supreme Court determined that California's share of the water from the Colorado River was to be only 4.4 million acre-feet during normal water years, California was nonetheless able to use much more than that because Arizona and Nevada were not yet able to use their full entitlements. (See, e.g., In re Bay-Delta etc. (2008) 43 Cal.4th 1143, 1153 [77 Cal.Rptr.3d 578, 184 P.3d 709].) During this period, vast quantities of irrigation return flow from the Irrigation District sustained the Salton Sea—that accidental body of water that owes its very existence to the quest for Colorado River water for the Imperial Valley. Eventually, however, pressure built on California to live within its annual 4.4 million acre-feet entitlement and on the Irrigation District to curb its wasteful water use. At the same time, the water needs of coastal Southern California continued to grow.
The Quantification Settlement Agreement and related agreements sought to address these problems in part by making Colorado River water conserved within the Irrigation District's service area available for use by the denizens of coastal Southern California, from San Diego to Los Angeles, in exchange for money to fund the conservation efforts. But environmental interests fear that shipping more Colorado River water to the coast will doom the Salton Sea.
It is within the context of this fight that we are called on to review the judgments in three coordinated cases connected with the Quantification Settlement Agreement.
In January 2010, the coordination trial judge found that one of the 12 agreements related to the Quantification Settlement Agreement—specifically, the "Quantification Settlement Agreement Joint Powers Authority Creation and Funding Agreement" (the Joint Powers Agreement)—was unconstitutional. The Joint Powers Agreement was supposed to provide the principal mechanism for ensuring the mitigation required for implementation of the Quantification Settlement Agreement was completely funded. According to the trial court, the State of California's "unconditional contractual obligation," as part of the Joint Powers Agreement, to pay all of the mitigation costs beyond a particular amount for which the Irrigation District, Coachella, and San Diego were to be liable, was contrary to the appropriation requirement of article XVI, section 7 of the California Constitution, which provides that money may be drawn from the Treasury only through an appropriation enacted by the Legislature. In the trial court's view, the unconditional commitment of an uncertain amount of state funds contravened this appropriation requirement. Accordingly, the trial court entered a judgment in the validation action determining that all but one of the agreements the Irrigation District sought to validate—including the Quantification Settlement Agreement—were invalid.
Ten different parties filed three notices of appeal and two notices of cross-appeal, challenging the trial court's judgment in the validation action and the two CEQA actions. Numerous other parties have filed responsive or amicus curiae briefs. The parties supporting the Quantification Settlement Agreement and related agreements contend the trial court erred in finding the Joint Powers Agreement unconstitutional, while the parties opposing the agreements assert that the trial court did not err and that, in any event, there are other bases to uphold the trial court's judgment in the validation action. As to the CEQA actions, the proponents of those actions contend the trial court erred in dismissing them as moot, and they importune us to adjudicate their CEQA claims in the first instance, to avoid further delay, while the CEQA opponents contend those matters must be addressed by the trial court on remand.
As we explain more fully below, we conclude the trial court erred in determining that the Joint Powers Agreement violates article XVI, section 7 of the California Constitution. While the agreement does unconditionally obligate the state to pay the excess mitigation costs beyond those for which the Irrigation District, Coachella, and San Diego are responsible, the imposition of that obligation on the state does not violate the appropriation requirement of article XVI, section 7 of the California Constitution because nothing in the Joint Powers Agreement gives those three water agencies (or anyone else for that matter) the right to enforce that obligation by drawing money from the treasury without an appropriation by the Legislature. While the state cannot assert the failure of the Legislature to appropriate funds to pay the excess mitigation costs as a defense to a breach of contract claim under the Joint Powers Agreement—because the state's obligation is "unconditional"—the state cannot be compelled to appropriate funds to satisfy its obligation, although the water agencies might, in appropriate circumstances, be able to enforce the state's obligation against other funds already appropriated. Read in this manner, the Joint Powers Agreement is constitutional.
Nor do we find any other basis for affirming the trial court's judgment in the validation action. To the extent the parties contend the Joint Powers Agreement violates the debt limitation in section 1 of article XVI of the California Constitution, we conclude they are wrong because the state's commitment to pay the excess mitigation costs is contingent on there being excess costs to pay, and a contingent obligation does not qualify as a "debt"
For guidance on remand in the validation action, we also conclude that the trial court lacks subject matter jurisdiction to adjudicate claims under the federal Clean Air Act
As for the two CEQA actions, we conclude that the argument by the Imperial County Air Pollution Control District (the Air District) that the trial court erred in denying its motion to intervene in those actions is not properly before us because the Air District did not appeal from the order denying leave to intervene. We further conclude that the trial court properly granted summary adjudication on the cause of action in the County's CEQA action based on the wheeling statutes. We also conclude that the trial court erred in finding the CEQA actions moot, but we decline to adjudicate those actions in the first instance and instead we remand those actions to the trial court for adjudication. Finally, we conclude the trial court did not abuse its discretion in denying a pretrial motion to dismiss the County's CEQA action because the County failed to name the United States and various other parties as real parties in interest.
For the foregoing reasons, and as explained more fully below, we will reverse the judgments and remand the validation action and the two CEQA actions for further proceedings.
Illustrating how deep the roots of the disputes before us go, we draw a substantial amount of the general background of these cases from the United States Supreme Court's decision nearly 50 years ago in Arizona v. California, supra, 373 U.S. 546 [10 L.Ed.2d 542], which involved the earlier, interstate aspect of the fight over Colorado River water. In an opinion authored by Justice Hugo Black, the Supreme Court explained as follows:
"During the latter part of the nineteenth and the first part of the twentieth centuries, people in the Southwest continued to seek new ways to satisfy their water needs, which by that time were increasing rapidly as new settlers moved into this fast-developing region. But none of the more or less primitive diversions made from the mainstream of the Colorado conserved enough water to meet the growing needs of the basin. The natural flow of the Colorado was too erratic, the river at many places in canyons too deep, and the engineering and economic hurdles too great for small farmers, larger groups, or even States to build storage dams, construct canals, and install the expensive works necessary for a dependable yearround water supply. Nor were droughts the basin's only problem; spring floods due to melting snows and seasonal storms were a recurring menace, especially disastrous in California's Imperial Valley where, even after the Mexican canal provided a more dependable water supply, the threat of flood remained at least as serious as before. Another troublesome problem was the erosion of land and the deposit of silt which fouled waters, choked irrigation works, and damaged good farmland and crops.
"It is not surprising that the pressing necessity to transform the erratic and often destructive flow of the Colorado River into a controlled and dependable water supply desperately needed in so many States began to be talked about and recognized as far more than a purely local problem which could be solved on a farmer-by-farmer, group-by-group, or even state-by-state basis,
"The prospect that the United States would undertake to build as a national project the necessary works to control floods and store river waters for irrigation was apparently a welcome one for the basin States. But it brought to life strong fears in the northern basin States that additional waters made available by the storage and canal projects might be gobbled up in perpetuity by faster growing lower basin areas, particularly California, before the upper States could appropriate what they believed to be their fair share. These fears were not without foundation, since the law of prior appropriation prevailed in most of the Western States. Under that law the one who first appropriates water and puts it to beneficial use thereby acquires a vested right to continue to divert and use that quantity of water against all claimants junior to him in point of time. `First in time, first in right' is the shorthand expression of this legal principle. In 1922, only four months after the Fall-Davis Report, this Court in Wyoming v. Colorado [(1922)] 259 U.S. 419 [66 L.Ed. 999, 42 S.Ct. 552] . . . held that the doctrine of prior appropriation could be given interstate effect. This decision intensified fears of Upper Basin States that they would not get their fair share of Colorado River water. In view of California's phenomenal growth, the Upper Basin States had particular reason to fear that California, by appropriating and using Colorado River water before the upper States, would, under the interstate application of the prior appropriation doctrine, be `first in time' and therefore `first in right.' Nor were such fears limited to the northernmost States. Nevada, Utah, and especially Arizona were all apprehensive that California's rapid declaration of appropriative claims would deprive them of their just share of basin water available after construction of the proposed United States project. It seemed for a time that
"Pursuant to this congressional authority, the seven States appointed Commissioners who, after negotiating for the better part of a year, reached an agreement at Santa Fe, New Mexico, on November 24, 1922. The agreement, known as the Colorado River Compact, failed to fulfill the hope of Congress that the States would themselves agree on each State's share of the water. The most the Commissioners were able to accomplish in the Compact was to adopt a compromise suggestion of Secretary of Commerce Herbert Hoover, specially designated as United States representative. This compromise divides the entire basin into two parts, the Upper Basin and the Lower Basin, separated at a point on the river in northern Arizona known as Lee Ferry. . . . Article III (a) of the Compact apportions to each basin in perpetuity 7,500,000 acre-feet of water a year from the Colorado River System, defined in Article II (a) as `the Colorado River and its tributaries within the United States of America.' In addition, Article III (b) gives the Lower Basin `the right to increase its beneficial consumptive use of such waters by one million acre-feet per annum.' Article III (c) provides that future Mexican water rights recognized by the United States shall be supplied first out of surplus over and above the aggregate of the quantities specified in (a) and (b), and if this surplus is not enough the deficiency shall be borne equally by the two basins. Article III (d) requires the Upper Basin not to deplete the Lee Ferry flow below an aggregate of 75,000,000 acre-feet for any 10 consecutive years. Article III (f) and (g) provide a way for further apportionment by a compact of `Colorado River System' waters at any time after October 1, 1963. While these allocations quieted rivalries between the Upper and Lower Basins, major differences between the States in the Lower Basin continued. Failure of the Compact to determine each State's share of the water left Nevada and Arizona with their fears that the law of prior appropriation would be not a protection but a menace because California could use that law to get for herself the lion's share of the waters allotted to the Lower Basin. Moreover, Arizona, because of her particularly strong interest in the Gila, intensely resented the Compact's inclusion of the Colorado River tributaries in its allocation scheme and was bitterly hostile to having Arizona tributaries, again particularly the Gila, forced to contribute to the Mexican burden. Largely for these reasons, Arizona alone, of all the States in both basins, refused to ratify the Compact.
"Between 1922 and 1927 Congressman Philip Swing and Senator Hiram Johnson, both of California, made three attempts to have Swing-Johnson bills enacted, authorizing construction of a dam in the canyon section of the Colorado River and an all-American canal. These bills would have carried out the original Fall-Davis Report's recommendations that the river problem be recognized and treated as national, not local. Arizona's Senators and Congressmen, still insisting upon a definite guaranty of water from the mainstream, bitterly fought these proposals because they failed to provide for exclusive use of her own tributaries, particularly the Gila, and for exemption of these tributaries from the Mexican burden.
"Finally, the fourth Swing-Johnson bill passed both Houses and became the Boulder Canyon Project Act of December 21, 1928, 45 Stat. 1057. The Act authorized the Secretary of the Interior to construct, operate, and maintain a dam and other works in order to control floods, improve navigation, regulate the river's flow, store and distribute waters for reclamation and other beneficial uses, and generate electrical power. The projects authorized by the Act were the same as those provided for in the prior defeated measures, but in other significant respects the Act was strikingly different. The earlier bills had offered no method whatever of apportioning the waters among the States of the Lower Basin. The Act as finally passed did provide such a method, and, as we view it, the method chosen was a complete statutory apportionment intended to put an end to the long-standing dispute over Colorado River waters. To protect the Upper Basin against California should Arizona still refuse to ratify the Compact, § 4 (a) of the Act as finally passed provided that, if fewer than seven States ratified within six months, the Act should not take effect unless six States including California ratified and unless California, by its legislature, agreed `irrevocably and unconditionally . . . as an express
"The Project Act became effective on June 25, 1929, by Presidential Proclamation, after six States, including California, had ratified the Colorado River Compact and the California legislature had accepted the limitation of 4,400,000 acre-feet as required by the Act.[
Following the enactment of the Boulder Canyon Project Act (43 U.S.C. § 617 et seq.), disputes continued between the states over their respective rights to Colorado River water. "The principal dispute that became increasingly pressing over the years concerned the respective shares of the Lower-Basin States, particularly the shares of California and Arizona. [¶] Th[e]
"After lengthy proceedings, Special Master Simon Rifkind filed a report recommending a certain division of the Colorado River waters among California, Arizona, and Nevada. The parties' respective exceptions to the Master's report were extensively briefed and the case was twice argued. The Court for the most part agreed with the Special Master, 373 U.S. 546 . . ., and [the court's] views were carried forward in the decree found at 376 U.S. 340 [11 L.Ed.2d 757, 84 S.Ct. 755] (1964).
". . . [The court] agreed with the Special Master that the allocation of Colorado River water was to be governed by the standards set forth in the [Boulder Canyon] Project Act rather than by the principles of equitable apportionment which in the absence of statutory directive th[e] Court ha[d] applied to disputes between States over entitlement to water from interstate streams. Nor was the local law of prior appropriation necessarily controlling. The Project Act itself was held to have created a comprehensive scheme for the apportionment among California, Nevada, and Arizona of the Lower Basin's share of the mainstream waters of the Colorado River, leaving each State its tributaries. Congress had decided that a fair division of the first 7.5 million acre-feet of such mainstream waters would give 4.4 million acre-feet to California, 2.8 million acre-feet to Arizona, and 300,000 acre-feet to Nevada. Arizona and California would share equally in any surplus." (Arizona v. California (1983) 460 U.S. 605, 608-609 [75 L.Ed.2d 318, 326-327, 103 S.Ct. 1382], fn. omitted.)
As the Supreme Court explained further, "Congress intended the Secretary of the Interior, through his § 5 contracts, both to carry out the allocation of the waters of the main Colorado River among the Lower Basin States and to decide which users within each State would get water" "without regard to the law of prior appropriation." (Arizona v. California, supra, 373 U.S. at pp. 580, 581 [10 L.Ed.2d at pp. 566, 567].) Thus, "it is the [Boulder Canyon Project] Act and the Secretary's contracts, not the law of prior appropriation, that control the apportionment of water among the States. Moreover, . . . the Secretary in choosing between users within each State and in settling the
In 1999, in comments recognizing and celebrating the service of former Justice Stanley Mosk on the California Supreme Court, former Chief Justice Ronald George noted that Mosk had argued the Arizona v. California case before the United States Supreme Court during his service as California Attorney General; Chief Justice George described Mosk's argument, and the decision in the case, as follows: "He argued in that case, `Are we going to give Colorado River water to the people of California to drink or to Arizona for asparagus?' The court preferred asparagus." (Recognition of Service of Justice Stanley Mosk (1999) 21 Cal.4th 1314, 1321.)
Justice Mosk's argument to the United States Supreme Court recognized that California's interest in maximizing its share of Colorado River water was largely driven by the increasing demand for water for domestic use by the ever-growing population of coastal Southern California. As will be seen, it is the conflict between this growing thirst for water from San Diego to Los Angeles and the desire that that same water be used to save the Salton Sea which is the driving force behind the litigation from which these appeals arise.
In 1929, the year after the Boulder Canyon Project Act took effect, the Secretary of the Interior requested from California's Division of Water Resources a recommendation of the proper apportionments of California's share of Colorado River water among the various applicants and water users within the state. This request led to the "Seven-Party Agreement" of August 1931. The terms of this agreement, which apportioned a total of 5.362 million acre-feet of water annually between the parties, were incorporated into contracts between the Secretary of the Interior and various California water users for delivery of Colorado River water under the Boulder Canyon Project Act.
The Irrigation District was organized in 1911. Its service area covers the Imperial Valley, which is situated in the County between the Colorado River and Arizona on the east, Mexico on the south, Riverside County and the Salton Sea on the north, and San Diego County on the west. The district is the sole source of fresh water for the Imperial Valley, and all of that water comes from the Colorado River. The Irrigation District diverts water equating to a consumptive use of about 3.1 million acre-feet annually, and 98 percent of that water is used for agriculture on nearly 500,000 acres in the Imperial Valley. The remaining 2 percent serves residential customers in nine cities. The water is diverted at Imperial Dam and conveyed through the All American Canal to a 1,667-mile network of canals throughout the district's service area.
Coachella was organized in 1918 to conserve and protect the Coachella Valley's water supplies. Today, those water supplies come from various sources, including Colorado River water transported to the valley via the Coachella Canal, a branch of the All American Canal. Almost all of the Colorado River water that reaches the Coachella Valley is delivered for agricultural use.
Metropolitan was organized in 1928 to provide supplemental water to the coastal plain of Southern California. At its outset, Metropolitan was made up of 11 cities, including Los Angeles. (Cooper, Aqueduct Empire: A Guide to Water in California, Its Turbulent History and Its Management Today (1968) p. 82 (Cooper, Aqueduct Empire).) Today, Metropolitan has 26 member agencies. Metropolitan diverts Colorado River water at Parker Dam on Lake Havasu and conveys that water to its service area via the Colorado River Aqueduct.
San Diego, which is one of Metropolitan's member agencies, was organized in 1944 to bring imported water to the San Diego region. Consisting of 23 member agencies itself, San Diego purchases more water from Metropolitan than any of the 25 other member agencies of Metropolitan. The majority of the imported water San Diego receives from Metropolitan comes from the Colorado River (a lesser amount comes from the State Water Project). Imported water accounts for between 75 and 95 percent of all water used in San Diego's service area.
Even more conducive to future conflict was the fact that the amount of water apportioned in the Seven-Party Agreement (and provided for in the contracts with the Secretary of the Interior) was nearly a million acre-feet more than the basic annual allotment of 4.4 million acre-feet of Colorado River water allocated to California in the Boulder Canyon Project Act—to which the California Legislature had "irrevocably and unconditionally" agreed. This problem was particularly significant to Metropolitan and its member agencies. Under the Seven-Party Agreement, Metropolitan was entitled to a fourth priority of 550,000 acre-feet annually, as well as a fifth priority in the same amount.
For a long time, California was able to regularly use approximately 800,000 acre-feet more than its basic annual allotment of Colorado River water because Arizona and Nevada were not using their full allotments. With growing demand for water in both of those states, however, pressure increased on California to reduce its annual use of Colorado River water in normal years to the 4.4 million acre-feet to which it had agreed. In turn, this pressure led to increased potential for conflict between the parties to the Seven-Party Agreement.
In large part, the foregoing chronology sets the stage for the conflicts and resulting negotiations among the various users of California's share of Colorado River water that led to the Quantification Settlement Agreement and its related agreements and, in turn, to the litigation that gave rise to these appeals. One very important element, however, is missing from the story told so far, and that is the Salton Sea. It is the fate of that accidental body of water—along with the ever-growing thirst for water from San Diego to Los Angeles, and the pressure on California to "live within its means" when it comes to water from the Colorado River—that is the real driving force behind the litigation that has brought us here today. Accordingly, we turn to the history of the sea.
Before the 20th century, various temporary lakes had existed in the depression early settlers named the Salton Sink, created by heavy precipitation or the flow of the Colorado River. (Cooper, Aqueduct Empire, supra, at pp. 69-70 <http://www.saltonsea.ca.gov/history_chronology.html> [as of Dec. 7, 2011].) By 1900, however, there was nothing there but salt pools. (Cooper, Aqueduct Empire, supra, at p. 70.)
Around that time, the California Development Company dredged a 60-mile ditch from the Colorado River westward to the Imperial Valley as part of the company's effort to promote settlement in the valley. (Cooper, Aqueduct Empire, supra, at pp. 70-71.) When that ditch became clogged with silt, the company made a new 60-foot cut in the riverbank, and by the fall of 1903 the water from the new canal was irrigating up to 100,000 acres. (Id. at p. 71.) In the summer of 1904, however, heavy flood waters rushed through the cut, washed out the canal, and began to inundate broad areas of farmland. (Ibid.) An effort to stem the flood was almost complete when, in November 1905, "the second largest flood in the river's known history came thundering down from its Gila River tributary" and cut a break in the riverbank a mile wide. (Ibid.) For two years, the Colorado River flowed into the Salton Sink instead of the Gulf of California, and the Salton Sea was formed. (Id. at pp. 71-72.)
After the flow of the Colorado River was restored to its channel in 1907, the Salton Sea eventually would have evaporated but for the growth in agriculture that was supported by increasing diversions from the river, as agricultural drainage from the Imperial, Mexicali, and Coachella Valleys continued to feed the sea. (Cooper, Aqueduct Empire, supra, at pp. 72, 74-75.) Indeed, by the late 1970's approximately 1 million acre-feet of irrigation return flow was entering the Salton Sea from the Irrigation District's service area alone, comprising about 71 percent of all inflow into the sea.
The result was Water Rights Decision No. 1600 in June 1984. In that decision, the Board found considerable evidence that water loss within the Irrigation District could be reduced through reasonable conservation measures. The Board noted that beneficial use of water conserved by the Irrigation District could be made by both Coachella and Metropolitan, but the Board also recognized that such conservation would have a significant effect on both the level and the salinity of the Salton Sea. Nevertheless, acknowledging there would soon be insufficient Colorado River water available to satisfy the existing level of demand within California, the Board ordered the Irrigation District to undertake additional conservation measures and to develop a detailed and comprehensive water conservation plan.
In the wake of Water Rights Decision No. 1600, the Irrigation District engaged in negotiations with Metropolitan to transfer conserved water to Metropolitan in exchange for payments that would be used to fund the conservation program. Unfortunately, those negotiations proved fruitless when the Irrigation District's board of directors rejected a proposed memorandum of understanding that would have transferred 100,000 acre-feet of water annually to Metropolitan in exchange for annual payments of $10 million.
Four years after Water Rights Decision No. 1600, the Board conducted further hearings on the Irrigation District's unreasonable water use practices and its failure to correct them. As a result of those hearings, in Order No. WR 88-20 the Board ordered the Irrigation District to enter into an agreement with a separate entity willing to finance water conservation measures in the district or take other measures. Thereafter, the Irrigation District entered into an agreement with Metropolitan for the transfer of approximately 100,000 acre-feet annually from the Irrigation District to Metropolitan.
From 1990 through 1999, California consistently used between 100,000 and 800,000 acre-feet more Colorado River water annually than the 4.4
To that end, in 1998 the Irrigation District entered into an agreement with San Diego for the transfer of up to 300,000 acre-feet of conserved water to San Diego annually (the Transfer Agreement). This was the largest agricultural-to-urban water transfer in United States history. In connection with the agreement, the Irrigation District and San Diego jointly petitioned the Board for approval of the transfer. (See County of Imperial v. Superior Court (2007) 152 Cal.App.4th 13, 20 [61 Cal.Rptr.3d 145].) Metropolitan, Coachella, and the County protested the transfer petition. Metropolitan and Coachella also filed court actions challenging the agreement. Around this same time, Metropolitan asked the Secretary of the Interior to revisit whether the allocations of California's share of Colorado River water provided for in the Seven-Party Agreement should be continued.
Thereafter, negotiations ensued "to consensually settle [the] longstanding disputes regarding the priority, use and transfer of Colorado River water." In October 1999, the Irrigation District, Metropolitan, Coachella, and the state issued a document memorializing the "`Key Terms'" for a proposed Quantification Settlement Agreement between and among those parties. Three years passed, however, without any definitive settlement being reached.
In 2002, the Irrigation District, San Diego, Coachella, and Metropolitan entered into an agreement whereby Coachella and Metropolitan dismissed their protests to the transfer petition in exchange for the Irrigation District making 100,000 acre-feet of conserved water available annually to Coachella or Metropolitan, leaving 200,000 acre-feet annually for San Diego. Thereafter, in December 2002, the Board approved the Transfer Agreement.
When no definitive Quantification Settlement Agreement was signed by the end of 2002, however, the Secretary of the Interior reduced the Irrigation District's water allocation for 2003. After the Irrigation District obtained a preliminary injunction from a federal court to halt the reduction, the Secretary of the Interior reduced Metropolitan's and Coachella's deliveries instead to keep California within its annual 4.4 million acre-feet allocation.
As described in one of the agreements, the Quantification Settlement Agreement "settle[d] a variety of long-standing Colorado River disputes regarding the priority, use and transfer of Colorado River water, establishe[d] the terms for the further distribution of Colorado River water among [Coachella, the Irrigation District, and Metropolitan] for a period of time based upon the water budgets set forth therein and include[d] as a necessary component thereof the implementation of the . . . Transfer Agreement and the . . . Acquisition Agreement. These conserved water transfers and the [Quantification Settlement Agreement] are critical components of the State's efforts to comply with the California Limitation Act of 1929, Section 4 of the Boulder Canyon Project Act of 1928 and to implement the California Constitutional mandate of Article X, Section 2."
In connection with the Quantification Settlement Agreement, the Irrigation District, Coachella, Metropolitan, and San Diego—acting as "co-lead agencies"—prepared a program environmental impact report (EIR) evaluating the potential environmental impacts from the implementation of the agreement (the Quantification Settlement Agreement PEIR). The Irrigation District also prepared an EIR for the water transfers from the Irrigation District to San Diego, Coachella, and Metropolitan (the Transfer Project EIR). (County of Imperial v. Superior Court, supra, 152 Cal.App.4th at p. 23.)
To resolve and allocate responsibility between the Irrigation District, San Diego, and Coachella for environmental mitigation relating to the Transfer Agreement and the Acquisition Agreement, those parties entered into the "Environmental Cost Sharing, Funding and Habitat Conservation Plan Development Agreement." Those parties, along with the State of California (by and through the Department of Fish and Game), also entered into the Joint Powers Agreement, which was to serve as "the principal mechanism for ensuring that required mitigation under [state and federal environmental laws] for the[ water] transfers w[ould] be fully paid for." The Joint Powers Agreement allocated responsibility for the environmental mitigation costs among the four parties to that agreement, with the aggregate liability of the three water agencies (the Irrigation District, San Diego, and Coachella) capped at a then present value of $133 million (the environmental mitigation cost limitation) and with responsibility for any additional costs (excess
On November 5, 2003, the Irrigation District commenced the validation action by filing a validation complaint in Imperial County Superior Court seeking to validate the Quantification Settlement Agreement and 12 related agreements, including the Joint Powers Agreement, the Transfer Agreement, and the Acquisition Agreement (Imperial Irrigation Dist. v. All Persons Interested (Super. Ct. Imperial County, No. ECU01649)). A week later, the Irrigation District filed its first amended complaint.
On November 7, 2003, POWER commenced its CEQA action by filing a mandamus petition in Imperial County Superior Court challenging the Transfer Project EIR (Protect Our Water and Environmental Rights v. Imperial Irrigation Dist. (Super. Ct. Imperial County, No. ECU01653) (POWER v. Imperial Irrigation Dist.)). POWER later filed an answer in the validation action, asserting (among other things) that the Irrigation District was asking "for validation of unconstitutional agreements" and that the Irrigation District had failed "to comply with all environmnental [sic] regulations and laws prior to execution of the contracts."
On November 10, 2003, the County commenced its CEQA action by filing a mandamus petition in Imperial County Superior Court challenging the Quantification Settlement Agreement PEIR (County of Imperial v. Metropolitan Water Dist. of Southern California (Super. Ct. Imperial County, No. ECU01656)). The County also filed an answer in the validation action, asserting (among other things) that the Irrigation District did not properly
Parties that filed answers in the validation action supporting the Irrigation District's position included the State of California ex rel. Department of Water Resources and Department of Fish and Game, San Diego, Coachella, Metropolitan, Vista Irrigation District (Vista), and the City of Escondido (Escondido). Parties other than POWER and the County that filed answers in the validation action opposing the Irrigation District's position included the Air District, Cuatro Del Mar (Cuatro),
In December 2003, San Diego moved to transfer the validation action and the two CEQA actions from Imperial County to Sacramento County. While those motions were pending, the Irrigation District filed a petition to coordinate the validation action with eight other actions relating to the Quantification Settlement Agreement, two of which were pending in Sacramento County and six of which were pending in Imperial County (including the two CEQA actions).
In March 2004, the presiding judge of the Imperial County Superior Court assigned Judge Donal B. Donnelly as the coordination motion judge. In May 2004, Judge Donnelly ordered the nine actions coordinated, selected this court as the reviewing court with appellate jurisdiction, and recommended that the coordinated proceeding be assigned to a trial judge in Sacramento with CEQA experience.
Later that month, the Chief Justice of California and Chairperson of the Judicial Council authorized the presiding judge of the Sacramento County Superior Court to assign a coordination trial judge. In June 2004, the presiding judge assigned the coordinated proceeding to Judge Roland L. Candee.
In July 2004, the validation action and the two CEQA actions were formally received by the Sacramento County Superior Court and assigned Sacramento County case numbers.
In August 2004, the County filed an amended mandamus petition in its CEQA action. The first cause of action in that petition purported to allege a claim under the wheeling statutes. The second cause of action contained the County's CEQA claims challenging the Quantification Settlement Agreement PEIR.
Subsequently, two add-on cases (Super. Ct. Imperial County, Nos. ECU01834 & ECU01886)—sometimes referred to as the Western Farms cases—were coordinated with the original nine actions.
In January 2005, the trial court sustained demurrers without leave to amend in two of the coordinated cases filed by the County (Super. Ct. Imperial
In June 2007, this court affirmed the trial court's ruling. (County of Imperial v. Superior Court, supra, 152 Cal.App.4th at p. 13.) In August 2007, the stay on the coordinated proceeding was finally lifted.
In February 2008, the trial court sustained a demurrer without leave to amend with respect to another of the coordinated cases (South Coast Air Quality Management Dist. v. State Water Resources Control Bd. (Super. Ct. Sac. County, No. 03CS00083)), and a judgment dismissing that case was entered in April 2008. (An appeal from that judgment is presently pending in this court.) (Imperial County Air Pollution Control Dist. v. State Water Resources Control Bd. (C059264).) That left six of the coordinated cases pending, including the three cases that are at issue in these appeals.
Following a settlement conference in September 2009, the trial court published a "list of remaining issues" and tentatively set trial dates. The court divided the trial into three phases. Phases 2 and 3—which are not at issue here—were to address the Western Farms cases and the Meyers Farms matter respectively.
The trial of phase 1A went forward as scheduled. On December 10, 2009, the court issued its tentative ruling, in which the court proposed to invalidate 11 of the 12 agreements the County had sought to validate and to dismiss the CEQA challenges as moot. Based on this tentative ruling, the trial court vacated the phase 1B and phase 1C trial dates.
Having determined that the Joint Powers Agreement was unconstitutional, the trial court found that the 11 other contracts had to be invalidated as well because they were "interdependent with the [Joint Powers Agreement]." The court then determined that all of "the CEQA, NEPA and Clean Air Act claims and defenses" in the validation action and the two CEQA actions were moot because of the invalidation of the Quantification Settlement Agreement and the 11 related agreements.
Subsequently, on February 11, 2010, the trial court issued its judgment. In the validation action, the court decreed that the 12 agreements subject to validation were "void and invalid." The court then dismissed POWER's CEQA action and the County's CEQA action as moot, with the exception that the court entered judgment against the County on its first cause of action in its CEQA action (for violation of the wheeling statutes).
On February 19, 2010, the Irrigation District appealed. That same day, San Diego, Coachella, Metropolitan, Vista, and Escondido filed a joint notice of appeal. On February 23, 2010, the state appealed.
On March 9, 2010, the County and the Air District filed a joint notice of cross-appeal, asserting the trial court had committed various errors in the validation action, the County's CEQA action, and POWER's CEQA action.
On March 1, 2010, all of the appellants, with the exception of the state, filed a petition for writ of supersedeas. The state filed its own supersedeas petition on March 30, 2010. On May 7, 2010, we granted both petitions, staying enforcement of the judgment in the coordinated proceedings pending the finality of our decision on the various appeals and cross-appeals.
With this factual and procedural background in mind, we turn now to the various arguments offered in the hundreds of pages of opening, responding, reply, and amicus curiae briefs. We first address the arguments relating to the validation action, then address those that relate to the two CEQA actions.
On appeal, the state, the Irrigation District, Coachella, Metropolitan, and San Diego all argue the trial court erred in determining the Joint Powers Agreement is unconstitutional under section 7 of article XVI of the California Constitution. As we have noted, that section provides that "[m]oney may be drawn from the Treasury only through an appropriation made by law and upon a Controller's duly drawn warrant."
The trial court's explanation in its statement of decision of how the Joint Powers Agreement violates article XVI, section 7 of the California Constitution is not entirely clear; however, the court appeared to be concerned that because section 9.2 of the Joint Powers Agreement makes the state's obligation to pay the excess mitigation costs "an unconditional contractual obligation" that is "not conditioned upon an appropriation by the Legislature," and because "the event of non-appropriation [is not] a defense," the intended effect of section 9.2 of the Joint Powers Agreement was to entitle the Irrigation District, Coachella, and San Diego (which, along with the state, were the parties to the Joint Powers Agreement) to money from the treasury to satisfy the state's obligation to pay the excess mitigation costs even without an appropriation of that money by the Legislature. To the extent this was the court's reasoning, the trial court understandably concluded that such a result would contravene section 7 of article XVI of the California Constitution, which allows money to be drawn from the treasury only by means of an appropriation.
As we will explain, however, we conclude the trial court erred in its interpretation of section 9.2 of the Joint Powers Agreement because under California law there is a fundamental difference between an obligation of the state and the right of the party to whom the obligation is owed to enforce that obligation. While section 9.2 of the Joint Powers Agreement unconditionally obligates the state to pay the excess mitigation costs, the imposition of that
Under a proper understanding of the Joint Powers Agreement, read consistently with article XVI of section 7 of the California Constitution, if the conditions for the state's payment of excess mitigation costs were to arise but the state refused to appropriate money from the treasury to pay those costs, then the Irrigation District, Coachella, and San Diego would have a breach of contract claim against the state based on the state's breach of the Joint Powers Agreement, and the state would not be able to assert the lack of an appropriation as a defense to that claim. Nevertheless, even if the water agencies obtained a judgment against the state, they could not force the state to draw money from the treasury to satisfy that judgment because the separation of powers doctrine precludes the courts from compelling the Legislature to enact an appropriation measure. Thus, in the face of legislative intransigence, it is possible the water agencies could be left with an unenforceable judgment for the unpaid excess mitigation costs, despite the state's unconditional contractual obligation to pay those costs.
"[I]t will not be supposed that the parties entered into agreements contemplating a violation of the law. On the contrary, it will be deemed that they intended a lawful, rather than an unlawful, act, and their agreements will be construed, if possible, as intending something for which they had the power to contract." (Barham v. Barham (1949) 33 Cal.2d 416, 429 [202 P.2d 289].) "The court may not assume, in the absence of evidence, that the parties intended to make an unlawful contract." (Davidson v. Kessler (1935) 10 Cal.App.2d 89, 91 [51 P.2d 174].)
The Supreme Court disagreed, concluding that "the Legislature possesses the power to stop the whole machinery of government, whenever it is willing to take the responsibility of doing so." (Myers v. English, supra, 9 Cal. at p. 349.) According to the court, "the power to collect and appropriate the revenue of the State is one peculiarly within the discretion of the Legislature," and while "[i]t is within the legitimate power of the judiciary, to declare the action of the Legislature unconstitutional, where that action exceeds the limits of the supreme law," "the Courts have no means, and no power, to avoid the effects of non-action. . . . Therefore, when the Legislature fails to make an appropriation, we cannot remedy that evil. It is a discretion specially confined by the Constitution to the body possessing the power of taxation." (Ibid.)
Thus, "the separation of powers doctrine has generally been viewed as prohibiting a court from directly ordering the Legislature to enact a specific appropriation . . . ." (Mandel v. Myers (1981) 29 Cal.3d 531, 540 [174 Cal.Rptr. 841, 629 P.2d 935].) "[I]t is equally well established[, however,] that once funds have already been appropriated by legislative action, a court transgresses no constitutional principle when it orders the State Controller or other similar official to make appropriate expenditures from such funds," "[a]lthough such an order will normally issue only when the Legislature has authorized the use of the appropriated funds for the purpose for which an expenditure is sought." (Ibid.)
With the background set forth above in mind, we turn to the question of whether, interpreting the Joint Powers Agreement as a whole, section 9.2 of the Joint Powers Agreement can reasonably be construed as lawful and consistent with the appropriation requirement of article XVI, section 7 of the California Constitution. We conclude that it can.
The state finds support for this distinction in White v. Davis (2003) 30 Cal.4th 528 [133 Cal.Rptr.2d 648, 68 P.3d 74]. One of the issues the Supreme Court addressed in White was whether "under the provision of the California Constitution barring the impairment of contracts (Cal. Const., art. I, § 9), the state is constitutionally required during a budget impasse to pay state employees, on their regular payday, their regular and full salaries for work performed during that period." (White, at p. 564.) A state employees' union argued for the requirement, asserting "that the Controller is authorized to pay a state employee's salary on his or her regular payday even in the absence of a duly enacted and available appropriation, because the failure to pay an employee's salary at such time would amount to an unconstitutional impairment of contract." (Ibid.)
The Supreme Court first observed that "past California cases clearly establish that although the conditions of public employment generally are established by statute rather than by the terms of an ordinary contract, once a public employee has accepted employment and performed work for a public employer, the employee obtains certain rights arising from the legislative provisions that establish the terms of the employment relationship—rights that are protected by the contract clause of the state Constitution from elimination or repudiation by the state." (White v. Davis, supra, 30 Cal.4th at p. 566.) The court then turned to the question of whether those rights included "the right to receive payment of earned salary in the absence of an available appropriation." (Ibid., italics omitted.)
Based on the appropriation requirement in section 7 of article XVI of the California Constitution, as well as several Government Code provisions that,
The Supreme Court's decision in White supports the distinction the state draws in this case in support of a constitutional reading of section 9.2 of the Joint Powers Agreement. Under White, a state employee who performs services for the state during a budget impasse has a right to be paid for those services, and the state has a corresponding obligation to pay for those services. But the employee does not have a right to payment in the absence of an appropriation. Thus, while the state has an obligation to pay the employee, the employee does not have a right to enforce that obligation if there has been no applicable appropriation. (See also Valdes v. Cory (1983) 139 Cal.App.3d 773, 789 [189 Cal.Rptr. 212] [if the Legislature fails to appropriate funds to satisfy an obligation of the state, the courts cannot compel the Legislature to make an appropriation or to order payment of the obligation].)
This distinction between an obligation of the state and the right of the party to whom the obligation is owed to enforce that obligation explains the "unconditional obligation" language of section 9.2 of the Joint Powers Agreement in a way that avoids the constitutional infirmity the trial court found in that language. Under the terms at issue here, the state's "obligation" to the Irrigation District, Coachella, and San Diego to pay the excess mitigation costs is "unconditional" in the sense that it is "not conditioned upon an appropriation by the Legislature" to pay those costs; in other words, the state owes that obligation to the water agencies as a matter of contract law regardless of whether an appropriation has been made, and the state cannot assert the lack of appropriation as a defense to a contract claim against the state under the California Tort Claims Act (see Gov. Code, § 905.2, subd. (b)(3) [requiring presentation of a claim for "money or damages on
This reading of section 9.2 of the Joint Powers Agreement is consistent with section 14.2 of the agreement, which addresses the action to be taken "[i]f the Authority anticipates that the Environmental Mitigation Cost Limitation will be exceeded within two years." In that circumstance, section 14.2 of the Joint Powers Agreement provides that "the Authority shall submit a written notice to the State stating the reasons for that anticipation, as well as estimates of the projected cost of remaining Environmental Mitigation Requirements." Then, "as soon as it appears that the expenditures of the Authority are within $5,000,000 of the Environmental Mitigation Requirement Cost Limitation," "[t]he State will seek, with the support of the other Parties, to obtain Legislative appropriation of funds sufficient to satisfy the State obligation, if any, for costs of the Environmental Mitigation Requirements. . . so long as the Authority has encumbered the total amount owed pursuant to Article IX by [Coachella], the [Irrigation District] and [San Diego]."
Thus, section 14.2 of the Joint Powers Agreement provides for efforts to be made to obtain an appropriation to satisfy the state's obligation to pay the excess mitigation costs. This commitment to seek an appropriation would have been unnecessary if the trial court's interpretation of section 9.2 of the Joint Powers Agreement were correct and the parties' intent was that the water agencies could enforce the obligation against the state without an appropriation. Thus, reading the Joint Powers Agreement as a whole supports a construction of section 9.2 of the Joint Powers Agreement that is consistent, rather than inconsistent, with the constitutional appropriation requirement of article XVI, section 7 of the California Constitution.
Additionally, it must be noted that just because the Legislature might, hypothetically, refuse to appropriate funds for the specific purpose of paying the excess mitigation costs does not necessarily mean the water agencies would be left with no ability to enforce the state's obligation to pay those costs. As we have noted already, while a court cannot order the Legislature to enact a specific appropriation—including an appropriation to satisfy a judgment against the state—"once funds have already been appropriated by legislative action, a court transgresses no constitutional principle when it orders the State Controller or other similar official to make appropriate expenditures from such funds . . . when the Legislature has authorized the use of the appropriated funds for the purpose for which an expenditure is sought." (Mandel v. Myers, supra, 29 Cal.3d at p. 540.) For example, in Mandel the Supreme Court determined that money that had been appropriated for the "`operating expenses and equipment'" of the Department of Health Services "was generally available for payment of court-awarded attorney fees." (Id. at pp. 542-545.) Thus, to the extent the Legislature had already appropriated money for purposes that could be deemed to encompass the payment of excess mitigation costs under the Joint Powers Agreement, and to the extent that money was still available for expenditure under such an appropriation, the three water agencies could seek a court order for that money to enforce the state's payment obligation under the agreement even in the absence of an appropriation made specifically to satisfy that obligation.
For all of the foregoing reasons, we conclude the trial court erred in finding that the Joint Powers Agreement violated the appropriation requirement of article XVI, section 7 of the California Constitution.
Having rejected the sole reason the trial court gave for invalidating the Joint Powers Agreement—and the other agreements with it—we next turn to the various other arguments offered by respondents to uphold the trial court's decision. We do this because "we review the judgment, not the rationale, and may affirm if the judgment is correct on any theory." (Airlines Reporting Corp. v. Renda (2009) 177 Cal.App.4th 14, 21 [99 Cal.Rptr.3d 66].) "In other words, it is judicial action, and not judicial reasoning or argument, which is the subject of review; and, if the former be correct, we are not concerned with the faults of the latter." (Davey v. Southern Pacific Co. (1897) 116 Cal. 325, 330 [48 P. 117].)
One of the alternate rationales offered for the trial court's decision is based on section 1 of article XVI of the California Constitution, which provides, in pertinent part, that "[t]he Legislature shall not, in any manner create any debt or debts, liability or liabilities, which shall, singly or in the aggregate with any previous debts or liabilities, exceed the sum of three hundred thousand dollars ($300,000), except in case of war to repel invasion or suppress insurrection, unless the same shall be authorized by law for some single object or work . . . but no such law shall take effect unless it has been passed by a two-thirds vote of all the members elected to each house of the Legislature and until, at a general election or at a direct primary, it shall have been submitted to the people and shall have received a majority of all the votes cast for and against it at such election . . . ."
On appeal, the County and Cuatro both rely on article XVI, section 1 of the California Constitution in arguing that the trial court correctly found the Joint Powers Agreement unconstitutional. Accordingly, we must address whether the Joint Powers Agreement is consistent with section 1 as well as with section 7 of article XVI of the California Constitution. We conclude that it is.
The County and Cuatro premise their argument that the Joint Powers Agreement violates article XVI, section 1 of the California Constitution on the assertion that mitigation costs are expected to exceed by far more than $300,000 the $133 million the Irrigation District, Coachella, and San Diego committed to pay. According to Cuatro, because "the State's expected obligations would exceed $300,000," the state's commitment to pay the excess mitigation costs would pass constitutional muster under article XVI, section 1 of the California Constitution only if the Legislature "passed [legislation authorizing the expenditure] by two-thirds vote in each house and place[d] a bond initiative on the ballot" or if the Legislature "appropriate[d] monies to cover the State's Obligation."
Long ago, the California Supreme Court stated that "[a] sum payable upon a contingency is not a debt, nor does it become a debt until the contingency happens." (Doland v. Clark (1904) 143 Cal. 176, 181 [76 P. 958].) And even earlier than that, the court stated that "[a] sum of money which is certainly and in all events payable is a debt, without regard to the fact whether it be payable now or at a future time. A sum payable upon a contingency, however, is not a debt, or does not become a debt until the contingency has happened." (People v. Arguello (1869) 37 Cal. 524, 525.)
Here, there is no "sum of money which is certainly and in all events payable" by the state because of its commitment in the Joint Powers Agreement to pay the excess mitigation costs. On the contrary, the state is not
Support for this conclusion can be found in Bickerdike. That case involved an act of the Legislature (the Bounty Act of 1891) providing for the payment of a $5 bounty from the state's General Fund for every coyote killed. (Bickerdike v. State, supra, 144 Cal. at p. 683.) In a suit brought by a plaintiff who claimed to be the assignee of $72,330 worth of bounty claims, the state asserted the Bounty Act was invalid under section 1 of article XVI of the California Constitution. (Bickerdike, at pp. 685, 694.) The Supreme Court disagreed, writing as follows: "At the date of the passage of the Bounty Act of 1891 the indebtedness created by the legislature did not, so far as appears, exceed five thousand dollars. The legislature still had the power to create a further indebtedness of two hundred and ninety-five thousand dollars. The act of 1891, which provided for a bounty of five dollars for each coyote destroyed, to be paid to the person destroying it, did not of itself create any debt or liability. It was simply an offer upon condition, and only upon the performance of the condition by any person could a debt or liability arise on the part of the state. Upon such performance, however, by any person, the amount specified in the act—viz., five dollars for each coyote killed by him in accordance with the provisions of the act—would become due such person from the state, and, no appropriation having been provided to meet the claim, such amount would be a debt created by the legislature within the meaning of the constitutional provision. But the amounts which might become due to persons under the terms of said act would not necessarily exceed two hundred and ninety-five thousand dollars. The act could not, therefore, be held upon its face to violate the constitutional provision. The legislature had the power to create indebtedness to the extent of three hundred thousand dollars. The mere fact that the total amount that would ultimately be paid under the act was not named, and that under its terms, in the course of years, claims might possibly accrue and remain unpaid that, with other debts, would exceed the constitutional limit, would not affect the question as to the constitutionality of the act. The only possible effect of the constitutional provision in such a case would be to render void, as beyond the power of the legislature, any indebtedness incurred in excess of the constitutional limit." (Id. at pp. 696-697, italics omitted.)
Just like the enactment of the Bounty Act in Bickerdike, the signing of the Joint Powers Agreement "did not of itself create any debt or liability." (Bickerdike v. State, supra, 144 Cal. at p. 696.) "The mere fact that the total amount that would ultimately be paid under the [Joint Powers Agreement] was not named, and that under its terms, in the course of years, [excess
The County and Cuatro offer various arguments to counter this conclusion, but we are not persuaded by any of them. Cuatro argues that the "contingent obligation" exception
It is true many of the cases in which the contingent obligation exception to the debt limitation of section 1, article XVI of the California Constitution has been applied—including Doland v. Clark—involved lease agreements that could be characterized (as Cuatro characterizes them) as involving "limits" on the ultimate amount of the obligation and "ongoing contemporaneous consideration" that was to be received in exchange for the obligation. For example, Doland involved city leases for two telegraph systems. (Doland v. Clark, supra, 143 Cal. at pp. 177-178.) The first lease provided for payment of $390 per month in rent for a period of five years, while the second provided for a payment of $300 per month for the same period. (Id. at p. 178.) Thus, the terms of the contracts at issue in Doland set an outside limit on the amount payable under the leases—the monthly rent times the number of months in the lease period—and those contracts could be understood as providing ongoing contemporaneous consideration—use of the telegraph systems—in exchange for the monthly payments that were due under the leases. In the end, however, the legally significant fact was that "[t]he monthly rental under both contracts . . . would not become due until the [lessor] had performed his contracts and put the systems contemplated by the contracts in operation" and thus "[t]he amounts to become due on completion of the contracts by [the lessor] might never become a liability upon the city." (Id. at p. 181.) It was immediately following the observation of this fact that the Supreme Court observed, "A sum payable upon a contingency is not a debt, nor does it
For its part, the County argues that the "attempt" of the water agencies and the state to "portray [the state's mitigation] commitment as a `contingent debt'" "fails on multiple levels." Ultimately, however, the County's only argument that directly addresses the contingent obligation exception is that "[t]he present case more closely resembles ones in which commitments to fund open-ended and potentially unlimited amounts have violated constitutional debt limits." But the two cases the County cites are distinguishable because, unlike the case before us, those cases both clearly involved obligations that, while perhaps uncertain in amount, could in no way be characterized as "contingent."
Thus, in Chester v. Carmichael (1921) 187 Cal. 287 [201 P. 925], the obligation at issue was the obligation of the City of Sacramento to spend at least $5,000 a year until certain property deeded to the city had been improved into a park, which obligation was imposed as a condition of the conveyance of title to the city. (Id. at pp. 287-289.) The Supreme Court recognized that the completion of the improvements, "with a prescribed minimum expenditure therefor each year, was . . . the purchase price for the land, payable in yearly installments." (Id. at p. 291.) "So regarding the transaction," the Supreme Court concluded that "it falls within the inhibition of section 18 of article XI of the constitution, which precludes any city from incurring `any indebtedness or liability in any manner or for any purpose' exceeding in any year the income and revenue provided for such year without the assent of two-thirds of the qualified electors thereof." (Chester, at p. 291.) In reaching this conclusion, the court specifically found that its earlier decision in Doland was "in no way in point" because in Chester (unlike in Doland) "the full liability [of the city] to the grantors was created upon the acceptance of the deed . . . ." (Chester, at pp. 293-294.) In other words, the city's obligation to turn the property into a park was not contingent on anything once the city accepted the deed to the property. In this case, however, as we have noted already, the state's obligation to pay the excess mitigation costs was contingent on there actually being excess mitigation costs.
In Mahoney v. San Francisco (1927) 201 Cal. 248 [257 P. 49], the obligation at issue was the obligation of the City and County of San Francisco under what purported to be a lease agreement to construct "a park and playground, including a wading and swimming pool," "which, it is
Because the state's commitment in the Joint Powers Agreement to pay the excess mitigation costs was contingent on there being excess costs to pay, the agreement did not create a "debt" within the meaning of section 1 of article XVI of the California Constitution and accordingly did not violate that constitutional provision. Thus, we cannot uphold the trial court's invalidation of the Joint Powers Agreement and the 11 other agreements on this basis.
Some respondents argue that we should affirm the judgment invalidating the various agreements for reasons that do not relate to the constitutionality of the Joint Powers Agreement. We turn to those arguments now.
Cuatro argues that the Irrigation District's execution of the Joint Powers Agreement on October 10, 2003, was "ultra vires" because "material and significant changes were made to the [agreement] after the [Irrigation District's] board [of directors] approved the draft outline" of the agreement on October 2, 2003. We conclude this argument is not properly before us.
Cuatro's ultra vires argument is based on the fact that when the Irrigation District's board of directors adopted the resolution approving the various agreements (resolution No. 10-2003) on October 2, 2003, some of the agreements, including the Joint Powers Agreement, were not in final form. To address this situation, instead of authorizing the Irrigation District's officers to sign a particular version of the agreements, the board of directors authorized "the President or Vice President and the Secretary to sign the [agreements], upon determination by the General Manager and the Chief Counsel that said agreements are substantially in the same form and substance as those . . . submitted to the [b]oard [of directors] for review prior to approval of this Resolution."
In its statement of decision, the trial court set forth what it believed to be the basic elements of the Irrigation District's prima facie case in the validation action; those elements did not include proof that the agreements the Irrigation District sought to validate were not ultra vires and void.
Such "new matter" is also known as "an affirmative defense." (Advantec Group, Inc. v. Edwin's Plumbing Co., Inc. (2007) 153 Cal.App.4th 621, 627 [63 Cal.Rptr.3d 195].) Affirmative defenses must not be pled as "terse legal
Here, in its answer to the Irrigation District's second amended complaint, Cuatro alleged as its second affirmative defense that the Irrigation District was "without authority in whole or in part to take the actions addressed" and as its eighth affirmative defense that the Irrigation District "violated its fiduciary and other trust obligation[s] . . . by, executing the contracts at issue." To the extent Cuatro contends these allegations were sufficient to put at issue the ultra vires argument it now advances, we disagree. As we have noted, affirmative defenses cannot be pled as mere legal conclusions but must instead be alleged with as much factual detail as the allegations of a complaint. Cuatro's second and eighth affirmative defenses, which were alleged as mere legal conclusions, were not sufficient to put at issue the question Cuatro now argues on appeal, which is that the Joint Powers Agreement signed on October 10, 2003, was ultra vires and void because it was substantively different than what was submitted for the Board's review prior to adoption of resolution No. 10-2003.
Even if we were to assume that the ultra vires argument Cuatro now seeks to raise was adequately pled in Cuatro's answer, Cuatro abandoned its ultra vires defense before trial, because in its revised statement of issues, which "identifie[d] the specific challenges and affirmative defenses [Cuatro] intend[ed] to pursue at trial," Cuatro did not identify any ultra vires argument as an issue Cuatro intended to pursue at trial. Consistent with Cuatro's abandonment of its ultra vires defense in its statement of issues, the final list of issues to be litigated in phase 1A of the trial did not include the ultra vires issue Cuatro now attempts to advance on appeal, and Cuatro did not argue the ultra vires issue in its trial brief.
It is true "[a] party may raise a new issue on appeal if that issue is purely a question of law on undisputed facts." (Phillips v. TLC Plumbing, Inc. (2009) 172 Cal.App.4th 1133, 1141 [91 Cal.Rptr.3d 864].) Here, however, Cuatro has made no effort to show that its ultra vires argument falls within the scope of that exception to the general rule that new issues cannot be raised for the first time on appeal. (See Giraldo v. Department of Corrections & Rehabilitation (2008) 168 Cal.App.4th 231, 251 [85 Cal.Rptr.3d 371] [stating the general rule].) Given this failure, we decline to consider whether we should exercise our discretion to address this argument. (See Resolution Trust Corp. v. Winslow (1992) 9 Cal.App.4th 1799, 1810 [12 Cal.Rptr.2d 510]
The Barioni/Krutzsch parties and the Morgan/Holtz parties both argue that there was no "meeting of the minds" between the parties to the Joint Powers Agreement, and this lack of mutual consent to the agreement's terms provides an independent basis for affirming the judgment in the validation action. We disagree.
The Barioni/Krutzsch parties essentially argue that, whether one looks solely at the face of the Joint Powers Agreement or one includes other "objective manifestations of the intent of the parties" in the analysis as well, "[a] reasonable person cannot say that the parties [to the agreement] have all agreed upon the same thing in the same sense as contemplated by Civil Code [section] 1580."
For their part, the Morgan/Holtz parties contend the trial court actually found there was no meeting of the minds between the parties to the Joint Powers Agreement, and they contend this finding was supported by substantial evidence. Unlike the argument of the Barioni/Krutzsch parties, the meeting of the minds argument the Morgan/Holtz parties advance focuses— like Cuatro's ultra vires argument—on alleged differences between what was before the Irrigation District's board of directors when the board of directors adopted resolution No. 10-2003 approving the various agreements and the final version of the Joint Powers Agreement signed by the Irrigation District's
The Irrigation District, Coachella, Metropolitan, and San Diego offer numerous arguments in response to the assertion that there was no meeting of the minds on the Joint Powers Agreement. Among other things, they contend that these meeting of the minds arguments involve "asserted defects in contract formation [that] are not properly before th[is] Court in this validation action" because "[c]ontract elements [we]re not part of [the Irrigation District]'s prima facie case in validation" and respondents did not plead or prove the lack of a meeting of the minds as an affirmative defense. For its part, the Irrigation District asserts (among other things) that trial was limited to identified issues, and "[n]o one identified a trial issue regarding intent, mutual assent, mutual mistake, or `meeting of the minds.'"
We have serious doubt as to whether these meeting of the minds arguments are properly before us, because whether they had to be pleaded and proved as affirmative defenses, they were not—as the Irrigation District points out— included in the final list of issues to be litigated in phase 1A of the trial. But even if we assume the arguments are properly before us, we find no merit in them.
First, we disagree with the Morgan/Holtz parties' assertion that the trial court actually found there was no meeting of the minds on the Joint Powers Agreement. It is true that under the subheading of "The IID Contract Approval Process" in its statement of decision—which in turn fell under the heading of "What are the relevant facts on the issue of whether [the Irrigation District]'s action was not arbitrary, capricious, or entirely lacking in evidentiary support?"—the trial court found that (1) "[t]he wording of the [Joint Powers] Agreement . . . was not settled on at the time of the [Irrigation
To the extent the Morgan/Holtz parties rely on alleged differences between what was before the Irrigation District board of directors and the version of the Joint Powers Agreement the Irrigation District's officers signed to argue there was no meeting of the minds, their premise is flawed. If there was a contract at all, it was the one all the contracting parties signed.
Here, we have explained already in rejecting the constitutional challenges to the Joint Powers Agreement how the terms of the agreement can be reconciled, not only with each other but with constitutional requirements and limitations. Under California law, the parties must be deemed to have mutually consented to the reasonable and lawful interpretation we have given their agreement to save it from constitutional invalidity. That someone, subjectively, might have had a different understanding of the agreement is of no moment. Accordingly, the meeting of the minds arguments are without merit.
The Morgan/Holtz parties argue that the judgment in the validation action should be affirmed because all the agreements the Irrigation District sought to validate were void as violating Government Code section 1090. The gist of their argument appears to be that members of the Irrigation District's "team" involved in negotiating the agreements had financial interests in connection with the agreements that were adverse to the Irrigation District and therefore "all parts of the . . . transaction—[including] the environmental documentation. . . —are void ab initio."
Specifically, the Morgan/Holtz parties allege the following people had conflicting financial interests: John Carter, the Irrigation District's chief
The final list of issues for phase 1A of the trial included the Morgan/Holtz parties' assertion that the Irrigation District "violated Government Code section 1090 by allowing persons who are conflicted public officials within the meaning of the law to influence the [agreements] and transfers and hid that evidence from the public." The Morgan/Holtz parties argued this issue in their brief, but the trial court rejected the argument in its statement of decision. The court found that while "John Carter was, as [the Irrigation District's] Chief Counsel, a public official within the meaning of Government Code section 1090," there was no evidence that either "David Osias or Dr. Rodney Smith were public officials." Furthermore, as to Carter, the court found no evidence that he "had a `financial interest' in the [agreements] as . . . required to establish a [Government Code] section 1090 violation."
On review, we find no error in the trial court's determinations. Government Code section 1090 provides in relevant part as follows: "Members of the . . . district . . . shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members.. . . . [¶] As used in this article, `district' means any agency of the state formed pursuant to general law or special act, for the local performance of governmental or proprietary functions within limited boundaries."
Under the foregoing principles, the Morgan/Holtz parties' Government Code section 1090 argument is easily resolved. Even assuming for the sake of argument that all three "negotiators" for the Irrigation District qualified as government officials or employees who participated in the making of the Quantification Settlement Agreement in their official capacities, no violation of Government Code section 1090 was shown here because the Morgan/Holtz parties fail to point to any evidence that any of the negotiators had a financial interest in any of the agreements the Irrigation District approved.
As to Osias, they assert "[h]e had professional, i.e., fiscal, relationships with others interested in the water transfer matters." In support of that assertion, the Morgan/Holtz parties cite the Irrigation District's retainer agreement with Osias's firm, in which Osias (in whose name the letter was written) stated that the firm was going to continue its representation of various other clients in "matters involving water issues in the Imperial and Coachella Valleys," as well as other clients "located within the Metropolitan Water District service area, San Diego County, [and] Imperial and Coachella Valleys in matters unrelated to water."
Based on this statement, the Morgan/Holtz parties argue that Osias was "disloyal [to the Irrigation District], placing himself in a position of temptation of putting [the Irrigation District] into a secondary position." At no point, however, do they explain what specific financial interest Osias or his firm had in any of the various agreements or how their continued representation of other clients in the area on water issues (as well as matters unrelated to water) impaired them from discharging their fiduciary duties with undivided
The same is true with respect to Smith. According to the Morgan/Holtz parties, Smith "chose to work for" San Diego—"a party directly adverse to" the Irrigation District—"during negotiations" of the agreements. In support of their assertion, the Morgan/Holtz parties point to evidence that while advising the Irrigation District with relation to the issues that led to the agreements, Smith undertook to provide "expert advice and consulting services" to San Diego "concerning financial issues pertaining to" Metropolitan. Again, however, the Morgan/Holtz parties fail to explain how Smith stood to gain or lose financially with respect to the services he was providing San Diego because of his role in negotiating the agreements for the Irrigation District. Thus, the Morgan/Holtz parties failed to show that Smith had a financial interest in those agreements.
Finally, with respect to Carter—chief counsel for the Irrigation District— the Morgan/Holtz parties offer no argument and point to no evidence to show he had a prohibited financial interest in the agreements. Instead, they limit their argument on this element to Osias and Smith, thus effectively conceding that the trial court was correct in finding no evidence that Carter "had a `financial interest' in the [agreements] as . . . required to establish a [Government Code] section 1090 violation."
Because the Morgan/Holtz parties point to no evidence sufficient to establish that any of the three negotiators for the Irrigation District had a prohibited financial interest in any of the agreements, the judgment invalidating those agreements cannot be upheld based on this issue.
The Morgan/Holtz parties argue that we should dismiss the appeals and affirm the judgment in the validation action because of what the Morgan/Holtz parties characterize as misconduct by the appellants during the trial court proceedings relating to the Joint Powers Agreement. We find no merit in this argument.
The basis for the argument is as follows: At trial in November 2009, David Osias, counsel for the Irrigation District, represented to the court that when the Irrigation District's board of directors approved the various agreements in October 2003 (by adopting resolution No. 10-2003), the Joint Powers Agreement was "in . . . outline form with the material terms only."
As we have noted already, in its statement of decision the trial court found that "material portions of the [Joint Powers] Agreement were still being negotiated days after the October 2, 2003, approval by the [Irrigation District] Board." In support of this finding, the court relied in part on "the lack of any draft [Joint Powers] Agreement in the administrative record at the time of the [Irrigation District] [b]oard meeting."
In March 2010, in support of their petition for a writ of supersedeas, the Irrigation District, Coachella, Metropolitan, and San Diego filed with this court a declaration from John Carter, who at that time was special water rights counsel for the Irrigation District and had been the Irrigation District's chief legal counsel in 2003. In his declaration, Carter expressed his suspicion that "certain real parties in interest" would oppose the writ petition "on the grounds that the [Irrigation District's] Board of Directors . . . never approved the [Joint Powers] Agreement." Carter asserted that this accusation was "absolutely untrue," and in support of that assertion he explained that while the trial court was correct in noting the lack of a draft of the Joint Powers Agreement in the administrative record, that omission was inadvertent. Carter
It is Carter's declaration in support of the supersedeas petition in this court that provides the primary basis for the argument by the Morgan/Holtz parties that we should dismiss the appeals and affirm the judgment in the validation action. Essentially, the Morgan/Holtz parties posit that Carter's claim of inadvertent omission is incredible and the draft of the Joint Powers Agreement must have been intentionally withheld from the trial court despite knowledge by all of the appellants of its existence.
The short answer to the Morgan/Holtz parties' argument is that Slesinger— the sole authority they cite—is entirely inapplicable to the situation before us. The appellate court in Slesinger held "that when a plaintiff's deliberate and egregious misconduct makes any sanction other than dismissal inadequate to ensure a fair trial, the trial court has inherent power to impose a terminating sanction." (Stephen Slesinger, Inc. v. Walt Disney Co., supra, 155 Cal.App.4th at p. 740.) In another statement of its holding, the court concluded "that California trial courts have inherent power to issue a terminating sanction when a plaintiff's misconduct is deliberate, is egregious, and makes lesser sanctions inadequate to ensure a fair trial." (Ibid.)
The misconduct in Slesinger was that over a period of at least three years a private investigator hired by the plaintiff had broken into the defendant's office buildings and secure trash receptacles and trespassed on other property to surreptitiously obtain thousands of pages of documents belonging to the defendant, including documents marked privileged and confidential, and for a period of approximately 10 years the plaintiff had concealed the investigator's activities from the defendant and the court. (Stephen Slesinger, Inc. v. Walt Disney Co., supra, 155 Cal.App.4th at p. 740.)
Even if Slesinger could be read to give us authority to dismiss an appeal based on litigation misconduct by an appellant, just like a trial court can do to a case based on misconduct by a plaintiff, the circumstances presented here—even assuming everything the Morgan/Holtz parties want us to find is true—simply do not justify the imposition of such a drastic sanction. In Slesinger, no sanction short of dismissal could ensure the defendant a fair trial because, among other things, the plaintiff's "principals had gleaned information from the documents that no court order could dissipate." (Stephen Slesinger, Inc. v. Walt Disney Co., supra, 155 Cal.App.4th at p. 774.) In essence, there was no way to ensure that the plaintiff did not use information derived from the stolen documents during the trial. Here, even if we were to assume that one or more of the appellants deliberately concealed the draft of the Joint Powers Agreement from the trial court, the Morgan/Holtz parties fail to explain how the absence of that document prevented them from having a fair trial. To the extent the Morgan/Holtz parties believe the draft of the Joint Powers Agreement could have been used to show there was no meeting of the minds on the terms of that agreement, we have essentially rejected that argument already. Whether there was mutual consent among the contracting parties to the terms of the Joint Powers Agreement must be determined from the face of the agreement that was signed, not from some prior draft.
In short, even assuming the misconduct the Morgan/Holtz parties contend, no legitimate basis for dismissing these appeals and affirming the trial court's judgment in the validation action based on that supposed misconduct has been shown.
To the extent the Morgan/Holtz parties assert, in a related argument, that the Carter declaration "illustrates that this entire appeal is moot" and should be dismissed on that basis, we reject that assertion as well. Essentially the Morgan/Holtz parties contend the absence of the draft Joint Powers Agreement from the administrative record made that record "materially misleading." To the extent that contention is just another manifestation of their assertion that the absence of the draft agreement deprived them of a fair
Finally, we reject the Morgan/Holtz parties' argument that by failing to present the draft Joint Powers Agreement to the trial court, appellants somehow invited the trial court's error in its determination that the Joint Powers Agreement was unconstitutional. "Under the doctrine of invited error, when a party by its own conduct induces the commission of error, it may not claim on appeal that the judgment should be reversed because of that error." (Mary M. v. City of Los Angeles (1991) 54 Cal.3d 202, 212 [285 Cal.Rptr. 99, 814 P.2d 1341].) Here, even assuming appellants deliberately failed to include the draft of the Joint Powers Agreement in the administrative record (a fact that has not been shown), we do not see how the absence of the draft induced the trial court to err in its constitutional analysis of the final version of the agreement that was the subject of the validation action. Frankly, the draft agreement is immaterial to the question of whether the final version of the agreement passes constitutional muster. Accordingly, the invited error doctrine does not apply here and provides no basis for affirming the judgment in the validation action.
Cuatro argues that none of the agreements the Irrigation District sought to validate were properly subject to validation, and "the entire case should have been heard as a declaratory relief action."
Water Code section 22762 specifically provides that "[a]n action to determine the validity of the Quantification Settlement Agreement defined in subdivision (a) of Section 1 of Chapter 617 of the Statutes of 2002,
Relying largely on City of Ontario v. Superior Court (1970) 2 Cal.3d 335 [85 Cal.Rptr. 149, 466 P.2d 693], Cuatro argues that the "legitimacy [of Water Code section 22762] cannot stand." The gist of Cuatro's argument appears to be that, notwithstanding the broad language of the statute, statutes like Water Code section 22762 "permitting validation of contracts executed between government agencies . . . are intended only for financing arrangements involving bonds and indebtedness." Because the various agreements at issue here did not involve such arrangements, the argument goes, they were not subject to validation. Cuatro is wrong.
In City of Ontario, the city—acting in conjunction with a private contractor— organized a nonprofit corporation to issue bonds to finance the construction of an automobile racing stadium in the city, and the nonprofit corporation
The city "moved to dismiss the entire action on the ground that the summons did not conform to the special requirements of Code of Civil Procedure sections 861 to 863," i.e., the validation statutes. (City of Ontario v. Superior Court, supra, 2 Cal.3d at p. 339.) "The [trial] court impliedly determined that the action was governed by [the validation statutes], but expressly found that [the] plaintiffs had shown `good cause' to excuse their failure to comply with [Code of Civil Procedure] sections 861 and 861.1" and gave them permission to belatedly comply. (City of Ontario, at p. 339.) The city sought a writ of prohibition from the Supreme Court "to review that ruling and to prevent further proceedings in the action." (Ibid.)
On review, the Supreme Court discussed the "humble beginnings" of the validation statutes in 1961 and expressed concern that the enactment of Government Code sections 53510 and 53511 in 1963 had caused the statutes to grow "far beyond the scope originally conceived by the [Judicial] Council," which had first proposed enactment of the validation statutes. (City of Ontario v. Superior Court, supra, 2 Cal.3d at pp. 340-341.) In particular, the court noted that "rather than limiting this procedure to a specific class of acts by an agency, [Government Code] section 53511 extended [the validation statutes] to `an action to determine the validity of [the agency's] bonds, warrants, contracts, obligations or evidences of indebtedness.'" (Id. at p. 341.)
The city contended that "the word `contracts' in [Government Code] section 53511 [should be understood] to mean any contract into which the agency may lawfully enter ...." (City of Ontario v. Superior Court, supra, 2 Cal.3d at p. 341.) While noting that this construction of the statute would result in a "far-reaching expansion of the [validation] statute[s]" (ibid.), the Supreme Court ultimately did not decide whether Government Code section 53511 should be given the broad construction advocated by the city. Instead, the court ultimately decided that there was "one clear conclusion" in the case, namely, that "the question whether [the validation statutes] appl[y] to the case at bar presents a `complex and debatable' issue." (City of Ontario, at p. 345.) "[A]ssuming arguendo that [the validation statutes] d[id] apply to th[e] case," the Supreme Court concluded that "a mistaken but reasonable decision by plaintiffs' counsel that [they] did not apply constitute[d] good cause for the trial court to permit belated compliance with [their] terms." (Id. at p. 346.) Accordingly, the court denied the city's writ petition. (Id. at p. 348.)
To the extent that courts after City of Ontario have construed the word "contracts" in Government Code 53511 as having "a restricted meaning," encompassing "only those [contracts] that are in the nature of, or directly relate to a public agency's bonds, warrants or other evidences of indebtedness" (Kaatz v. City of Seaside (2006) 143 Cal.App.4th 13, 42 [49 Cal.Rptr.3d 95]), that conclusion has no bearing here on the intended scope of Water Code section 22762. In the latter statute, the Legislature specifically authorized validation of "the Quantification Settlement Agreement" and "any . . . contract entered into that implements, or is referenced in, th[e] Quantification Settlement Agreement." There simply can be no rational argument that by this broad and straightforward language, the Legislature intended to permit validation only of agreements that "involve bonds and indebtedness." Accordingly, we reject Cuatro's argument that the agreements the Irrigation District sought to validate in this action were not properly subject to validation.
Having concluded that the trial court erred in finding the Joint Powers Agreement unconstitutional, and having rejected all of the other grounds offered for affirming the judgment in the validation action, we conclude the judgment in that action must be reversed. This conclusion obviates the need for us to address several other arguments offered by appellants relating to the validation action. Specifically, we need not consider the arguments by Coachella, Metropolitan, and San Diego that (1) the trial court misapplied California contract law when it invalidated 11 other agreements based on the invalidity of the Joint Powers Agreement and (2) even if the Joint Powers Agreement was invalid, for various reasons the trial court erred in invalidating "the three federal agreements." We also need not consider the argument of Vista and Escondido that, even if the Joint Powers Agreement was invalid, the trial court erred in invalidating the agreement known as the "Allocation
Even without these arguments, however, two questions remain with respect to the validation action. First, should we remand the validation action for further proceedings or for entry of judgment in favor of the Irrigation District? Second, even if we remand for further proceedings, are there any other issues for us to decide relative to the validation action?
On the first question, we note that none of the appellants—not even the Irrigation District—has asked us to remand with instructions to the trial court to enter judgment in favor of the Irrigation District in the validation action. Coachella, Metropolitan, and San Diego ask us to remand "for completion of the validation action." The state asks that we "remit the matter to the trial court for consideration of CEQA and other claims it did not reach." And for its part, the Irrigation District asks us to "find that the [Joint Powers] Agreement was constitutional, and that all other matters be sent back for trial."
That the trial court did not finish adjudicating all of the issues raised in the validation action before concluding the Joint Powers Agreement and the 11 other agreements were invalid is readily apparent. As just one example, although the trial court concluded that one of the elements of the Irrigation District's prima facie case in the validation action was whether the Irrigation District's approval of the agreements complied with open meeting requirements, the court specifically stated in its statement of decision that it did "not in this decision reach the open meeting issue." Since no one has argued the open meeting issue on appeal, we must remand for the trial court to finish adjudicating this issue at least, along with whatever other unadjudicated issues remain in the validation action.
Recognizing that we must remand the validation action to the trial court to complete its adjudication of the matter, we are faced with the question of whether any issues relating to the validation action remain for our resolution before we do so. We find one: the argument by Coachella, Metropolitan, and San Diego that the trial court erred in asserting jurisdiction over issues regarding compliance with the federal Clean Air Act and the NEPA. Although discussion of this issue is not necessary to our decision to reverse the judgment in the validation action and remand that action to the trial court for further proceedings, it is nonetheless properly before us for decision because (1) it is an issue of law; (2) the three water agencies raised the issue in their appeal; and (3) on remand in the validation action it appears the trial court will adjudicate claims and defenses based on these two federal laws unless we direct the court otherwise.
The issue regarding compliance with the federal Clean Air Act and NEPA arose in the validation action as follows:
In its operative complaint, the Irrigation District alleged that it had "timely complied with all laws necessary for [the agreements] to be valid, legal, and binding, including without limitation, full compliance with . . . all applicable California and Federal Environmental Laws . . . ."
In its answer, the Air District denied that allegation and alleged in two affirmative defenses that the Transfer Agreement and the Quantification Settlement Agreement were both invalid because they violated the federal Clean Air Act.
In opposing the Air District's motion, the Irrigation District argued (among other things) that the trial court lacked jurisdiction to adjudicate whether the Secretary of the Interior should have conducted a conformity analysis under the federal Clean Air Act because such a challenge "may only be brought in federal court, against the federal agency alleged to be in violation, on the administrative record of the federal agency's action, and pursuant to a standard of review that inquires only whether the agency's action was `arbitrary and capricious' or contrary to law."
In ruling on the Air District's motion, the trial court rejected the Irrigation District's jurisdictional argument. Specifically, the court concluded that "[t]he federal Clean Air Act issues do not raise a `substantial' question of federal law, nor are those issues `central' to the case, as those terms are used for purposes of determining whether a state court has jurisdiction to rule on federal law questions. There are a host of state law issues to be litigated . . . . Compliance with the federal Clean Air Act (and, for that matter, NEPA), are merely two ingredients in this multi-ingredient validation action. For the foregoing reasons, the Court has jurisdiction to rule on this motion." Turning to the merits, the court concluded there were material factual disputes that precluded the court from determining the issue of compliance with the federal Clean Air Act on summary adjudication. Accordingly, the trial court denied the Air District's motion.
On appeal, Coachella, Metropolitan, and San Diego contend the trial court erred in this conclusion. In their view, "state courts have general jurisdiction over federal law claims and can adjudicate such claims except when (1) Congress has specified that federal courts have exclusive jurisdiction over such claims . . ., or (2) when a necessary and indispensable party to a federal law claim has sovereign immunity and cannot be sued in state court. Both of these situations apply to the NEPA and [federal Clean Air Act] claims at issue" here.
For the reasons that follow, we agree with the water agencies that the trial court has no jurisdiction to adjudicate in this validation action the question of whether the responsible federal agencies complied with the federal Clean Air Act and/or NEPA.
The purpose of the validation statutes is to serve "`the acting agency's need to settle promptly all questions about the validity of its action.'" (Friedland v. City of Long Beach (1998) 62 Cal.App.4th 835, 842 [73 Cal.Rptr.2d 427].) Thus, by its very nature a validation action is focused on the validity of the actions taken by the agency that is seeking the determination of validity. Here, that agency is the Irrigation District. Consistent with this focus, the Irrigation District alleged in its complaint that it had "timely complied with all laws necessary for [the Settlement Agreements] to be valid, legal, and binding, including without limitation, full compliance with . . . all applicable California and Federal Environmental Laws . . . ." Even though the United States (or one of its agencies) is a party to more than one of the agreements the Irrigation District seeks to validate, this does not mean the validation action encompasses the validity of the actions taken by the United States in connection with those agreements. The validation action brought by
Even assuming for the sake of argument that the federal government violated the federal Clean Air Act in signing one or more of the agreements— because no conformity analysis was performed before the agreements were signed—that fact has no bearing on this validation action brought by the Irrigation District to validate its actions in entering into those agreements. Thus, the proper scope of a validation action under Code of Civil Procedure section 860 et seq. and the limitations imposed by federal law on judicial review of an alleged violation of the conformity provision in the federal Clean Air Act mesh perfectly here. Consequently, the trial court has no jurisdiction in this validation action to adjudicate whether the Secretary of the Interior violated the federal Clean Air Act, and the court erred in concluding otherwise.
Turning to NEPA, we first note that in the affirmative defense in which it raised NEPA, the Air District took a position largely consistent with our conclusion regarding the federal Clean Air Act, objecting that "[t]o the extent that the complaint seeks a determination of compliance with the [NEPA] in the absence of the United States, the complaint seeks adjudication of matters outside the jurisdiction of the Court." In an abundance of caution, the Air District nonetheless asserted that "[s]hould the Court exercise jurisdiction notwithstanding this objection, the [Air District] asserts in the alternative that compliance with NEPA has not been achieved."
As we have observed, Coachella, Metropolitan, and San Diego sought a decision from the trial court on whether the court had jurisdiction over NEPA compliance when they sought partial judgment on the pleadings on the ground that the trial court did not have such jurisdiction, but the trial court denied that motion without reaching the merits of the question. Nevertheless, in ruling (erroneously) that it had jurisdiction to determine compliance with the federal Clean Air Act, the trial court strongly implied that it likewise had jurisdiction to determine compliance with NEPA.
The Air District contends the complaint in the validation action, and its affirmative defenses, "put compliance with federal laws at issue" in that action. Not so.
First, the Irrigation District alleged in its complaint that it had "timely complied with all laws necessary for [the settlement agreements] to be valid, legal, and binding, including . . . all applicable . . . Federal Environmental Laws." That allegation did not put compliance with the federal Clean Air Act or NEPA at issue because not even the Air District asserts that the Irrigation District—as opposed to the federal government—had any obligation under either of those federal laws. Since the Irrigation District was not bound to comply with either the federal Clean Air Act or NEPA, its general allegation that it had complied with "all applicable . . . Federal Environmental Laws" could not put compliance with those laws at issue in this case.
To the extent the Air District argues that "legality and statutory compliance cannot be determined by solely examining what [the Irrigation District] did or did not do because [the Irrigation District] is not the only contract signatory," we have answered that argument already above. The validation action brought by the Irrigation District necessarily encompasses only the validity of the Irrigation District's actions with respect to the agreements the Irrigation
Lest there be any fear that a judgment in favor of the Irrigation District in the validation action would somehow have the effect of immunizing from review the actions of the United States in connection with the agreements validated in that judgment,
As to the validation action, then, the judgment determining that "the subject contracts, identified as Contracts A through L in the Second Amended Complaint in Validation . . ., are void and invalid" must be reversed, and the action must be remanded to the trial court for that court to finish adjudicating the outstanding issues in the action. In doing so, the trial court shall not adjudicate any claims or defenses based on the federal Clean Air Act or NEPA because the court lacks subject matter jurisdiction over any such issues.
Having fully resolved the appeals filed by the state, the Irrigation District, Coachella, Metropolitan, San Diego, Vista, and Escondido with respect to the judgment in the validation action, we now turn our attention to the arguments that address the trial court's resolution of the CEQA actions, specifically, the
Recall that, based on its (erroneous) determination in the validation action that 11 of the 12 agreements the Irrigation District sought to validate were unconstitutional, the trial court dismissed the two CEQA actions as moot, with the exception of the first cause of action in the County's CEQA action, as to which the trial court entered judgment against the County on the merits. As will be seen, before reaching this ultimate disposition of the CEQA actions, the trial court made some interim rulings that are now at issue on appeal. We begin with those rulings.
In April 2008, the Air District filed motions to intervene in the two CEQA actions. The trial court denied both motions.
On appeal from the judgment with respect to the two CEQA actions, the Air District contends the trial court erred in not permitting it to intervene in those actions. We conclude this issue is not properly before us because the Air District failed to appeal from the order denying its motions to intervene.
The County's first amended petition for writ of mandate in what we have referred to as its CEQA action actually contained two causes of action: one for various alleged violations of CEQA (which was denominated the second cause of action and was set forth in eight different counts) and another (denominated the first cause of action) for an alleged violation of the wheeling statutes (Wat. Code, §§ 1810-1814).
As we have noted, when the court entered judgment in the County's CEQA action in February 2010, the court entered judgment against the County on its cause of action for violation of the wheeling statutes and dismissed the remainder of the action (i.e., the second cause of action containing the CEQA claims) as moot.
The County's cause of action for violation of the wheeling statutes alleged substantially as follows: "In approving the [Quantification Settlement Agreement], respondents and each of them refused to recognize that they were required to comply with Water Code sections 1810-1814, and on that ground failed to implement those sections. [¶] . . . Respondents thereby breached their duty under Water Code section 1810 to include in the [Quantification Settlement Agreement] and its components, including the Transfer Agreement, a requirement to avoid unreasonable economic or environmental effects within the County of Imperial as determined by the County of Imperial."
Here, the plain meaning of the wheeling statutes unequivocally refutes the County's argument that the four water agencies had to obtain a finding from the County about the economic and environmental effects of the transfer of water from the Irrigation District to San Diego before they could approve the Quantification Settlement Agreement.
"Notwithstanding any other provision of law, neither the state, nor any regional or local public agency may deny a bona fide transferor of water the use of a water conveyance facility which has unused capacity, for the period of time for which that capacity is available, if fair compensation is paid for that use, subject to the following:
"(a) Any person or public agency that has a long-term water service contract with or the right to receive water from the owner of the conveyance facility shall have the right to use any unused capacity prior to any bona fide transferor.
"(b) The commingling of transferred water does not result in a diminution of the beneficial uses or quality of the water in the facility, except that the transferor may, at the transferor's own expense, provide for treatment to prevent the diminution, and the transferred water is of substantially the same quality as the water in the facility.
"(c) Any person or public agency that has a water service contract with or the right to receive water from the owner of the conveyance facility who has an emergency need may utilize the unused capacity that was made available pursuant to this section for the duration of the emergency.
"(d) This use of a water conveyance facility is to be made without injuring any legal user of water and without unreasonably affecting fish, wildlife, or other instream beneficial uses and without unreasonably affecting the overall economy or the environment of the county from which the water is being transferred."
Water Code section 1811 defines the terms "`[b]ona fide transferor,'" "`[e]mergency,'" "`[f]air compensation,'" "`[r]eplacement costs,'" and "`[u]nused capacity.'"
Water Code section 1812 provides that "[t]he state, regional, or local public agency owning the water conveyance facility shall in a timely manner determine the following: [¶] (a) The amount and availability of unused capacity. [¶] (b) The terms and conditions, including operation and maintenance requirements and scheduling, quality requirements, term or use, priorities, and fair compensation." (Italics added.)
Water Code section 1813 provides that "[i]n making the determinations required by this article, the respective public agency shall act in a reasonable
Finally, Water Code section 1814 provides that "[t]his article shall apply to only 70 percent of the unused capacity."
When a bona fide transferor seeks to make use of the unused capacity of a water conveyance facility, the owner of the facility must timely determine the amount and availability of unused capacity and the terms and conditions of the use, including what constitutes fair compensation. (Wat. Code, § 1812.) In making those determinations, the owner must act in a reasonable manner and must make written findings. (Id., § 1813.) The owner's determinations are subject to judicial review for substantial evidence. (Ibid.)
The wheeling statutes do not expressly provide that anyone—let alone the county from which the water is being transferred—must make a finding that the transfer will not unreasonably affect the overall economy or the environment of the county before a water transfer can be authorized, as the County argues here. Water Code section 1810 does allow the owner of a water conveyance facility that has unused capacity to deny a bona fide transferor the use of the facility if the transfer in question will unreasonably affect the overall economy or the environment of the county from which the water is being transferred. But to the extent this provision implies the necessity of a finding of unreasonable effect, the finding is obviously to be made by the owner of the water conveyance facility who is denying the use of its facility on that basis. The terms of the statute do not, by any stretch of the imagination, impose a requirement that the county of origin must make a finding that there will be no such effect before the transfer can occur.
Because the County's cause of action for violation of the wheeling statutes is based on a premise that is unsupported by the terms of those statutes, we find no error in the trial court's grant of summary adjudication against the County of that cause of action.
As we have noted, with the exception of the County's cause of action for violation of the wheeling statutes, the trial court dismissed POWER's and the County's CEQA actions on the ground they were moot because they were "predicated upon contracts the Court has found invalid." Inasmuch as we have concluded the trial court erred in invalidating the agreements the Irrigation District sought to validate, and the validation action must be remanded for the trial court to finish adjudicating the issues in that action, it follows that the trial court also erred in finding the CEQA actions moot. It also appears to follow that the proper disposition of those actions is to reverse the judgment and remand them to the trial court to adjudicate them.
POWER and the County argue, however, that instead of remanding the CEQA actions to the trial court, we should adjudicate those actions ourselves in the first instance. They complain that the trial court "persistently refused" to adjudicate their CEQA claims, despite the statutory preference accorded
In assessing the more than six years that passed between the filing of the CEQA actions in the fall of 2003 and the trial court's judgment in February 2010, we find several points of particular significance. First, while the actions were commenced in the fall of 2003, they did not get coordinated and in front of the coordination judge in Sacramento until the summer of 2004. Thereafter, in January 2005, the trial court sustained demurrers without leave to amend in two of the other coordinated actions the County had filed on the ground that the County did not name Metropolitan and Coachella as parties within the statute of limitations. The County sought writ relief from this court, and on March 30, 2005, this court issued an alternative writ and stayed all proceedings in the coordinated cases. Ultimately, this court affirmed the trial court's ruling. (County of Imperial v. Superior Court, supra, 152 Cal.App.4th at p. 13.) It was not until August 14, 2007, however, that the stay on the coordinated proceeding was lifted. Thus, the two CEQA actions at issue now did not move forward for nearly two and one-half years because of the stay this court imposed at the County's behest. That delay can hardly be blamed on the trial court.
As far as we can tell, the coordination judge here did the best he could under the circumstances managing multiple coordinated cases, with all of the various parties and the tens of thousands of pages of paper that make up the administrative records and the trial court file. More importantly, though, regardless of our view on how fast these matters have or have not been adjudicated, the question posed by the requests of POWER and the County is whether we should adjudicate the CEQA actions in the first instance. Upon consideration of their arguments, we conclude the answer to that question is "no."
POWER and the County both argue that because the parties thoroughly briefed the CEQA actions in the trial court, and because the record of the administrative proceedings underlying both actions was admitted in the trial court and is now before us, "[t]his Court can proceed to the merits." In support of this assertion, they cite two cases, but neither of those cases is applicable.
In Californians for Alternatives to Toxics v. Department of Pesticide Regulation (2006) 136 Cal.App.4th 1049 [39 Cal.Rptr.3d 393], this court addressed arguments made in a mandamus petition the trial court had found moot, based on the principles that "if a matter is of general public interest and is likely to recur in the future, a resolution of the issue by the court is appropriate" and "cases are not moot when they present questions that are
Those cases do not apply here because we have determined the issues raised in the two CEQA actions are not moot. Neither POWER nor the County offers any authority for the proposition that this court, in the exercise of its appellate jurisdiction (see Cal. Const., art. VI, § 11), can or should decide in the first instance an issue that is not moot and is within the original jurisdiction of the superior court (see id., § 10), like the issues raised in the CEQA actions at issue here.
Here, on the cross-appeals filed by POWER and the County in their CEQA actions, we properly exercise our appellate jurisdiction by determining that the trial court erred in dismissing those actions on the ground of mootness. The proper remedy for that error is obviously reversal. To the extent POWER and the County argue that, in addition to reversing the judgments of dismissal in those actions, we should also take the further step of adjudicating the merits of those actions ourselves—something the trial court itself never reached—POWER and the County have not proven to our satisfaction that we are authorized to do so in the exercise of our appellate jurisdiction under the circumstances presented here.
And even if we assume for the sake of argument that we have the power to adjudicate the CEQA actions in the first instance on these appeals, we decline to do so. Although we often exercise de novo review in CEQA cases, the trial court's role of adjudicating those cases in the first instance is not inconsequential. "[I]n many such cases, trial courts provide us with a thorough written opinion which helps to clarify issues for appeal," and "[a]lthough it is
Thus, a writ petition initiating a CEQA action can be filed in this court in the first instance. Because such a petition can also be filed in the superior court, however, a party who chose to seek relief from this court in the first instance would have to "explain why the reviewing court should issue the writ as an original matter." (Cal. Rules of Court, rule 8.486(a)(1).) "In form, this is a rule of pleading; in effect, however, it expresses the policy of the Supreme Court and Courts of Appeal to refuse to exercise their original jurisdiction in the first instance, unless the circumstances are exceptional." (8 Witkin, Cal. Procedure, supra, Extraordinary Writs, § 144, p. 1040.) Thus, while in theory we have jurisdiction to consider as an original matter a petition for a writ of mandate alleging a public agency's noncompliance with CEQA, in practice we will ordinarily not exercise that jurisdiction but instead will leave it to the superior courts to do so in the first instance.
Obviously, the circumstances before us are nothing like those in Yorty. Here, POWER and the County are not asking us to exercise our original jurisdiction to resolve the relatively simple question of whether an EIR was required after the trial court decided that question against them. Instead, to the extent they are asking us to exercise our original jurisdiction at all,
In determining whether we should adjudicate the CEQA issues, it is also important to remember that, as we have determined already, the validation action must be remanded to the trial court so that court can finish adjudicating the outstanding issues in that action. If we were to adjudicate the merits of the two CEQA actions, however, further litigation of the validation action would have to be suspended while we did so, because we cannot send the validation action back to the trial court while retaining the CEQA actions for further review. This delay in the validation action to allow for our review of the CEQA actions would give unjustified preference to the adjudication of the CEQA actions, when both validation actions and CEQA actions have the same statutory preference. (Compare Code Civ. Proc., § 867 [validation actions "shall be given preference over all other civil actions before the court in the matter of setting the same for hearing or trial, and in hearing the same, to the end that such actions shall be speedily heard and determined"] with Pub. Resources Code, § 21167.1, subd. (a) [courts must give CEQA actions "preference over all other civil actions, in the matter of setting the action or proceeding for hearing or trial, and in hearing or trying the action or proceeding, so that the action or proceeding shall be quickly heard and determined"].)
Based on the foregoing, we decline the invitation of POWER and the County to adjudicate the merits of the CEQA actions ourselves in the first instance and instead will remand those actions to the trial court for that court to adjudicate.
Coachella, Metropolitan, and San Diego contend the trial court abused its discretion when it denied a pretrial motion to dismiss the County's CEQA action with prejudice because the County had failed to name as real parties in interest the United States and the "Indian Settlement Parties" (defined below). We are not persuaded.
In April 2009, San Diego and Metropolitan filed a joint motion to dismiss the County's CEQA action based on their assertion that the United States and La Jolla, Pala, Pauma, Rincon, and San Pasqual Bands of Mission Indians and the San Luis Rey Indian Water Authority (collectively, the Indian
In ruling on the motion to dismiss, the trial court determined that the United States and the Indian Settlement Parties were "recipients of approval" for purposes of subdivision (a) of Public Resources Code section 21167.6.5 because (1) the County's CEQA action "indisputably challenges the [Quantification Settlement Agreement] PEIR, and would if successful set it aside" and (2) "[t]he `project' covered by the [Quantification Settlement Agreement] PEIR includes not only the state [Quantification Settlement Agreement] but also ... the Allocation Agreement, to which ... the Indian Settlement Parties, and the U.S. are parties." The trial court further ruled, however, that the United States and the Indian Settlement Parties were "not indispensable." Accordingly, the trial court denied the motion to dismiss.
In reply, Coachella, Metropolitan, and San Diego contend "the County is precluded from challenging" "the trial court's ruling that the U.S. and Indian [Settlement Parties] were necessary parties in" the County's CEQA action because "[t]he County's Notice of Cross-Appeal specified the issues which the County intended to argue in this Court," and "[t]he Notice did not include the trial court's [necessary parties] ruling." The two cases on which the water agencies rely to support their argument, however, do not do so because each of those cases dealt with the distinguishable situation in which the notice of appeal (or cross-appeal) clearly states an intent to appeal from only part of a judgment. (See Glassco v. El Sereno Country Club, Inc. (1932) 217 Cal. 90, 91-92 [17 P.2d 703] [the notice of appeal stated the appeal was "`from so much of the judgment ... as denies relief to the plaintiffs against [a particular] defendant'"]; Unilogic, Inc. v. Burroughs Corp. (1992) 10 Cal.App.4th 612, 623 [12 Cal.Rptr.2d 741] [the notice of cross-appeal stated the cross-appeal was from the judgment on two specific causes of action].) In such cases, "[i]t is elementary that an appeal from a portion of a judgment brings up for review only that portion designated in the notice of appeal." (Glassco, at p. 92.)
Here, the County stated in its notice of cross-appeal that it was taking a "cross-appeal from the final judgment (including the applicable incorporated statement of decision and rulings on contested matters) entered on February 11, 2010." The fact that the County went on to identify in its notice of cross-appeal seven specific "grounds" for its cross-appeal does not make the cases on which the water agencies rely applicable here, nor do the water agencies cite any authority for the proposition that a party who chooses to specify grounds for appeal in its notice is limited to only those grounds thereafter in its briefing and argument.
More importantly, though, the County's argument on the "recipient of approval" issue is not part of its cross-appeal, but instead is part of its response to the appeal by Coachella, Metropolitan, and San Diego. The County had no reason to challenge in its cross-appeal the trial court's determination that the United States and the Indian Settlement Parties were recipients of an approval that was the subject of the County's CEQA action because the trial court's determination of that issue was only part of a ruling
Thus, in addressing the argument by Coachella, Metropolitan, and San Diego that the trial court erred in denying the motion to dismiss, we begin with the question of whether the trial court properly concluded that the United States and the Indian Settlement Parties were recipients of an approval for purposes of section 21167.6.5(a) with respect to the County's CEQA action.
Examination of the petition reveals that the County's allegations focused on the alleged insufficiency of the Quantification Settlement Agreement PEIR, which the County admitted was prepared "for the QSA." In essence, the County claimed the PEIR did not comply with CEQA in numerous regards, set forth in eight different counts. In its prayer for relief, the County asked for a writ of mandate "setting aside the certification of" the Quantification Settlement Agreement PEIR and "setting aside the decisions of respondents to carry out the QSA." The County also asked to "[e]njoin the transfer of water pursuant to the QSA until and unless respondents lawfully approve [it]."
Because, as the County's petition alleges, "the QSA" is the project for which the PEIR was prepared, the approval of "the QSA" appears to be the
The ambiguity in the term "the QSA" runs throughout these coordinated proceedings. In its narrowest sense, "the QSA" refers to the Quantification Settlement Agreement between the Irrigation District, Coachella, and Metropolitan. Use of the term in its narrowest sense can be found, for example, in the Quantification Settlement Agreement itself, which defines the term "QSA" as "[t]his Agreement, the Quantification Settlement Agreement."
In its broadest sense, however, "the QSA" refers to the Quantification Settlement Agreement and all of the related agreements. Use of the term in a broad sense like this can be found in the Quantification Settlement Agreement PEIR the County challenged in its CEQA action. In various places, the PEIR provides that "[t]he QSA is composed of related agreements, activities and projects, which, when taken together, support the consensual agreement among the four co-lead agencies regarding the use of Colorado River water."
In this broad sense, one of the components of "the QSA" is the Allocation Agreement, to which the Irrigation District, Metropolitan, Coachella, San Diego, the United States, and the Indian Settlement Parties were all parties. According to the recitals in the Allocation Agreement, the parties entered into that agreement "to provide for the allocation of an amount of Colorado River water equal to the amount conserved from the Title II works," which referred to certain works designed to limit water losses from the All American Canal and the Coachella Canal.
That the transfer of water pursuant to the Allocation Agreement is part of "the QSA" in its broad sense is also confirmed by the fact that when the Irrigation District, in resolution No. 10-2003, certified the Quantification Settlement Agreement PEIR ("as modified and supplemented by the Amended and Restated Addendum thereto dated September 2003"), it also approved "the QSA, on the terms and conditions set forth in the agreements and documents set forth" in an exhibit to the resolution. That exhibit consisted of
This is consistent with the Quantification Settlement Agreement PEIR as a program EIR. "A program EIR is an EIR which may be prepared on a series of actions that can be characterized as one large project ..." (Cal. Code Regs., tit. 14, § 15168, subd. (a).) Here, that "series of actions" was the Quantification Settlement Agreement and the various related agreements and actions that were addressed in the PEIR.
With the foregoing in mind, we turn back to the question of what project approval was "the subject of" the County's CEQA action: was it the approval of "the QSA" in its narrow sense—meaning only the Quantification Settlement Agreement between the Irrigation District, Metropolitan, and Coachella—or was it the approval of "the QSA" in its broad sense, which includes the water transfers under the Allocation Agreement? The resolution of this question is crucial because if the project approval that is the subject of the County's action was the approval that encompassed the Allocation Agreement, then the determination of whether the United States and the Indian Settlement Parties were "recipients" of that approval seems a foregone conclusion, as they were named parties to that agreement.
In the trial court, the County's position about what project was the subject of its CEQA action shifted back and forth. In opposing a demurrer filed by Coachella and San Diego, the County asserted there was no "lack of clarity" in its petition, which was "unequivocally directed at, and only at, the Quantification Settlement Agreement and associated CEQA compliance" and "no other agreement."
Later, however, when San Diego moved to limit the County's CEQA action to challenges to the Quantification Settlement Agreement, the County argued that "the operative reference in the County's pleadings is to the QSA and its components" and "it is clear that the way that the QSA is being looked at in the coordinated actions is in reference to the QSA and the associated agreements." (Italics added.) Thereafter, in ruling on San Diego's motion, the court noted that "[t]he County's First Amended Petition for Writ of Mandate could be read to define the `QSA' as not limited to the QSA itself, but also the related agreements," and "[t]he scope of [the action] thus does not appear to be limited to the QSA."
In ruling on the motion to dismiss, the trial court noted "the apparently inconsistent assertions by the County regarding the scope of its pleading." Ultimately, however, the trial court determined that the United States and the Indian Settlement Parties were recipients of an approval that was the subject of the County's CEQA action without reference to the County's varying characterizations of its action. Instead, the trial court focused on the fact that the County's action "indisputably challenges the PEIR, and would if successful set it aside." The trial court reasoned that "[t]he `project' covered by the PEIR includes not only the state [Quantification Settlement Agreement] but also the variety of related actions," including "the Allocation Agreement.... In other words, the PEIR is intended to function as CEQA compliance (at least in part) for the Allocation Agreement."
Having concluded that the trial court properly determined the United States and the Indian Settlement Parties were necessary parties to the County's CEQA action under section 21167.6.5(a), "we must next determine whether the trial court correctly concluded they were [not] indispensable parties under Code of Civil Procedure section 389, subdivision (b)." (County of Imperial v. Superior Court, supra, 152 Cal.App.4th at p. 35.) In addressing that issue, "we consider the four factors listed in the statute" and review for abuse of discretion the trial court's determination under the statute that in equity and good conscience the County's CEQA action should proceed even in the absence of the United States and the Indian Settlement Parties. (County of Imperial, at p. 35.) In conducting this review, we keep in mind that the burden is on Coachella, Metropolitan, and San Diego, as the appellants, to establish an abuse of discretion (Denham v. Superior Court (1970) 2 Cal.3d 557, 566 [86 Cal.Rptr. 65, 468 P.2d 193]), which is shown only if "the trial court exceeded the bounds of reason, all of the circumstances before it being
Obviously Coachella, Metropolitan, and San Diego, which advocate the conclusion that the United States and the Indian Settlement Parties are indispensable to the County's CEQA action, do not challenge this finding by the trial court. Nor does the County. Accordingly, we turn to the second factor.
There are some cases that suggest any amount of prejudice to an absent party means that party is indispensable, and Coachella, Metropolitan, and San Diego cite one of those cases in their reply brief. Specifically, in Sierra Club, Inc. v. California Coastal Com. (1979) 95 Cal.App.3d 495 [157 Cal.Rptr. 190], the court stated that "[w]here the plaintiff seeks some type of affirmative relief which, if granted, would injure or affect the interest of a third person not joined, that third person is an indispensable party." (Id. at p. 501.) In support of that statement, however, the Sierra Club court cited Bank of California v. Superior Court (1940) 16 Cal.2d 516 [106 P.2d 879], which was decided at a time when Code of Civil Procedure section 389 was a vastly different statute than it is now (and was in 1979). In 1940, as stated in the Bank of California opinion, the statute provided in pertinent part that "`[t]he court may determine any controversy between parties before it, when it can be done without prejudice to the rights of others, or by saving their rights ....'" (Bank of California v. Superior Court, supra, 16 Cal.2d at p. 520.) In 1971, however, the Legislature revised Code of Civil Procedure section 389 "to substitute practically in its entirety Rule 19 of the Federal Rules of Civil Procedure for former Section 389." (Cal. Law Revision Com. com., reprinted at 14 West's Ann. Code Civ. Proc. (2004 ed.) foll. § 389, p. 418.) Under the revised version of the statute, prejudice to an absent party is only one factor to be considered in determining whether that party is indispensable, rather than being the only determinative factor as it was under the previous version of the statute. Thus, statements like those in the Sierra Club case, on which the water agencies rely, are outdated.
Coachella, Metropolitan, and San Diego argue that "[f]ailure to join the U.S. and the Indian [Settlement Parties] would result in an inadequate judgment because of the risk of inconsistent obligations that would exist if the County succeeded in this action without the U.S.'s and the Indian [Settlement Parties'] participation." The third factor in subdivision (b) of Code of Civil Procedure section 389, however, "calls attention to the extent of the relief that can be accorded among the parties joined." (Advisory Com. note, reprinted at 14 West's Ann. Code Civ. Proc., supra, foll. § 389, p. 422.) The water agencies fail to explain how "a risk of conflicting obligations for the Water Agencies" that would supposedly result from a judgment in the absence of the United States bears on "the extent of the relief that can be accorded among the parties joined." The fact is that, even in the absence of the United States and the Indian Settlement Parties, the trial court in the County's CEQA action could void the certification of the Quantification Settlement Agreement PEIR and halt the water transfers between the water agencies under the Quantification Settlement Agreement, which would be adequate relief from the County's perspective.
To the extent Coachella, Metropolitan, and San Diego complain of the possibility they will face conflicting obligations in the event of a judgment obtained in the County's CEQA action in the absence of the United States, that complaint is properly considered under the first factor in the statute, which involves consideration of the "extent a judgment rendered in the person's absence might be prejudicial to him or those already parties." (Code
In essence, the trial court appeared to recognize (1) that the Quantification Settlement Agreement PEIR is at issue in the validation action only by virtue of the answering parties' denial of the Irrigation District's allegation that it "complied with all laws necessary for contracts A through M to be valid, legal, and binding, including ... all applicable California ... Environmental Laws" and (2) that the only remedy the County will have a possibility of obtaining in the validation action is a judgment that the agreements that are the subject of that action are not valid. What the County will not be able to obtain in the validation action is any relief directly involving the Quantification Settlement Agreement PEIR, including a "writ of mandate setting aside the certification of ... the[] PEIR," which is part of the relief the County is seeking in its CEQA action.
On appeal, Coachella, Metropolitan, and San Diego complain that the trial court abused its discretion in determining that the validation action provides "a very limited remedy" for the County "because this Court's decision in County of Imperial previously determined that the ... validation action
Coachella, Metropolitan, and San Diego next argue that the trial court "disregarded settled law that: (a) an alternative remedy need not be perfect; and (b) an adequate remedy is just one of several factors to be considered in a [Code of Civil Procedure] section 389 analysis." But there is absolutely no support for this argument in the trial court's ruling, and the water agencies do not attempt to muster any support for the argument, so we will not consider it any further.
The water agencies complain that "[t]he trial court based its ruling on the lack of input from either the U.S. or the Indian [Settlement Parties] regarding the impact of a judgment rendered in their absence." Again, this argument is not supported by the record. It is true the trial court once noted it did not "have input from either the U.S. or the Indian Settlement Parties" and then later noted that "neither the U.S. nor the Indian Settlement Parties have in any way participated in this proceeding." These observations were offered, however, only to explain why the court could not reach a clear or definitive conclusion on some of the subissues involved in determining whether the County's CEQA case should proceed in the absence of the United States and the Indian Settlement Parties. In no way did the trial court "base its ruling on the lack of input" from the absent parties.
Finally, Coachella, Metropolitan, and San Diego complain that in denying the motion to dismiss, the trial court considered—adversely to the water agencies—the fact that they did not bring the motion until very late in the proceedings. The water agencies contend an indispensable party objection can be raised at any time, and they filed their motion to dismiss at "the earliest opportunity in the litigation schedule" after they learned "[f]or the first time" from the County's statement of issues "that the challenge in [the County's CEQA action] included all approvals that relied on the PEIR," not just the Quantification Settlement Agreement.
The water agencies have utterly failed to show any abuse of discretion in this aspect of the trial court's ruling. The fact that the indispensable party issue can be raised at any time does not mean the court cannot consider the complaining party's diligence (or lack thereof) in raising the issue as a factor under subdivision (b) of Code of Civil Procedure section 389 in deciding whether "in equity and good conscience the action should proceed among the parties before it, or should be dismissed without prejudice."
As for the water agencies' suggestion that they acted as diligently as they could under the circumstances, the trial court's view of matters was eminently reasonable on this point as well. Essentially, the court recognized that from the very outset of the County's CEQA action, the water agencies had everything needed to assert that the action should not go forward in the absence of the United States and the Indian Settlement Parties. They never needed to know (as they contend) what approvals the County contended its CEQA action encompassed. What they needed to know was that (1) the County's CEQA action challenged the adequacy of the Quantification Settlement Agreement PEIR; (2) the Quantification Settlement Agreement PEIR was the environmental document that was used to support the water agencies' approval of the various actions that were analyzed in the PEIR, including the water transfers provided for in the Allocation Agreement; and (3) the United States and the Indian Settlement Parties were integral parties to the Allocation Agreement but were not before the court. With knowledge of these facts, the water agencies could have demurred to the County's CEQA action based on the absence of the United States and the Indian Settlement Parties much, much earlier in the proceeding, just as they demurred to the actions that were the subject of our decision in County of Imperial v. Superior Court, supra, 152 Cal.App.4th 13.
In the end, then, just as the County failed to do in County of Imperial, the water agencies here have not persuaded us that the trial court exceeded the
The judgments in Imperial Irrigation Dist. v. All Persons Interested (Super. Ct. Imperial County, No. ECU01649/Super. Ct. Sac. County, No. 04CS00875), POWER v. Imperial Irrigation Dist. (Super. Ct. Imperial County ECU01653/Super. Ct. Sac. County, No. 04CS00877), and County of Imperial v. Metropolitan Water Dist. of Southern California (Super. Ct. Imperial County, No. ECU01656/Super. Ct. Sac. County, No. 04CS00878) are reversed, and the cases are remanded to the trial court for further proceedings consistent with this opinion. The writ of supersedeas, having served its purpose, is discharged upon the finality of this decision.
The Irrigation District, the state, Coachella, Metropolitan, San Diego, Vista, and Escondido shall recover their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
Butz, J., and Murray, J., concurred.
On appeal, Andrew Krutzsch has apparently thrown in his lot with the Barioni parties, as a single respondents' brief has been filed on behalf of the "Barioni/Krutzsch parties."
Second, numerous requests for judicial notice were made during the briefing in these cases, and we deferred ruling on six of them pending calendaring and assignment of the panel. We also have not yet ruled on a seventh request filed after the case was calendared for oral argument. As to three of those requests (the request filed by Cuatro on Dec. 2, 2010; the request filed by the County and the Air District on Feb. 10, 2011; and the request filed by the Irrigation District on Apr. 1, 2011), no opposition was filed, so those requests are granted. As to the remaining four requests, we rule as follows:
(1) With respect to the request filed by the County and the Air District on November 23, 2010, opposed by Coachella, Metropolitan, and San Diego, we conclude the subject documents are irrelevant to our resolution of these appeals and cross-appeals. Accordingly, we deny this request. (See Hughes Electronics Corp. v. Citibank Delaware (2004) 120 Cal.App.4th 251, 266, fn. 13 [15 Cal.Rptr.3d 244] ["As a general matter, judicial notice is not taken of matters irrelevant to the dispositive points on appeal."].)
(2) With respect to the request filed by the Irrigation District on January 7, 2011, opposed by Cuatro, the County, and the Air District, we likewise conclude the subject documents are irrelevant to our resolution of these appeals and cross-appeals and therefore deny this request also.
(3) With respect to the request filed by Coachella, Metropolitan, and San Diego on January 10, 2011, opposed by the County and the Air District, we also find the subject documents irrelevant to our resolution of these appeals and cross-appeals and deny this request on that basis.
(4) Finally, with respect to the request filed by the County and the Air District on October 31, 2011, opposed by the Irrigation District and San Diego, we also deny this request on, the ground that the subject documents are irrelevant to our resolution of these appeals and cross-appeals.
Cuatro does not dispute that the Quantification Settlement Agreement at issue in these appeals falls within the foregoing definition.
Moreover, because we do not reach the Irrigation District's "validation by operation of law" argument, we likewise do not reach Cuatro's responsive argument that validation by operation of law violates due process, or the Morgan/Holtz parties' related argument.
On appeal, it is not entirely clear whether the County's arguments regarding the wheeling statutes are directed at the trial court's ruling with respect to the County's affirmative defenses in the validation action as well as at the ruling on the County's cause of action in its CEQA action; however, inasmuch as (1) the County asserts that its "wheeling claim" must be reviewed on appeal (italics added) and (2) the County presents its argument regarding the wheeling statutes in support of its cross-appeal, rather than as part of its respondent's brief, we deem the County's argument as limited to the trial court's summary adjudication of the cause of action for violation of the wheeling statutes in the County's CEQA action. Nevertheless, the basis for our rejection of the County's arguments in the context of the cause of action in the CEQA action applies with equal force and logic to the affirmative defenses the County asserted in the validation action based on the wheeling statutes.
