Westlands Water District Case Study - Law Professor …lawprofessors.typepad.com/files/westlands-water-district... · Web viewWater Resources Spring, 2016 Westlands Water District

Water Resources Spring, 2016

Westlands Water District Case Study

California’s San Joaquin Valley is one of the most productive agricultural areas in the world. Hot, sunny, fertile, and exceedingly flat, it provides wonderful conditions for agriculture—if one can find reliable sources of water, for the valley is naturally a near-desert. With a little bit of governmental help, the valley’s farmers have done well at finding such sources, and much of the nation’s produce now comes from San Joaquin Valley farms.

Some of the largest of those farms fall within the service area of Westlands Water District, an agricultural water supply district1 located on the valley’s west side. This case study considers the environmental implications of supplying Westlands with its water.

The case study is set in the mid-2000s, and you should consider the issues raised based on the facts presented and the circumstances of that time. Of course, many things have happened since then. While underlying laws have not significantly changed, major cases have been decided and settlements reached, and water delivery patterns have been drastically changed by drought. But those later events are the epilogue to this case study, and will be part of our discussion only toward the end of class.

Geography

The San Joaquin Valley forms the southern portion of California’s Great Central Valley. The valley is surrounded by the Coast Ranges to the west, the Tehachapi Mountains to the south, and the Sierra Nevada to the east.

1 Westlands Water District, like most water districts in the west, is a governmental body, and, like a city or town, is considered a local subdivision of the state. It is governed by votes among its members, and voting shares are allocated on the basis of landownership, not on a one-person-one-vote basis. In Salyer Land Co. v. Tulare Lake Basin Water Storage Dist., 410 U.S. 719 (1973), the Supreme Court upheld this type of arrangement against a constitutional challenge.

Westlands Water District’s location

The valley is naturally a dry place. In the summer, rain falls hardly anywhere in California. Even in the winter, when much of California receives ample rain and snow, the Coast Ranges create a rain shadow effect, and the valley gets little precipitation. Consequently, the valley’s farmers have always relied heavily on irrigation. On the east side of the valley, the irrigators have tapped the rivers that drain the Sierra Nevada’s west slope. The Coast Ranges are lower and dryer, however, and west-side streams provide little supply and can only be irrigated if water is drawn from below the ground or from some other part of the state.

California Precipitation

In the middle part of the twentieth century, the California and federal governments responded to this “perversity of nature”—precipitation’s unfortunate tendency to fall neither where nor when people needed it—by building water supply projects. See United States v. Gerlach Live Stock Co., 339 U.S. 725, 728-29 (1950). In several phases, the United States Bureau of Reclamation built the Central Valley Project, which used dams on Sierra Nevada and northern California rivers to supply agricultural water users throughout the Central Valley. The California state government built the State Water Project, which delivered most of its supplies to farmers in the southern San Joaquin Valley and to urban users in the Los Angeles and San Diego metropolitan areas. This was an era of major water project construction all over the west, but even in a time of waterworks gigantism, these projects stood out. The projects tap much of California’s watershed area, consume enormous amounts of power, and deliver water to many of the state’s agricultural businesses and over two-thirds of its people.

Landowners on the west side of the San Joaquin Valley were the beneficiaries of the last major phase of project construction. In the early 1960s, the Bureau of Reclamation constructed the Central Valley Project’s San Luis unit, which delivers water pumped from the Sacramento and San Joaquin Rivers’ shared delta to west-side farms.

Those farms can be highly profitable. Because of the long growing season, abundant sunlight, and traditionally ample water supplies, San Joaquin Valley farms can grow abundant, high-value crops and are capable of generating significant income. Some of that income leaves the land as pure profits, but farmers served by Westlands have also invested significant capital in their land, using high-tech methods to maximize the income generated by each acre of land and each acre-foot of irrigation water. More discussion of these programs is available at westlandswater.org, and please spend a few minutes looking at the site.

Left: Federal (yellow), state (red) and local (green) water projects in California

Below: The Delta-Mendota Canal, which supplies the San Luis unit

Westlands’ Water Rights

Westlands delivers water through a legally complex arrangement:

The individual landowners within the district receive water under contracts with the district itself.

In 1963, the district signed a 40-year contract with the Bureau of Reclamation. That contract specified the District’s maximum delivery “entitlement”—about 1.2 million acre-feet of water per year—but also contained shortage provisions allowing the Bureau to deliver less under certain conditions. In O’Neill v. United States, the Ninth Circuit held that because of those shortage provisions, “the contract does not obligate the government to furnish to Westlands the full contractual amount of water when that water cannot be delivered consistently with the requirements of the Endangered Species Act.” 40 F.3d 677, 680 (9th Cir. 1995). Westlands was to pay for that water “at a maximum rate of $8 per acre-foot.” Orff v. United States, 545 U.S. 596, 599 (2000).

Westlands’ 1963 contract has expired and has not yet been renewed, and the district now receives water under interim one-year contracts with terms essentially the same as those of the 1963 contract.

The Bureau obtained the right to deliver water by obtaining a permit from the California State Water Resources Control Board, which administers appropriative water rights in California.

The Bureau therefore holds the actual appropriative water right—a right it acquired and exercises in accordance with state law and subject to state regulation—while Westlands holds contractual rights to receive water deliveries from the Bureau, and Westlands’ farmers hold contractual rights to deliveries from the district.

Like any appropriative right, the priority of the Bureau’s rights depends upon seniority. That sometimes creates problems for Westlands. The Bureau of Reclamation built the San Luis Unit after it built the rest of the Central Valley Project, after California built the State Water Project, and after many other water users had laid claim to water supplies in the Central Valley. That means that the Bureau permits that supply Westlands are relatively junior. According to the standard rules of priority, Westlands therefore can be among the first users shut off in times of shortage.

The Drainage Challenge

From the first stages of construction of the San Luis unit, engineers and soil scientists knew that farming the west side of the San Joaquin Valley could create drainage problems. The Coast Ranges are composed of marine sediments. Those sediments naturally contain high concentrations of salts and selenium, both of which can be toxic to both plant and animal life. Repeated irrigation of west side soils can raise selenium concentrations to levels that make farming impossible.

The problem might be solved by flushing the soils with more water, but an impervious subsurface clay layer limits the effectiveness of that solution, and creates the need to drain excess water to someplace else. The Bureau of Reclamation initially tried draining the water to wetland areas within the valley, but that approach failed disastrously, with widespread mortality and deformities appearing among birds in the Kesterson National Wildlife Refuge. See Exhibit 3.

Deformed birds, Kesterson National Wildlife Refuge

The easiest other place, from an engineer’s perspective, to dispose of that runoff would be into the San Joaquin River or the Bay-Delta. But the runoff is toxic, and both areas already are environmentally sensitive and are listed (under section 303 of the Clean Water Act) as water-quality-impaired. Consequently, the drainage water has been accumulating for years, some of it leaking in to the San Joaquin River system and the rest with nowhere to go. In 2000, the Ninth Circuit Court of Appeals held that the federal government was obligated to come up with a disposal system for the drainage water, but it has not done so yet. Firebaugh Canal Co. v. United States, 203 F.3d 568 (2000).2

The Water Supply Challenge

Westlands’ other major environmental challenge is its water supply. In addition to being a water supply source for much of California, the Sacramento/San Joaquin Bay-Delta is

2 The United States and water contractors on the west side of the San Joaquin Valley just negotiated and agreed to a major settlement designed to resolve this drainage issue. But for purposes of this exercise, you should assume that the issue remains unresolved.

an important and imperiled environmental resource. The Bay-Delta is a migratory pathway for multiple salmonid runs, some of them threatened or endangered; home to several other threatened or endangered endemic fish species; a significant stopover on the Pacific Flyway (the avian migratory pathway that follows the west coast of North America); and one of the most invasive-species-impacted ecosystems in the United States. Exhibit 2 describes some of the environmental problems.

Several key points should emerge from this description (and would emerge from some of the other written material—and there’s lots of it—about the Bay-Delta). First, many environmental problems affect the Bay-Delta. Second, there are many causes of those problems; water diversions are just one of many contributing factors. Third, however, there now seems to be little real question that water diversions are a contributing factor to some of those problems.

That water supply challenge, and others like it throughout the west, also exists in the shadow of some potential legal uncertainty. In recent years, water rights holders have brought a series of constitutional claims alleging that enforcement of the Endangered Species Act effected “takings” of their water rights.3 Those challenges have met with mixed results, but in a few cases, water users have won significant procedural victories, and while they have lost several cases, they did succeed once in securing a final judgment in their favor and a multi-million dollar award. See Tulare Lake Water Basin Storage District v. United States, 49 Fed. Cl. 313 (2001).

The Future

Westlands has several key concerns for the future.

- It would like to bolster its water supply. In the mid-1990s, its supplies were cut significantly in response to drought and environmental needs. Environmental advocates have been vocally advocating for reduced deliveries in the future. But Westlands would prefer a future filled with steadier and larger supplies.

- It would like to firm up its contract, and to do so on favorable terms. So long as the contract is not renewed, the possibility exists that the federal government could decline to renew it, or could offer substantially different terms.

- It would like to find a fix to its drainage problems. The present practice of irrigating fields without flushing them “leads inexorably to the spoilation of the agricultural capacity of the land… What is happening to the land here is akin to putting clothes from a washing machine without a rinse cycle directly into a dryer. Not only will the clothes emerge still dirty, but they will eventually be destroyed.” Firebaugh Canal Co., 203 F.3d at 578 (Trott, J. dissenting). Westlands obviously would prefer to end that practice, though at a price it finds affordable.

3 See U.S. Const. Amend. V (“…nor shall private property be taken for public use, without just compensation”).

- Above all, it would like to protect its members’ financial interests. There are many areas in the country where farm owners farm for reasons that transcend economics; they love working the land, for example, or they feel culturally tied to the farming community. That culture is not so pronounced on the west side of the San Joaquin Valley. Many farms are large in scale, some are absentee-owned, and management practices tend to be driven more by business concerns and less by culture. That means that the farmers supplied by Westlands may be receptive to an arrangement that significantly changes their practices—so long as they are adequately compensated.

Other entities have different ideas about the future, however. Many environmental groups4 have long considered Westlands to be the bête noir of California water politics. They believe it uses huge amounts of water that could be put to far better use as in-stream flow; that it disposes contaminated wastewater that should never go back into rivers; and that it does all this at significant taxpayer expense and through overly cozy relationships with the Bureau of Reclamation and with state and federal politicians. Their goals are quite different. They would like to see Westlands’ water allocations substantially reduced. And they want to make sure the drainage problem is solved as cheaply as possible, and is not solved by disposing wastewater in any sensitive location.

Those environmental groups’ advocacy is complicated by a socio-economic factor, however. Much of the work on farms in the Westlands area is done by migrant laborers, many of them Hispanic and poor. Their jobs are in many ways undesirable, but they are still jobs, and many of the people dependent upon those jobs have few other options beside agricultural labor. A settlement that reduces the amount of farming in the district might reduce the availability of those jobs, creating economic difficulties for the already-poor people working Westlands’ fields.

The Class Format

For this class, we will not split into groups. Instead, we will all represent Westlands, and we will spend the class considering potential legal issues that might face Westlands. Our goal is to explore possibilities and to identify issues that, if you really were Westlands’ lawyer, you would want to research in more detail. I do not expect you, at this stage of the course, to provide definitive opinions on every legal issue that might arise and how it might be resolved. But I do hope we can go beyond just identifying statutes under which issues might arise, and instead can sketch out, at least in general terms, which statutory provisions might be at issue, and what the competing arguments might be.

4 Full disclosure: this includes my former clients.

Exhibits:

1. Statutory summary and materials

2. Jay Lund et al., Envisioning Futures for the Sacramento-San Joaquin Delta (2007) (excerpts)

3. Russell Clemings, Death Traps

Please also review the Mono Lake case and your notes/readings on reasonable use.