Abatti v. Imperial Irrigation District

Filed 8/5/20 (unmodified opn. attached)
CERTIFIED FOR PUBLICATION

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

MICHAEL ABATTI, as Trustee, etc., et al., D072850

Plaintiffs and Appellants, (Super. Ct. No. ECU07980)

v.
ORDER MODIFYING OPINION
IMPERIAL IRRIGATION DISTRICT, AND DENYING PETITION FOR
REHEARING
Defendant and Appellant.
NO CHANGE IN JUDGMENT

THE COURT:

It is ordered that the opinion filed herein on July 16, 2020, be modified as follows:

1. On page 26, footnote 15, the following sentences are to be added at the end:

In addition, Abatti stated in his combined brief that "the [District's] [f]armers
have pre-1914 water rights," but explained in a petition for rehearing that he is
asserting an interest in the District's water rights, not legal title to pre-1914 rights.
We accept the clarification.

Accepting this clarification, we make the following further modifications:

On page 28, second paragraph, the sentence beginning with "And it is" is to end

after "Imperial Valley."
 On page 32, first paragraph, the first two sentences, starting with "Abatti raises"

and ending with "the District" are to be deleted and replaced with:

Abatti raises a related issue here. He contends that because the District's
predecessor, the CDC, held water rights for private use, those rights remained
private following establishment of the District.

On pages 33 and 34, the paragraph spanning these pages, starting with "Second,

Abatti" and ending with "CDC," and footnote 22 therein are to be deleted, which will

necessitate renumbering of all the subsequent footnotes.

On page 60, partial paragraph at the bottom of the page, the sentence starting with

"He argues" and ending with "industrial use" is to be deleted and replaced with:

He argues that farmers can assert injury because they are beneficial users of the
District's water rights, and because the District's permit is subject to "vested
rights"; Abatti maintains that, under its permit, the District would have "no power
to transfer . . . water" other than for the original irrigation and domestic purposes
and would have to comply with the no injury rule to add industrial use.

On page 61, first full paragraph, the sentence starting with "Abatti has not" and

ending with "implicated" is to be deleted and replaced with:

The key issue here is not whether the farmers are legal users; it is that there is no
relevant injury since, as noted, there was no change to the point of diversion or
place or purpose of use and thus, the no injury rule is not implicated.

2. The opinion is also modified as follows:

On page 33, partial paragraph at the top of the page, the sentence starting with

"The issue" and ending with "undisputed" shall be deleted and replaced with:

The issue is not whether the District had to continue to provide some level of
service upon acquiring its water rights; that appears to be undisputed.

2
 On page 35, first full paragraph, the sentence starting with "In addition" and

ending with "as well" is to be deleted and replaced with:

In addition, present perfected rights are not based entirely on farming, but
municipal and industrial use, as well, and farming was not the only historical use.

There is no change in judgment.

The petition for rehearing is denied.

BENKE, Acting P. J.

Copies to: All parties

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Filed 7/16/20 (unmodified opinion)
CERTIFIED FOR PUBLICATION

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

MICHAEL ABATTI, as Trustee, etc., et al., D072850

Plaintiffs and Appellants,
(Super. Ct. No. ECU07980)
v.

IMPERIAL IRRIGATION DISTRICT,

Defendant and Appellant.

APPEALS from a judgment and writ of mandate of the Superior Court of Imperial

County, L. Brooks Anderholt, Judge. Affirmed in part, reversed in part, and remanded

with directions.

Musick, Peeler & Garrett, Theodore A. Chester, Jr., Cheryl A. Orr; Caldarelli

Hejmanowski Page & Leer, Lee E. Hejmanowski and Marisa Janine-Page for Plaintiffs

and Appellants.

Sutherland & Gerber and Lowell F. Sutherland for Imperial County Farm Bureau,

Imperial Valley Vegetable Growers Association, and Imperial Valley Water as Amici

Curiae on behalf of Plaintiffs and Appellants.
 Nossaman, Frederic A. Fudacz, Jennifer L. Meeker, Gina R. Nicholls and Tara E.

Paul for Defendant and Appellant.

O'Laughlin & Paris, Tim O'Laughlin, Valerie C. Kincaid and Ryan E. Stager for

San Joaquin Tributaries Authority as Amicus Curiae on behalf of Defendant and

Appellant.

Allen Matkins Leck Gamble Mallory & Natsis and David L. Osias for Imperial

Valley Coalition for the Fair Sharing of Water as Amicus Curiae on behalf of Defendant

and Appellant.

Somach Simmons & Dunn, Andrew M. Hitchings and Alyson E. Ackerman for

Association of California Water Agencies as Amicus Curiae on behalf of Defendant and

Appellant.

Xavier Becerra, Attorney General, Robert W. Byrne, Assistant Attorney General,

Tracy L. Winsor and Daniel M. Fuchs, Deputy Attorneys General, for State Water

Resources Control Board as Amicus Curiae on behalf of Defendant and Appellant.

INTRODUCTION

The Imperial Irrigation District (District) supplies water from the Colorado River

system to California's Imperial Valley. As an irrigation district, the District holds its

water rights in trust for the benefit of its users, is responsible for managing the water

2
supply for irrigation and other beneficial uses, and is empowered by California law to do

so. District water users include municipal, industrial, and agricultural users, or farmers. 1

In 2013, the District implemented an equitable distribution plan with an annual

water apportionment for each category of users (2013 EDP). Michael Abatti presently

owns and farms land in the Imperial Valley. Abatti, as trustee of the Michael and Kerri

Abatti Family Trust, and Mike Abatti Farms, LLC (collectively, Abatti) filed a petition

for writ of mandate to invalidate the 2013 EDP on the grounds that, among other things,

the farmers possess water rights that entitle them to receive water sufficient to meet their

reasonable irrigation needs—and the plan unlawfully and inequitably takes away these

rights. Abatti's position, fairly construed, is that farmers are entitled to receive the

amounts of water that they have historically used to irrigate their crops.2 The District

contended that the farmers possess a right to water service, but not to specific amounts of

water; that the District is required to distribute water equitably to all users, not just to

1 The terms "agricultural user," "agricultural water user," "landowner," and "farmer"
appear throughout the record, briefing, and case law, sometimes interchangeably. In the
interest of clarity, we generally use the term "farmer" to refer to irrigating landowners
like Abatti, unless the context requires otherwise.

2 Abatti disavows that he is arguing that farmers are entitled to receive a particular
quantity of water. But we see no other reasonable way to interpret his position, given that
he appears to view any reduction in the amount of water available to farmers as a transfer
of their rights to other users. We note that although Abatti's challenge to the 2013 EDP
implicates farmers' rights and the treatment of farmers under the plan, and we therefore
address farmers generally throughout the opinion, no other farmers are parties to this
lawsuit and Abatti does not purport to be bringing a class or representative action.

3
farmers; and that the 2013 EDP allows the District to do so, while fulfilling the District's

other obligations, such as conservation.

The superior court granted the petition. The court found that farmers "own the

equitable and beneficial interest" in the District's water rights, which is appurtenant to

their lands and "is a constitutionally protected property right." The court found that the

District abused its discretion in prioritizing other users over farmers, taking water rights

away from farmers and transferring those rights to other users, and failing to use

historical apportionment to determine the quantities of water that farmers would receive

under the plan. The court entered a declaratory judgment that prohibits the District from

distributing water in the manner set forth in the 2013 EDP, and requires the District to

use a historical method for any apportionment of water to farmers.

The District appeals from the judgment and writ of mandate. The District

maintains that the farmers' interest is a right to water service, only, and contends that it

did not abuse its discretion in setting the annual apportionment of water among its

various categories of users or in adopting its agricultural allocation. The District further

contends that the superior court erred by declaring that the District is required to

distribute water to farmers based on historical use. Abatti cross-appeals from an earlier

order sustaining the District's demurrer to his claims that the District's adoption of the

2013 EDP constitutes a breach of its fiduciary duty to farmers and a taking. The parties

also raise procedural arguments.

We conclude that the farmers within the District possess an equitable and

beneficial interest in the District's water rights, which is appurtenant to their lands, and

4
that this interest consists of a right to water service; the District retains discretion to

modify service consistent with its duties to manage and distribute water equitably for all

categories of users served by the District. Although the superior court acknowledged

certain of these principles, its rulings reflect that it took an unduly narrow view of the

District's purposes, thus failing to account for the District's broader obligations, and took

an overly expansive view of the rights of farmers.

We further conclude that although the court correctly found that the District

abused its discretion in the manner in which it prioritizes water users in the 2013 EDP,

the court erred to the extent that it found any other abuse of discretion on the part of the

District in its adoption of the 2013 EDP. The court also erred by granting declaratory

relief that usurps the District's authority, and that is based in part on flawed findings. The

court properly dismissed Abatti's breach of fiduciary duty and taking claims. Finally, we

conclude that the parties' procedural arguments lack merit.

We emphasize that our conclusions are limited in scope. In order to resolve the

issues raised by Abatti's challenge to the 2013 EDP, we must first determine the nature of

the farmers' interest in the District's water rights. But we focus solely on the District, and

take no position on other irrigation districts or the rights of their users. We analyze only

the discretion exercised by the District in adopting the 2013 EDP, do not dictate the

District's future exercise of that discretion—including as to any action taken in response

to this opinion, and reject the superior court's attempt to do so. And we offer no opinion

as to potential claims that a user might bring based upon such future actions by the

District.

5
 We affirm the judgment and writ of mandate as to the superior court's ruling that

the District abused its discretion in how it prioritizes apportionment among categories of

water users in the 2013 EDP, and affirm the dismissal of the breach of fiduciary duty and

taking claims. We reverse the judgment and writ of mandate in all other respects, and

remand with directions.

FACTUAL AND PROCEDURAL BACKGROUND3

The District "is the sole source of fresh water for the Imperial Valley, and all of

that water comes from the Colorado River." (Quantification Settlement Agreement Cases

(2011) 201 Cal.App.4th 758, 784 (QSA Cases).) Approximately 97 percent of the water

that the District distributes is used for agriculture. Pursuant to the Quantification

Settlement Agreement (QSA), a set of agreements reached in 2003 among the District,

other Southern California water entities, and the government, which resolved long-

standing water rights disputes, the District's entitlement was capped at 3.1 million acre-

feet, subject to an overrun policy.4 (Id. at p. 789) Following the QSA, the District

instituted fallowing and efficiency-based conservation measures, retained experts to

assess distribution in shortage situations, and eventually adopted an equitable distribution

plan (EDP) for water shortage conditions, which apportioned water by category of user

3 The history of the District, and of water rights in the Imperial Valley generally, is
extensive. We limit this initial overview and our discussions post to facts necessary for
this appeal, and rely at times on prior cases that summarized these matters.

4 One acre foot is equivalent to 325,851 gallons.

6
and was revised multiple times. In October 2013, the District's Board adopted the 2013

EDP, which unlike previous EDPs, provides for an annual apportionment that does not

require a shortage as a precondition to its implementation and is thus intended to be

permanent. Pursuant to the 2013 EDP, water would be apportioned first to non-

agricultural users, with remaining amounts apportioned among farmers using either a

straight line method or another method chosen by the District. Farmers would be able to

share water within farm units, and buy and sell water in a clearinghouse. At the same

meeting, the Board approved a hybrid historical/straight line agricultural apportionment

for 2014. As we discuss post, this meant that half the apportionment would be based on

historical use, while the other half was a set amount of water per acre.

Abatti's family has been farming in the Imperial Valley for over 100 years. Abatti

filed a petition for writ of mandate in the Imperial County superior court in November

2013 challenging the 2013 EDP, objecting to its prioritization of other users over farmers

and the agricultural allocation in the 2013 EDP. The case was assigned to the Honorable

Diane B. Altamirano. Abatti brought claims for mandamus under Code of Civil

Procedure section 1085, declaratory relief, taking without compensation (taking), and

breach of fiduciary duty.5 The District challenged the action on multiple grounds in

demurrers and in a motion to strike, claiming that the petition was untimely, that it was

barred by a prior validation action, and that the petition did not state adequate allegations

5 Abatti also raised a claim for administrative mandamus, but subsequently
dismissed that claim.

7
to support the breach of fiduciary duty and taking claims. The court struck the breach of

fiduciary duty and taking claims, and allowed the remaining claims to proceed.

Abatti filed the operative third amended petition in November 2014, seeking

mandamus and declaratory relief. The case was reassigned to the Honorable L. Brooks

Anderholt. The District brought another motion to strike, which the court denied.

The superior court held a hearing on Abatti's petition in April 2017. In August

2017, the court issued a writ of mandate directing the District to repeal the 2013 EDP. In

its statement of decision, the court (i) determined the parties' water rights; (ii) found that

the District had abused its discretion by prioritizing other water users over farmers and by

violating the "no injury" and appurtenancy rules; (iii) found that the District had also

abused its discretion by using straight line agricultural apportionment as the default

method in the 2013 EDP, rather than a historical method; and (iv) ruled that Abatti's

action was not barred by the statute of limitations or by a prior validation action. The

court also issued a declaratory judgment that prohibits the District from prioritizing any

category of users over farmers, except domestic users; from using straight-line or hybrid

agricultural apportionment, rather than historical; and from entering into contracts that

guarantee water to any users other than domestic or agricultural users, during shortages.

The District appealed from the judgment and writ of mandate, and Abatti appealed

from the dismissal of his breach of fiduciary duty and taking claims. The San Joaquin

Tributaries Authority, Association of California Water Agencies, State Water Resources

Control Board (State Board), and Imperial Valley Coalition for the Fair Sharing of Water

(IVC) all applied to file amicus curiae briefs on behalf of the District. The Imperial

8
County Farm Bureau, Imperial Valley Vegetable Growers Association, and Imperial

Valley Water together applied to file a brief on behalf of Abatti. We granted the

applications, indicating that we would not consider newly raised issues. The parties filed

answering briefs.6

DISCUSSION

A. Standard of review

A writ of mandate under Code of Civil Procedure section 1085 (i.e., an ordinary

mandamus action) compels the "performance of a legal duty imposed on a government

official." (Environmental Protection Information Center, Inc. v. Maxxam Corp. (1992)

4 Cal.App.4th 1373, 1380; see People ex rel. Younger v. County of El Dorado (1971)

5 Cal.3d 480, 491 [describing ordinary mandamus actions].)

An ordinary mandamus suit "permits judicial review of . . . quasi-legislative acts

of public agencies." (Carrancho v. California Air Resources Board (2003) 111

Cal.App.4th 1255, 1264-1265 (Carrancho).) " 'In reviewing such quasi-legislative

decisions, the trial court does not inquire whether, if it had power to act in the first

instance, it would have taken the action taken by the administrative agency. The

6 The parties and amicus IVC have filed a number of requests for judicial notice, as
well as related declarations, oppositions, and objections. Most of the requested
documents are not relevant or necessary to our determination of the issues raised in the
present appeals (among other potential barriers to notice). (See People v. Rowland
(1992) 4 Cal.4th 238, 268, fn. 6 (Rowland) [declining notice of irrelevant court records].)
We grant judicial notice as to certain documents, as identified post. To the extent that our
analysis calls for a discussion of why particular documents are not suitable for notice, we
address those matters post, as well. We deny the remaining requests.

9
authority of the court is limited to determining whether the decision of the agency was

arbitrary, capricious, entirely lacking in evidentiary support, or unlawfully or

procedurally unfair.' " (Id. at p. 1265, quoting Fullerton Joint Union High School Dist. v.

State Bd. of Education (1982) 32 Cal.3d 779, 786.)

"The appellate court reviews the trial court's decision de novo under the same

standard." (California Bldg. Industry Ass'n v. San Joaquin Valley Air Pollution Control

Dist. (2009) 178 Cal.App.4th 120, 130; see City of Arcadia v. State Water Resources

Control Board (2006) 135 Cal.App.4th 1392, 1409 [review is de novo, "except where the

trial court made foundational factual findings, which are binding on appeal if supported

by substantial evidence"].)7

B. Water rights in the Imperial Valley

The parties' fundamental disagreement pertains to whether the farmers possess

water rights that entitle them to receive the amounts of water that they have historically

used to irrigate their crops, amounting to a priority over other non-domestic users, or

instead, whether their interest is a right to water service that is subject to modification by

7 We reject certain of Abatti's assertions regarding the scope of review. First, Abatti
disputes that the substantial evidence standard of review is at issue; however, application
of the abuse of discretion standard will often call for an assessment of the sufficiency of
the evidence to support the finding at issue. Second, Abatti argues that the superior court
must conduct independent review if fundamental rights are involved. This principle
applies to administrative, not ordinary, mandamus. (Dominey v. Department of
Personnel Administration (1998) 205 Cal.App.3d 729, 738, fn. 5.) Finally, we disagree
with Abatti's assertion that under In Re Marriage of Arceneaux (1990) 51 Cal.3d 1130,
we are bound by factual findings to which the District did not object. One must object to
avoid implied findings (id. at pp. 1133-1134), but this does not mean that such findings
are not subject to review for substantial evidence.

10
the District. We thus begin with a threshold issue: whether the superior court accurately

determined the nature of the farmers' rights. This analysis requires both historical and

legal context. Among other things, that context reflects that even if some landowners in

the Imperial Valley held private water rights at some time in the past, the District is the

sole owner of appropriative water rights to Colorado River water in the Imperial Valley;

all users possess only a right to service in some form.

We first discuss the history of water rights and irrigation in the Imperial Valley.

We then address California water and irrigation law, including as applied to irrigation

districts and landowners. Finally, we address the parties' arguments regarding the

farmers' rights, and explain how the superior court erred in determining them.

1. Additional background

Efforts to divert Colorado River water, and disputes regarding its use, began well

over a century ago. (Arizona v. California (1963) 373 U.S. 546, 552-562 (Arizona I).)

This history was marked by "the inability of local groups or individual States to deal with

these enormous problems; the continued failure of the States to agree on how to conserve

and divide the waters; and the ultimate action by Congress at the request of the States

creating a great system of dams and public works nationally built, controlled, and

operated for the purpose of conserving and distributing the water." (Id. at p. 552.) The

QSA Cases decision discusses this history in detail. (QSA Cases, supra, 201 Cal.App.4th

at pp. 776-792.) For our purposes, it suffices to highlight certain salient events, as well as

matters particular to California irrigation history and the District.

11
 California enacted the Wright Act in 1887, which "gave irrigation districts the

power to construct and maintain irrigation and drainage systems," and passed amended

versions in the decades to follow. (Turlock Irr. Dist. v. Hetrick (1999) 71 Cal.App.4th

948, 951.)

The District's predecessor, the California Development Company (CDC), was

formed in the late 1890's to irrigate the Imperial Valley with diverted Colorado River

water. (See Thayer v. Cal. Dev. Co. (1912) 164 Cal. 117, 120 (Thayer).) The CDC

posted a notice of appropriation. (Ibid.)8 Individuals also posted notices of

appropriation, and later assigned their rights to the CDC. The CDC organized mutual

water companies to facilitate distribution to stockholders. (Id. at pp. 122-123; see ibid.

[landowners could purchase stock, which entitled them to a certain amount of water per

share].) Water was also furnished to the City of Imperial and to a power company. (Id.

at p. 123.) Southern Pacific Company took a controlling interest in CDC, and later

foreclosed.

In 1902, Congress enacted the Reclamation Act, to facilitate water reclamation in

the West through the construction and operation of dams, reservoirs, and canals.

(California v. U.S. (1978) 438 U.S. 645, 648-650.) The Reclamation Act and

supplemental legislation "generally limited to 160 acres the amount of private land in

single ownership eligible to receive water from a reclamation project." (Bryant v. Yellen

8 A notice of appropriation was an early method of asserting appropriative rights, as
was actual use. (Civ. Code, § 1415; De Necochea v. Curtis (1889) 80 Cal. 397, 407-408
(Curtis).) We discuss appropriative rights in more detail, post.

12
(1980) 447 U.S. 352, 360, 368, fn. 19 (Bryant); see id. at p. 365 [parties included class

representatives for Imperial Valley landowners with more than 160 acres].) However, the

Reclamation Act provided that it would not " 'affect any right of any State . . . or of

any . . . user of water in, to, or from any interstate stream or the waters thereof.' "

(Arizona I, supra, 373 U.S. at p. 623.)

The District was organized in 1911. It posted a notice of appropriation in 1913,

then acquired the CDC's water rights in 1916 from the Southern Pacific Company

following foreclosure, and absorbed the mutual water companies between 1922 and 1923.

The District has been "solely responsible since that time for the diversion, transportation,

and distribution of water from the Colorado River to the Imperial Valley." (Bryant,

supra, 447 U.S. at p. 357, fn. 3.)9

Efforts to divert water from the Colorado River continued in California and the

other basin states—Wyoming, Colorado, Utah, New Mexico, Arizona, and Nevada.

(QSA Cases, supra, 201 Cal.App.4th at pp. 777-778.) In 1922, these states entered a

compact (1922 Compact) to, among other things, apportion water between the lower and

9 Abatti contends that farmers formed the District, while the District states that it
was established by popular vote. These claims are not necessarily at odds; current law
requires landowner support for a petition to form a water district, but permits all residents
to vote on formation. (Choudhry v. Free (1976) 17 Cal.3d 660, 662-663 (Choudhry).) In
any event, the parties do not explain how the manner in which the district was originally
formed impacts its status once formed. Abatti's amici contend that Imperial Valley
landowners founded the CDC, but they cite nothing to support this assertion. (Cf.
Thayer, supra, 164 Cal. at p. 121 [when CDC was organized, Imperial Valley "was
unoccupied . . . and substantially the whole thereof was surveyed public land"]; Arizona
I, supra, 373 U.S. at pp. 552-553 ["group of people interested" in Imperial Valley had
idea to divert water].)

13
upper basins. (Id. at p. 779.) Article VIII of the compact stated that "[p]resent perfected

rights to the beneficial use of waters of the Colorado River System are unimpaired by this

compact."

In 1928, Congress passed the Boulder Canyon Project Act (Project Act), which

incorporated the 1922 Compact, and went into effect on June 25, 1929. (Pub. L. No. 70-

642, 45 Stat. 1057, codified as amended at 43 U.S.C. §§ 617-619.) The Project Act

authorized the construction of "a dam and other works" to regulate the river and distribute

water, among other purposes. (QSA Cases, supra, 201 Cal.App.4th at p. 780.) It also

incorporated a "complete statutory apportionment intended to put an end to the long-

standing dispute over Colorado River waters." (Ibid.) Under the Project Act, California

was limited to 4.4 million acre-feet (MAF), and certain surplus amounts. (Id. at p. 782.)

Section 6 stated that "the dam and reservoir provided for by section 1 hereof shall be

used: First, for river regulation, improvement of navigation, and flood control; second,

for irrigation and domestic uses and satisfaction of present perfected rights in pursuance

of Article VIII of said Colorado River compact; and third, for power." (43 U.S.C.

§ 617e.)

In 1931, the District and other California water entities entered into a Seven-Party

Water Agreement. The District's priorities entitled it to amounts not to exceed 3.85 MAF

under that agreement. In 1932, the District entered into a contract with the United States

for water delivery consistent with those priorities, the 1922 Compact, and the Project Act,

and for dam and canal construction (1932 Contract).

14
 The District applied for a permit from the predecessor to the State Board in 1933,

and in 1950 it received Permit No. 7643 to appropriate up to 3.85 MAF of Colorado

River water annually. The permit indicated that the water would be for domestic and

irrigation use. The permit further provided that it was subject to vested rights and was

without prejudice to rights under appropriation. Municipal use was added to the District's

permit in or after 2002.

Arizona sued to resolve disputes concerning the allocation of water from the

Colorado River, including whether state law would control allocation. This led to the

United States Supreme Court decision in Arizona I. (Arizona I, supra, 373 U.S. at

p. 560.) In that case, the Court held that allocation of Colorado River water is governed

by "the [Project] Act and the Secretary [of the Interior's] contracts, not the law of prior

appropriation . . . ." (Id. at pp. 585-586.) The Court noted that "[o]ne of the most

significant limitations in the Act is that the Secretary is required to satisfy present

perfected rights, a matter of intense importance to those who had reduced their water

rights to actual beneficial use at the time the Act became effective." (Id. at p. 584, citing

§ 6 of the Project Act.) In a 1964 decree, the Court defined "perfected right" as "a water

right acquired in accordance with state law, which right has been exercised by the actual

diversion of a specific quantity of water that has been applied to a defined area of land or

to definite municipal or industrial works. . . ." (Arizona v. California (1964) 376 U.S.

340, 341 (Arizona II).) The Court defined "present perfected rights" as rights perfected

as of June 25, 1929, the effective date of the Project Act. (Ibid.) In 1979, the Court

entered a decree setting forth the present perfected rights. (Arizona v. California (1979)

15
439 U.S. 419 (Arizona III).) The decree stated that the District had present perfected

rights in "annual quantities not to exceed (i) 2,600,000 acre-feet of diversions from the

mainstream or (ii) the quantity of mainstream water necessary to supply the consumptive

use required for irrigation of 424,145 acres and for the satisfaction of related uses,

whichever of (i) or (ii) is less, with a priority date of 1901." (Id. at p. 429.)10

California was able to continue using more than its allotment of Colorado River

water, until other states increased their use. (QSA Cases, supra, 201 Cal.App.4th at

pp. 773, 785.) In the 1990's, the federal government required that California implement a

strategy to limit its water use. (Id. at p. 788.) Negotiations over water issues in Southern

California culminated in the 2003 QSA and related arrangements, which were intended to

resolve disputes among the District, other Southern California water entities, and the

government about priority, use, and water transfers. The QSA limited the District's

entitlement to 3.1 MAF. (Id. at p. 784.)

The 2013 EDP and this litigation eventually followed, as we discuss post. The

superior court addressed the parties' rights in its statement of decision. The court

determined that the District holds "appropriative rights to Colorado River water"; that its

property is "in trust for its use and purposes"; and that the District is required to establish

rules for equitable water distribution under Water Code section 22252.11 The court also

10 Additional proceedings followed in Arizona, but they do not impact this appeal.

11 Further statutory references are to the Water Code, unless noted. We still identify
the Water Code as needed for purposes of clarity.

16
determined that the District's users "own the equitable and beneficial interest in the water

rights," and that the "farmers' equitable and beneficial interest in the water rights is

appurtenant to their lands and is a constitutionally protected property right." The court

proceeded to find that the "beneficial use of Colorado River water . . . in the early 1900s"

by farmers, including Abatti's ancestors, perfected the District's water rights (and,

subsequently, that the "only source" of District water is from rights acquired through

"agricultural interests in the Imperial Valley").12

2. Applicable law

a. Overview of California water law

"California operates under a 'dual' or hybrid system of water rights which

recognizes both doctrines of riparian rights and appropriation rights." (United States v.

State Water Resources Control Bd. (1986) 182 Cal.App.3d 82, 101 (United States).)

"The riparian doctrine confers upon the owner of land the right to divert the water

flowing by his land for use upon his land. . . ." (Ibid.; see Santa Barbara Channelkeeper

v. City of San Buenaventura (2018) 19 Cal.App.5th 1176, 1183-1184 (Channelkeeper)

[noting similar principles govern groundwater rights].)

Appropriative rights "confer[] upon one who actually diverts and uses water the

right to do so provided that the water is used for reasonable and beneficial uses and is

12 The parties use the term "Law of the River," which refers to the federal obligations
"that govern the allocation and use of the water of the Colorado River." (Grand Canyon
Trust v. U.S. Bureau of Reclamation (9th Cir. 2012) 691 F.3d 1008, 1019, fn. 13.) We
refer instead to the specific authorities, as necessary to our discussion.

17
surplus to that used by riparians or earlier appropriators." (United States, supra, 182

Cal.App.3d at pp. 101-102; Nicoll v. Rudnick (2008) 160 Cal.App.4th 550, 556 (Nicoll)

[" 'Both riparian and appropriative rights are usufructuary only and confer no right of

private ownership in the watercourse.' "].) "Although there is no private property right in

the corpus of the water . . . , the right to its use is classified as real property." (Fullerton

v. State Water Resources Control Bd. (1979) 90 Cal.App.3d 590, 598.) Appropriative

water rights are ordinarily appurtenant to the land. (Ibid.)

Abatti emphasizes the appurtenant nature of the farmers' rights, so we briefly

address the meaning of the term. An "appurtenance" is "something attached to something

else," and has long been used in reference to land and easements. (Black's Law Dict.

(11th ed. 2019); ibid. ["appurtenant rights" cross-references to "secondary easement," one

"appurtenant to the primary . . . easement; the right to do things . . . necessary to fully

enjoy the easement"].) Accordingly, Civil Code section 662 defines an appurtenance to

land as a "thing . . . deemed to be incidental or appurtenant to land when it is by right

used with the land for its benefit, as in the case of a way, or watercourse, or of a passage

for light, air, or heat . . . ." Thus, "appurtenant" denotes that the water right or interest is

attached to land, but does not denote its type or scope. (See, e.g., Stanislaus Water Co. v.

Bachman (1908) 152 Cal. 716, 724 [contractual right to water delivery for irrigating

specific land became easement appurtenant]; City of Pasadena v. City of Alhambra

(1949) 33 Cal.2d 908, 925 [overlying water right "is based on ownership of the land and

is appurtenant thereto"]; Nicoll, supra, 160 Cal.App.4th at p. 561 [appropriative right was

appurtenant to entire property, and subsequent owner was entitled to portion thereof].)

18
Thus, an appurtenant, appropriative water right is one associated with land. A right to

water service can also be appurtenant to land (Erwin v. Gage (1964) 226 Cal.App.2d 189,

194 (Erwin)), and as discussed in more detail post, that is the appurtenant right held by

the farmers.

"Initially, rights to appropriate water were acquired by actual diversion and use of

the water." (United States, supra, 182 Cal.App.3d at p. 102; see Curtis, supra, 80 Cal. at

pp. 407-408 [addressing notice of appropriation as another way to assert appropriative

rights].) "Beginning in 1914, however, a statutory scheme has provided the exclusive

method of acquiring appropriation rights" in California. (United States, at p. 102.) An

application is made to the State Board "for a permit authorizing . . . the taking and use of

a specified quantity of water." (Ibid; see § 1201, et seq.)

"Superimposed on the dual system for defining water rights are two limiting

principles. First is the rule of reasonableness: 'the overriding constitutional limitation

that the water be used as reasonably required for the beneficial use to be served.' "

(Channelkeeper, supra, 19 Cal.App.5th at p. 1184; see Cal. Const. Art. X, § 2,

["conservation of . . . waters is to be exercised with a view to the reasonable and

beneficial use thereof in the interest of the people and for the public welfare"];

Channelkeeper, at p. 1184 [right to use water is limited to that " ' reasonably required for

the beneficial use to be served' "].) Reasonable use is "dependent upon not only the

entire circumstances presented but varies as the current situation changes."

(Environmental Defense Fund v. E. Bay Mun. Util. Dist. (1980) 26 Cal. 3d 183, 194.)

Beneficial uses are "categories of water use." (Channelkeeper, at p. 1185.) Under Water

19
Code section 106, it is "the established policy of this State that the use of water for

domestic purposes is the highest use of water and that the next highest use is for

irrigation." Other beneficial uses include municipal, industrial, and aquaculture. (Cal.

Code Regs., tit. 23, § 659, et seq.)

A second limit on water rights is "the public trust doctrine." (Channelkeeper,

supra, 19 Cal.App.5th at p. 1184.) This doctrine derives from the principle that water is a

shared resource, and has been applied to find that " 'parties acquiring rights in trust

property,' such as water flowing in a stream, 'generally hold those rights subject to the

trust . . . .' " (Id. at p. 1186.)

b. Irrigation districts

The current Irrigation District Law was enacted in 1943. (Wat. Code, § 20500, et

seq.) Section 22437 provides that "[t]he title to all property acquired by a district is held

in trust for its uses and purposes." Earlier irrigation acts contained similar provisions.

(Wright Act, § 13 [property acquired by the district would be held "in trust" and

"dedicated and set apart to the uses and purposes" under the act]; Wright-Bridgford Act,

§ 29 [accord].) Property includes "all real and personal property, including water, water

rights, works, franchises, concessions and rights." (§ 20529; see ibid. [except as applied

to assessments].)

"The ultimate purpose of a district organized under the Irrigation Act is the

improvement, by irrigation, of the lands within the district." (Jenison v. Redfield (1906)

149 Cal. 500, 503 (Jenison).) Their core purposes include supporting other beneficial

uses as well. (Crawford v. Imperial Irr. Dist. (1927) 200 Cal. 318, 329 (Crawford)

20
["prime object and purpose" is to "provide water for the use of its inhabitants and land

owners for irrigation and domestic purposes"]; City of Modesto v. Modesto Irrigation

Dist. (1973) 34 Cal.App.3d 504, 507 (Modesto) [district's "main purpose is to develop,

preserve and conserve water for the beneficial use of the inhabitants"].)

A primary duty of irrigation districts is to distribute water. Statutory provisions

govern distribution. Section 22252, the provision under which the District distributes

water, provides: "When any charges for the use of water are fixed by a district the water

for the use of which the charges have been fixed shall be distributed equitably as

determined by the board among those offering to make the required payment." Irrigation

districts have other responsibilities as well, including drainage, electrical power, and

flood control. (§ 22075, et seq.)

Multiple provisions of the Water Code authorize irrigation districts to carry out

their purposes and duties and accord them broad discretion in doing so. (See, e.g.,

§ 22075 ["A district may do any act necessary to furnish sufficient water in the district

for any beneficial use"]; § 22076 ["A district may do any act in order to put to any

beneficial use any water under its control"]; § 22225 ["Each district has the power

generally to perform all acts necessary to carry out fully the provisions of this division"];

see also § 22437 ["The district may hold, use, acquire, manage, sell, or lease the property

as provided in this division"]; see Baldwin Park Cnty. Water Dist. v. Cnty. of Los Angeles

(1962) 208 Cal.App.2d 87, 90 (Baldwin Park) ["Legislature has given broad powers to

irrigation districts with respect to the control and distribution of water"]; Crawford,

supra, 200 Cal. at p. 329 [powers are "broad and comprehensive"].)

21
 Finally, California courts have long held that irrigation districts operate in a public

capacity. (See Jenison, supra, 149 Cal. at p. 503 [irrigation district "when formed is a

public corporation"]; Clough v. Compton-Delevan Irr. Dist. (1938) 12 Cal.2d 385, 388

(Clough) [addressing Wright-Bridgford Act § 29, regarding property being held in trust:

"The property is by this language impressed with the public use"]; Allen v. Hussey (1950)

101 Cal.App.2d 457, 467 (Allen) [irrigation district is "an active trust for public uses and

purposes"].)

c. Irrigating landowners

In Merchants' National Bank of San Diego v. Escondido Irrigation District (1904)

144 Cal. 329 (Merchants), the California Supreme Court held that landowners have a

beneficial and equitable interest in the irrigation district's property, consisting of a right to

use or service:

"[T]he [irrigation district] is distinguished from ordinary municipal
corporations by the fact that 'the legal title,' only of the property of
the corporation is vested in the district, 'in trust for the uses and
purposes set forth in [the] act'; and that the beneficiaries of the
trust[,] who, upon familiar equitable principles, are to be regarded as
the owners of the property[,] are the landowners in the district . . .
and in whom, indeed, is vested . . . in each, the right to the several
use of a definite proportion of the water of the district, and in all, in
common, the equitable ownership of its water rights . . . as the means
of supplying water. (Stats. 1887 . . . , secs. 11, 13 [Wright Act].)"

(Id. at p. 334; ibid. [rejecting lender's claim to district's water system], limited on other

grounds in La Mesa, Lemon Grove & Spring Val. Irr. Dist. v. Halley (1925) 197 Cal. 50,

59-60.) The Merchants court further explained that these rights are indistinguishable

22
"from other private rights," and are protected under the state and federal constitutions.

(Merchants, at p. 334.)

The California Supreme Court applied these principles in subsequent cases. (See,

e.g., Hall v. Sup. Ct. (1926) 198 Cal. 373, 376-378, 383 (Hall) [affirming injunction

barring landowner Imperial County judges from presiding over an action for damages

against a water company whose interests were purchased by the District; as "equitable

owners" of District property, they had a proprietary interest in the case].) In the Ivanhoe

Irrigation District litigation, the California Supreme Court affirmed the rejection of a

federal contract that incorporated the Reclamation Act's 160-acre limit. (Ivanhoe Irr.

Dist. v. All Parties (1957) 47 Cal.2d 597, 606-607, 625 (Ivanhoe I), rev'd on other

grounds sub nom. Ivanhoe Irr. Dist. v. McCracken (1958) 357 U.S. 275 (Ivanhoe II).)

The Court reasoned that the state functioned as a trustee of its domestic waters for the

benefit of users, and that under state law, the right to use water could not be limited based

on acreage; the Reclamation Act prohibited interference with state law; and the interest of

the United States was thus subject to the terms of the trust. (Ivanhoe I, at pp. 625-628,

637-638.) In reaching this conclusion, the Court observed that "[i]t has long been the

23
established law of the state that an irrigation district is trustee for the landowners," citing

Merchants and other cases. (Id. at p. 625.)13

In Bryant, the United States Supreme Court addressed the relationship between

irrigation districts and landowners in concluding that the Reclamation Act's 160-acre cap

limit did not apply to District lands for which the District held present perfected rights.

(Bryant, supra, 447 U.S. at p. 356.) The Court rejected the Ninth Circuit's view that

"landowners . . . were merely members of a class" for whom the water was held in trust,

and that the 160-acre limit "would merely require reallocation . . . ." (Id. at p. 369.) The

Court determined that the Ninth Circuit had failed to take adequate account of Arizona, in

which the Court had "recognized that § 6 of the Project Act, requiring satisfaction of

present perfected rights" was a limit on the government's power. (Id. at pp. 370-371.)

The Court explained:

"It may be true . . . that no individual farm in the District has a
permanent right to any specific proportion of the water held in trust
by the District. But there is no doubt that prior to 1929 the District,
in exercising its rights as trustee, delivered water to individual
farmer beneficiaries without regard to the amount of land under
single ownership. . . . Indeed, as a matter of state law, not only did
the District's water right entitle it to deliver water to the farms in the
District regardless of size, but also the right was equitably owned by
the beneficiaries to whom the District was obligated to deliver

13 The United States Supreme Court reversed, holding that the federal contract
incorporating the Reclamation Act limit there was valid, for reasons not pertinent to this
appeal. (Ivanhoe II, at p. 278.) On remand, the California Supreme Court repudiated the
trust theory as to the state, but did not revisit the relationship between the irrigation
district as trustee and its users. (Ivanhoe Irr. Dist. v. All Parties (1960) 53 Cal.2d 692,
715-716 (Ivanhoe III).)

24
 water." (Id. at p. 371, citing Ivanhoe I, supra, 47 Cal.2d at pp. 624-
625.)

(See Bryant, at p. 371, fn. 23 [landowners have "legally enforceable right, appurtenant to

their lands, to continued service by the District," citing, inter alia, Erwin, supra, 226

Cal.App.2d at pp. 194-195]; see also Bryant, at p. 356, fn. 1 [District is "empowered to

distribute and otherwise administer water for the beneficial use of its inhabitants"].)14

At the same time, the California Supreme Court has held that landowner water

rights are subordinate to District purposes. (Jenison, supra, 149 Cal. at pp. 503-504

["The right of a landowner of the district to the use of the water . . . is a right to be

exercised in consonance with and in furtherance of such ultimate purpose,—viz. for the

improvement by irrigation of lands within the district,—and in no other way. His right is

always in subordination to the ultimate purpose of the trust"], italics added).

The foregoing authorities reflect that irrigating landowners like Abatti possess an

equitable and beneficial interest in the District's appropriative water rights that is

appurtenant to their lands and consists of a right to service.

14 The Court observed that the District is required "to apportion water . . . ratably to
each landowner in accordance with his share of the total assessments," citing section
22250. (Bryant, at p. 371, fn. 23.) The Court was referring to an assessment system that
is no longer in use, and we do not view this statement as impacting its larger analysis.
Separately, we reject amicus State Board's contention that Bryant mistakenly relied on
the trust theory repudiated in Ivanhoe III. The Court noted all three Ivanhoe decisions,
and Ivanhoe III did not repudiate the theory as to irrigation districts. (Bryant, supra, 447
U.S. at pp. 371, fn. 23, 377; Ivanhoe III, supra, 53 Cal.2d at pp. 715-716.)

25
 3. Analysis

Having reviewed the historical and legal landscape, we now turn to the parties'

arguments and the superior court's conclusions regarding the nature of farmers' rights.

a. Parties' arguments regarding farmers' rights

We begin with Abatti, who makes a number of arguments to support his view of

farmers' rights.15 None has merit.

As a preliminary matter, Abatti contends that the District's purpose is to enable

landowners to irrigate and that its powers are "narrower" than those of other municipal

corporations. However, the District's purposes and powers extend beyond irrigation, as

discussed ante, and it is obligated to provide equitable service to all beneficial users; the

authority held by other municipal entities is irrelevant. (See Crawford, supra, 200 Cal. at

pp. 325-326, 329 [irrigation district is not a municipal corporation, but it is a " 'public

corporation for municipal purposes,' " with broad powers]; see Modesto Irrigation Dist. v.

Pacific Gas and Elec. Co. (N.D. Cal. 2004) 309 F.Supp.2d 1156, 1164-1165

[" 'municipal corporation' label is neither talismanic nor particularly instructive"].)

15 We limit our discussion of Abatti's arguments to issues properly raised in his
combined brief. The District and Abatti briefed the parties' rights in connection with the
District's appeal. However, Abatti devoted much of his cross-appellant's reply brief to
the issue, including addressing the reply portion of the District's combined brief, under
the guise of "establishing the . . . water rights" to show that the breach and taking claims
have merit. We do not consider these points. (Hawran v. Hixson (2012) 209 Cal.App.4th
256, 268 [cross-appellant " 'may not use its cross-appellant's reply brief to answer points
raised in the appellant's reply brief.' "].) We also do not consider arguments newly raised
in the amicus answer briefing.

26
 Turning to Abatti's central argument, he contends that the farmers have vested,

appurtenant property rights to use water for their "reasonable irrigation needs" and in

their "usual manner," and that they should have priority over other non-domestic users.

As noted ante, Abatti is essentially arguing that farmers have a right to receive the

amounts of water that they have historically used to irrigate their crops. This argument is

contrary to both the case law regarding irrigation districts and their users, and the

principle of reasonable use. (See Merchants, supra, 144 Cal. at pp. 333-334 [landowners

have right to "several use of a definite proportion of the water of the district, and in all, in

common, the equitable ownership of its water-rights"]; Modesto, supra, 34 Cal.App.3d at

p. 507 [district's purpose is to "develop, preserve, and conserve" water for "beneficial use

of the inhabitants"]; Bryant, supra, 447 U.S. at p. 371 [no farm in the District has

"permanent right to any specific proportion of the water"]; cf. Allegretti & Co. v. County

of Imperial (2006) 138 Cal.App.4th 1261, 1279 (Allegretti) [overlying user's "claim to an

unlimited right to use as much water as it needs to irrigate flies in the face" of reasonable

use standard].)

Abatti's position appears to be that historical use by the farmers' ancestors

established their vested rights to continue to receive the amounts of water that they have

been using to meet their irrigation needs, as equitable and beneficial owners of

appurtenant interests in the District's water rights, and that these vested rights have been

preserved, including in the District's permit. He relies on authority holding that

appurtenant water rights are measured by reasonable use. However, Abatti does not

establish that the farmers possessed any such vested rights in the first place.

27
 The farmers may have a vested, appurtenant right, but that right consists of an

appurtenant right to service, not an appurtenant water right. Erwin recognized this

distinction in rejecting a shareholder effort to block a canal company settlement. (Erwin,

supra, 226 Cal.App.2d at p. 192.) The court found that the shareholders' position

"presuppose[d] that it is the water right itself . . . that is appurtenant to the land of each

shareholder," but that the real issue was "whether it is the water right or simply the right

to receive water, that is appurtenant . . ." (Ibid.) Looking to the company's history of

conveyances, the court concluded that the shareholders "own a right to have water

delivered . . . ." (Id. at pp. 193.)

Similarly, here, the farmers have an appurtenant right to water service, rather than

an appurtenant water right, dictated by the history of water rights in the Imperial Valley

and by the law governing irrigation districts.16 Present perfected rights based primarily

on agriculture do form a basis for the District's entitlement to Colorado River water,17

but as the United States Supreme Court's decree in Arizona made clear, those rights are

held by the District, not the farmers. (Arizona III, supra, 439 U.S. at p. 429.) And it is

the District that holds title to the appropriative rights to the Colorado River water that

16 Cf. Empire West Side Irrigation Dist. v. Lovelace (1970) 5 Cal.App.3d 911, 913
[distinguishing Erwin in concluding landowners could challenge agreement between
irrigation districts, where it was previously determined that one of the water entities was
trustee for water rights that remained with certain lands].)

17 The District's present perfected rights entitle it to the lesser of 2.6 MAF or enough
water to service certain acreage. (Arizona III, supra, 439 U.S. at p. 429.) The Seven
Party Agreement allows for 3.85 MAF, which was limited to 3.1 MAF under the QSA.

28
comes into the Imperial Valley; as discussed post, Abatti does not establish the farmers

hold any pre-1914 rights. Thus, the farmers do not hold traditional appropriative rights

entitling them to "divert[] and use[] water" (United States, supra, 182 Cal.App.3d at

pp. 101-102), other than as beneficial owners of the District's rights. That beneficial

ownership entitles them only to water service from the District.

In turn, Abatti's reliance on the principle that "[t]he appurtenant water right is

'measured by the amount of water that is reasonably and beneficially used on the land' " is

misplaced. It is true that with appropriative water rights acquired by use, "the extent of

the right . . . is limited to the amount of water applied to a beneficial use" and "reasonably

necessary" for that use. (Haight v. Costanich (1920) 184 Cal. 426, 431; cf. 43 U.S.C.

§ 372 [beneficial use is the measure of the right to use water acquired under the

Reclamation Act].) Reasonable use is also a limit on all water rights, as discussed ante.

(Channelkeeper, supra, 19 Cal.App.5th at p. 1184.) But, again, the farmers do not hold

appurtenant water rights; they hold appurtenant rights to water service.

Having failed to establish any entitlement to a particular level of continued water

service, Abatti's position amounts to an assumption that the appurtenant nature of the

farmers' right to service—the fact that it is linked to their land—renders it superior to

other users' rights to water service. We are not persuaded. All beneficial users have a

right to service, consistent with the District's statutory obligations to equitably distribute

29
water. Although some users may warrant different treatment in that distribution, the right

itself remains one to water service.18

However, we reject the District's argument that "a constitutionally protected

property right—as opposed to continued service of water—is inconsistent with statutory

and extensive case law." The District presents a false dichotomy. The farmers are

beneficial owners of the District's water rights, which entitles them to a right to service,

and that right is constitutionally protected. Thus, the farmers are entitled to appropriate

consideration in the District's equitable distribution of water to all of its users. The cases

cited by the District illustrate that users cannot acquire legal ownership of district

property, including water rights, or receive water outside the district—not that farmers

lack beneficial ownership interests. (See, e.g., Glenn Colusa Irrigation District v.

Paulson (1925) 75 Cal.App. 57, 69, 71-72 ["no private estate can be created in property

devoted to a public use"]; Hildreth v. Montecito Creek Water Co. (1903) 139 Cal. 22, 24,

29 [beneficiaries had no rights to private ownership of water]; Madera Irrigation District

v. All Persons, Etc. (1957) 47 Cal.2d 681, 691-693, rev'd on other grounds sub nom. in

18 We recognize that deprivation of a beneficial ownership right could potentially
give rise to remedies different from remedies available for deprivation of other rights, but
this does not change the nature of the entitlement itself. Lindsay-Strathmore Irr. Dist. v.
Wutchumna Water Co. (1931) 111 Cal.App. 688, cited by Abatti here, does not aid him.
The case involved an irrigation district's entitlement to a particular share of water from a
water company, not a water user's entitlement to a particular amount of water from an
irrigation district, and is otherwise distinguishable. (Id. at pp. 701-702 [after irrigation
district purchased stock in water company, company passed resolution limiting water
deliveries; resolution was discriminatory and void insofar as it interfered with district's
"right . . . to receive the proportion of water to which it was entitled by virtue of its shares
of stock"].)

30
Ivanhoe II [owners of lands excluded from district could not receive water, as there was

no right to receive water outside the district; indicating nothing therein was inconsistent

with cases holding that irrigation district members are "beneficial owners" of its water

rights].)19

In what appears to be a separate effort to diminish the nature of farmers' rights, the

District contends that "the Irrigation District Law does not create a trust in the classic

probate sense." Irrigation districts hold their property in trust under the Water Code, not

the Probate Code, but landowners still hold a beneficial interest in that property.

(§ 22437; Merchants, supra, 144 Cal. at pp. 333-334.)20

19 The District also cites section 22262, which provides that "[n]o right in any water
or water right owned by the district shall be acquired by use . . . ." It elsewhere argues
that the section underscores that historical use cannot ripen into entitlement. Abatti
contends that the section "can only be read to prevent new water users" from claiming an
interest. Neither party provides any statutory analysis, and we do not address these points
further. We note that water service has been recognized as a property interest in other
contexts. (Cf., e.g., Erwin, supra, 226 Cal.App.2d at p. 194; De Boni Corp. v. Del Norte
Water Co. (2011) 200 Cal.App.4th 1163, 1167-1168 ["shareholder's stake in a mutual
water company is a property interest," with consumers entitled to receive water].)

20 We also reject the District's reliance on Clough, supra,12 Cal.2d at pp. 388-389 to
contend that "it is futile to attempt to discover the 'beneficiaries . . . .' " Clough was one
of multiple cases addressing the rights of bondholders in irrigation districts. (Id. at
pp. 387-388; El Camino Irr. Dist. v. El Camino Land Corp. (1938) 12 Cal.2d 378, 380-
381; Provident v. Zumwalt (1938) 12 Cal.2d 365, 368.) The Court disagreed that
bondholders could be exclusive beneficiaries and thus rejected partition of district land as
a remedy (Clough, at pp. 388-389), but the Court confirmed elsewhere that a trust must
have beneficiaries. (Zumwalt, at p. 375 ["It would be manifestly absurd to say that
although property is held in trust, none of the benefits of the trust accrue to the
beneficiaries"].)

31
 Abatti raises two related issues here. First, Abatti contends that because the

District's predecessor, the CDC, held water rights for private use, those rights remained

private following establishment of the District. The District responds that it is a public

entity, and that there was no reservation of title at the time it purchased from the Southern

Pacific Company the water rights that the CDC had previously held. We need not delve

into the contours of title reservation, but we agree with the District's general point: an

irrigation district is public. Absent some indication that property conveyed to the District

was to remain separate and private, we see no basis for treating it as such. (Erwin, supra,

226 Cal.App.2d at pp. 193-194 [canal company shareholders who possessed only right to

service could not block settlement; history "reflect[ed] no reservation of title by the

owners who conveyed the various water rights"].)

The cases that Abatti cites do not support his position. Thayer confirmed that the

CDC had not dedicated water to public use, in reversing a judgment requiring water

delivery to a landowner who did not own mutual water company stock. (Thayer, supra,

164 Cal. at pp. 121-124, 131, 138.) That case was filed in 1910, before the District was

even formed, and decided in 1912; the Thayer court thus had no occasion to address the

District's later acquisition of the CDC's water rights and its absorption of the water

companies. (Id. at p. 120.) Abatti's reliance on cases holding that one who acquires

water rights must maintain water service is likewise misplaced. (See, e.g., City of South

Pasadena v. Pasadena Land & Water Co. (1908) 152 Cal. 579, 586-588 (South

Pasadena) [transfer of water rights from company to city did not relieve service

obligation; mandamus could "compel the continuance of the distribution, in the usual and

32
proper manner"]; Brooks v. Oakdale Irr. Dist. (1928) 90 Cal.App. 225, 240-241 [grantees

of water system had obligation to continue same service].) The issue is not whether the

District had to continue to provide service upon acquiring its water rights; that appears to

be undisputed. Hall is simply inapposite. (Hall, supra, 198 Cal. at p. 383 [landowner

judges had proprietary interest].)21

Second, Abatti contends that, "the [District's] [f]armers have pre-1914 water

rights" (i.e., appropriative rights acquired through use or notice prior to the current

statutory regime). Abatti raised this argument in the superior court. The court did not

find that farmers possessed such rights but instead, found that the farmers hold a

beneficial and equitable interest in the District's water rights. Abatti does not contend on

appeal that this finding is erroneous. Further, Abatti identifies no evidence that would

support a finding that farmers in the District possess pre-1914 water rights. His 2013

declaration states that his "family established itself in Imperial County over one hundred

years ago and has farmed land in the valley since that time," but does not state that they

21 Abatti also cites Greeson v. Imperial Irr. Dist. (S.D. Cal. 1931) 55 F.2d 321, aff'd,
59 F.2d 529 (9th Cir. 1932) to support his contention that the "Ninth Circuit recognized
that . . . [the District], as successor-in-interest . . . was obligated to honor the landowners'
'vested . . . right to have the supply continued [which right] becomes in the nature of an
appurtenance to the land.' " Greeson involved a landowner challenge to the 1932
Contract; the district court rejected it, because there was no present threat to the
landowners' interests (55 F.2d at p. 325); and the Ninth Circuit affirmed. The quoted
language is from the district court, which itself was quoting South Pasadena, and is not
dispositive, for the reasons discussed ante. In its affirmance, the Ninth Circuit
emphasized that the matter at issue was "not one alone affecting an individual citizen,"
and, rather, that water must be apportioned "for the common good." (59 F.2d at p. 533.)

33
owned the water rights. As noted, other individuals did hold appropriative rights, but

later assigned them to the CDC.22

b. The superior court erred in determining the farmers' rights

The superior court erred in determining the farmers' rights by embracing Abatti's

unduly narrow view of the District's purposes and his overly expansive view of farmers'

rights.

First, the superior court focused on the District's distribution of water, and mainly

as to farmers, consistent with Abatti's limited view of the District's purpose—but

inconsistent with California law. As discussed above, the District's purpose is not only to

support irrigation, but also to furnish and conserve water for all beneficial users (e.g.,

Jenison, supra, 149 Cal. at p. 503; Modesto, supra, 34 Cal.App.3d at p. 507), and the

District has broad powers to "control and distribut[e]" water consistent with these

purposes. (Baldwin Park, supra, 208 Cal.App.2d at p. 90; see, e.g., § 22075 [district may

do "any act necessary" to furnish water in district "for any beneficial use"].) Further, a

22 Additionally, although pre-1914 rights holders do not need a State Board permit,
they are subject to its oversight and must file a statement of diversion and use. (Cal.
Farm Bureau Fed. v. State Water Res. Control Bd. (2011) 51 Cal.4th 421, 428-429;
§ 5101.) Abatti has not established that he or other District farmers have filed such
statements with the State Board, and the State Board has recognized the District, not
individual farmers, as the pre-1914 rights holder. (See Imperial Irrigation Dist. v. State
Water Res. Control Bd. (1986) 186 Cal.App.3d 1160, 1163, fn. 4.) Amicus IVC seeks
judicial notice of documents that purportedly reflect that Abatti and other landowners
tried to file statements of diversion in 2006, and the State Board rejected them. We
decline to take judicial notice, because the materials are not necessary to address Abatti's
argument regarding pre-1914 rights.

34
water user's asserted water needs are subordinate to the purpose of the District to serve all

users. (See Jenison, supra, 149 Cal. at p. 504.)

Second, the superior court impliedly accepted Abatti's erroneous view that farmers

have vested rights to receive the amounts of water that they have historically used to

irrigate their crops, as evidenced by certain of its rulings, including that the District

cannot transfer "perfected water rights" to other beneficiaries without consideration and

that the District must use historical apportionment for farmers. In accepting this view,

the court appears to have accorded undue significance to the appurtenant nature of the

farmers' interests, including by failing to recognize that they hold appurtenant rights to

water service only, and to the role that farmers played in perfecting the District's water

rights—a role that the court twice notes. We discussed appurtenance and the present

perfected rights ante. Further, pursuant to state law, under which the water rights

originate, the farmers' rights are to water service, and not more. In addition, the District's

present perfected rights are not based entirely on farming, but are based on municipal and

industrial use, as well. (See Arizona II, supra, 376 U.S. at p. 341 [perfected rights are

based on diversion of water to defined land area or to "definite municipal or industrial

works"].)

In sum, the District has broad purposes and powers, and although the farmers

possess an appurtenant right to water service, that right does not entitle farmers to a

particular amount of water or to absolute priority over other non-domestic users with a

right to service, and it does not limit the District's authority to satisfy its other obligations.

35
The extent to which the District balances these obligations implicates questions of

discretion and policy, not rights. We address those questions next.23

C. The District's exercise of discretion

The superior court determined that the 2013 EDP is unfair and/or inequitable

because it prioritizes non-agricultural users over agricultural users and establishes straight

line apportionment among agricultural users as the default method of apportionment,

rather than a historical method. We conclude that the District did err in the manner in

which it prioritizes users, although for reasons different from the superior court's. We

further conclude that the District did not abuse its discretion in adopting the agricultural

allocation.24

23 The California Supreme Court has noted the "pervasive powers" of the District
specifically, albeit in a different context. (Choudhry, supra, 17 Cal.3d at pp. 663, 666
[holding that requirement that directors be landowners was unconstitutional as applied;
describing the various powers of the Board, the District's supplying "all the water and
electrical power needs of Imperial County" (and portions of other counties), and the
residents' lack of alternatives, and noting that the District's "pervasive powers" are
exercised over all residents, not just landowners].) As noted in the introduction, we
express no view regarding the application of this opinion to other irrigation districts or
their users. (See id. at p. 669 ["Imperial is singular among irrigation districts in that it has
more residents, land and employees than the others."].)

24 To minimize confusion that might result from using "apportionment" in multiple
contexts, we refer to the manner in which the 2013 EDP apportions water to agricultural
users as the "agricultural allocation."

36
 1. Additional background

a. The QSA and the Inadvertent Overrun Payback Policy

The QSA capped the District's entitlement at 3.1 MAF. The Inadvertent Overrun

Payback Policy (IOPP), adopted in connection with the QSA, "provide[d] a mechanism

for pay-back to the Colorado River system" from entitlement holders, due to "inadvertent

overuse by [those] holders. . . ." Payback had to be achieved through the implementation

of "extraordinary conservation measures," i.e. those beyond normal beneficial and

reasonable use, such as fallowing. As we explain post, the District would eventually

experience large overruns, subjecting it to these payback provisions.

Under the IOPP, the maximum overrun account for entitlement holders, such as

the District, was limited to 10 percent of the normal entitlement. Water "ordered but . . .

not diverted" was not included in the policy; the District understood the IOPP as not

providing credit for underuse. An entitlement holder with a payback obligation had to

submit a plan to the federal Bureau of Reclamation (Reclamation) to "show how it will

intentionally forbear use of Colorado River water by extraordinary conservation

measures," such as fallowing. If payback obligations were not on target for two

consecutive years, Reclamation would begin enforcement proceedings and limit releases

to that entitlement holder for the remainder of the year.

b. Conservation efforts and equitable apportionment study

Before we proceed to address the District's conservation efforts, we briefly

describe how the District delivers water to farmers and municipal users. For farmers, the

"basic unit for the delivery of water . . . is the gate. The lands served by a gate are

37
divided into fields and this division varies. Sometimes a single gate serves a single field;

sometimes a single gate serves more than one field; and . . . this [may] change[] over time

as the fields served by a gate are reorganized." For municipal users, the District generally

provides raw water to water agencies, which treat the water and distribute it to users

within their service areas.

To manage its obligations under the QSA and address potential overruns, the

District began using fallowing programs, under which it paid farmers to remove fields

from production. It later implemented efficiency-based conservation measures, through

which it paid farmers to pursue on-farm conservation efforts. The programs used a 10-

year water use history baseline. Fallowing required that each field have a water use

delivery history, and that multiple fields/tenants at a gate have "verifiable water use

records." The conservation program generally allowed for estimated baselines, but

required that all fields at a gate participate (or have deliveries measured individually).

The District also began evaluating how to equitably distribute its limited water

under the QSA. In December 2004, it retained Dr. Michael Hanemann and Mr. Bennett

Brooks to "evaluate alternative methods for the equitable apportionment of water" when

there was a "supply/demand imbalance (SDI) situation" (i.e., when "expected demand for

water [was] likely to exceed the supply expected to be available to the District").

Hanemann and Brooks reviewed reports, considered other districts in California, and

communicated with stakeholders.

Hanemann and Brooks provided their Draft Final Report to the District in August

2006. They explained that the District was "rather unique in California" in not allocating

38
water. It was also unique in having a "large amount of data," attributable to the fact that

it had a "sophisticated computerized data system for recording how much water is

delivered . . . ." They noted that the data were used "primarily for accounting and

billing," and explained that there were "errors whereby deliveries to one field . . . are

recorded as deliveries to another field in the same account," and that "while accurate at

the account level, the data are not necessarily accurate at the field level."

For primary agricultural uses (field crops and vegetables), Hanemann and Brooks

assessed the following methods of water apportionment: historical (soil group); historical

(field history); historical (grower/farm unit); pure straight line; and transition from

historical to straight line. Under soil group history, "each field would receive an

allocation based on the historical average delivery of all fields with that soil type . . . ."

Individual field history "allocates water to each individual field based on the specific

history of water use per acre on that field over a baseline period of time." Grower history

allocates water "to each individual water user or farming unit" based on their history of

water use. Under straight line apportionment, "all fields are allocated the same amount of

water per acre."

Hanemann and Brooks recommended against individual field or grower history, or

pure straight line without any transition. They found that using individual field history

39
would not be practical, due to data gaps and errors.25 They also did not believe that it

would be equitable, because there was "a large variation in field-level water use," much

of which appeared to be attributable to farming practices rather than to soil, crop,

irrigation method, or weather, which "undercut[] the notion that . . . individual field

history is inherently fairer . . . ." They elsewhere noted that if water use varied due to

farming practice, then variations "reflect[ed] differences in the interests and skills of

farmers and not necessarily differences in their needs per se." They also found that using

grower history would not be feasible, because there were not "sufficiently consistent

record[s] . . . ." The District's records, by account and gate, did "not necessarily

correspond to farming units," and some fields were leased. Hanemann and Brooks also

had "serious concerns about the implementation and equity" of that method.

Hanemann and Brooks explained that they would "recommend either [straight line

or soil group history] apportionment for an SDI situation." They noted the similarity of

the results of the two methods, but concluded that soil group was "likely to be a bit fairer

because it recognizes the differences between soil types." They made other

recommendations, as well. Specifically, they indicated that if straight line apportionment

were adopted, there should be a "transition period . . . to allow time for adjustment"; it

should be based initially on soil group; and it should last no more than 10 years. For

25 Hanemann and Brooks found that of the 7,000 fields with deliveries since 1987,
2,000 did not have a consistent history and 20-30 percent of those with consistent
deliveries "may have histories that are incomplete or questionable"—resulting in "as
many as 3,000 or more fields with histories that are problematic . . . ."

40
either straight line or soil group, they recommended allowing "transfers among fields

charged under the same account," which would provide flexibility. They also advised

that the apportionment "need[ed] to be complemented by permitting internal exchanges

of water within the District," again, to provide flexibility.26

Hanemann and Brooks also addressed apportionment to industrial and urban users

in the event of an SDI. For industrial users, they recommended focusing on water use

efficiency and District monitoring, and suggested that "the District should generally

impose a smaller reduction . . . or possibly no reduction . . ." on such users. For urban

users, they recommended apportionment per capita, by water agency, to account for

development and density. They further recommended that the District consider

conditions for the agencies, such as drought plans, and that if they met them, the "District

should generally impose on them a smaller reduction . . . ."

c. Adoption of the Equitable Distribution Plan and other efforts

In 2006, the District's Board of Directors (Board) adopted a resolution for

implementation of an equitable distribution plan for SDI conditions. The resolution

explained that straight line apportionment would be used "based upon the ease of

implementation and efficiency . . . ."

26 These recommendations pertain to field crops and vegetables, which comprise
most water use. The experts recommended a different method for permanent crops (e.g.
fruit trees). The District did not address permanent crops in the 2013 EDP, the parties do
not focus on them in their briefing, and we do not address them.

41
 The District proceeded to adopt the 2007 Equitable Distribution Plan. The

"Apportionment of Supply" section of the plan apportioned water in an SDI in the

following order: supply of last resort; municipal; industrial; feed lots, dairies, and fish

farms; environmental resources water; and agriculture. Agricultural users would receive

a straight line apportionment based on the available water supply, less the estimated

demand of other users. The plan also provided for a District Water Exchange through

which farmers could buy or sell water.

The District began developing an Integrated Water Resources Management Plan in

2008, and adopted a draft plan in 2009. It also began working with the county, cities, and

community members to develop an Imperial Integrated Regional Water Management

Plan, which the Board adopted in 2012.

The District revised the EDP in 2008 and 2009 "to address administrative issues

and conceptual disparities . . . ." After the revisions, water would go first to municipal

users, and the industrial apportionment required consideration of the Integrated Water

Resources Management Plan for new contracts. In 2009, the district declared an SDI, but

rescinded it before implementation.27

d. Adoption of the 2013 Equitable Distribution Plan

The District experienced large consecutive overruns in its use of water in 2011 and

2012 due to improved agricultural markets and continuing drought conditions. The

27 The District suggests that it is relevant that Abatti voted as a Board member to
adopt prior EDPs. We disagree.

42
overruns cost the District $22 million to resolve. As a January 2013 water management

policy document explained, payback under the IOPP was with conserved water. The

District's primary method of water conservation was fallowing, for which costs had

increased with the agricultural markets; conservation projects had even higher costs. The

policy document concluded that "large-scale[] consecutive overruns" were "not

financially manageable," and that the current EDP system was "backward-looking" and

not sufficient for water management. The policy document also noted that Lake Mead's

elevation had dropped, and that reservoir depletions could lead to accelerated payback or

suspension of the IOPP.

In February 2013, the District's Water Conservation Committee recommended that

the Board "provide for an annual system of apportionment to more effectively manage its

Colorado River water supply . . . ." The Board accepted this recommendation.

The Board considered the revised, permanent EDP, with farmers remaining last in

the apportionment order and receiving water by straight line apportionment, at a public

Board of Directors meeting held in April 2013. Abatti submitted a letter to the Board at

the meeting, raising concerns. Director Stephen Benson stated that it was "important that

[they] just get started . . . . Whether it works or not, we're pretty sure that it won't

work . . . I think we've all agreed on that. And we're . . . assuming . . . that there will be

changes going forward." Benson believed that the straight line method was unfair to

those with higher historical water use and that Abatti had raised valid arguments in his

letter, but said that the District "just . . . need[ed] to move forward." Director James

Hanks explained that the plan "had some major flaws," but that it was meant to get a

43
handle on the IOPP and send the message that the District was doing so. He did think

straight line apportionment "kill[ed] the future on farm program [sic]"; put higher water

users "at the mercy of . . . low water users"; and that the District had to move away from

it. Director Bruce Kuhn suggested getting the plan "ratified under historical or . . .

straight line," making sure "everybody knows . . . that it's flexible," and "down the road,

if it looks like straight line is not making it, perhaps we can go historical." The Board

adopted a revised EDP. The revised EDP provided for an annual apportionment, kept the

same apportionment user order as in the earlier EDPs, i.e., with agricultural users last,

and maintained straight line apportionment for agricultural users, together with the water

exchange, which was in the form of an Agricultural Water Clearinghouse in the revised

EDP.

The Board further revised the EDP in May 2013. Meetings with the Water

Conservation Committee had continued, and it was "discussed that the EDP should not be

limited to the straight line method . . . , but instead allow for other known methods . . . ."

A "Method of Apportionment" section in the May 2013 EDP identified the various

methods of agricultural apportionment and indicated that straight line would be used for

the pilot program. The overall apportionment order was revised to place agriculture users

second, after municipal users, and to reference the Method of Apportionment section.

In August 2013, Reclamation's regional director notified the District that it was at

risk of exceeding its 2013 adjusted entitlement. He explained that if the District were to

do so, Reclamation would be required under the IOPP to bring enforcement proceedings

and limit 2014 releases.

44
 At an October 2013 meeting, the Board discussed the agricultural apportionment

method to be implemented for 2014. Members of the public addressed their concerns

about the apportionment methods and process. The Board asked District staff to look

into a hybrid method of apportionment.

At a meeting the following week, District staff presented its findings, and there

were again public comments. The staff explained that different per-acre straight line

apportionment levels would leave different reserve amounts. The Board approved a

"50/50 percent hybrid agricultural apportionment with a historical use component . . . for

calendar year 2014 consistent with the [EDP], with approximately 36,000 acre feet in the

agricultural water clearinghouse as a reserve." A later District communication explained

how the apportionment would be calculated, and the 2014 apportionment range (i.e., half

of average use from 2003 to 2012, measured up to 10 acre feet, and excluding high and

low years, plus 2.86 acre feet per eligible agricultural acre from the straight line

component, up to a potential total of 7.86 acre feet).

The Board made a further revision to the EDP, which is not at issue here, resulting

in the version challenged in this appeal (the 2013 EDP). The 2013 EDP provides that

annual apportionment of the Available Water Supply would occur as follows:

"a. Municipal Users - Base amount of 2006 usage plus current
District wide average use per capita multiplied by the increase in
population since 2006.

"b. Industrial Users - For existing contracts, estimated based on
past use, not to exceed contracted amount and contract terms. For
new contracts, estimated based on anticipated use, not to exceed
contract amount and contract terms, taking into consideration the
Integrated Water Resources Management Plan.

45
 "c. Feed Lots, Dairies, and Fish Farms - Estimated based upon
past use and consideration of future changes.

"d. Environmental Resources Water - Estimated based upon the
amount reasonably necessary to achieve the purposes of the
District's commitments, taking past use into account.

"e. Agricultural Lands - Subtract the estimated demand for
categories in Subsections (a) through (d) above from the Available
Water Supply. Under a Straight Line Apportionment, divide the
remaining Available Water Supply by the total number of Eligible
Agricultural Acres to determine the Apportionment per Eligible
Agricultural Acre. Under a different Method of Apportionment, the
Apportionment will be calculated for Eligible Agricultural Acres
based on that Method of Apportionment. . . ."28

The Method of Apportionment section provides:

"Apportionment models understood and discussed to date are
historical, straight line, soil type, and hybrids of a combination of
these methods. The default Method of Apportionment is Straight
Line Apportionment, which may be changed for any Water Year
prior to the notification period . . . herein at the discretion of the
[Board]."

A separate section states that "[n]on-agricultural water users shall be allowed to

use that amount of water needed for reasonable and beneficial use." Another section

states in part that the Board "may terminate the implementation of an annual

Apportionment at any time . . . ."

The plan provides for two types of transfers. First, it provides for a "farm unit," a

"grouping designated by an Agricultural Water User of one or more water accounts

28 The District uses the term Municipal Apportionment to describe the apportionment
to non-agricultural users. This term does not appear in the 2013 EDP, and we elect to
refer generally to user priority or apportionment order.

46
comprised of one or more fields leased or owned by the Agricultural Water User that can

share the Apportionment for those fields." Second, it includes the Agricultural Water

Clearinghouse for transfers between users.

Finally, the plan addresses overruns. The Available Water Supply is defined to

exclude "any Water Management Reduction," which itself is defined as a reduction due

to a "district wide overrun payback requirement[,] mandatory program, or regulatory

limitation . . . ." The plan also provides for development of an Overrun Payback

Program, in which "the cost of and/or responsibility for any District payback obligation

will be borne" by the responsible users.

The District represents that the hybrid method was implemented from 2014

through 2017.

2. User prioritization

a. Superior court ruling

As noted ante, the superior court determined that the District is required to set

equitable rules for water distribution. The court also determined that agricultural water

users are among those to whom the no injury rule applies, and that the District could not

"take perfected water rights from the present owner of the lands to which they are

47
appurtenant and transfer [them] . . . without appropriate consideration," citing Bryant.29

The court also explained that Water Code section 106 prioritizes domestic and then

irrigation use, and not other uses.

The superior court found that an equitable distribution plan could be structured to

"ensure that every class of users has its water reduced equally . . . when demand exceeds

supply," but that the 2013 EDP "prioritizes other groups of water users, in addition to

domestic water users, over farmers." The court similarly noted that industrial contracts

could subject water deliveries to proportionate reductions, but that the 2013 EDP does not

place limits on deliveries under such contracts. The court then found that the 2013 EDP

"allows water to be provided to new water users, such as new industrial and

environmental users, which, in a period of shortfall, would disproportionately affect

existing farmers," because water is apportioned to farmers last and thus, the amount of

water that the farmers would receive would depend on the amounts received by other

users.

The court concluded that the 2013 EDP is "not equitable because it disadvantages

farmers, who should not be treated differently and with a lesser priority than other, non-

29 As discussed post, the no injury rule generally bars a change to the place or use of
water if it injures a legal user. (North Kern Water Storage Dist. v. Kern Delta Water
Dist. (2007) 147 Cal.App.4th 555, 559 (North Kern).) We will also discuss the superior
court's finding under the "appurtenancy rule," which is not addressed in the case law and
appears to refer to the trial court’s acceptance of Abatti's argument that the appurtenant
nature of the farmers' rights to water service precludes the District from modifying that
service. This finding is unrelated to the superior court's earlier dismissal of Abatti's
taking claim in his second amended petition, which we address post.

48
domestic, classes of water users," and that the District abused its discretion in adopting it.

The court further concluded that because the "prioritization puts those other water users

ahead of farmers, the 2013 EDP violates both the 'no injury' rule and the 'appurtenancy

rule[,]' " and that the District "abused its discretion by violating such rules."

b. The District abused its discretion in its prioritization of users

The District is required to distribute water equitably to its users. (See § 22252

[when charges are fixed, water "shall be distributed equitably as determined by the

board"].) This is consistent with the District's public purpose. (Allen, supra, 101

Cal.App.2d at p. 467; cf. Leavitt v. Lassen Irrigation Co. (1909) 157 Cal. 82, 90 (Leavitt)

[water suppliers acting in public capacity "must supply all alike who are like situated"].)

At the same time, the District must distribute water consistent with its purposes and

obligations, which could potentially warrant using different distribution methods for

different user groups. (See Jenison, supra, 149 Cal. at p. 503 [water use must be "in

consonance with and in furtherance" of the trust's purpose]; Cal. Const., art. X, sec. 2

[requiring conservation, and limiting use to that reasonably required].) However, in order

to fall within the bounds of the District's discretion, such distinctions must be reasonable.

The 2013 EDP provides for all other water users to receive water before

agricultural users, with few, if any, meaningful limitations on the amounts of water those

other water users are permitted to use, beyond requiring reasonable and beneficial use,

and utilizing factors such as past use and subsequent changes. Although the plan

includes District discretion to modify the agricultural apportionment method, there does

not appear to be a similar provision for the apportionment prioritization order. Thus, in a

49
shortage situation, it is the farmers who would bear the impact—with potentially little

District flexibility to provide them any relief. Further, the District had resources with

which it could have assessed potentially robust limitations on other users, including the

expert report discussion of industrial and municipal users, but did not include such limits

in the 2013 EDP.

It was not reasonable for the District to adopt a permanent, annual apportionment

that applies few, if any, limits on most categories of users and effectively places the

burden of shortages almost entirely on farmers. The District must treat all categories of

users equitably under the plan, consistent with the interests of the users, the District's

purposes, and California water policy. As long as the District satisfies these obligations,

it is not required to carry out its apportionment in any particular manner, and the superior

court erred to the extent that it directed the District to do so.

We now turn to the District's arguments, and begin with one that we agree with, in

part. The District argues that its apportionment "helps to prevent unsustainable overruns

and promotes water conservation . . . ." Abatti contends that the 2013 EDP is

unnecessary and actually undermines the District's water rights. We conclude that the

District could have reasonably determined that a permanent EDP is necessary.

Beginning in 2003, the District was subject to a 3.1 MAF cap under the QSA, and

payback procedures under the IOPP. In response, the District took steps to address water

management: it implemented fallowing programs and, later, efficiency-based

conservation measures; retained experts; adopted and revised the EDP; and developed

water management plans. Yet, there were still overruns, including the consecutive

50
overruns in 2011 and 2012, which cost the District $22 million. In 2013, Reclamation

notified the District that the District was in danger of another overrun, which could result

in enforcement proceedings and reduced deliveries. The experts had found that the

District was "rather unique" in not allocating water. Even the directors who had concerns

about the agricultural allocation in the 2013 EDP indicated that it was important to take

action.

Abatti's argument that the 2013 EDP is unnecessary lacks force. He points out

that the District did not have an EDP for over 100 years; that there had been only two

overruns, which were repaid via conservation (suggesting that the cost figure was

misleading); and that those overruns were due to market conditions and drought. While it

is true that there was no EDP prior to 2003, events beginning at that time necessitated

action by the District; the conservation programs used to repay overruns cost the District

a significant amount of money to operate; and further market changes and droughts were

not merely possible, but the District actually faced another overrun in 2013.30 Abatti

then argues that the IOPP was working as "designed," by providing flexibility to pay

back overruns later. This argument minimizes the costs, and also ignores the

consequences, of successive overruns. Finally, Abatti contends that the 2013 EDP causes

a "forced reduction" of water use by farmers, that an appropriator's "water rights . . . are

30 Abatti also contends that the District "underused 800,000 AF of water . . . worth
hundreds of millions of dollars . . . ." He does not dispute the District's view that
underuse is not counted under the IOPP, nor does he contend that underruns in some
years prevent overruns in others.

51
lost by a sustained period of five years of non-use" under sections 1240 and 1241, and

that the District risks losing its rights by reducing the amount of water used by farmers.

The authority that Abatti cites in support of these contentions pertains to forfeiture of pre-

1914 rights and is inapposite (Millview County Water Dist. v. State Water Resources

Control Bd. (2014) 229 Cal.App.4th 879, 891), and he provides no statutory analysis.

We deem the point forfeited, other than to note that Abatti is essentially ignoring the

existence of the clearinghouse, as he does in other arguments that we discuss, post.

Further, amicus IVC contends that the District is exempt from reversion of its water

rights based on non-use.31

Turning to the District's defense of the overall apportionment in the 2013 EDP, the

District begins by contending that 97 percent of its water is delivered to farmers. There is

no dispute that farmers receive the vast majority of the water that the District distributes,

but that does not diminish their entitlement to equitable distribution. Further, other

sources, including the water management plans, reflect anticipated growth of non-

agricultural water use by 2050.

31 IVC cites section 1005, which provides that "[a]ny right to the water of any stream
which flows along a boundary of the State and which is the subject of an interstate
compact to which the State is a party . . . , shall not be subject to any . . . limitation
provided by law . . . relating to the continuity of use of such water." The District's permit
references section 1005. Abatti also contends that the overrun issue was a "smokescreen"
to deprive farmers and favor new, geothermal users, in connection with Board financial
interests. He relies on documents purportedly reflecting campaign contributions and
individuals moving between the District and geothermal companies, for which he
requests judicial notice. We decline to consider these speculative allegations, and deny
the request, because these materials are not properly subject to judicial notice. (Rowland,
supra, 4 Cal.4th at p. 268, fn. 6.).

52
 The District next contends that different categories of users are subject to different

laws and contracts, and the 2013 EDP subjects each group to "specifically tailored"

limitations. It also denies that the 2013 EDP prioritizes other categories of users over

farmers or that farmers bear the burden of shortages. The District's denials are not

persuasive. The provisions for non-agricultural users account for population increases

and other future changes—leaving few if any meaningful limitations on the amounts of

water those users may receive, other than a requirement that their use be reasonable and

beneficial. The District seems to assume that non-agricultural demand will be reduced

going forward. However, the evidence does not necessarily support this assumption.

Further, even if this were correct, that would not change the fact that the only users

whose use is actually limited under the EDP are farmers. We now turn to the

apportionment for each group in the 2013 EDP, addressing demand as applicable.

Municipal users receive a "[b]ase amount of 2006 usage plus current District-wide

average use per capita multiplied by the increase in population since 2006," under the

2013 EDP. Although this provision uses a 2006 baseline, it also accounts for current

average use, albeit across the District, and for population growth. We are not persuaded

by the District's argument that per capita municipal consumption will decline based on

laws inapplicable to farmers. In making this argument, the District relies on, among

other things, the governor's target of reducing urban consumption 20 percent by 2020,

which is also reflected in the Water Conservation Act of 2009. (Exec. Order B-37-16;

§ 10608.16 (Stats. 2009-2010, 7th Ex. Sess., ch. 4, § 1).). But the governor's executive

order and the Act also address agriculture, and the Water Management Plans in the record

53
reflect that municipal demand will continue to increase through 2050. (Exec. Order B-

37-16 [addressing urban and agricultural water management, including requiring

agricultural water management plans for more water suppliers and ensuring that plans

"identify and quantify measures to increase water efficiency and . . . adequately plan for

periods of limited water supply"]; § 10608.4 [legislative intent to, among other things,

"[e]stablish consistent water use efficiency planning and implementation standards for

urban water suppliers and agricultural water suppliers"]; § 10608.48 [agricultural water

management measures].)32 Further, and significantly, regardless of whether municipal

use increases or decreases in the future, the municipal apportionment provision still

provides for water sufficient to meet that use.

Industrial users receive water "estimated based on past use not to exceed

contracted amount and contract terms." For new contracts, water use is "estimated based

on anticipated use not to exceed contract amount and contract terms taking into

consideration the Integrated Water Resources Management Plan." Assuming that the

existing contracts contain both limits on use and barriers to modification, as the District

contends, and for which evidence exists, it is not the EDP that imposed those use limits.

This also does not establish that the 2013 EDP imposes meaningful usage limits on new

32 The District cites the executive order, but the order does not appear to be in the
record. We take judicial notice of the order on our own motion. (Evid. Code, §§ 452,
459; last accessed at https://www.ca.gov/archive/gov39/wp-
content/uploads/2017/09/5.9.16_Attested_Drought_Order.pdf). As for evidence of
growth, we do not consider the chart attached to Abatti's initial brief and rely on the
record.

54
contracts. The District contends that it has "implemented additional safeguards," citing

language in the EDP regarding anticipated use and the Integrated Water Resources

Management Plan, and maintains that it is "looking to best management practices under

the state Water Conservation Act to set target reductions . . . ." The water management

plans do reflect targets for reducing industrial use, but they also reflect anticipated

increases in demand through 2050 (even with assumed reductions). Further, nothing in

the 2013 EDP requires the District to set target reductions for industrial users, and it

identifies no evidence demonstrating that it has.33

Feed lots, dairies, and fish farms are apportioned water "[e]stimated based upon

past use and consideration of future changes." This "consideration of future changes"

accounts for changes in demand that might occur. The District contends that these users

"communicated the importance of treating this category differently," citing 2009 hearing

input and the unique issues associated with raising live animals. The issue is not that the

District treats live animal farmers differently from farmers who grow crops; rather, the

issue is that the District imposes no real limitations on live animal farmers' water use.

The remaining category, "Environmental Resources Water," receives water under

the EDP "based upon the amount reasonably necessary to achieve the purposes of the

33 We address two related arguments that the parties raise. The District argues that
industrial contracts provide "stability . . . necessary to get funding for these uses . . . ."
That contracts are needed to get project funding is unsurprising, but that does not mean
that the projects themselves are necessary or that their water requirements are justified.
Abatti contends that "use of fresh inland water . . . for geothermal cooling . . . violates the
State Board's Resolution No. 75-58," adopted in 1975. He does not elaborate and we do
not consider the contention further.

55
District's commitments, taking past use into account." The District contends that this

category is "extremely limited" to allow it to "meet current and future environmental

legal obligations . . . ." However, the fact remains that there is no limitation placed on

this category of user.

We now turn to Abatti's arguments. Although Abatti agrees with the superior

court that the District abused its discretion in prioritizing other categories of users over

farmers, he makes a number of assertions regarding the Water Code in this regard, some

of which are erroneous. Abatti begins by citing statutes pertaining to irrigation district

watermasters and irrigation procedures to contend that statutory provisions other than

section 22252 reflect that a district "may not disregard Farmers' pre-existing water rights

in favor of distribution to other users without such rights." Abatti misapprehends the

import of these statutes.

The provisions concerning districts with watermasters are simply inapposite; the

District states that it has never participated in the watermaster program to which the

provisions apply. (See, e.g., § 22080, et. seq.)

Abatti contends that under the irrigation procedures codified in sections 22252.1

and 22252.3, "with respect to any expected shortage . . . , the [District] must provide

notice and take into account the Farmers' beneficial needs . . . ." We are not persuaded.

Sections 22252.1 and 22252.3 are discretionary and do not support his point.

Section 22252.1 provides that a district board "may specify" a water application

deadline for the upcoming irrigation season (which remains fixed unless the board

provides compliant notice of a change), and "may . . . give preference" to timely

56
applications or lands not requiring an application. Section 22252.1 further provides that

"[n]othing in this section shall prohibit apportionment of available water to land given

preference under this section or otherwise restrict or limit existing powers of the board to

control and provide for distribution of water." Section 22252.3 states, in pertinent part,

that in years when a district board determines that water supplies "will be inadequate to

provide water in a quantity furnished in years of average precipitation," it "may specify"

a water application date for the next irrigation season. It again states that "[n]othing in

this section shall prohibit or limit the apportionment of available water to land given

preference under Section 22252.1 or this section or to otherwise restrict or limit existing

powers of the district to control and provide for distribution of water."

Both sections use the term "may," not "shall" or "must," and both confirm that

they place no limitation on a district's power to control water distribution. Thus, these

statutory provisions permit, but do not require, compliance with their irrigation

application procedures. Abatti disagrees, citing State Water Resources Control Board

Cases (2006) 136 Cal.App.4th 674 (SWRCB) to support his contention that the term

"may" must "be construed as mandatory where the 'public interest or private right

requires that a thing should be done.' " But SWRCB was talking about the State Board

itself, and found the power at issue to be of public interest. (Id. at p. 687 [addressing

various State Board decisions]; id. at pp. 731-732 [§§ 1257 and 1258 specified factors for

applications to appropriate water and permitted State Board to subject appropriations to

conditions necessary for water control plans; explaining that the power to impose such

conditions was "undoubtedly . . . to be exercised for the public at large" and thus

57
mandatory].) Abatti does not establish that requiring districts to follow certain

application procedures for one set of users is a matter of public interest, particularly in

view of the fact that the statutes make clear that districts retain discretion over water

distribution.34

Finally, Abatti contends that the 2013 EDP violates Water Code section 106, and

the superior court's finding that it does so constitutes an independent basis for affirmance.

The District contends that the 2013 EDP is consistent with section 106, based on, among

other things, the fact that most of the District's water goes to farmers, and its need to

balance competing policy considerations. Having already concluded that the District

abused its discretion in its user prioritization, we need not resolve whether section 106 is

an alternative basis for affirmance on that issue.

However, we do have doubts that the 2013 EDP is consistent with this section.

Section 106 expresses a clear policy preference for domestic and then irrigation use,

providing, "It is hereby declared to be the established policy of this State that the use of

water for domestic purposes is the highest use of water and that the next highest use is for

irrigation." The 2013 EDP effectively prioritizes all other users over farmers, not only

34 We reject two other points that Abatti raises. He contends that these provisions
demonstrate that the legislature intended for water to be "limited to Farmers in times of
shortage," not permanently. Abatti provides no statutory analysis to support this
assertion, and this interpretation would be contrary to the permissive nature of the statutes
and their preservation of District discretion. He also contends that "the notice provisions
in the earlier SDI EDPs [are] a tacit admission" that allocations during shortages are
subject to section 22252.3. Previous EDPs provided for notices to farmers with their
apportionment, not an application system as envisioned under section 22252.3.

58
domestic users. It is true, as the District observes, that other policies apply to the District

as well, including conservation. (See § 107 ["The declaration of the policy of the State in

this chapter is not exclusive, and all other or further declarations of policy in this code

shall be given their full force and effect"]; e.g., § 100 [requiring that water be put to

reasonable and beneficial use, and that conservation be exercised in view of such use].)

Nevertheless, the District must exercise its discretion to distribute water under section

22252 consistent with all of these policies—including section 106.35

c. The District did not violate the no injury rule or appurtenancy

i. No injury rule

The no injury rule arises from the common law principle that an owner of water

rights "has the right to change the purpose and place of use of . . . water, so long as any

change does not injure others with rights in the watercourse." (North Kern, supra, 147

Cal.App.4th at p. 559; SWRCB, supra, 136 Cal.App.4th at pp. 739-740 [discussing

common law sources for no injury rule].) This rule was incorporated into the Water

35 We address one final point here. The superior court found that the 2013 EDP
"allows water to be provided to new water users," to the detriment of farmers in
shortages. The court appears to have assumed that the District has control over new
residential or commercial development within its service area, or at least the authority to
deny water to such new users. We question these assumptions, and to the contrary,
surmise that new development may entail review and decisionmaking by multiple
entities, as we see in California Environmental Quality Act cases. New users then
become part of the public served by the District, consistent with its obligations to manage
and distribute water equitably. (See Leavitt, supra, 157 Cal. at p. 90 ["[a]ll who enter the
class may demand the use of the water"]; Butte County Water Users' Ass'n v. Rr. Comm'n
of Cal. (1921) 185 Cal. 218, 230 [company supplying water for irrigation "has not the
power to take on new consumers without limit" and the matter is "one of judgment"].)

59
Code. (§ 1700, et seq.) A permittee holding appropriative water rights "may change the

point of diversion, place of use, or purpose of use," subject to requirements that include

Board permission. (§ 1701.) "Before permission . . . is granted the petitioner shall

establish, to the satisfaction of the board, and it shall find, that the change will not operate

to the injury of any legal user of the water involved." (§ 1702; see also § 1706 [other

appropriators (e.g., pre-1914 rights holders) "may change the point of diversion, place of

use, or purpose of use if others are not injured by such change"]; §§ 1725, 1736

[addressing water transfers].) The no injury rule applies to all legal users of water, not

just traditional rights holders, but its application in a particular situation depends on the

effect of the changes at issue on the users' rights. (SWRCB, at pp. 743, 800.)

The superior court found that the "District's agricultural water users are among the

class of legal water users to which the 'no injury' rule applies," and that the 2013 EDP

violates the rule, "[b]ecause [its] prioritization puts [new water users] ahead of

farmers . . . ." We disagree. The no injury rule applies only to changes to the point of

diversion or place or purpose of use—not to modifications to water service—and

therefore does not apply here. The farmers are legal users, but their right is to water

service; the District conduct at issue is the implementation of the 2013 EDP, which

modifies that service. Further, this case does not involve an attempt to change the

District's permit, such that § 1702 would apply. (SWRCB, supra, 136 Cal.App.4th at

p. 753.)

Abatti's arguments for application of the no injury rule lack merit. He argues that

farmers can assert injury because they hold pre-1914 water rights, the District's permit is

60
subject to "vested rights," and, under its permit, the District would have "no power to

transfer . . . water" other than for the original irrigation and domestic purposes and would

have to comply with the no injury rule to add industrial use. (§ 1381 [water use is limited

"to the extent and for the purpose allowed in the permit"]; § 1700 [purpose may be

changed pursuant to statute]; § 1701.2 [permit holder must demonstrate reasonable

likelihood of no injury to legal user].)

As an initial matter, we reject Abatti's characterization of apportionment as a

"transfer" of water or water rights, and his similar use of "redistribut[ion]" elsewhere. As

discussed above, the farmers' rights are to service; implementing an apportionment plan

does not shift water rights, but rather, modifies the service. The arguments themselves

lack merit, as well. Abatti has not established that the farmers hold pre-1914 rights and

regardless, the key issue here is not whether the farmers are legal users; it is that there is

no relevant injury since, as noted, there was no change to the point of diversion or place

or purpose of use and thus, the no injury rule is not implicated. As for the District's

permit, not only is the conduct at issue the adoption of an equitable apportionment plan,

rather than a permit change application, but uses beyond domestic and irrigation were

already in place at the time of the adoption of the 2013 EDP. Municipal use was added to

the District's permit in or after 2002, and contracts in the record reflect that the District

had been supplying water to industrial users for decades. If that industrial use constituted

61
a change in use for purposes of the no injury rule, it arguably occurred when those

contracts went into effect—not in the 2013 EDP.36

ii. Appurtenancy

As discussed ante, landowners possess a right to water service that is appurtenant

to their lands. (Bryant, supra, 447 U.S. at p. 371, fn. 23.) The District objects to the

superior court's determination that, under Bryant, the District could not "take perfected

water rights from the present owner of the lands to which they are appurtenant and

transfer [them] . . . without appropriate consideration." We agree that this reasoning, and

the superior court's finding that the District violated the "appurtenancy rule," are in error.

Neither the superior court nor the parties have identified any authority for this

"appurtenancy rule." We infer that the court was referring to its finding that the District

may not modify service to users with appurtenant rights, to provide service to others who

do not possess such rights, which is how Abatti used the term in his proposed statement

of decision. Whatever the terminology, we disagree. First, this conclusion relies on

viewing apportionment as a transfer, which we rejected ante. Second, although Bryant

recognized that landowners are equitable and beneficial owners of the District's water

rights, with an appurtenant right to service (Bryant, supra, 447 U.S. at pp. 371, fn. 23), it

36 The District relies on federal law and California regulations to contend that
domestic use encompasses industry; Abatti disagrees, citing the permit's lack of industrial
use coverage. (See Arizona I, supra, 373 U.S. at p. 566 [Project Act incorporates 1922
Compact definitions]; 1922 Compact [defining domestic use to include municipal,
industrial, and more]; Cal. Code Regs., tit. 23, § 663 [municipal use includes "use
incidental thereto"].) Because the 2013 EDP did not effect a change in use, we need not
resolve this issue.

62
did not make the ruling described by the superior court. Abatti contends that, in Bryant,

the Ninth Circuit had found that redistribution of water deliveries among landowners

would be permissible and that the Supreme Court stated that such a redistribution

" 'would go far toward emasculating the substance, under state law, of the water right

decreed to the District.' " In making this observation, the Supreme Court was discussing

the Reclamation Act cap generally, not redistribution specifically; elsewhere, the Bryant

Court declined to find that landowners were entitled to particular amounts of water.

(Bryant, at p. 371.) Further, and more importantly, Bryant had no reason to address

whether the District could modify deliveries to those with appurtenant rights to service,

much less whether such modification would require consideration.37

3. Agricultural allocation

a. Superior court hearing and ruling

At the hearing on Abatti's petition, the superior court inquired about gate history.

District counsel stated that the District possessed gate history for the past 30 years, but

not field history, and "on any single gate you can have multiple fields which are farmed

by multiple different farms." The court responded that "the great majority . . . have a

single gate for a single field unit," and although some did not, "at least it will give you a

37 As noted ante, the Bryant Court was not even considering equitable distribution
under § 22252; as noted ante, it described apportionment as taking place under § 22250,
an assessment approach no longer in use by the District. (Bryant, at p. 371, fn. 23.) We
also reject Abatti's contention that the District forfeited its argument regarding the
superior court's appurtenancy rule finding by not raising it in its opening brief. The
ruling turned on the court's reasoning regarding appurtenant rights, which the District did
challenge.

63
history for that gate and then you can . . . address the delivery to that area, something that

can be figured out." District counsel explained that they "had a lot of difficulty . . .

figuring out field history . . . prior to QSA, when [they] started implementing [their]

fallowing program," and that "many – probably the majority [of gates] – do have multiple

fields . . . ."38

The superior court concluded in its Statement of Decision that the 2013 EDP is

unfair and/or inequitable due in part to the agricultural allocation. The court determined

that "[t]o apportion irrigation water equitably, an irrigation district must examine the

irrigated land, considering the soil type and crops grown," citing Tehachapi-Cummings

County Water District v. Armstrong (1975) 49 Cal.App.3d 992, 1001-02 (Tehachapi) and

Simon Newman Co. v. Sanches (1945) 69 Cal.App.2d 432, 438 (Simon Newman).

The superior court found that "different parcels of farmland require different

amounts of water," due to soil type and conditions, crop water requirements, and

decisions to grow different crops at different times of year. The court elaborated:

"[A]pportioning water among farmers using average historical use
data measured at field [g]ates over a 25 to 30 year period would take
into account such variables, including soil type, crop selection and
rotation, and single and double cropping, would minimize any
disadvantage to farmers who have invested in on-farm conservation

38 The superior court disagreed with the District's counsel, explaining that the court
was "quite familiar with the Valley and [its] irrigation system" and had "driven from one
end to the other numerous times." The court later acknowledged that there were a
"considerable number" of gates that serviced multiple fields, but stated that the "problem
arises if . . . it's the same gate servicing two different farmers" and "[t]here's probably not
a lot of those . . . ."

64
 measures and would resolve all of [Abatti's] objections to the 2013
EDP's measures for apportionment among farmers."

The court stated that the District "has records of historical water usage on farmland,

measures at the gate to each field, dating back to 1987, based on the acknowledgement of

such by counsel for [the District] at the hearing."

Next, the court found that the District's use of straight line apportionment was "not

equitable," because "standing alone, it potentially allocates more water to some users than

they need, increasing the potential for waste, and concomitantly risks shorting other

farmers who need higher volumes of water because of soil type and/or crop

requirements." The court further found that "[t]o the extent it encourages waste, straight-

line apportionment violates Article X, Section 2 of the California Constitution."

Finally, the court indicated that Board directors "recognized that historical use was

a better basis" for apportionment and that "one reason [the District] resorted to the

straight-line method was ease of implementation and administration by staff." The court

also viewed the District's implementation of the hybrid method, after specifying straight

line as the default method, as "an acknowledgement of the inappropriateness" of straight-

line apportionment.

b. The District did not abuse its discretion in its agricultural allocation

The superior court's ruling is flawed in several respects, including its failure to

assess the agricultural allocation actually adopted in the 2013 EDP. After addressing

these flaws, we review the agricultural allocation adopted in the 2013 EDP and conclude

that the District did not abuse its discretion.

65
 First, the court did not address all of the components of the agricultural allocation

contained in the EDP. The court found that the straight line method, "standing alone,"

would potentially lead to water shortages and unconstitutional waste. The court also

found that the District's implementation of the hybrid method for calendar year 2014

reflected that straight line apportionment was inappropriate. But the court did not

account for the Method of Apportionment section of the 2013 EDP, which sets forth

multiple different methods of apportionment and permits the District to change the

method each year; that the EDP allows for sharing among farm units; and that the EDP

establishes a water clearinghouse for sharing among users.39

Second, the court erred in determining that equitable distribution requires an

irrigation district to "consider[] the soil type and crops grown," and that using "average

historical use data measured at field [g]ates over a 25 to 30 year period" would take into

account such variables. The court also found that utilizing historical use would "resolve

all of [Abatti's] objections to the 2013 EDP's measures for apportionment among

farmers." In making these findings, the court appeared to find, at least impliedly, that a

particular historical approach is the only reasonable method of apportionment. However,

the issue is whether the District acted within its discretion in selecting the agricultural

allocation that it did, not whether a different type of apportionment would be better—

much less whether the apportionment selected would satisfy Abatti's personal concerns.

39 Further, the fact that straight line apportionment remained an option meant that the
District presumably had not found the method to be inappropriate.

66
(See Carrancho, supra, 111 Cal.App.4th at p. 1268 [traditional mandamus may not be

used to "force the exercise of discretion in a particular manner or to reach a particular

result"]; Klajic v. Castaic Lake Water Agency (2001) 90 Cal.App.4th 987, 995 [" 'In

determining whether an agency has abused its discretion, the court may not substitute its

judgment for that of the agency' "].) Even if one could conceive of a situation in which

only one particular action on the part of an agency could be reasonable, the court's legal

and factual findings do not support such a conclusion here.

The cases cited by the superior court, Tehachapi and Simon Newman, do not

address equitable distribution, and, contrary to the superior court's suggestion, do not

require that a historical approach to apportionment be used. If anything, those cases

make clear that past use and current need are not synonymous. Tehachapi reversed a

judgment adjudicating groundwater rights, explaining that an overlying owner's share "is

predicated not on his past use . . . but solely on his current reasonable and beneficial

need . . . ." (Tehachapi, supra, 49 Cal.App.3d at pp. 996, 1000-1001.) The court

explained that when "there is insufficient water for the current reasonable needs of all the

overlying owners, many factors are to be considered in determining each owner's

proportionate share," such as soil character. (Id. at pp. 1001-1002.) The Tehachapi court

did not hold that any particular factor must be considered, much less that focusing on past

use is the only appropriate way to take into account pertinent factors. Simon Newman

reversed a judgment apportioning water by acreage to owners of parcels that had been

part of a tract serviced by a ditch. (Simon Newman, supra, 69 Cal.App.2d at p. 434; see

id. at p. 440 [where open ditch irrigates tract, sold parcels may benefit by "implied

67
easement . . . for necessary, correlative irrigation purposes"].) The Simon Newman court

explained that if apportionment is based on acreage, rather than need, the apportionment

plan should consider use or "may not be deemed to be equitable"—thus supporting a

focus on need or use.40

Third, the superior court's factual findings lack support. The court found that

"different parcels of farmland require different amounts of water," due to soil type, crop

water requirements, and decisions about crop type and time of planting, and that field

history would take such factors into account. The expert report by Hanemann and

Brooks found that variation in water use was more likely due to farming practices rather

than factors such as soil or crop type—meaning that even if apportionment based on field

history would account for those practices, it would not necessarily be equitable. The

court also found that apportioning based on field history would "minimize any

disadvantage to those who had used on-farm conservation." To the contrary, using field

history could force those who had conserved to continue doing so, while giving those

who had not conserved no reason to start.

40 Simon Newman's explanation is somewhat opaque, but we believe we capture the
gist of it: "It is apparent that an apportionment of water based solely on the relative
number of acres of land which each owner possesses, without determining the quantity of
water necessary for use on any parcel or portion thereof should depend upon an accurate
estimate of the actual number of acres in each parcel subject to similar irrigation and that
all of the land in each tract is susceptible of producing the same variety of crops, or that it
may reasonably be used for similar purposes." (Simon Newman, supra, 69 Cal.App.2d at
438.) To the extent that Simon Newman calls into question pure straight line
apportionment, that is not the agricultural allocation adopted by the District in the 2013
EDP.

68
 Finally, the record does not support the superior court's finding that the District

"has records of historical water usage on farmland, measures at the gate to each field,

dating back to 1987, based on the acknowledgement of such by counsel . . . ." The expert

report reflected that although the District had water delivery data, it was "not necessarily

accurate" at the field level and that as many as 3,000 fields (of the 7,000 with deliveries

since 1987) either lacked, or had questionable, histories. Indeed, the report recommended

against using field history in part because of the inadequacy of the data. In addition,

contrary to the court's assertion, District counsel did not acknowledge that the District has

25-30 years of field history. Rather, counsel indicated that the District has gate history;

that most gates served multiple fields; and that the District has potentially better

information only from 2003 forward, when the District implemented its fallowing policy.

It was the court that suggested that field history was available, stating that the court was

familiar with the region and that most gates served a single field, or fields owned by a

single farm. The court's personal experience is not evidence. (Cf. United States v.

Berber-Tinoco (9th Cir. 2007) 510 F.3d 1083, 1091 [judge may not rely on personal

experience to take judicial notice].)41 Thus, while the record reflects that the District had

41 For similar reasons, we reject the superior court's reliance on certain Board
members' purported recognition that historical use would be a better method of
apportionment than straight line. The issue is whether the agricultural allocation that the
District selected was within its discretion, not whether individual directors may have
preferred a different agricultural allocation.

69
at least some recent field data, it does not support the court's finding that it had more than

25 years' worth.42

We now turn to the agricultural allocation that the District actually adopted in the

EDP, and conclude that the District did not abuse its discretion in selecting it. We have

already determined that the District reasonably found it necessary to adopt a permanent

EDP to address its water management issues. The District could further have reasonably

found that the agricultural allocation in the 2013 EDP, which gives the Board discretion

to choose among apportionment methods and provides flexibility through farm unit

sharing and the clearinghouse, addressed those issues by permitting farmers to meet their

needs while encouraging them to conserve. This determination is reasonable and

supported by the record.

With respect to the default straight line apportionment method, although the

experts recommended using a soil group history method, or transitioning from soil group

to straight line, they found that the two methods were similar and that pure straight line

could eventually be used. Further, the District retained discretion to use soil group,

historical, or hybrid methods and to modify them. The clearinghouse and intra-farm

42 Abatti cites fallowing and conservation program materials, as well as other
documents, as further evidence that the District possesses historical field data. Those
programs do use 10-year historical baselines, although fallowing appeared to require that
participants with multiple fields at a gate have water use records, implying some still
might not have them, and could not participate. Reliance on the other materials, such as
the QSA (which does not address historical use) and a federal register digest regarding
the IOPP (which focuses on District-wide overruns), appears misplaced.

70
sharing were also consistent with the experts' recommendations and could ensure

flexibility. Farmers who received more water than they needed could use the

clearinghouse to sell it, thereby avoiding waste. Those who received less water than they

needed could purchase more from the clearinghouse. Finally, by implementing a hybrid

method with a 10-year historical component in 2014, the District demonstrated that the

2013 EDP was sufficiently flexible to account for the experts' caution about moving

directly to a straight line method of apportionment, the inadequacy of the older field data,

and the input from the public, which had raised concerns about both the historical and

straight line methods. The District also set the straight line component of the hybrid

apportionment at a level that created a reserve in the clearinghouse, ensuring that water

would be available there.43

Abatti's arguments lack force. We have rejected his contention that the 2013 EDP

is unnecessary. He also contends that an equitable allocation must take into account the

existing users' "entitlement to reasonable use of water," and that the superior court

correctly concluded that straight line apportionment does not do so. We reject this

contention, as well. Reasonable use is a limiting principle, not a basis for finding

entitlement to a particular amount of water. Further, the contention disregards other

43 The District also cites evidence demonstrating that other irrigation districts use
straight line apportionment and that the method is the "most common" method used in
"other parts of California and in several other western states." Abatti contends that
"[m]any of those districts have alternative sources of water . . . ." While that may be true,
use of the method elsewhere does suggest that it does not necessarily lead to shortages
and waste.

71
components of the EDP, and their role in getting water to those who need it, such as the

water clearinghouse.

Abatti's reliance on City of Barstow v. Mojave Water Agency (2000) 23 Cal.4th

1224 is misplaced. In that case, the superior court entered a judgment in a water dispute

without regard to existing overlying and riparian rights, and found it unnecessary to

adjudicate individual rights, due in part to its view that the solution that the court had

arrived at was consistent with reasonable use. (Id. at pp. 1237-1238.) On review, the

Supreme Court held that the superior court could not "disregard legal water rights in

order to apportion on an equitable basis water rights to all producers in an overdrafted

groundwater basin." (Id. at pp. 1239-1240; id. at p. 1248 ["we have never endorsed a

pure equitable apportionment that completely disregards . . . owners' existing rights"].) In

this case, no overlying or riparian rights were at issue; rather, the District was

apportioning water among users with a right to service, not among holders of different

water rights.44

44 Abatti cites several other cases. We addressed Tehachapi and Simon Newman,
ante. The remaining cases do not involve equitable distribution, address different rights
holders, or are otherwise inapposite. (See, e.g., Katz v. Walkinshaw (1903) 141 Cal. 116,
133-136, 141 [overlying owners had correlative rights in common supply of groundwater,
and were entitled to reasonable use]; Rancho Santa Margarita v. Vail (1938) 11 Cal.2d
501, 518-519 [superior court erred by enjoining water use among riparians based on
extent of ownership, rather than current needs and uses]; El Dorado Irr. Dist. v. State
Water Resources Control Bd. (2006) 142 Cal.App.4th 937, 942-943, 965-967 [affirming
writ of mandate requiring removal of permit condition that did not apply to later
appropriators; reasonable use and public trust doctrines were primary, but no interest
there justified subverting priority].)

72
 Finally, Abatti contends that there is substantial evidence to support the superior

court's finding that straight line apportionment encourages waste, in violation of the state

constitution. We have already concluded that the superior court's reasoning is flawed in

this regard; although the court focuses on the default straight line apportionment method,

the agricultural allocation gives the Board discretion to select among multiple

apportionment methods and the EDP also includes sharing within farm units and a

clearinghouse. Abatti's specific arguments here are no more persuasive. He first cites

Willard v. Glenn-Colusa Irrigation Dist. (1927) 201 Cal. 726 to suggest that straight line

apportionment is inequitable. In that case, the California Supreme Court held that

irrigation districts may charge rates in lieu of assessments, and noted potential issues with

assessment systems. (Id. at p. 744; id. at pp. 742-743 [gap between land value and water

need could lead to waste and uncertainty, because owners would not be obligated to sell

excess water].) Willard was not addressing an equitable apportionment plan, much less

one that allows for implementation of different apportionment methods and includes a

clearinghouse. Abatti also cites charts used by District staff to present their

apportionment method findings at one of the October 2013 hearings. One chart shows

average historical use by acre over a 10-year period, and the other shows water amounts

that would be used under different apportionment methods. Not surprisingly, these charts

reflect that if initial apportionment is not based on historical use, it will vary from such

73
use. However, the charts do not account for the farm unit sharing and clearinghouse

contained in the 2013 EDP.45

We conclude that the District abused its discretion only as to its user prioritization.

In all other respects, the District acted within its discretion in adopting the 2013 EDP, and

the superior court erred in concluding otherwise.

D. Declaratory relief

The District contends that the superior court erred by granting declaratory relief

that, among other things, requires that the District use a historical method for

apportioning water. We agree.

1. Additional background

Abatti sought a declaration that the District had no authority to adopt or implement

the 2013 EDP, or any other water distribution plan that "treats agricultural water users

unfairly, inequitably and in violation of the [District's] statutory and fiduciary duties to its

beneficiaries and their water rights." He alleged that an actual controversy exists as to

whether the District had the authority to adopt the 2013 EDP. He further alleged that the

2013 EDP does not equitably distribute water because it prioritizes other users over

farmers, and because it treats all farmland as requiring the same amount of water.

45 Abatti additionally contends that farmers "cannot reasonably be subjected" to the
uncertainty of straight line apportionment, arguing that the "Legislature recognized as
much in enacting sections 22252.1 and 22252.3 . . . ." We rejected Abatti's interpretation
of these sections ante, and he provides no support for this further assertion.

74
 In the statement of decision, the superior court declared that the District "lack[ed]

authority to further implement the 2013 EDP," or to adopt any other plan that prioritizes

"certain classes of water users, other than domestic, ahead of farmers." The court stated:

"[A]ny apportionment of water among farmers must not use a
straight-line apportionment method or hybrid method incorporating a
straight-line component, which is not equitable. . . . [A]n equitable
apportionment of water must take into consideration factors
including the area to be irrigated, the character of the soil, the crops
to be grown, and the practicability of irrigation. Therefore, the court
declares that historical use, which reflects these factors, is the
equitable and acceptable means of apportionment."

Finally, the court declared that the District is "not empowered" to enter into new contracts

with non-domestic or non-agricultural users that would guarantee water during shortages,

in a manner inconsistent with the court's findings. The court entered a declaratory

judgment consistent with these findings.

2. Applicable law

Under Code of Civil Procedure section 1060, declaratory relief "is available 'in

cases of actual controversy relating to the legal rights and duties of the respective

parties.' " (Coronado Cays Homeowners Assn. v. City of Coronado (2011) 193

Cal.App.4th 602, 607). "If an actual controversy exists, it is within the trial court's

discretion to grant or deny declaratory relief." (Gilb v. Chiang (2010) 186 Cal.App.4th

444, 458.) However, the power to grant declaratory relief " 'does not purport to confer

upon courts the authority to control administrative discretion.' " (Zetterberg v. State

Dept. of Public Health (1974) 43 Cal.App.3d 657, 664; see Bautista v. State of California

(2011) 201 Cal.App.4th 716, 733-734 (Bautista) ["[d]eclaratory relief . . . does not confer

75
upon the court the authority to make pronouncements in a field reserved to other branches

of government"].)

We review the decision to grant or deny declaratory relief for an abuse of

discretion. (Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC

(2010) 191 Cal.App.4th 357, 364.) We review underlying factual findings for substantial

evidence, and apply de novo review to legal issues. (City of Oakland v. Oakland Police

& Fire Retirement System (2014) 224 Cal.App.4th 210, 226.)46

3. The superior court erred in its grant of declaratory relief

The District first contends that the superior court usurped its authority in declaring

that historical apportionment is the only reasonable method of apportionment. We agree.

Abatti sought a declaration that the District lacks authority to adopt the 2013 EDP or any

other plan that treats farmers inequitably. Even if the District acted inequitably and

abused its discretion in adopting the 2013 EDP, the superior court did not simply declare

that the plan is inequitable and that the District lacks authority to adopt it. Instead, the

court went beyond the relief requested, requiring the District to prioritize users in a

particular way, to use a particular apportionment method, and to refrain from entering

46 Declaratory relief can be "employed to determine the relative rights of all
interested parties to a specified water source." (1 Slater, California Water Law and
Policy (2006) Introduction, ch. 9, p. 9-2; see, e.g., Tulare Irrigation Dist. v. Lindsay-
Strathmore Irrigation Dist. (1935) 3 Cal.2d 489, 533 (Tulare).) However, Abatti did not
ask for a declaration of rights; instead, he assumed that the farmers possessed certain
water rights that were superior to the rights of other water users, and based on those
assumed rights, asked for relief as to the EDP. We addressed the issue of the farmers'
rights ante, and focus here only on the EDP.

76
into certain contracts. The court thus directed the District's future exercise of discretion.

In doing so, it erred. (See Bautista, supra, 201 Cal.App.4th at pp. 733-734 [rejecting

farmworkers' request for declaration that heat illness regulation was inadequate and order

for state "to provide more protection to farmworkers" through its agencies]; Cal.

Optometric Assn. v. Lackner (1976) 60 Cal.App.3d 500, 509 [declaratory judgment under

statute allowing challenge to regulation validity was "infused with error" and abuse of

discretion, where it was "not confined to a declaration of invalidity," but "essay[ed]

control over the agency's future proceedings"]; ibid. [declaration also exceeded relief

under Code Civ. Proc., § 1060; it would "dictate a public agency's ongoing administration

of statutory functions"].)

The view advanced by Abatti that the declaratory relief that the superior court

ordered is proper, is not persuasive. Abatti contends that use consistent with local custom

is reasonable, citing Tulare, and that "historical use of irrigation water gives rise to a

presumption of necessary and beneficial use," citing Joerger v. Pac. Gas & Elec. Co.

(1929) 207 Cal. 8, 23. Even if prior use were always reasonable—and the cases that

Abatti cites do not stand for this principle—that would not would justify requiring the

District to use historical apportionment rather than another method. (See Tulare, supra, 3

Cal.2d at pp. 547, 567 [appropriator can make reasonable use of water "according to the

general custom," but elsewhere noting that a beneficial use "may, because of changed

conditions, become a waste of water at a later time"]; Joerger, at pp. 22-23 [noting

presumption of necessary and beneficial use "[i]n passing"].) Abatti also contends that

the court properly concluded that equitable apportionment must consider various factors

77
reflected by historical use. The court's conclusions lack support, as discussed above, and

do not suffice to bar other methods.

Second, the District contends that the superior court's declaratory relief violates

the state constitution, because requiring historical apportionment is contrary to reasonable

use. The reasonableness of historical apportionment is not properly before us: the 2013

EDP permits, but does not require, historical apportionment, and we have already

concluded that the superior court erred in finding that this method is the only reasonable

one and granting declaratory relief requiring its use. However, we shall still address the

parties' arguments.

The District contends that under the superior court's historical apportionment

method, users with high past use "will be apportioned the most water, while those who

have conserved . . . will be apportioned less," and there would be no incentive to

conserve. These concerns are well-founded.47

Abatti suggests that the District is arguing that taking farmers' needs into

consideration encourages waste, and contends that the District has not identified evidence

that farmers "engaged in any unreasonable use of water in 2013" that justifies limiting

their water rights or the amounts of water that they will receive from the District. The

District is arguing against a historical method that could impede conservation; it is not

47 We reject any inference that historical apportionment is necessarily problematic.
Just as the District used a default straight line method and other components, and was
able to address conservation and user needs, a different apportionment plan could
conceivably be based on the historical method and satisfy similar objectives.

78
advocating that farmers' needs be ignored. Further, the District has the authority to

modify service by way of an apportionment plan regardless of whether farmers' past use

was unreasonable.

Abatti offers various arguments in support of the superior court's historical

apportionment method, which are not persuasive and would not justify its mandatory use,

in any event.

First, Abatti contends that farmers have become more efficient since the QSA,

citing a 2012 report on water transfers that shows conservation from fallowing and

efficiency-based measures. Given the overruns, the District could have reasonably

concluded that water management beyond these programs was needed. Abatti further

contends that he has a "reasonable and beneficial need" for more water than the hybrid

method would allocate and that he would suffer even more under straight line

apportionment, citing declarations that he filed in the superior court. However, the

declarations minimize Abatti's ability to obtain water from the clearinghouse, claiming

that "there is no guarantee" that he could. Further, the declarations reflect that Abatti has

not actually been denied water.48

Second, Abatti relies on an early discussion paper prepared by Hanemann and

Brooks to argue that the experts "originally agreed" that historical allocation "more

accurately reflect[ed] differences in farmers' water needs"; that it should require minimal

48 Abatti represented that the reason he has not been denied water was because of the
on-going litigation and other factors.

79
cost, given the District's data; and that straight line apportionment could be viewed as

unfair. This description is incomplete at best, and regardless, the District could

reasonably rely on the experts' report rather than on an earlier discussion paper.49 Abatti

also maintains that the District possesses the data necessary for a historical approach.

Both the experts and District counsel addressed the limits on the District's field-level

data, at least prior to 2003.

Finally, Abatti contends that if an apportionment plan fails to recognize historical

use, the "fundamental premise under which the QSA and the IOPP operate[] will be

undermined," and that "[a]ny precedent . . . that water use history is irrelevant . . . would

threaten future conserved water transfers" by Colorado River diverters. Abatti does not

elaborate on the "fundamental premise" underlying the QSA and IOPP, but to the extent

that he is referring to the historical agricultural basis for the District's Colorado River

entitlement, we explained ante that the District's obligation to the farmers is to consider

their rights in apportioning water—not to preserve the amounts that they have historically

been apportioned without change. As for Abatti's fears about precedent, the District's

objection to being forced to rely on historical use does not mean that it intends to ignore

it. Indeed, the District included historical use as a possible apportionment method in the

49 The paper described the apportionment methods, but did not identify one as more
accurate in reflecting users' water needs. It stated that straight line "may or may not be
viewed as fair" and also noted that the historical method could be viewed as a "source of
inequity." Abatti also notes that the experts' conclusions focused on shortage situations.
The paper that Abatti cites preceded the experts' report, it addressed shortage situations as
well as normal ones, and the report provides support for the 2013 EDP, notwithstanding
its focus on shortage scenarios.

80
2013 EDP, and implemented a hybrid method that contained a historical component for

calendar year 2014.50

E. Breach of fiduciary duty and taking claims

The superior court sustained the District's demurrer to Abatti's claims for breach of

fiduciary duty and taking without compensation (taking). We conclude that the court

properly sustained the demurrer.

1. Additional background

Abatti initially pursued claims for breach of fiduciary duty and taking, when the

case was assigned to Judge Altamirano. The court sustained the District's demurrer to

these claims in the first amended petition, with leave to amend. In Abatti's second

amended petition, with respect to his breach of fiduciary duty claim, he alleged that the

District "owes Abatti and other users a fiduciary duty of fair dealing, candor, care and

loyalty" and that the District breached its fiduciary duties with the adoption of the 2013

EDP. He further alleged that "[a]s a proximate result of the [District's] actions in

adopting and implementing" the 2013 EDP, he "has been damaged . . . ."

As for his taking claim, Abatti alleged that he and other owners hold "valuable

appropriative water rights" and that "[r]eceiving water service from the [District] in an

equitable manner is essential to preserving the value" of his real property and water

50 Abatti contends that this purported precedent would impact water transfers
"contemplated by the proposed Drought Contingency Plan for the Colorado River," for
which he seeks judicial notice. Because we reject this argument, we have no need to take
judicial notice.

81
rights. He further alleged that in adopting the 2013 EDP, the District "has taken and

damaged such private property rights of Abatti and other similarly-situated agricultural

property owners both through a physical taking of water and a regulatory taking of rights

without compensation."

The District demurred again. At the hearing on the demurrer, the superior court

expressed concern that there "might not be property rights that are being taken" and "may

not be any damages." Abatti's counsel argued that there was "harm to . . . water rights"

once the 2013 EDP was implemented, explaining that water could be "shunted at any

time" to those without rights and "[t]hat is the nature of the harm." Abatti's counsel

further argued that the 2013 EDP "eroded [Abatti's] property rights, [and] constitut[ed] a

taking and a breach of fiduciary duty." Counsel then asked the court to "[a]ssume,

hypothetically" that he had an appraiser who would say that the value of Abatti's real

property has been reduced due to the uncertainty caused by the EDP, and contended that

he "may or may not be able" to establish "that there is a proper element of damage, but

the time to prove it . . . is at the trial . . . ."

Judge Altamirano sustained the demurrer. The court noted that there was "an

allegation of the bare legal conclusion of damage, without the allegation of ultimate facts

to back it up." The court concluded:

"Although the court agrees that by virtue of past dealings, [Abatti
has] a reasonable expectation of an allocation of water that is fair
and equitable, the court disagrees with [Abatti's] claim that [he has]
property rights in allocations of water on a specific basis such that
[he] can claim damages for changes in such allocations, if such
changes in fact occur. Because [the District] is funded on water
rates, as opposed to assessments, if the allocation fluctuates

82
 downward, [Abatti is] relieved of the requirement of paying for
water [he does] not receive, hence there is no 'taking' which would
give rise to a claim for inverse condemnation damages."

The court denied leave to amend, explaining that "[l]eave to amend is generally favored,"

but noting that Abatti had "already amended twice" and that he had made "no showing as

to how [he] could in good faith amend . . . to actually state a cause of action."

2. Applicable law

We review a ruling sustaining a demurrer de novo, exercising independent

judgment as to whether the complaint states a cause of action as a matter of law. (Desai

v. Farmers Ins. Exchange (1996) 47 Cal.App.4th 1110, 1115.) "We affirm the judgment

if it is correct on any ground stated in the demurrer, regardless of the trial court's stated

reasons." (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97,

111.) Further, " '[i]f another proper ground for sustaining the demurrer exists, this court

will still affirm the demurrer[ ] . . . .' " (Jocer Enterprises, Inc. v. Price (2010) 183

Cal.App.4th 559, 566.)

When a demurrer is sustained without leave to amend, "we decide whether there is

a reasonable possibility that the defect can be cured by amendment: if it can be, the trial

court has abused its discretion and we reverse; if not, there has been no abuse of

discretion and we affirm. [Citations.] The burden of proving such reasonable possibility

is squarely on the plaintiff." (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 (Blank).)

83
 3. Analysis

a. Breach of fiduciary duty claim

" 'The elements of a cause of action for breach of fiduciary duty are the existence

of a fiduciary relationship, its breach, and damage proximately caused by that breach.' "

(Green Valley Landowners Assn. v. City of Vallejo (2015) 241 Cal.App.4th 425, 441.)

Where "damages are an element of a cause of action, the cause of action does not accrue

until the damages have been sustained." (City of Vista v. Robert Thomas Securities, Inc.

(2000) 84 Cal.App.4th 882, 886 (City of Vista).)

The superior court determined that Abatti failed to allege facts establishing

damages that would support his claims. We construe this as a finding that Abatti did not

sufficiently plead damages for purposes of his breach of fiduciary duty claim. Even

assuming that the District had a fiduciary duty to Abatti and that the EDP somehow

breached that duty, we conclude that Abatti's failure to adequately plead damages is a

sufficient basis to sustain the demurrer.51

In his initial brief, Abatti contended that his pleading was adequate, because

irrigation districts cannot violate vested property rights. He elsewhere cited, in support of

both of his claims, allegations describing the farmers' purported property interests in

water distributed by the District, asserting that the District "unlawfully takes water rights

51 Given the inadequacy of Abatti's allegations of damages or harm, we need not
reach the superior court's theory that the nature of Abatti's rights forecloses damages, and
thus need not address Abatti's objection that the District never raised his "lack of any
property right" in its demurrer.

84
and water away" from farmers, and that the District had exacerbated the harm by

implementing the 2013 EDP after Abatti had planted crops and "in many instances"

financed them and crops for later that season. He also contended that his counsel "made

a proffer as to diminution in value evidence" at the hearing, referencing his counsel's

request to the superior court that it "[a]ssume, hypothetically" that he could provide such

evidence. We are not persuaded. As we have determined, ante, Abatti possesses a right

to service, and changes to service do not necessarily impede or diminish that right.

Assuming that injuries from such changes could support a claim for damages, one would

still have to sufficiently allege them. Abatti simply speculates that the 2013 EDP could

harm farmers, if it were to operate based on his own assumptions (e.g., the clearinghouse

would be ineffectual, etc.), and it appears his counsel assumed that he could show a

diminution in value in connection with those assumptions. Even in alleging that the 2013

EDP has the effect of taking water from him, Abatti does not assert that he has actually

been denied any water. Neither potential harms, nor counsel's hypothetical arguments,

suffice to establish compensable damages. (Blank, supra, 39 Cal.3d at p. 318 [demurrer

is treated as "admitting all material facts properly pleaded, but not contentions,

deductions or conclusions of fact or law"]; City of Vista, supra, 84 Cal.App.4th at p. 886

[" 'Mere threat of future harm, not yet realized, is not enough.' "].)

On reply, Abatti contends that the breach of fiduciary duty cause of action "was

properly alleged even if the specific nature and proof of [his] damages, such as the value

of [his] water right, the diminution in the value of [his] real property due to a

permanently reduced water right, and/or the losses to [his] farming business attributable

85
to a future diminished supply of water, remained for determination," citing Allen, supra,

101 Cal.App.2d at p. 467. We need not address points raised on reply. (American Drug

Stores, Inc. v. Stroh (1992) 10 Cal.App.4th 1446, 1453 (Stroh) ["[p]oints raised for the

first time in a reply brief will ordinarily not be considered, because such consideration

would deprive the respondent of an opportunity to counter the argument"].) Even if we

were to consider these arguments, we would not find them to be persuasive. The issue is

not a lack of specificity in alleging damages; rather, it is the lack of any alleged damages

at all. In describing potential harms, Abatti does not contend that he has in fact suffered

those harms. As for Allen, the case is inapposite. (Allen, at pp. 467-468, 473-475

[affirming judgment voiding irrigation district lease that constituted breach of public

trust; no analysis of pleadings or damages].)

Finally, the burden is on Abatti to articulate how he could amend his pleading to

render it sufficient. (Blank, supra, 39 Cal.3d at p. 318; Goodman v. Kennedy (1976) 18

Cal.3d 335, 349 ["Plaintiff must show in what manner he can amend his complaint and

how that amendment will change the legal effect of his pleading."].) Not only did Abatti

fail to meet this burden, he forfeited the issue by not addressing amendment in his initial

brief. (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785 ["When an

appellant fails to raise a point, or asserts it but fails to support it with reasoned argument

and citations to authority, we treat the point as waived."]; Stroh, supra, 10 Cal.App.4th at

p. 1453.) Abatti's conclusory assertion on reply that he should be allowed to amend does

not salvage the argument.

86
 b. Taking claim

" 'The paradigmatic taking requiring just compensation is a direct government

appropriation or physical invasion of private property.' " (Bottini v. City of San Diego

(2018) 27 Cal.App.5th 281, 307 (Bottini).) Government regulation may also "be so

onerous that its effect is tantamount to a direct appropriation or ouster" and such

"regulatory takings" may also be compensable. (Ibid. [" 'regulations that completely

deprive an owner of "all economically beneficial us[e]" of her property' "].) There is also

a "third 'essentially ad hoc' category of regulatory takings" under Penn Central

Transportation Company v. New York City (1978) 438 U.S. 104, 124 (Penn Central).

(Bottini, at pp. 307-308 [primary factors are economic impact, interference with

investment-backed expectations, and character of the government action].)

The superior court determined that Abatti did not sufficiently allege a taking

claim, reasoning that the District is funded from water rates, so if the "allocation

fluctuate[d] downward," Abatti would be relieved of "paying for water [he does] not

receive" and "there is no 'taking'. . . ." We agree that Abatti did not sufficiently allege a

taking claim, but for reasons different from the superior court's.

In his initial brief, Abatti contended that he "specifically alleged a taking," citing

his allegation that the 2013 EDP resulted in a taking of his property through both a

physical and a regulatory taking. He also relied on his allegations and counsel's

arguments as to property rights and potential harms, as he did for his claim of breach of

87
fiduciary duty. He then reiterated that he "sufficiently alleged all of the required

elements of a taking," citing various cases.52 These contentions lack merit.

First, Abatti's allegations that a taking occurred are entirely conclusory. As for his

other allegations, we explained ante that Abatti's right entitles him to water service, and

that he cannot allege harm based on a change to service, alone, or speculation about

future harms. At best, Abatti's taking cause of action amounts to a claim that if the 2013

EDP were to cause injury to farmers by denying them water, then it would support a

taking claim of some sort. This does not establish that a physical taking has occurred, or

that any regulatory taking that might exist is ripe. (Bottini, supra, 27 Cal.App.5th at

p. 307; see York v. City of Los Angeles (2019) 33 Cal.App.5th 1178, 1195 [owner bears

" ' "heavy burden of showing that a regulation as applied to a particular parcel is ripe for a

taking claim" ' "].) Abatti also offers no analysis or authority as to how a purported

diminution in value would support a taking claim here.

Courts have rejected taking claims based on water use when they were premature

or otherwise unfounded. (See Casitas Municipal Water District v. United States (Fed.

Cir. 2013) 708 F.3d 1340, 1359 (Casitas) [physical taking claim based on right to

beneficial use of water accrued not when agency issued opinion, but whenever diversion

might occur]; Allegretti, supra, 138 Cal.App.4th at pp. 1267, 1271-1272 [county did not

effect a physical taking by approving conditional use permit that limited aquifer

52 Abatti elsewhere cites section 22263, which provides that nothing in the Irrigation
District Law authorizes diversion to an interest holder's detriment without compensation.
Abatti provides no substantive argument about this section, and thus forfeits the point.

88
extraction, where county did not encroach or authorize encroachment on owner's land or

aquifer, or divert water]; id. at pp. 1276, 1277 [owner also did not establish total

regulatory taking or taking under Penn Central].)

The cases that Abatti cites illustrate that water rights can support a taking claim.

However, that point is not in dispute. The cases do not establish that Abatti adequately

pled such a claim. (See Peabody v. City of Vallejo (1935) 2 Cal.2d 351, 358-359, 374-

375 [in action by riparian owners, acknowledging appropriator use that "causes

substantial damage" to land with paramount right is "an impairment . . . for which

compensation must be made," but remanding for consideration of reasonable use and

other issues]; Salton Bay Marina, Inc. v. Imperial Irr. Dist. (1985) 172 Cal.App.3d 914,

937-938 (Salton Bay) [ordinance required owner to dedicate property "for flooding

purposes" to obtain building permit; because "potentially all of a . . . property might have

to be dedicated," the ordinance acted as a "subterfuge for a taking"]; Klamath Irr. Dist. v.

United States (Fed. Cir. 2011) 635 F.3d 505, 509, 511, 517-18 [addressing federal

cessation of water deliveries in 2001 to protect endangered species; remanding for

determination of whether plaintiffs had property interests under applicable Oregon law

and whether those rights were impaired]; Baley v. United States (2017) 134 Fed. Cl. 619,

668 [taking claim by landowner class in Klamath litigation; termination of water delivery

89
was analyzed as physical taking].)53 If anything, the cases underscore the inadequacy of

Abatti's allegations. For example, in the Klamath litigation, the government actually

withheld water deliveries. Trial testimony reflected that a subsequent "late release of

water was of very little, or more often, no use," and that some plaintiffs "never received

any of this water." (Baley, at p. 640.)

On reply, Abatti attempts to show that his taking claim is not speculative. Even if

we were to address these belated arguments, we would reject them.

Abatti first cites the allegation in his petition that receiving equitable water service

is essential to preserving the "value of [his] property rights." He also cites allegations

from his petition that, under the 2013 EDP, he could lose up to 50 percent of the water

that he needs, and his business activities would be severely hampered as a result. These

allegations are inadequate for the same reasons as those he discussed in his initial brief;

they are speculative, rest on unfounded assumptions regarding the EDP's operation, and

reference a value diminution theory for which he provides no substantive analysis.

Second, in response to the District's contention that Abatti's claims are speculative, Abatti

argues that if he had filed suit after water delivery had been curtailed, the District would

have argued that his claim accrued in October 2013, when the 2013 EDP was adopted,

citing Davies v. Krasna (1975) 14 Cal.3d 502, 515. We decline to entertain such

conjecture. Davies is not a taking case, but rather, confirms that harm is necessary for a

53 Abatti also cites a case outside the water context, Kissinger v. City of Los Angeles
(1958) 161 Cal.App.2d 454. Similar to Salton Bay, it involved a zoning ordinance that
was basically a subterfuge for a taking. (See id. at pp. 460, 462-463.)

90
claim of breach of fiduciary duty to accrue, and, as noted, Abatti is merely assuming that

water will become unavailable at some future time. (Davies, at p. 514; see Casitas,

supra, 708 F.3d at p. 1360 [a "physical taking . . . may never occur"].)

Abatti cites additional cases on reply, but those cases involve actual diversions of

water or cessation of water delivery, or are otherwise inapposite. (See Los Angeles v.

Aitken (1935) 10 Cal.App.2d 460, 466-472, 475 [affirming damages for riparian and

littoral owners after city condemned and diverted recreational waters in manner that

would reduce water levels]; U.S. v. Gerlach Live Stock Co. (1950) 339 U.S. 725, 729-

730, 752-753 [upholding compensation to riparian owners who depended on river

overflow, after construction of Friant Dam ended overflow]; Dugan v. Rank (1963) 372

U.S. 609, 613, 625-626 [downstream water rights holders challenged upstream

impounding from Friant Dam construction; if available, remedy would be damages based

on market value before and after taking]; Tulare Lake Basin Water Storage Dist. v. U.S.

(2001) 49 Fed. Cl. 313, 314-315, 318-320 [projects with government contracts for water

91
established physical takings based on pumping restrictions to protect fish habitats that

resulted in water being unavailable].)54

Finally, as with his breach of fiduciary duty claim, Abatti had the burden to show

how he could amend his petition to state a taking claim, but failed to address the issue in

his opening brief, and has thus forfeited it. The arguments that he raises in reply are not

persuasive. Abatti contends that he is entitled to amend "to state more detailed

allegations that the amount of water allocated to [his] lands under the EDP" is less than

what he requires and "to allege diminution in value of [his] lands as a result." Even if

Abatti were to amend as he suggests, he would still fail to allege any actual denial of

water, and he cites no evidence or authority to establish that the value of his land has

been diminished as a result of the adoption of the EDP, or that even if there were a

diminution of value, that this would establish a taking in these circumstances.55

54 Abatti cites two additional sources. In his initial brief, he seeks judicial notice of a
comment made by a Board member at a 2018 hearing that an appurtenant right to use
water cannot be taken without compensation. On reply, he contends that the District
argued in Bryant that imposing the federal acreage cap would have "taken the
landowners' water rights" and addressed the value of the lost right. We decline to take
judicial notice of the Board member's comment; the sufficiency of Abatti's pleadings is a
question of law, and this does not advance that inquiry. Although we need not consider
the belated contention about the District's argument in Bryant, we point out that Bryant
did not involve a taking claim.

55 Our conclusions here are limited to the taking claim brought by Abatti. We take
no position as to claims that a user might bring in the future.

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F. District challenges to Abatti's petition

The superior court rejected the District's arguments that Abatti's lawsuit is barred

by the statute of limitations and by a prior validation action. The District has not

established that these rulings are in error.

1. Additional background

In addition to challenging Abatti's breach of fiduciary duty and taking claims, the

District demurred to his first amended petition on the grounds that the petition challenged

provisions that were contained in previous EDPs and were thus barred by the statute of

limitations (Code Civ. Proc., § 338), and that Abatti's claims were also barred by the

Morgan v. Imperial Irrigation District (2014) 223 Cal.App.4th 892 (Morgan) validation

action.56 Judge Altamirano overruled the demurrer, but indicated that she had questions.

The District subsequently filed a motion to strike the second amended petition on similar

grounds, and specifically sought to strike allegations regarding EDP provisions that had

been contained in previous EDPs (i.e., allocation of water to non-agricultural users before

farmers, the default straight line apportionment, and the formation of a clearinghouse).

In the same order in which Judge Altamirano sustained the District's demurrer as

to the taking and breach of fiduciary duty claims in the second amended petition, she

56 As we explain post, a government agency can bring a validation action to confirm
the validity of certain of its actions, and a judgment in the agency's favor bars future
challenges; a person or entity can also file a reverse validation action to challenge
government action. (Code Civ. Proc., § 860 et seq.) Morgan was a reverse validation
action in which water users contested a rate change and fees in the 2008 EDP. The
District believes that Morgan bars challenges to provisions of the 2013 EDP that existed
at the time. (Morgan, supra, 223 Cal.App.4th at pp. 897, 903, fn. 4, 925.)

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granted the motion to strike, in part. In the demurrer section of the order, the court ruled

that a party aggrieved by an EDP is required to file a reverse validation action within 60

days (i.e., of the challenged government action), and that Abatti could therefore challenge

only the October 2013 EDP "with respect to any change . . . from the May 2013 EDP, as

to which, along with all prior [EDPs], attack is barred by the passage of time."

Addressing the motion to strike, the court first indicated that "references to the earlier

[EDPs] intended to in any [way] attack their current vitality, are barred." Pertinent here,

and notwithstanding the preceding rulings, the court denied the motion to strike as to

certain allegations in Abatti's petition that addressed provisions in the 2013 EDP that

were contained in previous EDPs.

In November 2014, Abatti filed the operative third amended petition, which

retained these allegations. The District filed another motion to strike addressing the

statute of limitations under Code of Civil Procedure section 338 and Morgan, which

Abatti opposed. The case was reassigned to Judge Anderholt in December 2014. Judge

Anderholt heard and denied the motion to strike. In denying the motion, the court noted

that Judge Altamirano's order was "very specific . . . . [p]arts of these paragraphs are in;

parts of these paragraphs are out." The court also asked the District's counsel whether

these were issues that the District could raise at trial, and counsel indicated that it could.

The District addressed the statute of limitations and Morgan in its brief opposing Abatti's

petition.

In its Statement of Decision, the superior court ruled that Abatti's action was

timely. The court explained that "the 2013 EDP was not merely piecemeal revisions . . . ,

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and was adopted . . . as a new, complete, fully integrated plan which did not require resort

to older plans for interpretation." The court further explained that the 2013 EDP

"contained substantial changes" from prior EDPs, including changes to the plan

definitions and provisions impacting farmers. The court also found that Morgan did not

bar Abatti's claims, explaining in part that the challenges to the prior EDPs in that action

"had been dismissed and therefore [were] not adjudicated in that case," and that the 2013

EDP "did not exist at the time of resolution of the [Morgan] case."57

2. Analysis

a. The superior court did not exceed its authority

As an initial matter, the District contends that Judge Anderholt exceeded his

authority by essentially "overruling a different judge's interim ruling in the same case."

We disagree. Although the District's pleading challenges were based on the statute of

limitations under Code of Civil Procedure section 338 and the Morgan validation action,

Judge Altamirano's rulings were based on a different ground, i.e., her view that the statute

of limitations for reverse validation actions limited Abatti to challenging the October

2013 EDP. Further, in her ruling on the District's motion to strike, she declined to strike

certain allegations regarding existing EDP features—implying that she did not view the

57 As part of his cross-appeal, Abatti challenged Judge Altamirano's ruling to the
extent that it limited his ability to challenge aspects of the 2013 EDP that had also been
included in the April and May 2013 versions of the EDP. The District viewed the issue
as moot, given that Judge Anderholt had ruled that Abatti could challenge all aspects of
the 2013 EDP, and Abatti agreed in reply that his challenge to that portion of Judge
Altamirano's ruling might be moot. We need not address the issue further.

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reverse validation issue as a total bar to consideration of such features. After the case

was reassigned to Judge Anderholt, the District filed another motion to strike based on

the statute of limitations under Code of Civil Procedure section 338 and Morgan—

grounds that Judge Altamirano had not ruled on. The District agreed at the hearing that

the statute of limitation and Morgan issues could be addressed at trial, and it raised them

in its trial brief. Thus, Judge Anderholt properly addressed these issues in the court's

Statement of Decision.

b. Statute of limitations

"The general rule is that a cause of action accrues ' "when, under the substantive

law, the wrongful act is done," or the wrongful result occurs, and the consequent

"liability arises." ' " (Arcadia Dev. Co. v. City of Morgan Hill (2008) 169 Cal.App.4th

253, 262 (Arcadia).) Whether an act related to a prior act is separately actionable is "best

analyzed by determining whether there is a factual basis for distinguishing" between

them. (Ibid; id. at pp. 261-262 [addressing whether owner could challenge city's

extension of a previously-adopted growth control ordinance].) Where, as here, "the

underlying facts are not in dispute . . . , the question of when a cause of action accrues is

a question of law, subject to independent review." (Pacific Shores Property Owners

Assn. v. Department of Fish & Wildlife (2016) 244 Cal.App.4th 12, 34.)58

58 Abatti views the issue of whether the 2013 EDP is new as a disputed factual
matter; even if that were so, it would not change our conclusion in his favor.

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 The superior court properly rejected the District's timeliness argument, because

Abatti's challenge to the 2013 EDP accrued upon the adoption of the 2013 EDP. There is

a significant basis to distinguish between the 2013 EDP and the prior EDPs even if the

prior EDPs contained some of the same provisions as are contained in the 2013 EDP: the

prior plans would apply only in shortage conditions, while the 2013 EDP was intended to

be a permanent annual apportionment plan. There were other differences, as well,

including changes to the agricultural allocation and new provisions to address overruns.

Further, as the superior court observed, the 2013 EDP is a complete, independent plan

that does not reference or depend on prior versions. (See Arcadia, supra, 169

Cal.App.4th at p. 265 [extension of growth control ordinance not intended to be

permanent was "new burden" and could be challenged]; Barratt American, Inc. v. City of

Rancho Cucamonga (2005) 37 Cal.4th 685, 703 [reenactment that extended duration of

fee schedule supported cause of action; change was significant when considered with

local agency's duties, and contrary result would render later reenactments immune to

challenge].)

To establish that the 2013 EDP and those that preceded it are the same for

purposes of its statute of limitations argument, the District relies on its description of the

2013 EDP and prior versions as "revisions," and notes that certain features contained in

previous plans remain in place in the 2013 EDP. We are not persuaded. The issue is

whether the 2013 EDP is different from previous plans. To the extent that pre-existing

plan elements remain in place, they take on new significance as permanent, annual

features in the 2013 EDP. As for the cases cited by the District, those cases involve

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provisions not impacted by later enactments or are otherwise distinguishable. (See Buena

Park Motel Assn. v. City of Buena Park (2003) 109 Cal.App.4th 302, 308 [plaintiffs

could not challenge older hotel stay ordinance, or portions of related provision not altered

by later ordinance]; Napa Citizens for Honest Govt. v. Napa Cnty. Bd. of Supervisors

(2001) 91 Cal.App.4th 342, 387, 390 [petitioners contended that traffic measures in

specific plan invalidated circulation element of general plan; holding that attack on

general plan was untimely].)59 Finally, the District contends that permitting challenges

to long-standing policies will "hamstr[ing]" its Board from making needed changes.

Again, because the 2013 EDP marks a significant change, it is not insulated from

challenge; permitting such challenge poses no threat to District's discretion.

c. Morgan validation action

The validation statutes (Code Civ. Proc., § 860, et seq.) "provide a procedure by

which a public agency may determine the validity of certain acts." (Kaatz v. City of

Seaside (2006) 143 Cal.App.4th 13, 29.) A judgment in a validation proceeding is

"binding and conclusive, as to all matters therein adjudicated or which at that time could

have been adjudicated . . . ." (Code Civ. Proc., § 870.) If the agency does not timely file

a validation proceeding, interested persons must bring what is called a "reverse validation

action" to challenge the agency's action. (Kaatz, at p. 30 and fn. 16.) "The validation

59 (See also De Anza Properties X, Ltd. v. Cnty. of Santa Cruz (9th Cir. 1991) 936
F.2d 1084, 1086 [physical taking claim based on elimination of sunset clause in rent
control provision was untimely, because duration impacted only damages]; cf. Arcadia,
supra, 169 Cal. App.4th at p. 266 and fn. 8 [distinguishing De Anza, as a taking is
complete upon occupation, and noting doubt that it was "still viable law"].)

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statutes do 'not specify the matters to which [they] appl[y]; rather, [their] procedures

apply to "any matter which under any other law is authorized to be determined pursuant

to this chapter." ([Code. Civ. Proc.,] § 860.)' " (Id. at p. 31.) Under the Irrigation

District Law, matters subject to validation include the legality of an irrigation district and

the validity of contracts with a duration of more than three years (and any federal

contract), assessments, and bonds. (Wat. Code, §§ 22670, 23225, 23571, 50440.)

We agree with the superior court that Morgan did not result in a validation

judgment that bars Abatti's action.

First, the EDP-related claims in Morgan were dismissed as moot. In that case,

water users filed a reverse validation action contending that the District's passage of new

water rates violated Proposition 218. (Morgan, supra, 223 Cal.App.4th at p. 897.) They

also challenged certain fees contained in the 2008 EDP, which the District subsequently

eliminated. (Id. at pp. 903, fn. 4, 925.) The superior court in the reverse validation action

found that the rate-setting was proper. (Id. at pp. 903-904.) As for the EDP fees, the

court found that the District "was discharging its obligation to establish equitable rules"

for water distribution, but dismissed the EDP claims as "moot by stipulation" because the

fees had been deleted and the parties stipulated that the EDP contained no property-

related charge. (Id. at p. 927.) The court then awarded attorney fees based on the EDP

claims. (Id. at p. 928) This court affirmed the merits ruling, but reversed the attorney fee

award. (Id. at p. 930.) We determined that the superior court had mistakenly assumed

that the EDP fees were improper, explaining that the fees had been deleted, the issue was

not litigated, and the parties' stipulation did not imply that the fees would have been

99
improper if they had remained in effect. (Ibid.) We noted that nothing in the court's

decision precluded the District from imposing a fee in the future, or customers from

challenging it. (Id. at p. 931.) Second, Morgan could not have addressed, much less

resolved, the validity of the permanent, annual provisions in the 2013 EDP, because they

did not exist at the time that case was litigated. Because a validation judgment is binding

only on matters that were specifically adjudicated or "which at that time could have been

adjudicated" (Code Civ. Proc., § 870), Morgan does not bar Abatti's challenges to the

2013 EDP.

The District's position is not persuasive. It argues that the superior court in

Morgan validated the EDP, this was not challenged on appeal, and the validation was

thus binding and conclusive. Even assuming that an EDP is subject to a validation

proceeding, which Abatti disputes, the District's argument fails to account for our holding

in Morgan; our opinion in that matter makes clear that the superior court did not resolve

the EDP claims on the merits. (Morgan, supra, 223 Cal.App.4th at p. 930.) Next, the

authorities that the District cites involve matters encompassed by the prior litigation,

which is not the case here. (See, e.g., Colonies Partners, L.P. v. Superior Court (2015)

239 Cal.App.4th 689, 694 [validity of settlement agreement was litigated in prior

validation action]; Eiskamp v. Pajaro Valley Water Mgmt. Agency (2012) 203

Cal.App.4th 97, 100, 105-106 [challenge to 2002 ordinance increasing groundwater

augmentation charges was barred by 2008 stipulated judgment that addressed similar

ordinances and extinguished claims as to augmentation and management charges];

Griffith v. Pajaro Valley Water Mgmt. Agency (2013) 220 Cal.App.4th 586, 605,

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disapproved on other grounds by City of San Buenaventura v. United Water Conservation

Dist. (2017) 3 Cal.5th 1191, 1209, fn. 6 [same claim as in Eiskamp; although ordinance

"was not technically under attack" at time of stipulated judgment, case was validation

proceeding that extinguished potential claims].)

Finally, the District argues that "[t]he validating statutes should be construed so as

to uphold their purpose, i.e., the acting agency's need to settle promptly all questions

about the validity of its action," citing Friedland v. City of Long Beach (1998) 62

Cal.App.4th 835, 842. The purpose of validation is not in dispute; validation judgments

nevertheless are binding only on "matters . . . adjudicated or which at that time could

have been adjudicated . . . ." (Code Civ. Proc., § 870.) Morgan does not satisfy those

requirements with respect to Abatti's action.

G. Abatti's challenges to the District's appeal

Abatti argues that both collateral and judicial estoppel preclude the District from

relitigating the farmers' rights, and that the District's appeal is moot. We disagree.

1. The District's contentions regarding the nature of farmers' rights is not

barred by collateral or judicial estoppel

"Collateral estoppel precludes relitigation of issues argued and decided in prior

proceedings." (Lucido v. Superior Court (1990) 51 Cal.3d 335, 341, citation omitted.)

The doctrine's requirements are as follows: "First, the issue sought to be precluded from

relitigation must be identical to that decided in a former proceeding. Second, this issue

must have been actually litigated in the former proceeding. Third, it must have been

necessarily decided in the former proceeding. Fourth, the decision in the former

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proceeding must be final and on the merits. Finally, the party against whom preclusion is

sought must be the same as, or in privity with, the party to the former proceeding." (Id. at

p. 341.)

Abatti argues that the "issue of Farmers' water rights in the water held in trust by

[the District] is identical" to the issue in Bryant, and "was actually litigated and

necessarily decided" there. The issues are not identical. Bryant addressed whether a

federal law could prevent the District from distributing water to irrigating landowners

with more than 160 acres, and in doing so, discussed the nature of the landowners' rights.

(Bryant, supra, 447 U.S. at p. 356.) This case addresses whether the District abused its

discretion in adopting an equitable distribution plan for all users, including irrigating

landowners. Bryant aids our analysis, but does not resolve the inquiry. (See Johnson v.

GlaxoSmithKline, Inc. (2008) 166 Cal.App.4th 1497, 1513 [when " 'previous decision

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rests on "different factual and legal foundation" [from] the issue . . . in the case at bar,

collateral estoppel effect should be denied' "].)60

The judicial estoppel doctrine applies when: " '(1) the same party has taken two

positions; (2) the positions were taken in judicial or quasi-judicial administrative

proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal

adopted the position or accepted it as true); (4) the two positions are totally inconsistent;

and (5) the first position was not taken as a result of ignorance, fraud, or mistake.' "

(Aguilar v. Lerner (2004) 32 Cal.4th 974, 986-987.)

Abatti contends that the District is judicially estopped from arguing that the

farmers "do not have a constitutionally protected interest" in the District's water rights.

He relies on the District's submissions in Bryant, where it argued, among other things,

that irrigating landowners possess an appurtenant, constitutionally protected property

interest in the District's water rights and that "each individual landowner has a statutory

60 It does not appear that Abatti raised collateral estoppel in the superior court;
although this could be a basis for forfeiture (Rodgers v. Sargent Controls & Aerospace
(2006) 136 Cal.App.4th 82, 89), we elect to address it. He raises additional, related
arguments on appeal, as well. Specifically, Abatti contends that Bryant bars relitigation
under stare decisis, which we reject for reasons similar to our reasons for rejecting his
collateral estoppel argument. He makes a validation argument, based on a superior court
opinion validating the 1932 Contract between the District and the United States, for
which he seeks judicial notice. The portion of the case that Abatti cites addresses the
Reclamation Act. Abatti has not established that it is a binding, validation judgment as to
the issues before us, and we therefore decline to take judicial notice of the opinion. Last,
Abatti also contends on reply that the District raised different arguments regarding water
rights in the superior court, and thus forfeited the arguments that it raises on appeal. We
do not consider this belated, cumulative argument.

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right to a definite proportion of the District's water." The superior court did not address

this argument when Abatti made it below, and we reject it.

First, Abatti does not demonstrate that the District has taken entirely inconsistent

positions. (See Bell v. Wells Fargo Bank (1998) 62 Cal.App.4th 1382, 1387-1388 ["The

party must have taken positions that are so irreconcilable that . . . 'one necessarily

excludes the other' "].) It is not unreasonable, much less irreconcilable, that the District

emphasized landowners' rights in Bryant, but underscores its own discretion and

authority here; in both instances, the District was defending its authority to distribute

water. To the extent that the District argued for individual entitlement to a specific

proportion of water, Bryant appears to have rejected that contention. (Bryant, supra, 447

U.S. at p. 371 ["[i]t may be true . . . that no individual farm . . . has a permanent right to

any specific proportion of the water"].) Second, even if the elements of judicial estoppel

were satisfied, "[j]udicial estoppel is an extraordinary remedy that should be applied with

caution." (Kelsey v. Waste Management of Alameda County (1999) 76 Cal.App.4th 590,

598.) We see no basis for its application here.

2. The District's appeal is not moot

Finally, Abatti contends that the District's appeal is moot because the District has

repealed the 2013 EDP. We disagree.

Waiver of the right to appeal may occur when there is "voluntary compliance"

with a judgment. (Lee v. Brown (1976) 18 Cal.3d 110, 115.) However, "where

compliance arises [only] under compulsion of risk or forfeiture, a waiver will not be

implied." (Id. at p. 116; see Cunningham v. Magidow (2013) 219 Cal.App.4th 298, 302

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[appeal was not moot; respondent cited "no authority" that "to preserve her right to

appeal, [appellant] was required to defy the court's order"].) The District contends that it

repealed the 2013 EDP because of the "threat of contempt," and the record supports that

explanation.61

The superior court's writ of mandate required the District to withdraw the 2013

EDP. The District asked the superior court to recognize that the automatic stay under

Code of Civil Procedure section 916 applied pending its appeal; Abatti contended that the

stay did not apply. The superior court concluded that it did not have discretion to provide

the relief sought by either party in light of the appeal. The District then filed a petition

for writ of supersedeas in this court to confirm that the stay applied, while Abatti filed a

petition for writ of mandate to confirm that it did not. On January 31, 2018, we denied

the District's petition, concluding that the automatic stay did not apply. Meanwhile,

Abatti had objected to the District's actions in approving a geothermal contract and

advising farmers that it would continue implementing the 2013 EDP as disobeying the

superior court's rulings. On February 8, 2018, the District repealed the 2013 EDP. These

events support the District's explanation for the repeal, and reflect that in repealing the

2013 EDP, it was merely complying with the judgment pending its appeal. Sierra Club.

v. Bd. of Supervisors (1981) 126 Cal.App.3d 698, cited by Abatti, is inapposite. (See id.

61 We take judicial notice of the District's repeal of the 2013 EDP, the parties'
petitions to this court regarding a stay, and our order. (Evid. Code, § 452; In re R.V.
(2009) 171 Cal.App.4th 239, 245, fn. 1 [taking judicial notice of materials potentially
relevant to mootness].)

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at pp. 704-705 [appeal concerning allegedly inconsistent zoning ordinance was mooted

by adoption of general plan that eliminated the inconsistency].)

DISPOSITION

The judgment is affirmed as to the superior court's ruling that the District abused

its discretion in how it prioritizes apportionment among categories of water users in the

2013 EDP, and as to its dismissal of the breach of fiduciary duty and taking claims.

The judgment is otherwise reversed, and the superior court is directed to enter a

new and different judgment: (1) granting the petition on the sole ground that the

District's failure to provide for equitable apportionment among categories of water users

constitutes an abuse of discretion; and (2) denying the petition on all other grounds,

including as to declaratory relief.

The parties shall bear their own costs on appeal.

AARON, J.

WE CONCUR:

BENKE, Acting P. J.

IRION, J.

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