Court Upholds Validity of Landmark Water Transfer Agreement Providing Greater Certainty to California's Water Supply

On June 4, 2013, the Sacramento County Superior Court issued its much-anticipated ruling in the QSA Coordinated Civil Cases, upholding the validity of the historic Quantification Settlement Agreement and related agreements (the QSA) in the face of numerous environmental challenges. For the past 10 years, the Imperial Irrigation District (IID), the State of California, and other agencies had been seeking to have these QSA agreements validated and all environmental compliance approved for this, the largest set of consensual water transfers in the history of the United States. The court's ruling upholds the legality of the QSA on all points. Allen Matkins was trial counsel for IID.

The decision covers many important areas under validation law, the California Environmental Quality Act (CEQA), and the Brown Act. Among the many significant findings in the case are:

• Alternative sources of water identified under urban water management plans are not too speculative under CEQA;
• Baseline conditions under CEQA may be determined by modeling that uses established historical trends for future prediction;
• Multiple agencies may act as co-lead agencies under CEQA;
• New water merely replacing lost water is not necessarily growth-inducing under CEQA;
• Nothing in the QSA contracts relieves the State of California of its commitment to undertake the restoration of the Salton Sea (as had been claimed by QSA opponents);
• California courts have jurisdiction to validate federal contracts with California agencies, if brought by the California agencies as to the validity of their acts; and
• The Brown Act is not violated when a public agency delegates authority to officers at a public meeting, and the officers then effectuate that delegation later.

The court also rejected arguments that the project's analysis of air quality impacts and mitigation, and analysis of alternatives to the project, were insufficient.

This decision, once final, will provide developers and land use planners with greater certainty about the availability of long-term water supplies. Southern California receives its water primarily from the Bay Delta (through the State Water Project) and from the Colorado River. In particular, San Diego County Water Authority relies on its water conservation and transfer agreement with IID, and canal lining agreements in the Imperial and Coachella Valleys, for about 30% of its water supply. All of these agreements had been placed in jeopardy by the QSA litigation and, if found invalid, would have created uncertainty about the availability of water in Southern California. While we cannot predict whether an appeal will be filed or the outcome of an appeal, this decision, at least for now, removes potential uncertainty over Colorado River water supplies received via the QSA, uncertainty that would have impacted almost all water supply analyses performed in the region.