Op ed: Jury Trial an epic battle
Submitted by Cindy Steinbeck, Steinbeck Vineyards & Winery
–Over the past four weeks, an epic David and Goliath legal fight culminated in a historic jury trial protecting the groundwater rights of landowners from governmental taking without compensation. On one side of the courtroom sat lawyers for San Luis Obispo County, San Luis Obispo County Flood Control and Conservation District, the City of Paso Robles, Atascadero Mutual Water Company, Templeton Community Services District and San Miguel Community Services District represented by no less than 5 law firms, nine in court lawyers and a cadre of jury and trial consultants, media presentations and governmental representatives. On the other side sat representatives of the 1,000 plus landowners desperately trying to preserve their rights to the groundwater they pump from the wells on their property, which are their sole source of water, represented by father and son, Mr. Richard Zimmer & Mr. William Zimmer from a single law firm, Clifford & Brown. When the dust settled, the jury rejected the governmental attempt to take any meaningful groundwater rights from the landowners.
For over a hundred years, landowners in San Luis Obispo County have provided water to their homes, gardens, farms, ranches, agricultural crops, and wineries. They have maintained and operated their water wells responsibly and without any governmental contribution or assistance. In the meantime, the governmental entities grew at a rapid pace permitting new development including housing tracts, high-density housing, hotels, golf courses and large commercial enterprises. As representatives of the public, the governmental entities were required to assure a sufficient and appropriate water supply to the public.
The California Constitution, article X, section 2, requires that water resources be put to maximum use to afford water users with as much water as possible and prohibits unreasonable uses of water and waste. Groundwater use may be curtailed in the event of overdraft to prevent depletion of the basin water supply. In simple terms, overdraft means a condition where a groundwater basin is being over-pumped during wet and dry periods leading to long-term depletion of the supply rather than being replenished during wet periods. If curtailment of water use is necessary, California groundwater law provides a priority-based system of water use based upon the type of water use. Throughout the course of the last century, California has provided landowners a flexible right to pump and use groundwater on their properties as necessary depending upon the changing uses of such properties. These rights have priority under California law over the rights of water purveyors such as government entities which sell water to the public. The priority water right afforded landowners means that, in times of water shortage, the governmental entities are legally limited to their use of the excess water supply over and above what is necessary to supply landowners with the water they need to pump from their wells based upon their changing needs. As to additional water supplies which may be needed by the governmental entities to supply water for new growth such as hotels, golf courses and other new projects, the government entities are required to obtain and fund new sources of water for new development.
In 2005, amidst some concern regarding the water supply, San Luis Obispo County, Paso Robles and a group of landowners assured members of the public that the groundwater basin underlying the Paso Robles area was not in overdraft. In order to address concerns regarding the government entity representations that the water supply was not in overdraft and to assure landowners that a lawsuit to protect their rights was not necessary, San Luis Obispo County and Paso Robles sought additional landowners to engage in a formal agreement. The primary purpose of this agreement was to keep landowners from pursuing a lawsuit to protect their groundwater rights. This Agreement is known as the Paso Robles Groundwater Agreement or PRIOR Agreement, and can be reviewed here.
Essential terms of this Agreement are a representation that the basin was not in overdraft and the County’s agreement to act as a Technical Advisor to evaluate water conditions on an ongoing basis. The County agreed to notify the public in a written, noticed public hearing and in the newspaper at any point in the future if the groundwater basin was in overdraft. This process was implemented so that landowners could take steps to protect their rights if the County declared an overdraft. The County also agreed not to pursue any litigation claiming that the basin was in overdraft until an overdraft was declared by the County. Over time, additional landowners signed the Agreement and the Agreement is still in effect today.
The jury trial testimony by San Luis Obispo representative Courtney Howard and Paso Robles representative Christopher Alakal confirmed that they had made public presentations and reviewed multiple scientific expert reports confirming that the basin was not in overdraft. They had also requested amendment and or amended documents to assure that “overdraft” was not publicly reported, and they provided input for or participated in County Board meetings which confirmed that the basin was not in overdraft.
Following the PRIOR Agreement, the governmental entities continued to represent that the basin was not in overdraft and continued to assure the public that the government was properly managing and acquiring water supplies to meet public needs. Despite this assurance, and in the absence of any declaration of overdraft, in 2013, the County abruptly enacted an Emergency Ordinance to limit landowner pumping to a fixed amount rather than a flexible amount. Limiting landowners to a fixed amount was not only inconsistent with California law but also inconsistent with agricultural and other landowner usage which fluctuates based upon the type of crops being grown and with other land uses. The landowners involved in the recent jury trial became concerned that the Ordinance was being used by the County to take away the critical and necessary water rights of landowners provided by California law and the California Constitution. The landowners filed what is legally known as a quiet title action to determine whether the County and other governmental entities were claiming to be taking groundwater rights away from landowners, and to arrest and determine any such claims. In response to the quiet title action, the governmental entities confirmed that they were trying to take landowners groundwater rights based upon a legal claim called prescription. The prescription claims were the subject of the recent jury trial. For the first time in California history, landowners were given an opportunity by the court to have government agencies prove their prescription claims to a jury of the landowners’ peers.
Up until the point that the government entities made prescriptive claims to the landowner water rights in the recent jury trial, the governmental entities continued to assure the public that the government was properly managing and acquiring water supplies to meet public needs. Contrary to the terms of the PRIOR Agreement, the County as Technical Advisor never gave any notice of overdraft to the public before claiming overdraft and prescription in the recent jury trial. A prescription claim takes rights from a landowner and provides those rights to the governmental entity. Prescription is based upon open and notorious, hostile and adverse use, under claim of right, over a continuous and uninterrupted period of five years during which a landowner fails to take action to protect his or her water rights. Taking of property rights is very disfavored by law and a forfeiture of such rights may by law only occur when a property owner has knowledge of the open and notorious, hostile and adverse use and fails to take any action to protect the landowner’s property rights.
In the recent jury trial, San Luis Obispo County claimed overdraft even though it took on a role as Technical Advisor agreeing to notify the public of overdraft and agreeing not to pursue any prescription claims based upon overdraft in the absence of a public declaration of overdraft. At the jury trial, the prescription claims of the governmental entities were based upon a claim that the Paso Robles groundwater basin was in overdraft. The governmental entities claimed that the groundwater basin was in overdraft from 1981 to 1992, from 2001 to 2004 (just before the PRIOR Agreement was signed) and from 2006 to 2010 (just after the PRIOR Agreement was signed). The governmental entities argued that the groundwater basin was in overdraft during all three time periods. At the beginning of trial, the entities acknowledged that the second period from 2001 to 2004 could not support a prescription claim as it was not a five-year period. They continued to claim prescription during the remaining periods.
At the prescription trial, San Luis Obispo and Paso Robles witnesses Courtney Howard and Christopher Alakal testified under oath that the basin was in overdraft for purposes of claiming prescription even though they continually represented to the public before the trial that the basin was not in overdraft. A review of their trial testimony, which is public record, confirms the inconsistency of their public representations and their self-serving testimony at trial seeking to prove prescription against the groundwater basin as a whole and thereby against all landowners whether or not they were parties to the jury trial. Additionally, San Luis Obispo, Paso Robles and the other governmental entities presented testimony that the basin has been in overdraft since the 1980s. Their expert, Anthony Brown, using unaccepted scientific terms and analysis, testified that the basin safe yield is only 76,658 acre feet per year (“AFY”), roughly 14,000 to 20,000 AFY less than recent studies conducted by experts retained by the governmental entities to evaluate the safe yield. The safe yield is the amount of water that can be pumped from the basin without the basin being in overdraft. This new safe yield number relied upon a method of calculation not used by any previous expert nor used in any prior report evaluating safe yield. A determination of safe yield in this amount would have far-reaching consequences and potentially would limit pumping by all groundwater users to this artificially low safe yield, whether they were involved in the jury trial or not.
The governmental entities also presented the testimony of a historian expert who stated that any landowner in the basin with a fourth-grade education should have known the basin was in overdraft and should have sued the government to stop the government from pumping and using groundwater. Putting aside the condescending nature of the comment, the question remains why San Luis Obispo County and the other entities, with all the experts at their disposal, failed to understand that the basin was in overdraft and give notice to the public accordingly.
The landowners defending against the prescription claims of the governmental entities pointed out the inconsistent positions taken by San Luis Obispo and Paso Robles regarding overdraft during the 2006 to 2010 timeframe and presented their own expert on safe yield. The landowner expert, Anthony Daus of GSI Environmental, determined that the average annual safe yield was roughly 92,000 AFY, consistent with other experts which had evaluated the basin in the past. However, he explained that in order for the basin to operate normally, in dry years it is appropriate to pump more than an average annual quantity so long as the basin is replenished in wet years. Importantly, he noted that over the long term from 1981 to the present, over the past 37 years, the basin at issue in the trial responded normally to wet and dry periods without depleting or harming the basin. Therefore, Mr. Daus testified that the safe yield of the basin has not yet been reached and that the Constitutional mandate requiring maximum use for all water users has been met. The distinction between the average annual safe yield (an invented term created by the government’s expert) of water which can be withdrawn on average each year is different than the safe yield which is based upon long-term conditions and the health of the basin. Of concern to all water users is the recognition that cutting back water usage to an average annual number would not be consistent with the Constitution because limiting pumping to an average number would artificially limit pumping below what can safely be pumped from the groundwater basin. Pumping in excess of an average annual number is clearly necessary during drought and normal to proper functioning of a groundwater basin in the same way that taking money from a savings account is necessary when money in our checking is insufficient to pay for unusual expenditures.
The jury paid careful attention to the testimony and evidence. On September 24th, 2018, the twelve-person jury returned their verdict finding that the governmental entities failed to prove their prescription claims with the limited exception of the time period in the distant past from 1981 to 1990. The recent claim by the governmental entities that the jury sided with the governmental entities distorts the truth and the impact of the jury’s decision. The jury unanimously found that the governmental entities failed to prove prescription after 1990. The jury had significant questions as to the prescription claims back in the 1980s since the prescription finding during this distant time period was found based upon a minimum vote of only 9-3. The jury decision that the government entities failed to prove prescription in the more recent time period is significant because the entity prescription claims are limited to the amounts they pumped and actually used during the prescriptive period. The amounts pumped and used by the entity defendants back in the 1980s were minimal. Therefore, any prescription claims related to that distant period likewise are minimal.
The claims of San Luis Obispo County and other governmental entities at trial that the basin has been in overdraft, in an attempt to prove prescription, are completely inconsistent with the representations of the position they have taken in public that the basin is not in overdraft. Relying on the fox to protect the chickens never works out well. Other landowners continue to be at risk of receiving misinformation from the governmental entities seeking to scare landowners into settlements and to obtain prescriptive rights against additional landowners. The jury verdict has proved that landowners can stand up to secret government attempts to take their water rights.
The next phase of trial will involve quantification of the small amount of prescriptive rights proved in the 1980s. To determine this amount, the total amount of prescription against the entire basin and all landowners within the basin must be determined. That total amount, which itself will be minimal based upon the prescriptive period long ago, must then be apportioned among all landowners in the basin. The end result will be a nominal, extremely small percentage of claimed prescriptive rights obtained by each entity as to any given landowner. The nominal prescriptive right obtained by the government entities will not solve any water supply issue they have created by lack of proper governmental action and do not change the fact that these entities are required to manage water supplies properly rather than attempt to take groundwater rights by prescription from landowners.
All landowners should pay close attention to the details above and take appropriate action to protect their rights. Additionally, as recent legislation requires management of basins throughout the state, landowners should take an active role to assure that management plans are scientifically appropriate and written to protect the rights of all landowners.