e-Bulletin: Appellate Court Weighs In On Water Supply Assessment Litigation

A California appellate court recently struck down a direct challenge to a Water Supply Assessment (“WSA”) brought outside the normal planning and CEQA process.  An April 16, 2008 decision by the Second Appellate District of the California Court of Appeal, California Water Impact Network v. Newhall County Water District, held that (1) a third-party may not directly challenge a Water Supply Assessment (“WSA”) outside a challenge to a project approval and its CEQA process, (2) a challenge to a WSA is unripe if brought prior to project approval, and (3) a potential litigant must participate in the land use approval and CEQA process before challenging WSA. 

This case concerns the legal adequacy of a WSA prepared by the Newhall County Water District for the City of Santa Clarita (“City”).  The WSA was required as part of an Environmental Impact Report (“EIR”) for a 4.2 million square foot industrial/commercial development.  Before the City had an opportunity to review and evaluate the WSA or incorporate it into the EIR, the California Water Impact Network (“CWIN”) filed a lawsuit alleging that the WSA was deficient.  The trial court dismissed the petition as premature

On appeal, the Court upheld the trial court’s ruling.  First, the Court held that the challenge was [unripe] because the WSA was not final.  The Court determined that a WSA is not final until the CEQA lead agency certifies the project EIR and approves the project’s WSA.  In essence, the Appellate Court determined that a WSA is like a traffic report or any other technical document included in an EIR, and is therefore not subject to legal review, except in the context of a CEQA lawsuit challenging the EIR. 

Second, the Court held that prior to challenging the adequacy of the WSA, CWIN was required to raise its concerns before the City.  Because CWIN brought this lawsuit before the City considered the WSA or included it in its EIR, CWIN failed to exhaust its administrative remedies.

It is important to note that while the Court was hesitant to create an additional layer of judicial review by allowing direct challenges to WSAs before completion of the CEQA process, the Court did clearly state that WSAs could be challenged as part of a CEQA lawsuit.  The Court specifically stated that a city or county, acting as the lead agency under CEQA, has the “authority to consider, assess and examine the quality of the information in the WSA and endows the lead agency with the right to pass judgment upon the WSA.”  In practice then, this decision places the burden for ensuring an adequate WSA on the city or county requesting the assessment. 

Thus, to our city and county clients who are processing any environmental documents that may include a WSA, we recommend that they:

1)  Independently review and evaluate the information in the WSA to ensure that all requirements of the Water Code are satisfied.  If additional information is necessary, the water supplier should be contacted immediately and the additional information should be included in the EIR. 

2)  Fully respond to all comments and questions raised by the public regarding the adequacy of the WSA prior to certification of the EIR and project approval.  Special attention should be given to competing expert opinions and concerns regarding the sources of water identified in the WSA.

Please contact your BB&K Environmental and Natural Resources attorney if you have any questions regarding the adequacy of a particular WSA or if you should have any other questions regarding this case.