November 27, 2024
by Admin

The Latest Updates on the Sustainable Groundwater Management Act (“SGMA”) and Who’s in Hot Water

Groundwater is an essential resource, especially in California, where much of the water supply comes from groundwater in aquifers beneath us. In an effort to address overuse and ensure sustainable management of that groundwater supply, California passed a series of bills, collectively known as the Sustainable Groundwater Management Act (“SGMA”) in 2014. SGMA, the first of its kind in California, mandates the sustainable use of groundwater and empowers local and state agencies to oversee its management.

This article provides an overview of SGMA’s core provisions, recent developments, and ongoing legal disputes affecting California’s water users.

A. SGMA: A Brief Overview

SGMA required local agencies to form Groundwater Sustainability Agencies (“GSAs”) to oversee designated groundwater basins. Each GSA must develop a Groundwater Sustainability Plan(s) (“GSP(s)”) tailored to reduce overdraft and achieve a sustainable groundwater level by 2040 or 2042, as applicable. The California Department of Water Resources (“DWR”) evaluates these GSPs to ensure compliance. The options for DWR’s evaluation include:

Approval: GSPs that are in substantial compliance with SGMA, potentially with recommendations for improvement.
Incomplete: Plans needing corrective action within 180 days.
Inadequate: GSPs with significant issues, leading to possible probation and intervention by the State Water Resources Control Board (“SWRCB”).

B. Current Status of GSPs

As of November 2024, California’s groundwater sustainability efforts show progress, but challenges still remain:

Approved GSPs: 73 plans have received DWR’s approval.
Incomplete or Inadequate Basins: 13 Basins are incomplete, while 6 have been deemed inadequate, triggering the state intervention process. There have been two SWRCB probationary hearings in 2024, with four more expected in 2025.

C. Challenges and Deficiencies in GSPs

Common issues in GSPs that fail to meet SGMA standards include:

Lack of coordination between GSAs.
Lack of consideration for protecting domestic wells.
Insufficient prevention of subsidence.
Lack of justification for water quality thresholds.
Lack of monitoring to avoid depletion of interconnected surface waters.

D. Legal Battles Over SGMA Implementation

Several recent legal cases illustrate the tensions between groundwater users, GSAs, and regulatory agencies:

Mojave Pistachios, LLC v. Superior Court (2024) 99 Cal.App.5th 605, reh’g denied (Mar. 4, 2024), review denied (May 15, 2024):
1. In a case of first impression, the California Court of Appeal, Fourth Appellate District, applied the “pay-first, litigate later” rule, requiring groundwater users to pay SGMA fees before challenging such fees in court. Critically, footnote 20 requires the user to pay any fees incurred during the litigation to continue to maintain the action. The California Supreme Court denied to hear the case. In June 2024, an Orange County court granted an injunction ordering Mojave Pistachios to pay $30 million in back fees to the Indian Wells Valley Groundwater Authority.
Elizabeth Cardoza et al. v. Madera County GSA (Madera Co. Superior Ct. Case No. MCV086218):
1. A group of landowners challenged Madera County’s groundwater allocation system, arguing that it unfairly limits their overlying common law rights and creates arbitrary caps on groundwater extraction. A Case Management Conference is scheduled for January 1, 2025.
Valley Groundwater Coalition v. County of Madera (Madera Co. Superior Ct. Case No. MCV087677):
1. This case concerns whether or not groundwater fees imposed by Madera County on “White Areas” (areas with no access to surface water; groundwater dependent) are lawful property-related fees or special taxes, questioning the County’s adherence to California’s Proposition 218 and Proposition 26 requirements. Madera County’s Motion for Judgment on the Pleadings was granted with leave to amend during a hearing held on June 18, 2024 based on claims of (1) having named the wrong party (the County rather than the County as a GSA), and (2) being claim barred under the Mojave Pistachios (“pay first, litigate later”) rule. An Amended Complaint was filed on August 30, 2024.
Kings County Farm Bureau v. SWRCB (Kings Co. Superior Ct. Case No. 24CU9198):
1. This lawsuit seeks to overturn the probationary designation of the Tulare Lake Subbasin, challenging the SWRCB’s authority and regulatory decisions under SGMA. A Temporary Restraining Order was granted on July 10, 2024 restraining the SWRCB from enforcing the probationary metering and record-keeping requirements. Subsequently, on September 12, 2024, a Preliminary Injunction was granted against the SWRCB extending the restrictions until after the culmination of the case. The following day, on September 13, 2024, Kings County Superior Court Judge Kathy Ciuffini issued her ruling on the SWRCB’s Demurrer to the Complaint. In September 2024, the SWRCB filed a notice of appeal, which will be heard at the Fifth District Court of Appeal in Fresno.

E. Probationary Status

When local management falls short, SGMA permits the SWRCB to take temporary control over basins with inadequate GSPs. The SWRCB can impose fees, require extraction reports, and monitor basin sustainability, but ultimately, local GSAs must regain compliance to resume control. Currently, the Tulare Lake Subbasin and the Tule Subbasin are undergoing a one-year probationary status (with very limited exceptions). After a one year probationary period, if the GSAs do not revise their GSP(s) to meet SGMA requirements, the SWRCB may considering implementing its own plan to reach sustainability in the subbasin.

F. Looking Ahead

The chart below summarizes the current SWRCB probationary hearing schedule for inadequate subbasins as of November 2024:

Chart of basin names and the corresponding hearing dates

SGMA represents a critical step toward sustainable groundwater management in California. As the state continues to enforce and refine SGMA’s provisions, ongoing legal disputes highlight the complexity of balancing regulatory compliance with common law water rights and the needs of groundwater users. Both local and state agencies will need to work collaboratively to adapt management practices to meet California’s long-term water sustainability goals. This is essential for maintaining the future of the water supply in California and continuing to produce the highest quality food in the world.

Disclaimer
This Legal Update / Bulletin is for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. This update should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.