On Monday, September 12, 2022, a California Court of Appeal upheld a decision that the State Water Resources Control Board (the "Board") lacks jurisdictional authority to issue curtailment notices to pre-1914 appropriative water rights holders under Water Code section 1052. Although the decision pertained to the curtailment orders issued in 2015 during the previous drought, it has important implications for the scope of the Board's authority to respond to current and future drought conditions.

For historical reasons, appropriative water rights in California generally fall into two broad categories: those that were established before 1914, and those after. Originally, California law accepted common law appropriation, by which a person could appropriate water simply by diverting it and putting it to use. In 1913 the Legislature passed the Water Commission Act, which established the exclusive procedures that exist today for appropriating water—an appropriator must apply for and obtain a permit or license to appropriate water from the Board. These procedures went into effect in December 1914, creating the distinction between the two general categories of appropriative water rights.

Section 1052 falls under chapter 2, part 1 of division 2 of the Water Code, which governs the comprehensive permitting and licensing scheme for appropriative water rights. Subdivision (a) specifically provides that "[t]he diversion of water or use of water subject to this division other than as authorized in this division is a trespass." Other provisions in section 1052 allow the Board to issue daily penalties or impose civil liability for violations of subdivision (a). The particular issue in the case was whether subdivision (a) enables the Board to take enforcement action against "illegal" diversions, including diversions under pre-1914 appropriative water rights, through curtailment orders on grounds that there is insufficient water for more senior water rights holders. The Board asserted that it could, and several water agencies with pre-1914 appropriative rights challenged the application of those orders to their water rights.

Based on rules of statutory construction and review of the legislative history, the Court held that section 1052(a) does not apply to the valid exercise of a pre-1914 appropriative water right because such rights are not "subject to" chapter 2, part 1 of division 2 of the Water Code. By contrast, since post-1914 appropriative water rights are within the ambit of division 2, the Court observed that the Board can take enforcement action under section 1052(a) against such water rights holders through curtailment orders. It can also use those provisions to exercise enforcement action against a water rights holder who is diverting more than allowed under a valid pre-1914 right, or where such claimed right is found to be invalid. But section 1052(a) does not authorize the Board to categorically regulate all pre-1914 appropriative water rights "solely on the basis that the Board believes that there will be insufficient water to serve all pre-1914 appropriative rights."

Although it was not at issue in this case, other types of senior water rights, including riparian and pueblo water rights, would also not be subject to enforcement action by the Board under section 1052 because those types of water rights are also not "subject to" chapter 2, part 1 of division 2 of the Water Code. It is not yet known whether the Board will seek review of the Court's decision by the California Supreme Court.

Although the decision removes the Board's ability to broadly regulate pre-1914 appropriative rights under section 1052(a), the Court noted that the Board may exercise "emergency regulations" under other provisions of the Water Code to require curtailment of diversions when there is insufficient water. As the current drought continues, the Board will not be able to rely on section 1052(a) to curtail pre-1914 appropriative water rights, but it may attempt to do so under emergency regulatory provisions.

The full decision of the California Water Curtailment Cases is available here. If you have any questions about the decision or how it may impact your water rights, please contact the authors of this Legal Alert, or your Allen Matkins attorney.

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