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Tulare Lake Subbasin's "Good Actors" May Be Excluded from State Intervention
On October 29, 2025, the Fifth District Court of Appeal in Kings County Farm Bureau v. State Water Resources Control Board reversed a broad preliminary injunction that had barred the State Water Resources Control Board ("State Board") from imposing regulatory fees and mandating groundwater extraction monitoring and reporting in the San Joaquin Valley's critically overdrafted Tulare Lake Subbasin.
The case arose when the Kings County Farm Bureau ("Farm Bureau") challenged the State Board's 2024 determination to put the entire Tulare Lake Subbasin on "probation," based on a finding that the subbasin's groundwater sustainability plan ("GSP") failed to show a likelihood of achieving sustainability throughout the subbasin, as required by the Sustainable Groundwater Management Act ("SGMA").
In reversing and remanding the trial court's injunction against the State Board's probation actions, the appellate court highlighted that the Farm Bureau likely would prevail at trial on its "good actor" claim that the State Board must exclude from probation sustainable portions of a groundwater basin or subbasin. The appellate court found that "the State Board shall exclude portions of a basin from its probationary designation when a groundwater agency requests exclusion and demonstrates compliance with the sustainability goal."
The appellate opinion helps to clarify the State Board's SGMA authority to designate basins or subbasins as probationary, when local groundwater sustainability agencies ("GSAs") fail to adopt and carry out GSPs that will achieve sustainability by SGMA's deadlines (2040 for critically overdrafted subbasins, and 2042 for high- and medium-priority subbasins). To document progress toward those deadlines, GSAs were required to complete by 2025 Periodic Evaluations of GSPs for critically overdrafted subbasins, while such evaluations are due in 2027 for high- and medium-priority subbasins.
The Kings County Farm Bureau opinion provides guidance to help GSAs and stakeholders use Periodic Evaluations to make the case for protecting sustainable subbasins, or portions of subbasins, against the potential for probation when other subbasins or portions of subbasins are failing to show progress toward achieving sustainability.
How We Got Here
SGMA was enacted in 2014 to provide a comprehensive groundwater management framework to achieve groundwater sustainability across all California's high- and medium-priority groundwater basins and subbasins by 2042 (by 2040 if a subbasin is designated critically overdrafted). SGMA recognizes that the State's groundwater is best managed locally and allows the state to intervene only when local management fails to satisfy SGMA's mandates. In a process known as "state intervention," the California Department of Water Resources ("DWR") may refer a subbasin to the State Board for further oversight, based on DWR's determining that the subbasin is not meeting SGMA's sustainability goal of avoiding certain undesirable results caused by groundwater overdraft (e.g., seawater intrusion, land subsidence, reductions in groundwater storage).
Upon DWR's referral, SGMA shifts responsibility to the State Board to determine whether a subbasin should be designated as "probationary." When a subbasin is designated as probationary, the State Board may impose certain monitoring, reporting and fee requirements on groundwater pumpers, and may go further by imposing an "interim plan" to achieve sustainability. However, SGMA provides a "Good Actor" exclusion for any portion of a basin or subbasin that is sustainable or on track to timely achieve sustainability—despite undesirable results arising from unsustainable portions of the basin or subbasin.
The Tulare Lake Subbasin is managed by five GSAs that jointly approved and are carrying out a single GSP for the entire subbasin. In March 2023, DWR determined that the GSP was inadequate and referred the subbasin to the State Board, thereby beginning the state's intervention role under SGMA. In April 2024, the State Board designated the subbasin as probationary and imposed monitoring and reporting conditions, including associated fees, that are triggered by the designation. During this process, two of the GSAs in the subbasin requested the "Good Actor" exclusion based on claims that their portions of the subbasin were sustainable and on track to meet SGMA's sustainability goal. The State Board denied those requests on the sole ground that the allegedly sustainable portions were subject to a single GSP that was inadequate for the rest of the subbasin.
In response to the probationary designation, the Kings County Farm Bureau sued the State Board and claimed, among other things, that the State Board unlawfully denied the Good Actor exclusion for the two GSAs that requested it. The Farm Bureau also alleged that the State Board exceeded its authority under SGMA, including by demanding that an amended GSP be submitted as a result of probation.
Soon after the lawsuit was filed, and long before any trial, the Farm Bureau requested a temporary restraining order or preliminary injunction to prevent the State Board from imposing its extraction monitoring, reporting and fee requirements during the litigation. The trial court quickly granted a temporary restraining order, and later granted a preliminary injunction, prohibiting the State Board from imposing those requirements. In doing so, the trial court determined that the Farm Bureau's claims were likely to succeed on the merits at trial and that the Farm Bureau was likely to suffer far greater harm than the State Board if injunctive relief was not granted. The State Board appealed.
Court Clarifies "Good Actor" Exclusion From Probation
The appellate opinion helps clarify when the Good Actor exclusion may be invoked.
First, the court observed that SGMA requires the State Board to give notice to pumpers and hold a public hearing before designating a subbasin as probationary, and found that the Good Actor exclusion may be requested in connection with the probation hearing.
Second, two GSAs had showed for their portions of the subbasin that: (1) groundwater levels were relatively stable; (2) subsidence rates were low; (3) additional factors limited groundwater extractions; and (4) actions were taken by one GSA in the form of additional well mitigation, registration, and metering programs—all to show "that the global plan was sufficient to meet the sustainability goals in those portions of the basin." If proven, the court held, "the statutory scheme requires that these portions of the basin be excluded from the probationary designation."
Third, the court disagreed with the State Board's demanding a DWR-approved GSP as a prerequisite to applying the Good Actor exclusion. In that regard, the court focused on SGMA's statutory language that requires the Board to approve the exclusion for "any portion of a basin" if it "demonstrates compliance with the sustainability goal." The court interpreted this language as only requiring that a GSP for that portion of the basin be proposed or adopted by the GSA. The court further clarified that a portion of a basin may be excluded as a good actor regardless of whether there is an individualized GSP for the portion of the basin requesting an exclusion.
Court Clarifies State's SGMA Intervention Authority
Although the appellate court agreed with the trial court's determination that the State Board improperly applied the Good Actor exclusion, the court held that it was the only claim likely to succeed on the merits.
Another question addressed by the Court of Appeal was whether the State Board exceeded its authority by requiring GSAs to submit revised GSPs for the State Board's review during the probation process. As to that question, the Court of Appeal held that the State Board has "broad authority to act" once a subbasin is designated as probationary, including by reviewing its GSPs. As the Court of Appeal explained, a probationary designation shifts the oversight authority from DWR to the State Board. From that point, the State Board is required to wait one year before implementing an interim management plan for the subbasin. However, DWR has two years to review submitted plans under its regulations. The court reasoned that "submitting the adopted plan to the State Board for review in consultation with the Department appears to be the only way to ensure an exit from probationary status can occur before the one-year deadline for allowing the State Board to develop an interim plan."
Trial Court Injunction Was Too Broad
After concluding that the Farm Bureau's other theories were unlikely to succeed on the merits at trial, the Court of Appeal lifted the injunction, holding that it was overbroad because it extended far beyond the Good Actor claim for two portions of the subbasin to enjoin lawful State Board probation actions across the entire subbasin. A foundational requirement for injunctive relief is that it be narrowly tailored to prevent specific injury. In this case, the Farm Bureau's only colorable challenge pertained to the State Board's analysis and rejection of the Good Actor exclusion for two GSAs in two portions of the subbasin. The trial court's injunction was not limited to those jurisdictional boundaries but, rather, froze the State Board's probation activities subbasin-wide. The disconnect between the State Board's likely Good-Actor violation and the trial court's sweeping remedy required reversal, the appellate court found.
The Court of Appeal remanded the case back to the trial court to determine whether a narrower injunction is appropriate, such as one that applies only to the portions of the basin that have credible grounds for being excluded from the probation program as Good Actors.
Key Takeaways Regarding State Intervention and Probation under SGMA
- State Board probation hearings are an appropriate venue to request Good Actor exclusions.
- Under SGMA's Good Actor exclusion, the State Board shall exclude portions of a basin or subbasin from probation based on a demonstration that those portions comply with SGMA's sustainability goals.
- The Good Actor exclusion may be applied to portions of a subbasin, even if the GSP for the subbasin as a whole fails to comply with SGMA.
Why It Matters
Although the appellate opinion in Kings County Farm Bureau does not end the groundwater management battle within the Tulare Lake Subbasin, it approves the Good Actor exclusion for portions of a subbasin that are doing what is needed to maintain or timely achieve sustainability—even if the rest of the subbasin is struggling.
Kings County Farm Bureau highlights the importance of GSAs working with stakeholders to muster evidence showing that at least some portions of a SGMA-regulated subbasin are sustainable or on track to achieve sustainability by SGMA's deadlines. With many five-year Periodic Evaluations due in 2027, DWR will have new information to evaluate progress to maintain or achieve sustainability throughout California's high- and medium-priority subbasins before referring struggling subbasins to the State Board for a probation determination.
How Kronick Can Help
Kronick's Water Law team counsels GSAs, landowners, public water suppliers, and other SGMA stakeholders statewide on the full range of SGMA implementation issues. Our work spans GSP development and implementation, inter-GSA coordination, fee adoption, and GSA governance. We also guide clients through Periodic Evaluations and State Board actions. We have extensive regulatory experience and practical, data-driven strategies to help GSAs and stakeholders document Good Actor showings, navigate exit paths from probation, and align projects and management actions with measurable sustainability outcomes. Since SGMA's inception, we continue to provide practical SGMA solutions to preserve local control of groundwater resources.
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