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Planning & Conservation League v. Department of Water Resources

ELR Citation: 31 ELR 20178
Nos. No. C024576, 100 Cal. Rptr. 2d 173/(Cal. Ct. App., 09/15/2000)

The court holds that the environmental review of a water allocation agreement between the state department of water resources and 29 local water contractors violated the California Environmental Quality Act (CEQA). After the parties entered long-term contracts governing the supply of water under a state water project, the state agency and six parties to the contract renegotiated the contract's Article 18, which deals with the allocation of resources during water shortages. They agreed to allow one of the parties to the contract to serve as the lead agency for the purpose of preparing an environmental impact report (EIR) under the CEQA.

The court first holds that the party to the contract should not have been designated the lead agency for the purpose of preparing the EIR for implementation of the contract. Under the CEQA, the lead agency is the public agency with the principal responsibility for carrying out or approving a project that may have a significant effect on the environment. The text of the contract and the record suggest that it will be primarily the task of the state agency to execute the contract. Further, neither the language of the CEQA nor the facts of the case support a so-called shared principal responsibility. Although the party designated to conduct the EIR may have a substantial stake in the contract's implementation, it does not have principal responsibility for implementing the contract. The state agency is charged with the responsibility to build, manage, and operate the state water project.

The court next holds that the EIR was defective because it failed to consider the impact of eliminating the contract's Article 18(b), which proposed a permanent solution to the state's water shortages. Instead of discussing the impacts of eliminating Article 18(b), the EIR designated elimination of Article 18(b) as a "no-project alternative" and provided no analysis for the decision. So long as Article 18(b) can be plausibly construed in a manner that would result in significant environmental consequences, its elimination should be considered and discussed in the EIR. Many commenters to the draft EIR argued that the elimination of Article 18(b) would have a significant impact on land use planning. Nevertheless, the party conducting the EIR simply failed to fulfill its mandate to provide a thorough examination of the no-project alternative of eliminating Article 18(b). Further, the elimination of Article 18(b) was not adequately explained in the final EIR as an alternative that was rejected because it did not meet the objectives of the contract. The court then holds that the trial court erroneously dismissed for failure to name and serve indispensable parties a challenge to the state agency's transfer of title to a storage facility and execution of amended contracts. The proceedings at issue are in rem in nature. Thus, there are no indispensable parties beyond the public agency whose action is challenged. Therefore, the trial court erroneously characterized water contractors as indispensable parties.

Counsel for Plaintiffs
Antonio Rossmann
Law Offices of Antonio Rossmann
380 Hayes St., Ste. 1, San Francisco CA 94102
(415) 861-1401

Counsel for Defendants
Roderick E. Walston, Chief Ass't Attorney General
Attorney General's Office
1300 I St., Ste. 1740, Sacramento CA 95814
(916) 324-5437

Before Blease and Hull, JJ.