County of Butte v. Dept. of Water Resources

IN THE SUPREME COURT OF

CALIFORNIA

COUNTY OF BUTTE,

Plaintiff and Appellant,

v.

DEPARTMENT OF WATER RESOURCES,

Defendant and Respondent;

STATE WATER CONTRACTORS, INC., et al.,

Real Parties in Interest and Respondents.

COUNTY OF PLUMAS et al.,

Plaintiffs and Appellants,

v.

DEPARTMENT OF WATER RESOURCES,

Defendant and Respondent;

STATE WATER CONTRACTORS, INC., et al.,

Real Parties in Interest and Respondents.

S258574

Third Appellate District

C071785

Yolo County Superior Court

CVCV091258*

*

Two cases (Nos. 144282, 144283) were consolidated and

transferred from the Butte County Superior Court to the Yolo

County Superior Court (No. CVCV091258).

August 1, 2022

Justice Liu authored the opinion of the Court, in which

Justices Kruger, Groban, Jenkins, and Guerrero concurred.

Chief Justice Cantil-Sakauye filed a concurring and dissenting

opinion, in which Justice Corrigan concurred.

COUNTY OF BUTTE v. DEPARTMENT

OF WATER RESOURCES

S258574

Opinion of the Court by Liu, J.

Operation of a dam, reservoir, or hydroelectric power plant

requires a license from the Federal Energy Regulatory

Commission (FERC). (16 U.S.C. § 817(1).) For decades,

California has required public entities seeking licensing of state-

owned and state-operated hydroelectric projects to conduct

environmental review under the California Environmental

Quality Act (CEQA; Pub. Resources Code, § 21000 et seq.). In

this case, California’s Department of Water Resources (DWR or

Department) prepared an environmental impact report (EIR)

under CEQA in connection with its application for renewal of its

50-year license to operate the “Oroville Facilities,” an

interrelated group of public works operated by DWR in Butte

County. Butte and Plumas Counties (the Counties) filed writ

petitions challenging the sufficiency of the EIR.

The trial court found the Department’s EIR adequate, and

the Counties appealed. The Court of Appeal did not reach the

merits of the Counties’ CEQA claims, instead finding their

actions in part preempted by the Federal Power Act (FPA; 16

U.S.C. § 791a et seq.) and otherwise premature. In 2019, we

granted the Counties’ petitions for review and transferred the

matter to the Court of Appeal with directions to reconsider its

decision in light of Friends of the Eel River v. North Coast

Railroad Authority (2017) 3 Cal.5th 677 (Eel River). On remand,

the Court of Appeal again found the Counties’ actions in part

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Opinion of the Court by Liu, J.

preempted and otherwise premature. (County of Butte v. Dept.

of Water Resources (Sept. 5, 2019) C071785, opn. ordered

nonpub. Dec. 11, 2019, S258574 (County of Butte).)

The Court of Appeal held that the FPA preempts the

Counties’ challenge to the environmental sufficiency of the

settlement agreement DWR prepared as part of FERC

proceedings. We agree that the Counties’ claims are preempted

to the extent they attempt to unwind the terms of the settlement

agreement reached through a carefully established federal

process and seek to enjoin DWR from operating the Oroville

Facilities under the proposed license. As the Court of Appeal

recognized, FERC has sole jurisdiction over disputes concerning

the licensing process employed here (County of Butte, supra,

C071785; see 18 C.F.R. § 4.34(i)(6)(vii)), and the requested

injunction would be akin to the “veto power” prohibited by First

Iowa Coop. v. Federal Power Comm’n (1946) 328 U.S. 152, 164

(First Iowa).

But the Counties’ writ petitions also challenged the

sufficiency of the EIR more generally, and they have now

abandoned their requests to enjoin the operation of the Oroville

Facilities under the proposed license. In this court, the parties

have fully briefed and asked us to decide whether the FPA

preempts what remains of the Counties’ CEQA claims. On this

question, we observe that DWR relied on the EIR to analyze the

environmental impact of operating the Oroville Facilities under

the settlement agreement or an alternative proposed by FERC

staff. The EIR serves as the informational source for DWR’s

decisionmaking as to whether to request particular terms from

FERC as it contemplates the license (18 C.F.R. § 4.35(b) (2022))

or to seek reconsideration of terms once FERC issues the license

(id., § 4.200(b) (2022); 16 U.S.C. § 825l), avenues available to

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Opinion of the Court by Liu, J.

any applicant under federal law. It also informs decisionmaking

about potential measures that may be outside of or compatible

with FERC’s jurisdiction. Nothing in the FPA suggests

Congress intended to interfere with the way the state as owner

makes these or other decisions concerning matters outside

FERC’s jurisdiction or compatible with FERC’s exclusive

licensing authority. (See Eel River, supra, 3 Cal.5th at p. 724

[CEQA not categorically preempted where the federal scheme

permits the state as owner to “make its decisions based on its

own guidelines”]; Wyeth v. Levine (2009) 555 U.S. 555, 565

[congressional intent is the “ ‘ultimate touchstone in every pre-

emption case’ ”].) Accordingly, we conclude that the Court of

Appeal erred in finding the Counties’ CEQA claims entirely

preempted.

We affirm the decision of the Court of Appeal in part,

reverse in part, and remand for further proceedings consistent

with this opinion.

I.

The license governing DWR’s operation of the Oroville

Facilities (sometimes Facilities) was issued in 1957 and was set

to expire in 2007. DWR began public preparations to apply for

renewal of the license in October 1999. DWR has yet to achieve

relicensing of the Facilities, and it currently operates the

Facilities under annual, interim licenses. (See 18 C.F.R.

§ 16.18(b)(1) (2022).)

A.

At the time DWR undertook the relicensing process, FERC

regulations allowed applicants to pursue the traditional

licensing process or an alternative. DWR chose to pursue the

alternative licensing process (ALP), a voluntary procedure

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Opinion of the Court by Liu, J.

designed to achieve consensus among interested parties on the

terms of the FERC license before the licensing application is

submitted. (18 C.F.R. §§ 4.34(i), 4.34(i)(2)(iv) (2022).) The ALP

requires persons and entities with an interest in the operation

of the project to cooperate in a series of hearings, consultations,

and negotiations. (18 C.F.R. §§ 4.34(i)(3), (4) (2022).) The

objective of the process is to identify areas of concern and

disagreement among the stakeholders regarding the license

terms and to resolve those differences. (18 C.F.R.

§§ 4.34(i)(2)(ii), (iv), (v) (2022).) The ALP “[c]ombine[s] into a

single process the pre-filing consultation process [of the

traditional licensing procedure], the environmental review

process under the National Environmental Policy Act[ of 1969

(42 U.S.C. § 4321 et seq.),] and administrative processes

associated with the Clean Water Act [(33 U.S.C. § 1251 et seq.)]

and other statutes.” (18 C.F.R. § 4.34(i)(2)(i) (2022).) Ideally,

ALP participants conclude the process by entering into a

settlement agreement reflecting the terms of a proposed license.

(Id., subd. (i)(2)(v) (2022).) The settlement agreement then

becomes the centerpiece of the license application and serves as

the basis for FERC’s “orderly and expeditious review” in setting

the terms of the license. (Ibid.) Although FERC does not

surrender its regulatory authority when it allows an applicant

to pursue the ALP, the process permits the interested parties to

prepare what is effectively a first draft of the license.

FERC approved DWR’s request to use the ALP in January

2001, and the process consumed the next five years. The ALP

participants included representatives from 39 organizations —

five federal agencies, five state agencies, seven local government

entities, five Native American tribes, four local water agencies,

and 13 nongovernmental organizations. From late 2000

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Opinion of the Court by Liu, J.

through 2004, the six working groups formed to conduct the ALP

each met at least monthly, eventually logging an estimated

1,500 hours of meeting time.

During the early stages of the ALP, in September 2001,

DWR issued a document combining a CEQA notice of

preparation and a “scoping document.” The latter plays a role

under the National Environmental Policy Act (NEPA) that is

similar to a notice of preparation under CEQA. (See 40 C.F.R.

§ 1501.9 (2022) [describing role of scoping]; Cal. Code Regs.,

tit. 14 (CEQA Guidelines), § 15082 [describing the notice of

preparation and determination of scope of an EIR].) A primary

purpose of the joint document was to solicit comment on the

scope of a preliminary draft environmental assessment (PDEA)

for the renewed license, a document whose preparation is

mandated by the ALP. (18 C.F.R. § 4.34(i)(4)(iii) (2022).) The

PDEA eventually prepared for the Facilities, issued in January

2005, is a 700-page analysis of the Facilities’ proposed operation

and likely environmental impact, including consideration of

alternatives to the proposed project and mitigation measures.

The PDEA’s analysis was supported by an additional 1,500

pages of appendices.

After three years of hearings and consultations, the ALP

participants began negotiating an agreement in April 2004. The

28-page settlement agreement (with 96 pages of attached

appendices), concluded in March 2006, was signed by more than

50 parties. Butte and Plumas Counties, which participated in

the ALP, were dissatisfied with the terms of the settlement and

declined to sign the agreement. One appendix to the settlement

agreement contains more than 40 pages of provisions governing

the Facilities’ operation that were intended by the parties to be

included in the new FERC license. These provisions address

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Opinion of the Court by Liu, J.

environmental protection, recreation, protection of cultural

properties, flood control, land use, and expenditures. A second

appendix added nearly 20 pages of further provisions that were

not intended for inclusion in the new license, but which, as DWR

told the trial court, DWR “nonetheless agreed to undertake to

obtain consensus.”

The settlement agreement and PDEA were submitted to

FERC as DWR’s application for a renewed license, with the first

appendix serving as DWR’s proposal for the terms of the new

license. The settlement agreement stated that “[n]othing in this

[a]greement is intended or shall be construed to be . . . a pre-

decisional determination by a Public Agency. After the Effective

Date of this Settlement Agreement but prior to the issuance of

the New Project License, each Public Agency shall participate in

the relicensing proceeding, including environmental review and

consideration of public comments, as required by applicable

law.”

The relicensing process required FERC to comply with

NEPA. Relying in part on the PDEA, FERC prepared a 500-

page draft environmental impact statement (EIS), which issued

in September 2006. As FERC explained, “In this draft [EIS], we

assess the effects associated with the operation of the project as

well as alternatives to the proposed project; make

recommendations to [FERC’s governing commission] about

whether to issue a new license; and if so, recommend terms and

conditions to become part of any license issued. . . . In addition

to the power and developmental purposes for which licenses are

issued (e.g., flood control, irrigation, and water supply), [FERC]

must give equal consideration to the purposes of energy

conservation; protection of, mitigation of damage to, and

enhancement of fish and wildlife (including related spawning

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Opinion of the Court by Liu, J.

grounds and habitat); protection of recreational opportunities;

and the preservation of other aspects of environmental quality.”

In the draft EIS, FERC analyzed the environmental impact of

three different alternatives: a “Proposed Action” that assumed

the Facilities would operate under a new license incorporating

the terms of the settlement agreement; a “No-action

Alternative” that assumed continued operation under the

existing license; and a “Staff Alternative” that assumed

operation of the Facilities under a license based on the

settlement agreement but containing modifications and

additional provisions developed by FERC staff. The draft EIS

concluded that the staff alternative was the “preferred

alternative.”

B.

The Federal Water Pollution Control Act (33 U.S.C. § 1251

et seq.), commonly known as the Clean Water Act, requires an

applicant for a federal license to operate a facility that “may

result in any discharge into the navigable waters” to obtain a

certification from a state agency that the discharge will comply

with state and federal water quality laws. (33 U.S.C.

§ 1341(a)(1).) Because there is no question that operation of the

Facilities involves discharge into California rivers, DWR was

required to obtain such a certificate from the State Water

Resources Control Board (Water Board). DWR submitted its

application for this certification in October 2005, a few months

after the submission of its relicensing application to FERC.

Although, as noted, DWR issued a CEQA notice of

preparation in 2001, it did not undertake further CEQA

procedures, including the preparation of an EIR, until several

years later, after its submission of the settlement agreement to

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FERC. In May 2007, DWR issued a draft EIR analyzing the

environmental impact of the same three alternatives considered

in FERC’s draft EIS. The EIR characterized the project under

CEQA review as implementation of the settlement agreement,

which would allow “the continued operation and maintenance of

the Oroville Facilities for electric power generation.” According

to the EIR, DWR undertook CEQA procedures because (1) the

Water Board required preparation and certification of an EIR as

part of DWR’s application for certification under the Clean

Water Act and (2) the CEQA process could inform DWR’s

decision whether to accept the license containing the terms of

either the settlement agreement or the alternative proposed by

FERC staff, both of which were analyzed in the EIR.

After receiving and responding to public comment on the

draft EIR, DWR finalized the EIR and issued a notice of

determination in July 2008. The notice contained findings that

the adoption of mitigation measures was required for approval

of the project but that the project, so mitigated, would not have

a significant effect on the environment. Consequently, “as

conditions of project approval,” DWR adopted a six-page slate of

mitigation measures “that will be implemented by DWR” and a

mitigation monitoring program to ensure that implementation.

The mitigation measures adopted by DWR addressed the

Facilities’ impacts on wildlife resources, botanical resources,

noise, air quality, public health and safety, and geology, soils,

and paleontological resources. In general terms, the mitigation

measures require DWR to operate the Facilities and to conduct

any construction activities associated with the Facilities in a

safe and environmentally sensitive manner. The first measure,

for example, requires DWR to “[m]inimize direct habitat loss or

disturbance through project design and construction timing,”

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using various specified measures. Other mitigation measures

place similar constraints on the manner in which DWR can

operate the Facilities. The mitigation monitoring program

requires DWR to assign specialists to monitor mitigation

activities, incorporate the mitigation measures into DWR’s

design and planning activities and its contracting, generate

written documents reflecting the mitigation measures and their

implementation, and certify the completion of actions taken to

implement them. The EIR designated DWR as the agency

“responsible for the implementation and management of the

[mitigation monitoring program] and for ensuring that the

procedures and measures described [in the EIR] are

implemented.”

During the CEQA review process, proceedings continued

before the Water Board, which relied on the analyses in the

Department’s EIR and FERC’s EIS to define the scope of the

project and evaluate its environmental impact. In December

2010, the Water Board certified that the project considered in

the EIR would comply with water quality requirements. The

certification contained its own conditions, many of which

overlapped with the requirements of the settlement agreement.

By operation of law, these conditions must be included as terms

of any new FERC license. (33 U.S.C. § 1341(d).)

The appellate record contains no information about FERC

proceedings following DWR’s certification of the final EIR, but

the parties inform us that FERC has yet to take final action on

DWR’s application for a renewed license.

C.

In August 2008, following DWR’s certification of the EIR,

Butte County and Plumas County filed separate petitions for

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Opinion of the Court by Liu, J.

writ of mandate challenging DWR’s compliance with CEQA in

connection with the relicensing. The Plumas County lawsuit

also includes as a petitioner the Plumas County Flood Control

and Water Conservation District, a special law district that

receives water from the Facilities. We refer to the County and

the District jointly as “Plumas County.” Butte County’s claims

challenged the EIR’s analysis of the environmental impact of the

project, as well as the project definition, assessment of

alternatives, and adoption of mitigation measures with respect

to government services and socioeconomic effects, recreation,

water resources and quality, and climate change. Its petition

sought an order setting aside DWR’s certification of the EIR and

enjoining “DWR’s project,” as well as any “such further relief

that the Court deems just.” Plumas County’s petition raised

similar claims and sought similar relief, including an order

requiring the Facilities to “suspend all activity under the [EIR]

certification that could result in any change or alteration in the

physical environment” until certification of an adequate EIR

and “other equitable or legal relief that the Court considers just

and proper.”

The parties stipulated to consolidation of the two

petitions. In May 2012, the trial court issued a statement of

decision rejecting the Counties’ claims and finding the EIR

adequate, and the Counties appealed. The Court of Appeal

requested supplemental briefing to address whether the FPA

preempted the Counties’ actions. It subsequently held that the

Counties’ actions were preempted to the extent they challenged

the settlement agreement, challenges over which FERC has

exclusive jurisdiction, and premature to the extent they

challenged the Water Board’s certification, which had not issued

at the time the Counties filed their actions. We granted the

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Opinion of the Court by Liu, J.

Counties’ petitions for review and transferred the matter to the

Court of Appeal to reconsider its decision in light of Eel River,

supra, 3 Cal.5th 677. The Court of Appeal reached the same

conclusions on remand.

We granted review of this second decision to address two

issues: (1) whether the FPA preempts application of CEQA

when the state is acting on its own behalf and exercising its

discretion in pursuing relicensing of a hydroelectric dam, and (2)

whether the FPA preempts challenges in state court to an EIR

prepared under CEQA to comply with section 401 (33 U.S.C.

§ 1341) of the Clean Water Act. Upon review of the appellate

record and the parties’ briefs, we conclude that the second issue

is not properly presented, and we decline to address it.

II.

We describe here the interrelated federal and state

statutory schemes at play in this case.

A.

The FPA, the original predecessor of which was enacted in

1920, was created to facilitate development of the nation’s

hydropower resources, in part by removing state-imposed

roadblocks to such development. (First Iowa, supra, 328 U.S. at

p. 174 [“Congress was concerned with overcoming the danger of

divided authority so as to bring about the needed development

of water power”].) “[The FPA] was the outgrowth of a widely

supported effort of the conservationists to secure enactment of a

complete scheme of national regulation which would promote

the comprehensive development of the water resources of the

Nation, in so far as it was within the reach of the federal power

to do so . . . .” (Id. at p. 180.)

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Under the FPA, the construction and operation of a dam

or hydroelectric power plant requires a license from FERC.

(16 U.S.C. §§ 797(e) [authorizing license issuance], 817(1)

[unlawful to operate a hydropower plant without a FERC

license].) Operation of a licensed facility is “conditioned upon

acceptance by the licensee of all the terms and conditions of [the

FPA] and such further conditions, if any, as [FERC] shall

prescribe,” which must be stated in the license. (16 U.S.C.

§ 799.) A FERC license must provide for, among other things,

“the adequate protection, mitigation, and enhancement of fish

and wildlife . . . , and for other beneficial public uses, including

irrigation, flood control, water supply, and recreational and

other purposes.” (16 U.S.C. § 803(a)(1); see id., § 803(j).) To

achieve this and other objectives of the FPA, FERC is granted

express authority “to require the modification of any project and

of the plans and specifications of the project works before

approval.” (16 U.S.C. § 803(a)(1).)

B.

“CEQA embodies a central state policy to require state and

local governmental entities to perform their duties ‘so that

major consideration is given to preventing environmental

damage.’ [Citations.] [¶] CEQA prescribes how governmental

decisions will be made when public entities, including the state

itself, are charged with approving, funding — or themselves

undertaking — a project with significant effects on the

environment.” (Eel River, supra, 3 Cal.5th at pp. 711–712,

italics omitted.) CEQA applies to any discretionary “project,”

defined as an activity that may cause a physical change in the

environment and that is undertaken or financed by a public

agency or requires a public agency’s approval. (Pub. Resources

Code, §§ 21065, 21080; see id., § 21001.1 [projects proposed by

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Opinion of the Court by Liu, J.

public agencies are subject to the same level of review as private

projects].) If, after performing an initial study, the agency

responsible for CEQA compliance, referred to as the “lead

agency,” finds substantial evidence that a project may have a

significant environmental impact, the agency must prepare and

certify an EIR before approving or proceeding with the project.

(Union of Medical Marijuana Patients, Inc. v. City of San Diego

(2019) 7 Cal.5th 1171, 1187; Pub. Resources Code, § 21100,

subd. (a).)

The EIR is often referred to as the “ ‘ “heart’ ’ ” of CEQA.

(E.g., Eel River, supra, 3 Cal.5th at p. 713.) “Its purpose is to

inform the public and its responsible officials of the

environmental consequences of their decisions before they are

made.” (Citizens of Goleta Valley v. Board of Supervisors (1990)

52 Cal.3d 553, 564.) Ideally, an EIR serves “to identify the

significant effects on the environment of a project, to identify

alternatives to the project, and to indicate the manner in which

those significant effects can be mitigated or avoided.” (Pub.

Resources Code, § 21002.1, subd. (a).) The document must

include a description of the proposed project and its

environmental setting and discussions of (1) the possible

environmental effects of the project, (2) feasible measures to

mitigate any significant, adverse environmental effects of the

project, (3) the comparative environmental effects of a range of

reasonable alternatives to the proposed project, including a “no

project” alternative, (4) the cumulative impact of the project’s

various environmental effects, and (5) the economic and social

effects of the project. (CEQA Guidelines, §§ 15124, 15126,

15126.4, 15126.6, 15131.) Given the role it plays and its

required analysis, the EIR is commonly referred to as an

“informational document.” (Pub. Resources Code, § 21061;

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CEQA Guidelines, § 15121.) It serves to inform decision makers

and the general public about the nature and environmental

impact of a proposed project, feasible ways to reduce that impact

(often through the mechanism of mitigation measures), and

possible alternatives to the project. (Pub. Resources Code,

§ 21061.)

Mitigation measures are modifications of the proposed

design and implementation of a project imposed by the lead

agency to reduce the project’s adverse environmental effects. If

an EIR identifies significant environmental effects, CEQA

requires the adoption of mitigation measures when “it is feasible

to do so.” (Pub. Resources Code, § 21002.1, subd. (b).) CEQA

recognizes that “economic, social, or other conditions [may]

make it infeasible to mitigate one or more significant effects on

the environment” and that in those circumstances “the project

may nonetheless be carried out or approved at the discretion of

a public agency if the project is otherwise permissible under

applicable laws and regulations.” (Pub. Resources Code,

§ 21002.1, subd. (c); see CEQA Guidelines, § 15364 [“ ‘Feasible’

means capable of being accomplished in a successful manner

within a reasonable period of time, taking into account

economic, environmental, legal, social, and technological

factors”].) To move forward with the project, the lead agency

must find that “specific overriding economic, legal, social,

technological, or other benefits of the project outweigh the

significant effects on the environment.” (Pub. Resources Code,

§ 21081, subd. (b).)

When the project is publicly financed or undertaken, as

here, feasible mitigation measures must be incorporated into

the plan or project design. (CEQA Guidelines, § 15126.4,

subd. (a)(2); see also Pub. Resources Code, § 21081.6, subd. (b).)

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Further, to “ensure that the mitigation measures and project

revisions identified in the EIR . . . are implemented,” the lead

agency, when approving the EIR, must also adopt “a program

for monitoring or reporting on the revisions which it has

required in the project and the measures it has imposed to

mitigate or avoid significant environmental effects.” (CEQA

Guidelines, § 15097, subd. (a); see also Pub. Resources Code,

§ 21081.6, subd. (a)(1).) In this way, CEQA’s mitigation

measures play a crucial role in reducing the environmental

impact of projects undertaken in California.

III.

“The Supremacy Clause provides that ‘the Laws of the

United States’ (as well as treaties and the Constitution itself)

‘shall be the supreme Law of the Land . . . any Thing in the

Constitution or Laws of any state to the Contrary

notwithstanding.’ [U.S. Const.] Art. VI, cl. 2. Congress may

consequently pre-empt, i.e., invalidate, a state law through

federal legislation. It may do so through express language in a

statute. But even where . . . a statute does not refer expressly

to pre-emption, Congress may implicitly pre-empt a state law,

rule, or other state action.” (Oneok, Inc. v. Learjet, Inc. (2015)

575 U.S. 373, 376–377 (Oneok).)

There are “three different types of preemption — ‘conflict,’

‘express,’ and ‘field,’ [citation] — but all of them work in the

same way: Congress enacts a law that imposes restrictions or

confers rights on private actors; a state law confers rights or

imposes restrictions that conflict with the federal law; and

therefore the federal law takes precedence and the state law is

preempted.” (Murphy v. National Collegiate Athletic Assn.

(2018) 584 U.S. __, __ [138 S.Ct. 1461, 1480] (Murphy).)

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Conflict preemption “exists where ‘compliance with both

state and federal law is impossible,’ or where ‘the state law

“stands as an obstacle to the accomplishment and execution of

the full purposes and objectives of Congress.” ’ ” (Oneok, supra,

575 U.S. at p. 377.) “[T]he threshold for establishing” such an

obstacle “is demanding: ‘It requires proof Congress had

particular purposes and objectives in mind[ and] a

demonstration that leaving state law in place would compromise

those objectives . . . .’ ” (People v. Rinehart (2016) 1 Cal.5th 652,

661; see Chamber of Commerce of the United States of America

v. Whiting (2011) 563 U.S. 582, 607 (plur. opn. of Roberts, C. J.)

[a “ ‘high threshold must be met if a state law is to be pre-empted

for conflicting with the purposes of a federal Act’ ”].) “ ‘[P]re-

emption analysis is not “[a] freewheeling judicial inquiry into

whether a state statute is in tension with federal objectives” ’ ”

(Viva! Internat. Voice for Animals v. Adidas Promotional Retail

Operations, Inc. (2007) 41 Cal.4th 929, 939), but a focused

inquiry into “whether there exists an irreconcilable conflict

between the federal and state regulatory schemes” (Rice v.

Norman Williams Co. (1982) 458 U.S. 654, 659). “The existence

of a hypothetical or potential conflict is insufficient to warrant

the pre-emption of the state statute.” (Ibid.)

Further, when it comes to considering preemption of state-

owned or state-operated projects, we apply a presumption that

“protects against undue federal incursions into the internal,

sovereign concerns of the states.” (Eel River, supra, 3 Cal.5th at

p. 705, citing Gregory v. Ashcroft (1991) 501 U.S. 452 and Nixon

v. Missouri Municipal League (2004) 541 U.S. 125; see also

Cipollone v. Liggett Group, Inc. (1992) 505 U.S. 504, 518.) “To

determine the reach of the federal law preempting state

regulation of a state-owned [project] we must consider a

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presumption that, in the absence of unmistakably clear

language, Congress does not intend to deprive the state of

sovereignty over its own subdivisions to the point of upsetting

the usual constitutional balance of state and federal powers.”

(Eel River, at p. 690.) And there is a “related presumption” that

“Congress does not intend to reach and preempt a state’s

proprietary arrangements in the marketplace in the absence of

evidence of such an expansive congressional intent.” (Id. at

p. 705.)

A.

Respondent State Water Contractors, Inc., an association

of public water agencies, is the only party asserting that the

Counties’ claims are fully preempted. It argues that the FPA

contains the requisite “unmistakably clear” indication of

congressional intent to occupy the field and preempt the

Counties’ challenges. If the issue before us involved state

regulation of private entities, these arguments may have

prevailed. Although the FPA does not contain an express

preemption clause, the high court recognized 70 years ago in

First Iowa that “the FPA establishes a broad and paramount

federal regulatory role.” (California v. FERC (1990) 495 U.S.

490, 499.) “That broad delegation of power . . . , however, hardly

determines the extent to which Congress intended to have the

Federal Government exercise exclusive powers, or intended to

pre-empt concurrent state regulation of matters affecting

federally licensed hydroelectric projects.” (Id. at pp. 496–497.)

In two decisions, First Iowa and California v. FERC, the

high court determined that state regulatory efforts that

conflicted with the exclusive federal licensing authority granted

by the FPA were preempted. First Iowa concerned the state’s

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Opinion of the Court by Liu, J.

attempt to require an applicant for a federal license to secure a

state permit for a privately operated project that would regulate

“the very requirements of the project that Congress has placed

in the discretion” of the federal agency. (First Iowa, supra, 328

U.S. at p. 165.) California v. FERC similarly involved

“overlapping federal and state regulation.” (California v. FERC,

supra, 495 U.S. at p. 493.) In that case, the high court rejected

an attempt by the state to mandate minimum stream flow

requirements on a private project that were higher than federal

flow requirements. Both decisions interpreted the FPA to leave

“the permit requirements at issue to the federal sphere.” (Id. at

p. 503.)

First Iowa and California v. FERC could be read to apply

either conflict or field preemption. (See First Iowa, supra, 328

U.S. at pp. 167, 171, 178, 180–181; California v. FERC, supra,

495 U.S. at pp. 493, 496–497, 505, 506; cf. California Oregon

Power Co. v. Superior Court of Cal. (1955) 45 Cal.2d 858, 868

[“Implicit in [First Iowa] is the concept that the field is not

exclusively occupied for all purposes by the [FPA] or [FERC’s

predecessor]”].) As the Ninth Circuit noted in Sayles Hydro

Assn. v. Maughan (9th Cir. 1993) 985 F.2d 451 (Sayles Hydro),

“[t]he dichotomy between the two types of preemption is not so

sharp in practical terms as the legal characterization makes it

appear, so the mixed language has little significance.” (Id. at

p. 456; see Murphy, supra, 584 U.S. at p. __ [138 S.Ct. at

p. 1480] [“field preemption[,] . . . like all other forms of

preemption, . . . concerns a clash between a constitutional

exercise of Congress’s legislative power and conflicting state

law”].) Sayles Hydro ultimately applied field preemption in a

case that, similar to First Iowa and California v. FERC, involved

the licensing of a private entity.

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Opinion of the Court by Liu, J.

None of these cases considered whether Congress

intended to occupy the field to the extent of precluding a state

from exercising authority over its own subdivision’s license

application. Field preemption requires not only a determination

that Congress intended to occupy the field, but consideration of

what the “boundaries of the pre-empted field” are. (English v.

Gen. Electric Co. (1990) 496 U.S. 72, 82 (English).) First Iowa,

California v. FERC, and Sayles Hydro each involved state

regulation of private parties rather than the type of self-

government we discussed in Eel River, which is also at issue

here. (See Eel River, supra, 3 Cal.5th at p. 723 [“CEQA

embodies a state policy adopted by the Legislature to govern

how the state itself and the state’s own subdivisions will exercise

their responsibilities.”].) None of those cases defined the field to

include the state’s prerogative to govern the work of its own

agency in a manner that does not conflict with federal law. (See,

e.g., First Iowa, supra, 328 U.S. at p. 171 [“The [FPA] leaves to

the states their traditional jurisdiction”].)

The concurring and dissenting opinion relies on the FPA’s

savings clause, 16 United States Code section 821 (commonly

referred to as section 27), in concluding that Congress intended

to occupy the field to preclude CEQA’s application here. Section

27 states: “Nothing contained in this chapter shall be construed

as affecting or intending to affect or in any way to interfere with

the laws of the respective States relating to the control,

appropriation, use, or distribution of water used in irrigation or

for municipal or other uses, or any vested right acquired

therein.” (16 U.S.C. § 821.) Notably, the statute does not say

that these matters are the only matters reserved. (See Niagara

Mohawk Power Corp. v. Hudson River-Black River Regulating

Dist. (2d Cir. 2012) 673 F.3d 84, 97 (Niagara Mohawk Power

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Opinion of the Court by Liu, J.

Corp.) [“just because the savings clause fails to mention certain

state-law powers does not mean that all unmentioned powers

are federally preempted”].) In Eel River, we found an explicit

and broad preemption clause insufficiently clear to overcome the

presumption that Congress did not intend to preempt a state’s

internal decisionmaking under CEQA, even if it intended to

preempt the state’s regulation of private parties in the same

context. (Eel River, supra, 3 Cal.5th at p. 723.) The language of

section 27, a savings clause, does not support a different

preemption conclusion here.

Our concurring and dissenting colleagues also rely on

judicial interpretations of section 27 in First Iowa, California v.

FERC, and Sayles Hydro. But none of these decisions is

probative of congressional intent on the issue before us, nor do

any address whether section 27 evinces an “unmistakably clear”

(Eel River, supra, 3 Cal.5th at p. 690) intent by Congress to

preempt a state’s environmental review of its own project as

opposed to its regulation of a private entity. The concurring and

dissenting opinion does not explain how any of these cases

supports defining the preempted field to include the specific

conduct at issue today. We must determine whether Congress

intended to preclude “the state [from] trying to govern itself —

to engage in ‘decision[s] of the most fundamental sort for a

sovereign entity.’ ” (Id. at p. 729; see, e.g., English, supra, 496

U.S. at p. 82; Pacific Gas & Elec. v. Energy Resources Comm’n

(1983) 461 U.S. 190, 205; Niagara Mohawk Power Corp., supra,

673 F.3d at pp. 95–96.) Reliance on these opinions in the

absence of evidence that Congress intended to reach this far is

contrary to the “strong presumption against preemption” that

applies “to the existence as well as the scope of preemption.”

(Farm Raised Salmon Cases (2008) 42 Cal.4th 1077, 1088, citing

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Opinion of the Court by Liu, J.

Medtronic, Inc. v. Lohr (1996) 518 U.S. 470, 485; see Eel River,

at p. 729 [“Without plainer language to that effect, we do not

believe Congress intended to displace the exercise of a state’s

ordinary power of self-governance when the state does not

propose to act in contravention of the dictates” of federal law].)

The concurring and dissenting opinion contends that

Congress has accepted these interpretations of section 27 and by

so doing “has made unmistakably clear the broad preemptive

reach it intends for [the] FPA.” (Conc. & dis. opn., post, at p. 29.)

But “[a]rguments based on supposed legislative acquiescence

rarely do much to persuade.” (Scher v. Burke (2017) 3 Cal.5th

136, 147; see Dyna-Med, Inc. v. Fair Employment & Housing

Com. (1987) 43 Cal.3d 1379, 1395–1396.) And they do nothing

at all when premised on acquiescence to judicial opinions that

do not concern the same subject matter. (Scher, at p. 147.) To

the extent legislative acquiescence is relevant at all, it is notable

that the concurring and dissenting opinion places no weight on

the Counties’ claim that “[f]or decades, CEQA review for such

projects has coexisted with federal regulation without FERC [or

Congress] ever suggesting that CEQA is preempted.” (See conc.

& dis. opn., post, at p. 22, fn. 8.)

Neither the FPA’s legislative history nor its language

suggests that Congress intended this to be one of the “rare cases”

where it has “ ‘legislated so comprehensively’ . . . that it ‘le[aves]

no room for supplementary state legislation’ ” of the type at

issue here concerning how a state entity conducts its own

decisionmaking. (Kansas v. Garcia (2020) 589 U.S. __, __ [140

S.Ct. 791, 804]; see First Iowa, supra, 328 U.S. at p. 171 [the

FPA, when “read in the light of its long and colorful legislative

history, . . . discloses both a vigorous determination of Congress

to make progress with the development of . . . water power . . .

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Opinion of the Court by Liu, J.

and a determination to avoid unconstitutional invasion of the

jurisdiction of the states”].) This does not appear to be “an area

the Federal Government has reserved for itself,” which is “the

basic premise of field preemption.” (Arizona v. United States

(2012) 567 U.S. 387, 402.)

As DWR states in its briefing, “[t]he fact that the [FPA]

has a significant preemptive sweep says nothing about

congressional intent to prohibit state action that is non-

regulatory.” When the state or a subdivision proposes to develop

its own property, CEQA “operates as a form of self-government

. . . . Application of CEQA to the public entity charged with

developing state property is not classic regulatory behavior,

especially when there is no encroachment on the regulatory

domain of the [federal authority] or inconsistency with [federal

law] . . . . Rather, application of CEQA in this context

constitutes self-governance on the part of a sovereign state and

at the same time on the part of an owner.” (Eel River, supra, 3

Cal.5th at p. 723.)

State Water Contractors argues that the reasoning of Eel

River is inapt because the federal scheme at issue in that case

deregulated the industry while the federal legislation here

requires every dam and hydroelectric power plant to obtain a

federal license to operate and grants FERC the exclusive right

to issue such licenses. (See also conc. & dis. opn., post, at p. 26.)

But our reasoning in Eel River did not hinge on the industry’s

deregulation; rather, it was based on what the federal scheme

permitted the state as owner to do as a result of that

deregulation — namely, make its own choices about its project,

guided by an EIR. (Eel River, supra, 3 Cal.5th at p. 724.) There

is “no indication in the language of the [FPA] that Congress

intended to preempt [state] self-governance” when it is carried

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Opinion of the Court by Liu, J.

out by means of a state law permitting challenges to a state

agency’s EIR. (Id. at p. 704; see id. at p. 730 [“The availability

of citizen enforcement mechanisms does not change our view

that CEQA operates as a system of self-governance . . . in this

case”].) Without more, we cannot conclude that “Congress . . .

intended ‘to foreclose any state [activity] in the area,’

irrespective of whether state law is consistent or inconsistent

with ‘federal standards.’ ” (Oneok, supra, 575 U.S. at p. 377,

italics omitted.)

B.

At the same time, the fact that CEQA is not categorically

preempted does not mean that no CEQA applications or

remedies are preempted by the federal scheme. (Eel River,

supra, 3 Cal.5th at p. 740; id. at pp. 740–741 (conc. opn. of

Kruger, J.).) To the contrary, the Counties made clear during

oral argument that they are no longer seeking injunctive relief

that would interfere with the federal licensing process,

conceding preemption on this issue, and all parties agree that

no state court can issue a remedy that conflicts with federal law.

In this respect, the Counties now appear to acknowledge that

the Court of Appeal was correct in holding that they cannot, in

this CEQA action, challenge the terms of the settlement

agreement reached through the ALP.

We agree. The overriding purpose of the FPA is to

facilitate the development of the nation’s hydropower resources.

(First Iowa, supra, 328 U.S. at pp. 174, 180.) A primary tool in

achieving that goal was to centralize regulatory authority in the

federal government in order to remove any obstacles to such

development posed by state regulation. (Ibid.) A CEQA

challenge to the terms of a settlement agreement reached

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Opinion of the Court by Liu, J.

through the ALP would raise preemption concerns to the extent

the action would interfere with the federal process detailed

above or with FERC’s jurisdiction over the proceedings. (See 18

C.F.R. § 4.34(i)(6)(vii) (2022); International Paper Co. v.

Ouellette (1987) 479 U.S. 481, 494 [“A state law . . . is pre-

empted if it interferes with the methods by which the federal

statute was designed to reach [its] goal”].) A state court order

granting the injunctive relief the Counties initially sought

would stand as a direct obstacle to the accomplishment of

Congress’s objective of vesting exclusive licensing authority in

FERC. (See California v. FERC, supra, 495 U.S. at pp. 506–

507.)

If that were all the Counties had requested, we would

affirm the judgment below directing the trial court to dismiss

the action in its entirety. But the Counties’ writ petitions

challenge the Department’s EIR more broadly. Beyond seeking

to enjoin DWR’s project, the Counties also requested a writ of

mandate setting aside the certification of the EIR as adequate

and whatever “further relief . . . the Court deems just.”

State Water Contractors defends the Court of Appeal’s

complete dismissal on the sole ground that all of the Counties’

CEQA claims are preempted. As discussed, the Court of Appeal

was correct to hold that the Counties’ challenge to the

environmental sufficiency of the settlement agreement was

preempted. But the Counties not only sought an injunction

against DWR’s operation of the Facilities under the terms of the

settlement agreement. They also challenged the environmental

sufficiency of the EIR itself, which they claim DWR can use in

connection with its decisionmaking about the licensing process

and the operation of the Facilities without interfering with

FERC’s authority.

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Opinion of the Court by Liu, J.

The EIR characterized the project under CEQA review as

implementation of the settlement agreement and analyzed the

environmental impact of the settlement agreement as well as

the FERC staff alternative. At this stage in the proceedings,

review of the Department’s EIR does not interfere with FERC’s

jurisdiction or exclusive licensing authority. Federal law

expressly allows applicants (public or private) to amend their

license application or seek reconsideration once FERC has

issued a license. (See 18 C.F.R. § 4.35(b) (2022) [application may

be amended pending review]; id., § 385.713 (2022) [authorizing

request for rehearing]; 18 C.F.R. § 4.200(b) (2022) [allowing

application to amend license after issuance]; 16 U.S.C. § 825l

[authorizing rehearing application and judicial review].) And

we are aware of no federal law — and the concurring and

dissenting opinion cites none — that limits an applicant’s ability

to analyze its options or the proposed terms of the license before

doing so. That is, DWR can undertake CEQA review, including

permitting challenges to the EIR it prepares as part of that

review, in order to assess its options going forward. Nothing

about such use of CEQA review is incompatible with federal

authority. (See Eel River, supra, 3 Cal.5th at p. 724 [where

federal law does not otherwise require, “the state as owner may

make its decisions based on its own guidelines rather than some

anarchic absence of rules of decision”].) These activities are a

far cry from the conflicting state regulations imposed on private

actors at issue in First Iowa and California v. FERC.

DWR’s decision document recognized that “[a]pproval of

the Proposed Project . . . will not lead to immediate

implementation of the [settlement agreement (SA)] articles.

DWR’s implementation of the SA actions that are within FERC’s

jurisdiction depend[s] on FERC issuing and DWR accepting a

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Opinion of the Court by Liu, J.

license materially consistent with the Proposed Project.” It also

noted that if the license FERC issues involves “terms and

conditions not included in the Proposed Project or FERC Staff

Alternative,” additional CEQA review will be required by DWR.

The Department’s EIR is programmatic in nature, meaning it

contemplates additional CEQA review in connection with later

activities that are part of the project. (See CEQA Guidelines,

§§ 15168, 15152.) There is no indication Congress “believe[d]

that it was inconsistent to vest [FERC] with exclusive

regulatory authority . . . while at the same time allowing”

applicants to analyze ongoing environmental considerations,

request certain terms, or seek reconsideration of the terms of

any license offered within the means federal law supplies.

(Silkwood v. Kerr-McGee Corp (1984) 464 U.S. 238, 258.)

State Water Contractors takes issue with the Counties’

desire to see particular mitigation measures imposed on the

project. But any preemption concerns related to DWR’s ability

to adopt additional mitigation measures in the EIR, if

warranted, are premature. At this stage, the Counties challenge

only the sufficiency of the EIR, and they contend the EIR can

inform DWR’s decisionmaking in ways that do not conflict with

FERC’s authority. They do not ask the court to impose or

enforce any CEQA mitigation measures, much less any that are

contrary to federal authority. A CEQA challenge to the

Department’s EIR is not inherently impermissible, nor is it clear

that any mitigation measures will conflict with the terms of the

license ultimately issued by FERC. As noted, an EIR may

contain mitigation measures that fall outside of FERC’s

jurisdiction or are compatible with FERC’s exclusive licensing

authority. Meanwhile, federal law provides avenues for any

mitigation measures identified by the Department’s CEQA

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Opinion of the Court by Liu, J.

review that fall under FERC’s jurisdiction to be incorporated

into the eventual license if FERC so decides. If they are

incorporated, then it is no obstacle to FERC’s authority that

they originated with the state as applicant. If they are not, then

FERC has simply exercised its discretion to dictate the terms of

the license offered, preempting any particular applications or

enforcement mechanisms of CEQA that conflict with that

authority. (See Eel River, supra, 3 Cal.5th at p. 740; id. at

pp. 740–741 (conc. opn. of Kruger, J.).) In either case, CEQA can

inform the public entity’s decisionmaking without encroaching

on FERC’s ultimate licensing authority.

The concurring and dissenting opinion mistakes today’s

inquiry and our holding at several turns. We do not consider Eel

River’s rationale to be inapplicable here, nor do we understand

Eel River to have found CEQA “exempt from preemption” by the

federal statute at issue in that case. (Conc. & dis. opn., post, at

p. 24; see id. at p. 26.) In Eel River, we conducted traditional

preemption analysis to determine that the state’s use of CEQA

in particular circumstances was not preempted, while carefully

delineating the circumstances in which it was preempted.

Today’s opinion likewise does not conclude that DWR’s actions

are “not subject to” the usual analysis for field preemption and

purposes and objectives preemption. (Conc. & dis. opn., post, at

p. 33.) Instead, we find that State Water Contractors has not

carried its burden to establish field preemption here. And in

determining “ ‘whether, under the circumstances of this

particular case, [CEQA] stands as an obstacle to the

accomplishment and execution of the full purposes and

objectives of Congress’ ” (Jones v. Rath Packing Co. (1997) 430

U.S. 519, 526), we find the Counties’ claims preempted in part.

Although the concurring and dissenting opinion considers

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Opinion of the Court by Liu, J.

today’s ruling to go “beyond the holding of” Eel River (conc. &

dis. opn., post, at p. 33; see id. at pp. 30–31), Eel River itself

considered certain applications of CEQA preempted (Eel River,

at pp. 739–740) and took no issue with the observation that

“particular CEQA remedies might be preempted” on remand (id.

at p. 741 (conc. opn. of Kruger, J.)). We do the same here.

The concurring and dissenting opinion’s concerns about

the workability of today’s holding are misplaced. In contending

that there is or will be conflict between our decision and federal

case law, our colleagues overlook the distinction between state

regulation of private parties and the state’s self-governance at

issue here. We are not aware of any authority contrary to our

holding today. As noted, Sayles Hydro involved state regulation

of a private party, and Eel River did not involve the FPA. The

closest case that our concurring and dissenting colleagues can

find is a New York appellate court decision that applied field

preemption, based on two sentences of analysis, to an issue we

do not address here. (Conc. & dis. opn., post, at p. 22, fn. 8.)

Further, the concurring and dissenting opinion says this

lawsuit has resulted in years of delay to FERC’s issuance of the

license. (Conc. & dis. opn., post, at pp. 3, fn. 1, 38.) But this

assertion is mere conjecture. No party has argued that the delay

in obtaining a license from FERC is attributable to the Counties’

litigation, and there is no evidence in the record to that effect.

There are more than a dozen relicensing applications other than

this one that were filed prior to 2010, when the section 401

certification issued in this project, that are still pending before

FERC. (See FERC, Licensing: Pending License, Relicense, and

Exemption Applications, updated 7/15/2022, available at

<https://www.ferc.gov/licensing> [as of Jul. 28, 2022]; all

Internet citations in this opinion are archived by year, docket

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Opinion of the Court by Liu, J.

number, and case name at

<http://www.courts.ca.gov/38324.htm>.) And a cursory

inspection of FERC’s docket reveals numerous requests for

delays in the proceedings unrelated to this litigation. Moreover,

even if the delay were attributable solely to the litigation, there

is little reason to assume any future litigation will be as

prolonged. Today’s opinion resolves the matter in dispute, and

a challenge to the environmental sufficiency of the Department’s

EIR need not delay issuance of FERC’s license in these

circumstances.

The concurring and dissenting opinion says our holding

will have little practical impact. As an initial matter, the

question of the sufficiency of the EIR or the merits of the

Counties’ claims is not before us. But even if the Counties’

lawsuit is not meritorious, that does not mean a finding of

preemption is warranted. Our colleagues repeatedly note the

fact that environmental review was conducted at earlier stages.

(Conc. & dis. opn., post, at pp. 4, 5, 34–36.) But it is incorrect to

suggest the Department’s EIR is identical to those prior

inquiries when it involves matters that were not yet before them

or are beyond their scope. An EIR can play a role in DWR’s

evaluation of matters outside of or compatible with FERC’s

jurisdiction, and the concurring and dissenting opinion does not

identify any mitigation measures DWR has adopted that conflict

with FERC’s authority. At this stage, any concerns about

conflicting mitigation measures are exaggerated or at least

premature.

In sum, we affirm the Court of Appeal’s ruling that the

Counties “cannot challenge the environmental sufficiency of the

[settlement agreement]” (County of Butte, supra, C071785) or

seek to unwind it. To do so would pose an obstacle to FERC’s

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Opinion of the Court by Liu, J.

congressionally granted exclusive authority on those matters.

But the same is not the case for the Counties’ challenge to the

environmental sufficiency of the EIR more generally, insofar as

a compliant EIR can still inform the state agency concerning

actions that do not encroach on FERC’s jurisdiction. Nothing

clearly precludes our courts from considering a challenge to the

sufficiency of the EIR in these circumstances and ordering, for

example, DWR to reconsider its analysis if warranted.

Accordingly, we reverse in part and remand for further

consideration of the Counties’ remaining claims, largely

unaddressed by the Court of Appeal’s decision, and for

resolution of any open questions such as whether there are

procedural or other bars to those claims.

CONCLUSION

We affirm the judgment of the Court of Appeal in part,

reverse in part, and remand for further proceedings consistent

with this opinion.

LIU, J.

We Concur:

KRUGER, J.

GROBAN, J.

JENKINS, J.

GUERRERO, J.

30

COUNTY OF BUTTE v. DEPARTMENT

OF WATER RESOURCES

S258574

Concurring and Dissenting Opinion by Cantil-Sakauye, C. J.

I agree with my colleagues that the decision of the

Department of Water Resources (DWR) to engage in review

under the California Environmental Quality Act (CEQA; Pub.

Resources Code, § 21000 et seq) is subject to the dictates of the

supremacy clause of the United States Constitution. (U.S.

Const., art. VI, cl. 2.) My disagreement concerns the scope and

consequences of that preemption.

CEQA is a powerful regulatory statute, requiring a lead

agency to adopt tailored regulations, referred to as “mitigation

measures,” designed to reduce to insignificance any potentially

significant adverse environmental effects of a project. The

majority holds that the doctrine of preemption takes effect in

this case only when these mitigation measures prove to be

inconsistent with a license granted by the Federal Energy

Regulatory Commission (FERC) or when a private action to

enforce CEQA seeks to interfere with FERC licensing

proceedings. Such limited preemption is an unavoidable

concession to the most basic doctrine of implied preemption,

which holds that “[w]here state and federal law ‘directly

conflict,’ state law must give way.” (PLIVA, Inc. v. Mensing

(2011) 564 U.S. 604, 617.) If that were all the supremacy clause

requires, I would have no quarrel with the majority’s holding

today.

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

The scope of preemption, however, is considerably

broader. For one, Congress can choose to occupy a regulatory

field entirely, thereby precluding all state regulation, regardless

of its content. (See Arizona v. United States (2012) 567 U.S. 387,

401 [“Where Congress occupies an entire field, . . . even

complementary state regulation is impermissible”].) Equally

applicable is “purposes and objectives” preemption, a partner of

the rule acknowledged by the majority: State legislation is

preempted not only when it directly conflicts with federal law,

but also when the state law “ ‘ “stands as an obstacle to the

accomplishment and execution of the full purposes and

objectives of Congress.” ’ ” (Oneok, Inc. v. Learjet, Inc. (2015) 575

U.S. 373, 377 (Oneok).) CEQA is preempted here under either

category.

The United States Supreme Court has consistently

interpreted the Federal Power Act (FPA; 16 U.S.C. § 791a et

seq.) to reflect Congress’s intent to occupy the field of

hydropower regulation, as the United States Court of Appeals

for the Ninth Circuit recognized nearly 30 years ago. (Sayles

Hydro Assn. v. Maughan (9th Cir. 1993) 985 F.2d 451, 454–455

(Sayles Hydro).) Through a savings clause, the FPA limits the

states to a narrow band of regulation, and no one contends that

CEQA falls within that band. Indeed, the Ninth Circuit found

CEQA preempted in connection with FPA proceedings, although

it did not identify the statute by name. (Sayles Hydro, at p. 455.)

In addition, CEQA stands as a clear obstacle to the

Congressional objective of vesting exclusive control over

hydropower licensing and regulation in FERC. The key to

CEQA’s success in limiting the environmental impact of

regulated activities in California is its mitigation mandate.

A CEQA lead agency must, in approving a project, adopt both a

2

COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

slate of mitigation measures, which have the effect of law, and

a mitigation monitoring program designed to ensure compliance

with those mitigation measures. That regulatory tool, however,

conflicts with the exclusive authority granted to FERC under

the FPA. The mitigation measures required by CEQA, enforced

by the equally compulsory mitigation monitoring program,

create a competing state regulatory regime that stands as a

direct obstacle to the accomplishment of the congressional

purpose and objective of vesting unchallenged regulatory

authority over hydropower in FERC.

Further, as this case glaringly demonstrates, the private

enforcement provisions of CEQA stand as an inevitable

impediment to the congressional purpose of granting to FERC

exclusive control over the hydropower licensing process. FERC’s

licensing regulations were clearly designed to render

unnecessary the application of state environmental review

statutes. Imposing such state proceedings adds nothing to the

licensing process, but it appears to have created, in this case, a

delay of 12 years (and counting). 1

Because these critical features of CEQA — the mandatory

imposition of mitigation measures and the allowance for private

enforcement — stand as an obstacle to the accomplishment of

1

All of the regulatory pieces appear to have been in place

for FERC to issue a new license in 2010, but no license has

issued. The parties have not addressed the cause of the

intervening 12-year delay, but no one has suggested there is a

continuing legal barrier to license issuance. An obvious

inference is that FERC decided to let the state proceedings play

out before issuing a new license. And FERC is still waiting. The

litigation is 14 years old, and the majority’s remand will

guarantee it another year of life, at a minimum.

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Cantil-Sakauye, C. J., concurring and dissenting

congressional purposes and objectives, invocation of the CEQA

statute is wholly preempted in these circumstances. On this

basis, I would affirm the judgment of the Court of Appeal

dismissing the consolidated actions brought by the County of

Butte and the County of Plumas.

I. FACTUAL AND PROCEDURAL BACKGROUND

As the majority explains, this matter comes to us in the

midst of a federal relicensing proceeding for the Oroville

Facilities (Facilities), a collection of dams and hydropower

projects operated by DWR in Butte County. (Maj. opn., ante, at

pp. 3–7.) The unfinished relicensing proceeding is, at present,

22 years old.

FERC’s alternative licensing process (ALP) is hardly

insensitive to environmental concerns. At the outset, the ALP

required DWR to prepare a preliminary draft environmental

assessment (PDEA), an analysis of the likely environmental

impact of Facilities operation. (18 C.F.R. § 4.34(i)(4)(iii) (2022).)

As the majority notes, this was a 700-page document supported

by 1,500 pages of appendices. (Maj. opn., ante, at p. 5.) In its

content, the PDEA was materially indistinguishable from an

environmental impact report (EIR), whose preparation is

required by CEQA. Only after the preparation of this PDEA,

DWR and the other 50-odd participants in the ALP convened to

negotiate the terms of a proposed license for presentation to

FERC. Inasmuch as the ALP participants included a wide

variety of public agencies, managing the possible environmental

effects of Facilities operations undoubtedly played an important

role in the negotiations. In any event, no one contends that

environmental concerns were given inadequate consideration

during the ALP.

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

The ALP participants — with the exception of the present

two counties — managed to agree on the terms of a proposed

license, which DWR forwarded to FERC as its application for

relicensing. A FERC license must provide for, among other

things, “the adequate protection, mitigation, and enhancement

of fish and wildlife . . . , and for other beneficial public uses,

including irrigation, flood control, water supply, and

recreational and other purposes.” (16 U.S.C. § 803(a)(1); see id.,

§ 803(j).) After time for study, FERC prepared its own formal

environmental analysis, an environmental impact statement

(EIS) prepared under the authority of the federal analog to

CEQA, the National Environmental Policy Act of 1969 (NEPA;

42 U.S.C. § 4321 et seq.) Again, the informational requirements

for an EIS are not materially different from those for an EIR. 2

In the EIS, FERC outlined the additional terms it proposed to

add to the license terms proposed in the settlement agreement

and evaluated the environmental impact of these additional

measures, as well as the impact of the settlement agreement’s

proposal.

At this point in the licensing process, two complete EIR

equivalents had been prepared. Yet DWR elected to prepare a

third environmental analysis under the authority of CEQA,

defining as its project the implementation of the settlement

agreement, which it viewed as equivalent to “the continued

operation and maintenance of the Oroville Facilities for electric

2

Like an EIR, an EIS “must contain, among other things, a

detailed discussion of ‘the environmental impact of the proposed

action,’ ‘adverse environmental effects which cannot be avoided,’

‘alternatives to the proposed action,’ and possible mitigation

measures.” (Protect Our Cmtys. Found. v. Lacounte (9th Cir.

2019) 939 F.3d 1029, 1035.)

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

power generation.” Once triggered, however, CEQA required

much more than the preparation of an EIR. As part of its CEQA

compliance, DWR issued a notice of determination finding that

the adoption of mitigation measures was required for approval

of the project.3 Consequently, “as conditions of project

approval,” DWR adopted a series of mitigation measures and a

mitigation monitoring program to ensure that implementation.

The mitigation measures largely overlapped with the

environmental concerns of the settlement agreement and the

anticipated FERC license. As the majority explains, they

imposed constraints on future operation of the Facilities to

minimize the project’s environmental effects. (Maj. opn., ante,

at pp. 8–9.)

Following DWR’s certification of the EIR, Butte County

and Plumas County filed petitions for a writ of mandate,

contending that DWR’s compliance with CEQA was deficient

and seeking to stay the licensing proceedings. Although no court

order halting the proceedings ever issued, the counties’ petitions

had the desired effect. All of the pieces appear to have been in

place for FERC’s issuance of a new license in 2010, but the

federal agency has, to date, taken no action on DWR’s

application.

3

The notice of determination’s reference to project

approval, of course, was approval under state law. Because

FERC has exclusive authority over Facilities’ operation, this

approval had no practical significance beyond CEQA

compliance.

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

II. DISCUSSION

A. Governing Law

1. Federal Power Act

The construction and operation of a dam or hydroelectric

power plant requires a license from FERC, which has broad

discretion to require changes in the project design and impose

conditions on project operation. (16 U.S.C. §§ 797(e), 799,

803(a)(1), 817(1).) This authority places the design and

operation of hydroelectric power plants and related facilities

squarely under FERC’s comprehensive regulatory control.

2. California Environmental Quality Act

“CEQA embodies a central state policy to require state and

local governmental entities to perform their duties ‘so that

major consideration is given to preventing environmental

damage.’ ” (Friends of the Eel River v. North Coast Railroad

Authority (2017) 3 Cal.5th 677, 711 (Eel River).) As discussed

more fully by the majority (maj. opn., ante, at pp. 12–15), CEQA

applies to discretionary public and private projects that may

cause a change in the physical environment. (Pub. Resources

Code, §§ 21065, 21080; see id., § 21001.1.) Projects that may

have a significant environmental impact require the

preparation of an EIR (Pub. Resources Code, § 21100, subd. (a)),

which must discuss the possible environmental effects of the

project, measures to mitigate those effects, and possible

alternatives to the project. (CEQA Guidelines, §§ 15124, 15126,

15126.4, 15126.6, 15131.) 4

4

CEQA is implemented by an extensive series of

administrative regulations promulgated by the Secretary of the

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Cantil-Sakauye, C. J., concurring and dissenting

An EIR provides decision makers with copious

information about the potential impact of a proposed project, but

the CEQA process is not solely informational. It also plays a

critical regulatory role, largely through the mechanism of

mitigation measures, which are conditions placed on the design

and operation of a project to reduce the project’s adverse

environmental effects. CEQA mandates their imposition, when

feasible, if significant environmental effects are identified in an

EIR. As CEQA declares in its opening provisions, “the

procedures required by this division are intended to assist public

agencies in systematically identifying both the significant

effects of proposed projects and the feasible alternatives or

feasible mitigation measures which will avoid or substantially

lessen such significant effects.” (Pub. Resources Code, § 21002,

italics added.) “Each public agency shall mitigate or avoid the

significant effects on the environment of projects that it carries

out or approves whenever it is feasible to do so.” (Id., § 21002.1,

subd. (b), italics added.) To serve this end, an EIR is required

to “identify mitigation measures for each significant

environmental effect identified in the EIR.” (CEQA Guidelines,

§ 15126.4, subd. (a)(1)(A).)

Once identified in an EIR, the feasible mitigation

measures must be adopted by the lead agency as legally

enforceable features or conditions of the project. (Sierra Club v.

County of Fresno (2018) 6 Cal.5th 502, 524–525 [agencies are

Natural Resources Agency, codified at title 14, division 6,

chapter 3 of the California Code of Regulations, which I will

refer to as the “CEQA Guidelines.” Courts must “afford great

weight” to them when interpreting CEQA. (Laurel Heights

Improvement Assn. v. Regents of University of California (1988)

47 Cal.3d 376, 391, fn. 2.)

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

required “to implement all mitigation measures unless those

measures are truly infeasible”].) CEQA expressly forbids a lead

agency from approving or carrying out a project unless

“[c]hanges or alterations have been required in, or incorporated

into, the project which mitigate or avoid” any significant effects

on the environment identified in the EIR. 5 (Pub. Resources

Code, § 21081, subd. (a)(1).) When the project under

consideration is a private project, the mitigation measures must

be made “fully enforceable” through “legally-binding

instruments.” (CEQA Guidelines, § 15126.4, subd. (a)(2); see

also Pub. Resources Code, § 21081.6, subd. (b).) When, as here,

the project is publicly financed or undertaken, the mitigation

measures must be incorporated into the plan or project design.

(CEQA Guidelines, § 15126.4, subd. (a)(2); see also Pub.

Resources Code, § 21081.6, subd. (b).) To ensure compliance

with the mitigation measures, CEQA also requires the adoption

and implementation of a mitigation monitoring program.

5

An exception is recognized if mitigation of the significant

environmental effects is not feasible, but a project having such

effects may only be approved if the lead agency expressly finds

that the benefits of the project outweigh its unmitigable

environmental effects. (Pub. Resources Code, § 21081, subds.

(a)(3), (b).) Although the majority appears to view this as a

significant exception to the requirement of mitigation (maj. opn.,

ante, at p. 14), the adoption of such a finding (called a “statement

of overriding considerations”) is not the preferred course.

(CEQA Guidelines, § 15093, subd. (c).) Agencies

understandably seek to avoid the approval of projects that will

generate significant adverse environmental effects, and most

proposed mitigation measures are “capable of being

accomplished in a successful manner within a reasonable period

of time,” the standard for feasibility. (Pub. Resources Code,

§ 21061.1.)

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Cantil-Sakauye, C. J., concurring and dissenting

(CEQA Guidelines, § 15097, subd. (a); see also Pub. Resources

Code, § 21081.6, subd. (a)(1).)

CEQA’s mitigation measures play a crucial role in

controlling and reducing the environmental impact of projects

undertaken in California. The proposed mitigation measures in

an EIR outline a series of constraints on the design and

execution of a project intended to reduce its environmental

impact. The lead agency’s adoption of these measures in

approving the project imposes these constraints on the project’s

implementation. Further, by the adoption of a mitigation

monitoring program, the lead agency ensures compliance with

this CEQA-imposed regulation.

3. Federal Preemption and the Federal Power Act

The Supreme Court has organized preemption into three

categories: Conflict, express, and field preemption. (Murphy v.

National Collegiate Athletic Assn. (2018) ___ U.S. ___, ___ [138

S.Ct. 1461, 1480] (Murphy).) Although the FPA does not

expressly preempt state law, the application of CEQA in these

circumstances triggers the two other varieties, field and conflict

preemption.

“Field preemption occurs when federal law occupies a

‘field’ of regulation ‘so comprehensively that it has left no room

for supplementary state legislation.’ ” (Murphy, supra, ___ U.S.

at p. ___, 138 S.Ct. at p. 1480.) “Where Congress occupies an

entire field . . . , even complementary state regulation is

impermissible. Field pre-emption reflects a congressional

decision to foreclose any state regulation in the area, even if it

is parallel to federal standards.” (Arizona v. United States,

supra, 567 U.S. at p. 401.)

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Cantil-Sakauye, C. J., concurring and dissenting

Conflict preemption is further divided into two separate

and independent doctrines. It exists (1) “where ‘compliance with

both state and federal law is impossible,’ ” or (2) “where ‘the

state law “stands as an obstacle to the accomplishment and

execution of the full purposes and objectives of Congress.” ’ ”

(Oneok, supra, 575 U.S. at p. 377.) The lower federal courts refer

to these distinct subcategories of conflict preemption as

“impossibility” and “obstacle” preemption, respectively (e.g.,

Chamber of Commerce of the United States v. Bonta (9th Cir.

2021) 13 F.4th 766, 774), but the Supreme Court has

characterized the latter as “purposes and objectives”

preemption. (Hillman v. Maretta (2013) 569 U.S. 483, 490.)

I will use the language of the high court.

The FPA has long been recognized to preempt state

regulation of hydropower facilities. As the Supreme Court first

held 70 years ago in First Iowa Coop. v. Power Comm’n (1946)

328 U.S. 152 (First Iowa) and subsequently reaffirmed nearly

40 year later, “the FPA establishes a broad and paramount

federal regulatory role.” (California v. FERC (1990) 495 U.S.

490, 499.) Through a savings clause, 16 United States Code

section 821 (Section 27), 6 the FPA preserves some state

regulatory authority, but that authority is limited to the

determination of “ ‘proprietary rights’ ” in the use of water.

(California v. FERC, supra, 495 U.S. at p. 498; see also First

Iowa, supra, 328 U.S. at p. 176.) The high court held that state

regulation outside the scope of this preserved authority is

preempted. (First Iowa, at p. 176 [“in those fields where rights

6

Title 16 United States Code section 821 is commonly

referred to as “Section 27” due to its numbering in the original

legislation, and I observe that convention here.

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

are not thus ‘saved’ to the States, Congress is willing to let the

supersedure of the state laws by federal legislation take its

natural course”].) As the Ninth Circuit later characterized this

holding, “The Supreme Court has read the broadest possible

negative pregnant into this ‘savings clause.’ [Citation.] The

rights reserved to the states in [Section 27] are all the states

get.” (Sayles Hydro, supra, 985 F.2d at p. 454.)

In its seminal First Iowa decision, the Supreme Court

found preempted the state’s attempt to require the proponent of

a proposed dam and power plant to obtain a state license for the

project, the terms of which would have implemented state law

governing the use of its waterways. (First Iowa, supra, 328 U.S.

at pp. 161, 166, 176–178.) As the high court noted, requiring

compliance with state law under these circumstances “would

subject to state control the very requirements of the project that

Congress has placed in the discretion of the Federal Power

Commission.” (Id. at p. 165.) The court ultimately concluded

that “[t]he detailed provisions of the [FPA] providing for the

federal plan of regulation leave no room or need for conflicting

state controls.” (Id. at p. 181.)

The high court reaffirmed the FPA’s broad preemptive

effect in California v. FERC, which addressed an order issued

by our State Water Resources Control Board (Water Board)

requiring the operator of a hydropower plant to maintain a

greater minimum flow rate in a stream than the minimum rate

set by FERC in the plant’s license. (California v. FERC, supra,

495 U.S. at pp. 494–496.) In addressing the preemptive effect of

the FPA, the court first rejected the Water Board’s challenge to

First Iowa’s narrow interpretation of the FPA’s savings clause,

Section 27. Although recognizing that Section 27 might

plausibly be read to reserve to the states the power to regulate

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

stream flow to protect wildlife (California v. FERC, at p. 497),

the court declined to revisit the earlier ruling. (Id. at p. 499.) In

holding the Water Board’s attempt to impose its own minimum

flow rate preempted, the high court reaffirmed that state law is

preempted when it either conflicts with federal law or obstructs

congressional purposes. It explained: “As Congress directed in

[the] FPA [citation], FERC set the conditions of the license,

including the minimum stream flow, after considering which

requirements would best protect wildlife and ensure that the

project would be economically feasible, and thus further power

development. [Citations.] Allowing California to impose

significantly higher minimum stream flow requirements would

disturb and conflict with the balance embodied in that

considered federal agency determination” “and would ‘constitute

a veto of the project that was approved and licensed by FERC.’ ”

(Id. at pp. 506, 507.) Because the minimum stream flow

requirement was not concerned with proprietary rights in

water, the court concluded, it was not insulated from federal

preemption. (Id. at pp. 498, 506.)

B. DWR’s Use of CEQA Is Preempted by the

Doctrine of Field Preemption

As explained above, it is well settled that Section 27 of the

FPA limits state regulation in this area to proprietary rights in

water and precludes state regulation outside those confines.

(First Iowa, supra, 328 U.S. at pp. 175–176.)

In Sayles Hydro, the Ninth Circuit reasonably applied

high court precedent in holding that the FPA preempts under

the doctrine of field preemption all state regulation beyond the

scope of Section 27. (Sayles Hydro, supra, 985 F.2d at p. 455;

see id. at p. 456 [“Once [California v. FERC] made it clear that

the state could control only proprietary rights to water, that

13

COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

established the category as ‘occupy the field’ preemption for

everything but proprietary rights to water”].) I find no basis for

disagreeing with the Ninth Circuit’s analysis. Because DWR’s

application of CEQA purported to regulate the environmental

consequences of the Facilities, it falls far outside the regulatory

authority left to the states by Section 27 and is therefore

preempted.

In Sayles Hydro, the Water Board withheld a state

operating permit from a hydroelectric plant licensed by FERC

because the applicant eventually declined to respond to the

Water Board’s requests for “a shifting, expanding range of

reports and studies, to assure that the project satisfies the

[Water] Board’s concerns regarding recreation, aesthetics,

archaeology, sport fishing, and cultural resources.” (Sayles

Hydro, supra, 985 F.2d at p. 453.) In considering the Water

Board’s authority over the project, the Ninth Circuit concluded

that the state’s power was restricted to matters authorized by

Section 27. The court recognized that the scope of state

authority, judged solely from the language of that statute, was

“capable of different interpretations.” (Sayles Hydro, supra, 985

F.2d at p. 454.) But, the court observed, “we cannot . . . construe

this statute on a blank slate. The Supreme Court has read the

broadest possible negative pregnant into this ‘savings clause.’

[Citation.] The rights reserved to the states in this provision are

all the states get.” (Ibid.) Explaining the court’s interpretation

of the savings clause, the Ninth Circuit noted that “[i]n many

states where water is scarce, a state property law regime

enables users of streams and wells to obtain proprietary rights

in a continuing quantity of water. By perfecting state water

rights, users can enjoin other users who deprive them of their

share of the flow. [Citation.] This state property law regime in

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

water is what the savings clause reserves, under First Iowa.”7

(Sayles Hydro, supra, 985 F.2d at p. 455.) In contrast, the court

held, “[s]uch proprietary rights are not at issue in the case before

us. . . . Since forcing [the plaintiffs] to provide environmental

impact reports to the [Water] Board has nothing to do with

determining proprietary rights in water, federal preemption

bars the state requirements.” (Ibid.) Although Sayles Hydro did

not mention CEQA by name, its reference to “environmental

impact reports” gives the game away. (Ibid.) The court was

holding CEQA preempted in connection with the licensing of

hydropower projects.

Significantly, the Ninth Circuit addressed and rejected the

very approach to preemption adopted in the majority opinion:

“The [Water] Board urges that we read California v. FERC as

establishing federal preemption only where a state requirement

conflicts with a federal requirement, not where it supplements

a federal requirement. . . . [⁋] . . . The ratio decidendi, however,

does not take that course. Instead, California v.

FERC reaffirms First Iowa’s narrow interpretation of the

savings provision, so that the only authority states get over

federal power projects relates to allocating proprietary rights in

water. First Iowa said that the separation of authority between

state and federal governments ‘does not require two agencies to

share in the final decision of the same issue.’

[Citation.] California v. FERC reaffirms First Iowa, uses the

‘occupy the field’ characterization ‘broad and paramount federal

7

The court recognized that First Iowa’s discussion of

Section 27 could be regarded as dictum, but it held that this

contention became moot when California v. FERC reaffirmed

the ruling. (Sayles Hydro, supra, 985 F.2d at p. 455.)

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

regulatory role,’ [citation], and plainly states that

‘constricting § 27 to encompass only laws relating to proprietary

rights’ accomplishes this ‘no sharing’ purpose. . . .” (Sayles

Hydro, supra, 985 F.2d at pp. 455–456, fn. omitted.) As the

court added: “Once the [First Iowa] Court made it clear that the

state could control only proprietary rights to water, that

established the category as ‘occupy the field’ preemption for

everything but proprietary rights to water.” (Id. at p. 456.)

Sayles Hydro continued, in an observation of obvious

application here: “In the case at bar, it is clear that the federal

laws have occupied the field, preventing state regulation. This

conclusion is strengthened by the fact that most or all of the

[Water] Board’s concerns were considered by [FERC] in

granting the license, and conditions were imposed in the license

to protect these multiple values. . . . There would be no point in

Congress requiring the federal agency to consider the state

agency recommendations on environmental matters and make

its own decisions about which to accept, if the state agencies had

the power to impose the requirements themselves.” (Sayles

Hydro, supra, 985 F.2d at p. 456.)

The majority argues that “First Iowa and California v.

FERC could be read to apply either conflict or field preemption.”

(Maj. opn., ante, at p. 18.) Sayles Hydro acknowledged as much

(Sayles Hydro, supra, 985 F.2d at pp. 455, 456), and the point

does not answer the Ninth Circuit’s careful analysis of the

language of those cases in finding field preemption. As Sayles

Hydro determined, the high court’s decisions lead inescapably

to the conclusion that field preemption precludes state

regulation in this area.

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

The majority faults Sayles Hydro for relying on a savings

clause, noting that “the statute does not say that these matters

are the only matters reserved.” (Maj. opn., ante, at p. 19.) The

Supreme Court, however, has long since resolved this issue,

holding that matters outside the savings clause are preempted,

a ruling that is binding on us regardless of the language of

Section 27. (First Iowa, supra, 328 U.S. at p. 176 [“in those fields

where rights are not thus ‘saved’ to the States, Congress is

willing to let the supersedure of the state laws by federal

legislation take its natural course”].)

The majority points out that none of the cases cited, First

Iowa, California v. FERC, and Sayles Hydro, expressly declared

that field preemption applies to federally regulated public

agencies. (Maj. opn., ante, at p. 19.) The omission is

understandable because all of the cases concerned state

regulation of private parties, rather than a public agency. But

if Congress occupies a field, it does so regardless of the identity

of the party affected by the state regulation; application of the

doctrine of field preemption has never been held to depend upon

the nature of the party being regulated. Notably, the majority

cites no case holding that state regulation preempted by the

doctrine of field preemption when applied to a private party is

not similarly preempted if applied to a public agency, even when

the public agency applies that regulation to its own conduct. Eel

River comes closest, but, for the reasons discussed below, it does

not apply here.

The Ninth Circuit’s analysis and conclusions in Sayles

Hydro are sound. Under First Iowa and California v. FERC,

Congress has occupied the field of hydropower licensing and

operation outside the authority reserved to states under

Section 27. DWR’s application for relicensing did not concern

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

proprietary rights to water. The agency’s use of CEQA was

therefore preempted.

C. DWR’s Use of CEQA Is Also Preempted by the

Doctrine of Purposes and Objectives

Preemption

Even if Congress had not occupied the field of hydropower

regulation, the nature of CEQA and its application in these

circumstances would still require a finding of preemption

because CEQA stands as a substantial obstacle to the

accomplishment of the purposes and objectives of Congress in

enacting the FPA.

It bears repeating that CEQA is an important regulatory

statute, requiring the imposition of restrictions on the manner

in which public and private projects are designed and operated

to minimize their adverse environmental impacts. When it

undertook to comply with CEQA, DWR characterized the project

under review as implementation of the settlement agreement —

in other words, as the future operation of the Facilities under

the terms proposed in that agreement. DWR’s use of CEQA

therefore required it to adopt a series of mitigation measures,

enforceable by DWR through a mitigation monitoring program,

addressing the precise subject matter of the FERC license. The

FPA, however, vests exclusive regulatory authority over the

operation of hydropower projects like the Facilities in FERC.

DWR’s use of CEQA necessarily stands as an obstacle to the full

accomplishment of the congressional purpose and objective of

vesting exclusive regulatory authority over the operation of

hydroelectric power plants in the federal government.

In addition, DWR’s invocation of CEQA in the midst of the

ALP, a unique federal licensing process clearly designed to

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Cantil-Sakauye, C. J., concurring and dissenting

duplicate and thereby supplant the need for state

environmental review, constituted a second, equally disruptive

obstacle to achieving the congressional purpose of vesting

exclusive control over hydropower licensing in FERC.

In applying the doctrine of purposes and objectives

preemption, “[w]hat is a sufficient obstacle [to the

accomplishment of Congress’s purposes and objectives] is a

matter of judgment, to be informed by examining the federal

statute as a whole and identifying its purpose and intended

effects.” (Crosby v. National Foreign Trade Council (2000) 530

U.S. 363, 373 (Crosby).) As this instruction suggests, “ ‘the

purpose of Congress is the ultimate touchstone’ ” in determining

whether state law is preempted. (Wyeth v. Levine (2009) 555

U.S. 555, 565.) Even if the federal and state laws share the same

goal, “[a] state law also is pre-empted if it interferes with the

methods by which the federal statute was designed to reach this

goal.” (International Paper Co. v. Ouellette (1987) 479 U.S. 481,

494 (Ouellette).)

The obvious first step in a purposes and objectives

preemption analysis is to identify the purposes and objectives of

the federal law. (Crosby, supra, 530 U.S. at p. 373.) As the

majority acknowledges, “The overriding purpose of the FPA is to

facilitate the development of the nation’s hydropower resources.

(First Iowa, supra, 328 U.S. at pp. 174, 180.) A primary tool in

achieving that goal was to centralize regulatory authority in the

federal government in order to remove any obstacles to such

development posed by state regulation.” (Maj. opn., ante, at

p. 23.) This intent is made manifest by Section 27, which

restricts state law in this area to laws governing proprietary

rights in water. (California v. FERC, supra, 495 U.S. at p. 498;

First Iowa, at p. 176.) The Congressional objective was therefore

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Cantil-Sakauye, C. J., concurring and dissenting

to promote the development of hydropower resources; an

important means it chose to accomplish that objective was to

grant FERC exclusive control over the licensing and regulation

of hydropower facilities.

DWR’s invocation of CEQA following its submission of a

license application to FERC necessarily created the risk that the

EIR would identify significant potential environmental effects

resulting from operation of the Facilities, which would, in turn,

trigger the required formulation and adoption of mitigation

measures to reduce those effects. The mitigation measures,

legally enforceable constraints governing the manner in which

a project is designed and operated, are regulations in all but

name. Because the project identified in the EIR, the operation

of the Facilities under the terms proposed in the settlement

agreement, was, as a practical matter, indistinguishable from

the subject of the FERC license, at least some, if not all, of the

mitigation measures identified in the EIR would inevitably

overlap with the authority granted FERC by the FPA. Once

adopted, such mitigation measures would impose mandatory

conditions on the operation of the Facilities that were in

addition to the license conditions ultimately imposed by FERC.

And that is what occurred. In certifying the EIR, DWR

identified significant adverse environmental effects and adopted

six pages of mitigation measures and a mitigation monitoring

program. The mitigation measures directly addressed, and

purported to constrain, the manner in which the Facilities could

operate with respect to the many factors affecting its impact on

the environment. Because these same factors are subject to

FERC’s regulatory authority, DWR’s certification of the EIR, in

effect, created an alternative set of regulations governing

operation of the Facilities and designated an agency other than

20

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Cantil-Sakauye, C. J., concurring and dissenting

FERC to enforce these regulations. DWR’s use of CEQA in this

manner presented an obstacle to the accomplishment of the full

purposes and objectives of Congress precisely because a primary

purpose of the FPA, by vesting exclusive regulatory authority

over the operation of hydropower facilities in FERC, was to

preclude just the type of state regulation created by adoption of

the mitigation measures and their monitoring program.

The majority acknowledges that any mitigation measures

adopted by DWR that conflict with the eventual FERC license

would be preempted (maj. opn., ante, at p. 27), but that does not

solve the more fundamental problem. CEQA serves as an

obstacle to the accomplishment of congressional purposes

regardless of whether the mitigation measures adopted by DWR

are in direct conflict with the provisions of the FERC license,

including when state law interferes with the methods by which

the federal statute was designed to reach its goals. (Ouellette,

supra, 479 U.S. at p. 494.) Regardless of whether DWR’s

mitigation measures are in direct conflict with the eventual

terms of the FERC license, the adoption of the mitigation

measures and a program to enforce them created an alternative

regulatory regime governing operation of the Facilities that is

independent of the FERC license and purports to vest regulatory

authority in an agency other than FERC. These actions will

cause unnecessary confusion about the nature of the regulations

properly governing operation of the Facilities and create the

potential for future conflict over the proper roles of DWR and

FERC in regulating those operations. They are therefore

21

COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

preempted as an obstacle to achieving the full Congressional

purpose.8

In addition, to meet its objectives Congress granted FERC

exclusive control not only over the terms of an eventual license

but also over the conduct of the licensing proceedings. Because

the implementation of CEQA in the midst of an ALP proceeding

is inconsistent with that process, it stands as an independent

obstacle to the accomplishment of federal purposes and

objectives. Again, that risk was realized here.

The ALP was designed not merely to focus the

participants’ attention on environmental concerns, but also to

supplant the need for independent environmental review under

state law. The ALP commences with the preparation of a PDEA,

the functional equivalent of the type of informational document

typically required by environmental review statutes such as

CEQA and NEPA. In other words, state environmental review

is already an integral part of the ALP. The inclusion of this

requirement was clearly intended to make it unnecessary for an

8

The majority contends that this analysis disregards a

decades-long history of coexistence between CEQA and

exclusive federal regulation. (Maj. opn., ante, at p. 21.) But I am

hardly the first to suggest that CEQA is preempted in this

context. Sayles Hydro so holds (Sayles Hydro, supra, 985 F.2d

at p. 455); we suggested as much in Eel River (Eel River, supra,

3 Cal.5th at p. 715); and a New York appellate court held that

application of the state’s environmental protection law was

preempted when applied to a Section 401 certification in Matter

of Eastern Niagara Project Power Alliance v. State Department

of Environmental Conservation (N.Y.App.Div. 2007) 840

N.Y.S.2d 225, 229. In light of this history, the mere fact that

CEQA’s application to a public project has not been the subject

of a published appellate opinion says nothing about the merits

of the claim.

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Cantil-Sakauye, C. J., concurring and dissenting

applicant to perform its own environmental review under state

law, thereby streamlining the licensing process and avoiding

delays and regulatory conflicts found here. To further ensure

the protection of environmental values, the ALP also requires

FERC to prepare an EIS. Given the design of the ALP, the

preparation of an EIR is redundant and unnecessary to ensure

proper consideration of environmental concerns.

There is another problem (and one readily apparent from

these proceedings): CEQA’s provision for judicial review is not

contemplated by the ALP and is entirely inconsistent with an

efficient licensing process. The ALP provides for judicial review

of FERC licensing decisions, but that review occurs in the

United States Courts of Appeals after an order has been issued.

(16 U.S.C. § 825l(b).) A judicial action in state court challenging

the conduct of the licensing proceeding, as here, is wholly

outside the contemplation of the ALP. There is little doubt that

CEQA’s provision for judicial review stands as a sizable obstacle

to Congress’s objective of granting FERC exclusive control over

hydropower licensing.

The majority rightly maintains that “ ‘ “a high threshold

must be met if a state law is to be pre-empted for conflicting with

the purposes of a federal Act.” ’ ” (Maj. opn., ante, at p. 16,

quoting Chamber of Commerce of the United States of America

v. Whiting (2011) 563 U.S. 582, 607 (plur. opn. of Roberts, C. J.).)

I am persuaded that the threshold is satisfied here. The

required adoption of mitigation measures and a mitigation

monitoring program unavoidably interferes with FERC’s

exercise of exclusive federal authority; the preparation of an EIR

needlessly replicates procedures already a part of the federal

licensing process; and the provision for civil enforcement of

CEQA creates a readily realized risk of interference with

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Cantil-Sakauye, C. J., concurring and dissenting

FERC’s control of the licensing process. In sum, there are

compelling reasons to find CEQA preempted in its entirely, and

little reason to resist that conclusion.

D. Eel River Does Not Exempt CEQA from

Preemption in These Circumstances

As the majority concedes, the foregoing considerations

might well be conclusive in requiring field preemption of state

regulation if the applicant were a private entity. (Maj. opn.,

ante, at p. 17 [if a private party were being regulated, “these

arguments may have prevailed”]; id at p. 18 [distinguishing

Sayles Hydro as involving “the licensing of a private entity”].)

But the majority consistently relies on DWR’s status as a public

entity and my decision in Eel River to justify its decision to

impose limited preemption in these circumstances. (Maj. opn.,

ante, at pp. 21–22.) Unlike the majority, however, Eel River did

not find partial preemption. Rather, as discussed below, we

found CEQA exempt from preemption by the Interstate

Commerce Commission Termination Act of 1995 (ICCTA;

49 U.S.C. § 10101 et seq.), which grants the federal government

exclusive jurisdiction over the nation’s rail transport. In

acknowledging that CEQA is preempted by the FPA, at least to

the extent it directly conflicts with the FPA, the majority

implicitly concedes that the factors exempting CEQA from

preemption in the circumstances of Eel River are not present

here.

The lead agency in Eel River, the North Coast Railroad

Authority (Railroad Authority), was created by the Legislature

to revitalize an abandoned intrastate rail line in Northern

California. (Eel River, supra, 3 Cal.5th at pp. 691–692.) Those

efforts were governed by the ICCTA, which grants exclusive

regulatory authority over railroads to the federal government.

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Cantil-Sakauye, C. J., concurring and dissenting

The ancestor statute of the ICCTA was motivated by concerns

over state regulation comparable to those that brought about the

FPA (Eel River, supra, 3 Cal.5th at p. 708), but by the time of

Eel River the legislation had long since been amended to

promote deregulation. While regulation of the rail industry was

greatly diminished, exclusive federal regulatory authority was

maintained. (Eel River, at pp. 709–710.)

As part of its deregulatory mission, the Surface

Transportation Board (STB), the federal agency responsible for

enforcing the ICCTA, had exempted the Railroad Authority

from the ordinary requirement to obtain a certificate of

operation, leaving the agency’s proposed activity effectively

unregulated by federal authorities. (See Eel River, supra,

3 Cal.5th at pp. 695, 709–710.) The Railroad Authority initially

followed CEQA procedures in planning for the resumption of rail

service (Eel River, at pp. 696–697), but it later reversed course,

declaring CEQA preempted by the ICCTA. (Eel River, at p. 700.)

Despite the long history of federal preemption of local rail

regulation, Eel River rejected the Railroad Authority’s claim

that the ICCTA preempted the state’s application of CEQA.

We began our discussion by acknowledging that the

application of CEQA to an equivalent private project would be

preempted. (Eel River, supra, 3 Cal.5th at p. 715.) As we

observed, “Although CEQA does not on its face specifically

regulate rail transportation, its enforcement mechanisms

requiring environmental compliance as a condition of project

approval involving a private rail carrier would have the effect of

regulating rail transportation, a result inconsistent with

49 United States Code section 10501.” (Eel River, at p. 715.)

But we contrasted this with a state agency’s application of

CEQA to its own rail project, which “operates as a form of self-

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Cantil-Sakauye, C. J., concurring and dissenting

government” because the agency is, in effect, regulating itself.

(Eel River, at p. 723.)

Importantly, our conclusion in Eel River that CEQA was

not preempted under the circumstances did not purport to

constitute a general ruling that CEQA is insulated from

preemption in connection with all federal regulation of state-

sponsored projects. The majority’s application of impossibility

preemption here is an implicit acknowledgment of this limit.

Rather, the ruling in Eel River that the Railroad Authority was

exempt from preemption rested on two circumstances unique to

the ICCTA. The first was the absence of federal regulation,

made manifest by the STB’s issuance of an exemption from the

certificate requirement. As we noted, upon issuance of such an

exemption, “the railroad owner has a protected domain that is

subject neither to federal nor to state regulation, a freedom to

plan, develop, and restore rail service on market principles . . . .”

(Eel River, supra, 3 Cal.5th at pp. 723–724.) “[W]ithin the

deregulated zone, the state as owner may make its decisions

based on its own guidelines . . . .” (Id. at p. 724.) In light of

CEQA’s role in planning for the operation of the rail line, we

held, its application was not preempted in this deregulated

context.

It cannot be seriously contended that this rationale

supports a finding of no preemption in this matter. The

regulatory circumstances here are in direct contrast to those

prevailing in Eel River. FERC has exercised its exclusive right

to regulate operation of the Facilities, and DWR has engaged in

a years-long licensing process in compliance with FERC’s

exercise of that authority. There is no “deregulated zone.”

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Cantil-Sakauye, C. J., concurring and dissenting

Our second ground for declining to find CEQA preempted

in Eel River recognized CEQA’s role in intergovernmental

regulation. We noted that the application of CEQA “constitutes

the state’s governance of its own subdivision [i.e., the Railroad

Authority], a matter of self-management that the ICCTA

presumptively was not intended to entirely preempt.” (Eel

River, supra, 3 Cal.5th at pp. 725–726.) We found the language

of the ICCTA insufficiently clear to justify an interpretation that

“would infringe on state sovereignty” in the manner proposed.

(Eel River, at p. 726.)

This aspect of our reasoning relied on two Supreme Court

decisions, Gregory v. Ashcroft (1991) 501 U.S. 452 (Gregory) and

Nixon v. Missouri Municipal League (2004) 541 U.S. 125

(Nixon). In Gregory, the court held that federal age

discrimination laws did not preempt a state’s constitutional

provision requiring state judges to retire at age 70. (Gregory, at

p. 464.) In explanation, the high court noted that setting judicial

qualifications “goes beyond an area traditionally regulated by

the States; it is a decision of the most fundamental sort for a

sovereign entity. . . . [⁋] Congressional interference with this

decision . . . would upset the usual constitutional balance of

federal and state powers.” (Id. at p. 460.) The court declined to

find preemption in such circumstances unless Congress had

made “ ‘its intention to do so “unmistakably clear in the

language of the statute.” ’ ” (Ibid.)

Nixon addressed the preemptive effect of a federal statute

that prevented states from “prohibiting the ability of any entity

to provide” telecommunications services. (Nixon, supra, 541

U.S. at p. 128, quoting 47 U.S.C. § 253(a).) Despite the statute’s

broad language, Nixon declined to find preempted a state law

prohibiting the state’s own local governments from providing

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Cantil-Sakauye, C. J., concurring and dissenting

such services. (Nixon, at p. 138.) Drawing on Gregory, the court

recognized that preempting the telecommunications ban “would

come only by interposing federal authority between a State and

its municipal subdivisions.” (Nixon, at p. 140.) Given this

circumstance, the court in Nixon “invoke[d] our working

assumption that federal legislation threatening to trench on the

States’ arrangements for conducting their own governments

should be . . . read in a way that preserves a State’s chosen

disposition of its own power, in the absence of the plain

statement Gregory requires.” (Ibid.) Finding no unmistakably

clear language in the federal statute requiring preemption in

the circumstances, Nixon declined to do so. (Id. at p. 141.)

The FPA’s language, as consistently interpreted by the

Supreme Court since First Iowa, makes unmistakably clear

Congress’s intent to preempt CEQA in the present

circumstances, regardless of CEQA’s impact on inter-

governmental relations. As discussed, Section 27, the FPA’s

savings clause, defines the rights reserved to the states under

the statute. The high court has on numerous occasions

emphasized the limited nature of Section 27 and the broad reach

of the FPA. As the high court held in First Iowa, “in those fields

where rights are not thus ‘saved’ to the States, Congress is

willing to let the supersedure of the state laws by federal

legislation take its natural course.” (First Iowa, supra, 328 U.S.

at p. 176.) Section 27 contains no exception to preserve state

regulation touching inter-governmental relations.

In other words, well over a half-century ago the FPA was

construed to preempt all state laws relating to the licensing of

hydroelectric power plants, except to the extent such state

legislation governs proprietary rights in water. The limited

scope of the FPA’s savings clause was subsequently reaffirmed

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Cantil-Sakauye, C. J., concurring and dissenting

in California v. FERC, which held that Section 27 “provides the

clearest indication of how Congress intended to allocate the

regulatory authority of the States and the Federal Government”

under the act. (California v. FERC, supra, 495 U.S. at p. 497.)

The high court recognized that it has “endorsed and applied

First Iowa’s limited reading of [Section] 27, [citations], and has

employed the decision with approval in a range of decisions, both

addressing the FPA and in other contexts.” (California v. FERC,

at p. 499.) Further, “Congress has amended the FPA to

elaborate and reaffirm First Iowa’s understanding that the FPA

establishes a broad and paramount federal regulatory role,”

including by amending the statute to require FERC to adopt

provisions for the protection of fish and wildlife in its licenses.

(Id. at p. 499; see also id. at p. 500.)

The majority notes the lack of any express language in the

FPA requiring the preemption of state regulation touching

inter-governmental relations. (Maj. opn., ante, at p. 21.) But

neither Eel River, Nixon, nor Gregory requires a literal

statement of intent to preempt self-government. Rather, these

decisions require that congressional intent to preempt the

relevant state law must be “unmistakably clear.” (Eel River,

supra, 3 Cal.5th at p. 731; see Gregory, supra, 501 U.S. at

pp. 460–461; Liberty CableVision of Puerto Rico, Inc. v.

Municipality of Caguas (1st Cir. 2005) 417 F.3d 216, 221

[finding “unmistakably clear” requirement met despite absence

of any reference to inter-governmental relations in statutory

preemption clause].) By accepting a well-settled and

consistently restrictive judicial interpretation of the savings

clause, augmented by statutory amendments accommodating

that interpretation, Congress has made unmistakably clear the

broad preemptive reach it intends for the FPA: State regulation

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

outside the savings clause — i.e., state law regulating matters

other than proprietary rights in water — is preempted. For the

reasons discussed above, that reach compels the conclusion that

CEQA is preempted under these circumstances, regardless of

any interference that preemption might cause to relations

between the state and its subdivisions.

The majority’s holding, if not its discussion, makes clear

that the majority does not find applicable here the second

rationale in Eel River. That rationale relied on high court

authority holding that the overriding importance of state

legislation governing intergovernmental relations makes it

immune from preemption unless Congress has unmistakably

indicated otherwise. As a consequence, any legislation subject

to this second rationale is exempt from preemption. In Gregory,

the Supreme Court held that a state’s mandatory judicial

retirement age prevailed over the contrary requirements of

federal anti-discrimination law. Nixon held the same. Although

a federal law forbade states from precluding entities from

providing telecommunications services, the Supreme Court

upheld a state statute that did just that. When the

circumstances addressed by these cases are present, preemption

simply does not operate.

In holding that CEQA is preempted in these

circumstances, the majority implicitly finds that the unusual

circumstances underlying Eel River are absent. If the FPA

indeed lacks language making unmistakably clear a

congressional intent to preempt CEQA in these circumstances,

Gregory and Nixon — and Eel River, for that matter — demand

the conclusion that preemption is absent entirely. Yet the

majority concedes that CEQA is preempted here to the extent it

directly conflicts with FERC regulation. This would appear to

30

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Cantil-Sakauye, C. J., concurring and dissenting

be an expansion of Eel River, but the scope and application of

the exception is left unclear.

E. The Majority’s Ruling Is Unworkable and

Serves Little Practical Purpose

Preemption is ultimately an issue of law, not practicality.

But the difficulty of meshing the majority’s scheme of partial

preemption with the implementation of CEQA in these

circumstances illustrates the wisdom of precluding state

regulation when the federal government has assumed exclusive

regulatory authority.

This unworkability begins with the majority’s treatment

of CEQA’s civil enforcement mechanism. The majority permits

a CEQA compliance lawsuit to proceed, so long as it does not

seek to interfere with the FERC licensing proceedings. But, as

noted above, FERC is not bound, either by the majority’s ruling

or CEQA. Once any other necessary permits are obtained,

including a Clean Water Act certificate, FERC is free to issue a

license and move on. It need not await the resolution under

state law of issues of CEQA compliance. Yet issuance of a

license plainly moots any compliance lawsuit, practically if not

legally. If the EIR is found deficient, DWR can, perhaps, be

forced to compile a compliant EIR, but it will be for naught. The

FERC license will have issued, and any DWR dissatisfaction

with the license must be resolved in a federal lawsuit, not

through CEQA proceedings. Although DWR is presumably

permitted to impose further mitigation measures consistent

with the FERC license after its issuance, the agency would be

free to adopt such practices outside the context of CEQA in any

event. The FERC license inevitably provides no more than a

guide to project operation that must be implemented by DWR

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Cantil-Sakauye, C. J., concurring and dissenting

through its administration of the facilities. CEQA adds nothing

to this process.

The practical problems with the majority’s treatment of

mitigation measures inconsistent with the FERC license are

more significant. Because, as here, CEQA compliance will

precede issuance of the FERC license, DWR will be unable to

determine at the time of their adoption whether any particular

mitigation measures will be consistent with the terms of the

FERC license. Yet the majority concedes that inconsistent

mitigation measures are preempted. Because inconsistent

mitigation measures are not self-preempting, they will remain

binding on the agency as a matter of (non-preempted) state law

unless declared preempted by an appropriate court. In the

meantime, DWR will be bound by two inconsistent regulations,

one binding under state law and one binding under federal law,

and forced to violate either one or the other.

Even assuming FERC, DWR, or a third party brings an

appropriate action to have a conflicting mitigation measure

declared preempted, the problems do not end there. Given the

majority’s holding that CEQA applies to projects covered by a

FERC licensing proceeding, those projects require lead agency

approval under CEQA. Any such approval will require, as

discussed above, a finding that the project’s adverse

environmental effects have been mitigated to insignificance, a

finding based on adoption of mitigation measures. As a

consequence, any declaration that a mitigation measure is

unenforceable necessarily invalidates the agency’s project

approval under CEQA, premised on the mitigation measure.

Operation of the project may thereby be rendered unlawful

under state law until a new CEQA proceeding results in a valid

project approval.

32

COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

These conundrums highlight a fundamental problem with

the majority’s holding. CEQA was enacted to govern projects

governed by state law and requiring state regulatory approval.

CEQA was not intended or designed to operate in a manner

subordinate to a superior federal regulatory scheme. There is

no provision in CEQA for partial implementation. An agency

cannot use CEQA solely for informational purposes, without

adopting mitigation measures when required. Nor can an

agency implement CEQA without exposing its compliance to a

civil enforcement lawsuit. The practical problems cited above

are all a result of the majority’s attempt to shoehorn CEQA into

a circumstance in which its use is redundant and, under

governing federal law, preempted. There is no indication that

the Legislature intended CEQA to operate in the manner

required by the majority, or would approve of it.

The lack of a clear doctrinal basis for the majority’s version

of preemption will create further problems of its own. The

majority seems to hold that when a public agency sponsors a

project requiring federal approval, the ordinary rules of

preemption do not apply; at a minimum, the agency’s action is

not subject to field preemption and purposes and objectives

preemption. The majority justifies this partial preemption

under Eel River, but, as discussed above, because the ruling goes

well beyond the holding of that case, the boundaries,

application, and jurisprudential basis of this partial preemption

remain obscure. And there is no way to determine what other

state statutes, if any, are covered by the ruling. All of this

uncertainty will guarantee further litigation every time a public

agency invokes a state statute in the midst of a federal licensing

proceeding, adding to the cost, length and burden of such

proceedings. In addition, because there is no reason to believe

33

COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

the federal courts will follow the majority in its flight — the

federal district courts in California, for example, are bound by

Sayles Hydro’s adherence to First Iowa and California v.

FERC — we can expect different results in litigation commenced

in the respective jurisdictions. As a result of the majority’s

ruling, CEQA is deemed preempted in litigation commenced in

federal court, while it is subject only to impossibility preemption

in litigation commenced in our courts.

Putting aside the unworkability of the majority’s vision of

limited CEQA preemption, the most disturbing aspect of its

ruling is the lack of any practical benefit from its bending of the

preemption rules. The implementation of CEQA here is neither

necessary, nor even important. There is no claim on any side

that environmental concerns are given short shrift in the FERC

licensing process. As noted, the ALP appears designed

specifically to render state environmental review unnecessary.

The ALP requires, at the outset of the process, the creation of a

document that is the full equivalent of an EIR. The majority

does not contend otherwise. The applicant is then required to

negotiate with all other interested parties to reach consensus on

the terms of a proposed FERC license. Given the nature of

hydropower projects and the parties interested in their

operation, environmental concerns are likely to be in the

forefront. The majority does not identify any environmental

concerns that were overlooked in the formulation of the DWR

settlement agreement. Yet FERC then performs its own

environmental analysis under NEPA, involving the preparation

of a second environmental review document, the EIS.

Environmental protection is plainly among the top priorities of

the ALP. CEQA adds nothing.

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Cantil-Sakauye, C. J., concurring and dissenting

Against this background, the majority fails to articulate

any persuasive reason for preserving state environmental

review over the clear dictates of the supremacy clause. The

project considered by DWR’s EIR — the operation of the

Facilities under the settlement agreement — is virtually

identical to the project considered in FERC’s EIS. Contrary to

the majority’s claim (maj. opn., ante, at p. 29), the EIS was not

prepared at an “earlier stage[]” in the ALP. It occurred

immediately prior to DWR’s redundant preparation of the EIR.

Neither DWR nor the majority have identified a deficiency in

either NEPA or FERC’s EIS that made this duplication of effort

necessary, or even efficacious.9

DWR contends that it invoked CEQA in order to decide

whether to accept the amendments proposed by FERC to the

terms of a license proposed in the settlement agreement, and the

majority accepts the explanation. (Maj. opn., ante, at p. 2.)10

9

The majority also theorizes that “a compliant EIR can still

inform the state agency concerning actions that do not encroach

on FERC’s jurisdiction.” (Maj. opn., ante, at p. 29.) If DWR had

carefully defined the project under CEQA review in a manner

that avoided FERC jurisdiction, DWR might also have avoided

preemption. But that is demonstrably not this case. As

explained above, the project studied by DWR in its EIR was the

exact subject of FERC regulation — future operation of the

Facilities under the terms of the settlement agreement.

10

As the majority observes, “DWR relied on the EIR to

analyze the environmental impact of operating the Oroville

Facilities under the settlement agreement or an alternative

proposed by FERC staff. The EIR serves as the informational

source for DWR’s decisionmaking as to whether to request

particular terms from FERC as it contemplates the license . . .

or to seek reconsideration of terms once FERC issues the

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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

But those new terms had already been the subject of complete

environmental review in the EIS, in addition to its full

environmental review of the settlement agreement’s proposal.

Such review is presumably the very purpose of the ALP’s

requirement of an EIS at this stage of the process — to make

unnecessary an independent state environmental review,

including review of any changes FERC might propose to the

terms of a settlement agreement. There was no need for DWR

to repeat the environmental review process to reach conclusions

about the effect and desirability of FERC’s proposal. FERC had

done the work for them. Tellingly, neither DWR nor the

majority has identified deficiencies in the EIS analysis that

were uncovered by DWR’s EIR.

DWR’s rationalization ignores the duplication of effort

represented by its pursuit of CEQA. Any information developed

by DWR to aid its decision-making had already been developed

and revealed in FERC’s EIS. The EIR added nothing to the store

of information on which DWR’s decision makers were required

to act and will add nothing to their evaluation of the FERC

proposal, should that proposal ever be communicated. The

majority’s rationale reduces to this: DWR was entitled to do the

analysis itself, even if that duplication of effort served no other

purpose. It seems a small benefit to justify upsetting the proper

application of the rules of preemption.

The impact of the majority’s ruling is magnified by the

mandatory nature of CEQA compliance. The application of

CEQA is not discretionary; when a public agency proposes to

license . . . .” (Maj. opn., ante, at p. 2.) Of course, FERC’s EIS

considered exactly the same matters, and there is no claim that

FERC’s work was inadequate.

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Cantil-Sakauye, C. J., concurring and dissenting

undertake a project that might cause a physical change in the

environment, the agency must engage in CEQA procedures.

(Pub. Resources Code, §§ 21001.1, 21065, 21080.) In Eel River,

we found no preemption of CEQA in circumstances in which the

use of CEQA served an important public purpose, given the

federal government’s exemption of the state’s project from an

otherwise exclusive scheme of federal regulation. That limited

ruling was well grounded in law and public policy; CEQA was

permitted to fill the regulatory vacuum created by the

exemption. In today’s ruling, the majority appears to have

extended that ruling — granted, subject to impossibility

preemption — to every state and local public project subject to

exclusive federal regulation. Because CEQA compliance is

mandatory, public agencies subject to exclusive federal

regulation now will be required to pursue CEQA regardless of

whether, as in this case, it serves no practical or regulatory

purpose. Public agencies will be required to duplicate federal

or, as in this case, their own environmental studies, run the risk

of allowing CEQA enforcement proceedings to interfere with the

licensing proceedings, and create their own, potentially

conflicting regulatory scheme through the adoption of

mitigation measures.

The absence of any meaningful regulatory or practical

justification for DWR’s invocation of CEQA reveals the

majority’s opinion for what it is: The preservation of state

regulatory authority for its own sake. The proper role of our

court in the application of the Supreme Court’s supremacy

clause jurisprudence should be to prevent such vain assertions

of state power, not to promote and facilitate them.

37

COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES

Cantil-Sakauye, C. J., concurring and dissenting

III. CONCLUSION

In its haste to acquiesce to DWR’s pointless and redundant

invocation of CEQA, the majority has devised its own version of

federal preemption, relying on a vague and inappropriate

application of Eel River. The majority’s new preemption

tolerates state interference in exclusive federal authority so long

as the state’s interference does not “directly” conflict with

federal action — in other words, so long as the state does not

create a situation in which it is impossible simultaneously to

comply with state and federal mandates. This limited

preemption may seem appropriate to the majority, but it bears

no resemblance to the United States Supreme Court’s

articulation of the doctrine of preemption, which must be our

guide. In adopting its own version of preemption, the majority

tolerates DWR’s unnecessary delay of FERC’s licensing

proceedings, turns a blind eye to Congress’s invocation of field

preemption through the enactment of Section 27, and sweeps

purposes and objectives preemption under the rug. Although

I concur with the majority to the extent it finds certain aspects

of CEQA’s implementation here preempted, I decline to adopt

the majority’s version of preemption and would favor a faithful

application of the high court’s law of preemption. I would affirm

the judgment of the Court of Appeal.

CANTIL-SAKAUYE, C. J.

I Concur:

CORRIGAN, J.

38

See next page for addresses and telephone numbers for counsel who

argued in Supreme Court.

Name of Opinion County of Butte v. Department of Water Resources

__________________________________________________________

Procedural Posture (see XX below)

Original Appeal

Original Proceeding

Review Granted (published) XX Opn. filed 9/5/19, ordered nonpub.

12/11/19 – 3d Dist

Review Granted (unpublished)

Rehearing Granted

__________________________________________________________

Opinion No. S258574

Date Filed: August 1, 2022

__________________________________________________________

Court: Superior

County: Yolo

Judge: Daniel P. Maguire

__________________________________________________________

Counsel:

Bruce Alpert, County Counsel; Rossmann and Moore, Antonio

Rossmann, Barton Lounsbury; Law Office of Roger B. Moore, Roger B.

Moore; Shute Mihaly & Weinberger, Ellison Folk and Edward T.

Schexnayder for Plaintiff and Appellant County of Butte.

R. Craig Settlemire, County Counsel; Law Office of Roger B. Moore,

Roger B. Moore; Law Offices of Michael B. Jackson and Michael B.

Jackson for Plaintiffs and Appellants County of Plumas and Plumas

County Flood Control and Water Conservation District.

E. Robert Wright for Sierra Club, Center for Biological Diversity,

Friends of the River, California Sportfishing Protection Alliance and

Friends of the Eel River as Amici Curiae on behalf of Plaintiffs and

Appellants.

Law Office of Adam Keats and Adam Keats for California Water

Impact Network and Aqualliance as Amici Curiae on behalf of

Plaintiffs and Appellants.

Laura E. Hirahara for California State Association of Counties as

Amicus Curiae on behalf of Plaintiffs and Appellants.

Kamala D. Harris, Xavier Becerra and Rob Bonta, Attorneys General,

Michael J. Mongan, State Solicitor General, Janill L. Richards,

Principal Deputy State Solicitor General, Robert W. Byrne, Assistant

Attorney General, Joshua Patashnik and Aimee Feinberg, Deputy

State Solicitors General, Randy L. Barrow, Tracy L. Winsor, Deborah

L. Barnes, Matthew J. Goldman, Carolyn Nelson Rowan and Linda L.

Gandara, Deputy Attorneys General, for Defendant and Respondent.

The Sohagi Law Group, Margaret M. Sohagi, Philip A. Seymour;

Duane Morris, Thomas M. Berliner, Paul J. Killion, Jolie-Anne S.

Ansley; Downey Brand and David R.E. Aladjem for Real Parties in

Interest and Respondents.

Counsel who argued in Supreme Court (not intended for

publication with opinion):

Edward T. Schexnayder

Shute Mihaly & Weinberger LLP

396 Hayes Street

San Francisco, CA 94102

(415) 552-7272

Joshua Patashnik

Deputy State Solicitor General

455 Golden Gate Avenue, Suite 11000

San Francisco, CA 94102

(415) 510-3896

Jolie-Anne S. Ansley

Duane Morris LLP

Spear Tower

One Market Street, Suite 2200

San Francisco, CA 94105-1127

(415) 957-3320