Appendix — City of Los Angeles Department of Water & Power v. National Audubon Society

83-300

Office-Supreme Court, U.S.

ht Ot

In the Supreme Courtaue 22 1982

OF THE | ALEXANODTR L. STEVAS,

United States | Re

Octozer Term, 1953

City or Los ANGELES

DePARTMENT OF WaTeER AND Power,

Petitioner,

Vs.

NaTIoNaL AuDUBON Society, a corporation;

FRigNbs OF THE EartH, @ corporation;

THe Mono Lake ComMitres, a corporation;

and the Los ANGELES AupUgoN Society, a corporation;

Respondents.

APPENDIX TO

PETITION FOR WRIT OF CERTIORARI

TO THE SUPREME COURT

OF THE STATE OF CALIFORNIA

Ina REINER

City Attorney

Kpwarp C. FarRELL

Kronick, Moskovirz,

Trepemann & Grrarp

Chief Assistant City Attorney

for Water and Power

KENNETH W. Downey

Assistant City Attorney

Department of Water and

Power

1520 Legal Division

111 North Hope Street,

Box 111

Los Angeles, CA 90051

(213) 481-6362

A Professional Corporation

AvoLPpH MoskovitTz®

Currrorp W. Scuvu.z

Janet K. GotpsMITH

Betu Anw Lane

*COUNSEL OF RECORD

555 Capitol Mall, Suite 900

Sacramento, CA 95814

(916) 444-8920

Attorneys for Petitioner City of Los Angeles

Department of Water and Power

BOWNE OF SAN FRANCIBCO. INC + 180 NINTH ©T *¢ 8 F CA 84103 * (415) 864-2300

TABLE OF CONTENTS

Page

Opinion of California Supreme Court, 33 Cal.3d 419

(February 17, 1983) ................0..++ scetnotnldsataeskianienbiadehecia A-l

Modification of Opinion by California Supreme Court,

BB Cal.Bd TiGe CArertl 16, TOGB) nn... ccecccnsncscetccnsscesions. J A-57

March 2, 1981 Order of U.S. District Court for the

Eastern District of California, re Abstention .......... A-59

January 19, 1981 Order of U.S. District Court for the

Eastern District of California, re Abstention .......... A-64

Intended Ruling on Motion for Summary Judgment,

Superior Court for Alpine County, California (Sep-

Ee) ETE cot S SEED, ARES Sivertson tina x A-77

Judgment, Superior Court for Alpine County, Cali-

fornia (November 9, 1981) ...............:c.ccscssccsessereeeeeseessees AD

California Constitution, Article X, Section 2 ................ A-83

Selected Sections of California Water Code Relating

to Appropriative Water Rights ..............:.:cceseeees A-54

License for Diversion and Use of Water No. 10191

Issued by California State Water Resources Control

Board to City of Los Angeles Department of Water

Do, CGE Cena MAPLES Uae at FEne OP Ete Be hol ha OEE A-93

License for Diversion and Use of Water No. 10192

Issued by California State Water Resources Control

Board to City of Los Angeles Department of Water

BE saccasecscecccstienim caceamnals sieioasenaea A-99

A-l

Opinion of California Supreme Court

33 Cal. 3d 419

(February 17, 1983)

(S.F. No, 24368. Feb. 17, 1983.]

NATIONAL AUDUBON SOCIETY et al., Petitioners, v.

THE SUPERIOR COURT OF ALPINE COUNTY, Re-

spondent;

DEPARTMENT OF WATER AND POWER OF THE

CITY OF LOS ANGELES et al.,

Real Parties in Interest.

OPINION

BROUSSARD, J.—Mono Lake, the second largest lake in

California, sits at the base of the Sierra Nevada escarpment

near the eastern entrance to Yosemite National Park. The

lake is saline; it contains no fish but supports a large popu-

lation of brine shrimp which feed vast numbers of nesting

and migratory birds. Islands in the lake protect a large

breeding colony of California gulls, and the lake itself

serves as a haven on the migration route for thousands of

Northern Phalarope, Wilson's Phalarope, and Eared Grebe.

Towers and spires of tufa on the north and south shores are

matters of geological interest and a tourist attraction.

Although Mono Lake receives some water from rain and

snow on the lake surface, historically most of its supply

came from snowmelt in the Sierra Nevada. Five fresh-

water streams—Mill, Lee Vining, Walker, Parker and Rush

Creeks—arise near the crest of the range and carry the

annual runoff to the west shore of the lake. In 1940, how-

ever, the Division of Water Resources, the predecessor to

A-2

the present California Water Resources Board,’ granted

the Department of Water and Power of the City of Los

Angeles (hereafter DWP) a permit to appropriate virtually

the entire flow of four of the five streams flowing into the

lake. DWP promptly constructed facilities to divert about

half the flow of these streams into DWP’s Owens Valley

aqueduct. In 1970 DWP completed a second diversion tun-

nel, and since that time has taken virtually the entire flow

of these streams.

As a result of these diversions, the level of the lake has

dropped; the surface area has diminished by one-third; one

of the two principal islands in the lake has become a penin-

sula, exposing the gull rookery there to coyotes and other

predators and causing the gulls to abandon the former

island. The ultimate effect of continued diversions is a inat-

ter of intense dispute, but there seems little doubt that both

the scenic beauty and the ecological values of Mono Lake

are imperiled.’

Plaintiffs filed suit in superior court to enjoin the DWP

diversions on the theory that the shores, bed and waters of

Mono Lake are protected by a public trust. Plaintiffs’ suit

‘For convenience we shall refer to the state agency with authority

to grant appropriative rights as the Water Board or the board, with-

out regard to the various names which this agency has borne since

it was first created in 1913.

*For discussion of the effect of diversions on the ecology of Mono

Lake, see Young, The Troubled Waters of Mono Lake (Oct. 1981)

National Geographic, at page 504; Jehl, Jr. Mono Lake: A Vital

Way Station for the Wilson's Phalarope (Oct. 1981) National

Geographic, at page 520; Hoff, The Legal Battle Over Mono Lake

(Jan. 1982) Cal. Law., at page 28; (Cal Dept. Water Resources,

Rep. of the Interagency Task Force on Mono Lake (Dec. 1969)

(hereafter Task Force Report) ).

A-3

was transferred to the federal district court, which re-

quested that the state courts determine the relationship

between the public trust doctrine and the water rights

system, and decide whether plaintiffs must exhaust admin-

istrative remedies before the Water Board prior to filing

suit. The superior court then entered summary judgments

against plaintiffs on both matters, ruling that the public

trust doctrine offered no independent basis for challenging

the DWP diversions, and that plaintiffs had failed to ex-

haust administrative remedies. Plaintiffs petitioned us

directly for writ of mandate to review that decision; in

view of the importance of the issues presented, we issued an

alternative writ. (See County of Sacramento v. Hickman

(1967) 66 Cal.2d 841, 845 [59 Cal.Rptr. 609, 428 P.2d 593].)

This case brings together for the first time two systems of

legal thought: the appropriative water rights system which

since the days of the gold rush has dominated California

water law, and the public trust doctrine which, after evolv-

ing as a shield for the protection of tidelands, now extends

its protective scope to navigable lakes. Ever since we first

recognized that the public trust protects environmental and

recreational values (Marks v. Whitney (1971) 6 Cal.3d 251

(98 Cal.Rptr. 790, 491 P.2d 374]), the two systems of legal

thought have been on a collision course. (Johnson, Public

Trust Protection for Stream Flows and Lake Levels (1980)

14 U.C. Davis L.Rev. 233.) They meet in a unique and dra-

matic setting which highlights the clash of values. Mono

Lake is a scenic and ecological treasure of national signifi-

cance, imperiled by continued diversions of water: yet, the

need of Los Angeles for water is apparent, its reliance on

rights granted by the board evident, the cost of curtailing

diversions substantial.

A-t

Attempting to integrate the teachings and values of both

the public trust and the appropriative water rights system,

we have arrived at certain conclusions which we briefly

summarize here. In our opinion, the core of the public trust

doctrine is the state’s authority as sovereign to exercise a

continuous supervision and control over the navigable

waters of the state and the lands underlying those waters.

This authority applies to the waters tributary to Mono Lake

and bars DWP or any other party from claiming a vested

right to divert waters once it becomes clear that such diver-

sions harm the interests protected by the public trust. The

corollary rule which evolved in tideland and lakeshore cases

barring conveyance of rights free of the trust except to

serve trust purposes cannot, however, apply without modi-

fication to flowing waters. The prosperity and habilitability

of much of this state requires the diversion of great quan-

tities of water from its streams for purposes unconnected

to any navigation, commerce, fishing, recreation, or eco-

logical use relating to the source stream. The state must

have the power to grant nonvested usufructuary rights to

appropriate water even if diversions harm public trust uses.

Approval of such diversion without considering public trust

values, however, may result in needless destruction of those

values. Accordingly, we believe that before state courts and

agencies approve water diversions they should consider the

effect of such diversions upon interests protected by the

public trust, and attempt, so far as feasible, to avoid or

minimize any harm to those interests.

The water rights enjoyed by DWP were granted, the

diversion was conunenced, and has continued to the present

without any consideration of the impact upon the public

trust. An objective study and reconsideration of the water

A-5

rights in the Mono Basin is long overdue. The water law

of California—which we conceive to be an integration

including both the public trust doctrine and the board-

administered appropriative rights system—permits such a

reconsideration; the values underlying that integration

require it.

With regard to the secondary issue of exhaustion of

administrative remedies, the powers, experience, and

expertise of the Water Board all argue in favor of granting

that agency primary jurisdiction. Long-established prece-

dent, however, declares that courts have concurrent

jurisdiction in water right controversies. The Legislature,

instead of overturning that precedent, has implicitly

acknowledged its vitality by providing a procedure under

which the courts can refer water rights disputes to the

water board as referee. We therefore conclude that the

courts may continue to exercise concurrent jurisdiction,

but note that in cases where the board's experience or ex-

pert knowledge may be useful the courts should not hesi-

tate to seek such aid.

1. Background and history of the Mono Lake litigation.

DWP supplies water to the City of Los Angeles. Early

in this century, it became clear that the city’s anticipated

needs would exceed the water available from local sources,

and so in 1913 the city constructed an aqueduct to carry

water from the Owens River 233 miles over the Antelope-

Mojave plateau into the coastal plain and thirsty city.

The city’s attempt to acquire rights to water needed by

local farmers met with fierce, and at times violent, opposi-

tion. (See generally Cown y of Inyo v. Public Utilities Com.

(1980) 26 Cal.3d 154, 156-157 [161 Cal.Rptr. 172, 604 P.2d

A-6

566}; Kahrl, Water and Power: The Conflict Over Los

Angeles’ Water Supply in the Owens Valley (1982).) But

when the “Owens Valley War” was over, virtually all the

waters of the Owens River and its tributaries flowed south

to Los Angeles. Owens Lake was transformed into an

alkali flat.’

The city’s rapid expansion soon strained this new supply,

too, and prompted a search for water from other regions.

The Mono Basin was a predictable object of this extension,

since it lay within 50 miles of the natural origin of Owens

River, and thus could easily be integrated into the existing

aqueduct system.

After purchasing the riparian rights incident to Lee

Vining, Walker, Parker and Rush Creeks, as well as the

riparian rights pertaining to Mono Lake,’ the city applied

to the Water Board in 1940 for permits to appropriate the

waters of the four tributaries. At hearings before the

board, various interested individuals protested that the

city's proposed appropriations would lower the surface

level of Mono Lake and thereby impair its commercial,

recreational and scenic uses.

‘Ironically, among the decisions reviewed in preparing this opin-

ion was one in which Los Angeles was held liable for permitting

water to flow into Owens Lake, damaging mineral extraction facili-

ties constructed in reliance on the city taking the entire flow of the

Owens River. (Natural Soda Prod. Co. v. City of L.A. (1943) 23

Cal.2d 193 [143 P.2d 12].)

*Between 1920 and 1934, the city purchased lands riparian to

creeks feeding Mono Lake and riparian rights incident to such

lands. In 1934, the city brought an eminent domain proceeding for

condemnation of the rights of Mono Lake landowners. (City of Los

Angeles v. Aitken (1935) 10 Cal.App.2d 460 [52 P.2d 585]. )

AT

The board’s primary authority to reject that application

lay in a 1921 amendment to the Water Commission Act of

1913, which authorized the board to reject an application

“when in its judgment the proposed appropriation would

not best conserve the public interest.” (Stats. 1921, ch. 329,

£1, p. 443, now codified as Wat. Code, © 1255.)* The 1921

enactment, however, also “declared to be the established

policy of this state that the use of water for domestic

purposes is the highest use of water” (id., now codified as

Wat. Code, § 1254), and directed the Water Board to be

guided by this declaration of policy. Since DWP sought

water for domestic use, the board concluded that it had

to grant the application notwithstanding the harm to public

trust uses of Mono Lake.’

*In theory, the board could have rejected the city’s application on

the ground that the waters of the streams were already being put to

beneficial use or that the DWP proposed an unreasonable use of

water in violation of article X, section 2 of the California Constitu-

tion. It does not appear that the board considered either proposi-

tion.

‘DWP calls our attention to a 1940 decision of the Water Board

involving Rock Creek, a tributary of the Owens River, in which the

board stated that “the Water Commission Act requires it to protect

streams in recreational areas by guarding against depletion below

some minimum amount consonant with the general recreational

conditions and the character of the stream.” (Div. Wat. Resources

Dec. 3850 (Apr. 11, 1940), at p. 24.) The decision concluded that

the board had insufficient information to decide what conditions, if

any, to place upon DWP’s application to divert water from Rock

Creek for hydroelectric generation.

We do not know why the board was seemingly more willing to

limit diversions to protect recreational values for Rock Creek than

for the creeks fowing into Mono Lake. (Neither do we know the

eventual outcome of the Rock Creek application.) The language of

the board’s opinions suggests that the crucial distinction was that

A-8

The board’s decision states that “[i]t is indeed unfor-

tunate that the City’s proposed development will result in

decreasing the aesthetic advantages of Mono Basin but

there is apparently nothing that this office can do to pre-

vent it. The use to which the City proposes to put the water

under its Applications ... is defined by the Water Com-

mission Act as the highest to which water may be applied

and to make available unappropriated water for this use

the City has, by the condemnation proceedings described

above, acquired the littoral and riparian rights on Mono

Lake and its tributaries south of Mill Creek. This office

therefore has no alternative but to dismiss all protests

hased upon the possible lowering of the water level in Mono

Lake and the effect that the diversion of water from these

streams may have upon the aesthetic and recreational value

of the Basin.” (Div. Wat. Resources Dec. 7053, 7055, 8042 &

8043 (Apr. 11, 1940), at p. 26, italics added.)’

By April of 1941, the city had completed the extension of

its aqueduct system into the Mono Basin hy construction

of certain conduits, reservoirs at Grant and Crowley Lakes,

the application for the Mono Lake streams was for domestic use,

the highest use under the Water Code, while the Rock Creek ap-

plication was for power generation.

"Plaintiffs submitted an interrogatory to the present Water Board,

inquiring: “Do you contend that the predecessor of the Water

Board, at the time it issued the DWP appropriation permit, held the

view that, notwithstanding the protests based on environmental

concerns, it had no alternative but to issue DWP the permits DWP

sought to export water from the Mono Basin?”

The Water Board replied: “The [Water] Board believes that its

predecessor did hold the view that, notwithstanding pro‘ests based

upon loss of land values resulting from diminished recreational op-

portunity, if unappropriated water is available, it had no alternative

but to issue DWP the permits DWP sought in order to export water

from the Mono Basin . .

A-9

and the Mono Craters Tunnel from the Mono Basin to

the Owens River. In the 1950's, the city constructed

hydroelectric power plants along the system to generate

electricity from the energy of the appropriated water as

it flowed downhill into the Owens Valley. Between 1940

and 1970, the city diverted an average of 57,067 acre-feet

of water per year from the Mono Basin. The impact of

these diversions on Mono Lake was clear and immediate:

the lake’s surface level receded at an average of 1.1 feet

per vear.

In June of 1970, the city completed a second aqueduct

desiuned to increase the total flow into the aqueduct by

oU percent.” Between 1970 and 1980 the city diverted an

average of 99,580 acre-feet per year from the Mono Basin.

By October of 1979, the lake had shrunk from its pre-

diversion area of 85 square miles to an area of 60.3 square

miles. Its surface level had dropped to 6,373 feet above

sea level, 43 feet below the prediversion level.’

‘In 1974 the Water Board confirmed that DWP had perfected its

appropriative right by the actual taking and beneficial use of water,

and issued two permanent licenses (board licenses Nos. 10191 and

10192) authorizing DWP to divert up to 167,000 acre-feet annually

(far more than the average annual flow) from Lee Vining, Walker,

Parker and Rush Creeks. The Water Board viewed this action as a

ministerial action, based on the 1940 decision, and held no hearings

on the matter.

"In 1979 the California Department of Water Resources and the

United States Department of the Interior undertook a joint study of

the Mono Basin. The study recommends that the level of Mono

Lake be stabilized at 6,355 feet. To achieve this end it recom-

mended that exports of water from the Mono Basin be reduced

from the present average of 100,000 acre-feet annually to a limit of

15,000 acre-feet. (Task Force Report at pp. 36-55.) Legislation was

introduced to implement this recommendation, but was not enacted.

A-10

No party seriously disputes the facts set forth above.

However, the parties hotly dispute the projected effects

of future diversions on the lake itself, as well as the

indirect effects of past, present and future diversions on

the Mono Basin environment.

DWP expects that its future diversions of about 100,000

acre-feet per year will lower the lake’s surface level

another 43 feet and reduce its surface area by about 22

square miles over the next 80 to 100 years, at which point

the lake will gradually approach environmental equilibrium

(the point at which inflow from precipitation, groundwater

and nondiverted tributaries equals outflow by evaporation

and other means). At this point, according to DWP, the

lake will stabilize at a level 6,330 feet above the sea’s,

with a surface area of approximately 38 square miles.

Thus, by DWP’s own estimates, unabated diversions will

ultimately produce a lake that is about 56 percent smaller

on the surface and 42 percent shallower than its natural

size.

Plaintiffs consider these projections unrealistically

optimistic. They allege that, 50 years hence, the lake will

be at least 50 feet shallower than it now is, and hold less

than 20 percent of its natural volume. Further, plaintiffs

fear that “the lake will not stabilize at this level,” but “may

continue to reduce in size until it is dried up.” Moreover,

unlike DWP, plaintiffs believe that the lake’s gradual reces-

sion indirectly causes a host of adverse environmental im-

pacts. Many of these alleged impacts are related to an

increase in the lake's salinity, cansed by the decrease in its

water volume.

A-1l

As noted above, Mono Lake has no outlets. The lake loses

water only by evaporation and seepage. Natural salts do

not evaporate with water, but are left behind. Prior to com-

mencement of the DWP diversions, this naturally rising

salinity was balanced by a constant and substantial supply

of fresh water from the tributaries. Now, however, DWP

diverts most of the fresh water inflow. The resultant im-

balance hetween inflow and outflow not only diminishes the

lake's size, but also drastically increases its salinity.

Plaintiffs predict that the lake's steadily increasing

salinity, if unchecked, will wreck havoc throughout the local

food chain. They contend that the lake's algae, and the brine

shrimp and brine flies that feed on it, cannot survive the

projected salinity increase, To support this assertion, plain-

tiffs point to a 50 percent reduction in the shrimp hatch for

the spring of 1980 and a startling 95 percent reduction for

the spring of 1981. These reductions affirm experimental

evidence indicating that brine shrimp populations diminish

as the salinity of the water surrounding them increases.

(See Task Force Report at pp. 20-21.) DWP admits these

substantial reductions, but blames them on factors other

than salinity.

DWP’s diversions also present several threats to the

millions of local and migratory birds using the lake. First,

since many species of birds feed on the lake’s brine shrimp,

any reduction in shrimp population allegedly caused by

rising salinity endangers a major avian food source. The

Task Force Report considered it “unlikely that any of

Mono Lake’s major bird species ... will persist at the lake

if populations of invertebrates disappear.” (Task Force

A-12

Report at p. 20.) Second, the increasing salinity makes it

more difficult for the birds to maintain osmotic equilibrium

with their environment.”

The California gull is especially endangered, both by the

increase in salinity and by loss of nesting sites. Ninety-five

percent of this state’s gull population and 25 percent of the

total species population nests at the lake. (Task Force

Report at p. 21.) Most of the gulls nest on islands in the

lake. As the lake recedes, land between the shore and some

of the islands has been exposed, offering such predators as

the coyote easy access to the gull nests and chicks. In 1979,

coyotes reached Negrit Island, once the most popular nest-

ing site, and the number of gull nests at the lake declined

sharply. In 1981, 95 percent of the hatched chicks did not

survive to maturity. Plaintiffs blame this decline and alarm-

ing mortality rate on the predator access created by the

land bridges; DWP suggests numerous other causes, such

as increased ambient temperatures and human activities,

and claims that the joining of some islands with the main-

land is offset by the emergence of new islands due to the

lake's recession.

In the face of rising salinity, birds can maintain such equilibri-

um only by increasing either their secretion of salts or their intake of

fresh water. The former option is foreclosed, however, because

Mono Lake is already so salty that the birds have reached their

limit of salt secretion. Thus, the birds must drink more fresh

water to maintain the osmotic equilibrium necessary to their sur-

vival. As the Task Force predicts, “(t]he need for more time and

energy to obtain fresh water will mean reduced energy and time

for other vital activities such as feeding, nesting, etc. Birds attempt-

ing to breed at Mono Lake... are likely to suffer the most from

direct salinity effects, since the adult birds must devote so much

time to obtain fresh water that they may not be able to raise young

successfully.” (Task Force Report, at p. 19. )

A-13

Plaintiffs allege that DWP’s diversions adversely affect

the human species and its activities as well. First, as the

lake recedes, it has exposed more than 18,000 acres of lake

hed composed of very fine silt which, once dry, casily be-

comes airborne in winds. This silt contains a high concen-

tration of alkali and other ininerals that irritate the mucous

membranes and respiratory systems of humans and other

animals. (See Task Force Report at p. 22.) While the

precise extent of this threat to the public health has yet to

be determined, such threat as exists can be expected to in-

crease with the exposure of additional lake bed. DWP, how-

ever, Claims that its diversions neither affect the air quality

in Mono Basin nor present a hazard to human health.

Furthermore, the lake's recission obviously diminishes its

value as an economic, recreational, and scenic resource, Of

course, there will be less lake to use and enjoy. The declin-

ing shrimp hatch depresses a local shrimping industry. The

rings of dry lake bed are difficult to traverse on foot, and

thus impair human access to the lake, and reduce the lake’s

substantial scenic value. Mono Lake has long been treasured

as @ unique scenic, recreational and scientific resource (see,

eg., City of Los Angeles v. Aitken, supra, 10 Cal.App.2d

460, 462-463: Task Force Report at pp. 22-24), but con-

tinued diversions threaten to turn it into a desert wasteland

like the dry hed of Owens Lake.

To abate this destruction, plaintiffs filed suit for injune-

tive and declaratory relief in the Superior Court for Mono

County on May 21, 1979. DWP moved to change venue.

“DWP contended that plaintiffs lack standing to sue to enjoin

violations of the public trust, citing Antioch v, Williams Irr. Dist.

(1922) 188 Cal. 451 [205 P. 658] and Miller & Lux v. Enterprise

etc. Co. (1904) 142 Cal. 205 [75 P. 770], both of which held that

A-l4

When the court granted the motion and transferred the

case to Alpine county, DWP sought an extraordinary writ

to bar this transfer. The writ was denied, and the Superior

Court for Alpine County set a tentative trial date for

March of 1980.

In January of that year, DWP cross-complained against

117 individuals and entities claiming water rights in the

Mono Basin. On February 20, 1980, one cross-defendant,

the United States, removed the case to the District Court

for the Eastern District of California. On DWP’s motion,

the district court stayed its proceedings under the federal

abstention doctrine’? to allow resolution by California

only the state or the United States could sue to enjoin diversions

which might imperil downstream navigability. Judicial decisions

since those cases, however, have greatly expanded the right of a

member of the public to sue as a taxpayer or private attorney

general. (See Van Atta v. Scott (1980) 27 Cal.3d 424, 447-450

[166 Cal.Rptr. 149, 613 P.2d 21Q], and cases there cited.) Con-

sistently with these decisions, Marks v. Whitney, supra, 6 Cal.3d

251, expressly held that any member of the general public (p. 261)

has standing to raise a claim of harm to the public trust. (Pp. 261-

262; see also Environmental Defense Fund, Inc. v. East Bay Mun.

Utility Dist. (1980) 26 Cal.3d 153 [161 Cal.Rptr. 466, 605 P.2d 1),

in which we permitted a public interest organization to sue to

enjoin allegedly unreasonable uses of water.) We conclude that

plaintiffs have standing to sue to protect the public trust.

“*The federal practice of abstention sprang from the decision in

Railroad Comm'n, v. Pullman Co. (1941) 312 U.S. 496 [85 L.Ed.

971, 61 S.Ct. 643]. (See generally, Wright et al., Federal Practice

and Procedure, § 4241 et seq.) In Pullman, the Supreme Court

held that, where resolution of an open state question presented

in a federal action might prevent the federal court from reach-

ing a constitutional question in that action, the court should stay

its proceedings and order the parties to seek resolution of the

state question in state courts. In Pullman-type cases, the federal

court retains Jurisdiction so that it may either apply the resolved

A-16

courts of two important issues of California law: “1. What

is the interrelationship of the public trust doctrine and the

California water rights system, in the context of the right

of the Los Angeles Department of Water and Power (‘De-

partment’) to divert water from Mono Lake pursuant to

state law, or resolve the state question itself if the state courts

refuse to do so for any reason.

Though federal abstention was originally limited to Pullman-type

cases, the grounds for abstention were later expanded in accord-

ance with the policies of federalism. Abstention is now “appro-

priate where there have been presented difficult questions of state

law bearing on policy problems of substantial public import whose

importance transcends the result in the case then at bar.” (Colo-

rado River Water Cons. Dist. v. U.S. (1976) 424 U.S. 800, S14

(47 L.Ed.2d 483, 496, 96 S.Ct. 1236], citing Louisiana P. & L. Co. v.

Thibodaux City (1959) 360 U.S. 25 (3 L.Ed.2d 1055, 79 $.Ct. 1070]

and Kaiser Steel Corp. v. W. S. Ranch Co. (1968) 391 U.S. 593

(20 L.Ed.2d 835, 88 S.Ct. 1753].)

Kaiser Steel is similar to the case at bar. In that diversity case,

W. S. Ranch Co. sued Kaiser Steel for trespass. Kaiser claimed that

a New Mexico statute authorized it to trespass as necessary for use

of its water rights granted by New Mexico. The ranch replied that

if the statute so authorized Kaiser, the statute would violate the

state constitution, which allowed the taking of private property

only for “public use.” Both the district court and the court of

appeals reached the merits of the case after denying Kaiser's

motion to stay the determination until conclusion of a declaratory

relief action then pending in New Mexico courts. The United States

Supreme Court reversed, reasoning in a per curiam opinion that

“(t]he Court of Appeals erred in refusing to stay its hand. The

state law issue which is crucial in this case is one of vital concern

in the arid State of New Mexico, where water is one of the most

valuable natural resources. The issue, moreover, is truly a novel

one... {, and] will eventually have to be resolved by the New

Mexico courts ... . Sound judicial administration requires that the

parties in this case be given the benefit of the same rule of law

which will apply to all other businesses and landowners concerned

with the use of this vital state resource.” ( Kaiser Steel Corp. v. W.

S. Ranch Co., supra, 391 U.S. at p. 594 (20 L.kd.2d at p. 537.)

A-15

permits and licenses issued under the California water

rights system? In other words, is the public trust doctrine

in this context subsumed in the California water rights

system, or does it function independently of that system?

Stated differently, can the plaintiffs challenge the Depart-

ment’s permits and licenses by arguing that those permits

and licenses are limited by the public trust doctrine, or must

the plaintiffs challenge the permits and licenses by arguing

that the water diversions and uses authorized thereunder

are not ‘reasonable or beneficial’ as required under the Cali-

fornia water rights system! [] 2. Do the exhaustion prin-

ciples applied in the water rights context apply to plain-

tiffs’ action pending in the United States District Court for

the Eastern District of California?’

In response to this order, plaintiffs filed a new complaint

for declaratory relief in the Alpine County Superior

Court.’* On November 9, 1981, that court entered summary

“DWP objected to the form of the abstention order, and peti-

tioned the United States Court of Appeals for the Ninth Circuit

for leave to file an interlocutory appeal. The Ninth Circuit denied

this petition.

**DWP argues that the second superior court action, filed after

the federal court's abstention order, constitutes a request for an

advisory opinion and thus seeks relief beyond the jurisdiction of

the California courts. (See Younger cv. Superior Court (1978) 21

Cal.3d 102, 119-120 [145 Cal.Rptr. 674, 577 P.2d 1014), and cases

there cited.) No California case has discussed the propriety of a

declaratory relief action filed to resolve an unsettled issue of Cali-

fornia law following a federal court abstention. A holding that such

a suit is an improper attempt to obtain an advisory opinion, how-

ever, would constitute a decision by the California courts to refuse

to cooperate in the federal abstention procedure. It would thus

compel federal courts to decide unsettled questions of California

law which under principles of sound judicial administration (see

Kaiser Steel Corp. v. W. 8. Ranch Co., supra, 391 U.S. 593, 594

[20 L.Ed.2d 835, 837]) should be resolved by the state courts.

A-17

judgment against plaintiffs. Its notice of intended ruling

stated that “(t]he California water rights system is a com-

prehensive and exclusive system for determining the le-

gality of the diversions of the City of Los Angeles in the

Mono Basin .... The Publie Trust Doctrine does not fune-

tion independently of that system. This Court concludes

that as regards the right of the City of Los Angeles to

divert waters in the Mono Basin that the Public Trust Doc-

The usual objections to advisory opinions do not apply to the

present case. This is not a collusive suit (compare People v. Pratt

(1866) 30 Cal. 223), nor an attempt to get the courts to resolve a

hypothetical future disagreement (compare Younger v. Superior

Court, supra, 21 Cal.3d 102). It is, rather, one phase of a hotly

contested current controversy. The only conceivable basis for

refusing to decide the present case is that our decision will not

finally resolve that controversy, but will serve only as an interim

resolution of some issues necessary to the final decision. That fact,

however, is insufficient to render the issue nonjusticiable. As the

Court of Appeal stated in response to a similar contention, it is

in the interest of the parties and the public that a determination

be made: “even if that determination be but one step in the

process, it is a useful one.” ( Regents of University of California v.

State Bd. of Equalization (1977) 73 Cal.App.3d 660, 664 [140

Cal.Rptr. 857]. )

If the issue of justiciability is in doubt, it should be resolved in

favor of justiciability in cases of great public interest. (See, e.g.,

California Physicians’ Service v. Garrison (1946) 28 Cal.2d 790,

801 [172 P.2d 4, 167 A.L.R. 306) [trial court's determination of

justiciability will not be overturned on appeal absent clear show-

ing of abuse of discretion]; Golden Gate Bridge etc. Dist. v. Felt

(1931) 214 Cal. 308, 315-319 [5 P.2d 585] [jurisdiction retained

over admittedly friendly suit of public importance, where dismissal

would have delayed construction of Golden Gate Bridge}; Cali-

fornia Water & Telephone Co. v. County of Los Angeles ( 1967)

253 Cal.App.2d 16, 26 (61 Cal.Rptr. 618] [doubts about the

justiciability of a dispute should be resolved in favor of immediate

adjudication, where “the public is interested in the settlement of

the dispute.”}. )

A-18

trine is subsumed in the water rights system of the state.”

With respect to exhaustion of administrative remedies, the

superior court concluded that plaintiffs would be required

to exhaust their remedy before the Water Board either

under a challenge based on an independent public trust

claim or one based on asserted unreasonable or nonbene-

ficial use of appropriated water.

Plaintiffs filed a petition for mandate directly with this

court to review the summary judgment of the Alpine

County Superior Court. We issued an alternative writ and

set the case for argument.

2. The Public Trust Doctrine in California,

“By the law of nature these things are common to man-

kind—the air, running water, the sea and consequently the

shores of the sea.” (Institutes of Justinian 2.1.1.) From

this origin in Roman law, the English common law evolved

the concept of the public trust, under which the sovereign

owns “all of its navigable waterways and the lands lying

beneath them ‘as trustee of a public trust for the benefit

of the people.’ ” (Colberg, Inc. v. State of California ex rel.

Dept. Pub. Wks. (1967) 67 Cal.2d 408, 416 [62 Cal.Rptr.

401, 432 P.2d 3).)** The State of California acquired title

“Spanish law and subsequently Mexican law also recognized the

public trust doctrine. (See City of Los Angeles v. Venice Peninsula

Properties (1982) 31 Cal.3d 288, 297 [182 Cal.Rptr. 599, 644 P.2d

792].) Commentators have suggested that the public trust rights

under Hispanic law, guaranteed by the Treaty of Guadalupe Hi-

dalgo, serve as an independent basis for the public trust doctrine in

California. (See Stevens, The Public Trust: A Sovereign's Ancient

Prerogative Becomes the People’s Environmental Right (1980) 14

U.C. Davis L.Rev. 195, 197; Dyer, California Beach Access: The

Mexican Law and the Public Trust (1972) 2 Ecology L.Q. 571.)

A-19

as trustee to such lands and waterways upon its admission

to the union (City of Berkeley v. Superior Cour! (1980) 26

Cal.3d 515, 521 [162 Cal.Rptr. 327, 606 P.2d 362) and cases

there cited) ; from the earliest days (see Eldridge v. Cowell

(1854) 4 Cal. 80, 87) its judicial decisions have recognized

and enforced the trust obligation.”

Three aspects of the public trust doctrine require con-

sideration in this opinion: the purpose of the trust; the

scope of the trust, particularly as it applies to the non-

navigable tributaries of a navigable lake; and the powers

and duties of the state as trustee of the public trust. We

discuss these questions in the order listed.

(a) The purpose of the public trust.

The objective of the public trust has evolved in tandem

with the changing public perception of the values and uses

of waterways. As we observed in Marks v. Whitney, supra,

6 Cal.3d 251, “{pjublie trust easements [were] tradition-

ally defined in terms of navigation, commerce and fisheries.

They have been held to include the right to fish, hunt, bathe,

swim, to use for boating and general recreation purposes

the navigable waters of the state, and to use the bottom of

the navigable waters for anchoring, standing, or other pur-

poses.” (P. 259.) We went on, however, to hold that the tra-

ditional triad of uses—navigation, commerce and fishing—

did not limit the public interest in the trust res. In lan-

guage of special importance to the present setting, we

“For the history of the public trust doctrine, see generally Sax,

The Public Trust Doctrine In Natural Resource Law: Effective

Judicial Intervention (1970) 68 Mich.L.Rev. 471; Stevens, op. cit.

supra, 14 U.C. Davis L.Rev. 195.

A-20

stated that “(t]he public uses to which tidelands are sub-

ject are sufficiently flexible to encompass changing public

needs. In administering the trust the state is not burdened

with an outmoded classification favoring one mode of

utilization over another. [Citation.] There is a growing

public recognition that one of the most important public

uses of the tidelands—a use encompassed within the tide-

lands trust—is the preservation of those lands in their

natural state, so that they may serve as ecological units

for scientific study, as open space, and as environments

which provide food and habitat for birds and marine life,

and which favorably affect the scenery and climate of the

area.” (Pp, 259-260.)

Mono Lake is a navigable waterway. (City of Los An-

geles v. Aitken, supra, 10 Cal.App.2d 460, 466.) It sup-

ports a small local industry which harvests brine shrimp

for sale as fish food, which endeavor probably qualifies the

lake as a “fishery” under the traditional public trust cases.

The principal values plaintiffs seek to protect, however,

are recreational and ecological+the scenic views of the

lake and its shore, the purity of the air, and the use of the

lake for nesting and feeding by birds. Under Marks v.

Whitney, supra, 6 Cal.3d 251, it is clear that protection of

these values is among the purposes of the public trust.

(b) The scope of the public trust.

Early English decisions generally assumed the public

trust was limited to tidal waters and the lands exposed

and covered by the daily tides (see Stevens, op. cit. supra,

14 U.C. Davis L.Rev. 195, 201 and authorities there cited) ;

many American decisions, including the leading California

cases, also concern tidelands. (See, e.g., City of Berkeley

A-21

v. Superior Court (1980) 26 Cal.3d 515 (162 Cal.Rptr. 327,

606 P.2d 362]; Marks v. Whitney, supra, 6 Cal.3d 251;

People v. California Fish Co. (1913) 166 Cal. 576 [138 P.

79).) It is, however, well settled in the United States gen-

erally and in California that the public trust is not limited

by the reach of the tides, but encompasses all navigable

lakes and streams. (See /llinois Central Railroad Co. v.

Illinois (1892) 146 U.S. 387 [36 L.Ed, 1018, 13 S.Ct. 110]

(Lake Michigan); State of California v. Superior Court

(Lyon) (1981) 29 Cal.3d 210 [172 Cal.Rptr. 696, 625 P.2d

239) (Clear Lake); State of California v. Superior Court

(Fogerty) (1981) 29 Cal.3d 240 (172 Cal.Rptr. 713, 625

P.2d 256] (Lake Tahoe); People v. Gold Run D. & M. Co.

(1884) 66 Cal. 138 [4 P. 1152) (Sacramento River); Hitch-

ings v. Del Rio Woods Recreation d¢ Park Dist. (1976) 55

Cal.App.3d 560 [127 Cal.Rptr. 830] (Russian River).)’’

Mono Lake is, as we have said, a navigable waterway.

The beds, shores and waters of the lake are without ques-

tion protected by the public trust. The streams diverted

hy DWP, however, are not themselves navigable. Accord-

ingly, we must address in this case a question not discussed

in any recent public trust case—whether the public trust

limits conduct affecting nonnavigable tributaries to navi-

gable waterways.

This question was considered in two venerable California

decisions. The first, People v. Gold Run D. d& M. Co. (1884)

‘A waterway usable only for pleasure boating is nevertheless a

navigable waterway and protected by the public trust. (See People

ex rel, Younger v. County of El Dorado (1979) 96 Cal.App.3d 403

(157 Cal.Rptr. $15] (South Fork of American River); People ex rel.

Baker v. Mack (1971) 19 Cal.App.3d 1040 [97 Cal.Rptr. 448] ( Fall

River ).)

A-22

66 Cal. 138 [4 P. 1152], is one of the epochal decisions of

California history, a signpost which marked the transition

from a mining economy to one predominately commercial

and agricultural. The Gold Run Ditch and Mining Company

and other mining operators used huge water cannon to

wash gold-bearing gravel from hillsides; in the process

they dumped 600,000 cubie yards of sand and gravel an-

nually into the north fork of the American River. The

debris, washed downstream, raised the beds of the Ameri-

can and Sacramento Rivers, impairing navigation, pollut-

ing the waters, and creating the danger that in time of flood

the rivers would turn from their channels and inundate

nearby lands.

Although recognizing that its decision might destroy

the remains of the state’s gold mining industry, the court

affirmed an injunction barring the dumping. The opinion

stressed the harm to the navigability of the Sacramento

River, “a great public highway, in which the people of the

State have paramount and controlling rights.” (P. 146.)

Defendant's dumping, the court said, was “an unauthorized

invasion of the rights of the public to its navigation.” (P.

147.) Rejecting the argument that dumping was sanctioned

by custom and legislative acquiescence, the opinion as-

serted that “the rights of the people in the navigable rivers

of the State are paramount and controlling, The State

holds the absolute right to all navigable waters and the

soils under them .... The soil she holds as trustee of a

public trust for the benefit of the people; and she may, by

her legislature, grant it to an individual; but she cannot

grant the rights of the people to the use of the navigable

waters flowing over it... .” (Pp. 151-152.)

A-23

In the second decision, People v. Russ (1901) 132 Cal.

102 [64 P. 111], the defendant erected dams on sloughs

which adjoined a navigable river. Finding the sloughs non-

navigable, the trial court gave judgment for defendant. We

reversed, directing the trial court to make a finding as to

the effect of the dams on the navigability of the river. “Di-

rectly diverting waters in material quantities from a navi-

gable stream may be enjoined as a public nuisance. Neither

may the waters of a navigable stream be diverted in sub-

stantial quantities by drawing from its tributaries... .

If the dams upon these sloughs result in the obstruction of

Salt River as a navigable stream, they constitute a public

nuisance.” (P. 106.)

DWP points out that the Gold Run decision did not in-

volve diversion of water, and that in Russ there had been

no finding of impairment to navigation. But the principles

recognized by those decisions apply fully to a case in which

diversions from a nonnavigable tributary impair the pub-

lic trust in a downstream river or lake. “If the public trust

doctrine applies to constrain fills which destroy navigation

and other public trust uses in navigable waters, it should

equally apply to constrain the extraction of water that de-

stroys navigation and other public interests. Both actions

result in the same damage to the public interest.” (Joln-

son, Public Trust Protection for Stream Flows and Lake

Levels (1980) 14 U.C. Davis L.Rev. 233, 257-258; see Dun-

ning. The Significance of California's Public Trust Ease-

ment for California Water Rights Law (1980) 14 U.C.

Davis L.Rev. 357, 359-360. )

We conclude that the public trust doctrine, as recognized

and developed in California decisions, protects navigable

A-24

waters’ from harm caused by diversion of nonnavigable

tributaries.”

(c) Duties and powers of the state as trustee.

In the following review of the authority and obligations

of the state as administrator of the public trust, the domi-

nant theme is the state’s sovereign power and duty to exer-

cise continued supervision over the trust. One consequence,

of importance to this and many other cases, is that parties

acquiring rights in trust property generally hold those

rights subject to the trust, and can assert no vested right

to use those rights in a manner harmful to the trust.

As we noted recently in City of Berkeley v. Superior

Court, supra, 26 Cal.3d 515, the decision of the United

States Supreme Court in Jlllinots Central Railroad Com-

pany v. Illinois, supra, 146 U.S. 387, “remains the primary

authority even today, almost nine decades after it was de-

cided.” (P. 521.) The Illinois Legislature in 1886 had

granted the railroad in fee simple 1,900 acres of submerged

lands, virtually the entire Chicago waterfront. Four years

later it sought to revoke that grant. The Supreme Court

upheld the revocatory legislation. Its opinion explained

that lands under navigable waters conveyed to private par-

ties for wharves, docks, and other structures in furtherance

“For review of California decisions on navigability, see Dunning,

op. cit. supra, 14 U.C. Davis L.Rev. 357, 384-386.

‘In view of the conclusion stated in the text, we need not con-

sider the question whether the public trust extends for some pur-

poses—such as protection of fishing, environmental values, and

recreation interests—to nonnavigable streams. For discussion of this

subject, see Walston, The Public Trust Doctrine in the Water

Rights Context: The Wrong Environmental Remedy (1982) 22

Santa Clara L.Rev. 63, 85.

A-25

of trust purposes could be granted free of the trust be-

cause the conveyance is consistent with the purpose of the

trust. But the legislature, it held, did not have the power

to convey the entire city waterfront free of trust, thus

barring all future legislatures from protecting the public

interest. The opinion declares that: “.\ grant of all the

lands under the navigable waters of a State has never been

adjudged to be within the legislative power; and any at-

tempted grant of the kind would be held, if not absolutely

void on its face, as subject to revocation. The State can no

more abdicate its trust over property in which the whole

people are interested, like navigable waters and soils under

them, ... than it can abdicate its police powers in the ad-

ministration of government and the preservation of the

peace. In the administration of government the use of such

powers may for a limited period be delegated to a munici-

pality or other body, but there always remains with the

State the right to revoke those powers and exercise them

in a more direct manner, and one more conformable to its

wishes. So with trusts connected with public property, or

property of a special character, like lands under navigable

waterways, they cannot be placed entirely beyond the di-

rection and control of the State.” (Pp. 453-454 [36 L.Ed.

pp. 1042-1043].)

Turning to the Jllimois Central grant, the court stated

that: “Any grant of the kind is necessarily revocable, and

the exercise of the trust by which the property was held by

the State can be resumed at any time. Undoubtedly there

may he expenses incurred in improvements made under

such a grant which the State ought to pay; but, be that as it

may, the power to resume the trust whenever the State

A-26

judges best is, we think, incontrovertible. ... The ownership

of the navigable waters of the harbor and of the lands

under them is a subject of public concern to the whole peo-

ple of the State. The trust with which they are held, there-

fore, is governmental and cannot be alienated, except in

those instances mentioned of parcels used in the improve-

ment of the interest thus held, or when parcels can he dis-

posed of without detriment to the public interest in the

lands and waters remaining.” (Pp. 455-456 [36 L.Ed. p.

1043).)

The California Supreme Court indorsed the Illinois

Central principles in People v. California Fish Co. (1913)

166 Cal. 576 [138 P. 79]. California Fish concerned title to

about 80,000 acres of tidelands conveyed by state commis-

sioners pursuant to statutory authorization. The court first

set out principles to govern the interpretation of statutes

conveying that property: “[S]tatutes purporting to

authorize an abandonment of ... public use will be care-

fully scanned to ascertain whether or not such was the

legislative intention, and that intent must be clearly ex-

pressed or necessarily implied. It will not be implied if any

other inference is reasonably possible. And if any inter-

pretation of the statute is reasonably possible which would

not involve a destruction of the public use or an intention

to terminate it in violation of the trust, the courts will

give the statute such interpretation.” (/d., at p. 597.)

Applying these principles. the court held that because the

statute in question and the grants pursuant thereto were

not made for trust purposes, the grantees did not acquire

absolute title: instead, the grantees “own the soil, subject

to the easement of the public for the public uses of naviga-

tion and commerce, and to the right of the state, as ad-

A-27

ministrator and controller of these public uses and the

public trust therefor, to enter upon and possess the same

for the preservation and advancement of the public uses

and to make such changes and improvements as may be

deemed advisable for those purposes.” (/d., at pp. 598-599. )

Finally, rejecting the claim of the tideland purchasers

for compensation, the court stated they did not lose title,

but retained it subject to the public trust. (See pp. 599-

601.) While the state may not “retake the absolute title

without compensation” (p. 599), it may without such pay-

iment erect improvements to further navigation and take

other actions to promote the public trust.”

Boone v. Kingsbury (1928) 206 Cal. 148 (273 P. 797],

presents another aspect of this matter. The Legislature

authorized the Surveyor-General to lease trust lands for

oil drilling. Applying the principles of Illinois Central, the

court upheld that statute on the ground that the derricks

would not substantially interfere with the trust. Any

licenses granted by the statute, moreover, remained sub-

ject to the trust: “The state may at any time remove [the]

"In Mallon v. City of Long Beach (1955) 44 Cal.2d 199 [282 P.

2d 481), the court held that revenues derived from the use of trust

property ordinarly must be used for trust purposes. ( Pp. 205-206. )

(See also City of Long Beach v. Morse (1947) 31 Cal.2d 254 [188

P.2d 17]: State of California ex rel. State Lands Com. y. County

of Orange (1982) 134 Cal.App.3d 20 [184 Cal.Rptr. 423].) The

Legislature could abandon the trust over the proceeds, the court

said, absent evidence that the abandonment would impair the pow-

er of future legislatures to protect and promote trust uses. (P. 207.)

So long as the tidelands themselves remained subject to the trust,

however, future legislatures would have the power to revoke the

abandonment and reestablish a trust on the revenues. ( Ibid.) (See

City of Coronado v. San Diego Unified Port District (1964) 227

Cal.App.2d 455, 473-474 [38 Cal Rptr. 834]. )

A-28

structures ..., even though they have been erected with

its license or consent, if it subsequently determines them to

be purprestures or finds that they substantially interfere

with navigation or commerce.” (Pp. 192-193.)”

Finally, in our recent decision in City of Berkeley v.

Superior Court, supra, 26 Cal.3d 515, we considered

whether deeds executed by the Board of Tidelands Com-

missioners pursuant to an 1870 act conferred title free of

the trust. Applying the principles of earlier decisions, we

held that the grantees’ title was subject to the trust, both

because the Legislature had not made clear its intention to

71In Colberg, Inc. v. State of California ex rel. Dept. Pub. Wks.,

supra, 67 Cal.2d 408, the state constructed a freeway bridge which

partially impaired navigation in the Stockton Deep Water Ship

Channel. Upstream shipyard owners, disclaiming any reliance on

the public trust, filed suit for damages on a theory of inverse con-

demnation. The opinion stated that “the state, as trustee for the

benefit of the people, has power to deal with its navigable waters

in any manner consistent with the improvement of commercial in-

tercourse, whether navigational or otherwise.” ( P. 419.) It then con-

cluded thet lands littoral to navigable waters are burdened by a

navigational servitude in favor of the state and, absent an actual

taking of those lands, the owners cannot claim damages when the

state acts within its powers.

We agree with DWP and the state that Colberg demonstrates the

power of the state, as administrator of the public trust, to prefer

one trust use over another. We cannot agree, however, with

DWP’s further contention that Colberg proves the power of a state

agency to abrogate the public trust merely by authorizing a use

inconsistent with the trust. Not only did plaintiffs in Colberg delib-

erately decline to assert public trust rights, but the decision rests

on the power of the state to promote one trust purpose (commerce )

over another (navigation), not on any power to grant rights free of

the trust. (See Dunning, op. cit. supra, 14 U.C. Davis L.Rev. 357,

382-288. )

A-29

authorize a conveyance free of the trust and because the

1870 act and the conveyances under it were not intended

to further trust purposes.

Once again we rejected the claim that establishment of

the public trust constituted a taking of property for which

compensation was required: “We do not divest anyone of

title to property; the consequence of our decision will

be only that some landowners whose predecessors in inter-

est acquired property under the 1870 act will, like the

grantees in California Fish, hold it subject to the public

trust.” (P. 532.)*?

In summary, the foregoing cases amply demonstrate the

continuing power of the state as administrator of the

public trust, a power which extends to the revocation of

previously granted rights or to the enforcement of the

trust against lands long thought free of the trust (see City

of Berkeley v. Superior Court, supra, 26 Cal.3d 515).

Acquisition of a right to use former trust property free of

trust restrictions is a rare thing. It is possible only if (a)

the Legislature intended to grant a right free of the trust

(and under California Fish statutes should be interpreted

#23We noted, however, that “any improvements made on such

lands could not be appropriated by the state without compensa-

tion.” (Pp. 533-534, citing Illinois Central Railroad Co. v. Illinois,

supra, 146 U.S. 387, 455 (36 L.Ed. 1018, 1043].)

In State of Caifornia v. Superior Court (Fogerty ), supra, 29 Cal.

3d 240, 249, we stated that owners of shoreline property in Lake

Tahoe would be entitled to compensation if enforcement of the

public trust required them to remove improvements. By implica-

tion, however, the determination that the property was subject to

the trust, despite its implication as to future uses and improve-

ments, was not considered a taking requiring compensation.

A-30

if reasonably possible to avoid such an intention), and (b)

either the grant serves the purpose of the trust or the

grantee, in reasonable reliance on the grant, has rendered

the property unsuitable for trust purposes. Except for such

rare instances, the grantee holds subject to the trust, and

while he may assert a vested right to the servient estate

(the right of vse subject to the trust) and to any improve-

ments he erects, he can claim no vested right to bar recog-

nition of the trust or state action to carry out its purposes,

Since the public trust doctrine does not prevent the state

from choosing between trust uses (Colberg, Inc. v. State of

California, supra, 67 Cal.2d 408, 419; County of Orange v.

Heim (1973) 30 Cal.App.3d 694, 707 [106 Cal.Rptr. 825]),

the Attorney General of California, seeking to maximize

state power under the trust, argues for a broad concept of

trust uses. In his view, “trust uses” encompass all public

uses, so that in practical effect the doctrine would impose

no restrictions on the state's ability to allocate trust prop-

erty. We know of no authority which supports this view of

the public trust, except perhaps the dissenting opinion in

Illinois Central Railroad Co. v. Illinois, supra, 146 US.

387. All decisions and commentators assume that “trust

uses” relate to uses and activities in the vicinity of the

lake, stream, or tidal reach at issue (see e.g., County of Los

Angeles v. Aitken, supra, 10 Cal.App.2d 460, 468-469; State

v. County of Orange, supra, 134 Cal.App.3d 20; Sax, op.

cit, supra, 68 Mich. L.Rev. 471, 542.) The tideland cases

make this point clear; after City of Berkeley v. Superior

Court, supra, 26 Cal.3d 515, no one could contend that

the state could grant tidelands free of the trust merely

because the grant served some public purpose, such as

A-31

increasing tax revenues, or because the grantee might put

the property to a commercial use.

Thus, the public trust is more than an affirmation of

state power to use public property for public purposes. It

is an affirmation of the duty of the state to protect the

people’s common heritage of streams, lakes, marshlands

and tidelands, surrendering that right of protection only in

rare cases when the abandonment of that right is con-

sistent with the purposes of the trust.

3. The California Water Rights System.

“It is laid down by our law writers, that the right of

property in water is usufructuary, and consists not so

much of the fluid itself as the advantage of its use.” (Eddy

v. Simpson (1853) 3 Cal. 249, 252.) Hence, the cases do not

speak of the ownership of water, but only of the right to

its use. (Rancho Santa Margarita v. Vail (1938) 11 Cal.2d

501, 554-555 [81 P.2d 533]; see generally Hutchins, The

Cal. Law of Water Rights (1956) pp. 36-38; 1 Rogers &

Nichols, Water for Cal. (1967) p. 191.) Accordingly, Water

Code section 102 provides that “[a}ll water within the

State is the property of the people of the State, but the

right to the use of water may be acquired by appropria-

tion in the manner provided by law.”

Our recent decision in People v. Shirokow (1980) 26 Cal.

3d 301 [162 Cal.Rptr. 30, 605 P.2d 859], described the early

history of the appropriative water rights system in Cali-

fornia. We explained that “California operates under the

so-called dual system of water rights which recognizes both

the appropriation and the riparian doctrines. (Hutchins,

The California Law of Water Rights, supra, at pp. 40,

A-32

55-67.) The riparian doctrine confers upon the owner of

land contiguous to a watercourse the right to the reason-

able and beneficial use of water on his land. The appropri-

ation doctrine contemplates the diversion of water and

applies to ‘any taking of water for other than riparian or

overlying uses.’ (City of Pasadena v. City of Alhambra

(1949) 33 Cal.2d 908, 925 [207 P.2d 17], and cases there

cited.) ...

“Common law appropriation originated in the gold rush

days when miners diverted water necessary to work their

placer mining claims. The miners adopted among them-

selves the priority rule of ‘first in time, first in right,’ and

California courts looked to principles of equity and of real

property law to adjudicate conflicting claims. (Citations. ]

Thus it was initially the law in this state that a person

could appropriate water merely by diverting it and putting

it to use.

“The first appropriation statute was enacted in 1872

and provided for initiation of the appropriative right by

the posting and recordation of notice, (Civ. Code, §§ 1410-

1422.) The nonstatutory method retained its vitality and

appropriative rights were acquired by following either

procedure. (Citation. ]

“Both methods were superseded by the 1913 enactment

of the Water Commission Act, which created a Water

Commission and provided a procedure for the appropria-

tion of water for useful and beneficial purposes, The main

purpose of the act was ‘to provide an orderly method for

the appropriation of [unappropriated] waters.’ (Temescal

A-33

Water Co, v. Dept. Public Works (1955) 44 Cal.2d 90, 95

[280 P.2d 1]; Bloss v. Rahilly (1940) 16 Cal.2d 70, 75 [104

P.2d 1049].) By amendment in 1923, the statutory proce-

dure became the exclusive means of acquiring appropriative

rights. (§ 1255, Stats. 1923, ch. 87.) The provisions of the

Water Commission Act, as amended from time to time,

have been codified in Water Code, divisions 1 and 2. (Stats.

1943, ch. 368.)"’ (Pp. 307-308, fns. omitted. )

The role of the Water Board under the 1913 act, as

Shirokow indicated, was a very limited one. The only water

subject to appropriation under the act was water which

was not then being applied to useful and beneficial pur-

poses, and was not otherwise appropriated. (See Wat.

Code, § 1201, based upon Stats. 1913, ch. 586, § 11, p. 1017.)

Thus, appropriative rights acquired under the act were

inferior to preexisting rights such as riparian rights,

pueblo rights, and prior prescriptive appropriations. (See

City of San Diego v. Cuyamaca Water Co. (1930) 209 Cal.

105 [287 P. 475].)

Judicial decisions confirmed this limited role. According

to the courts, the function of the Water Board was re-

stricted to determining if unappropriated water was avail-

able; if it was, and no competing appropriator submitted

a claim, the grant of an appropriation was a ministerial

act. (Tulare Water Co. v. State Water Com, (1921) 187

Cal, 533 [202 P. 874].)

In 1926, however, a decision of this court led to a consti-

tutional amendment which radically altered water law in

California and led to an expansion of the powers of the

A-34

board. In Herminghaus v. South. California Edison Co.

(1926) 200 Cal. 81 [252 P. 607], we held not only that ripar-

ian rights took priority over appropriations authorized by

the Water Board, a point which had always been clear,

but that as between the riparian and the appropriator, the

former's use of water was not limited by the doctrine of

reasonable use. (Pp. 100-101.) That decision led to a con-

stitutional amendment which abolished the right of a rip-

arian to devote water to unreasonable uses, and established

the doctrine of reasonable use as an overriding feature

of California water law. (See Fullerton v, State Water Re-

sources Control Bd. (1979) 90 Cal.App.3d 590, 596 [153

Cal.Rptr. 518], and cases there cited.)

Article X, section 2 (enacted in 1928 as art. XIV, § 3)

reads in pertinent part as follows: “It is hereby declared

that because of the conditions prevailing in this State the

general welfare requires that the water resources of the

State be put to beneficial use to the fullest extent of which

they are capable, and that the waste or unreasonable use

or unreasonable method of use of water be prevented, and

that the conservation of such waters is to be exercised with

a view to the reasonable and beneficial use thereof in the

interest of the people and for the public welfare. The right

to water or to the use or flow of water in or from any nat-

ural stream or water course in this State is and shall be

limited to such water as shall be reasonably required for

the beneficial use to be served, and such right does not and

shall not extend to the waste or unreasonable use or unrea-

sonable method of use or unreasonable method of diversion

of water. ... This section shall be self-executing, and the

Legislature may also enact laws in the furtherance of the

policy in this section contained.”

A-35

This amendment does more than merely overturn Her-

minghaus—it establishes state water policy. All uses of

water, including public trust uses, must now conform to

the standard of reasonable use. (See Peabody v. City of

Vallejo (1935) 2 Cal.2d 351, 367 [40 P.2d 486); People ex

rel, State Water Resources Control Bd. v. Forni (1976) 54

Cal.App.3d 743, 749-750 [126 Cal.Rptr. 851).)*

The 1928 amendment did not declare whether the in-

stream uses protected by the public trust could be consid-

ered reasonable and beneficial uses. In a 1936 case involv-

ing Mono Lake, however, the court squarely rejected DWP’s

argument that use of stream water to maintain the lake's

scenic and recreational values violated the constitutional

provision barring unreasonable uses (County of Los An-

geles v, Aitken, supra, 10 Cal.App.2d 460.) The point is now

settled by statute, Water Code section 1243 providing that

“(t]he use of water for recreation and preservation and

enhancement of fish and wildlife resources is a beneficial

use of water.” (See also California Trout, Inc. v. State

Water Resources Control Bd, (1979) 90 Cal.App.3d 816,

$21 (153 Cal.Rptr. 672).)

The 1928 amendment itself did not expand the authority

of the Water Board. The board remained, under controlling

*After the effective date of the 1928 amendment, no one can ac-

quire a vested right to the unreasonable use of water. See Joslin v.

Marin Mun. Water Dist. (1967) 67 Cal.2d 132, 145 [60 Cal.Rptr.

377, 429 P.2d 889]; 1 Rogers & Nichols, op. cit. supra, p. 413 and

cases there cited.) Rights acquired prior to 1928, however, may

include a right to unreasonable use which, if taken by the state,

requires compensation. (U.S. v. Gerlach Live Stock Co. (1950) 339

U.S, 725, 754 [94 L.Ed. 1231, 1250, 70 S.Ct. 955, 20 A.L.R. 2d 633].)

A-36

judicial decisions, a ministerial body with the limited task

of determining priorities between claimants seeking to ap-

propriate unclaimed water. More recent statutory and judi-

cial developments, however, have greatly enhanced the

power of the Water Board to oversee the reasonable use of

water and, in the process, made clear its authority to weigh

and protect public trust values.

In 1955, the Legislature declared that in acting on ap-

propriative applications, “the board shall consider the rel-

ative benefit to be derived from (1) all beneficial uses of

the water concerned including, but not limited to, use for

domestic, irrigation, municipal, industrial, preservation

and enhancement of fish and wildlife, recreational, mining

and power purposes .... The board may subject such ap-

propriations to such terms and conditions as in its judg-

ment will best develop, conserve, and utilize in the public

interest, the water sought to be appropriated.” (Wat. Code,

$1257.) In 1959 it stated that “[t]he use of water for ree-

reation and preservation and enhancement of fish and wild-

life resources is a beneficial use of water.” (Wat. Code,

$1243.) Finally in 1969 the Legislature instructed that

“ijn determining the amount of water available for ap-

propriation for other beneficial uses, the board shall take

into account, whether it is in the public interest, the amounts

of water needed to remain in the source for protection of

beneficial uses.” (Wat. Code, § 1243.5.)

Judicial decisions have also expanded the powers of the

Water Board. In Temescal Water Co. v. Dept. Public

Works (1955) 44 Cal.2d 90 [280 P.2d 1], we rejected the

holding of Tulare Water Co, v. State Water Com., supra,

A-37

187 Cal. 533, and held that the decision of the board to

grant an application to appropriate water was a quasi-

judicial decision, not a ministerial act. In People v. Shiro-

kow, supra, 26 Cal.3d 301, we held that the board could

enjoin diversion of water by the owner of a prescriptive

right who refused to comply with water conservation pro-

grams, even though his right was not based on a board li-

cense. Our decision rested on the legislative intent “to vest

in the board expansive powers to safeguard the scarce

water resources of the state.” (P. 309; see also Environ-

mental Defense Fund, Inc. v. East Bay Mun. Utility Dist.,

supra, 26 Cal.3d 183, 194-195; In re Waters of Long Valley

Creek Stream System (1979) 25 Cal.3d 339 [158 Cal.Rptr.

350, 599 P.2d 656).) Although the courts have refused to

allow the board to appropriate water for instream uses,

even those decisions have declared that the board has the

power and duty to protect such uses by withholding water

from appropriation. (Fullerton v, State Vater Resources

Control Bd., supra, 9) Cal.App.3d 590, 603-604; California

Trout, Inc. v. State Water Resources Control Bd., supra,

90 Cal.App.3d 816, 821.)

Thus, the function of the Water Board has steadily

evolved from the narrow role of deciding priorities between

competing appropriators to the charge of comprehensive

planning and allocation of waters. This change necessarily

affects the board's responsibility with respect to the public

trust. The board of limited powers of 1913 had neither the

power nor duty to consider interests protected by the pub-

lie trust; the present board, in undertaking planning and

allocation of water resources, is required by statute to take

those interests into account.

A-38

4. The relationship between the Public Trust Doctrine

and the California Water Rights System.

As we have seen, the public trust doctrine and the appro-

priative water rights system administered by the Water

Board developed independently of each other. Each devel-

oped comprehensive rules and principles which, if applied

to the full extent of their scope, would occupy the field of

allocation of stream waters to the exclusion of any com-

peting system of legal thought. Plaintiffs, for example, ar-

gue that the public trust is antecedent to and thus limits

all appropriative water rights, an argument which implies

that most appropriative water rights in California were

acquired and are presently being used unlawfully. De-

fendant DWP, on the other hand, argues that the public

trust doctrine as to stream waters has been “subsumed”

into the appropriative water rights system and, absorbed

by that body of law, quietly disappeared; according to

DWP, the recipient of a board license enjoys a vested right

in perpetuity to take water without concern for the conse-

quences to the trust.

We are unable to accept either position. In our opinion,

both the public trust doctrine and the water rights system

embody important precepts which make the law more re-

sponsive to the diverse needs and interests involved in the

planning and allocation of water resources. To embrace

one system of thought and reject the other would lead to

*Plaintiffs suggest that appropriative rights expressly conferred

by the Legislature would not be limited by the public trust doc-

trine. The Attorney General informs us, however, that the Legisla-

ture has rarely created water rights by express legislation, but in-

stead has delegated that task to the Water Board.

A-39

an unbalanced structure, one which would either decry as

a breach of trust appropriations essential to the economic

development of this state, or deny any duty to protect or

even consider the values promoted by the public trust.

Therefore, seeking an accommodation which will make use

of the pertinent principles of both the public trust doctrine

and the appropriative water rights system, and drawing

upon the history of the public trust and the water rights

system, the body of judicial precedent, and the views of

expert commentators, we reach the following conclusions:

a. The state as sovereign retains continuing supervisory

control over its navigable waters and the lands beneath

those waters. This principle, fundamental to the concept of

the public trust, applies to rights in flowing waters as well

as to rights in tidelands and lakeshores; it prevents any

party from acquiring a vested right to appropriate water

in a manner harmful to the interests protected by the pub-

lic trust.””

b. As a matter of current and historical necessity, the

Legislature, acting directly or through an authorized

agency such as the Water Board, has the power to grant

usufructuary licenses that will permit an appropriator to

take water from flowing streams and use that water in

a distant part of the state, even though this taking does

*°As we discussed earlier (ante, p. 440), there are two exceptions

to the rule stated in text: one can acquire vested rights free of trust

restraints when the property is no longer adaptable to trust uses

or when the original grant was made to further trust purposes. It

is unlikely that either exception will often apply to usufructuary

water rights. (See discussion in Johnson, op. cit. supra, 14 U.C.

Davis L.Rev. 233, 263-264. )

A-40

not promote, and may unavoidably harm, the trust uses

at the source stream. The population and economy of this

state depend upon the appropriation of vast quantities of

water for uses unrelated to in-stream trust values.” Cali-

fornia’s Constitution (see art. X, 42), its statutes (see

Wat. Code, 44 100, 104), decisions (see, e.g., Waterford I.

Dist. v. Turlock I. Dist. (1920) 50 Cal.App. 213, 220 [194

P. 757]), and commentators (e.g., Hutchins, The Cal. Law

of Water Rights, op. cit. supra, p. 11) all emphasize the

need to make efficient use of California’s limited water

resources: all recognize, at least implicitly, that efficient

use requires diverting water from instream uses. Now

that the economy and population centers of this state have

developed in reliance upon appropriated water, it would

be disingenuous to hold that such appropriations are and

have always been improper to the extent that they harm

publie trust uses, and can be justified only upon theories

of reliance or estoppel.

c. The state has an affirmative duty to take the public

trust into account in the planning and allocation of water

resources, and to protect public trust uses whenever feas-

ible.” Just as the history of this state shows that appro-

**In contrast, the population and economy of this state does not

depend on the conveyance of vast expanses of tidelands or other

property underlying navigable waters. (See Comment, The Public

Trust Doctrine and California Water Law: National Audubon So-

ciety, Dept. of Water and Power (1952) 33 Hastings L.J. 653, 665. )

Our opinion does not affect the restrictions imposed by the public

trust doctrine upon transfer of such properties free of the trust.

27Amendments to the Water Code enacted in 1955 and subse-

quent years codify in part the duty of the Water Board to consider

public trust uses of stream water. (See, ante, at p. 444.) The require-

A-41

priation may be necessary for efficient use of water despite

unavoidable harm to public trust values, it demonstrates

that an appropriative water rights system administered

without consideration of the public trust may cause un-

necessary and unjustified harm to trust interests. (See

Johnson, op. cit. supra, 14 U.C. Davis L.Rev. 233, 256-257 ;

Robie, Some Reflections on Environmental Considerations

in Water Rights Administration (1972) 2 Ecology L.Q. 695,

710-711; Comment, op. cit. supra, 33 Hastings L.J. 653, 654.)

As a matter of practical necessity the state may have to

approve appropriations despite foreseeable harm to pub-

lic trust uses. In so doing, however, the state must bear

in mind its duty as trustee to consider the effect of the

taking on the public trust (see United Plainsmen v. ND.

State Water Cons. Commission (N.D. 247 N.W.2d 457,

462-463), and to preserve, so far as consistent with the

public interest, the uses protected by the trust.

Once the state has approved an appropriation, the public

trust imposes a duty of continuing supervision over the

taking and use of the appropriated water. In exercising its

sovereign power to allocate water resources in the public

interest, the state is not confined by past allocation deci-

sions which may be incorrect in light of current knowledge

or inconsistent with current needs.

ments of the California Environmental Quality Act (Pub. Resources

Code, § 21000 et seq.) impose a similar obligation. (See Robie,

op. cit. supra, 2 Ecology L.Q. 695.)

These enactments do not render the judicially fashioned public

trust doctrine superfluous. Aside from the possibility that statutory

protections can be repealed, the noncodified public trust doctrine

remains important both to confirm the state’s sovereign supervision

and to require consideration of public trust uses in cases filed di-

rectly in the courts without prior proceedings before the board.

A-42

The state accordingly has the power to reconsider allo-

cation decisions even though those decisions were made

after due consideration of their effect on the public trust.*

The case for reconsidering a particular decision, however,

is even stronger when that decision failed to weigh and

consider public trust uses. In the case before us, the

salient fact is that no responsible body has ever deter-

mined the impact of diverting the entire flow of the Mono

Lake tributaries into the Los Angeles Aqueduct. This is

not a case in which the Legislature, the Water Board, or

any judicial body has determined that the needs of Los

Angeles outweigh the needs of the Mono Basin, that the

benefit gained is worth the price. Neither has any respon-

sible body determined whether some lesser taking would

better balance the diverse interests.** Instead, DWP ac-

quired rights to the entire flow in 1940 from a water board

**The state Attorney General asserts that the Water Board could

also reconsider the DWP water rights under the doctrine of un-

reasonable use under article X, section 2. DWP maintains, however,

that its use of the water for domestic consumption is prima facie

reasonable. The dispute centers on the test of unreasonable use—

does it refer only to inordinate and wasteful use of water, as in

Peabody v. City of Vallejo, supra, 2. Cal.2d 351, or to any use less

than the optimum allocation of water? (On this question, see gen-

erally Joslin v. Marin Mun. Water Dist., supra, 67 Cal.2d 132,

138-141.) In view of our reliance on the public trust doctrine as

a basis for reconsideration of DWP’s usufructuary rights, we need

not resolve that controversy.

**The one objective study which has been done to date, the

Report of the Interageny Task Force on Mono Lake recommended

a sharp curtailment in the diversion of water by the DWP. (See

Task Force Report at pp. 36-40.) The task force, however, had

only the authority to make recommendations, and lacked power

to adjudicate disputed issues of fact or law or to allocate water.

A-43

which believed it lacked both the power and the duty to

protect the Mono Lake environment, and continues to exer-

cise those rights in apparent disregard for the resulting

damage to the scenery, ecology, and human uses of Mono

Lake.

It is clear that some responsible body ought to recon-

sider the allocation of the waters of the Mono Basin.”

No vested rights bar such reconsideration. We recognize

the substantial concerns voiced by Los Angeles—the city’s

need for water, its reliance upon the 1940 board decision,

the cost both in terms of money and environmental impact

of obtaining water elsewhere. Such concerns must enter

into any allocation decision. We hold only that they do not

preclude a reconsideration and reallocation which also

takes into account the impact of water diversion on the

Mono Lake environment.

**In approving the DWP appropriative claim, the 1940 Water

Board relied on Water Code section 106 which states that “[i]t is

hereby declared to be the established policy of this State that the

use of water for domestic purposes is the highest use of water and

that the next highest use is for irrigation.” DWP points to this sec-

tion, and to a 1945 enactment which declares a policy of protecting

municipal water rights (Wat. Code, § 106.5), and inquires into the

role of these policy declarations in any reconsideration of DWP’s

rights in the Mono Lake tributaries.

Although the primary function of these provisions, particularly

section 106, is to establish priorities between competing appropria-

tors, these enactments also declare principles of California water

policy applicable to any allocation of water resources. In the latter

context, however, these policy declarations must be read in conjunc-

tion with later enactments requiring consideration of in-stream uses

(Wat. Code, §§ 1243, 1257, quoted ante at pp. 443-444) and judicial

decisions explaining the policy embodied in the public-trust doc-

trine. Thus, neither domestic and municipal uses nor in-stream

uses can claim an absolute priority.

A-44

5. Exhaustion of Administrative Remedies.

On motion for summary judgment, the trial court held

that plaintiffs must exhaust their administrative remedies

before the Water Board prior to filing suit in superior

court. Plaintiffs, supported on this point by DWP, con-

tend that the courts and the board have concurrent juris-

diction over the merits of their claim, and thus that they

had no duty to exhaust any administrative remedy before

filing suit.

The first _.estion we must face is whether plaintiffs

had any Water Board remedy to exhaust. There appear

to be two possible grounds upon which plaintiffs could

initiate a board proceeding. First, they could claim that

DWP was making an unreasonable use of water, in viola-

tion either of controlling constitutional and statutory pro-

visions or of the terms of DWP’s license. (See Cal.Admin.

Code, tit. 23, § 764.10.) Plaintiffs, however, expressly dis-

claim any intent to charge unreasonable use, and announced

instead their intent to found their action solely on the

public trust doctrine, so this remedy is unavailable.

The only alternative method of bringing the issue before

the board is a proceeding invoking Water Code section

2501, which provides that “[t]he board may determine, in

the proceedings provided for in this chapter, all rights

to water of a stream system whether based upon appro-

priation, riparian right, or other basis of right.” We rec-

ognize certain difficulties in applying this remedy to the

present case. It is unclear whether a claim based on the

public trust is a “water right” in the technical sense of

that term. (See Dunning, op. cit. supra, 14 U.C. Davis

L.Rev. 357, 383; cf. Fullerton v. State Water Resources

i

A-45

Control Bd., supra, 90 Cal.App.3d 590, 604.) Also, the

relevant chapter of the Water Code refers to petitions filed

by “claimants to water” (see, e.g., Wat. Code, § 2525);

it is uncertain whether a person asserting the interest of

the public trust would be considered a “claimant.”

In recent decisions, however, we have discerned a legis-

lative intent to grant the Water Board a “broad,” “open-

ended,” “‘expansive” authority to undertake comprehensive

planning and allocation of water resources. (Jn re Waters

of Long Valley Creek Stream System (1979) 25 Cal.3d

339, 348-349, 350, fn. 5 [158 Cal.Rptr. 350, 599 P.2d 656] ;

People v. Shirokow, supra, 26 Cal.3d 301, 309.) Both cases

emphasized the board’s power to adjudicate all competing

claims, even riparian claims (Long Beach) and prescrip-

tive claims (Shirokow) which do not fall within the appro-

priative licensing system. Having construed section 2501 to

give the board broad substantive powers—powers adequate

to carry out the legislative mandate of comprehensive pro-

tection of water resources—it would be inconsistent to read

that statute so narrowly that the board lacked jurisdiction

to employ those powers.

We therefore construe Water Code section 2501 to per-

mit a person claiming that a use of water is harmful to

interests protected by the public trust to seek a board

determination of the allocation of water in a stream sys-

tem, a determination which may include reconsideration of

rights previously granted in that system. Under this inter-

pretation of section 2501, plaintiffs have a remedy before

the Water Board.

Must plaintiffs exhaust this administrative remedy be-

fore filing suit in superior court! A Jong line of decisions

A-46

indicates that remedies before the Water Board are not

exclusive, but that the courts have concurrent original

jurisdiction.

As we observed earlier in this opinion (see ante, pp.442-

443), for much of its history the Water Board was an

agency of limited scope and power. Many water right dis-

putes, such as those involving riparian rights, pueblo

rights, and prescriptive rights, did not fall within the

jurisdiction of the board. But even in cases which argu-

ably came within the board's limited jurisdiction, the par-

ties often filed directly in the superior court, which assumed

jurisdiction and decided the case. (See, e.g., Allen v. Cali-

fornia Water & Tel. Co. (1946) 29 Cal.2d 466 [176 P.2d 8}.)

All public trust cases cited in this opinion were filed di-

rectly in the courts. Thus, a 1967 treatise on California

water law could conclude that “[g]enerally, the superior

courts of California have original jurisdiction over water

rights controversies ..."° but in some cases must share con-

current jurisdiction with administrative bodies. (1 Rogers

& Nichols, op, cit. supra, at p. 528.)

Although prior cases had assumed jurisdictional con-

currency, we first discussed that question in our decision

in Environmental Defense Fund, Inc. v. East Bay Mun.

Utility Dist. (1977) 20 Cal.3d 327 [142 Cal.Rptr. 904, 572

P.2d 1128] (EDF 1), and our later decision in the same

case on remand from the United States Supreme Court,

Environmental Defense Fund, Inc. v. East Bay. Mun,

Utility Dist., supra, 26 Cal.3d 183 (EDF 11). Plaintiff in

that case sued to enjoin performance of a contract for

diversion of water from the American River on the

ground that under the doctrine of reasonable use the

utility distriet should instead use reclaimed waste water.

’

A-47

Intervener County of Sacramento claimed the diversion

was an unreasonable use because the diversion point was

too far upstream, and would deprive downstream users of

the water.

In EDF I we held that the Legislature had intended to

vest regulation of waste water reclamation in the Water

Board because of the need for expert evaluation of the

health and feasibility problems involved. We therefore con-

cluded that the plaintiffs’ superior court action to compel

waste water reclamation was barred by failure to exhaust

administrative remedies. (20 Cal.3¢ 327, 343-344.)

EDF I further held the intervener’s claim concerning

- the diversion point was barred by federal preemption (p.

340), but the United States Supreme Court vacated our

decision and remande:l for reconsideration in light of Cali-

fornia v, United States (1978) 4388 U.S. 645 [57 L.Ed.2d

1018, 98 S.Ct. 2985]. On remand, we found no federal pre-

emption, and further held that intervener’s claim was not

defeated by failure to exhaust administrative remedies.

Noting that “the courts [had] traditionally exercised juris-

diction of claims of unreasonable water use” (EDF II, 26

Cal.3d 183, 199), we stated that “[a]part from overriding

cdnsiderations such as are,presented by health and safety

dangers involved in the’reclamation of waste water, we are

satisfied that the cotrts have concurrent jurisdiction with

. administrative agencies to enforce the self-executing

provisions of article X, section 2.” (P. 200.)"

“This case does not fall within the exception established in

EDF II granting the board exclusive jurisdiction over reclamation

waters and other matters involving a potential danger to

public health. (See EDF II, pp. 199-200.) The issues involving

Mono Lake are complex, and because the emerging lakebed may

A-48

The present case involves the same considerations as

those before us in the EDF cases. On the one hand, we

have the board with experience and expert knowledge, not

only in the intricacies of water law but in the economic and

engineering problems involved in implementing water

policy.** The board, moreover, is charged with a duty of

comprehensive planning, a function difficult to perform if

some cases bypass board jurisdiction. On the other hand,

we have an established line of authority declaring the con-

current jurisdiction of the courts, and reliance upon that

authority by the plaintiffs.

We have seriously considered whether, in light of the

broad powers and duties which the Legislature has con-

ferred on the Water Board, we should overrule EDF II

and declare that henceforth the board has exclusive pri-

mary jurisdiction in matters falling within its purview.

We perceive, however, that the Legislature has chosen an

alternative means of reconciling board expertise and judi-

cial precedent. Instead of granting the board exclusive

primary jurisdiction, it has enacted a series of statutes

contribute to dust storms, the case includes a public health aspect.

Nevertheless, those issues are more analogous to those typically

decided by the courts under their concurrent jurisdiction (such as

the claim of intervener in EDF II that the diversion point of water

was too far upstream) than they are to the narrow and specialized

problem of reclaiming waste water. If we read the exception in

EDF II so broadly that any complex case with tangential effect

on public health came within the board’s exclusive jurisdiction,

that exception would-cdhsume the rule of concurrent jurisdiction.

“We noted in EDF I that “[t]he scope and technical complexity

of issues concerning water resource management are unequalled by

virtually any other type of activity presented to the courts.” (EDF

I, supra, 20 Cal.3d 327, 344.)

‘

A-49

designed to permit state courts, and even federal courts, to

make use of the experience and expert knowledge of the

board.

Water Code section 2000 provides that “[iJn any suit

brought in any court of competent jurisdiction in this State

for determination of rights to water, the court may order

a reference to the board, as referee, of any or all issues

involved in the suit.” Section 2001 provides alternatively

that the court “may refer the suit to the board for investi-

gation of and report upon any or all of the physical facts

involved.” Finally, recognizing that some water cases will

be filed in or transferred to federal courts, section 2075

provides that “[i]n case suit is brought in a federal court

for determination of the rights to water within, or partially «

within, this State, the board may accept a reference of such

suit as master or referee for the court.”

These statutes necessarily imply that the superior court

has concurrent original jurisdiction in suits to determine

water rights, for a reference to-the board as referee or

master would rarely if eyer be appropriate in a case filed

originally with the board. The court, however, need not

proceed in ignorance, for need it invest the time required

to acquire the skills and knowledge the board already

possesses. When the case raises issues which should be con-

sidered by the board, the court may refer the case to the

board. Thus the courts, through the exercise of sound dis-

cretion and the use of their reference powers, can sub-

stantially eliminate the danger that litigation will bypass

oye

A-50

the board’s expert knowledge and frustrate its duty of

comprehensive planning.”

6. Conclusion.

This has been a long and involved answer to the two

questions posed by the federal district court. In summariz-

ing our opinion, we will essay a shorter version of our

response. a.

The federal court inquired first of the interrelationship

between the public trust doctrine and the California water

rights system, asking whether the “public trust doctrine in

this context [is] subsumed in the California water rights

system, or... function[s} independently of that system?”

Our answer is “neither.” The public trust doctrine and the

appropriative water rights system are parts of an inte-

grated system of water law. The public trust doctrine

serves the function in that integrated system of preserving

the continuing sovereign power of the state to protect

public trust uses, a power which precludes anyone from

acquiring a vested right to harm the public trust, and

imposes a continuing duty on the state to take such uses

into account in allocating water resources.

**The state Attorney General argues that even though the courts

generally possess concurrent jurisdiction in water cases, the board

should have exclusive jurisdiction over actions attacking a board-

granted water right. In view of the reference power of the courts,

we think this exception unnecessary. The court presently has the

power to refer suchweases to the board whenever reference is ap-

propriate; a rule of exclusive jurisdiction, requiring all such cases

to be initiated before the board, would not significantly improve

the fairness or efficiency of the process. In some cases, including

the present one, it would lead to unproductive controversy over

whether the plaintiff is challenging a right granted by the board

or merely asserting an alleged right of higher priority.

A-51

Restating its question, the federal court asked: “[C]an

the plaintiffs challenge the Department’s permits and licen-

ses by arguing that those permits and licenses are limited

by the public trust doctrine, or must the plaintiffs...

[argue] that the water diversions and uses authorized

thereunder are not ‘reasonable or beneficial’ as required

under the California water rights system?” We reply that

plaintiffs can rely on the public trust doctrine in seeking

reconsideration of the allocation of the waters of the Mono

Basin.

The federal court’s second question asked whether plain-

tiffs must exhaust an administrative remedy before filing

suit. Our response is “no.” The courts and the Water

Board have concurrent jurisdiction in cases of this kind.

If the nature or complexity of the issues indicate that an

initial determination by the board is appropriate, the

courts may refer the matter to the board.

This opinion is but one step in the eventual resolution of

the Mono Lake controversy. We do not dictate any par-

ticular allocation of water. Our objective is to resolve a

legal conundrum in which two competing systems, of

thought—the public trust doctrine and the a aii

water rights system—existed indepenently of each other,

espousing principles which seemingly suggested opposite

results. We hope by integrating these two doctrines to

clear away the legal barriers which have so far prevented

either the Water Board or the courts from taking a new

and objective look at the water resources of the Mono

Basin. The human and environmental uses of Mono Lake—

uses protected by the public trust doctrine—deserve to be

A-52

taken into account. Such uses should not be destroyed

because the state mistakenly thought itself powerless to

protect them.

Let a peremptory writ of mandate issue commanding

the Superior Court of Alpine County to vacate its judg-

ment in this action and to enter a new judgment consistent

with the views stated in this opinion.”

Bird, C. J., Mosk, J., Kaus, J., and Reynoso, J., con-

curred.

KAUS, J.—I concur in the court's opinion. While I share

Justice Richardson’s reservations on the issue of concur-

rent jurisdiction, I doubt that the problem can be solved

by making the question of exclusive board jurisdiction

depend on such rather vague tests as those announced in

EDF I and EDF II. If a majority of the court were in-

clined to reconsider the issue, I would respectfully suggest

that the exclusive jurisdiction of the board should be

broadened to include disputes such as the present one. This

would, obviously, involve the overruling of certain prece-

dents on which plaintiffs justifiably relied. The new rule

should, therefore, not be applicable to them.

Since, however, the requisite majority interest in recon-

sidering the question of concurrent jurisdiction is lacking,

I join the court’s opinion.

RICHARDSON, J.—I concur with parts 1 through.4 of

the majority opinion and with its analysis of the relation-

“The superior court should determine whether plaintiffs are en-

titled to attorney fees under Code of Civil Procedure section 1021.5

and Woodland Hills Residents Assn., Inc. v. City Council (1979)

23 Cal.3d 917, 938-940 [154 Cal.Rptr. 503, 593 P.2d 200).

. -

A-53

ship between the public trust doctrine and the water rights

system in this state. I respectfully dissent, however, from

part 5 of the opinion wherein the majority holds that the

courts and the California Water Resources Board (Water

Board) have concurrent jurisdiction in cases of this kind.

In my view, there are several compelling reasons for hold-

ing that the Water Board has exclusive original jurisdic-

tion over the present dispute, subject of course to judicial

review of its decision.

As the majority recognizes, the matter of concurrent

jurisdiction involves the related issue of exhaustion of

administrative remedies. It is well settled that where an

administrative remedy is provided by statute, that remedy

must be pursued and exhausted before the courts will act.

(Abelleira v. District Court of Appeal (1941) 17 Cal.2d

280, 292 (109 P.2d 942, 132 A.L.R. 715].) This doctrine

applies to disputes regarding water appropriated pursuant

to permits issued by the Water Board. (Temescal Water

Co. v. Dept. Public Works (1955) 44 Cal.2d 90, 106 [280

P.2d 1].) The majority concedes that plaintiffs had an ad-

ministrative remedy available to them in the present case,

namely, a proceeding under Water Code section 2501 “to

seek a board:determination of the allocation of water in a

stream system,” including “reconsideration of rights previ-

ously granted in that system.” (Ante, p. 450.) Neverthe-

less, the majority concludes that prior cases of this court,

together with certain statutory provisions permitting (but

not requiring) reference of water disputes to the Water

Board, both excuse plaintiffs’ failure to exhaust their ad-

ministrative remedy allow the courts to exercise con-

current jurisiétion in cases of this kind. I reach a con-

trary conclusion.

A-d4

As the majority explains (ante, p. 450), earlier cases

which held that the court shared concurrent jurisdiction

with the Water Board were decided at a time when the

board “was an agency of limited scope and power,” with-

out authority to consider many water right issues such as

the application of the public trust. Indeed, the Water

Board in the present case itself had assumed that it lacked

jurisdiction over public trust issues; the board’s 1940 deci-

sion granting appropriative permits reflects that assump-

tion. (Ante, pp. 427-428.) If, as the majority now holds,

the Water Board’s jurisdiction extends to public trust

issues, it is entirely proper to apply the exhaustion of

remedies principle and insist that plaintiffs seek recon-

sideration from the board before litigating the matter in

court.

The majority relies primarily upon Environmental De-

fense Fund, Inc. v. East Bay Mun. Utility Dist. (1980) 26

Cal.3d 183, 198-200 [161 Cal.Rptr. 466, 605 P.2d 1] (EDF

II), but our language in that case supports the view that,

in cases of the kind now before us, the board has exclusive

jurisdiction. In EDF II, we held that “Apart from over-

riding considerations,” the courts have concurrent jurisdic-

tion with the Water Board to enforce the self-executing

constitutional proscriptions against unreasonable water

use and diversion. (P. 200.) Most of the “overriding con-

siderations” referred to in EDF I/ are present here.

Thus, in that case we observed that waste water recla-

mation disputes require consideration of such complex and

“transcendent” factors as the potential danger to jmblic

health and safety and the feasibility of reclamation, fac-

ee ee cee

A-55

tors which would require deference to “appropriate ad-

ministrative agencies,” such as the Water Board, and

would foreclose concurrent court jurisdiction. (P. 199; see

also Environmental Defense Fund, Inc. v. East Bay Mun.

Utility Dist. (1977) 20 Cal.2d 327, 343-344 [142 Cal.Rptr.

904, 572 P.2d 1128] (EDF 1).) We repeated our earlier

observation that “private judicial litigation involves piece-

meal adjudication determining only the relative rights of

the parties before the court, whereas in administrative

proceedings comprehensive adjudication considers the

interests of other concerned persons who may not be

parties to the court action.” (EDF II, at p. 199; see In re

Waters of Long Valley Creek Stream System (1979) 25

Cal.3d 339, 359-360 [158 Cal.Rptr. 350, 599 P.2d 656].)

The same “overriding considerations” catalogued by us

in EDF II seem applicable here. Although this case does

not involve waste water reclamation, nevertheless the

balancing of public trust values affecting Mono Lake and

the water rights of a large metropolitan community pres-

ents similarly complex, overriding and “transcendent”

issues which demand initial consideration by the Water

Board. Only the board, which had issued the very licenses

and permits now under challenge, possesses the exper-

ience and expertise needed to balance all of the various

competing interests in reaching a fair and reasonable reso-

lution of this vastly important litigation.

As we noted in EDF I, “The scope and technical com-

plexity of issues concerning water resource management

are unequalled by virtually any other type of activity pre-

sented to the courts.” (20 Cal.3d at p. 344.) As the majority

opinion herein amply demonstrates, similar complexities

A-56

are presented here. The majority concedes that (1) “The

present case involves the same considerations as those

before us in the EDF cases,” (2) the Water Board posses-

ses the expertise to resolve “the intricacies of water law”

and “the economic and engineering problems involved in

implementing water policy,” and (3) the board “is charged

with a duty of comprehensive planning, a function difficult

to perform if some cases bypass board jurisdiction.”

(Ante, p. 450.) Thus, the case for exclusive board juris-

diction seems to me truly overwhelming.

The majority’s suggestion that various statutory provi-

sions contemplate the exercise of concurrent jurisdiction

in cases of this kind is unconvincing. These provisions

(Wat. Code, $4 2000, 2001, 2075) merely authorize the

courts in water rights cases to refer the issues to the

Water Board for its determination as a referee. Obviously,

these provisions do not purport to excuse a prior failure to

exhaust available administrative remedies before the

Water Board. Moreover, these provisions do not attempt

to resolve the question, presented in the EDF case3,

ehether “overriding considerations” dictate an exception

to the general rule of concurrent jurisdiction.

As we said in EDF I, “When .. . the statutory pattern

regulating a subject matter integrates the administrative

agency into the regulatory scheme and the subject of the

litigation demands a high level of expertise within the

agency’s special competence, we are satisfied that the liti-

gation in the first’ instance must be addressed to the

agency. [Citation.|” (20 Cal.3d at p. 344.) That principle

seems fully applicable here. |

I would affirm the judgment.

A-57

Modification of Opinion by California Supreme Court

33 Cal.3d 726a

(April 14, 1983)

[S.P. No. 24368. Apr. 14, 1983.]

NATIONAL AUDUBON SOCIETY et al., Petitioners,

Vv.

THE SUPERIOR COURT OF ALPINE COUNTY,

Respondent ;

DEPARTMENT OF WATER AND POWER

OF THE CITY OF LOS ANGELES, et al.,

Real Parties in Interest.

[Modification of opinion (33 Cal.3d 419; ...... Cal.Rptr. ......,

THE COURT.—The opinion in this case, appearing at 33

Cal.3d 419, is hereby modified as follows:

In the second paragraph on page 440, delete from head-

note marker (9) to the end of the paragraph, and substitute

the following language: Except for those rare instances in

which a grantee may acquire a right to use former trust

property free of trust restrictions, the grantee holds sub-

ject to the trust, and while he may assert a vested right to

the servient estate (the right of use subject to the trust)

and to any improvements he erects, he can claim no vested

right to bar recognition of the trust or state action to carry

out its purposes.

In the third paragraph on page 440, continuing to page

441, modify the last two sentences to read as follows: Most

decisions and commentators assume that “trust. uses” relate

A-58

to uses and activities in the vicinity of the lake, stream, or

tidal reach at issue (see, e.g., City of Los Angeles v. Aitken,

supra, 10 Cal.App.2d 460, 468-468; State of California ex

rel. State Lands Com. v. County of Orange, supra, 134 Cal.

App.3d 20; Sax, op. cit. supra, 68 Mich.L.Rev. 471, 542.)

The tideland cases make this point clear; after City of

Berkeley v. Superior Court, supra, 26 Cal.3d 515, no one

could contend that the state could grant tidelands free of

the trust merely because the grant served some public pur-

pose, such as increasing tax revenues, or because the

grantee might put the property to a commercial use.

In the first full paragraph on page 444, modify the last

sentence to read as follows: Finally in 1969 the Legislature

instructed that “[i]n determining the amount of water

available for appropriation, the board shall take into ac-

count, whenever it is in the public interest, the amounts of

water needed to remain in the source for protection of

beneficial uses.”

On page 443, footnote 23, delete the sentence and citation

reading: Rights acquired prior to 1928, however, may

include a right to unreasonable use which, if taken by the

state, requires compensation. (U.S. v. Gerlach Live Stock

Co. (1950) 339 U.S. 725, 754 [94 L.Ed. 1231, 1250, 70 S.Ct.

955, 20 A.L.R.2d 633].)

On page 445, footnote 25, delete the existing language

and substitute the following: As we discussed earlier ante,

p. 440), there are rare exceptions to the rule stated in the

text. It is unlikely that these exceptions will often apply to

usufructuary water rights. (See discussion in Jolinson, op.

cit, supra, 14 U.C. Davis L.Rey. 233, 263-264.)

A-59

March 2, 1981 Order of U.S. District Court for the

Eastern District of California, re Abstention

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

No. Civil S-80-127 LKK

NATIONAL AUDUBON SOCIETY,

a corporation, et al.,

Plaintiffs,

Ws

DEPARTMENT OF WATER AND POWER

OF THE CITY OF LOS ANGELES,

Defendants.

[Filed Mar. 2, 1981]

ORDER

The Court vacates the Order entered January 19, 1981,

and orders filed a new Order as follows:

Pages 1 through line 14 of page 9 are incorporated herein

by reference and made a part hereof as if fully set forth

herein.

ABSTENTION PROCEDURE

Depending upon the type of abstention adopted by the

court, the resulting procedure will vary. The state has

argued that this action comes under the provisions of

Burford abstention as well as Thibodeaux abstention and

that therefore the court should dismiss the action.

A-60

In Colorado, supra, the court delineated the parameters

of abstention where the state law questions bear on public

policy to include actions where the exercise of federal juris-

diction “would be disruptive of state efforts to establish a

coherent policy with respect to a matter of substantial

public concern.” Burford v. Sun Ou Co., 319 U.S. 315 (1943)

and Alabama Pub. Serv. Comm’s v. Southern R. Co., 341

U.S. 341 (1951).

The state argues that the California water system is a

complicated and comprehensive system of regulation and

that for the federal court to determine that the public trust

doctrine is independent of the state administrative system

would disrupt that system. Thus, the state asserts Burford-

type abstention is appropriate and dismissal required. The

state’s argument begs the question presented by the case.

To determine at this point that a federal court resolution of

the action would disrupt the administrative processes

would be to determine that plaintiffs’ theory of the action

will prevail. In Burford, supra, the court abstained and

dismissed because the administrative agency had undoubted

jurisdiction over the questions to be litigated before the

federal court. The basis of abstention was the presence of

a comprehensive administrative and judicial process which

unquestionably could resolve the dispute. Whether the

administrative agency has jurisdiction over plaintiffs’

action is central to this action. The court therefore deter-

mines that the policies controlling Burford-type abstention

do not apply in this action and dismissal ix inappropriate.

Another procedure employed by the courts where absten-

tion is appropriate is certification to the state court. Clay

v. Sun Insurance Office, Ltd., 363 U.S. 207 (1960). As

A-61

pointed out by counsel for Audubon, no such procedure

exists between the California and the federal courts. Neces-

sarily that procedure will not be adopted by this court.

In Thibodeaux and Kaiser Steel the court stayed the

federal action to allow the state court to determine the

issues in question through the use of declaratory relief.

This approach appears appropriate in the present case.

The court therefore stays this action with directions to the

plaintiff to seek resolution of the following issues by de-

claratory relief in the state court from which.this matter

was removed:

1. What is the interrelationship of the public trust

doctrine and the California water rights system, in the

context of the right of the Los Angeles Department of

Water and Power (“Department”) to divert water from

Mono Lake pursuant to permits and licenses issued under

the California water rights system? In other words, is the

public trust doctrine in this context subsumed in the Cali-

fornia water rights system, or does it function indepen-

dently of that system? Stated differently, can the plaintiffs

challenge the Department's permits and licenses by arguing

that those permits and licenses are limited by the public

trust doctrine, or must the plaintiffs challenge the permits

and licenses by arguing that the water diversions and uses

authorized thereunder are not “reasonable or beneficial”

as required under the California water rights system.

2. Do the exhaustion principles applied in the water

rights context apply to plaintiffs’ action pending in the

United States District Court for the Mastern District of

California?

A-62

The federal issue raised by the complaint will be

addressed, if necessary, following the state court resolui.on

of the public trust issue. The McCarren action brought by

the Department of Water and Power is also stayed. Once

a determination is made by the state court regarding the

appropriate application of the public trust doctrine, this

court will move forward on that claim as well.

Audubon has argued that staying this action and seeking

declaratory relief from the state courts is inappropriate

since the California courts do not render advisory opinions

and an action for declaratory relief where the main suit is

still before the federal court could not be considered such

an action, Admittedly Audubon has found no case in which

the California courts have refused to proceed in such

circumstances. In order that this action not be further

delayed, the court additionally directs defendant to raise

this issue before the state court as part of its responsive

pleadings.

Any party to the present litigation is permitted to inter-

vene in the state court action, provided that party does not

seek to expand the scope of the declaratory relief action

outlined above.

The parties are directed to file copies of all proceedings

in the state court with this court. In the event declaratory

relief is not promptly songht from the state court, or if it

cannot promptly be obtained, this court “having retained

complete control of the litigation will doubtless assert it te

decide [the issues upon which it has abstained].” 360 U.S.

at 20. Because the court recognizes that the approach it now

takes does not fall squarely within anv of the abstention

A-63

cases, this order is certified for immediate appeal to the

Ninth Cireuit under 28 U.S.C. § 1292(b).

IT IS THEREFORE ORDERED THAT:

1, Plaintiffs’ motion to amend is granted:

2. Plaintiffs’ motion to sever or separate is deferred;

3. Plaintiffs’ motion for a hearing on the issue of a

preliminary injunction is denied:

4. The motion of the state to amend is granted;

3. The motion of the Department to dismiss the third

and fourth causes of action of its cross-complaint

is granted;

6. The motion of the Department to remand is denied:

“. This action be stayed until either a determination

on the public trust issues is made by the state court or

until that court determines it cannot proceed on those

issues; and

8. The parties are ordered to file Status Reports pur-

suant to Local Rule 125 in ninety (90) days. The court will

determine at that time whether a Status Conference is

appropriate.

DATED: February 27, 1981.

‘s/ Lawrence K. Karitrox

U.S. District Judge

A-O4

January 19, 1981 Order of U.S. District Court

for the Eastern District of California

re Abstention

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

No. Civil S-80-127 LKK

NATIONAL AUDUBON SOCIETY,

a corporation, et al.,

Plaintiffs,

V.

DEPARTMENT OF WATER AND POWER

OF THE CITY OF LOS ANGELES,

Defendant.

[Filed Jan. 19, 1981]

= ORDER

Plaintiffs National Audubon Society, Friends of the

Earth, the Mono Lake Committee, the Los Angeles Audu-

bon Society, and four individuals filed this action against

the Los Angeles Department of Water and Power. The

gravamen of the complaint is plaintiffs’ assertion that the

defendant's diversion of water from the Mono Lake Basin

is seriously damaging the environment of the Basin. The

complaint alleges violation of the public trust, violation of

California Constitution Article XVI, section 6 (prohibiting

a gift by the state of a state asset), a quiet title action to

establish the public trust rights in the water of the Basin,

public and private nuisance, and violation of California

Constitution, Article X, section 4 (which prohibits obstrue-

tion of navigable waters).

A-65

In its cross-complaint the Department sought adjudica-

tion of the Basin’s water rights, a quieting of title to those

rights, declaratory relief relative to its use of the water,

and a declaration that if the United States had jurisdic-

tion over California's navigational trust, that the United

States has consented to any impairment thereof.

The State of California cross-complained for declaratory

relief asserting that the public trust was to be administered

by the state through its water rights system, and that

plaintiffs were precluded from bringing the action without

exhausting their administrative remedies,

The action was removed by the United States and this

court in its Memorandum and Order of July 17, 1980, found

that removal appropriate.

Plaintiffs now move to amend their complaint to add a

federal cause of action, to have the complaint severed from

the cross-actions or tried separately and to have a date for

a preliminary injunction hearing set. The Department

moves to dismiss its third and fourth causes of action and

to remand the case to the state court. California seeks to

amend its cross-complaint to add a request for declaratory

relief.

MOTION TO AMEND

Plaintiffs seek to amend their complaint under Rule

15(a) to add a cause of action alleging a new legal theory

which will create federal jurisdiction in the original ac-

tion—a cause of action based on the federal common law

of nuisance. See Illinois v. Milwaukee, 406 U.S. 91 (1972).

The Department has opposed that motion on two grounds:

first, it asserts that the amendment will be subject to a

motion to dismiss since federal common law nuisance ac-

A-66

tions apply only where there is a need for interstate uni-

formity. Secondly, the Department asserts that the amend-

ment raises new issues of fact and law. The Department

states that it will be necessary to determine both the nature

of the alleged nuisance and whether state or federal law

will be applied.

Under F.R.Civ.P. 15(a) leave to amend should be freely

given. In determining whether plaintiffs may amend the

court is to consider such factors as “undue delay, bad faith

or dilatory motive on the part of the movant. repeated fail-

ure to cure deficiencies by amendments previously allowed,

undue prejudice to the opposing party by virtue of the

amendment [and} futility... .” Foman v. Davis, 371 US.

178, 182 (1962).

The fact that the motion to amend may be subject to

dismissal does not necessarily require that the court dis-

miss for futility. In Brier v. Northern California Bowling

Proprietors’ Ass'n., 316 F.2d 787 (9th Cir. 1963) the court

in refusing to speculate as to whether the amended coim-

plaint would be legally sufficient remarked “It has been

said that the sufficiency of an amended pleading ordinarily

will not be considered on motion for leave to amend.”

(citations omitted). 316 F.2d at 790. Only where the com-

plaint “cannot under any conceivable state of facts be

amended to state a claim” should the amendment be denied

on the grounds of futility. 316 F.2d at 790. While the court

‘(loes not at this juncture pass upon the ability of the

amendment to survive a motion to dismiss, the amendment

cannot be described as futile under the standard estah-

lished in Brier, supra.

A-67

As to the Department's second argument that the amend-

ment will add new issues of law and fact, it appears to the

court inherent in the nature of amendment to add new

theories of liability. Since the Department has not demon-

strated, or even asserted that any of the bases for denial

set out in Foman, supra, are present, the court hereby

grants plaintiff leave to file its amended complaint.

MOTION TO SEVER OR SEPARATE

Audubon seeks a separate trial on the issues of its com-

plaint or a severing of the complaint from the remainder

of the action. Audubon states that a separate trial should

be granted on a showing of convenience or to avoid preju-

dice. F.R.Civ.P. 42(b). Alternatively Audubon requests

severance under Rule 21 asserting that the delay arising

from pursuing the cross-complaint of the Department would

foreclose relief. Further, Audubon states that such sever-

ance would avoid involving peripheral parties.

Whether either separation or severance would be appro-

priate in this action in turn rests upon a determination of

the nature of the public trust rights that plaintiffs seek to

assert. Accordingly, the court will defer a determination on

these motions until the issues of the public trust doctrine

discussed below are resolved.

PRELIMINARY INJUNCTION

Audubon also requests that this court set a date for

hearing a motion for preliminary injunction. Plaintiffs

have filed no motion for such relief. Therefore there is no

basis for setting a hearing date. Plaintiffs’ motion is denied.

A-68

MOTION OF THE STATE OF CALIFORNIA

TO AMEND THE CROSS-COMPLAINT

The state has also moved to amend its pleadings to add a

request for a declaration that the plaintiffs have no stand-

ing to maintain a claim in federal common law nuisance.

That motion, being unopposed, is hereby granted,

MOTION OF THE DEPARTMENT TO DISMISS THE

THIRD AND FOURTH CAUSES OF ACTION OF

THE CROSS-COMPLAINT AND TO REMAND

The Department seeks to have the third and fourth

causes of action dismissed under F.R.Civ.P. 41(a)(2),

which permits dismissal upon order of the court “upon

such terms and conditions as the court deems proper.” Fol-

lowing the dismissal the Department seeks a remand of the

action to the state court. The United States and Audubon

have opposed the motion to dismiss, asserting that it is an

attempt by the Department to “oust” the court of juris-

diction. Plaintiff Audubon further opposes the motion to

dismiss on the grounds that the Department has given no

reason to dismiss these claims and that the requirements

of Rule 42(a) are therefore not met.

Both Audubon and the United States argue that should

the motion to dismiss be granted that the court should

exercise its jurisdiction to retain the action even though

the “head of federal jurisdiction” is lost.

1. Motion to Dismiss

The terms of voluntary dismissal by the court after an

opposing party has filed an answer or other opposition

paper is controlled by F.R.Civ.P. 41 (a)(2) which provides

in pertinent part; *... an action shall not be dismissed at

A-69

the plaintiff's instance save upon order of the court and

upon such terms and conditions as the court deems proper.”

Such motions to dismiss are within the discretion of the

court. Blue Mountain Construction Co. v. Werner, 270 F.2d

305 (9th Cir. 1959). It has been observed that the reason

for this rule is to avoid prejudice to the defendant and to

insure substantial justice to both parties. Wright and

Miller, Federal Practice and Procedure 4 2364 pp. 169-170.

The Department stated at oral argument in its earlier mo-

tion to remand and again during the hearings on these

motions, that at least as to the third cause of action the

Department had badly pled and was seeking to dismiss the

claim at the time the action was removed to federal court.

In an action as complex as this no purpose is served in

retaining claims which no party seeks to act upon. Further,

as will be discussed, the dismissal of these causes of action

does not prejudice either the United States or Audubon in

their attempt to pursue this action in federal court. The

motion of the Department to dismiss the third and fourth

causes of action is therefore granted,

2. Motion to Remand

Once the motion to dismiss is granted the Department

asserts that the head of federal jurisdiction is lost and

that the court should not go forward with the action, but

rather should remand it to the state court. While the issue

of the retention of pendant state claims by the federal

court is both complex and interesting, the present posture

of the action does not require the court to delve into sub-

sequent interpretations of dicta in United Mine Workers

v. Gibbs, 383 U.S. 715 (1966); See Rosado v. Wyman, 397

U.S. 397 (1970); Arizona v. Cook, 541 F.2d 226 (9th Cir.

A-70

1976); Hodge v. Mountain States Telephone & Telegraph

Co., 555 F.2d 254 (9th Cir. 1977). The amendment of plain-

tiffs’ claim to add a cause of action in federal common law

nuisance provides sufficient basis for the court to retain

jurisdiction over the action. As stated by the United States

Supreme Court in I/linois v. Milwaukee, 406 U.S, 91 (1972)

“The question is whether pollution of interstate or navi-

gable waters creates actions arising under the ‘laws’ of the

United States within the meaning of §1331(a). We hold

that it does;.. . 406 U.S. at 99. The court therefore finds

that the amended complaint does state a federal claim and

remand is inappropriate.

ABSTENTION

While no party has specifically moved this court to ab-

stain, the Department raises as a factor to be considered

in the remand motion the fact that abstention is appro-

priate. The court therefore sua sponte raised the absten-

tion issue and received further briefing on that issue from

all parties. After due consideration, the court now deter-

mines that abstention is appropriate.

The complaint and cross-complaints filed in this action

raise many difficult issues, One issue, central to this action,

however, is the nature of the public trust doctrine, Plain-

tiffs seek to assert this doctrine as a right independent of

the complex state water rights system, The state in its

cross-complaint asserts that the doctrine is subsumed

within the system established under the state Constitution,

Article X, section 2. The characteristics of this central

issue When examined in light of the policies of abstention

compels the court to abstain,

A-71

In Colorado River Water Conservation District v. United

States, 424 U.S, 800 (1976) the Supreme Court outlined the

circumstances appropriate to abstention:* “cases present-

ing a federal constitutional issue which might be mooted or

presented in a different posture by a state court determina-

tion of pertinent state law.” Citing inter alia County of

Allegheny v. Frank Mashuda Co., 360 U.S. 185 (1959),

Railroad Comm’s of Texas v. Pullman Co., 312 U.S. 496

(1941) ;> cases where federal jurisdiction has been invoked

to restrain certain state criminal proceedings. Younger v.

Harris, 401 U.S. 37 (1971)* “Abstention is also appropri-

ate where there have been presented difficult questions of

state law bearing on policy problems of substantial public

import whose importance transcends the result in the case

then at bar.” Citing Louisiana Power and Light Co. v. City

of Tnibodaur, 360 U.S. 25 (1959) and Kaiser Steel Corp. v.

W.S. Ranch Co., 391 U.S. 593 (1968). 424 U.S. at 814. In the

present section the circumstances presented appear to fall

within Thibodaur-type abstention.

Both the complaint and the cross-complaint by the state

rely on interpretations of the California Constitution which

have not been spoken to by the state courts. No state court

issues could be more sensitive nor more appropriately

determined by the state court than the interpretation of

that state's own constitution. Plaintiffs argue that the state

law questions are not novel in that the public trust doctrine

is firmly established by state lew. It is not the existence of

the public trust doctrine that is at issue in this action but

the interrelationship of that doctrine and the system of

water rights provided for by the state constitution. The

questions raised relative to this relationship have not been

A-72

addressed by any California court. The difficulty of dealing

with issues relating to the water law system of the state

has caused the California Supreme Court to remark “The

scope and technical complexity of issues concerning water

resource management are unequalled by virtually any other

type of activity presented by the courts.” Environmental

Defense Fund v. East Bay Utility District, 20 Cal.3d 327,

344 (1977), vacated on other grounds, 439 U.S, S11 (1978).

Should plaintiffs prevail on their theory of the publie

trust, the result may be to limit the availability of water

to present users. The public import of such a decision in a

state whose most populated areas are quite arid cannot be

doubted. Courts have recognized the importance of water to

arid areas in numerous decisions. See, e.g., Naiser Steel,

supra at 594; Chow v, City of Santa Barbara, 317 Cal. 678,

702 (1933). In California-Oregon Power Co, v. Beaver

Portland Cement Co., 73 F.2d 555 (9th Cir. 1934), aff'd 295

U.S. 142 (1935), the Ninth Cirenit stated: “The intensity of

the public interest involved [in water] is indicated by the

provisions in the constitutions and statutes of western

states declaring the waters of natural streams and lak. « to

he the property of the public or of the state.” 73 F.2d at 567,

The posture of this case is very similar to that of Aaiser

Steel, supra, wherein the Supreme Court held per curiam

that abstention was appropriate where the water rights

issue raised required interpretation of the state consti-

tution. This court therefore finds that this case raises novel

and difficult issues of state law which bear on substantial

publie policy problems.

It must he noted by the court that at least one dissimi-

larity exists between this case and other cases which have

A-73

abstained under the Thibodaur rationale, In Thibodauz and

Kaiser Steel the basis of federal] jurisdiction Was diversity,

Here the Jurisdictiona] basis is a federal question, Whether

diversity js crucial to this form of abstention js entirely

unclear to this court. The concurring opinion of Justice

Brennan in Kaiser Steel refers to this form of abstention

4s abstention in diversity cases. 391 ULS. at 595, In dieta

the Ninth Cireyit has stated after listing the requirements

of Pullman abstention, abstention js “ppropriate in other

exceptional circumstances such as “diversity cases involy.

ing no federal question at all.” Canton v, Spokane School

District #87. 498 F.2q 840, 845, ng (9th Cir, 1974), The

Cases which actually apply this type of abstention do not

assert that the Jurisdictional] basis js determinative and

this court finds that the application of Thibodaur-type

abstention jn light of the presence of factors specifically

referred to by the courts is appropriate,

ABSTENTION PROCEDURE

Depending upon the type of abstention adopted by the

court, the resulting Procedure wil] vary. The state has

argued that this action comes under the Provisions of

Burford abstention as well as Thibodaur abstention and

that therefore the court should dismiss the action,

In Colorado, Supra, the court delineated the parameters

of abstention where the state law questions bear on publie

policy to inelude actions where the exercise of federal

jurisdiction “would be disruptive of State efforts to estab.

lish a coherent policy with respect to a matter of substantia]

public concern,” Burford v. Sun Oil Co., 319 U.S. 315 (1943)

and Alabama Pub.Serv.Comm ‘8 v. Southern P.Co., 341 U.S.

341 (1951),

A-74

The state argues that the California water system is a

complicated and comprehensive system of regulation and

that for the federal court to determine that the public trust

doctrine is independent of the state administrative system

would disrupt that system. Thus, the state asserts Burford-

type abstention is appropriate and dismissal required, The

state’s argument begs the question presented by the case,

To determine at this point that a federal court resolution of

the action would disrupt the administrative processes

would be to determine that plaintiffs’ theory of the action

will prevail. In Burford, supra, the court abstained and

dismissed because the administrative agency had undoubted

jurisdiction over the questions to be litigated before the

federal court. The basis of abstention was the presence of

a comprehensive administrative and judicial process which

unquestionably could resolve the dispute. Whether the

administrative agency has jurisdiction over plaintiffs’

action is central to this action. The court therefore deter-

mines that the policies controlling Burford-type abstention

do not apply in this action and dismissal is inappropriate.

Another procedure employed by the courts where absten-

tion is appropriate is certification to the state court. Clay v.

Sun Insurance Office, Ltd., 363 U.S, 207 (1960), As pointed

out by counsel for Audubon, no such procedure exists be-

tween the California and the federal courts. Necessarily

that procedure will not be adopted by this court,

In Thibodaux and Kaiser Steel the court stayed the

federal action to allow the state court to determine the

issues in question through the use of declaratory relief,

This approach appears appropriate in the present CASE,

The court therefore stays this action with directions to the

A-75

parties to seek a determination of the interrelationship

of the public trust doctrine and the state water rights

system. The federal issue raised by the complaint will be

addressed, if necessary, following the state court resolution

of the public trust issue. The McCarren action brought by

the Department of Water and Power is also stayed. Once a

determination is made by the state court regarding the

appropriate application of the public trust doctrine, this

court will move forward on that claim as well.

Audubon has argued that staying this action and seeking

declaratory relief from the state courts is inappropriate

since the California courts do not render advisory opinions

and an action for declaratory relief where the main suit is

still before the federal court could be considered such an

action. Admittedly Audubon has found no case in which the

California courts have refused to proceed in such circum-

stances. In order that this action not be further delayed,

the court additionally directs the parties to raise this issue

before the state court as part of their request for declara-

tory relief,

The parties are directed to file copies of all proceedings

in the state court with this court. In the event declaratory

relief is not promptly sought from the state court, or if it

cannot promptly be obtained, this court “having retained

complete control of the litigation will doubtless assert it to

decide [the issue upon which it has abstained].” 360 U.S,

at 29. Because the court recognizes that the approach it

now takes does not fall squarely within any of the absten-

tion cases, this order is certified for immediate appeal to

the Ninth Cirenit under 28 U.S.C, § 1292(b).

A-76

IT IS THEREFORE ORDERED THAT:

1. Plaintiffs’ motion to amend is granted;

2. Plaintiffs’ motion to sever or separate is deferred;

3. Plaintiffs’ motion for a hearing on the issue of a pre-

liminary injunction is denied;

4. The motion of the state to amend is granted;

5. The motion of the Department to dismiss the third

and fourth causes of action of its cross-complaint is granted ;

6, The motion of the Departinent to remand is denied;

7. This action be stayed until either a determination on

the public trust issues is made by the state court or until

that court determines it cannot proceed on those issues; and

8. The parties are ordered to file Status Reports pur-

suant to Local Rule 125 in ninety (%)) days. The court will

determine at that time whether a Status Conference is

appropriate,

DATED: January 16, 1981,

s/ LAWRENCE K, KARLTON

U.S. District Judge

A-77

Intended Ruling on Motion for Summary Judgment,

entered September 18, 1981 by Superior Court for

Alpine County, California

IN THE SUPERIOR COURT OF

THE STATE OF CALIFORNIA

IN AND FOR THE COUNTY OF ALPINE

No. 639

NATIONAL AUDUBON SOCIETY, et al.

Plaintiffs,

Vs,

DEPARTMENT OF WATER AND POWER OF

THE CITY OF LOS ANGELES, et al..

Defendants.

[Filed Sept. 18, 1981]

INTENDED RULING ON MOTION

FOR SUMMARY JUDGMENT

The Court intends to grant the motion for summary

judgment of defendant State of California filed herein on

May 8, 1981.

The plaintiffs have failed to state a cause of action.

The California water rights system is a comprehensive

and exclusive system for determining the legality of the

diversions of the City of Los Angeles in the Mono Basin.

Any use of appropriated water is subject to and conditional

upon the statutory procedure. People v. Sherokow (1980)

26 Cal.3d 301, 306-309, The Public Trust Doctrine does not

function independently of that system. This Court con-

cludes that as regards the right of the City of Los Angeles

A-78

to divert waters in the Mono Basin that the Public Trust

Doctrine is subsumed in the water rights system of the

state.

Defendant City of Los Angeles argues that this Court

may not proceed to rule on the exhaustion of adminis-

trative remedy issue as such would clearly be an advisory

opinion unless and until plaintiffs amend and challenge

the reasonable and beneficial use of the defendant City’s

diversions. Both the Federal Court and defendant State

have requested this Court to proceed with the exhaustion

issue. This Court intends to accommodate the Federal

Court. This Court would of course grant a motion by

plaintiffs to amend their pleadings so as to challenge the

reasonable and beneficial use of the City’s diversions.

However even should plaintiffs choose to do so this Court

would and does rule that plaintffs have not exhausted their

administrative remedy. This issue is “ripe” for determina-

tion. Defendant State is alone in arguing this position.

All of the other parties who argue this issue urge the

Court to adopt a ruling that this Court has concurrent

jurisdiction with the State Water Resources Control Board.

However none of the other parties challenge the State's

position that issues here are complex and transcendent.

Consequently this Court must conclude that this is in fact

so. Environmental Defense fund v, East Bay Muni Utility

District (1980) 26 Cal.3d 183 holds that plaintiff would

he required to exhaust their administrative remedy before

the State Board where there is a direct challenge to

appropriative rights. The State Board has exclusive juris-

diction over the granting and administration of such rights,

This Court should defer in the first instance to the expertise

of the appropriate administrative agency where the issues

A-79

are complex and transcendent. In addition to considera-

tions of securing water from sources other than the Mono

Basin the State Board will have to consider the issues of

conservation and reclamation of waters after they reach

Los Angeles. This Court intends to conclude that plaintiffs

would be required to exhaust their administrative remedy

either under a challenge based on an independent Public

Trust claim or under the reasonable and beneficial use test.

The Court intends to deny plaintiffs’ motion for sum-

mary judgment.

The attorneys for defendant State shall prepare the

order.

DATED: Sept. 8, 1981

/3/ J. HILARY COOK

Judge of the Superior Court

A-80

Judgment Entered November 9, 1981 by

Superior Court for Alpine County, California

GEORGE DEUKMEJIAN, Attorney General

of the State of California

R. H. CONNETT

Assistant Attorney General

RODERICK E. WALSTON

GREGORY K. WILKINSON

JAN S. STEVENS

BRUCE S. FLUSHMAN

Deputy Attorneys General

6000 State Building

San Francisco, California 94102

Telephone: (415) 557-3920

Attorneys for Defendants and Cross-Defendants State

of California, California State Lands Commission

and California Water Resources Control Board

IN THE SUPERIOR COURT OF

THE STATE OF CALIFORNIA

IN AND FOR THE COUNTY OF ALPINE

Civil No. 639

NATIONAL AUDUBON SOCIETY, a Corporation:

FRIENDS OF THE EARTH, a Corporation;

THE MONO LAKE COMMITTEE, a Corporation; and

THE LOS ANGELES AUDUBON SOCIETY,

a Corporation;

Plaintiffs,

Vv.

DEPARTMENT OF WATER AND POWER OF THE

CITY OF LOS ANGELES; STATE OF CALIFORNTA,

CALIFORNIA STATE LANDS COMMISSION, and the

CALIFORNIA WATER RESOURCES

CONTROL BOARD,

Defendants.

A-81

DEPARTMENT OF WATER AND POWER

OF THE CITY OF LOS ANGELES,

Cross-Complainant,

Vv.

NATIONAL AUDUBON SOCIETY, a Corporation;

FRTENDS OF THE EARTH, a Corporation;

THE MONO LAKE COMMITTEE, a Corporation; and

THE LOS ANGELES AUDUBON SOCIETY,

a Corporation;

STATE OF CALIFORNIA, and

CALIFORNIA STATE WATER RESOURCES

CONTROL BOARD,

Cross-Defendants.

[Filed Nov. 9, 1981]

JUDGMENT

The above matter having come for hearing on cross-

motions for summary judgment on August 17, 1981, Judge

J. Hilary Cook presiding; Palmer Brown Madden appear-

ing as counsel for plaintiffs; Adolph Moskovitz and Ken-

neth Downey appearing as counsel for defendant Depart-

ment of Water and Power of the City of Los Angeles;

Roderick Ek. Walston appearing as counsel for defendants

State of California, et al.; Arthur L. Littleworth appear-

ing as counsel for intervenors June Lake Public Utilities

District, et al.; Jennifer Moran appearing as counsel for

Southern California Edison Company; and Stuart Somach

appearing as counsel for intervenor United States; the

court having heard the arguments and considered the

briefs, exhibits, declarations and other documents filed

herein; and good cause appearing therefore, the court now

renders its judgment as follows:

A-82

IT IS HEREBY ORDERED, ADJUDGED AND DE.-

CREED that:

(1) The complaint of plaintiffs National Audubon So-

ciety, et al. shall be, and the same is hereby, dismissed with

prejudice ;

(2) The cross-complaint of cross-complainant Depart-

ment of Water and Power of the City of Los Angeles shall

be, and the same is hereby, dismissed without prejudice;

(3) Judgment shall be, and the same is hereby, granted

in favor of defendants, and against plaintiffs; and

(4) The defendants shall recover their costs of suit

herein.

DATED: November 9, 1981

s J. HILARY COOK

Judge, Superior Court

Judgment has been entered this day in the above-entitled

case in Judgment Book Volume C, page 138,

DATED: November 9, 1981

By »s JOAN G, CHACON

Clerk, Alpine County

A-83

California Constitution

Article X, Section 2

lt is hereby declared that because of the conditions pre-

vailing in this State the general welfare requires that the

water resources of the State be put to beneficial use to the

fullest extent of which they are capable, and that the waste

or unreasonable use or unreasonable method of use of

water be prevented, and that the conservation of such

waters is to be exercised with a view to the reasonable and

beneficial use thereof in the interest of the people and for

the public welfare. The right to water or to the use or flow

of water in or from any natural stream or water course in

this State is and shall be limited to such water as shall be

reasonably required for the beneficial use to be served, and

such right does not and shall not extend to the waste or

unreasonable use or unreasonable method of use or un-

reasonable method of diversion of water. Riparian rights

in a stream or water course attach to, but to no more than

so much of the flow thereof as may be required or used

consistently with this section, for the purposes for which

such lands are, or may be made adaptable, in view of such

reasonable and beneficial uses; provided, however, that

nothing herein contained shall be construed as depriving

any riparian owner of the reasonable use of water of the

stream to which the owner's land is riparian under reason-

able methods of diversion and use, or as depriving any

appropriator of water to which the appropriator is law-

fully entitled. This section shall be self-executing, and the

Legislature may also enact laws in the furtherance of the

policy in this section contained,

A-S+

Selected Sections of

California Water Code

Relating to

Appropriative Water Rights

102, <All water within the State is the property of the

people of the State, but the right to the use of water may

be acquired by appropriation in the manner provided by

law.

106, It is hereby declared to be the established policy of

this State that the use of water for domestic purposes is

the highest use of water and that the next highest use is

for irrigation.

106.5. It is hereby declared to be the established policy

of this State that the right of a municipality to acquire and

hold rights to the use of water should be protected to the

fullest extent necessary for existing and future uses, but

that no municipality shall acquire or hold any right to

waste water, or to use water for other than municipal

purposes, or to prevent the appropriation and application

of water in excess of its reasonable and existing needs to

useful purposes by others subject to the rights of the

municipality to apply such water to municipal uses as and

when necessity therefor exists.

109(a). The Legislature hereby finds and declares that

the growing water needs of the state require the use of

water in an efficient manner and that the efficient use of

water requires certainty in the definition of property rights

to the use of water and transferability of such rights. Tt is

A-85

hereby declared to be the established policy of this state to

facilitate the voluntary transfer of water and water rights

where consistent with the public welfare of the place of

export and the place of import.

1201. All water flowing in any natural channel, except-

ing so far as it has been or is being applied to useful and

beneficial purposes upon, or in so far as it is or may be

reasonably needed for useful and beneficial purposes upon

lands riparian thereto, or otherwise appropriated, is

hereby declared to be public water of the State and subject

to appropriation in accordance wtih the provisions of

this code.

1240, The appropriation must be for some useful or

beneficial purposes, and when the appropriator or his suc-

cessor in interest ceases to use it for such a purpose the

right ceases.

1241. When the person entitled to the use of water

fails to use beneficially all or any part of the water claimed

by him, for which a right of use has vested, for the purpose

for which it was appropriated or adjudicated, for a period

of five years, such unused water may revert to the public

and shall, if reverted, be regarded as unappropriated public

water. Such reversion shall occur upon a finding by the

board following notice to the permittee and a public hearing

if requested by permittee,

1243. The use of water for recreation and preservation

and enhancement of fish and wildlife resources is a bene-

ficial use of water. In determining the amount of water

available for appropriation for other beneficial uses, the

board shall take into account, whenever it is in the public

A-86

interest, the amounts of water required for recreation and

the preservation and enhancement of fish and wildlife

resources,

The board shall notify the Department of Fish and

Game of any application for a permit to appropriate water.

The Department of Fish and Game shall recommend the

amounts of water, if any, required for the preservation and

enhancement of fish and wildlife resources and shall re-

port its findings to the board.

This section shall not be construed to affect riparian

rights,

1243.5. In determining the amount of water available

for appropriation, the board shall take into account, when-

ever it is in the public interest, the amounts of water

needed to remain in the source for protection of beneficial

uses, including any uses specified to be protected in any

relevant water quality contro] plan established pursuant

to Division 7 (commencing with Section 13000) of this

code,

This section shall not be construed to affect riparian

rights.

1252. Any person may apply for and secure from the

board, in conformity with this part and in conformity with

reasonable rules and regulations adopted from time to time

hy it, a permit for any unappropriated water,

1253. The board shall allow the appropriation for bene-

ficial purposes of unappropriated water under such termes

and conditions as in its judgment will best develop, con-

serve, and utilize in the public interest the water sought

to he appropriated.

A-87

1254. In acting upon applications to appropriate water

the board shall be guided by the policy that domestic use

is the highest use and irrigation is the next highest use of

water.

1255. The board shall reject an application when in its

judgment the proposed appropriation would not best con-

serve the public interest.

1257. In acting upon applications to appropriate water,

the board shall consider the relative benefit to be derived

from (1) all beneficial uses of the water concerned includ-

ing, but not limited to, use for domestic, irrigation, munici-

pal, industrial, preservation and enhancement of fish and

wildlife, recreational, mining and power purposes, and any

uses specified to be protected in any relevant water quality

control plan, and (2) the reuse or reclamation of the water

sought to be appropriated, as proposed by the applicant.

The board may subject such appropriations to such terms

and conditions as in its judgment will best develop, con-

serve, and utilize in the public interest, the water sought

to be appropriated.

we

1350. The board may grant, or refuse to grant a permit

and may reject any application, after hearing.

1380. Upon the approval of an application the board

shall issue a permit.

1390, A permit shall be effective for such time as the

water actually appropriated under it is used for a useful

and beneficial purpose in conformity with this division,

but no longer.

1394. The beard may reserve jurisdiction in whole or

in part to amend, revise, supplement, or delete terms

A-38

and conditions in a permit under either of the following

circumstances.

(a) If the board finds that sufficient information is

not available to finally determine the terms and con-

ditions which will reasonably protect vested rights

without resulting in waste of water or which will best

develop, conserve, and utilize in the public interest the

water sought to be appropriated, and that a period of

actual operation will be necessary in order to secure

the required information,

(b) If the application or applications being acted

upon represent only part of a co-ordinated project,

other applications for such project being pending, and

the board finds that the co-ordinated project requires

co-ordinated terms and conditions which cannot rea-

sonably be decided upon until decision is reached on

said other pending applications.

Jurisdiction shall be reserved under this section for no

longer period of time than the board finds to be reasonably

necessary, and in no case shall such jurisdiction be exer-

cised after the issuance of the license. Such reserved juris-

diction shall be exercised only after notice to the parties

and a hearing. The board's decision or order reserving

jurisdiction and the board's decision or order in the exer-

cise of its reserved jurisdiction shall both be subject to

reconsideration by the board and judicial review as au-

thorized in this part.

1410. If the board finds that the work is not commenced,

prosecuted, and completed, or the water applied to hene-

ficial use as contemplated in the permit and in accordance

with this division and the rules and regulations of the

A-89

board, the board shall, after notice in writing and mailed

in a sealed, postage prepaid and registered letter addressed

to the permittee at his last known address, and after a

hearing, when a hearing is requested by the permittee pur-

suant to Section 1410.1, revoke the permit and declare the

water subject to further appropriation.

1425.

(a) When the board finds that an applicant has an

urgent but only temporary need to divert and use

water for a period not to exceed six months, and that

such water may be diverted and used without injury

to any lawful user of water, and without unreasonable

effect upon fish, wildlife, or other instream beneficial

uses, the board may issue to the applicant a condi-

tional, temporary permit, without requiring compli-

ance with other procedures or provisions of this di-

vision, but subject to all requirements of this chapter.

(b) When the board finds that a person who is an

applicant for a permit under the provisions of this

division other than this chapter has a need to divert

and use water under unforeseen emergency conditions,

and that such water may be diverted and used with-

out injury to any lawful user of water, and without

unreasonable effect upon beneficial uses, the board may

issue to such person, upon application made pursuant

to this chapter, a conditional, temporary permit, with-

out requiring compliance with other procedures or

provisions of this division, but subject to all require-

ments of this chapter.

(¢) No temporary permit may be issued pursuant

te the provisions of this chapter unless it is first de-

A-90

termined that unappropriated water is available and

that the diversion and use could not adversely affect

the rights of downstream users, The board may dele-

gate to any employee of the board all or any of its

functions under this chapter; provided, that the board

shall, at its next regular meeting, review and validate

any temporary or emergency permit issued by an

employee.

for the

purposes of this section, shall be found to exist when

(d) “Unforeseen emergency conditions,’

there have been unexpected circumstances requiring

immediate action by an applicant to divert and use

water so as to protect the public health, welfare, or

safety, It is not necessary that the emergency condi-

tions be such that they could not have been anticipated

or prepared for but only that in the normal course of

events they would seldom be expected,

1429. The board shall supervise appropriation of water

under the temporary permit for the protection of vested

rights and instream beneficial uses and for compliance with

permit conditions,

1430, Any temporary permit issued under this chapter

shall not result in creation of a vested right, even of a

temporary nature, but shall be subject at all times to modi-

fication or revocation in the discretion of the board. Any

temporary permit shall automatically expire 180 days after

the date of its issuance, unless an earlier date is specified

or it has been revoked,

1450, Any application properly made gives to the ap-

plicant a priority of right as of the date of the application

A-91

until such application is approved or rejected, Such pri-

ority continues only so long as the provisions of law and

the rules and regulations of the hoard are followed by the

applicant.

1455. The issuance of a permit continues in effect the

priority of right as of the date of the application and gives

the right to take and use the amount of water specified

in the permit until the issuance of a license for the use of

the water or until the permit is revoked.

1600. Immediately upon completion of the construction

of works and application of the water to beneficial use the

permittee shall report the completion to the board.

1610. If the determination of the board as to completion

is favorable to the permittee, the board shall issue a li-

cense which confirms the right to the appropriation of such

an amount of water as has been determined to have been

applied to beneficial use.

1611. If the board determines that the construction and

condition of the works or the use of water therefrom are

not in conformity with the law, the rules and regulations

of the board, or the terms of the permit, it may revoke the

permit in the manner provided in Article 5 (commencing

with Section 1410) of Chapter 6 of this part. The board

may in its discretion allow a reasonable time for the per-

mittee to correct discrepancies in the works or use of water

before taking action to revoke the permit.

1627. <A license shall be effective for such time as the

water actually appropriated under it is used for a useful

and beneficial purpose in conformity with this division but

no longer.

A-92

1675, If at any time after a license is issued, the board

finds that the licensee has not put the water granted under

the license to a useful or beneficial purpose in conformity

with this division or that the licensee has ceased to put the

water to such useful or beneficial purpose, or that the li-

censee has failed to observe any of the terms and condi-

tions in the license, the board, after due notice to the li-

censee and after a hearing, when a hearing is requested

by the licensee pursuant to Section 1675.1, may revoke the

license and declare the water to be subject to appropria-

tion in accordance with this part. As used in this section

“licensee” includes the heirs, successors, or assigns of

the licensee.

A-93

License for Diversion and Use of Water No. 10191

Issued by California State Water Resources Control Board

to City of Los Angeles Department of Water & Power

State of California

The Resources Agency

State Water Resources Contro! Board

Division of Water Rights

[Seal

LICENSE FOR DIVERSION AND USE OF WATER

Application 8042 Permit 5555 License 10191

Tus Is To Certiry, That

City of Los Angeles, Department of Water and Power

c/o General Manager and Chief Engineer,

P. O. Box 111, Los Angeles, California 90051

has made proof as of May 2, 1973 (the date of inspection)

to the satisfaction of the State Water Resources Control

Board of a right to the use of the water of (1) Leevining

Creek (2) Walker Creek (3) Parker Creek and (4) Rush

Creek in Mono County tributary to (1)(4) Mono Lake and

(2)(3) Rush Creek thence Mono Lake for the purpose of

Municipal Use under Permit 5555 of the Board and that

the right to the use of this water has been perfected in ac-

cordance with the laws of

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