Los Molinos Mut. Water Co. v. Ekdahl

695 F.Supp.3d 1174

LOS MOLINOS MUTUAL WATER COMPANY, et al., Plaintiffs, v. Erik EKDAHL, et al., Defendants.

No. 2:21-cv-01961-DAD-DMC

United States District Court, E.D. California

Signed September 28, 2023

Filed September 29, 2023

Paul Ryan Minasian, Minasian Law, Oroville, CA, Jackson A. Minasian, Minasian, Meith, Soares, Sexton & Cooper, Oroville, CA, for Plaintiffs.

Scott Cavanaugh, State of California, Department of Justice, Sacramento, CA, Irene Schwieger Whitcombe, Sierra Shipley Arballo, Office of the Attorney General, Sacramento, CA, for Defendants Erik Ekdahl, Eileen Sobeck, E. Joaquin Esquivel, Dorene D'Adamo, Sean Maguire, Laurel Firestone, Nichole Morgan, Charlton Bonham.

ORDER GRANTING THE BOARD DEFENDANTS' MOTION TO DISMISS AND GRANTING IN PART AND DENYING IN PART THE DEPARTMENT DEFENDANTS' MOTION TO DISMISS

DALE A. DROZD, UNITED STATES DISTRICT JUDGE.

This matter is before the court on the motion to dismiss filed by defendants Erik Ekdahl, Eileen Sobeck, E. Joaquin Esquivel, Dorene D'Adamo, Sean Maguire, Laurel Firestone, and Nichole Morgan (collectively, "Board defendants") on March 25, 2022, and the motion to dismiss filed by defendants California Department of Fish and Wildlife (the "Department") and Charlton Bonham (collectively, "Department defendants") on May 24, 2022. (Doc. Nos. 31, 39.) The pending motions were taken under submission by the previously assigned district judge on April 26, 2022 and June 7, 2022, respectively.¹ (Doc. Nos. 36, 41.) For the reasons explained below, the motion to dismiss brought on behalf of the Board defendants will be granted, and the motion to dismiss brought on behalf of the Department defendants will be granted in part and denied in part.

BACKGROUND

On February 25, 2022, plaintiffs Los Molinos Mutual Water Company ("Los Molinos"), Peyton Pacific, LLC ("Peyton"), and Stanford Vina Ranch Irrigation Company ("Stanford Vina") filed their operative first amended complaint ("FAC") in this action challenging emergency regulations and water curtailment orders promulgated by the California State Water Resources Control Board ("Board") in response to extreme drought conditions occurring in 2021. (Doc. No. 16.) Plaintiffs did not name the Board as a defendant but rather brought this lawsuit against the Board defendants in their official capacities as members of the Board and staff employed by the Board.² (Id. at 1.) In addition, plaintiff Stanford Vina is asserting claims against the Department and its executive director, Charlton Bonham, in his official capacity, for allegedly abandoning fish ladders and screens intended to protect threatened Central Valley Spring Run Chinook Salmon ("salmon") and California Central Valley Steelhead ("steelhead"). (Id. at ¶ 165.) Plaintiffs allege as follows in their FAC.

Plaintiffs and their shareholders own land in the vicinity of Mill Creek and Deer Creek in Tehama County, California, and hold and administer water rights appurtenant to their land holdings. (Id. at ¶¶ 6-8.) Specifically, plaintiffs possess "adjudicated water rights" that permit them to divert water from Mill Creek (Los Molinos and Peyton) and Deer Creek (Stanford Vina) that is used for approximately 11,000 acres of irrigated land, including "for permanent plantings, including orchards, and for irrigated pasture, stock watering, and similar beneficial uses." (Id.) Los Molinos and Stanford Vina have also invested in water-related infrastructure to divert and distribute water for the use of their shareholders. (Id. at ¶¶ 6, 8.)

On April 21, 2021, Governor Gavin Newsom issued a proclamation declaring a drought state of emergency in California and directed state agencies to take certain actions in response to the drought. (Id. at ¶ 46.) On May 10, 2021, Governor Newsom issued another proclamation related to the drought emergency which directed the Board and the Department to work with water users and other parties on voluntary measures to implement actions needed to protect salmon, steelhead, and other native fishes. (Id. at ¶ 47.)

Meanwhile, on or about May 5, 2021, representatives from the Department, the Board, and the National Marine Fisheries Service ("NMFS") invited Stanford Vina and Los Molinos to discuss the 2021 water conditions and fish passage in Deer Creek and Mill Creek. (Id. at ¶ 33.) Plaintiffs allege that during this meeting, Stanford Vina and Los Molinos were given "an ultimatum": that they submit a proposal to ensure fish passage in 2021, otherwise the Board would adopt and impose emergency regulations that would curtail plaintiffs' water rights. (Id.) In response, Stanford Vina and Los Molinos submitted proposals for implementing "multi-benefit channel restoration projects" as well as "fishery protection proposals," which included a request for compensation for water transferred for instream use. (Id. at ¶ 34.) The Board, the Department, and NMFS allegedly rejected these proposals explaining that they did not have authority to authorize the measures that plaintiffs had proposed. (Id. at ¶ 35.) Despite rejecting these proposals from Los Molinos and Stanford Vina, "water users on Mill [Creek] and Deer [Creek] did coordinate with [the Department] and NMFS to voluntarily implement pulse flows in the Spring of 2021 for benefit of fishery [sic], while minimizing impacts to agricultural beneficial uses." (Id. at ¶ 37.) The 2021 spring salmon run that followed these voluntary measures was, according to plaintiffs, "very large" and "excellent." (Id. at ¶¶ 38, 41.)

On September 1, 2021, however, plaintiffs allege that all defendants issued a notice of proposed emergency rulemaking proposing the adoption of emergency regulations to implement minimum instream flows to protect anadromous fish and provide other public uses. (Id. at ¶ 49.) Plaintiffs allege that the effect of the proposed emergency regulations would require them, and their shareholders, "to forbear from exercising their vested rights to use water from Deer and Mill Creeks during irrigation season, thereby eliminating those rights." (Id.) On September 22, 2021, defendants Esquivel, D'Admo, Maguire, Firestone, and Morgan considered the proposed emergency regulations at a regularly scheduled meeting of the Board. (Id. at ¶ 55.) Plaintiffs allege that at that meeting of the Board, no evidentiary hearing was held regarding the emergency regulations despite plaintiffs requesting such a hearing and pointing out that if the emergency regulations were adopted and implemented an "inverse condemnation and taking would occur." (Id. at ¶ 56.) Plaintiffs also allege that their requests to cross-examine employees of the Department, the Board, and NMFS who presented on the purported merits of the emergency regulations at the meeting were denied. (Id. at ¶ 57.) At the conclusion of the Board's September 22, 2021 meeting, defendants Esquivel, D'Admo, Maguire, Firestone, and Morgan approved Resolution No. 2021-0038, which adopted the proposed emergency regulations, with some minor modifications. (Id. at ¶ 59.) On October 4, 2021, the California Office of Administrative Law approved the proposed emergency regulations, specifically, California Code of Regulations Title 23, §§ 876.5, 876.7, 878.4 and amended §§ 878.1 and 879 ("emergency regulations"), which then went into effect. (Doc. No. 16 at ¶ 59.)

The emergency regulations declared that any diversions from Deer Creek and Mill Creek would be deemed an "unreasonable use" if the diversions by water rights holders—no matter the reason or purpose for the diversions—reduced the flow in those two creeks below a minimum threshold set forth in the emergency regulation, specifically, California Code of Regulations Title 23, § 876.5. (Id. at ¶ 60.) The minimum instream flows set forth in the emergency regulations were deemed the "bare minimum" to ensure passage for anadromous fish on Deer Creek and Mill Creek and those flow rates vary based on the time of year and the presence of certain anadromous fish. See Cal. Code Regs. tit. 23, § 876.5(c). As a result of the emergency regulations, plaintiffs allege that they are prohibited from diverting any water in Deer Creek and Mill Creek if those diversions would interfere with achieving the minimum instream flows for fish. (Doc. No. 16 at ¶ 60.) Importantly, the emergency regulations authorized defendant Ekdahl to issue curtailment orders if he determined that continued diversions of water would interfere with achieving the minimum instream flows. (Id.) (citing Cal. Code Regs. tit. 23, § 876.5).

Plaintiffs allege that, on October 11, 2021, defendants issued Water Rights Orders 2021-0089 (Mill Creek) and 2021-0090 (Deer Creek) ("curtailment orders"), which ordered the water rights holders on those creeks, including plaintiffs, to curtail their diversion of water beginning on October 15, 2021. (Doc. No. 16 at ¶ 65.) Plaintiffs allege that the effect of the curtailment orders and emergency regulations is that their "vested water rights ... have been damaged and the reasonable value of the water was taken for public use by defendants." (Id. at ¶ 67.)

In addition to plaintiffs' challenge brought against the emergency regulations and curtailment orders, plaintiff Stanford Vina asserts several additional claims against the Department defendants. Specifically, plaintiffs allege that the Department "accessed, operated, and maintained fish ladders and screens that it designed and installed" on plaintiff Stanford Vina's main diversion dam on Deer Creek for over 60 years. (Id. at ¶ 87.) Plaintiffs allege that on June 18, 2021, the Department defendants informed Stanford Vina that they would no longer operate and maintain the fish ladders and fish screens at Stanford Vina's diversion dam on Deer Creek until Stanford Vina executed a "Memorandum of Agreement" detailing the respective parties' responsibilities in maintaining the fish ladders and screens. (Id. at ¶ 89.) According to plaintiffs, following the Department's refusal to maintain...