The case of County of Mono v. City of Los Angeles, ongoing in Alameda County Superior Court, is but the latest chapter in a century-long battle over water sourced by the City of Los Angeles from the eastern slope of California’s Sierra Nevada range. Last August, Mono County sued the City of Los Angeles, its Department of Water and Power, and Board of Water and Power Commissioners (collectively, the “City”) for reducing water deliveries to 6,400 acres of City-owned ranchland and increasing water exports from the county without first conducting environmental review pursuant to the California Environmental Quality Act (CEQA), Public Resources Code section 21000 et seq.

In both context and form, the County of Mono case is strikingly similar to some of the earliest CEQA case law, examining the fundamental question of whether the City’s decision to change its historical water management practices constitutes a “project” subject to CEQA’s environmental review requirements.

Los Angeles Water Supplied from the Eastern Sierra

In the early 20th century, the City acquired significant land and water rights throughout the Eastern Sierra area, including Mono County, in order to export water over 300 miles south via aqueduct to support the growing Los Angeles metropolis. (Read some of the colorful history of the Los Angeles Aqueduct here.) The City is one of the largest land owners in the Eastern Sierra, owning over 315,000 acres in Inyo and Mono Counties.

The “Waterless” Ranch Leases

The City has leased and supplied irrigation water to cattle ranchers on approximately 6,400 acres of land in Mono County for more than 70 years. The leases provide for delivery of up to 5 acre-feet of water per acre (AF/acre) each year. Historically, the Los Angeles Department of Water and Power (LADWP) has provided the ranch leases an average of 25,000 to 30,000 acre-feet (AF) annually (3.9 to 4.7 AF/acre). Exceptions occurred in 2015, when the ranchers received no water at the peak of the California drought, and in 2016, during the first year of recovery from the drought, when the ranchers received only 4,600 AF of water (0.71 AF/acre, or approximately 20 percent of historic amounts). The current ranch leases were established in 2010 and expired in 2013, meaning the Mono County ranchers have been operating on the leased land as holdover tenants for several years.

In March 2018, the City proposed new ranch leases that would provide no irrigation or stock water for the Mono County ranches. The proposed “waterless” leases would have eliminated water deliveries to the ranch leases beginning in the summer of 2018, reversing decades of land and water management practices. The City’s position is that water deliveries were never guaranteed under the leases, but were provided if surpluses were available at the City’s discretion. Facing reduced water supplies due to changing climate conditions, the City says it would be irresponsible to provide “free water” to commercial ranchers that could instead be exported to “serve 50,000 Los Angeles families” annually.

The City’s proposal to curtail water deliveries to the ranch leases caused great alarm, not only among the rancher lessees, but to state and local government, state elected officials, and local and national environmental advocacy organizations, who raised serious concerns to the City about environmental and economic consequences likely to ensue. Of particular concern are potential impacts to the bi-state sage grouse, which the US Fish & Wildlife Service proposed for listing as a “threatened” species under the Endangered Species Act.

As a result of the outcry, and intervention by Los Angeles Mayor Eric Garcetti, the City partially walked back its original proposal and committed to provide 18 percent of historic water allocations for summer 2018 (0.71 AF/acre per year or a total of less than 4,600 AF per year) with no commitment of any water deliveries in future years. Mono County asserts the reduced allocation received in 2018—following an exceptionally wet winter in the Eastern Sierra—is unrelated to water availability and, therefore, is a significant change from the City’s historical practices.

On August 15, 2018, the City published a “Notice of Preparation” announcing commencement of CEQA review of the potential environmental impacts of approving the proposed new “waterless” leases (the proposed Mono County Ranch Lease Renewal Project), which are yet to be approved by the Board of Water and Power Commissioners and the Los Angeles City Council. Mono County welcomes the CEQA review but complains that the review is coming too late.

Mono County Files CEQA Lawsuit

Mono County filed suit against the City on August 15, 2018, claiming the City failed to comply with CEQA. They allege a single cause of action, that the City’s “decision/action to change its historic land management practices and significantly reduce water deliveries to the 4,600 acres of Los Angeles-owned lands in Mono County in order to increase water export” constitutes a “project” for which the City failed to conduct the required CEQA review prior to “approval.”

The case may turn on two of the most fundamental questions under CEQA: What is a “project,” and when is that project “approved”?

CEQA requires public agencies to conduct environmental review prior to approving a “project,” defined in CEQA as “an activity that may cause either a direct physical change in the environment, or a reasonably foreseeable indirect change in the environment.” Public Resources Code § 21065. The term “approval” is defined in the CEQA Guidelines (Title 14 California Code of Regulations section 15000 et seq.) as a discretionary decision that commits a public agency to a definite course of action respecting the project. CEQA Guidelines, 14 CCR § 15352(a). CEQA requires that a lawsuit must be filed “within 180 days from the date of the public agency’s decision to carry out or approve the project, or, if the project is undertaken without a formal decision by the public agency, within 180 days from the commencement of the project.” Public Resources Code § 21167(d); CEQA Guidelines, 14 CCR § 15112.

The City filed a demurrer on statute of limitations (and other) grounds, asserting that the County’s claim is time-barred because they did not timely challenge the City’s approval of the operative ranch leases in 2010, which the City maintains is the “project” at issue and which did not guarantee water deliveries. Alameda County Superior Court Judge Evelio Grillo overruled the City’s demurrer, siding with Mono County’s characterization that the “project” is the City’s ”decision” (without formal administrative process) to cease the historic practice of offering leases providing 5 AF/acre of water and, instead, to commence offering leases providing 0.71 AF/acre of water.

Construing factual allegations in favor of the County, Judge Grillo nodded to early CEQA case law addressing similar Los Angeles-Eastern Sierra water rights issues:

A change in water use can be the continuation of a prior project or a new CEQA project. In County of Inyo v. Yorty (1973) 32 Cal.App.3d 795, the court held that the court should read the word “project” broadly and that a change in plans for water acquisition can be a new CEQA project. In County of Inyo v. City of Los Angeles (1997) 71 Cal.App.3d 185, 195, the court again stated that a proposed change in water acquisition and use can be a CEQA project.

Order Overruling Demurrer, p. 5. The court emphasized that it had “found no authority suggesting that a grant of discretion in a contract” (such as discretion to provide water in the operative 2010 ranch leases) can excuse the City’s obligation to comply with CEQA when substantially changing a project. Order Overruling Demurrer, p. 7. The court cited California Supreme Court precedent holding that the environmental baseline conditions for CEQA review “should reflect ‘established levels of particular use,’ and not the ‘merely hypothetical conditions allowable under the permits….’” Id. (quoting Communities for a Better Environment v. South Coast Air Quality Management District (2010) 48 Cal.4th 310, 316).

Current Status of the Case

The Petitioners are in the process of preparing the administrative record for the case, which the parties have stipulated will be lodged with the court by August 1, 2019. While the parties have not yet filed briefs, it is likely that the issues debated on demurrer will be central to the arguments raised on the merits of the case, turning on which actions constitute a significant change to or a new “project” under CEQA and the City’s compliance with CEQA procedure as a matter of law. As a result, coming attractions may include motions for summary judgment and preliminary injunction.

The case is County of Mono v. City of Los Angeles, Alameda County Superior Court Case No. RG18923377. No trial date has been set.