Under CEQA, a “trustee agency” is a “state agency having jurisdiction by law over natural resources affected by a project which are held in trust for the people of the State of California” and “[t]he California Department of Fish and Game [now Wildlife (“DFW”)] [is such a trustee agency] with regard to the fish and wildlife of the state, to designated rare or endangered native plants, and to game refuges, ecological reserves, and other areas administered by the department.” (14 Cal. Code Regs., § 15386(a).) CEQA lead agencies are required to provide notice to and consult with DFW and other trustee agencies (among other public agencies and entities) with respect to CEQA documents being prepared by the lead agency for projects that may affect the relevant resources. (E.g., 14 Cal. Code Regs., § 15086(a)(2) [lead agency shall consult with and request comments on Draft EIR from trustee agencies].) Development projects requiring work to be done in and around rivers, streams and lakes commonly require the developer – as one of the many project approvals typically required – to enter into what has become popularly known as a “Streambed Alteration Agreement” (“SAA”) with DFW to protect fish and wildlife resources that may be affected by the project. (See Fish & Game Code, § 1603; Environmental Protection Information Center v. California Dept. of Forestry & Fire Protection (2008) 44 Cal.4th 459, 1518-1521 [discussing statutory provisions for so-called “streambed alteration agreements” and their interplay with CEQA].)
Until very recently, the DFW did not administer its statutory authority and responsibilities so as to require notice from and SAAs with persons and entities – principally riparian landowners, such as ranchers and farmers – who merely diverted water from rivers, streams and lakes without altering or diverting their beds, channels or banks through construction or fill. California’s most recent severe drought has been the impetus for a change in DFW’s regulatory stance, however, due to increasing concerns about impacts on fish and wildlife resources from actions further decreasing or dewatering already low stream flows. In a 42-page published opinion filed June 4, 2015, the Third District Court of Appeal reversed the trial court’s judgment and upheld the DFW’s newly-exercised regulatory jurisdiction over stand-alone riparian water diversions as supported by the unambiguous statutory language of Fish and Game Code § 1602. Siskiyou County Farm Bureau v. Department of Fish and Wildlife (3d Dist. 2015) 237 Cal.App.4th 411, Case No. C073735.
Section 1602, enacted over 50 years ago, had its roots in post-Gold Rush legislation designed to protect navigable rivers and streams and their salmon/steelhead spawning grounds from the harmful siltation effects of hydraulic gold mining and later aggregate mining activities. By regulation the DFW has declared “all rivers, streams, lakes, and streambeds” to be subject to § 1602’s provisions, and the statute (last amended in 2003) currently provides:
An entity may not  substantially divert or obstruct the natural flow of; or  substantially change or use the material from the bed, channel, or bank of, any river, stream, or lake, or  deposit or dispose of debris, waste, or other material … where it may pass into any river, stream, or lake [absent, inter alia, written notification, as specified, to DFW].
(Fish & Game Code, § 1602(a), bracketed text added.)
The Court of Appeal, despite DFW’s 50-plus year history of non-enforcement, held this language unambiguously applies to substantial water diversions divorced from any physical bed, bank or channel alterations. As encapsulated by the Court of Appeal:
Regardless of an entity’s legal right to take water, such as for agricultural purposes, and regardless of whether the taking alters the streambed itself, section 1602 unambiguously requires notification to the [DFW] if an entity plans to “substantially divert” water. After notification, a statutory mechanism – arbitration followed by court review – exists to resolve disputes about diversions. This notification requirement neither encroaches on any entity’s water rights, nor impairs the powers and duties of the State Water Resources Control Board [“SWRCB”] . . . .
The Court of Appeal’s opinion contains interesting discussions of basic California water rights principles, the Gold Rush’s aftermath, and § 1602’s origins and early interpretations, as well as extensive discussion of the interpretive rules applicable to statutory ambiguity and the proper use of legislative history. The “bottom line” is that the statute unambiguously applies to “diversions” of water – as broadly defined by longstanding California water law – from streams, lakes and rivers, including those diversions commonly made by farmers and ranchers for agricultural purposes without altering bed or bank features. Such diversions may nonetheless harm public trust resources – particularly in drought times – and a case-by-case analysis is required to determine whether they are “substantial.” Per the Court’s analysis, Section 1602’s language is neither patently nor latently ambiguous in this regard and, despite DFW’s lack of prior enforcement history, the statute has always applied to “diversions” and “the Legislature is aware that diversion can be accomplished with pipes and pumps, and not merely by changing the streambed or course of a stream.” In the Court’s words: “[T]aking it as true – – as the trial court found – – that the [DFW] has not previously enforced section 1602 absent streambed alteration, that is an insufficient basis on which to find the statute precludes it from doing so. In the face of extreme drought and piscatorial peril, the [DFW] now wishes to apply the full measure of the law, to substantial dewatering of streams absent physical alteration to the streambeds. Its previous lack of enforcement does not rewrite the statute. [Citations omitted.]”
The practical implications of the Court’s straightforward exercise in statutory interpretation are not yet fully known, but may well be significant. Farmers, ranchers and other riparian owners who divert water for use on their lands are now subject to what will be perceived as the DFW’s expanded regulatory jurisdiction in potential conflict with their water use rights. Conflicts with the DFW (and other governmental entities and NGOs) over when notice needs to be given to DFW, whether notices given are adequate, and which diversions are “substantial” are readily foreseeable. Disputes over such issues, as well as the need for and adequacy of DFW’s requested mitigation measures (in the form of proposed SAAs) are likely to be decided (and litigated) on a case-by-case basis, although the precise method of adjudication appears unclear. (The Court of Appeal noted that, under the statutory scheme (see Fish & Game Code, §§ 1602-1604), the required “notification leads to arbitration if the parties cannot agree whether a substantial diversion has occurred or what remedial measures suffice, and the arbitral result is subject to judicial review. [Citations]” It observed in a footnote that “[o]ne case suggested the method of review would be a petition for writ of mandate (Code Civ. Proc., § 1094.5) to challenge permit conditions” but it “express[ed] no view of the viability of that mechanism.”)
The SWRCB supported DFW’s position in the case as amicus curiae, disavowing any conflict in areas of overlapping regulatory concern, and the Court agreed that DFW’s “actions [as upheld under its decision] in no way impair the [SWRCB’s] duty and power to adjudicate water rights issues.” It would appear that whether this really is the case, as well as whether and to what degree a “muscled up” DFW will possess a practical power to compel minimum in-stream flows, are issues that remain to be answered. What is clear is that the use of and law governing SAA’s has gotten a lot more interesting, and CEQA and land use practitioners should now be aware that the term “streambed alteration agreement” is somewhat of a misnomer that fails to accurately capture the breadth of DFW’s regulatory power and authority under Fish & Game Code §§ 1602-1603.
Questions? Please contact Arthur F. Coon of Miller Starr Regalia. Miller Starr Regalia has had a well-established reputation as a leading real estate law firm for more than fifty years. For nearly all that time, the firm also has written Miller & Starr, California Real Estate 3d, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state. The firm has expertise in all real property matters, including full-service litigation and dispute resolution services, transactions, acquisitions, dispositions, leasing, construction, management, title insurance, environmental law, and redevelopment and land use. For more information, visit www.msrlegal.com.