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Water Diverters Beware! The Third District Court of Appeal Opens the Regulatory Floodgates

Most of us know that the California Department of Fish and Wildlife is the state agency in charge of administering the California Endangered Species Act, which is the state’s version of the federal Endangered Species Act.  CDFW is also the state agency that regulates certain work activities within streambeds.  Under the California Fish and Game Code, CDFW has regulatory authority over the installation of culverts, bridge supports, erosion controls, or other such work within streambeds.  But beware!  CDFW’s regulatory reach has been extended significantly.  A recent decision by a California Court of Appeal now gives CDFW regulatory authority over the mere taking of water out of its natural flow for agricultural purposes, even if the streambed itself is not altered to facilitate the taking of that water.

By way of background, before a person may start work in a streambed, typically he or she must submit a “notification” to CDFW informing the agency of the nature of the work and any anticipated impacts to waterways or special species habitats within or adjacent to those waterways due to that work.  If CDFW determines the work may “substantially adversely affect” any fish and wildlife resources, then the agency will attempt to negotiate a “streambed alteration agreement” with the party.  These agreements often include significant, and sometimes quite onerous, conditions and restrictions on development.  Moreover, the whole process can take several months and typically requires some form of environmental clearance under the California Environmental Quality Act.  Only after both (i) CDFW and the party performing the work have signed the agreement and (ii) all other necessary approvals have been obtained may work in the streambed commence.

In Siskiyou County Farm Bureau v. Department of Fish and Wildlife, the Third District Court of Appeal determined that this notification and agreement process applies to the removal of water from a streambed, even if that removal of water does not result in any alteration or obstruction of the streambed.  The court’s determination was based on language in Section 1602 of the Fish and Game Code: “An entity may not substantially divert or obstruct the natural flow of, or substantially change or use any material from the bed, channel, or bank of, any river, stream, or lake, or deposit or dispose of debris, waste or other material containing crumbled, flaked, or ground pavement where it may pass into any river, stream, or lake, unless all of the following occur [listing notification and other requirements].”  According to the court, this language unambiguously covers pumping (or otherwise taking) water from a stream, and not just diverting the streambed itself in order to remove water from a stream.  In other words, the court found that this provision requires a water diverter to submit a notification to CDFW for a possible streambed alteration agreement, even if that water diversion includes nothing more than the mere act of pumping water from the stream.

This broad interpretation of CDFW’s jurisdictional reach is sure to open the regulatory floodgates.  The practical effects of requiring every water diverter in the state to submit to CDFW a notification under the Fish and Game Code before merely pumping water from a streambed are difficult to imagine, given the paperwork and process this would require and CDFW’s budgetary constraints.  Compounding these logistical difficulties is the fact that the drought in California likely will require creative water conveyance arrangements, many of which may require pumping from streambeds to move water from wetter to drier regions of the state.  Those kinds of activities now have one additional regulatory hurdle to scale.