August 17, 2023 — A recent ruling by a California appeals court has hindered the efforts of the Westlands Water District to secure permanent access to federally controlled water in California. The decision, handed down by Associate Justice Rosendo Peña Jr., on August 7, affirmed a previous 2021 judgment from the Superior Court of Fresno that dismissed Westlands’ bid to validate a contract with the U.S. Bureau of Reclamation, citing missing information about the district’s financial obligations.

Download the ruling –

Westlands Water Dist. v. All Persons Interested, No. F083632 (Cal. Ct. App. Aug. 7, 2023)

Legal Obstacles for Water Contract.

The water contract, initially negotiated in June 2020, aimed to provide Westlands with permanent access to over one million acre-feet of water annually for agricultural purposes. This was facilitated by the Water Infrastructure Improvement for the Nation Act, an Obama-era law that allowed water contractors to convert existing water service contracts with the Bureau to repayment contracts. These repayment contracts required the settlement of all outstanding project construction cost obligations within three years after the contracts’ effective date. Once repaid, contractors would no longer be subject to certain acreage limitations and pricing provisions of federal reclamation law.

However, Westlands’ repeated attempts to validate its contract with the Bureau in 2019 and 2021 were unsuccessful, as the district failed to disclose how much it owed the federal agency. During the validation hearing in December 2019, there was scant evidence of estimates ranging from $200 million to $362 million. Peña affirmed that the contract was missing essential terms and was therefore uncertain, making it unenforceable. Even though Westlands renewed its motion for validation in September 2019, claiming to have paid the Bureau $209,436,667 in June 2020, Peña couldn’t reconcile this figure with the calculations presented in either version of the exhibit pertaining to the district’s financial obligations.

Controversy Over Water Contract.

The contract in question does not impact Westgate’s existing contract with the Bureau, which was finalized in 2020. This contract relies on the Central Valley Project, a federal network of waterways, dams, pumping stations, and hydropower plants that deliver water to Southern California from the northern part of the state. It provides water for approximately 30 million residents and irrigates the region’s agricultural hubs.

Critics have labeled the deal a “sweetheart deal” between the Trump administration and the Westlands Water District, claiming that it unfairly benefits major farm owners at the expense of California salmon and other fish species. Over the past three years, environmentalists, tribal activists, and fishing groups have been fighting in court to reverse the contract between the U.S. Bureau of Reclamation and Westlands, which grants the district permanent access to as much as 1.15 million acre-feet of water annually.

Environmental groups have criticized the deal, arguing that it surfaced when David Bernhardt, who had represented Westlands as a lawyer and lobbyist, was serving as Interior Secretary under President Trump. The groups are now celebrating a legal victory that they believe brings them closer to invalidating the contract.

The water involved in the dispute flows through the Central Valley Project, a federally operated system delivering water to farmlands from the Sacramento-San Joaquin River Delta. Environmentalists claim that the contract charges Westlands too little for the water, which they view as an enormous gift of public resources. They argue that the district should have been charged more for water that could have been used for environmental protection.

The significance of the recent ruling will depend on the response from the federal government. It gives the federal government the option to back out of the contract and renegotiate it, making the contract voidable. However, the Bureau of Reclamation has not indicated any plans to take this position and has continued delivering water under the contract.