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«© 2006 William Blomquist ABSTRACT Water resources must be governed before they can be managed, and the crafting of governance institutions is an ...»

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State legislative authorization was secured for creation of a "metropolitan water district." This new jurisdictional creature would be governed by a board composed of representatives of the participating local government units within its territory, where "participating" meant paying the costs of financing the district's operations -- which would initially be financed through bond sales, secured against the valuation of real property in the participating localities. Originally, the cities of Anaheim, Beverly Hills, Burbank, Colton, Glendale, Los Angeles, San Bernardino, San Marino, Santa Ana, and Santa Monica joined the district along with Pasadena. San Bernardino and Colton subsequently withdrew from the organization, but Compton, Fullerton, Long Beach, and Torrance took their places. In all, thirteen cities became "charter members" of the Metropolitan Water District of Southern California, the MWD. In September 1931, the MWD Board agreed to submit to voters in the thirteen cities a bond issue for the whopping Depression-era sum of $220 million. The bond issue passed in November 1931 by a combined margin of 5 to 1. Construction of MWD's Colorado River Aqueduct began in December 1932 and was completed in June 1941, for a total cost approximately 20 percent less than estimated (MWD 1962: 14).

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At considerable expense to its taxpayers, Pasadena had taken a number of actions for its own benefit and to the benefit of basin water conditions, including the water-spreading operations and the acquisition of supplemental water supplies from the San Gabriel River and then the Colorado River. Nevertheless, water levels at the city's wells continued to fall, dropping more than 100 feet between 1922 and 1937. Pasadena officials called together other known Raymond Basin producers, reviewed the published reports of the Division of Water Resources, as well as Pasadena's own information about the basin, and attempted to negotiate a pumping reduction on a cooperative rather than an adversarial basis. These efforts failed, and city officials contemplated legal action (Sopp 1943: 431;

Blackburn 1961: 3).

Pasadena officials had reached the limits of their willingness to act alone. The city reduced pumping somewhat when it began to receive additional supplies from the San Gabriel River in 1935. But to redress the overdraft on its own, Pasadena would have to cut its production by one-half and import substantially more expensive Colorado River water from MWD when available, while other basin users continued to meet all their needs with less expensive groundwater—a classic collective-action sacrifice Pasadena was unwilling to make.

Pasadena chose instead to initiate proceedings in Superior Court against the city of Alhambra and other major Raymond Basin water users. The action sought to adjudicate and quiet title to Pasadena's rights in the basin, and to enjoin the annual overdraft. The court directed the city to amend its complaint to name as defendants all entities in the basin pumping more than 100 acre-feet annually; there were 30.

The Significance of Courts with Equity Jurisdiction. Water users such as Pasadena found it advantageous to address their water problems through the California courts for a number of reasons. Court action could encompass all relevant participants, but only the relevant participants, in sorting out the dispute and resolving it authoritatively. In other words, through court action the water users could define the boundaries of the basin "community." Within that institutionally defined community, agreements could be negotiated and actions taken for the basin as a whole.

In the California court system at the time, any civil court could function as a court of equity as well as a court of law. Equity jurisprudence had broader discretionary rules for procedure and remedy and could be invoked for the protection of a right or for the redress or prevention of a wrong in circumstances where ordinary legal remedies (such as money damages) did not afford adequate relief. Equity jurisprudence was especially well suited to water rights conflicts because: (1) an ongoing relationship among the parties was implied, so compensation of damages could be seen as an inadequate remedy; and (2) it permitted the parties and the court to search beyond prevailing rules of law for a solution that would effect justice among the parties, even if that meant devising a new set of rules.

Equity jurisprudence was transported to the United States from England, where it had emerged as the body of law developed in a separate set of courts. Although separate equity courts were not maintained for long in the U.S., the capabilities to fashion equitable remedies were widely regarded as belonging to any court of general jurisdiction. In Ex parte Peterson, 253 U.S. 300 (1920), for instance, the U.S. Supreme Court stated: “Courts have, in the absence of prohibition, inherent power to provide themselves with the instruments required for the performance of their duties” which included the authority to appoint fact-finding referees, to issue injunctions to the parties in a case, require discovery of information and documents, etc.

Courts’ use of these powers in water resources disputes has enabled water users and other interested parties to develop information about basin conditions, negotiate rules allocating resource use,1 appointing watermaster entities to monitor users’ compliance with those rules, and compel fair sharing of the administrative costs of basin management. This role of courts as institutions through which individuals and organizations can craft authoritative rules—through which, in other words, they might even craft constitutions—differs substantially from a view of litigation as zero-sum combat or of judges as awarding a victory to one side and a loss to the other. In the words of Judge Leon Yankwich, who presided over the water resources case United States v. Fallbrook Public Utilities District, 109 F.Supp. 28 (1952): “It is the aim of litigation to achieve social peace.” (1958: 478) The exercise of equity jurisprudence is one of the means by which that aim is achieved.

The Raymond Basin Constitution. The Raymond Basin case City of Pasadena v. City of Alhambra et al., employed a common equity procedure, reference of factual matters to a Judge Leon Yankwich (Chief Judge of the United States District Court for the Southern District of California) presided over United States v. Fallbrook Public Utilities District, 109 F.Supp. 28 (1952). That case, an action to quiet title to water use rights in the Santa Margarita River, involved 6,000 defendants.

Clearly the information and negotiation task that lay ahead was daunting. Eight of the largest defendants participated in extensive pre-trial discovery actions, and the judge convened them as well as some other parties to try to resolve a number of questions of fact. Afterward Judge Yankwich wrote a law review article, “Crystallization of Issues by Pretrial: A Judge’s View.” He recalled, “After motions to dismiss were denied and a motion for separate trial as to two of the principal defendants and the States of California, which had intervened, was granted, I held a pretrial conference which extended over four days and resolved a good many matters” (Yankwich 1958: 472). Another commentator (Carter 1959: 409-410) recalled in greater detail the strategy the judge employed to drive the fact-finding process forward in that case. The pretrial conference yielded a stipulation of facts concerning the description of the Santa Margarita River watershed, and memoranda formulated and filed by the court governing several of the legal issues for trial. The obvious problem that remained was how to make procedures and agreements that had involved only a small number of the parties applicable to the thousands of others. The stipulating parties and the judge made the agreed facts the “default conditions” that would prevail unless one or more of the other parties could dislodge them. The United States filed an amended complaint on all parties, attached to which was a copy of the pretrial stipulation of undisputed facts as agreed to by the major defendants, and a note that an engineer familiar with the watershed would be prepared to testify and/or submit to cross-examination on the alleged undisputed facts. Any party could cross-examine or present evidence to contradict the alleged facts, but in the absence thereof the court would find the facts to be as stipulated (Carter 1959: 410).

court-appointed referee or special master. With the consent of the parties, the judge appointed the California Division of Water Resources to report on basin conditions, the parties’ histories of pumping from the basin, and other pertinent facts. The draft report stated that the safe yield for Raymond Basin as a whole was 21,900 acre-feet per year, but that actual withdrawals and claimed rights totaled 29,400 acre-feet, for a total overdraft of about 8,500 acre-feet per year. To remedy the situation, the draft report recommended limiting withdrawals to the 21,900 acre-foot safe yield and using imported water to meet demands beyond the safe yield.

As the referee's draft report circulated among the parties, most of them agreed to attempt to work out a settlement. Before litigation, failure to negotiate a settlement simply continued the status quo -- the pumping race. With litigation under way, if the parties failed to achieve a negotiated settlement, the court might adopt the referee’s report and recommendation or fashion some other remedy. For several parties, the range of possible outcomes extended from a complete loss of rights to a complete protection of rights. Most parties agreed to appoint a committee of seven attorneys and engineers to work out a stipulated agreement that could be presented to the court. It was completed early in 1943. After studying it, Pasadena and all but two other parties agreed to the stipulation, which they presented to the court in November 1943.

The stipulation provided (1) an admission by each of the parties that its taking of water from the basin had been continuous, uninterrupted, open, notorious, and under claim of right, and adverse to the claims of all others, and thus satisfied the requirements of a superior prescriptive right for each party as against all others; (2) an allocation of the basin's safe yield among the parties; (3) the declaration and protection of each party's right to its specific proportion of the basin safe yield; and (4) an arrangement for the exchange of pumping rights among the parties. The judge signed an order requiring the parties to the stipulation to abide by its terms during the pendency of the litigation, and another order appointing the Division of Water Resources to serve as monitor, or watermaster, for the stipulation. After more negotiation, a brief trial was held in midAt the end of 1944, the judge signed the judgment in the Raymond Basin case, adopting the stipulation worked out by the parties, limiting each party to pumping rights that together equaled the basin’s safe yield and appointing the Division of Water Resources permanently as the watermaster for the basin to report annually to the court on basin conditions and parties’ compliance with the judgment. The California Supreme Court later upheld the judgment on appeal.

The stipulation and judgment in Pasadena v. Alhambra completed a first phase of institution building in Raymond Basin. Although it certainly never would appear in the Census Bureau's Census of Governments, water users had constituted a governance structure for the basin through the adjudication process. They had established: their rights and duties in the basin, a monitor to observe and report upon their compliance with those duties, means of checking each other's behavior through the publication and circulation of the watermaster's annual reports, means of sanctioning each other's behavior for violations of the court's injunctions, a representative body of water users, a mechanism for financing the governance system, and, through the court's continuing jurisdiction, an institutionalized procedure for altering the governance system in response to changed conditions, new ideas, or dissatisfaction with its performance.

The Raymond Basin approach has had its detractors. There were criticisms of the expensive and time-consuming court reference procedure. (e.g., Krieger 1955: 910;

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