Supreme Court of California Supreme Court of California

Jorge E. Navarrete, Clerk and Executive Officer of the Court Jorge E. Navarrete, Clerk and Executive Officer of the Court
Electronically RECEIVED on 3/19/2024 4:30:23 PM Electronically FILED on 3/19/2024 by Biying Jia, Deputy Clerk

Supreme Court Case No. S__________

S284252
IN THE SUPREME COURT OF THE STATE OF
CALIFORNIA

MOJAVE PISTACHIOS, LLC, a California After a Published Opinion by the

limited liability company; and PAUL G. Court of Appeal, Fourth Appellate
NUGENT AND MARY E. NUGENT, District, Division Three, Appellate
Trustees of the Nugent Family Trust dated Case No. G062327
June 20, 2011,
Orange County Superior Court -
Petitioners, Lead Case No. 30-2021-01187589-
CU-WM-CXC
v.
[Consolidated Case No. 30-2021-
SUPERIOR COURT OF THE STATE OF 01188089-CU-WM-CXC; Related
CALIFORNIA, COUNTY OF ORANGE, Case No. 30-2021-01187275-CU-
OR-CJC]
Respondent.

INDIAN WELLS VALLEY Hon. William D. Claster

GROUNDWATER AUTHORITY, a Department: CX104
California joint powers authority; THE Telephone: (657) 622-5304
BOARD OF DIRECTORS OF THE INDIAN
WELLS VALLEY GROUNDWATER
AUTHORITY, a governing body,

Real Parties in Interest.

PETITION FOR REVIEW

BROWNSTEIN HYATT FARBER SCHRECK, LLP

*SCOTT S. SLATER, Bar No. 117317
sslater@bhfs.com
AMY M. STEINFELD, Bar No. 240175
asteinfeld@bhfs.com
ELISABETH L. ESPOSITO, Bar No. 300983
eesposito@bhfs.com
1021 Anacapa Street, 2nd Floor
Santa Barbara, California 93101
Telephone: 805.963.7000/Facsimile: 805.965.4333
Attorneys for Petitioners
 TABLE OF CONTENTS
Page(s)

I. ISSUES PRESENTED FOR REVIEW .................................7

II. WHY REVIEW SHOULD BE GRANTED ............................7
III. STATEMENT OF THE CASE ........................................... 12
A. Procedural Background and Court of Appeal
Opinion ...................................................................... 12
B. Petition for Rehearing .............................................. 14
C. Statement of Facts .................................................... 14
1. Petitioners have a vested overlying
property right in the native groundwater
they use for agriculture. .................................. 14
2. SGMA expressly protects and preserves
water rights. .................................................... 14
3. Real Party allocates Petitioners’ existing
agricultural use zero native groundwater
based on its determination of “inferior”
water rights. .................................................... 15
4. Petitioners file this action challenging
Real Party’s illegal allocation of native
groundwater. ................................................... 18
IV. LEGAL DISCUSSION ........................................................ 19
A. Unless the Supreme Court Clarifies What
Authority a GSA Has to Determine
Groundwater Rights, GSA’s Will Have
Unrestrained Power to Deprive Targeted Users
of Their Vested Rights .............................................. 19
1. Supreme Court review is necessary to
establish the limits of a GSA’s authority
under SGMA.................................................... 19
2. Real Party’s water rights determinations
were clearly wrong under California
common law..................................................... 22

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 B. The Supreme Court Must Clarify that the Pay
First Rule Does Not Apply to Pre-Payment
SGMA Fee Challenges and Does Not Shield
Non-Fee Agency Actions from Review ..................... 24
1. SGMA and the Pay First Rule ........................ 24
2. Petitioners’ relevant claims allege a
deprivation of property rights through the
illegal allocation of native groundwater,
not the Replenishment Fee. ............................. 26
C. The Supreme Court Must Clarify the Limits on
the Pay First Rule to Prevent Abuse. ...................... 30
1. Petitioner has no adequate remedy at law. .... 31
2. The Pay First Rule doctrine must yield to
constitutional claims. ...................................... 33
3. The Court should clarify that the Pay
First Rule does not apply when the
government targets a particular group of
citizens with unreasonably high fees to
prevent those citizens from challenging its
illegal conduct. ................................................ 36
V. CONCLUSION .................................................................... 40
VERIFICATION ........................................................................... 42
CERTIFICATE OF WORD COUNT ............................................ 43

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 TABLE OF AUTHORITIES
Page(s)
Cases
Antelope Valley Groundwater Cases
(2021) 62 Cal.App.5th 992 ........................................................ 22
Ardon v. City of Los Angeles
(2011) 52 Cal.4th 241 ................................................................ 27
Baldwin v. State of California
(1972) 6 Cal.3d 424 ................................................................... 27
Calfarm Ins. Co. v. Deukmejian
(1989) 48 Cal.3d 805 ............................................... 27, 28, 29, 30
Center for Biological Diversity v. County of San
Bernardino
(2016) 247 Cal.App.4th 326 .........................................................9
Chodos v. City of Los Angeles
(2011) 195 Cal.App.4th 675 ...................................................... 25
City of Anaheim v. Superior Court
(2009) 179 Cal.App.4th 825 ................................................ 17, 25
City of Barstow v. Mojave Water Agency
(2000) 23 Cal.4th 1233 ....................................................... passim
City of Santa Maria v. Adam
(2012) 211 Cal.App.4th 266 ...................................................... 33
County of Los Angeles v. Superior Court
(2008) 159 Cal.App.4th 353 ...................................................... 25
Dows v. City of Chicago
(1870) 78 U.S. 108 ............................................................... 31, 32
Dugan v. Rank
(1963) 372 U.S. 609 ................................................................... 35
Dunker v. Field & Tule Club
(1907) 6 Cal.App. 524.......................................................... 31, 32
Fall River Valley Irrigation Dist. v. Mt. Shasta Power
Corp.
(1927) 202 Cal. 56 ..................................................................... 34

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Flying Dutchman Park, Inc. v. City and County of
San Francisco
(2001) 93 Cal.App.4th 1129 .......................................... 31, 36, 37
Horn v. County of Ventura
(1979) 24 Cal.3d 605 ................................................................. 21
Hunsaker v. Kersh
(Utah S.C. 1999) 991 P.2d 67 ................................................... 31
Internat. Paper Co. v. U.S.
(1931) 282 U.S. 399 ................................................................... 35
Lungren v. Deukmejian
(1988) 45 Cal.3d 727 ................................................................. 25
Pa. Coal Co. v. Mahon
(1922) 260 U.S. 393 ................................................................... 34
People v. Shirokow
(1980) 26 Cal.3d 301 ................................................................. 10
People’s Advocate, Inc. v. Superior Court
(1986) 181 Cal.App.3d 316 ....................................................... 30
Reid v. City of San Diego
(2018) 24 Cal.App.5th 343 ........................................................ 25
Richardson v. Jefferson County, Ala.
(1996) 517 U.S. 793 ................................................................... 37
San Luis & Delta-Mendota Water Authority v. Locke
(E.D. Cal. 2010) 2010 WL 500455 ............................................ 31
Tehachapi-Cummings County Water Dist., v.
Armstrong
(1975) 49 Cal.App.3d 992 ......................................................... 23
U.S. v. Gerlach Live Stock Co.
(1950) 339 U.S. 725 ................................................................... 35
Water Replenishment Dist. of Southern California v.
City of Cerritos
(2013) 220 Cal.App.4th 1450 .................................................... 25
Western Oil & Gas Assn. v. State Bd. of Equalization
(1987) 44 Cal.3d 208 ............................................... 27, 33, 36, 37

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Constitutions
California Constitution, Article X, § 2 .......................................... 23
California Constitution, Article XIII, § 32.......................... 7, 17, 25
Statutes
Code of Civil Procedure
§ 452 ........................................................................................... 38
§ 830 et seq. ..................................................................................9
Water Code
§ 106 ..................................................................................... 22, 38
§ 10720.1(b) ......................................................................... 10, 15
§ 10720.5 ................................................................................ 9, 10
§ 10720.5(b) ......................................................................... 15, 19
§ 10721(v) .................................................................................. 14
§ 10721(w) ........................................................................... 15, 16
§ 10723 ....................................................................................... 15
§ 10724 ....................................................................................... 15
§ 10726.6(c) .......................................................................... 24, 25
§ 10726.6(d) ............................................................................... 24
§ 10726.6(e) ............................................................................... 24
§ 10726.8(b) ............................................................................... 10
§ 10727.2 .................................................................................... 15
§ 10738 ....................................................................................... 10
Court Rules
California Rules of Court
Rule 8.500(b)(l) ...................................................................... 7, 25
Rule 8.500(c)(2) ......................................................................... 14

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I. ISSUES PRESENTED FOR REVIEW

This case presents the following novel issues for review:

1. Under the 2014 Sustainable Groundwater
Management Act (“SGMA”), may a groundwater sustainability
agency (“GSA”) determine law and facts to conclude that an
overlying landowners’ correlative water rights are “inferior” to
others and allocate them no (zero) groundwater?
2. Does the “pay first, litigate later” rule, California
Constitution, article XIII, section 32 (“Pay First Rule”) apply to
SGMA fees (or extend to non-fee provisions separately included in
the local agency fee ordinance)?
3. If so, does the Pay First Rule immunize local agencies
from constitutional takings claims where an agency establishes a
usurious fee designed to bar challenge?

II. WHY REVIEW SHOULD BE GRANTED

This Court may review a Court of Appeal decision “[w]hen
necessary to secure uniformity of decision or to settle an
important question of law.” (Cal. Rules of Court, rule 8.500(b)(l).)
This case presents this Court with the opportunity to course
correct issues of fundamental constitutional importance to the
sustainable management of one of California’s most precious
resources—groundwater—which provides roughly half of this
State’s water supplies. As the Court of Appeal expressly
recognized,
The issues raised in this writ proceeding are of
widespread interest and importance . . . [and] may
impact thousands of water users throughout the state
for years to come. Whether the “pay first” rule applies

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 in litigation challenging SGMA fees is a novel
question, the answer to which could impact
groundwater extractors throughout the state; it has
yet to be addressed by any appellate decision.

(Exh. A [Opinion], p. 19.)

We request that this Court clarify and provide guidance to

lower courts on the following matters of first impression: a) the
separation of powers between GSAs acting under SGMA which
requires the administration of groundwater to be consistent with
common law priorities and the courts’ exclusive jurisdiction to
determine water rights; and b) the limits of public agency
attempts to shield the exercise of their authority from judicial
review through the Pay First Rule—including whether this
common law doctrine prevents state and federal constitutional
claims from proceeding at the demurrer stage.
This case presents this Court with the first opportunity to
interpret key provisions of SGMA and to prevent the misuse of
SGMA to unlawfully take vested water rights in violation of the
California and United States Constitutions. This Court’s
guidance is necessary to ensure that overlying water rights
holders, otherwise entitled to recognition, priority and protection
under the holding of this Court in City of Barstow v. Mojave
Water Agency (2000) 23 Cal.4th 1233, 1253 (“Barstow”), may
challenge an administrative action that (1) allocates them zero
groundwater; (2) establishes an extortionate fee designed to bar
challenge; and (3) bankrupts their businesses as a condition of
litigating their claims.

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 Here, the circumstances weigh in favor of review. GSAs
must develop funding mechanisms to implement their SGMA
plans. To the extent those funding efforts are predicated on the
GSA making a determination of water rights as the basis for the
imposition of the fees, constitutionally grounded boundaries are
needed to prevent a multiplicity of proceedings in other cases.
First, review is needed to address the powers of a GSA to
impose a groundwater allotment based on the GSA’s own water
rights determination contrary to common law. If an allocation
system must be implemented, then the GSA must be clearly
obligated to apply the correct legal principles to that allocation
regime. (See Barstow, supra, 23 Cal.4th.) This is an issue of first
impression and of vital importance to the successful
implementation of SGMA throughout the state.
When the Legislature enacted SGMA, it confirmed that the
judiciary alone has the power to determine water rights and
immediately adopted new streamlined adjudication procedures.
(Wat. Code, § 10720.5; see Code Civ. Proc., § 830 et seq.)
Petitioners, as overlying owners beneficially using groundwater
on their land to irrigate pistachios, have a vested right to pump
native groundwater from the Indian Wells Valley Groundwater
Basin (“Basin”) that lies beneath their land, subject only to the
requirement that the water be beneficially used. (See Center for
Biological Diversity v. County of San Bernardino (2016) 247
Cal.App.4th 326, 336.) Having shown ownership, extraction, and
beneficial use of the groundwater, Petitioners established their
overlying rights. (Barstow, supra, 23 Cal.4th at 1253-54.) These

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rights have been established and governed by hundreds of years
of common law directives, and Constitutional and statutory
provisions. In recognition of the courts’ long-standing exclusive
jurisdiction over groundwater rights, the Legislature expressly
prohibited GSA’s from determining water rights. (Wat. Code, §§
10720.5, 10720.1(b), 10726.8(b), 10738.) A GSA must not be
allowed to attempt to re-allocate groundwater based on principles
that do not reflect long-standing principles developed by the
courts.
In this case, as a result of the GSA’s improper water rights
determination, the GSA re-allocated Petitioners’ entire
correlative share and priority right to native groundwater to
others. As this Court has repeatedly noted, all water rights are
usufructuary real property rights, with an established priority
among competing claimants. (See People v. Shirokow (1980) 26
Cal.3d 301, 307-08.) The GSA’s actions first established an
allocation system entirely inconsistent with the priority system
articulated in Barstow, and then the GSA further conditioned use
through the imposition of a usurious fee.
Second, review is needed because the Court of Appeal
drastically expanded the Pay First Rule to prevent judicial
challenges to illegal government conduct—in this case, conduct
that is distinct and severable from the imposition of the fee.
Under California law, Petitioners hold a vested, first priority real
property right in the native groundwater that they use for
agriculture. Real Party, the local GSA, deprived Petitioners of
that vested property right by allotting 100% of the native

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groundwater to other users in violation of state and federal law
via an allocation system termed the “Annual Pumping
Allocations” by Real Party’s Groundwater Sustainability Plan
(“GSP”). Despite the deprivation of property rights through this
ultra vires allocation of native groundwater, the Court of Appeal
determined that the Pay First Rule still applies because even if
Petitioners’ legal challenge to the allocation was successful and
resulted in access to the native groundwater, the net result would
be Petitioners paying less in fees to the GSA. In other words, the
Court of Appeal determined that the Pay First Rule prohibits
any judicial challenge if the illegal government conduct could
have some indirect impact on the payment of a fee. This Court’s
review is needed because this unprecedented expansion of the
Pay First Rule prevents the judicial review of legitimate
constitutional claims without furthering the purpose of the
doctrine.
Finally, as a matter of first impression, review is needed to
clarify that the Pay First Rule does not apply when the
government targets a specific group of citizens with illegal
conduct, then imposes an unreasonably high fee to intentionally
prevent those citizens from challenging the illegal conduct in
court. This Court has previously recognized several exceptions to
the Pay First Rule when needed to protect due process and other
constitutional safeguards. As a natural extension of these prior
decisions, this Court should confirm that the government cannot
shield itself from judicial scrutiny by intentionally imposing an
unreasonably high fee that it knows the taxpayer could never

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afford. This exception is particularly important here because the
illegal conduct being challenged is the taking of vested real
property rights without just compensation that will result in the
death of 215,000 mature pistachio trees and the total elimination
of all beneficial use of Petitioners’ property.
These circumstances weigh in favor of review. The public
has an interest in prompt resolution of this dispute because there
are over 260 GSAs statewide currently implementing SGMA—
developing groundwater management actions and adopting fees
to fund those actions. If accomplished without giving proper
respect to the real property rights being impacted, a multiplicity
of disputes will be triggered. This will further delay the
successful management of groundwater resources.

III. STATEMENT OF THE CASE

A. Procedural Background and Court of Appeal

Opinion

On December 11, 2022, Real Party demurred to four of

Petitioners’ Mojave Pistachios, LLC and Paul G. Nugent and
Mary E. Nugent, Trustees of the Nugent Family Trust dated
June 20, 2011 (“Petitioners”) causes of action—which challenge
Real Party’s Annual Pumping Allocations and plead Petitioners’
constitutional taking claims. Real Party argued the claims fail
under the Pay First Rule, which requires taxpayers to pay the
disputed tax before challenging it in court. Although Petitioners
are challenging the illegal allocation of native groundwater, and
not the Replenishment Fee, the trial court sustained the
demurrer after concluding that the Pay First Rule prohibited the
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claims. (Exh. A, pp. 17-18; 9PA 4059 1.) Thereafter, Petitioners
filed a writ of mandate with the Court of Appeal. (Exh. A, p. 18.)
On February 8, 2024, in a published opinion, the Court of
Appeal held that the Pay First Rule prohibits the relevant claims
(“Opinion”). (Exh. A.) The Court of Appeal held the doctrine
applies because Petitioners’ challenge to the illegal allocation of
native groundwater is part of the fee ordinance. In other words,
the Court of Appeal expanded the Pay First Rule to include
challenges to any illegal government conduct that has some
indirect impact on the imposition of fees. (Id., pp. 28-33.) With
respect to the constitutional taking claims, the Court of Appeal
questioned whether the takings clause even applies to
appurtenant water rights. (Id., pp. 34-35, fn. 22.) It then held
that Petitioners failed to allege a regulatory taking because
Petitioners’ only economic harm was the fee (not the GSP), which
it had not paid, and that Petitioners failed to allege a physical
taking because Petitioners are not physically prevented from
extracting water. (Id., p. 35.) The Opinion has deprived
Petitioners of an opportunity to plead claims that represent the
very essence of their case.
As discussed below, review by this Court is needed because
the Court of Appeal committed legal error on these issues of first
impression and widespread importance.

1Volume 9 of Petitioners’ Appendix in Support of Writ Petition,

at p. 4059. Subsequent references are formatted similarly.
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 B. Petition for Rehearing

On February 23, 2024, Petitioners timely filed a Petition for

Rehearing in the Court of Appeal challenging numerous
misstatements of fact and law in the Opinion, which should
not be taken as true by this Court (Cal. Rules of Court, rule
8.500(c)(2)). (See 2/23/2024 Petition for Rehearing.) The Petition
for Rearing was denied with no explanation or analysis on March
4, 2024. (See 3/4/2024 Order Denying Petition for Rehearing.)

C. Statement of Facts

1. Petitioners have a vested overlying

property right in the native groundwater they use for
agriculture.

Petitioners own approximately 1,600 acres of pistachio

trees overlying the Basin. (Exh. A, p. 6.) The land was purchased
and cultivated with pistachio trees using groundwater as their
sole source of supply, which are now mature with a total
commercial life expectancy of at least 75 years. (Id., p. 7.) As
discussed in more detail below, Petitioners have a vested
overlying water right (real property right appurtenant to their
overlying land) to pump native groundwater from the Basin for
use on this land. (Ibid.) Before 2020, Petitioners’ overlying use of
this native groundwater was not subject to governmental fee or
regulation. (Id., p. 13.)

2. SGMA expressly protects and preserves

water rights.

In 2014, California enacted SGMA to bring groundwater in

California under “sustainable management” by 2040. (Wat. Code,

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§§ 10721(v)-(w), 10727.2.) SGMA authorizes the creation of GSAs
to develop and create GSPs to accomplish SGMA’s goal of
sustainable management. (Id., §§ 10723-10724.)
While SGMA envisions local agency management of basins,
the Legislature specifically stated its intent was to “preserve the
security of water rights in the state to the greatest extent
possible consistent with the sustainable management of
groundwater.” (Id., § 10720.1(b).) As such, SGMA expressly
prohibits GSAs from determining water rights, which is
exclusively reserved to the courts. (Id., §§ 10720.5(b) [“Nothing in
[SGMA], or in any groundwater management plan adopted
pursuant to this part, determines or alters surface water rights or
groundwater rights under common law or any provision of law
that determines or grants surface water rights.”]; 10726.8(b)
[“Nothing in [SGMA] shall be construed as authorizing a local
agency to make a binding determination of the water rights of
any person or entity, or to impose fees or regulatory requirements
on activities outside the boundaries of the local agency.”].)
3. Real Party allocates Petitioners’ existing
agricultural use zero native groundwater based on its
determination of “inferior” water rights.

Real Party Indian Wells Valley Groundwater Authority

(“Real Party”) is a California joint powers authority established
to serve as the GSA for the Basin, tasked with developing a GSP
that describes the framework toward a 20-year management goal
as required by SGMA. (Exh. A, p. 9.)
Under SGMA, Real Party was required to manage the
Basin via a “sustainable yield,” defined as the “maximum

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quantity of water, calculated over a base period representative of
long-term conditions in the basin, and including any temporary
surplus, that can be withdrawn annually from a groundwater
supply without causing an undesirable result.” (Wat. Code, §
10721(w).) On July 16, 2020, Real Party adopted the Sustainable
Yield Report, finding that the Basin’s entire sustainable yield
(7,650 acre feet per year (AFY)) is subject to the United States
Navy’s Federal Reserve claim, despite the right’s inchoate status,
with the Navy asserting it only needed a maximum of 2,041 AF.
(Exh. A, p. 11, fn. 9; 2PA 1140, 1142, 1148–49.) Thus, the balance
is available for beneficial use by others.
Real Party determined that the water the Navy did not use
would be “transferred” to non-federal entities as a “carryover”
extraction. In order to allocate this native groundwater, Real
Party determined that certain pumpers have “superior” water
rights over Petitioners’ “inferior” water rights. (2PA 916–17; 7PA
3350.) Based on this determination of “superior” and “inferior”
water rights, Real Party adopted Ordinance No. 03-20, which
allocates 100% of the native groundwater to public pumpers—
including Real Party’s board members—leaving Petitioners with
zero native groundwater. (Exh. A, p. 12; 2PA 1151–53.) For
Petitioners, one of the few parties in the entire Basin that were
not included in the Annual Pumping Allocations or provided a
temporary “transient pool” allocation, Real Party imposed a
historically high “Replenishment Fee” of $2,130 per AF, most of
which would be used to purchase non-native water, which would
have to be imported to the Basin by constructing a lengthy

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pipeline. 2 (Ibid.) Paying for this imported water at such an
unreasonably high rate makes Petitioners’ farming operations
cost prohibitive, as Real Party is seeking approximately $10
million in fee payments and penalties for 2021, alone. (1/5/2022
Complaint for Preliminary and Permanent Injunction etc.,
Orange County Sup. Ct. Case No. 30-2022-01239479.) Similar
annual amounts for 2022-2024 are accruing.
Incredibly, Real Party admitted that driving agriculture
out of the Basin was its intent. (7PA 3425.) It expressly
acknowledged that its zero allocation of native groundwater and
historically high Replenishment Fee for imported non-native
water would mean “the likely cessation of large-scale agricultural
uses in the Basin due to the increased cost for surface water….”
(Ibid.) In other words, Real Party allocated Petitioners zero
native groundwater knowing that it would destroy all economic
and beneficial use of Petitioners’ property. As projected in Real
Party’s GSP, farming would be eradicated by 2040:

2 The policy behind article XIII, section 32 is to ensure that

revenue collection continues during litigation so essential public
services “are not unnecessarily interrupted.” (City of Anaheim v.
Superior Court (2009) 179 Cal.App.4th 825, 827.) Here, no
essential services are at issue—Real Party admits it has no real
plans to utilize the fee funds—no concrete cost estimates for the
future importation of water, no plans to convey that water, and
no plans for pipeline construction. (7PA 3460-61, 3476-78.)
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(7PA 3291.)
4. Petitioners file this action challenging
Real Party’s illegal allocation of native groundwater.

In this case, Petitioners are challenging Real Party’s

allocation of native groundwater on several grounds. Relevant
here, Petitioners’ fifth cause of action in their Third Amended
Complaint (“TAC”) alleges that the Annual Pumping Allocations
violated SGMA because they were based on Real Party’s
determination of priority water rights, which is expressly
prohibited under SGMA (“COA 5”). (6PA 3023-27.) Petitioners
further allege that Real Party violated California common law by,
among other things, disregarding their first priority overlying
water rights when allocating them zero native groundwater. (Id.,
pp. 3024, 3027.) Petitioners’ ninth, tenth and eleventh causes of
action allege that Real Party’s allocation of zero native
groundwater constitutes a taking of property rights without just
compensation in violation of the United States and California
Constitutions (“COAs 9-11”). (Id., pp. 3033-37.)

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IV. LEGAL DISCUSSION

A. Unless the Supreme Court Clarifies What

Authority a GSA Has to Determine Groundwater Rights,
GSA’s Will Have Unrestrained Power to Deprive Targeted
Users of Their Vested Rights

In reviewing whether the Pay First Rule applies to

Petitioners’ four causes of actions, it must first be noted that
Petitioners’ underlying claims arise from Real Party’s clear
violations of SGMA, established common law, and the California
and federal constitutions. Real Party’s illegal conduct, which was
specifically targeted at agricultural pumpers, underscores the
absurdity of allowing agencies like Real Party to intentionally
impose irrationally high fees to escape judicial scrutiny under the
Pay First Rule. If the Opinion stands, for the next few years
GSAs will have free range to target landowners by unlawfully
determining water rights within fee ordinances in abject defiance
of SGMA and groundwater law—because they can.

1. Supreme Court review is necessary to

establish the limits of a GSA’s authority under SGMA.

As the Court of Appeal correctly recognized, “SGMA

specifies that it does not modify rights to use groundwater, and it
expressly prohibits groundwater sustainability plans from
determining water rights.” (Exh. A, pp. 8-9 [emphasis added]; see
also Wat. Code, §§ 10720.5(b); 10726.8(b); 10720.1(b) [“It is the
intent of the Legislature to preserve the security of water rights
in the state to the greatest extent possible….”].)

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 Barstow rejected a trial court order that failed to honor the
common law priority for overlying landowners in an adjudication
just as the GSA did here. (Barstow, supra, 23 Cal.4th at 1253-54.)
The burden to prove prescription falls on a claimant to prove all
elements by clear and convincing evidence; that is, it isn’t the
overlying owners’ burden to prove the negative. (Id. at 1254 [“No
precedent exists for requiring an overlying user to file an action
to protect its right to pump groundwater.”].)
Instead of following Barstow, the GSA determined that
overlying owners’ rights were diminished by prescription: a
uniquely judicial question of law and fact, requiring proof and
subject to affirmative defenses. It is undisputed that Real Party
improperly determined water rights when adopting the Annual
Pumping Allocations. Indeed, the whole basis for Real Party’s
allocation of native groundwater was its determination of which
parties had “superior” and “inferior” water rights. As it expressly
stated in its GSP and as pled by Petitioners, Real Party
determined that the parties receiving an allocation of native
groundwater—including Real Party’s Board members—have
“superior” water rights to Petitioner:

• “The beneficial uses of other groundwater users,

including agricultural and industrial users, will
subsequently be evaluated based on water rights
priorities…." (2PA 917 [emphasis added]; 6PA
2961, 2966 [TAC].)

• “[T]he City and Kern County overlying

groundwater production rights are superior to
all other overlying rights because public entity

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 rights may not be prescribed against.” (2PA 916
[emphasis added]; 6PA 2961, 2966 [TAC].)

• “The IWVGA recognizes that the safe yield is

significantly lower than current pumping and some
groundwater pumpers with inferior rights will not
be granted any Annual Pumping Allocations.” (7PA
3350 [emphasis added]; 6PA 2966-67 [TAC].)

Based on its determination of “superior” and “inferior”

water rights, Real Party ordered that farmers would not be
allocated any native groundwater. (7PA 3453.) Because the
Annual Pumping Allocations are expressly based on Real Party’s
improper determination of “superior” and “inferior” water rights,
Real Party clearly violated SGMA when adopting the Annual
Pumping Allocations.

Further, the Opinion ignored the crux of Petitioners’ claim,

which is that GSAs are not legally empowered to disregard the
directives of SGMA to protect overlying rights and instead
allocate no groundwater to a pre-existing agriculture use because
it determined Petitioners had lost all their water rights by
prescription, without the due process and transparency afforded
by an adjudicatory proceeding. This type of governmental action
violates due process principles by depriving landowners of a
significant property interest without notice, fact finding, or an
opportunity to be heard. (Horn v. County of Ventura (1979) 24
Cal.3d 605, 612.) Supreme Court review is needed to address the
cornerstone legal question here: Whether it is permissible for a
GSA to adopt allocations implementing a GSP that are designed
to eliminate agriculture and give an overlying owner with an

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existing beneficial use a zero allocation of native groundwater.

2. Real Party’s water rights determinations

were clearly wrong under California common law.

In addition to unlawfully determining water rights, Real

Party’s priority determinations were also clearly wrong under
California common law. 3 Under California law, landowners have
“overlying rights to native ground water for reasonable beneficial
uses on their overlying land,” including “irrigation for
agriculture.” (Barstow, supra, 23 Cal.4th at 1247; Wat. Code, §
106.) This overlying right vests by operation of law through the
pumping of water. (Barstow, supra, 23 Cal.4th at 1253.)
As a matter of law, overlying users have a first priority
property right to the native groundwater beneath their property
that is used for beneficial purposes. (Antelope Valley
Groundwater Cases (2021) 62 Cal.App.5th 992, 1022 [“First
priority goes to the landowner whose property overlies the
groundwater.”]; Barstow, supra, 23 Cal.4th at 1240 [a landowner
“with overlying rights has rights superior to that of other persons
who lack legal priority.”] [emphasis added].) For example, in the
event of an overdraft (more groundwater is being used in the
basin than can be replenished), “overlying users have priority
over appropriative users.” (Barstow, supra, 23 Cal.4th at 1253
[emphasis added].) When the water basin contains multiple

3Real Party’s complete misapplication of established California

water law is exactly why SGMA prohibits GSAs from
determining water rights.
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overlying users accessing the same native groundwater and the
supply is insufficient, “each is limited to his proportionate fair
share of the total amount available based upon his reasonable
need.” (Tehachapi-Cummings County Water Dist. v. Armstrong
(1975) 49 Cal.App.3d 992, 1001.) In other words, each overlying
user has equal priority to the native groundwater needed for its
reasonable use. (Ibid.) Any effort to allocate native groundwater
that fails to recognize and protect an overlying user’s rights is
invalid as a matter of law. (Barstow, supra, 23 Cal.4th at 1253-
54.)
Here, Petitioners’ complaint alleges—and for purposes of a
demurrer those allegations must be taken as true—that it has a
prior and paramount overlying water right. As such, the Annual
Pumping Allocations clearly violate California common law by
using the administrative process to give certain users priority
they are not entitled to under California law and giving other
users zero access to the resource. Further, Real Party allocated
water among competing claims without any of the procedural
protections provided by a court, including an impartial
decisionmaker—where property rights are at risk—rather than
acting as an entity devoted to maximizing the beneficial use of
water from the Basin as is constitutionally required. (Cal. Const.,
art. X, § 2.)

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 B. The Supreme Court Must Clarify that the Pay
First Rule Does Not Apply to Pre-Payment SGMA Fee
Challenges and Does Not Shield Non-Fee Agency Actions
from Review

The Court of Appeal determined that Petitioners’ claim

challenging the Annual Pumping Allocations (COA 5) and its
constitutional taking claims (COAs 9-11) failed under the Pay
First Rule because the Real Party adopted the Annual Pumping
Allocations in a SGMA fee ordinance. (Exh. A, pp. 28-36.) This
unprecedented expansion of the Pay First Rule requires review
by this Court for several reasons.
1. SGMA and the Pay First Rule

Under SGMA, “actions by a [GSA] are subject to judicial

review.” (Wat. Code, § 10726.6(e).) Water Code section 10726.6(c)
expressly provides a limited, 180-day window for a prepayment
judicial remedy to challenge a GSA’s fee ordinance. (Id. [“Any
judicial action or proceeding to attack, review, set aside, void, or
annul the ordinance or resolution imposing a new, or increasing
an existing, fee . . . shall be commenced within 180 days following
the adoption of the ordinance or resolution.”].) Beyond that 180-
day window, SGMA also provides for a post-deprivation judicial
remedy in Water Code section 10726.6(d). When challenging a fee
imposed by a GSA, a person “may pay a fee . . . under protest and
bring an action against the governing body in the superior court
to recover any money that the governing body refuses to refund.”
(Id., subd. (d).) As a matter of first impression, the Court of
Appeal determined that Subdivision (d)’s “pay under protest”

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language extends the Pay First Rule to all legal challenges of fee
ordinances imposed by a GSA. (Exh. A, pp. 31-33.)
This reading of the statute is in tension with federal and
state precedent recognizing that: “the [pay first rule] does not
apply where . . . the [agency] has specifically provided a
prepayment remedy.” (Reid v. City of San Diego (2018) 24
Cal.App.5th 343, 357 (“Reid”).) The limited 180-day period to
challenge the imposition of a SGMA fee ordinance under Section
10726.6(c) is exactly the type of prepayment remedy discussed in
Reid. Thus, the Court of Appeal erred in reading section
10726.6(c) out of SGMA. (Lungren v. Deukmejian (1988) 45
Cal.3d 727, 735 [any interpretation that renders a statutory
provision nugatory must be avoided].)
Second, there is a split in authority among divisions of the
Court of Appeal on whether the Pay First Rule extends to local
agencies. Several Court of Appeal decisions have concluded that
it does not extend to local agencies because its plain language
states that it only applies to the “State or any officer thereof.”
(City of Anaheim, supra, 179 Cal.App.4th at 830); County of Los
Angeles v. Superior Court (2008) 159 Cal.App.4th 353, 363, fn. 6.)
Other Court of Appeal decisions have reached the opposite
conclusion. (Water Replenishment Dist. of Southern California v.
City of Cerritos (2013) 220 Cal.App.4th 1450, 1466-68; Chodos v.
City of Los Angeles (2011) 195 Cal.App.4th 675, 680.) Given this
split in authority, review by this Court is needed to “secure
uniformity” on the scope of article XIII, section 32 and whether it
applies to a GSA. (Cal. Rules of Court, rule 8.500(b)(l).)

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 2. Petitioners’ relevant claims allege a
deprivation of property rights through the illegal
allocation of native groundwater, not the Replenishment
Fee.

Whether or not the Pay First Rule applies to all SGMA fee
challenges is irrelevant because Petitioners are not challenging
the fee. Thus, review by this Court is needed to resolve an issue
of first impression on whether SGMA’s permissive “pay under
protest” language extends the Pay First Rule to any judicial
challenge of a GSA’s illegal conduct, even when the plaintiff is
not challenging the fee itself.
The TAC challenged illegal conduct by Real Party that was
separate from the imposition of a fee. Specifically, the TAC
alleges a deprivation of property rights through the Annual
Pumping Allocations, which allocate free native groundwater
to certain overlying users. (6PA 3023-27 [TAC].) As discussed
above, the TAC alleges that this allocation of groundwater is
illegal because: (1) it is based on Real Party’s determination of
priority water rights, which is expressly prohibited by SGMA; (2)
it violates California common law by disregarding Petitioners’
first priority overlying water rights and disproportionately
allocating native groundwater to only a few overlying users; and
(3) it violates the takings clause by interfering with Petitioners’
vested overlying water rights without just compensation. (Id., pp.
3023-27, 3033-37.) In other words, the conduct being challenged
is the allocation of native groundwater, not the imposition of a
fee.

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 Even though the TAC only attacks Real Party’s illegal
allocation of native groundwater, the Court of Appeal determined
that the Pay First Rule still prohibits the claims. (Exh. A, pp. 31-
33.) The Court of Appeal reasoned that the Pay First Rule applies
because Petitioners’ challenge to the illegal allocation of water
could ultimately result in Petitioners paying less in fees. (Id., p.
32.) In other words, the Court of Appeal expanded the Pay First
Rule to protect any illegal government conduct that could have
some indirect impact on the collection of a fee. (Id., p. 30.) Review
by this Court is needed because this unprecedented expansion of
the Pay First Rule directly conflicts with this Court’s prior
decisions. (Ardon v. City of Los Angeles (2011) 52 Cal.4th 241,
251-52; Western Oil & Gas Assn. v. State Bd. of Equalization
(1987) 44 Cal.3d 208, 213 (“Western Oil”); see also Baldwin v.
State of California (1972) 6 Cal.3d 424, 438 [where a “provision is
of constitutional stature, it overrides the statutory immunity
under [Gov. Code] section 830.6”].)
This Court has been clear that non-tax portions of a tax
ordinance are subject to judicial review, notwithstanding the Pay
First Rule, if they are “grammatically, functionally, and
volitionally separable.” (Calfarm Ins. Co. v. Deukmejian (1989) 48
Cal.3d 805, 821 (“Calfarm”).) Without actually applying this test,
the Court of Appeal summarily concluded that the Annual
Pumping Allocations are not severable from the Replenishment
Fee simply because both appear under the same heading of
Ordinance No. 03-20. (Exh. A, p. 33.) But appearing under the
same heading is not the test from Calfarm. When the Calfarm

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test is correctly applied, the Annual Pumping Allocations are
clearly severable.
A non-tax subdivision is grammatically severable if it
“constitutes a distinct and separate provision . . . which can be
removed as a whole without affecting the wording of any other
provision.” (Calfarm, supra, 48 Cal.3d at 822.) In Calfarm, this
Court held that a provision contained in Proposition 103—an
insurance reform measure—illegally precluded rate adjustments
that were necessary to the insurers but which were severable
from the remainder of the initiative. (Ibid.) In reaching this
decision, this Court found that the invalid provision was
severable from the remainder of the initiative even though the
severance changed the way in which rates would be calculated
under the remaining provisions (id., pp. 825-26), and despite the
removal of the invalid provision potentially costing the state
treasury $125 million (id., pp. 840-41).
Here, the Annual Pumping Allocations and the
Replenishment Fee are clearly severable.
Section 3 of Ordinance 03-20 4 contains three paragraphs.

4Ordinance No. 03-20 contains a severability clause stating:

“Should any provision of this Ordinance, or its application, be
determined . . . [to be] invalid, that determination shall have no
effect on any other provision of this Ordinance and to that end,
the provisions hereof are severable.” (7PA 3454 [§ 9].)
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(2PA 1152.) The first paragraph establishes the Replenishment
Fee that applies to “all groundwater extractions.” (Ibid.) The
second and third paragraphs establish the illegal Annual
Pumping Allocations that allow certain users to pump certain
amounts of groundwater for free. (Ibid.) Deleting the illegal
second and third paragraphs would leave the first paragraph
entirely intact. In other words, even without the illegal
allocations, the first paragraph would work exactly the same with
“all groundwater extractions from, and within the Basin, with the
exception of Federal and De Minimus extractions,” being “subject
to measurement and the payment of Basin Replenishment Fee of
$2,130.00 per acre foot, or portion thereof, of groundwater
extraction.” And like in Calfarm, where it did not matter that
severing the invalid provision changed the way rates would be
calculated under the remaining provisions, it does not matter
that severing the illegal allocations would subject more users to
the Replenishment Fee. (Calfarm, supra, 48 Cal.3d at 825-26.)

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Because removing the illegal allocations does not “affect[] the
wording of any other provision,” it is grammatically severable.
(Id., p. 822 [emphasis added].)
A subdivision is functionally severable if the remaining
portions of the ordinance are “capable of independent application”
and “separate enforcement.” (People’s Advocate, Inc. v. Superior
Court (1986) 181 Cal.App.3d 316, 331-32.) The allocation
paragraphs in Ordinance 03-20 are functionally severable
because the fee provisions would continue to operate
notwithstanding the deletion of the allocations.
Because the Annual Pumping Allocations are severable
from the Replenishment Fee in Ordinance No. 03-20, the Pay
First Rule does not prohibit the Petitioners’ challenge to the
illegal allocations. By concluding otherwise, the Court of Appeal
improperly expanded the Pay First Rule to an unprecedented
place where any illegal government conduct is shielded from
judicial challenge simply because it might have some indirect
impact on the collection of a fee. Thus, review by this Court is
appropriate.

C. The Supreme Court Must Clarify the Limits on

the Pay First Rule to Prevent Abuse.

This Court has recognized several exceptions to the Pay

First Rule. As discussed below, even if the doctrine applies to
Petitioners’ claims, the Court of Appeal erred by not applying any
exceptions and Supreme Court review is needed to establish
limits under these and similar facts.

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 1. Petitioner has no adequate remedy at law.

An exception to the Pay First Rule arises when the

taxpayer has no adequate remedy at law. (Flying Dutchman
Park, Inc. v. City and County of San Francisco (2001) 93
Cal.App.4th 1129, 1139-40.) A taxpayer lacks an adequate
remedy at law when “enforcement of the tax would … produce
irreparable injury, or where the property is real estate, throw
a cloud upon the title of the complainant. (Dows v. City of
Chicago (1870) 78 U.S. 108, 109 [emphasis added].) For example,
irreparable injury can include “irretrievable resource losses
(permanent crops, fallowed lands, destruction of family and
entity farming businesses).” (San Luis & Delta-Mendota Water
Authority v. Locke (E.D. Cal. 2010) 2010 WL 500455, at 6; see
also Hunsaker v. Kersh (Utah S.C. 1999) 991 P.2d 67, 70 [“Trees,
in particular, might take many years to replace. Loss of
agricultural, ornamental, and shade value could be
fundamentally irreparable”].) An injury is also irreparable when
it consists of “a serious change of, or is destructive to, the
property it affects, either physically or in the character in which
it has been held and enjoyed [and] the property [has] some
peculiar quality or use such that its pecuniary value . . . will not
fairly recompense the owner for the loss of it.” (Dunker v. Field &
Tule Club (1907) 6 Cal.App. 524, 529–30 [italics omitted].)
Petitioners will have no adequate remedy at law if the Pay
First Rule is applied. Indeed, Petitioners will suffer irreparable
injury through the loss of all beneficial use of their property,
including the death of 215,000 mature pistachio trees. (6PA 3035-

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36 [TAC].) This constitutes “a serious change of [and is]
destructive to . . . the character in which [Petitioners’ property]
has been held and enjoyed.” (Dunker, supra, 6 Cal.App. at 529–
30.) Moreover, by improperly determining that Petitioners’ first
priority overlying rights are “inferior” to other overlying users,
Real Party has “thrown a cloud upon the title” of Petitioners’
property. (Dows, supra, 78 U.S. at 109.)
Paying under protest and suing for a refund also does not
provide Petitioners an adequate remedy for the irreparable harm
caused by Real Party’s illegal allocations, both because (1) Real
Party intentionally established such an irrationally high fee that
Petitioners could never pay it, and (2) because it is highly
unlikely that a refund would even be possible. Indeed, Real Party
has not even enacted any refund procedures for Petitioners to
utilize. (See 2PA 1151-53.) And even if such refund procedures
existed, Real Party has failed to provide any evidence that it has
sufficient funds to make such a substantial refund or that a
refund would restore Petitioners’ overlying water rights. Lastly,
on March 13, 2024, Real Party, in a related action pending before
the same trial court judge in Orange County Superior Court filed
a Motion for Preliminary Injunction to shut down Petitioners’
pumping unless they pay the fee. (3/13/2024 Motion for
Preliminary Injunction, Orange County Sup. Ct. Case No. 30-
2022-01239479.) Because Petitioners do not have an adequate
remedy at law, the Pay First Rule should not apply.

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 2. The Pay First Rule doctrine must yield to
constitutional claims.

This Court has held that the Pay First Rule “must yield . . .
to the requirements of the federal Constitution.” (Western Oil,
supra, 44 Cal.3d at 213.) This exception applies when “it is clear
that under no circumstances can the government prevail.” (Id., p.
214 [cleaned up].) The state and federal takings clause sets an
outer limit on government power to impose regulatory fees like
those disputed here—such fees cannot be “confiscatory,” i.e., so
high as to expropriate the property of those subject to them. The
question before the Court is whether an annual fee exceeding
$8,000,000 ($24,000,000 currently due) constitutes such a
confiscatory fee or otherwise violates Petitioners’ rights to due
process, to petition for the redress of grievances, and to be free
from uncompensated takings.
The Opinion omitted material facts pled by Petitioners
demonstrating a protectable water right: Mojave’s ownership of
land overlying the Basin and the exercise of its water rights for
beneficial use. (6PA 2925:1–8, 2928:21–27 [TAC].) Nothing else is
required under common law to prove up a protectable property
interest. (City of Santa Maria v. Adam (2012) 211 Cal.App.4th
266, 278, 298.) Instead of recognizing Mojave’s properly pled
right, the Court, at the demurrer stage, improperly questioned
whether Mojave had even established a water right because of
the correlative and usufructuary nature of an overlying right, and
because Mojave never specified “the quantity of its water right or
its priority vis-à-vis other extractors . . . .” (Exh. A, p. 34, fn. 22.)
In doing so, the Court ignored decades of case law demonstrating
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water rights are uniformly recognized as vested property rights
“inhering in and a part and parcel of the abutting lands” (Fall
River Valley Irrigation Dist. v. Mt. Shasta Power Corp. (1927) 202
Cal. 56, 65) and that, “[o]verlying rights are special rights to use
groundwater under the owner’s property.” (Barstow, supra, 23
Cal.4th at 1237, fn. 7.)
Although the TAC property challenged the Real Party’s
Annual Pumping Allocations because they constitute a physical
taking for public use without just compensation, the Opinion
found otherwise. Under California law, Petitioners have a first
priority property right in the native groundwater that they use
for agriculture. (Barstow, supra, 23 Cal.4th at 1247, 1253-54.) By
allocating 100% of the native groundwater to other overlying
users—including public pumpers—leaving Petitioners with zero,
Real Party engaged in a physical taking of Petitioners’ property
rights without just compensation in violation of the takings
clause.
The Annual Pumping Allocations also constitute a
regulatory taking. As the Supreme Court explained, “while
property may be regulated to a certain extent, if regulation goes
too far it will be recognized as a taking.” (Pa. Coal Co. v. Mahon
(1922) 260 U.S. 393, 415.) The TAC properly alleges a regulatory
taking because the allocation of zero native groundwater has
deprived Petitioners of “all economically beneficial use of their
water rights” and pistachio trees. (6PA 3034, 3036.) Without
access to native groundwater, Petitioners’ farmland is worthless.
In fact, Real Party’s GSP expressly acknowledged that it

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intended to completely eliminate agriculture from the Basin by
intentionally making it cost prohibitive. (PA7 3291, 3425.)
Because the Annual Pumping Allocations deprive Petitioners of
“all economically beneficial” or productive use of their land, they
constitute a regulatory taking without just compensation in
violation of the takings clause.
The exception applies here because, as explained above,
under no circumstances was Real Party’s allocation of native
groundwater legal under the Constitution. The United States
Supreme Court has made it clear that interfering with a
landowners’ appurtenant water rights without just compensation
constitutes a taking in violation of the Fifth Amendment. (Dugan
v. Rank (1963) 372 U.S. 609, 625 (“Dugan”); Internat. Paper Co. v.
U.S. (1931) 282 U.S. 399, 407 (“Internat. Paper”); U.S. v. Gerlach
Live Stock Co. (1950) 339 U.S. 725, 754 (“Gerlach”).)
The unlawful taking in this case is undeniable. As pled,
Petitioners have a vested, first priority overlying property
interest in the native groundwater that they use for agriculture.
(See § III.C.1, ante.) Despite this vested property right, Real
Party allocated zero native groundwater to Petitioners and
reserved the full allocation for public pumpers. Because this
allocation unquestionably interferes with Petitioners’ vested
appurtenant water rights, “under no circumstances” would Real
Party’s actions not constitute an illegal taking under Dugan,
Internat. Paper, and Gerlach. It is also fundamentally unfair to
require payment of an extortionate and infeasible fee before being
able to challenge Real Party’s unfair and corrupt scheme.

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Petitioners alleged facts showing that Real Party acted illegally
which must be accepted as true on demurrer and which
necessitate a different conclusion in law. Under these
circumstances, the Pay First Rule “must yield to the
requirements of the federal Constitution.” (Western Oil, supra, 44
Cal.3d at 209.)
3. The Court should clarify that the Pay First
Rule does not apply when the government targets a
particular group of citizens with unreasonably high fees to
prevent those citizens from challenging its illegal conduct.

Courts have acknowledged several exceptions to the Pay

First Rule when needed to protect due process—such as the “no
adequate remedy” exception—and other constitutional
safeguards—such as the prohibition on unreasonable searches
and seizures. (Flying Dutchman Park, Inc., supra, 93 Cal.App.4th
at 1139-40; Western Oil, supra, 44 Cal.3d at 209.)
Consistent with these prior decisions, this Court should
clarify that the Pay First Rule does not apply when the
government targets a particular group of citizens with
unreasonably high fees to intentionally prevent those citizens
from challenging the government’s illegal conduct. Indeed, this
would simply be a natural extension of the exceptions that
already exist.
First, even if a taxpayer could technically challenge illegal
conduct by paying first and seeking a refund, as a practical
matter, the taxpayer lacks an “adequate remedy at law” if the
government has intentionally imposed an unreasonably high fee
that it knows the taxpayer could never afford. Such intentional

36
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conduct results in the same deprivation of due process rights that
the “adequate remedy” exception is intended to prevent. (See
Flying Dutchman Park, Inc., supra, 93 Cal.App.4th at 1139-40.)
Because due process requires a practical opportunity to contest
unlawful government action, an exception to the Pay First Rule
should apply under these circumstances. (Richardson v. Jefferson
County, Ala. (1996) 517 U.S. 793, 803 [“we have previously struck
down as a violation of due process a state court’s decision denying
an individual taxpayer any practicable opportunity to contest a
tax on federal constitutional grounds”] [emphasis added].)
Second, when the illegal conduct includes the taking of
property rights without just compensation, the Pay First Rule
should “yield to the requirements of the federal Constitution” and
prevent the government from using an intentionally high fee to
prevent a challenge to the taking. (Western Oil, supra, 44 Cal.3d
at 209.) Indeed, the government imposing an unreasonably high
fee to intentionally prevent a judicial challenge is just further
evidence that an unlawful taking has occurred.
The Court of Appeal acknowledged that applying the Pay
First Rule in such circumstances would be improper:
In reaching this holding, we are mindful
that a rigid application of the “pay first”
rule could allow local groundwater
sustainability agencies to impose
unreasonable fees that target certain
users, knowing they would be unable to
afford to pay the fees under protest, and
that those users could eventually be run
out of business.

(Exh. A, p. 30.) However, the Court of Appeal declined to apply

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such an exception here because it did not believe that any specific
targeting occurred in this case. (See id., pp. 28-31.) In reaching
this conclusion, however, the Court of Appeal improperly ignored
the allegations of intentional targeting pled in the TAC, which
must be accepted as true. (Code Civ. Proc., § 452.)
Specifically, Petitioners alleged in their TAC that Real
Party specifically targeted agriculture pumpers with the illegal
allocation in an intentional effort to drive those pumpers out of
the Basin, then imposed a historically high fee that forecloses any
practical opportunity to challenge the illegal allocation under the
Pay First Rule:

• “The failure to give agricultural producers a seat at the

table, or at least elect IWVGA Board members through a
popular vote, was prejudicial to Plaintiffs. For example, the
Kern County representative on the IWVGA Board,
Supervisor Mick Gleason, a former Navy Captain and
Commanding Officer of NAWS, publicly stated that his
‘job’ was to protect the Navy and that he believed
agriculture has no future in the Indian Wells
Valley…’” (6PA 2947:9-13 [emphasis added].)

• “Additionally, notwithstanding Water Code section 106,

which declares the use of water for irrigation of agriculture
one of this [sic] highest beneficial uses in the state, IWVGA
Special Counsel summarized discussions regarding
‘deprioritiz[ing]’ water use for agricultural
production, determining that water use for
agriculture ‘should not be considered a reasonable
use of water,’ and that the ‘priority goal’ should be
‘serving Navy employees’ . . . .” (6PA 2948:16-20
[emphasis added].)

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 • “IWVGA staff expressly acknowledged that
implementation of the GSP would lead farmers to
cease production. For example, at the June 18, 2020
IWVGA Board meeting, IWVGA staff and decision-makers
acknowledged that the collective result of the GSP
Implementing Actions proposed by the Board will result
in agricultural producers leaving the Indian Wells
Valley en masse.” (6PA 3004:1-8 [emphasis added].)

• “The Annual Pumping Allocations will have potentially

significant environmental impacts associated with
widespread fallowing resulting from the IWVGA’s
strategic elimination of agriculture, including, but not
limited to, impacts on air quality, human health,
greenhouse gas emissions, biological resources, aesthetics,
and local economies.” (6PA 3026:20-24 [emphasis added].)

• The GSP therefore reflects the fact that the IWVGA had
already determined and adjudicated that certain
groundwater users, including agricultural pumpers,
hold ‘inferior rights’ and will not receive any Annual
Pumping Allocation….” (6PA 2960:21-23[emphasis in
added].)

• “This action arises from a series of coordinated actions

by . . . the Indian Wells Valley Groundwater Authority . . .
that function to eliminate Plaintiffs’ senior paramount
rights to use groundwater (their appurtenant overlying
groundwater rights). In other words, IWVGA policies,
ordinances, and resolutions grant Plaintiffs zero allocation
of native groundwater for their existing 1,596 net acre
pistachio orchard. As a direct result of this determination
and to further compound the property right deprivation of
IWVGA’s policies, Plaintiffs’ access to groundwater is now
conditioned upon Plaintiffs paying the highest annual fee
on the production of groundwater in California
history to fund the IWVGA’s pipe dream of acquiring other
water to offset its groundwater use.” (6PA 2925:9-19.)

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Indeed, the GSP expressly acknowledged that it intended to
completely eliminate agriculture from the Basin by making it cost
prohibitive:

(7PA 3291.)
These allegations on intentional government conduct,
which must be accepted as true, provide a valid basis for applying
an exception to the Pay First Rule. At a minimum, deciding
whether Real Party intentionally imposed the historically high
Replenishment Fee to prevent a judicial challenge is a question of
fact that should not have been decided through demurrer.

V. CONCLUSION

As acknowledged by the Court of Appeal, this case presents

issues of first impression arising under SGMA that dramatically
expand the role of a GSA in allocating groundwater contrary to
this Court’s established rule of priority, and limit the rights of
overlying landowners to obtain judicial relief when aggrieved by a
GSA.
There is not a single reported opinion in California
countenancing an administrative agency’s apportionment of
groundwater based upon its water right determinations
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concerning competing claims. For well over 100 years,
apportionment of groundwater has been wielded exclusively by
the courts. Barstow, and decades of consistent common law
precedent, require courts to honor the priority of overlying
landowners. The Court of Appeal Opinion would stand all
precedent and SGMA legislative intent on its head, while
exempting the GSA’s action from scrutiny and challenge under
the Pay First Rule because the GSA’s allocation was coupled with
the establishment of a fee so high that it would bankrupt a
challenger.
If the Opinion stands, every overlying landowner in
California will be at risk—their correlative share of groundwater
may be redistributed by a GSA without being accorded the right
to defend, rebut and cross-examine adverse claims. As such, the
process undertaken by the GSA below and upheld by the Court of
Appeal does not simply nibble at the edges of the priority of
overlying rights under common law—it swallows them whole.
These circumstances provide good cause to grant review under
Cal. Rules of Court, rule 8.500(b)(l).

Dated: March 19, 2024 BROWNSTEIN HYATT FARBER SCHRECK,

LLP

______________________________
SCOTT S. SLATER
AMY M. STEINFELD
ELISABETH L. ESPOSITO
Attorneys for Petitioners
Mojave Pistachios, LLC and Paul G. Nugent and
Mary E. Nugent, Trustees of the Nugent Family
Trust dated June 20, 2011

41
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 VERIFICATION
I, Scott S. Slater, declare as follows:
I am an attorney duly licensed to practice law in California.
I am a shareholder at Brownstein Hyatt Farber Schreck LLP,
attorneys of record for Petitioners. I have reviewed and am
familiar with the records and files that are the basis of this
Petition. I make this declaration because I am more familiar with
the particular facts, i.e., the state of the record and the litigation,
than are my clients. I certify that the Petition’s allegations are
true and correct.
I declare under penalty of perjury under the laws of the
State of California that the foregoing is true and correct and that
this verification is executed on March 19, 2024 at Santa Barbara,
California.

___________________________
Scott S. Slater

42
27786543
 CERTIFICATE OF WORD COUNT

Pursuant to California Rules of Court, rule 8.204(c)(1),

(c)(4), I certify that this PETITION FOR REVIEW contains 8,373
words, not including the tables of contents and authorities, the
caption page, signature blocks, verification, or this Certification
page.

Date: March 19, 2024 ___________________________

Scott S. Slater

43
27786543
EXHIBIT A
 Court of Appeal, Fourth Appellate District, Division Three
Brandon L. Henson, Clerk/Executive Officer
Electronically FILED on 2/8/2024 by Lori Pickrell, Deputy Clerk
 PROOF OF SERVICE
I am a citizen of the United States and employed in Santa
Barbara County, California. I am over the age of eighteen years and
not a party to the within-entitled action. My business address is 1021
Anacapa Street, 2nd Floor, Santa Barbara, California 93101. My
electronic service address is Meldridge@bhfs.com. On March 19, 2024,
I served a copy of the within document(s):

PETITION FOR REVIEW

by placing the document(s) listed above in a sealed Federal

X Express envelope and affixing a pre-paid air bill, and causing
the envelope to be delivered to a Federal Express agent for
delivery.
by transmitting via e-mail or electronic transmission
X the document(s) listed above to the person(s) at the e-
mail address(es) set forth below.

SEE ATTACHED SERVICE LIST

I am readily familiar with the firm's practice of collection and

processing correspondence for mailing. Under that practice it would be
deposited with the U.S. Postal Service on that same day with postage
thereon fully prepaid in the ordinary course of business. I am aware
that on motion of the party served, service is presumed invalid if postal
cancellation date or postage meter date is more than one day after date
of deposit for mailing in affidavit. I declare under penalty of perjury
under the laws of the State of California that the above is true and
correct. Executed on March 19, 2024, at Santa Barbara, California.

/s/ Melissa Eldridge

Melissa Eldridge

27786543
 SERVICE LIST

BY E-MAIL BY E-MAIL
James L. Markman Phillip Hall
B. Tilden Kim Kern County Office of County
Kyle H. Brochard Counsel
Darrelle M. Field 1115 Truxtun Ave., 4th Floor,
Jack Hensley Bakersfield, CA 93301
Richards Watson & Gershon Telephone: (661) 868-3826
350 South Grand Avenue, 37th Floor phall@kerncounty.com
Los Angeles, CA 90071
Telephone (213) 626-8484 Attorneys for
jmarkman@rwglaw.com Respondents/Defendants/Real
TKim@rwglaw.com Parties in Interest
kbrochard@rwglaw.com Indian Wells Valley Groundwater
jhensley@rwglaw.com Authority; Board of Directors of
the Indian Wells Valley
Attorneys for Groundwater Authority
Respondents/Defendants/Real
Parties in Interest
Indian Wells Valley Groundwater
Authority; Board of Directors of the
Indian Wells Valley Groundwater
Authority

27786543
 BY E-MAIL BY E-MAIL
Wayne Keith Lemieux, Jr. Eric L. Garner
Aleshire & Wynder, LLP Jeffrey V. Dunn
2659 Townsgate Road, Suite 226 Wendy Y. Wang
Westlake Village, CA 91362-3852 Sarah Christopher Foley
Telephone: (805) 495-4770 Daniel L. Richards
klemieux@awattorneys.com Amanda K. Wells
Best & Krieger LLP
Attorneys for 18101 Von Karman Avenue,
Respondents/Defendants/Real Irvine, CA 92612
Parties in Interest Telephone: (949) 263-2600
Indian Wells Valley Groundwater Eric.Garner@bbklaw.com
Authority; Board of Directors of the Jeffrey.Dunn@bbklaw.com
Indian Wells Valley Groundwater Wendy.Wang@bbklaw.com
Authority Sarah.Foley@bbklaw.com
Amanda.Wells@bbklaw.com
katrina.wraight@bbklaw.com

Attorneys for
Petitioner/Plaintiff/Real Parties
in Interest Searles Valley Mineral,
Inc. in related case

BY E-MAIL BY E-MAIL
Derek R. Hoffman James A. Worth, Esq.
Byrin Romney McMurtrey, Hartsock & Worth
Fennemore Dowling Arron 2001 22nd Street, Suite 100
8080 N. Palm Avenue, Third Floor Bakersfield, California 93301
Fresno, CA 93711 Phone: (661) 322-4417
Telephone: (559) 432-4500 Fax: (661) 322-8123
dhoffman@fennemorelaw.com jim@mhwlegal.com
Attorneys for Real Parties in
Attorneys for Defendants Interest Indian Wells Valley
Meadowbrook Dairy Real Estate, Water District
LLC, Big Horn Fields, LLC, Brown
Road Fields, LLC, Highway 395
Fields, LLC, The Meadowbrook
Mutual Water Company in related
case

27786543
 BY E-MAIL BY FEDERAL EXPRESS:
John C. Murphy, Esq. Judge William Claster, Dept.
Douglas J. Evertz, Esq. CX104
Emily L. Madueno, Esq. Orange County Superior Court
Murphy & Evertz LLP Civil Complex Center
650 Town Center Drive, Suite 550 751 West Santa Ana Blvd.
Costa Mesa, California 92626 Santa Ana, CA 92701
Phone: (714) 277-1700 Telephone: (657) 622-5303
Fax: (714) 277-1777
jmurphy@murphyevertz.com
devertz@murphyevertz.com
emadueno@murphyevertz.com

Attorneys for Real Parties in Interest

Indian Wells Valley Water District

BY FEDERAL EXPRESS:
California Courts of Appeal
4th District Court of Appeal
Division Three
601 W. Santa Ana Blvd.
Santa Ana, California 92701
Telephone: (714) 571-2600

27786543