Filed 1/30/18
                            CERTIFIED FOR PUBLICATION

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                              FIRST APPELLATE DISTRICT

                                       DIVISION TWO


SANTA BARBARA
CHANNELKEEPER,
         Plaintiff and Respondent,                 A146573

v.                                                 (San Francisco City & County
CITY OF SAN BUENAVENTURA,                          Super. Ct. No. CPF-14-513875)
         Defendant and Appellant.


         The Ventura River watershed is home to Southern California steelhead trout, a
species listed as endangered since 1997. Defendant City of San Buenaventura (City) has
been diverting water from the Ventura River since 1870, but plaintiff Santa Barbara
Channelkeeper (Channelkeeper) sued the City and alleges that the City’s current
diversions are “unreasonable” because of the effect they have on the fish during summer
months, when water levels are low. Nobody disputes that the City holds water rights that
would otherwise allow it to divert this water, but under the California Constitution there
“is no property right in an unreasonable use” of water. (Joslin v. Marin Municipal Water
Dist. (1967) 67 Cal.2d 132, 145 (Joslin).) Thus, adjudicating Channelkeeper’s
allegations requires the court to determine whether the environmental consequences of
the City’s water diversion act to cap the City’s water rights at a level below its current
usage.
         The City not only asserts the reasonableness of its own water use, it has cross-
complained against other entities who also draw water from the Ventura River watershed,
alleging that their water use is unreasonable. The first amended cross-complaint (Cross-
Complaint) against seven named cross-defendants and hundreds of “Doe” cross-


                                               1
defendants (collectively Cross-Defendants) seeks to curtail these other entities’ water use
affecting the flow of the Ventura River. The question before this court is whether the
trial court abused its discretion in striking the City’s Cross-Complaint. We hold that it
did, because the water that the Cross-Complaint seeks to prevent Cross-Defendants from
using is effectively the same water that Channelkeeper asserts the City must leave in the
river for the fish.
                      FACTS AND PROCEDURAL BACKGROUND
       The Ventura River watershed drains a fan-shaped area of about 220 square miles.
The river has five reaches and several major tributaries. In Reach 4, about six miles
upstream from the mouth of the river, the City diverts water with a subsurface dam and
extracts groundwater that would otherwise flow into the river. Flow in any particular
reach of the river is affected by the amount of water withdrawn from the river, the
amount of water in underlying groundwater basins, and seasonal variations. During the
summer dry seasons from 2001 to 2008, flows declined to less than 1 cubic foot per
second (cfs) in Reach 4, and also in Reach 3 just below it. This flow level impairs the
river’s use as habitat, including for endangered, spawning, and young fish.
       The Ventura River and its tributaries have been designated as critical habitat for
the remaining population of Southern California steelhead trout, an endangered species
whose numbers in the Ventura River had plummeted by the 1990s. In 2007, the National
Marine Fisheries Service (NMFS) issued a Draft Biological Opinion finding that, to
avoid jeopardizing the steelhead’s continued existence, flows near Reach 4 of the
Ventura River should not fall below 11 to 12 cfs. In 2013, the City conducted its own
study, which concluded that at flows below 2 cfs steelhead habitat “declines
significantly.” Between 2008 and 2013, the City extracted about 3,000 acre-feet of
surface flow and groundwater annually, a small fraction of the water to which it is
entitled under pre-1914 water rights and considerably less than it took annually between
1980 and 2000. Yet Channelkeeper maintains that, “given the existing conditions in the
Ventura River,” the City’s pumping and diversion activities are unreasonable because of
their effects on the fish.


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       These are the allegations in the Complaint for Declaratory Relief and Verified
Petition for Writ of Mandate (Complaint) that Channelkeeper filed on
September 19, 2014. The Complaint’s first count, the only one against the City, seeks a
declaratory judgment that the City’s use of Reach 4 is unreasonable from “April through
October, and after water levels in the River fall below levels determined to be critical
minimum levels required to protect steelhead.” Counts two through five are directed
against the State Water Resources Control Board (Board) for failing to limit the City’s
use of the Ventura River, which Channelkeeper alleges is a dereliction of the Board’s
mandatory duties under the California Constitution, section 275 of the Water Code, and
the public trust doctrine. Against the Board, the Complaint seeks a writ of mandate
directing it to analyze the City’s use of the river, but against the City the Complaint seeks
only declaratory relief.
       The City answered the Complaint, denying that its use of waters from the Ventura
River was unreasonable, then cross-complained. The Cross-Complaint brings into the
case as Cross-Defendants numerous named and Doe entities who also extract water from
the Ventura River, its tributaries, a lake filled with water diverted from the river, and the
watershed’s groundwater basins. The Cross-Complaint alleges that these water sources
are all hydrologically connected, so that the Cross-Defendants’ water use diminishes the
surface and/or subsurface water flow of the Ventura River. The Cross-Complaint also
alleges that the Cross-Defendants’ water use is not reasonable or beneficial, and violates
the public trust doctrine. Count four seeks a declaratory judgment to that effect, and to
establish that the City’s water use, by contrast, is reasonable, beneficial, and consistent
with the public trust. Counts one and two seek injunctive relief, reducing Cross-
Defendants’ water use to levels that (1) are reasonable and beneficial, and (2) protect the
public trust. Count three “seeks a physical solution among” the City and the Cross-
Defendants, meaning a resolution of their “competing claims to water by cooperatively
satisfying the reasonable and beneficial needs of each user,” a goal to be accomplished
“by augmenting the water supply and other practical measures.”



                                              3
       Channelkeeper moved to strike the Cross-Complaint, a motion the trial court
granted on September 18, 2015. The court found, “the reasonable use and public trust
doctrines do not require the Court to examine other specific competing water rights on
the river to resolve the actual relief that Plaintiff is requesting.” The “only transaction at
issue” is the reasonableness of the City’s water use, the court found, and Channelkeeper’s
“claim does not implicate a property right.” Finally, the court concluded that joining
numerous parties as cross-defendants “does not . . . serve the purpose of judicial
economy.”
       The City timely appealed, and on December 14, 2015, this court denied a motion
to dismiss the appeal. We determined that the “September 18, 2015 order striking the
First Amended Cross-Complaint is a final judgment,” and that to the extent any portion
of it is non-appealable, we would treat it as a writ petition.
                                       DISCUSSION
                                   I. Legal Background
       We begin with a brief review of California water law and of applicable principles
of civil procedure.
A. California’s Dual System of Water Rights
       California’s water belongs to the people of this state, but the right to use surface
water may be acquired, either pursuant to the doctrine of riparian rights or by
appropriation. (United States v. State Water Resources Control Bd. (1986)
182 Cal.App.3d 82, 100–101 (United States).) The riparian doctrine, a legacy of the
English common law, “confers upon the owner of land the right to divert the water
flowing by his land for use upon his land, without regard to the extent of such use or
priority in time.” (Id. at p. 101.) When water is scarce, “all riparians must reduce their
usage proportionately.” (Ibid.) The appropriation doctrine is a legacy of the California
Gold Rush. It “confers upon one who actually diverts and uses water the right to do so”
for beneficial uses. (Ibid.) An appropriator’s rights are subordinate to riparian rights,
and to those of all earlier appropriators. (Id. at pp. 101–102.) This is the “rule of
priority” that determines allocations in times of shortage. (El Dorado Irrigation Dist. v.


                                               4
State Water Resources Control Bd. (2006) 142 Cal.App.4th 937, 961 (El Dorado).) It
means that an appropriator—especially one who is comparatively junior—may not be
able to take any of the water to which it would otherwise be entitled.
       Before 1914, one who sought to acquire water rights by appropriation had simply
to divert and use that water to perfect a claim. Since 1914, a statutory scheme has
required would-be appropriators to apply to the Board first for a permit. In reviewing
permit applications, the Board examines existing riparian and appropriative rights and
determines whether surplus water is available. (United States, supra, 182 Cal.App.3d at
p. 102.) If the Board issues a permit, the permit holder can take the water subject to the
terms of the permit (and subject to the rights of riparian users and senior appropriators),
and a license will then issue confirming appropriative rights. (Ibid.)
       Similar principles govern rights to water in an underground basin. First priority
goes to the landowner whose property overlies the ground water. These “overlying
rights” are analogous to riparian rights in that they are based on ownership of adjoining
land, and they confer priority. (City of Barstow v. Mojave Water Agency (2000)
23 Cal.4th 1224, 1240 (Barstow).) Surplus groundwater also may be taken by an
appropriator, and priority among “appropriative rights” holders generally follows the
familiar principle that “the one first in time is the first in right.” (Id. at p. 1241.) With
groundwater there is an exception, however, that gives rise to a third category of rights.
Under certain circumstances, an appropriator may gain “prescriptive rights” by using
groundwater to which it is not legally entitled in a manner that is “ ‘actual, open and
notorious, hostile and adverse to the original owner, continuous and uninterrupted for the
statutory period of five years, and under claim of right.’ ” (Ibid.) The permit and
licensing requirements that apply to certain in-stream water rights do not apply to
groundwater. (City of Pasadena v. City of Alhambra (1949) 33 Cal.2d 908, 933–934.)
       Whatever their derivation, “once rights to use water are acquired, they become
vested property rights.” (United States, supra, 182 Cal.App.3d at p. 101.) These
property rights are not absolute, however.



                                               5
B. The Rule of Reasonableness and the Public Trust Doctrine
       Superimposed on the dual system for defining water rights are two limiting
principles. First is the rule of reasonableness: “the overriding constitutional limitation
that the water be used as reasonably required for the beneficial use to be served.” (United
States, supra, 182 Cal.App.3d at p. 105.) Second is the public trust doctrine. Both apply
to limit all water rights, regardless of their legal basis. (Barstow, supra, 23 Cal.4th at
pp. 1241–1242.)
       The rule of reasonableness was added to the California Constitution by
amendment in 1928. (Light v. State Water Resources Control Bd. (2014)
226 Cal.App.4th 1463, 1479 (Light).) The amended Constitution declares: “The right to
water or to the use or flow of water in or from any natural stream or water course in this
State is . . . limited to such water as shall be reasonably required for the beneficial use to
be served, and such right does not and shall not extend to the waste or unreasonable use
or unreasonable method of use or unreasonable method of diversion of water.”
(Cal. Const., art. X, § 2.) “Beneficial use” and “reasonable use” are two separate
requirements, both of which must be met. (Joslin, supra, 67 Cal.2d at p. 143.)
       Beneficial uses are categories of water use. For Reaches 3 and 4 of the Ventura
River, the designated beneficial uses are: “municipal and domestic supply, industrial
service supply, agricultural supply, ground water recharge, freshwater replenishment,
warm freshwater habitat, cold freshwater habitat, wildlife habitat, rare, threatened, or
endangered species, migration of aquatic organisms, spawning, reproduction, and/or early
development, and wetland habitat,” according to the Complaint. All beneficial uses are
not created equal. The California Legislature has declared that “water for domestic
purposes is the highest use,” and that agricultural use comes second. (Water Code,
§ 106.)
       What constitutes reasonable use is case-specific. “California courts have never
defined . . . what constitutes an unreasonable use of water, perhaps because the
reasonableness of any particular use depends largely on the circumstances.” (Light,
supra, 226 Cal. App. 4th at p. 1479.) Conformity with local custom is one factor to


                                               6
consider in determining whether a use of water is reasonable, but custom is not
dispositive. (Water Code, § 100.5.) The inquiry is fact-specific, and the answer may
change over time. “What may be a reasonable beneficial use, where water is present in
excess of all needs, would not be a reasonable beneficial use in an area of great scarcity
and great need.” (Tulare Irrigation Dist. v. Lindsay-Strathmore Irrigation Dist. (1935)
3 Cal.2d 489, 567 (Tulare).) Because reasonableness is a question of fact, it generally is
not resolvable on the pleadings. (People ex rel. State Water Resources Control Bd. v.
Forni (1976) 54 Cal.App.3d 743, 754 (Forni).) But courts have on some occasions
determined that a given use of water is, as a matter of law, unreasonable. For example,
for farmers to flood their fields during winter solely for the purpose of drowning gophers
and squirrels is not a reasonable beneficial use. (Tulare, at p. 568.) So, too, is it
unreasonable for a riparian landowner to rely on a creek to deliver in suspension
continuing supplies of rock, sand, and gravel, when water from that stream could instead
be diverted for municipal use. (Joslin, supra, 67 Cal.2d at pp. 134–135, 140–141.)
       Another important limitation on water rights in California derives from the public
trust doctrine, an ancient legal principle that California courts have used to protect
environmental values. (See Natl. Audubon Society v. Superior Court (1983)
33 Cal.3d 419, 425 (Natl. Audubon).) The doctrine finds its origin in the Roman law
principle that mankind shares ownership in the sea, the seashore, the air, and (most
importantly for our purposes) running water. (Id. at pp. 433–434; Zack’s Inc. v. City of
Sausalito (2008) 165 Cal.App.4th 1163, 1175, fn. 5.) The doctrine arrived in California
via the English common law, and was often applied in cases involving public rights to
navigation, commerce, and fishing in tideland areas, or on navigable lakes and streams.
(Natl. Audubon, at pp. 434–435.) But in 1983 our Supreme Court held that the doctrine
also protects navigable waters, such as Mono Lake, “from harm caused by diversion of
nonnavigable tributaries.” (Id. at p. 437.) The State of California as trustee has a broad
“duty . . . to protect the people’s common heritage of streams, lakes, marshlands and
tidelands, surrendering that right of protection only in rare cases.” (Id. at p. 441.) As a
consequence, those “parties acquiring rights in trust property,” such as water flowing in a


                                              7
stream, “generally hold those rights subject to the trust, and can assert no vested right to
use those rights in a manner harmful to the trust.” (Id. at p. 437.)
       But public trust interests, like other interests in water use in California, are not
absolute. “As a matter of practical necessity the state may have to approve
appropriations despite foreseeable harm to public trust uses. In so doing, . . . the state
must bear in mind its duty as trustee . . . to preserve, so far as consistent with the public
interest, the uses protected by the trust.” (Natl. Audubon, supra, 33 Cal.3d at p. 446.) In
short, “[a]ll uses of water, including public trust uses, must now conform to the standard
of reasonable use.” (Id. at p. 443.)
C. Permissive Cross-Complaints
       The law allows a defendant in a civil case to cross-complain against entities not
originally parties to the action if there is a sufficient subject matter connection between
the action and the cross-complaint. Specifically, a defendant “may file a cross-complaint
setting forth” any cause of action that either “(1) arises out of the same transaction,
occurrence, or series of transactions or occurrences as the cause brought against him or
(2) asserts a claim, right, or interest in the property or controversy which is the subject of
the cause brought against him.” (Code Civ. Proc., § 428.10, subd. (b) (hereafter
Code Civ. Proc., section 428.10(b)).) The term “transaction” embraces not just
commercial contracts “but also whatever may be done by one person which affects
another’s rights and out of which a cause of action may arise.” (Kittle Mfg. Co. v. Speer
(1934) 3 Cal.App.2d 148, 149 [discussing related code section].) For example, a
defendant whose negligence is alleged to have caused an accident may file a cross-
complaint for equitable indemnity against concurrent tortfeasors. (American Motorcycle
Assn. v. Superior Court (1978) 20 Cal.3d 578, 584 (AMA), superseded on another ground
as stated in Miller v. Stouffer (1992) 9 Cal.App.4th 70, 82.) California cases have
generally “approved a broad and liberal interpretation of [Code Civ. Proc.,
section 428.10’s predecessor] to permit a declaration of the rights and liabilities of all
parties involved in a particular case.” (Valley Circle Estates v. VTN Consolidated, Inc.



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(1983) 33 Cal.3d 604, 612, fn. 4; see also Jasmine Networks, Inc. v. Superior Court
(2009) 180 Cal.App.4th 980, 986.)
       Both parties rely on Hanes v. Coffee (1931) 212 Cal. 777 in interpreting Code of
Civil Procedure section 428.10(b). That case was an action to quiet title brought against
a defendant who claimed a lease interest to develop oil and gas on the property. (Hanes,
at p. 778.) Defendant counterclaimed against the property owners for damages allegedly
caused by plaintiffs’ interference with his operations. (Id. at pp. 778–779.) The Supreme
Court held that the trial court erred in striking that pleading, not because it was a valid
counterclaim but because it was proper as a cross-complaint. (Id. at pp. 780–782.) Both
parties’ “claims are related to the same transaction, i.e., the leasing of the property, and
each must be adjudicated upon a consideration of the same issues.” (Id. at pp. 781–782.)
The court reached this conclusion because “[t]he facts surrounding the cause of action
and not the form of the complaint are determinative of what constitutes the transaction.”
(Id. at p. 781.)
D. Standard of Review
       The parties agree on the standard of review that governs this case. “An order
striking a pleading [citation] is reviewed for abuse of discretion.” (CLD Constr., Inc. v.
City of San Ramon (2004) 120 Cal.App.4th 1141, 1145.) That discretion is limited,
however, by the law being applied. (City of Sacramento v. Drew (1989)
207 Cal.App.3d 1287, 1297.) We must “determine whether the trial court’s factual
findings are supported by substantial evidence and independently review its legal
conclusions.” (Valley Crest Landscape Dev., Inc. v. Mission Pools of Escondido, Inc.
(2015) 238 Cal.App.4th 468, 482.)
    II. The Complaint and Cross-Complaint Concern a Common Transaction or
Occurrence: The Diversion of So Much Water from the Ventura River as to Endanger
                                   the Fish.
       The trial court struck the Cross-Complaint because the court concluded “the only
transaction at issue in Plaintiff’s complaint is whether or not the [City’s] water use is
unreasonable,” and the “cross-complaint does not arise from the same transaction.” The



                                              9
City argues that the trial court has characterized Channelkeeper’s Complaint too
narrowly, and that the transaction should be framed in a manner not specific to the City.
Rather, the transaction is “the use of water from the Ventura River affecting the River’s
flow,” the City argues. The trial court’s narrower characterization of the transaction was
informed by its view of applicable law, namely that “the reasonable use and public trust
doctrines do not require the Court to examine other specific competing water rights on
the river to resolve” whether Channelkeeper is entitled to a declaratory judgment that the
City’s water use is unreasonable. The City disagrees with this statement, arguing that in
this case one must consider the diversion and pumping activities of competing water
users in determining the reasonableness of the City’s water use. We agree with the City.
       The starting point in characterizing the “transaction” at issue in the Complaint
must be the facts that give rise to the cause of action. (Hanes v. Coffee, supra, 212 Cal. at
p. 781.) The Complaint’s central allegation against the City is that, “given the existing
conditions in the Ventura River,” the City’s pumping and diversion of water during
summer months leave too little flow in the river “to protect steelhead” and “avoid[]
impacts to public trust resources.” This formulation immediately begs the question
whether other water users are at least partially responsible for “the existing conditions in
the Ventura River.” Can other water users, by reducing the amount of water they divert
from the river or pump from surrounding groundwater basins, ensure sufficient waterflow
in the river to protect the steelhead (and other public trust resources) without any
diminution in the volume of water the City draws? The Complaint does not allow an
answer to this question because it says almost nothing about the demands on the river
made by competing water users. But it does allege that “[f]low in any particular reach of
the River” depends generally on surface and groundwater “withdrawals for municipal,
domestic, or agricultural uses,” as well as on natural factors. In the words of the Cross-
Complaint, between the river and its surrounding groundwater basins there is a
“hydrological connection.” This means that other water users’ pumping and diversion
activities may be contributing to the alarmingly low waterflow alleged in Reaches 3 and
4, and if these activities were curtailed the waterflow in the Ventura River might


                                             10
improve. Any significant improvement would take some pressure off of the City’s water
use, and might even leave enough water in the river to render the City’s water use
reasonable. The only way to know how influential other water users are—or are not—is
to look at their water use, too.
       Because of how Channelkeeper has framed its Complaint, the court cannot
completely ignore the activities of competing water users. We reach this conclusion not
because of the legal theory Channelkeeper employs—our Constitution’s article X,
section 2’s rule of reasonableness—but because of the facts that Channelkeeper deploys
(or fails to deploy) in support of its claim. The Complaint alleges that the City’s water
use is unreasonable because it results in insufficient flow in Reaches 3 and 4 of the river
during summer months. This is Channelkeeper’s sole allegation as to what is
unreasonable about the City’s water use. The Complaint does not allege that the City
uses water unreasonably because the City consumes much more water than do similarly
situated cities. The Complaint does not allege that City water users engage in inherently
wasteful practices, akin to the drowning of gophers by winter irrigation (see Tulare,
supra, 3 Cal.2d at p. 568), or the use of a stream as an agent for delivering suspended
sand and gravel (see Joslin, supra, 67 Cal.2d at pp. 134–135, 140–141). The Complaint
also does not allege that competing water users can be ignored because they take only de
minimis amounts of water, or because they divert and pump in a manner that does not
affect the flow in Reaches 3 and 4. Finally, the Complaint does not allege that the City’s
water rights are junior to those of all other entities who pump and divert water in the
watershed so that, under the rule of priority governing water allocations, the City must be
first to forgo its share if more water must be left in the river for public trust purposes.
There is, in short, no basis in the facts surrounding the cause of action against the City for
limiting the “transaction” at issue to the City’s water use alone.
       Instead, the transaction must be defined to include any diversion and pumping of
water that leads to allegedly insufficient flow in Reaches 3 and 4 of the river in summer
months. This “transaction” is the wrong-doing of which Channelkeeper complains,
generalized to include all entities potentially responsible for it.


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       An analogy to concurrent tortfeasors shows that the law requires this generalizing
step, both in defining the “transaction” and in deciding whether the Cross-Complaint is
proper. Suppose an accident victim brings a suit alleging negligence against a defendant
that is partially responsible for the accident, and the defendant files a counterclaim
against another entity, alleging that the counter-defendant, too, is partially responsible for
the accident. The transaction at issue would be “the accident,” not just the original
defendant’s contribution to the accident. (See Todhunter v. Smith (1934) 219 Cal. 690,
693 [“Where separate causes of action for personal injuries and for damages to the
automobiles involved arise from an automobile collision, such accident may be said to be
the ‘transaction’ out of which said causes arise”].) And the cross-complaint would be
proper. (See AMA, supra, 20 Cal.3d at pp. 584–585.) “[A] defendant is generally
authorized to file a cross-complaint against a concurrent tortfeasor for partial indemnity
on a comparative fault basis, even when such concurrent tortfeasor has not been named a
defendant in the original complaint.” (Id. at p. 607.) By analogy, the City is authorized
to file a cross-complaint against other water users in the Ventura River watershed, where
it alleges that other users are partially responsible for the reduced waterflow in Reaches 3
and 4 during summer months.
       Channelkeeper protests that it “should be able to control [its] case by proceeding
against the party or parties whom [it] feels to be most clearly liable.” (Thornton v. Luce
(1962) 209 Cal.App.2d 542, 551.) However, the case on which Channelkeeper relies for
this proposition predates AMA and is no longer good law on this point. Thornton v. Luce
held that a defendant in a negligence action may not cross-complain against a concurrent
tortfeasor in order to lighten its own burden. (Thornton, at pp. 551–552.) AMA holds just
the opposite, allowing such a cross-complaint to stand. (AMA, supra, 20 Cal.3d at
p. 607.) AMA now controls.
       Although its procedural posture is different, El Dorado also supports the City’s
right to cross-complain against other water users. Plaintiff water users in El Dorado had
rights dating back to 1927 to appropriate water from the South Fork of the American
River. (EI Dorado, supra, 142 Cal.App.4th at p. 942.) In issuing a permit allowing


                                             12
plaintiffs to exercise those rights, the Board imposed a term requiring them to curtail their
diversion of water at certain times of year (when federal or state authorities were
releasing stored water from the Central Valley Project or the State Water Project) in order
to promote water quality objectives in the Sacramento-San Joaquin Delta. (Id. at p. 943.)
Other water users in the Delta watershed whose appropriative rights derived from
applications filed after 1927 were not bound by this same permit restriction, prompting
plaintiff water users to object that the Board’s decision constraining their water use
without similarly constraining junior appropriators violated the rule of priority for
allocating scarce water. (Ibid.) They brought an administrative mandamus proceeding
challenging the restrictive term in their permit, and won relief.
       In affirming the trial court’s decision favoring plaintiff water users, the appellate
court discusses the rule of priority, the rule of reason, and the manner in which these two
principles interact. (El Dorado, supra, 142 Cal.App.4th at pp. 961–966.) As a corollary
to the constitutional principle “that all water use must be reasonable” (id. at p. 965), the
court explains that “when the rule of priority clashes with the rule against unreasonable
use of water, the latter must prevail.” (Id. at p. 966.) But the court goes on immediately
to instruct that in enforcing the rule of reasonableness “[e]very effort . . . must be made to
respect and enforce the rule of priority.” (Ibid.) Thus, the Board has the power to
constrain plaintiffs’ water use to protect public trust interests but must avoid, if possible,
subverting established principles of water right priority in the process. (Id. at p. 967.) To
the Board’s objection that it could not impose the same term on the permits of junior
water users in a proceeding convened to decide the terms only of the El Dorado plaintiff
water users’ permit, the court responded: “the Board presumably had the power to add
those junior appropriators as parties to the proceeding,” or to convene a parallel
proceeding on the junior water users’ permits. (Id. at pp. 969–970.) Better to broaden
the proceedings to add new parties than for the Board to address environmental concerns
by constraining only the senior rights holder’s water use, the court held.
       In order to avoid the same error in this case, the City must be allowed to proceed
with its Cross-Complaint. Whether or to what extent the Cross-Defendants’ water rights


                                              13
are junior to the City’s is not apparent from the pleadings, but Channelkeeper has alleged
that the City’s right to divert water from the river was first put in use in 1870 so its rights
may be senior to some of Cross-Defendants’ rights. On the logic of El Dorado, the City
is entitled to bring these water users into the case so that the trial court can determine
whether (at least) junior appropriators should share in any obligation to leave more water
in the river during the summer months. The participation in the case of Cross-Defendants
whose rights are senior to the City’s is also proper. To the extent senior water users’ are
using water in an amount or manner that is unreasonable, they may not take this water,
even where vested water rights would otherwise allow it. (United States, 182 Cal.App.3d
at p. 129.) And, as El Dorado points out, if a rights holder such as the City must forgo
water to which it otherwise is entitled in order to leave sufficient waterflow in the river to
promote public trust interests, that water only serves its purpose if others are prevented
from withdrawing it. (El Dorado, supra, 142 Cal.App.4th at p. 970.) Including other
water users as parties to the action ensures that they, too, are bound by its outcome.
       Channelkeeper discounts the significance of El Dorado and the rule of priority on
the ground that this action is for declaratory judgment only. Channelkeeper asserts that
in the current case the trial court need not “determine how much water the City can
reasonably divert.” That issue awaits a “subsequent process” initiated by the Board if the
court declares the City’s current usage unreasonable, Channelkeeper argues, and only
then will “the City’s priority compared to other users of the River” become relevant. The
problem with this argument is that even if the trial court does not need to quantify
precisely “how much water the City can reasonably divert,” the entire premise of the
current action is that the City cannot divert as much water as it has been diverting. If
Channelkeeper succeeds in its declaratory judgment action against the City, it will be
because the trial court determines that the City must take less water—or must leave more
water in the stream—than in recent years has been its practice. A declaration to that
effect, on the Complaint as Channelkeeper has framed it, requires the trial court to give at
least some consideration to other water users. The alternative—ignoring their diversions



                                              14
while condemning the City’s—would be artificial and unfair, and likely inconsistent with
the rule of priority.
       Channelkeeper argues that reasonableness should be assessed on what it calls “an
objective, water-right-by-water-right” basis, meaning without considering the demands
and priorities of other water users in a stream system. Channelkeeper cites cases where
reasonableness was, in fact, decided with respect to only one water user, but the cases are
distinguishable. Tulare and Joslin are Channelkeeper’s lead cases, and the
unreasonableness in both of those cases consisted of a specific wasteful use of water. No
such wasteful practice is alleged here.
       Channelkeeper also relies on Forni and Light, two cases in which courts
considered the reasonableness of farmers diverting water to spray grapes for frost
protection. But these, too, involved allegations of unreasonableness apart from the mere
volume of water consumed, and in any event the Board’s enforcement efforts in these
cases were not aimed at only one water user. In Forni the Board sought to prevent
growers from simultaneously diverting water directly from the Napa River when cold
weather approached, which the court agreed was an unreasonable use of water in the
context of that case. (Forni, supra, 54 Cal.App.3d at pp. 750–751.) Not only did the
Board target a specific water use (spraying grapes with water taken directly from the
river), but it brought the case originally against multiple “vineyardists.” (Id. at p. 747.)
Then Light rejected a facial challenge to a Board regulation designed to address a similar
problem in a different watershed. The regulation in Light designated as unreasonable any
diversion from the Russian River for frost protection that was not in compliance with a
plan that local water users were to devise and submit to the Board for approval. (Light,
supra, 226 Cal.App.4th at pp. 1472–1473.) Because the regulation anticipated that
diverting growers would devise the local plans by which they would all be bound, Light
does not support Channelkeeper in moving against only one water user in the stream
system. In fact, Light recognized that, “[w]hen the supply of water is insufficient to
satisfy all persons and entities holding water rights, it is ordinarily the function of the rule
of priority to determine the degree to which any particular use must be curtailed.” (Id. at


                                              15
p. 1489; see also In re Waters of Long Valley Creek Stream Sys. (1979) 25 Cal.3d 339,
354 (Long Valley) [“it appears self-evident that the reasonableness of a riparian use
cannot be determined without considering the effect of such use on all the needs of those
in the stream system”].)
       In sum, because the Complaint alleges unreasonableness based solely on the
resulting flow in the river channel, the court cannot render even a declaratory judgment
without considering other water users. The trial court’s contrary conclusion rests on a
mistake of law. While we express no view on the merits of the pending Complaint or the
proposed Cross-Complaint, we hold that the City was entitled to bring in other water
users, and its Cross-Complaint should have been allowed to stand. If the trial court
determines, after all parties are before it, that judicial economy is best served by
sequencing the action so that it addresses the reasonableness of the City’s water use
before addressing the reasonableness of others’ water use, Code of Civil Procedure
section 1048, subdivision (b) grants it that flexibility. The section provides, “when
separate trials will be conducive to expedition and economy” the court “may order a
separate trial of any cause of action, including a cause of action asserted in a cross-
complaint.” (Code Civ. Proc., § 1048, subd. (b); see also AMA, supra, 20 Cal.3d at
p. 606.) The trial court retains substantial discretion to structure the proceedings, but may
not prevent the City from cross-complaining against entities that the City maintains are
responsible for the reduced water flow in Reaches 3 and 4 of the Ventura River.
 III. The Cross-Complaint Asserts Vested Water Rights Which Are the Subject of the
  Complaint, Seeking to Prevent the Cross-Defendants from Interfering with Them.
       A separate and independent basis for reversing the trial court’s decision striking
the Cross-Complaint lies in the “property” prong of Code of Civil Procedure
section 428.10(b)’s test. As an alternative to the “same transaction” test, the statute
allows the City to cross-complain with a cause of action that “asserts a claim, right, or
interest in the property or controversy which is the subject of the cause brought against”
it. (Code Civ. Proc., § 428.10(b).) The trial court found that Channelkeeper’s Complaint




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“does not implicate a property right” since only “unreasonable use of the river is at
issue.” We disagree.
       The property to which the City asserts a claim in its Cross-Complaint is the same
water that the City seeks to pump and divert from the river. The Cross-Complaint asserts
that the “City is exercising vested water rights” in a manner that “is reasonable and
beneficial,” and it seeks to limit the Cross-Defendants’ water use to a level that is also
“reasonable and beneficial” after consideration of the environmental issues in
Channelkeeper’s Complaint. The Cross-Complaint would compel the Cross-Defendants
to leave more water in the river, where it will be available to the City and the fish.
Because the water sources on which all users draw are alleged to be hydrologically
connected, the water that the Cross-Defendants are using and which is the subject of the
City’s Cross-Complaint is the same water that the City is using, which is the subject of
the Complaint.
       Channelkeeper argues that no property rights are at issue because there is no
property right in the unreasonable use of water. But this familiar principle of water law
points up the contradiction in Channelkeeper’s argument. It is precisely because the City
has no property right to the unreasonable use of water (Joslin, supra, 67 Cal.2d at p. 145)
that Channelkeeper’s declaratory judgment action implicates the City’s property right.
Channelkeeper seeks a judicial declaration that will limit the City’s right to use water.
The City aims to avoid any such constraint with its Cross-Complaint, which would limit
others’ water use in the watershed instead. Because both pleadings address the
“reasonableness” of water use, both concern the extent of property rights to the use of
water—the same water, namely, that which flows in the Ventura River or can be pumped
from the watershed’s groundwater basins. The fact that Channelkeeper seeks only
declaratory, and not injunctive, relief does not change the fact that the subject matter of
the Complaint is—at bottom—the extent of the City’s water rights, specifically as they
affect waterflow in Reaches 3 and 4 during the summer months.
       Thus, the “property” prong of Code of Civil Procedure section 428.10(b) gives the
City the right to file its Cross-Complaint, and for this reason, too, the trial court erred in


                                              17
striking it. In determining whether the volume of water the City is diverting and pumping
is reasonable, the court must be able to consider the demands on the watershed being
made by other water users, at least where other water users take pursuant to rights that are
junior to the City’s or in amounts that are unreasonable. (El Dorado, supra,
142 Cal.App.4th at p. 965; Long Valley, supra, 25 Cal.3d at p. 354.)
                                     DISPOSITION
       The judgment against the City on its Cross-Complaint, in the form of the trial
court’s September 18, 2015 order striking the First Amended Cross-Complaint, is
reversed. The case is remanded for further proceedings, and costs on appeal are awarded
to the City.




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                                                  _________________________
                                                  Tucher, J.*




We concur:




_________________________
Kline, P.J.




_________________________
Richman, J.




Santa Barbara Channelkeeper v. City of San Buenaventura (A146573)




       * Judge of the Alameda County Superior Court, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.



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Trial Court: San Francisco City & County Superior Court

Trial Judge: Hon. Suzanne Bolanos

Counsel:

Best Best & Krieger, Gene Tanaka, Shawn Hagerty, Irene S. Zurko for Defendant and
Appellant.

Lawyers for Clean Water, Caroline Koch, Daniel Cooper for Plaintiff and Respondent.




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