Filed 5/10/16 Delaware Tetra Technolgies, Inc. v. Santa Margarita Water Dist. CA4/3




                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.


              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE


DELAWARE TETRA TECHNOLOGIES,
INC.,
                                                                       G050869
     Plaintiff and Appellant,
                                                                       (Super. Ct. No. 30-2012-00594355)
         v.
                                                                       OPINION
SANTA MARGARITA WATER
DISTRICT et al.,

     Defendants and Respondents;

COUNTY OF SAN BERNARDINO et al.,

   Real Parties in Interest and
Respondents.



                   Appeal from a judgment of the Superior Court of Orange County,
Gail Andrea Andler, Judge. Affirmed. Respondents’ request for judicial notice.
Granted.
              Rutan & Tucker, Robert S. Bower, Philip D. Kohn, John A. Ramirez and
Alan B. Fenstermacher for Plaintiff and Appellant.
              Best Best & Krieger, Michelle Ouellette and Sarah E. Owsowitz for
Defendants and Respondents.
              Downey Brand, Christian L. Marsh, Kevin M. O’Brien and
Rebecca R.A. Smith for Real Party in Interest and Respondent County of San Bernardino.
              Remy Moose Manley, Sabrina V. Teller and Gwynne B. Hunter for
California State Association of Counties and California Association of Sanitation
Agencies as Amici Curiae on behalf of Defendant and Respondent Santa Margarita Water
District and Real Party in Interest and Respondent County of San Bernardino.
              Brownstein Hyatt Farber Schreck, Diane C. De Felice, Amy M. Steinfeld;
Woodruff, Spradlin & Smart and M. Lois Bobak for Real Parties in Interest and
Respondents Cadiz, Inc., and Fenner Valley Mutual Water Company.
              Cox, Castle & Nicholson, Michael H. Zischke and Andrew B. Sabey for
California Building Industry Association, Building Industry Legal Defense Foundation,
Building Industry Association of the Bay Area, California Business Properties
Association, California Chamber of Commerce, and Southern California District Council
of Laborers as Amici Curiae on behalf of Defendant and Respondent Santa Margarita
Water District and Real Parties in Interest and Respondents.
                                  *          *           *
                                      INTRODUCTION
              Groundwater in California is owned by the state, not in a proprietary sense,
but in the sense that the state may fully supervise and regulate its use. The California
Constitution requires that the state’s water resources be put to reasonable and beneficial
use to the fullest extent possible, and that unreasonable waste of water be prevented. The
application and interpretation of these general principles have led ultimately to this
appeal.

                                              2
              A proposed project to pump fresh groundwater from an underground
aquifer located below real property owned by Cadiz, Inc. (Cadiz), in the Mojave Desert
(the Project) spawned six related cases. The Project is a public/private partnership, the
purposes of which are to prevent waste of the water in the underground aquifer, and to
transport the water to many other parts of the state in which it is needed.
              In this case, Delaware Tetra Technologies, Inc. (Delaware Tetra), filed a
petition for a writ of mandate in the trial court, challenging approval of the Project.
Delaware Tetra’s brine mining business will be negatively impacted by the removal of
groundwater from the aquifer. The named respondents were the Santa Margarita Water
District, the lead agency for the Project (Santa Margarita), and the Santa Margarita Water
District Board of Directors. The County of San Bernardino (the County), a responsible
agency for the Project, was named as a real party in interest, as were Cadiz, the Project’s
participant water agencies, and Fenner Valley Mutual Water Company (Fenner Valley),
the nonprofit mutual benefit corporation that would be formed to operate the Project and
distribute water to the Project participants. The trial court denied Delaware Tetra’s
petition for a writ of mandate, and Delaware Tetra appeals. We affirm.
              First, Delaware Tetra contends that Santa Margarita was improperly
designated as the lead agency for the Project, and that this error so tainted the
environmental review process that it requires preparation of a new environmental impact
report (EIR). As explained in the companion case, Center for Biological Diversity v.
County of San Bernardino (May 10, 2016, G051058) ___ Cal.App.4th ___, ___-___
[pages 14-15], under California Code of Regulations, title 4, section 15051,
subdivision (a), (b)(1), or (d), Santa Margarita was correctly designated as the lead
agency for the Project.
              Second, Delaware Tetra argues that Santa Margarita violated the California
Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.) by certifying
the EIR based on a draft of the groundwater management, monitoring, and mitigation

                                              3
plan (the Plan). The Plan was not finalized and approved by Santa Margarita and the
County until the final EIR was certified. New information was included in the final
version of the Plan that was not included in the Plan which had been attached to the draft
EIR. We conclude, however, these facts do not require recirculation of the EIR. The
new information did not constitute deferred mitigation measures and, if anything,
strengthened the management plan for the Project.


                    STATEMENT OF FACTS AND PROCEDURAL HISTORY
              The relevant facts are set forth in detail in, Center for Biological Diversity
v. County of San Bernardino, supra, ___ Cal.App.4th at pages ___-___ [pages 5-7].
              In July 2012, Santa Margarita certified the final EIR and approved an
updated version of the Plan. Delaware Tetra operates brine mining facilities at the dry
lakes, which produce calcium chloride brine and sodium chloride. The flow of
groundwater is critical to Delaware Tetra’s operations. The final EIR identifies negative
impacts on Delaware Tetra’s mining operations as a potentially significant adverse effect
of the Project, and specifies how any negative impacts will be addressed.
              In August 2012, Delaware Tetra filed a petition for a writ of mandate
challenging the approval of the Project and the certification of the EIR. A bench trial was
held, after which the trial court issued a detailed statement of decision outlining its
findings of fact and conclusions of law. The court denied the petition with prejudice and
entered judgment against Delaware Tetra. Delaware Tetra filed a timely notice of appeal.
                                        DISCUSSION
                                              I.
                                  CALIFORNIA WATER LAW
              The California Constitution and the Water Code make clear that the policy
of this state is to put water resources to reasonable and beneficial use. The Constitution
provides: “It is hereby declared that because of the conditions prevailing in this State the

                                              4
general welfare requires that the water resources of the State be put to beneficial use to
the fullest extent of which they are capable, and that the waste or unreasonable use or
unreasonable method of use of water be prevented, and that the conservation of such
waters is to be exercised with a view to the reasonable and beneficial use thereof in the
interest of the people and for the public welfare.” (Cal. Const., art. X, § 2.)
              Groundwater belongs to the state, not any person or entity, but may be
extracted by those with the right to do so, including those whose land overlies the
groundwater source. (Central and West Basin Water Replenishment Dist. v. Southern
Cal. Water Co. (2003) 109 Cal.App.4th 891, 905-906.)
              State agencies have consistently concluded that flexibility is necessary in
managing groundwater supplies. “Groundwater management must be adapted to an
area’s political, institutional, legal, and technical constraints and opportunities.
Groundwater management must be tailored to each basin or subbasin’s conditions and
needs. Even within a single basin, the management objectives may change as more is
learned about managing the resource within that basin. Flexibility is the key, but that
flexibility must operate within a framework that ensures public participation, monitoring,
evaluation, feedback on management alternatives, rules and regulations, and
enforcement.” (Dept. of Water Resources, Cal.’s Groundwater: Bulletin 118-Update
2003 (Oct. 2003) p. 38 <http://www.water.ca.gov/pubs/groundwater/bulletin_118/
california’s_groundwater__bulletin_118_-_update_2003_/bulletin118_entire.pdf> [as of
May 10, 2016].)
                                              II.
                       CEQA STANDARDS AND STANDARD OF REVIEW
              The standards used by the courts to review disputes under CEQA are
described in detail in Center for Biological Diversity v. County of San Bernardino, supra,
___ Cal.App.4th at pages ___-___ [pages 10-12], as is the standard of review applicable
here. In short, as the appellate court, we review the agency’s actions to determine

                                               5
whether a prejudicial abuse of discretion occurred. (Rialto Citizens for Responsible
Growth v. City of Rialto (2012) 208 Cal.App.4th 899, 923.)
                                             III.
     THE DESIGNATION OF SANTA MARGARITA AS THE LEAD AGENCY FOR THE PROJECT
                          IS IN COMPLIANCE WITH CEQA.

                Delaware Tetra contends that the County should have been designated as
the lead agency because the County had the principal responsibility for approving the
Project, the County was required to approve all of the Project’s facilities, the County has
primary enforcement authority over the Project, the County has more expertise in
determining the Project’s impacts, Santa Margarita was not able to be neutral and
accountable under CEQA, and Santa Margarita would not be carrying out the Project.
                As explained in detail in Center for Biological Diversity v. County of San
Bernardino, supra, ___ Cal.App.4th at pages ___-___ [pages 14-15], we hold that under
California Code of Regulations, title 14, section 15051, subdivisions (a) and (b)(1), Santa
Margarita will carry out the Project as part of a public/private partnership, and that Santa
Margarita has the greatest responsibility, vis-à-vis the County, for supervising or
approving the Project, and was therefore correctly designated as the lead agency.
Further, pursuant to section 15051, subdivision (d), Santa Margarita and the County
properly entered into an agreement for Santa Margarita to act as the lead agency for the
Project. Because there was no error in Santa Margarita’s designation as the lead agency
for the Project under the relevant statutes and regulations, we need not address the issue
of prejudice.
                                             IV.
           SANTA MARGARITA DID NOT VIOLATE CEQA BY CERTIFYING THE EIR
                         BASED ON A DRAFT OF THE PLAN.

                Delaware Tetra argues that the EIR was fundamentally defective because it
failed to consider and analyze the final version of the Plan, which Delaware Tetra refers


                                              6
to as “the key component of the Project” (boldface, underscoring, & some capitalization
omitted). The use of a “‘truncated project concept’” in an EIR violates CEQA, and
requires reversal of the approval of the Project. (San Joaquin Raptor/Wildlife Rescue
Center v. County of Stanislaus (1994) 27 Cal.App.4th 713, 729-730 [EIR for residential
development, which recognized the need for sewer expansion but failed to include sewer
expansion in its project description or to consider expansion’s effects, was in violation of
CEQA]; see County of Amador v. El Dorado County Water Agency (1999) 76
Cal.App.4th 931, 949-951 [EIR for a project to obtain new water sources for
contemplated growth in the county was fundamentally flawed when assumptions about
growth were based on a draft of the county’s general plan].)
              The full text of the draft of the Plan was included in the draft EIR.
According to Santa Margarita, the Plan was not merely a concept, but “was a fully
developed and detailed 100-plus page management plan to adaptively manage
groundwater resources.”
              Delaware Tetra points to several pieces of information, referred to by it
collectively as the “parameters,” which were included in the Plan attached to the final
EIR but not the Plan attached to the draft EIR. Delaware Tetra claims that by failing to
evaluate the Plan with those parameters, the draft EIR failed to analyze an integral
component of the Project.
              Santa Margarita contends that the portions of the Plan that were not
included in the version attached to the draft EIR did “not constitute significant new
information requiring recirculation of the EIR and did not preclude [Santa Margarita]
from certifying the EIR.”
              The CEQA findings that are a part of Santa Margarita’s resolution
approving the Project and certifying the EIR provide, in relevant part: “The Draft [Plan]
was updated since the publication of the Draft EIR to clarify matters such as the County’s
enforcement authority over the management plan, the details of monitoring and corrective

                                             7
measures beyond those required by CEQA to protect critical resources, and to establish a
‘floor’ for the drawdown of groundwater levels and a limit for brine migration. The
revisions strengthen the management plan, but do not alter the analysis or findings in the
Draft EIR, or present any new information that would require recirculation. The
Updated [Plan] was prepared to satisfy the exclusion provisions of the County Desert
Groundwater Management Ordinance, San Bernardino County Code Title 13 Division 3
Article 5 Sections 3306551, et. seq. (Ordinance), and is subject to the County’s
discretionary review and approval as a responsible agency under CEQA. Accordingly,
the inclusion of the Updated [Plan] in the Final ElR is not significant new information
which would trigger the need to recirculate the EIR.” (Italics added.)
              In Laurel Heights Improvement Assn. v. Regents of University of California
(1993) 6 Cal.4th 1112, 1129-1130, the California Supreme Court held: “[R]ecirculation
[of an EIR] is not required where the new information added to the EIR ‘merely clarifies
or amplifies [citations] or makes insignificant modifications in [citation] an adequate
EIR.’ [Citation.] On the other hand, recirculation is required, for example, when the new
information added to an EIR discloses: (1) a new substantial environmental impact
resulting from the project or from a new mitigation measure proposed to be implemented
[citation]; (2) a substantial increase in the severity of an environmental impact unless
mitigation measures are adopted that reduce the impact to a level of insignificance
[citation]; (3) a feasible project alternative or mitigation measure that clearly would
lessen the environmental impacts of the project, but which the project’s proponents
decline to adopt [citation]; or (4) that the draft EIR was so fundamentally and basically
inadequate and conclusory in nature that public comment on the draft was in effect
meaningless [citation].”




                                              8
              We next examine the topics Delaware Tetra contends constitute significant
new information.
              A. Saline Water Migration
              Section 6.4 of the copy of the Plan attached to the final EIR included a
requirement that saline water migration not extend beyond 6,000 feet from the baseline of
the saline-freshwater interface. This 6,000-foot limitation was not included in section 6.4
of the Plan attached to the draft EIR. We next determine whether new information in the
final EIR is significant.
              The 6,000 feet “parameter” comes from section 4.1.2.5 of the Plan attached
to the final EIR, which reads, in relevant part: “As a precautionary measure to limit the
migration of hyper-saline groundwater and protect the health of the aquifer under the
County Ordinance, the saline-freshwater boundary shall be monitored and its migration
limited to 6,000 ft northeast of the Dry Lakes through physical measures (e.g., injection
or extraction wells) or pumping restrictions if physical measures prove ineffective.” The
remainder of that section is identical to section 4.1.2.5 of the Plan attached to the draft
EIR.
              The explanation for the additional limitations on saline water migration is
set forth in Santa Margarita’s responses to comments on the draft EIR. “Specifically, any
effects the Project may have on water quality due to the migration of brine toward the
wellfield, lower groundwater levels in neighboring wells and in saline water wells used
by the salt production operations, or minor levels of land subsidence would be mitigated
by implementation of Mitigation Measures AQ-5, GEO-1, HYDRO-2, HYDRO-3, and
MIN-1. These mitigation measures are updated to provide clarifying detail on their
implementation methods and are included in the Final EIR . . . . [¶] . . . [¶] Mitigation
Measure HYDRO-2 would implement corrective measures to address water quality by
including early warning action criteria and establishing a limit to the migration of the
saline-freshwater interface through implementation of corrective measures. Five well

                                              9
clusters between the Project wellfield and the Dry Lakes on the freshwater side of the
saline-freshwater interface would monitor the migration of the saline-freshwater interface
and trigger corrective action to avoid impacts to beneficial uses of the aquifer. The
interface is designated as the line where the concentration of Total Dissolved Solids
(TDS) is 1,000 mg/1, based on the Upper Limit secondary Maximum Contaminant Level
(MCL). If the TDS concentration reaches 600 mg/1 at any of the monitoring cluster
wells, responsive measures will be triggered. Migration of the saline-freshwater interface
will be limited to 6,000 feet.” (Italics added, boldface omitted.)
                In short, the changes to section 6.4 of the Plan are merely minor
modifications to the EIR, all of which provide more, not less, environmental protection.1
Santa Margarita’s CEQA findings are supported by substantial evidence. We conclude
no significant new information was included, and, therefore, recirculation of the EIR was
not required.
                B. Groundwater Management Level
                Section 6.9.1 was not a part of the Plan when it was attached to the draft
EIR. Section 6.9.1, which adds a maximum level to which groundwater may be drawn
down in the center of the Project well field, was added to the Plan to conform with the
requirements of a memorandum of understanding executed in 2012 by Santa Margarita,




                1
                 Additionally, section 6.4 of the Plan, attached as an appendix to the draft
EIR, would require that Fenner Valley undertake a decisionmaking process if the
concentration of total dissolved solids in the observation wells between the Project’s well
field and the dry lakes was greater than 1,000 milligrams per liter. The Plan, as attached
to the final EIR, changes that amount to a concentration in excess of 600 milligrams per
liter. The earlier version of the Plan placed all responsibility for deciding whether
corrective measures should be undertaken on Fenner Valley. The later version of the
Plan created a decisionmaking process that would apply to all possible significant adverse
impacts, and involved Fenner Valley, Santa Margarita, the technical review panel, and
the County.

                                              10
the County, Cadiz, and Fenner Valley (the 2012 Memorandum).2 The 2012
Memorandum was executed five months after the draft EIR was released, and any
language required by it could not have been included in the earlier draft of the Plan.
              In response to the comments to the draft EIR, Santa Margarita explained
why section 6.9.1 was added to the Plan and why it was not significant new information.
“In addition to the imposition of mitigation measures in the EIR by [Santa Margarita], the
County of San Bernardino (County), as a responsible agency, will review and consider
the Project pursuant to its Groundwater Management Ordinance. As part of the
regulatory process, the County has requested additional conditions beyond those required
for CEQA compliance. Accordingly, the Updated [Plan] includes a groundwater ‘floor’
(maximum 80 feet of drawdown in the wellfield area) that will provide the County the
opportunity to evaluate effects of Project drawdown and require the modification or
suspension of Project operations to protect critical resources. The ‘floor’ is within the
model-predicted drawdown under the Project Scenario (based on 32,000 [acre-feet per
year] of recharge) (see Draft EIR Vol. 1, Section 4.9.3 Hydrology and Water Quality,
Figure 4.9-12). This feature is not required by CEQA but is included as a management
feature to reinforce implementation of the [Plan] and protection of critical resources.
Similarly, the Updated [Plan] also includes a management feature for springs by
providing for monitoring, action criteria and corrective measures to avoid any
unanticipated Project effects on spring flows.”



              2
                Under the terms of the 2012 Memorandum, the signing parties agreed
that the Plan would be developed, and would “govern the operation and management of
the Project by [Fenner Valley] during the operational phase of the Project, the currently
anticipated term of which is 50 years.” In the 2012 Memorandum, the parties agreed that
compliance with its provisions and the provisions of the Plan would satisfy the
requirements for an exclusion from the San Bernardino County Desert Groundwater
Management Ordinance. The 2012 Memorandum provided that the Project could not
proceed unless the parties finalized the Plan.

                                             11
              CEQA permits changes in a project description, particularly when those
changes occur in response to comments to the draft EIR. (Western Placer Citizens for an
Agricultural & Rural Environment v. County of Placer (2006) 144 Cal.App.4th 890, 898;
County of Inyo v. City of Los Angeles (1977) 71 Cal.App.3d 185, 199.)
              Additionally, changes to a project, which decrease, rather than increase,
adverse environmental impacts, do not make the draft EIR misleading or in violation of
CEQA, and do not require recirculation of the EIR. Such changes do not show (1) new
significant environmental impacts; (2) substantial increases in the severity of
environmental impacts; or (3) that alternatives or mitigation measures not considered in
the EIR were feasible. (Laurel Heights Improvement Assn. v. Regents of University of
California, supra, 6 Cal.4th at p. 1130.)
              Santa Margarita’s finding that section 6.9.1 of the Plan merely modified the
EIR in an insignificant way was supported by substantial evidence. (Laurel Heights
Improvement Assn. v. Regents of University of California, supra, 6 Cal.4th at
pp. 1134-1135.)
              C. Deferred Mitigation Measures
              Delaware Tetra argues that the final EIR should not have been certified
until the Plan was approved by the County because doing so was effectively deferring
formulation of required mitigation measures.
              In the context of CEQA, mitigation measures are “feasible measures which
could minimize significant adverse impacts.” (Cal. Code Regs., tit. 14, § 15126.4,
subd. (a)(1); see Pub. Resources Code, § 21100, subd. (b)(3).) As part of the final EIR,
Santa Margarita attached a mitigation monitoring and reporting program, which set forth
all “mitigation measures identified in the Final Environmental Impact Report (EIR) that
are required to address impacts associated with the Project.” Delaware Tetra does not
challenge any of the mitigation measures set forth in the program, and does not claim that
the mitigation measures, in total, are insufficient. Delaware Tetra bears the burden of

                                            12
showing there is insufficient evidence that the mitigation measures would reduce adverse
environmental impacts. (California Native Plant Society v. City of Rancho Cordova
(2009) 172 Cal.App.4th 603, 626.)
              Deferred mitigation is permissible when (1) it is known to be feasible, (2) it
is not feasible to set forth specific mitigation measures in the EIR, and (3) the EIR
articulates specific performance criteria for future mitigation measures. (Communities
for a Better Environment v. City of Richmond (2010) 184 Cal.App.4th 70, 94.) “When an
agency defers formulation of a mitigation measure, it should explain why deferral is
appropriate. Deferral can be found improper if no reason for it is given.” (1 Kostka &
Zischke, Practice Under the Cal. Environmental Quality Act (Cont.Ed.Bar 2d ed. 2016)
§ 14.12, p. 14-19 (rev. 3/16); see San Joaquin Raptor Rescue Center v. County of Merced
(2007) 149 Cal.App.4th 645, 671 [EIR deficient where no reason provided for deferral of
mitigation measures to future management plan]; Preserve Wild Santee v. City of Santee
(2012) 210 Cal.App.4th 260, 292 [improper deferral of mitigation measures violates
CEQA and requires reversal of project approval].)
              Impermissible deferral of mitigation measures occurs “when an EIR calls
for mitigation measures to be created based on future studies or describes mitigation
measures in general terms but the agency fails to commit itself to specific performance
standards.” (1 Kostka & Zischke, Practice Under the Cal. Environmental Quality Act,
supra, § 14.12, p. 14-18 (rev. 3/16).)
              The modification of section 6.4 of the Plan is included in the program as a
delineated mitigation measure; therefore, it is not a deferred mitigation measure.
              Section 6.9.1 of the Plan is not a mitigation measure at all. As explained
ante, section 6.9.1 adds to the final EIR monitoring criteria that go beyond CEQA’s
requirements. If the mitigation measures set forth in an EIR adequately minimize the
significant environmental impacts identified for a project, nothing prohibits the lead
agency on that project from going further and doing more, as long as the further actions

                                             13
do not cause their own significant environmental impacts. Here, Delaware Tetra does not
claim (1) the mitigation measures in the EIR were insufficient to resolve the significant
adverse impacts identified in the EIR; (2) the EIR failed to identify significant adverse
impacts; or (3) the additional monitoring and the “floor” set by section 6.9.1 would cause
further adverse impacts.


                                       DISPOSITION
              The judgment is affirmed. Respondents to recover costs on appeal.




                                                  FYBEL, J.

WE CONCUR:



ARONSON, ACTING P. J.



IKOLA, J.




                                             14
