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City of Barstow v. Mojave Water Agency

California Court of Appeals, Fourth District, Second Division
Jun 1, 1998
75 Cal. Rptr. 2d 477 (Cal. Ct. App. 1998)

Opinion

        Previously published at 64 Cal.App.4th 737

         Covingtons&s Crowe, LLP, Robert E. Dougherty and Eric S. Vail, Ontario, for Cross-defendants and Appellants Manuel Cardozo et al.

        Gutierrezs&s Preciado, Calvin House and Clifton A. Baker, Pasadena, for Cross-defendant and Appellant Jess Ranch Water Company.

        McCormick, Kidmans&sBehrens, LLP, Arthur G. Kidman, David D. Boyer and Bradley D. Pierce, Costa Mesa, for Plaintiffs and Respondents City of Barstow and Southern California Water Company.

        Brunick, Alvarezs&sBattersby, William J. Brunick, San Bernadino, and Jeffery L. Caufield, San Diego, for Defendants, Cross-complainants and Respondents Mojave Water Agency et al.

        Markman, Arczynski, Hanson, Curleys&sSlough, James Markman, Brea, and Boyd Hill for City of Hesperia and Hesperia Water Company.

        Nossaman, Guthner, Knoxs&sElliott, Frederic A. Fudacz and John Ossiff, Los Angeles, for Apple Valley Ranchos Water Company.

        Monteleones&s McCrory and Thomas P. McGuire, Los Angeles, for Victor Valley Water District.

        Best, Bests&s Krieger, Eric Garner and Arthur L. Littleworth, Riverside, for Rancho Las Flores Limited Partnership.

        Daniel E. Lungren, Attorney General, Roderick E. Walston, Chief Assistant Attorney General, Charles W. Getz, IV, Assistant Attorney General, and Marilyn H. Levin, Deputy Attorney General, for California Department of Fish and Game.

        Law Offices of Therese Exline Parker for Alfredo Arguelles, Richard F. Barak, Charles Bell, Lillian Borgogno, John Thomas Carter, Marshal Chuang, George Ronald Dahlquist, Alan DeJong, Frank T. Duran, Trinidad L. Gaeta, Wayne D. Gesiriech, S. Harold Gold, Ciril Gomez Living Trust, Daniel C. Gray, Karen Gray, Nick Grill, Merlin Gulbranson Excavating, Scott S. Hert, Melvin Hill, John Hosking, Jean Hosking, Larry Johnson, Joon Ho Kim, H. Leslie Levine, J. Peter Lounsbury, Ken Luth, The 160 Newberry Ranch Limited Partnership, Meadowbrook Dairy, Newberry Ranch, George Parker, Ruth Parker, Trinidad Perez, Daniel Pettigrew, Howard Pettigrew, John J. Pettis, Joan C. Randolph, Bill Resseque, Charles Short, Robert A. Smith, Wayne A. Soppeland, Stanley Stewart, Patricia Stewart, Edward W. Stringer, Thomas Taylor, Carole Taylor, Dale Thomas, Ronald Thomas, James A.

Thompson, Cornelius Van Diest, Van Leuwen Family Trust, Albert H. Vogler, Ykema Trust, Ykema Harmsen Dairy, Keith Young and Margie Young.

        Alan K. Marks, County Counsel, L. Thomas Krahelski and Paul M. St. John, Deputy County Counsel, for Baldy Mesa Water District, Juniper Riviera County Water District, San Bernardino County Barstow-Daggett Airport, San Bernardino County Service Area 29, San Bernardino County Service Area 42, San Bernardino County Service Area 64, San Bernardino County Service Area 70C, San Bernardino County Service Area 70G, San Bernardino County Service Area 70J and San Bernardino County Service Area 70L.

        Redwine and Sherrill and Steven B. Abbott, Riverside, for Lake Arrowhead Community Services District, Kemper Campbell Ranch and Southdown, Inc.

        Gresham, Savage, Nolans&sTilden, LLP and Michael Duane Davis, San Bernardino, for Hesperia Golfs&sCountry Club, Mitsubishi Cement Corporation, Rheox, Inc. and Silver Lakes Association, and Specialty Minerals, Inc.

        Southern California Edison Company, Nino J. Mascolo and Douglas P. Ditonto, Rosemead, for Southern California Edison Company.

        Nancy N. McDonough and David J. Guy, Sacramento, as Amicus Curiae on behalf of California Farm Bureau Federation.


        OPINION

        HOLLENHORST, Associate Justice.

        This case holds that the trial court erred in adjudicating water priorities in an overdrafted basin on the basis of an alleged physical solution based on the doctrine of equitable apportionment without due regard for the riparian and overlying water rights of farmers in the basin. We therefore reverse the judgment as to the farmers, and affirm the judgment as to other parties who stipulated to it.

        In the second portion of the opinion, we hold that a water producer who desired to stipulate to the judgment on the same terms as those offered to other parties was entitled to do so. We therefore reverse the judgment as to that producer.

        PROCEDURAL HISTORY

        In 1990, the City of Barstow and Southern California Water Company filed this action against the City of Adelanto, Mojave Water Agency, and others, claiming that groundwater production by the City of Adelanto and other upstream water producers was adversely impacting Barstow's water supply. The complaint also requested a writ of mandate to compel Mojave Water Agency to perform its duties and to import State Water Project water.

        In 1991, Mojave Water Agency filed an amended cross-complaint. The amended cross-complaint joins all water producers within the Mojave River watershed, except for certain small producers. The amended cross-complaint requests a declaration that the available water supply is inadequate to meet the demands of the producers within the watershed, and seeks a declaration of the water rights of water producers within the Mojave River watershed.

The Mojave Water Agency is a district which generally has the power to take steps necessary "to be done so that sufficient water may be available for any present or future beneficial use or uses of the lands or inhabitants of the agency...." (Water Code Appen., § 97-15, subd. (a).) It has the specific power to seek a court adjudication of water rights within the Mojave River Basin. (Water Code Appen., § 97-37.) In 1994, it was given specific statutory powers with regard to implementation of the trial court judgment in this case. (Water Code Appen., §§ 97-46 and 97-47.)

        A litigation standstill was ordered while a joint engineering committee studied certain production and use data in an attempt to formulate a proposed physical solution. Mojave Water Agency was allowed to conduct discovery to determine water production and use data in the basin. A legal committee sought to develop a physical solution to the long-term water shortage in the Mojave River system.

        After two years of negotiations, a draft physical solution was submitted to the trial court. The trial court then ordered that all parties be notified that they had to either accept the physical solution by stipulation,

        After definition of trial issues, a court trial was held for the nonstipulating parties. The trial court identified the following issues to be tried for the nonstipulating parties: (1) Characterization of water rights; (2) Priority, if any; (3) What are the uses? (4) Are the uses reasonable? (5) The amount of reasonable and beneficial use. Other trial issues included identification of the subareas, whether the physical solution creates an equitable apportionment of water, and whether the physical solution satisfies the requirements of California Constitution, article X, section 2.

        Following the court trial, the trial court issued a 25-page statement of decision. The trial court recited the procedural history of the case and the facts in detail. After a legal analysis, the trial court concluded that "the constitutional mandate of reasonable and beneficial use dictates an equitable apportionment of all rights when a water basin is in overdraft." Accordingly, the trial court found it unnecessary to adjudicate individual water rights and instead found that the proposed physical solution, incorporating a free production allowance, was fair and equitable to nonstipulating farmers. Specific findings, discussed below, were made as to the claims of the Cardozo Appellants and Jess Ranch Water Company. An amended statement of decision was filed on January 2, 1996. A 153-page judgment was filed on January 10, 1996. The Cardozo Appellants and the Jess Ranch Water Company each appeal from the judgment.

We use the term "Cardozo Appellants" to refer to the following appellants: Manuel and Maria Cardozo, Niel DeVries, Virgil Gorman, Richard and Geneva Leyerly, Jerry Osterkamp, David and Elizabeth Daily, Richard and Elaine Fitzwater, Cornelis J. Groen, Robert T. and Barbara T. Older and Steve Older.

         The Cardozo Appellants are holders of alleged riparian or overlying rights to water which they are using on their property for agricultural purposes. The Cardozo Appellants contend that the physical solution adopted by the trial court is fatally defective in a number of ways. They primarily assert that the trial court failed to recognize their pre-existing and paramount water rights under California law, and that the trial court's physical solution should be revised to recognize and protect those rights.

        Jess Ranch Water Company contends that the trial court erred in assuming the validity of the proposed physical solution and in imposing upon Jess Ranch the burden of proving its water rights. It also contends that the trial court ignored its water rights, in violation of the principle that a physical solution must take established water rights into account. Thirdly, it argues that the physical solution is inequitable as to it because the physical solution does not treat it the same as other water producers because it was not awarded a base annual production right calculated on the same basis as the base annual production rights of other producers.

        Respondents are Mojave Water Agency, the City of Barstow and Southern California Water Company. Mojave Water Agency contends that the trial court properly imposed the physical solution. It argues that the Cardozo Appellants failed to prove that they had water rights which were adversely affected by the judgment, that any water rights of the Cardozo Appellants were limited by the doctrine of reasonable use, and that the Cardozo Appellants failed to show that they would be damaged by the physical solution. Mojave Water Agency also argues that the base annual production allowed to Jess Ranch was properly calculated in the judgment.

        The City of Barstow and Southern California Water Company contend that article X, section 2 of the California Constitution requires a court to equitably apportion water among users in an overdrafted area, that the Mojave River Basin is an overdrafted area, and that the trial court properly considered         In addition, several post-trial issues were separately appealed, and will be separately considered.

        THE PHYSICAL SOLUTION

        The physical solution adopted by the trial court was generally described to the parties as follows:

        "The purpose of the judgment is to (1) develop means to conserve local water, (2) guarantee that downstream water producers will not be adversely affected by production upstream, and (3) raise money to purchase supplemental water supplies. The judgment does not place restrictions on the quantity of water a producer may pump.

        "The judgment divides the Mojave River Basin into five geologic subareas. Each subarea has an obligation to and will be assessed for providing a specific (historical) quantity of water to the adjoining downstream subarea. The obligations of an upstream subarea to provide water to the adjoining downstream subarea is known as a 'makeup' water obligation.

        "The judgment further provides that when a producer produces water in excess of the amount allocated to that producer under the judgment, the producer will be assessed a fee to purchase 'replacement' water for that particular subarea. This is known as a 'replacement' water obligation.

        "The judgment sets forth the 'free production allowance' of each subarea, as well as the 'base annual production' and the 'base annual production right' of each party. The free production allowance is the amount of water that may be produced from a subarea each year free of any replacement water obligation. A producer's base annual production is the maximum annual production that the producer produced for the five [-] year period 1986-1990. A producer's base annual production right is defined as the relative right of each producer to the free production allowance within a given subarea, as a percentage of the aggregate of all producers' base annual production in the subarea.

        "The base annual production right of each producer has been determined without priority for the type of use or type of water right. If a producer exceeds the producer's share of the free production allowance for that subarea, the producer will be assessed a 'replacement water assessment.' The judgment further provides that a court appointed watermaster will use the funds collected from replacement water assessments to purchase water to replace the excess production. To avoid the immediate adverse economic impacts associated with such assessments, the judgment provides that the free production allowance will be 'ramped down' gradually over a five[-]year period. The free production allowance for each subarea will be set as the amount of water equal to the following percentages of the aggregate base annual production for that subarea:

Water YearPercentage1993"19941001994"1995951995"1996901996"1997851997"199880

         "In addition to replacement water assessments, the parties may incur 'makeup water assessments' for the purpose of purchasing water to meet a subarea's makeup obligation to the adjoining downstream subarea. Makeup water assessments will be levied against each party in each subarea against each acre-foot of production which does not bear a replacement assessment.

        "Finally, an administrative assessment will be levied against each acre-foot of production to fund the administrative budget adopted by watermaster." (Emphasis added.)

        One of the drafters of the physical solution testified that its purpose was not to balance water consumption with natural supply because "then the only way to achieve that would be drastic reductions in the amount of water being produced by a lot of people. And that simply was not seen to be an acceptable direction to go by the people who drafted this. The idea was to create a solution that generates the money necessary to acquire water either through transfer or through import and to cause through economic         The drafters thus contemplated that "as a result of the physical solution being imposed that a large number of agricultural interests will cease production and transfer their base annual production to the municipalities." They did not accept any theory of priority of water rights in drafting the physical solution because the drafting committee thought that the results achieved were inequitable. As one of the drafters put it, "the decision was that there would not be a priority system other than an equal priority system." Mojave Water Agency also made no determination of anyone's water rights.

The drafting committee invented the terms "free production allowance" and "replacement water obligations" in the process of drafting the physical solution. The trial court, without explanation, accepted free production allowance as a water right.

THE CARDOZO APPELLANTS' ATTACK ON THE PHYSICAL SOLUTION

        The Cardozo Appellants attack the physical solution on grounds that (1) it fails to recognize and protect their water rights; (2) it imposes a burdensome expense on them, with the intention to reduce or eliminate agricultural uses; (3) it encourages waste of water; (4) it encourages unlawful transfer of water; (5) it fails to bind all producers in the basin; (5) it has other harmful and inequitable effects.

        Before considering these specific contentions, we first review the reasons given by the trial court and, particularly, its conclusion that "[s]ince riparian  rights are correlative as among riparians and overlying rights are correlative as among overlying users, the constitutional mandate of reasonable and beneficial use dictates an equitable apportionment of all rights when a water basin is in overdraft." (Emphasis added.)

        STANDARD OF REVIEW

        Different standards of review apply to different issues in this case. A sufficiency of the evidence standard of review applies to factual determinations made by the trial court. For factual issues "[w]e resolve all evidentiary conflicts in favor of the prevailing parties, and indulge all reasonable inferences possible to uphold the trial court's findings. [Citation.]" (Jordan v. City of Santa Barbara (1996) 46 Cal.App.4th 1245, 1254-1255, 54 Cal.Rptr.2d 340.) Legal issues are reviewed independently: "The trial court's determinations of issues of law, however, are fully reviewable by this court, and we are bound neither by the preliminary resolution of same by the Board nor by the subsequent trial court decision. [Citations.]" (Imperial Irrigation Dist. v. State Wat. Resources Control Bd. (1990) 225 Cal.App.3d 548, 553, 275 Cal.Rptr. 250.) Mixed questions of law and fact are reviewed under either standard by determining whether the issue is essentially factual or not. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 800-801, 35 Cal.Rptr.2d 418, 883 P.2d 960.) Finally, discretionary rulings of the trial court are reviewed under an abuse of discretion standard of review. (Blank v. Kirwan (1985) 39 Cal.3d 311, 331, 216 Cal.Rptr. 718, 703 P.2d 58.)

        EQUITABLE APPORTIONMENT

        The main issue on appeal is whether the trial court could disregard overlying water rights in order to "equitably apportion" water rights to all producers in an overdrafted groundwater basin. We hold that the trial court could not overlook well-settled principles of water law to establish its own system of groundwater allocation.

        The trial court found that the Mojave River groundwater basin is a subsurface reservoir which yields water to wells drilled in the area, and that the groundwater was properly classified as percolating groundwater. It also found that the basin was overdrafted and we agree with respondents that we are required by the substantial evidence rule to accept these conclusions. Accordingly, we are concerned with the overlying rights of landowners in an overdrafted groundwater basin. (See, generally, 1 Rogerss&sNichols, Water for Cal. (1967) §§ 249-250, pp. 354-  1. Overlying Rights.

        The Cardozo Appellants contend that they have overlying rights to use percolating groundwater to raise crops on their properties. "An overlying water right is analogous to that of a riparian owner's right in a stream; it is the right to take water from the ground underneath the land for use on the land. The right is based on the ownership of the land and is appurtenant thereto. [Citation.] As between overlying owners, the rights, like those of riparians, are correlative, i.e., they are mutual and reciprocal. This means that each has a common right to take all that he can beneficially use on his land if the quantity is sufficient; if the quantity is insufficient, each is limited to his proportionate fair share of the total amount available based upon his reasonable need. [Citations.] The proportionate share of each owner is predicated not on his past use over a specified period of time, nor on the time he commenced pumping, but solely on his current reasonable and beneficial need for water." (Tehachapi-Cummings County Water Dist. v. Armstrong (1975) 49 Cal.App.3d 992, 1001, 122 Cal.Rptr. 918.)

        In California Water Service Co. v. Edward Sidebothams&sSon (1964) 224 Cal.App.2d 715, 725, 37 Cal.Rptr. 1, the court described overlying rights as follows: "An overlying right, analogous to that of a riparian owner in a surface stream, is the owner's right to take water from the ground underneath for use on his land within the basin or watershed; it is based on the ownership of the land and is appurtenant thereto.... Any person having a legal right to surface or ground water may take only such amount as he reasonably needs for beneficial purposes [citations]. Public interest requires that there be the greatest number of beneficial users which the supply can yield, and water may be appropriated for beneficial use subject to the rights of those who have a lawful priority [citation]. Any water not needed for the reasonable beneficial use of those having prior rights is excess or surplus water and may rightly be appropriated on privately owned land for non-overlying use, such as devotion to public use or exportation beyond the basin or watershed [citation].... Proper overlying use, however, is paramount and the rights of an appropriator, being limited to the amount of the surplus [citation], must yield to that of the overlying owner in the event of a shortage, unless the appropriator has gained prescriptive rights through the taking of nonsurplus waters. As between overlying owners, the rights, like those of riparians, are correlative; each may use only his reasonable share when water is insufficient to meet the needs of all [citation]."

2. The 1928 Constitutional Amendment.

        The trial court, and respondents City of Barstow and Southern California Water Company rely on article X, section 2 of the California  Constitution to support the conclusion that "the constitutional mandate of reasonable and beneficial use dictates an equitable apportionment of all rights when a water basin is in overdraft."

        Article X, section 2 of the California Constitution was adopted in 1928 as former article XIV, section 3. It establishes the principle that all water rights are limited by the concept of reasonable and beneficial use. "[T]he rule of reasonable use as enjoined by         Respondents and the trial court rely on two cases to support their contention that the constitutional provision requires equitable apportionment of all water rights: City of Pasadena v. City of Alhambra (1949) 33 Cal.2d 908, 207 P.2d 17, and City of Los Angeles v. City of San Fernando (1975) 14 Cal.3d 199, 123 Cal.Rptr. 1, 537 P.2d 1250.

The entire section states: "It is hereby declared that because of the conditions prevailing in this State the 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. 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 and shall be 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. Riparian rights in a stream or water course attach to, but to no more than so much of the flow thereof as may be required or used consistently with this section, for the purposes for which such lands are, or may be made adaptable, in view of such reasonable and beneficial uses; provided, however, that nothing herein contained shall be construed as depriving any riparian owner of the reasonable use of water of the stream to which the owner's land is riparian under reasonable methods of diversion and use, or as depriving any appropriator of water to which the appropriator is lawfully entitled. This section shall be self-executing, and the Legislature may also enact laws in furtherance of the policy in this section contained." (Cal. Const., art. X, § 2, emphasis added.)

3. The City of Pasadena Case.

        The City of Pasadena case was an adjudication of water rights in an overdrafted basin that Pasadena relied on as a water source. The issue was essentially the same as the issue in this case: "There can be no question that the trial court had authority to limit the taking of ground water for the purpose of protecting the supply and preventing a permanent undue lowering of the water table. [Citations.] The main problems presented are which of the parties should bear the burden of curtailing the total production of the unit to the safe yield and what proportion, if any, of the pumping by each particular party should be restricted. Since the stipulation made by the other parties as to the reduction in pumping by each is not binding upon appellant, it is necessary to determine appellant's rights in relation to the other producers in the same manner as if there had been no agreement. [p] The question of who shall bear the burden of curtailing the overdraft, and in what proportion, depends upon the legal nature and status of the particular water right held by each party. Rights in water in an underground basin, so far as pertinent here, are classified as overlying, appropriative, and prescriptive.... [p] [I]t is now clear that an overlying owner or any other person having a legal right to surface or ground water may take only such amount as he reasonably needs for beneficial purposes. [Citations.] Public interest requires that there be the greatest number of beneficial uses which the supply can yield, and water may be appropriated for beneficial uses subject to the rights of those who have a         The court went on to hold that, when there was no surplus water, the riparian and overlying rights would prevail unless the appropriator had acquired prescriptive rights: "It is the policy of the state to foster the beneficial use of water and discourage waste, and when there is a surplus, whether of surface or ground water, the holder of prior rights may not enjoin its appropriation. [Citations.] Proper overlying use, however, is paramount, and the right of an appropriator, being limited to the amount of the surplus, must yield to that of the overlying owner in the event of a shortage, unless the appropriator has gained prescriptive rights through the taking of nonsurplus waters." (City of Pasadena v. City of Alhambra, supra, 33 Cal.2d 908, 926, 207 P.2d 17.) The court then found that there had been prescription under the facts of that case. (Id., at pp. 928-933, 207 P.2d 17.) The court concluded: "We hold, therefore, that prescriptive rights were established by appropriations made in the Western Unit subsequent to the commencement of the overdraft, that such rights were acquired against both overlying owners and prior appropriators, that the overlying owners and prior appropriators also obtained, or preserved, rights by reason of the water which they pumped, and that the trial court properly concluded that the production of water in the unit should be limited by a proportionate reduction in the amount which each party had taken throughout the statutory period." (Id., at p. 933, 207 P.2d 17.)

        Despite the similarities, the City of Pasadena case does not aid either respondents or the trial court because neither relies on the doctrine of prescriptive rights to claim priority. Although this position is understandable since rights cannot be acquired against a public agency by prescription (Civ.Code, § 1007), the City of Pasadena case does not support the position that an appropriator can acquire rights without prescription.

Our Supreme Court clearly stated what the situation would be in the absence of prescription: "It follows from the foregoing that, if no prescriptive rights had been acquired, the rights of the overlying owners would be paramount, and the rights of the appropriators would depend on priority of acquisition under the rule that the first appropriator in time is the first in right. The latest in time of the appropriations would then be the first to be curtailed in limiting total production of the area to the safe yield." (City of Pasadena v. City of Alhambra, supra, 33 Cal.2d 908, 927-928, 207 P.2d 17.) The case thus supports the position of the Cardozo Appellants.

        Instead of finding prescription here, the trial court gave equal weight to the stipulating parties, including any person who produced water during a five-year period prior to the filing of the action, and the nonstipulating parties, the alleged holders of riparian and overlying rights.

 4. The City of San Fernando Case.

        To support the contention that a finding of prescription was not required, the trial court and respondents rely on the City of San Fernando case. (City of Los Angeles v. City of San Fernando, supra, 14 Cal.3d 199, 123 Cal.Rptr. 1, 537 P.2d 1250.) In that case, Los Angeles sued to establish a prior right to groundwater in the upper Los Angeles river area. Los Angeles relied on its historic pueblo water rights, while the defendants argued that the Pasadena case gave them prescriptive rights to a proportionate share of the groundwater supply. The court upheld the pueblo rights asserted by Los Angeles, and overturned the trial court's award of prescriptive rights against the City of Los Angeles. The court held that Civil Code section 1007 precluded the obtaining of water rights by prescription against the city. (City of Los Angeles v. City of San Fernando, supra, at pp. 270-277, 123 Cal.Rptr. 1, 537 P.2d 1250.)

        The court also held that, in accordance with the constitutional provision, all water rights were subject to the constitutional limitation         After lengthy consideration, the Supreme Court upheld the pueblo right claimed by the City of Los Angeles. "The pueblo right gives the city holding it a paramount claim to particular waters only to the extent that they are required for satisfying its municipal needs and those of its inhabitants. 'It thus insures a water supply for an expanding city [citation] with a minimum of waste by leaving the water accessible to others until such time as the city needs it.' [Citation.]" (City of Los Angeles v. City of San Fernando, supra, 14 Cal.3d 199, 252, 123 Cal.Rptr. 1, 537 P.2d 1250. Emphasis in original.) Here, the overlying agricultural owners claim that they have paramount rights to the rights of the stipulating parties, and they are putting the water to reasonable and beneficial use.

        In a section of the City of San Fernando case entitled "Relationship of Pasadena Decision to Equitable Ground Basin Management," the Supreme Court considered the trial court's conclusion awarding mutually prescriptive rights and imposing restricted pumping quotas due to the fact that the basin was in an overdraft situation. (City of Los Angeles v. City of San Fernando, supra, 14 Cal.3d 199, 264 et seq., 123 Cal.Rptr. 1, 537 P.2d 1250) Defendants argued that the mutual prescription doctrine stated in the Pasadena case was "a beneficent instrument for conservation and equitable apportionment of water in ground basins which are subjected to extractions in excess of the replenishment supply. We are urged to declare the law in a way that will preserve this instrument for future use." (Id., at p. 265, 123 Cal.Rptr. 1, 537 P.2d 1250.) Our Supreme Court rejected this contention.

         In a passage emphasized by respondents, the court said, in giving reasons for the rejection: "[T]he allocation of water in accordance with prescriptive rights mechanically based on the amounts beneficially used by each party for a continuous five-year period after commencement of the prescriptive period and before the filing of the complaint, does not necessarily result in the most equitable apportionment of water according to need. A true equitable apportionment would take into account many more factors." (City of Los Angeles v. City of San Fernando, supra, 14 Cal.3d 199, 265, 123 Cal.Rptr. 1, 537 P.2d 1250, fn. omitted.)

        Respondents rely on a footnote which accompanies the latter sentence: "The principles by which the United States Supreme Court equitably apportions water among states are illustrated in Nebraska v. Wyoming (1945) 325 U.S. 589, 618 [65 S.Ct. 1332, 1351, 89 L.Ed. 1815]. After observing that apportionment between states whose laws base water rights on priority of appropriation should primarily accord with that principle, the court said: 'But if an allocation between appropriation States is to be just and equitable, strict adherence to the priority rule may not be possible. For example, the economy of a region may have been established on the basis of junior appropriations. So far as possible those established uses should be protected though strict application of the priority rule might jeopardize them. Apportionment calls for the exercise of an informed judgment on a consideration of many factors. Priority of appropriation is the guiding principle. But physical and climatic conditions, the consumptive use of water in the several sections of the river, the character and rate of return flows, the extent of established uses, the availability of storage water, the practical effect of wasteful uses on downstream areas, the damage to upstream areas as compared to the benefits to downstream areas if a limitation is imposed on the former--these are all relevant factors. They are merely illustrative, not an exhaustive catalogue. They indicate the nature of the problem of apportionment and the delicate adjustment of interest which must be made.' " (City of Los Angeles v. City of San Fernando, supra, 14 Cal.3d 199, 265-266, fn. 61, 123 Cal.Rptr. 1, 537 P.2d 1250.)         Respondents contend that "[t]his portion of the decision in San Fernando has been consistently interpreted as approval by the California Supreme Court of the use of equitable apportionment as a basis to allocate water among users in an overdraft basin. (See Hi-Desert County Water Dist. v. Blue Skies Country Club, Inc. (1994) 23 Cal.App.4th 1723, 1734 [fn.] 11 [28 Cal.Rptr.2d 909],; Wright v. Goleta Water District (1985) 174 Cal.App.3d 74, 92-93 [219 Cal.Rptr. 740]; A. Littleworth and E. Garner, California Water (1995) pp. 173-175.)"

In Nebraska v. Wyoming, Nebraska sought an equitable apportionment of the waters of the North Platte River "based on the principle of priority of appropriation applied interstate." (Nebraska v. Wyoming (1945) 325 U.S. 589, 599, 65 S.Ct. 1332, 1342, 89 L.Ed. 1815.) The states involved used systems of appropriative water rights, and the Supreme Court treated the case as involving competing appropriative rights. (Id., at p. 600, 65 S.Ct. at p. 1342.) Thus, although a priority of appropriation rule was applicable, it was not strictly applied because of the factors listed in the portion of the opinion quoted above. (Id., at pp. 617-627, 65 S.Ct. at pp. 1350-1355.)

        Before we examine this contention, we continue with our review of the City of San Fernando opinion. Our Supreme Court went on to explain why the mutual prescription used in the City of Pasadena case may have been a fair result in that case. For example, "a restriction to safe yield on a strict priority basis might have deprived parties who had been using substantial quantities of ground water for many years of all further access to such water." (City of Los Angeles v. City of San Fernando, supra, 14 Cal.3d 199, 266, 123 Cal.Rptr. 1, 537 P.2d 1250.) However, this condition was not present in the City of San Fernando case, and "the effect of the trial court's judgment in the present case was to eliminate plaintiff's priorities based not on the timing of its appropriations but on its importation of Owens water and on its pueblo right." (Id., at p. 267, 123 Cal.Rptr. 1, 537 P.2d 1250.)

        The court also considered the effect of an overdraft in a basin as follows: "A ground basin is in a state of surplus when the amount of water being extracted from it is less than the maximum that could be withdrawn without adverse effects on the basin's long term supply. While this state of surplus exists, none of the extractions from the basin for beneficial use constitutes such an invasion of any water right as will entitle the owner of the right to injunctive, as distinct from declaratory, relief. [Citations.] Overdraft commences whenever extractions increase, or the withdrawable maximum decreases, or both, to the point where the surplus ends. Thus on the commencement of overdraft there is no surplus available for the acquisition or enlargement of appropriative rights. Instead, appropriations of water in excess of surplus then invade senior basin rights, creating the element of adversity against those rights prerequisite to their owners' becoming entitled to an injunction and thus to the running of any prescriptive period against them." (City of Los Angeles v. City of San Fernando, supra, 14 Cal.3d 199, 277-278, 123 Cal.Rptr. 1, 537 P.2d 1250.) Thus, the court found that "the principles governing appropriative and prescriptive water rights will be relevant to the determination on remand of the conflicting interests of the parties in the water of the Sylmar basin." (Id., at p. 278, 123 Cal.Rptr. 1, 537 P.2d 1250.)

        Finally, our Supreme Court stated that, on remand, the trial court should consider the possibility of a physical solution. It said: "The usual purpose of  a physical solution is to avoid a waste of water without unreasonably or adversely affecting the rights of the parties. [Citations.]" (City of Los Angeles v. City of San Fernando, supra, 14 Cal.3d 199, 290, 123 Cal.Rptr. 1, 537 P.2d 1250.) The court noted that the trial court had equitable discretion to find a physical solution which was fair and just to all parties. (Id., at p. 291, 123 Cal.Rptr. 1, 537 P.2d 1250.) However, since defendants' rights were subordinate to the rights of the City of Los Angeles, the City "is entitled to have the         On a related subject, the Sylmar basin, the court noted that the private defendants may show "overlying rights to native ground water for reasonable beneficial uses on their overlying land, subject to any prescriptive rights of another party." (City of Los Angeles v. City of San Fernando, supra, 14 Cal.3d 199, 293, 123 Cal.Rptr. 1, 537 P.2d 1250.) The court noted: "Overlying rights take priority over appropriative rights in that if the amounts of water devoted to overlying uses were to consume all the basin's native supply, the overlying rights would supersede any appropriative claims by any party to the basin's native ground water [citation] except insofar as the appropriative claims ripened into prescriptive rights [citation]. Such prescriptive rights would not necessarily impair the private defendants' rights to ground water for new overlying uses for which the need had not yet come into existence during the prescriptive period. [Citation.]" (Id., at p. 293, fn. 100, 123 Cal.Rptr. 1, 537 P.2d 1250. Emphasis in original.) Accordingly, overlying defendants "should be awarded the full amount of their overlying rights, less any amounts of such rights lost by prescription, from the part of the supply shown to constitute native ground water." (Id., at p. 294, 123 Cal.Rptr. 1, 537 P.2d 1250.)

5. Equitable Apportionment After the City of San Fernando Case.

        As noted above, respondents rely on footnote 61 to give the City of San Fernando case an expansive reading by arguing that it is an "approval by the California Supreme Court of the use of equitable apportionment as a basis to allocate water among users in an overdraft basin." However, the subsequent cases cited by respondents do not support the argument.

        In Hi-Desert County Water Dist. v. Blue Skies Country Club, Inc. (1994) 23 Cal.App.4th 1723, 28 Cal.Rptr.2d 909, we stated: "Left unresolved in Pasadena, however, was whether by continuing to pump, an overlying user in an overdrafted basin retained its original overlying rights or obtained new ones by prescription. [Citations.] In 1975, in its most comprehensive statement of water law, our Supreme Court in City of Los Angeles v. City of San Fernando [supra,] 14 Cal.3d 199 [123 Cal.Rptr. 1, 537 P.2d 1250] ... finally clarified the proposition that overlying owners 'retain their rights by using them.' [Citation.] [p].... .... [T]he Supreme Court applied the preceding principles for establishing the rights of the parties to the water, declaring '(2) Private defendants should be awarded the full amount of their overlying rights, less any amounts of such rights lost by prescription, from the ... native groundwater.' [Citation.] That is, overlying users retain priority but lose amounts not pumped." (Hi-Desert County Water Dist. v. Blue Skies Country Club, Inc., supra, 23 Cal.App.4th 1723, 1731-1732, 28 Cal.Rptr.2d 909. Emphasis in original.)

        On the page cited by respondents, we said: "In arguing that the 1992 order should be sustained, the District relies on Pasadena, which required a proportionate reduction of the water use by all parties, regardless of their legal priority. The issue in Pasadena was who 'shall bear the burden of curtailing the overdraft, ...' [Citation.] Because everyone had been drawing down the basin's supply for far longer than the statutory period, the court instituted the doctrine of mutual prescription, requiring all parties to reduce their use by an amount in proportion to the share of the water each party had been extracting during the statutory period. [Citation.] Yet, San Fernando rejected mechanical application of the doctrine of mutual prescription, among other reasons, because it 'does not necessarily result in the most equitable apportionment of water according to need.' [Citation.]" (Hi-Desert County Water Dist. v. Blue Skies Country Club, Inc., supra, 23 Cal.App.4th 1723, 1734, 28 Cal.Rptr.2d 909.) Specifically, in the accompanying footnote which respondents rely on, we said: "The District also relies on California Water Service Co. v. Edward Sidebothams&s Son (1964) 224 Cal.App.2d 715 [37 Cal.Rptr. 1], which in turn cited Pasadena, to argue that proportionate reductions in water use is the preferred         In the other case cited by respondents, Wright v. Goleta Water District (1985) 174 Cal.App.3d 74, 219 Cal.Rptr. 740, overlying owners in a groundwater basin sued to determine relative water rights in the basin. The court held that the trial court erred in holding that exercised appropriative rights of a water  district had a higher priority than the unexercised rights of overlying owners. (Id., at pp. 78, 82, 219 Cal.Rptr. 740.) The trial court had relied on In re Waters of Long Valley Creek Stream System (1979) 25 Cal.3d 339, 158 Cal.Rptr. 350, 599 P.2d 656. In that case, the Supreme Court held that the State Water Resources Control Board had the power "to define and otherwise limit prospective riparian rights in determining all claimed rights to the use of water in a stream system...." (Wright v. Goleta Water Dist., supra, 174 Cal.App.3d 74, 83, 219 Cal.Rptr. 740.) The issue thus presented was whether the principles of Long Valley applied to overlying rights in groundwater. (Ibid.) Acknowledging that, logically, those principles should apply to groundwater adjudications, the appellate court held that they did not because the Legislature had adopted a comprehensive statutory scheme to define and limit riparian rights, but had not adopted such a scheme for adjudicating groundwater rights. (Id., at pp. 86-88, 219 Cal.Rptr. 740.) The court thus concluded that, "even though article X, section 2 applies to ground water as well as stream water and courts have enjoyed concurrent jurisdiction with the Board to enforce it [citation], absent a statutory scheme for comprehensive determination of all ground water rights, the application of Long Valley to a private adjudication would allow prospective rights of overlying landowners to be subject to the vagaries of an individual plaintiff's pleading without adequate due process protections." (Wright, supra, at p. 89, 219 Cal.Rptr. 740.) The court thus remanded for reconsideration in the light of the principles stated in Tulare Dist. v. Lindsay-Strathmore Dist., supra, 3 Cal.2d 489, 45 P.2d 972. (Wright, supra, at p. 89, 219 Cal.Rptr. 740.) Tulare dealt with the effect of adoption of California Constitution, article X, section 2. In the cited portion of that case, our Supreme Court held that an overlying owner was subject to the same beneficial use restrictions as riparian owners, and that the new provision protected only the reasonable beneficial uses of the riparian. If the riparian or overlying owner was not putting the water to actual reasonable beneficial use, it could be used by an appropriator until such time as the riparian or overlying owner elected to do so. (Wright, supra, at pp. 84-85, 219 Cal.Rptr. 740.)

        The portion of the Wright opinion relied on by respondents is from the discussion of principles to guide the trial court on remand, and is thus dicta. In that section, the court rejected the District's argument that "the trial court should have based its allocations on the amount of extractions at time safe yield was first exceeded rather than when suit was filed." (Wright v. Goleta Water Dist., supra, 174 Cal.App.3d 74, 92, 219 Cal.Rptr. 740.) It said: "Traditionally, as between appropriators, the one first in time is the first in right, and a prior appropriator is entitled to all the water he needs, up to the amount that he has taken in the past, before a subsequent appropriator may take any." (Ibid.) The court then discussed the Pasadena and San Fernando decisions, noting that the San Fernando case had rejected the mutual prescription doctrine and had instead         Respondents evidently take this instruction to mean that the trial court can do whatever it deems necessary in order to arrive at an equitable solution. However, as this appeal demonstrates, what appears equitable to respondents is not necessarily equitable to appellants. In any event, the law is clear that equitable principles underlying physical solutions do not sanction disregard of existing overlying rights.

        The final authority cited by respondents for the proposition that equitable apportionment may be used to allocate water in an overdrafted basin without regard for existing water rights is A. Littleworth and E. Garner, California Water (1995) pages 173-175. On the pages cited, the authors discuss the concept of equitable apportionment, contending that the Pasadena case used mutual prescription to reach an equitable apportionment, that the City of Los Angeles v. City of San Fernando case overruled mutual prescription but endorsed the idea of equitable apportionment, and that "a court should apply the rules that will produce the most equitable result in a given situation." (Id., at p. 174.) However, the authors concede that: "Excessive reliance on equitable apportionment ... leads to more uncertainty in water rights. Water users can never be certain of the rules or the outcome until a case is tried in court. The doctrine does not easily lend itself to needed predictability." (Id., at p. 176.)

We note that Mr. Littleworth advocated equitable apportionment in the opening statement in this case on behalf of the stipulating parties. Mr. Littleworth and Mr. Garner appeared in the case on behalf of Rancho Las Flores Limited Partnership.

        Uncertainty is "one of the major problems in contemporary California water rights law...." (In re Waters of Long Valley Creek Stream System, supra, 25 Cal.3d 339, 355, 158 Cal.Rptr. 350, 599 P.2d 656.) In Long Valley, our Supreme Court expressed its concerns about uncertainty in water law as follows: "Uncertainty concerning the rights of water users has pernicious effects. Initially, it inhibits long range planning and investment for the development and use of waters in a stream system.... [p] Uncertainty also fosters recurrent, costly and piecemeal litigation.... [p] Finally, uncertainty impairs the state's administration of water rights." (Id., at pp. 355-356, 158 Cal.Rptr. 350, 599 P.2d 656.) Here, uncertainty is promoted by a judgment which disregards all existing and future riparian, overlying and  prescriptive rights, and allocates water on the basis of the amount of actual production (regardless of whether there was a right to produce) in one of the five years prior to the filing of suit.

        Having concluded that respondents have failed to demonstrate that equitable apportionment may be the basis for allocating water in an overdrafted basin without considering overlying rights, we will review other cases that followed the Supreme Court's 1975 City of Los Angeles v. City of San Fernando decision.

6. Other Cases Decided After City of San Fernando.

        As noted above, the next major case after City of San Fernando was In re Waters of Long Valley Creek Stream System, supra, 25 Cal.3d 339, 158 Cal.Rptr. 350, 599 P.2d 656. In that case, our Supreme Court considered the Water Code provisions for statutory adjudication of all water rights in a stream system and held that "the Legislature, in order to foster more reasonable and beneficial uses of state waters, has granted the [State Water Resources Control] Board broad authority to ascertain the nature of future riparian rights in this adjudication procedure. In delimiting the scope of this         The court went on to discuss the limitations on riparian rights imposed by the adoption of article X, section 2 (formerly art. XIV, § 3) of the California Constitution in 1928. (In re Waters of Long Valley Creek Stream System, supra, 25 Cal.3d 339, 351-359, 158 Cal.Rptr. 350, 599 P.2d 656.) It concluded that "while we interpret the Water Code as not authorizing the Board to extinguish altogether a future riparian right, the Board may make determinations as to the scope, nature and priority of the right that it deems reasonably necessary to the promotion of the state's interest in fostering the most reasonable and beneficial use of its scarce water resources." (Id., at p. 359, 158 Cal.Rptr. 350, 599 P.2d 656, fn. omitted.) In a concurring and dissenting opinion, Justice Richardson said: "We have subsequently confirmed and approved our Tulare holding that a riparian owner's prospective water rights were and are preserved and protected by the 1928 constitutional amendment." (Id., at p. 362, 158 Cal.Rptr. 350, 599 P.2d 656, citing Tulare Dist. v. Lindsay-Strathmore Dist., supra, 3 Cal.2d 489, 525, 45 P.2d 972, and City of Los Angeles v. City of San Fernando, supra, 14 Cal.3d 199, 268, 123 Cal.Rptr. 1, 537 P.2d 1250.)

        Subsequently, in People v. Shirokow (1980) 26 Cal.3d 301, 162 Cal.Rptr. 30, 605 P.2d 859, our Supreme Court found that the Water Code's comprehensive scheme for acquiring appropriative rights precluded the acquisition of water rights by prescription against the State based on adverse use after adoption of the Water Code provisions. (Id., at pp. 304, 310, fn. 12, 312, 162 Cal.Rptr. 30, 605 P.2d 859.) The court noted that its opinion in Long Valley "observes the need for certainty in the administration of water rights to be 'readily apparent when one examines the statutory framework governing appropriative rights in California.' " (Id., at p. 310, fn. 12, 162 Cal.Rptr. 30, 605 P.2d 859.) Prescriptive rights obviously increase uncertainty as compared to adjudicated stream rights.

        In 1975, shortly after the City of San Fernando case was decided, an appellate court considered an adjudication of groundwater rights in an overdrafted basin. (Tehachapi-Cummings County Water Dist. v. Armstrong, supra, 49 Cal.App.3d 992, 122 Cal.Rptr. 918.) The appellate court held that the trial court erred in applying the mutual prescription doctrine "to quantify the water rights of the parties on the basis of past use rather than current, reasonable and beneficial need." (Id., at p. 1000, 122 Cal.Rptr. 918.) It found that all of the water rights in issue were overlying rights and there were no appropriative rights which could obtain priority by prescription.

        The court described the overlying rights as follows: "An overlying water right is analogous to that of a riparian owner's right in a stream; it is the right to take water from the ground underneath the land for use on the land. The right is based on the ownership of the land and is appurtenant thereto. [Citation.] As between overlying owners, the rights, like those of riparians, are correlative, i.e., they are mutual and reciprocal. This means that each has a common right to take all that he can beneficially use on his land if the quantity is sufficient; if the quantity is insufficient, each is limited to his proportionate fair share of the total amount available based upon his reasonable need. [Citations.] The proportionate share of each owner is predicated not on his past use over a specified period of time, nor on the time he commenced pumping, but solely on his current reasonable and beneficial need for water. [Citations.] [p] By analogy to riparian rights, where there is insufficient         The next major water case was Wright v. Goleta Water Dist., supra, 174 Cal.App.3d 74, 219 Cal.Rptr. 740, discussed above. That case discussed the City of Los Angeles v. City of San Fernando case in its discussion of prescriptive rights and Civil Code section 1007. (Wright, supra, at pp. 90-91, 219 Cal.Rptr. 740.) It does not read the City of San Fernando case as sanctioning an equitable apportionment without consideration of existing water rights. Nor do we.

        Imperial Irrigation Dist. v. State Wat. Resources Control Bd., supra, 225 Cal.App.3d 548, 275 Cal.Rptr. 250, was a dispute concerning the power of the Board to decide whether the irrigation district was wasting water. The court held that the Board had the power to establish standards of reasonableness under the constitutional mandate of article X, section 2, and applicable statutes. (Imperial Irrigation Dist., supra, at pp. 557-561, 275 Cal.Rptr. 250.) It also held that the irrigation district did not have a vested right to the water under the constitutional mandate, and had no right to waste water. (Id., at pp. 561-564, 275 Cal.Rptr. 250.) It cites City of Los Angeles v. City of San Fernando only in connection with a discussion of a physical solution involving the application of general equitable principles. The physical solution rationale is discussed further below.

        Respondents also cite Imperial for its unusual addendum to the opinion which states that water law is in flux, and "its evolution has passed beyond traditional concepts of vested and immutable rights." (Imperial Irrigation Dist. v. State Wat. Resources Control Bd., supra, 225 Cal.App.3d 548, 573, 275 Cal.Rptr. 250.) The addendum also refers to "an evolving process of governmental redefinition of water rights." (Ibid.) We disagree, for such statements only create the uncertainty which our Supreme Court has cautioned us against. (In re Waters of Long Valley Creek Stream System, supra, 25 Cal.3d 339, 355, 158 Cal.Rptr. 350, 599 P.2d 656.)

        Respondents also find the statement in the addendum to be an accurate summary of the changes to water law which were brought about by the 1928 amendment, and they find it to be equivalent to early statements that the amendment was intended to "marshal the water resources of the state and make them available for the constantly increasing needs of all of its people." (Meridian, Ltd. v. San Francisco (1939) 13 Cal.2d 424, 449, 91 P.2d 105.) However, the constitutional provision has not substantively changed since 1928, and we find the more comprehensive statement of the purpose of the 1928 amendment in In re Waters of Long Valley Creek Stream System, supra, 25 Cal.3d 339, 351-357, 158 Cal.Rptr. 350, 599 P.2d 656, to be dispositive. As discussed above, in that case the court held that the Board could not extinguish future riparian rights by relying on the constitutional provision. The purpose of the constitutional amendment was to prevent water waste "without interference with the beneficial uses to which such waters may be put by the owners of water rights, including riparian owners." (Gin S. Chow v. City of Santa Barbara (1933) 217 Cal. 673, 700, 22 P.2d 5.) Thus, to the extent that respondents argue that the constitutional provision allowed the trial court to disregard existing rights, they go too far.

        The next significant case is our Hi-Desert case. (Hi-Desert County Water Dist. v. Blue Skies Country Club, Inc., supra, 23 Cal.App.4th 1723, 28 Cal.Rptr.2d 909.) We         Finally, in Jordan v. City of Santa Barbara, supra, 46 Cal.App.4th 1245, 54 Cal.Rptr.2d 340, agricultural landowners sued public agencies, contending that the activities of the agencies had degraded groundwater and increased salinity in the Lompoc area. (Id., at p. 1252, 54 Cal.Rptr.2d 340.) The appellate court upheld the trial court's findings that the public agencies were not liable for increased vegetation in the river channel, that the public agencies had not violated the proscriptions of an earlier case interpreting the constitutional provision and delineating water rights in the area, and that the public agencies were not liable for increased salinity in the basin. In connection with the latter discussion, the opinion cites City of Los Angeles v. City of San Fernando for the statement that "[o]verdraft exists when average annual withdrawals or diversions exceed the safe yield of a groundwater supply, i.e., the amount that can be used without leading to ultimate depletion of the supply." (Jordan v. City of Santa Barbara, supra, 46 Cal.App.4th 1245, 1272, 54 Cal.Rptr.2d 340.) The court found substantial evidence to support the conclusion that there was no overdraft. (Ibid.)

7. Conclusion.

        In summary, neither the cases cited by respondents nor any other appellate decision following City of Los Angeles v. City of San Fernando, supra, 14  Cal.3d 199, 123 Cal.Rptr. 1, 537 P.2d 1250, support respondents' contention that footnote 61 of that opinion "has been consistently interpreted as approval by the California Supreme Court of the use of equitable apportionment as a basis to allocate water among users in an overdraft basin." To the contrary, as set forth above, we find that neither the footnote nor article X, section 2, of the California Constitution has been interpreted to allow the trial court to disregard existing water rights in order to fashion an allegedly equitable solution based on prior usage rather than current beneficial use.

        PHYSICAL SOLUTION

        Respondents argue that article X, section 2, of the California Constitution mandates the court to develop and implement a physical solution.

        The trial court did so, stating: "Having found that all rights are correlative, a just and fair result is achieved by establishing a physical solution which limits each user to a proportionate equitable share of the total amount available." It found that it had "the authority to draft and impose a physical solution which requires all users to share equitably in the cost and reduction of use, to safe yield." (Emphasis added.)

        Originally, a physical solution was just that --- "an order that certain engineering and diversion facility actions be taken to make the highest and best use of the water involved in the litigation." (1 Rogerss&sNichols, Water for Cal., supra, § 441, p. 579.) Although the trial court certainly has the power to implement a physical solution, the judgment here goes far beyond physical or engineering changes to solve the overdraft problem. In some instances, however, our Supreme Court has sanctioned additional measures to assure the beneficial use of the water. However, none of the Supreme Court cases sanction disregard of existing water rights in fashioning a physical solution.

        For example, in Peabody v. City of Vallejo, supra, 2 Cal.2d 351, 383-384, 40 P.2d 486, our Supreme Court reversed a trial court decision, saying that, on retrial, the trial should determine if a physical solution is ascertainable and, if so, "the court has the         In another case arising the same year, our Supreme Court elaborated: "The equity courts possess broad powers and should exercise them so as to do  substantial justice. Heretofore, the equity courts, in water cases, apparently have not seen fit to work out physical solutions of the problems presented, unless such solutions have been suggested by the parties. But it should be kept in mind that the equity court is not bound or limited by the suggestions or offers made by the parties to this, or any similar, action[.] For purposes of illustration, if the trial court, on the retrial, comes to the conclusion, based upon proper evidence, that a substantial saving can be effected at a reasonable cost, by repairing or changing some of the ditches ... it undoubtedly has the power ... to make its injunctive order subject to conditions which it may suggest and to apportion the cost thereof as justice may require, keeping in mind the fact that respondents have prior rights and cannot be required lawfully to incur any material expense in order to accommodate appellant. " (Tulare Dist. v. Lindsay-Strathmore Dist., supra, 3 Cal.2d 489, 574, 45 P.2d 972. Emphasis added.) The court also found that the constitutional amendment required the trial court to "fix the quantity required by each riparian for his actual reasonable beneficial uses, the same as it would do in the case of an appropriator." (Id., at p. 525, 45 P.2d 972.) It also held that "[t]he new doctrine not only protects the actual reasonable beneficial uses of the riparian but also the prospective reasonable beneficial uses of the riparian." (Ibid.) Further, it held that "the new doctrine embodied in the constitutional amendment, as interpreted in the Peabody case, not only applies the doctrine of reasonable use as between riparian and appropriator, but also as between an overlying owner and an appropriator." (Ibid.)

        The following year, our Supreme Court decided City of Lodi v. East Bay Mun. Utility Dist. (1936) 7 Cal.2d 316, 60 P.2d 439. The court noted that the parties had suggested various physical solutions which were not acceptable to all parties. The court stated: "Since the adoption of the 1928 constitutional amendment, it is not only within the power but it is also the duty of the trial court to admit evidence relating to possible physical solutions, and if none is satisfactory to it to suggest on its own motion such physical solution. [Citation.] The court possesses the power to enforce such solution regardless of whether the parties agree.... If a physical solution is to be worked out which would require the city to change its method of appropriation, any substantial expense incidental thereto should be borne by the District. The city is a prior appropriator and as such cannot be compelled to incur any material expense in order to accommodate the subsequent appropriator." (Id., at p. 341, 60 P.2d 439. Emphasis added. See also Reclamation Dist. No. 833 v. Quigley (1937) 8 Cal.2d 183, 188, 64 P.2d 399.)

In our previous opinion in this case, we stated the following and quoted a passage from Lodi: "[A] physical solution is generally a practical remedy that does not affect vested rights: 'Under such circumstances the 1928 constitutional amendment, as applied by this court in the cases cited, compels the trial court, before issuing a decree entailing such waste of water, to ascertain whether there exists a physical solution of the problem presented that will avoid the waste, and that will at the same time not unreasonably and adversely affect the prior appropriator's vested property right. In attempting to work out such a solution the policy which is now part of the fundamental law of the state must be adhered to.' [Citation.]" (City of Adelanto v. Mojave Water Agency (E013669) filed January 28, 1994, quoting City of Lodi v. East Bay Mun. Utility Dist., supra, 7 Cal.2d 316, 339-340, 60 P.2d 439. Emphasis added.)

        In February 1938, our Supreme Court applied the 1928 constitutional amendment to overlying rights in the Bishop groundwater basin. (Hillside Water Co. v. Los Angeles (1938) 10 Cal.2d 677, 76 P.2d 681.) Plaintiffs and defendants were overlying owners, but         In July, 1938, our Supreme Court applied the principle of a physical solution in Rancho Santa Margarita v. Vail (1938) 11 Cal.2d 501, 561, 81 P.2d 533: "In the present case the trial court on the retrial may determine that, considering all the factors above mentioned, respondent is entitled to the maintenance of the surface flow as provided in its present judgment.... [N]either riparian is entitled to the full flow of the stream as it existed in a state of nature. Each is required to make a reasonable use of the waters of the stream, and either or both can be required to endure a reasonable inconvenience or incur a reasonable expense in order that water may be reasonably used by the other. [Citations.] However, considering all the required factors, the lower owner cannot be expected or required to endure an unreasonable inconvenience or to incur an unreasonable expense in order to make more water available for the use of the upper riparian. If on the new trial it shall develop that the only feasible physical solution will involve the expenditure of large sums of money by respondent, and that the sum required, when all the facts, including the necessities and uses of the parties, are considered, is unreasonable, the trial court has full power to make its injunctive order conditional so as to require appellants to bear a portion of the expense. In other words the trial court, if the facts warrant it, can grant an injunction in favor of respondent unless appellants agree to bear a fair proportion of the expense necessary to construct the required improvements on respondent's ranch. This would appear to be a fair, just and equitable rule."

In our prior opinion in this case, we quoted the following portion of the Rancho Santa Margarita case: " '[T]he trial court should thoroughly investigate the possibility of some such physical solution, before granting an injunction that may be ruinous to either or both parties. It must be remembered that in this type of case the trial court is sitting as a court of equity, and as such, possesses broad powers to see that justice is done in the case. The state has a definite interest in seeing that none of the valuable waters from any of the streams of the state should go to waste. Each case must turn on its own facts, and the power of the court extends to working out a fair and just solution, if one can be worked out, of those facts.' " (City of Adelanto v. City of Barstow, supra, E013669, quoting Rancho Santa Margarita v. Vail, supra, 11 Cal.2d 501, 560-561, 81 P.2d 533.)

        In 1939, our Supreme Court again held that the 1928 constitutional amendment required the uses of the riparian to be beneficial uses of the stream flow: "Under the amendment of 1928 the rights of the riparian attach to, but to no more than so much of the flow as may be required or used consistently with the amendment. That is, the riparian is entitled to all of the water of the stream, both in the quantity and quality of its natural state, which he is able to put to a reasonable beneficial use, and to be protected in that right by the injunctive processes of the court. But the riparian owner is not entitled to an injunction to control the use of water by an appropriator in the exercise of a right admittedly subordinate but in no way injurious to the riparian right. It is well settled that an injunction is an equitable remedy available generally in the protection or to prevent the invasion of a legal right. In a case such as the one before us the right and its actual or         In 1946, the Supreme Court reviewed a case in which plaintiffs, as overlying agricultural owners in an overdrafted basin, sought to enjoin defendants, who were appropriators with a lower priority, from pumping and exporting water from the basin. (Allen v. California Waters&sTel. Co. (1946) 29 Cal.2d 466, 176 P.2d 8.) The trial court found that "the full safe net yield of water is required for reasonable, beneficial use on overlying lands and that after application of the waters of the basin to satisfy the individual needs under paramount rights, there remains no safe or dependable surplus available for exportation; that the only water not reasonably required under paramount rights for overlying lands is that part of the surface flow which  reaches the ocean, or would reach it if not diverted by defendant...." (Id., at pp. 473-474, 176 P.2d 8.) The trial court also found that a physical solution proposed by defendants was unworkable. (Id., at p. 474, 176 P.2d 8.) The Supreme Court upheld the rights of the overlying owners, stating that "[w]here owners overlying an underground basin have for many years developed their supply by individual pumping from shallow wells, and such method of use is not unreasonable under the circumstances shown, they are not required to centralize, localize, or scatter their pumping, or to unduly deepen their wells, or to undertake any other operations entailing a substantial increase of cost merely to enhance the surplus for the exporter. The overlying owner 'is entitled to make a reasonable use of the water according to the custom of the locality and as long as he does so, other persons cannot complain of his acts. ...' " (Id., at pp. 483-484, 176 P.2d 8. Emphasis added.)

        Thus, the overlying owners were entitled "to relief which (1) would protect them to the extent of their individually declared rights [citation], and (2) would also protect them, pending a physical solution of the water problem, against any exportation of water which would unduly increase their cost of use or lower the underground water level below the danger point." (Allen v. California Waters&sTel. Co., supra, 29 Cal.2d 466, 485-486, 176 P.2d 8.) The Supreme Court approved the provisions of the decree which retained jurisdiction to consider the effect of possible water obtainable from Mexico, stating that "[b]y retaining jurisdiction to consider the effect of this added source of water and its dependability for the purpose of working out a solution, the court will be carrying out the policy inherent in the water law of this state to utilize all water available." (Id., at p. 488, 176 P.2d 8.)

        Thus, it is clear that "[a] 'physical solution' involves the application of general equitable principles to achieve practical allocation of water to competing interests so that a reasonable accommodation of demands upon a water source can be achieved." (Imperial Irrigation Dist. v. State Wat. Resources Control Bd., supra, 225 Cal.App.3d 548, 572, 275 Cal.Rptr. 250.) However, as we stated in Hi-Desert, "[t]he general purpose of a physical solution 'is to avoid a waste of water without unreasonably or adversely affecting the rights of the parties.' [Citation.]" (Hi-Desert County Water Dist. v. Blue Skies Country Club, Inc., supra, 23 Cal.App.4th 1723, 1736, 28 Cal.Rptr.2d 909, emphasis in original, quoting City of Los Angeles v. City of San Fernando, supra, 14 Cal.3d 199, 290, 123 Cal.Rptr. 1, 537 P.2d 1250.) In other words, "In ordering a physical solution, the court may not change priorities among the water rights' holders nor can the solution be applied so as to eliminate vested rights." (1 Rogerss&sNichols, Water for Cal., supra, § 404, p. 549, and cases cited.)

         We therefore conclude that a physical solution cannot ignore or eliminate the rights of riparian or overlying property owners over their objections. THE WATER RIGHTS OF APPELLANTS

In his book, Mr. Littleworth discusses three trial court groundwater adjudications involving physical solutions that allegedly adjudicated all water rights in three groundwater basins without a determination of individual rights. (Littleworths&sGarner, Cal. Water, supra, pp. 186-190.)

        Respondents contend that the neither the Cardozo Appellants nor Jess Ranch Water Company sustained their burden of proving that they have any water rights. The trial court agreed, finding that the Cardozo Appellants did not prove any water right. The trial court acknowledged that Jess Ranch submitted testimony as to its alleged riparian, overlying and appropriative rights, but the trial court found it unnecessary to decide whether it actually had such rights.

        The trial court explained its conclusion as to the Cardozo Appellants by pointing out that a 1975 deed from McCulloch Properties to Manuel Cardozo excepts rights in underground water from the property transferred. It also cites a 1980 deed from Charlotte and Miles Lewis to Mr. and Mrs. Cardozo which specifically grants 800 acre-feet of water rights. As to the other Cardozo Appellants, the court states: "A number of other deeds reference reservations in deeds from the Arrowhead Lake Co. These earlier deeds may have conveyed or reserved water rights. The defendants' parcels are divisions of larger parcels. Thus, there may be no riparian rights existing on the subdivisions." Even though the trial court found no riparian rights for the other Cardozo defendants, it did not address the question of whether they had overlying rights.

        The evidence presented at trial was clear and undisputed. Each member of the Cardozo group testified that they owned land within the basin, and that  they had been pumping from it to grow crops, primarily alfalfa. Mr. Cardozo explained on direct examination that his family owned six parcels of property in the Mojave Basin. The McCulloch deed related to one parcel, a vacant lot in Silver Lakes.

        Although the trial court used the deeds as evidence of a lack of riparian rights, there was no substantial evidence that the Cardozo Appellants did not have overlying rights. Thus, the trial court's finding that they did not have any water rights is not supported by the evidence.

        As discussed above, overlying rights are a property right appurtenant to the land, and are based on ownership. (City of Pasadena v. City of Alhambra, supra, 33 Cal.2d 908, 925, 207 P.2d 17; Tehachapi-Cummings County Water Dist. v. Armstrong, supra, 49 Cal.App.3d 992, 1001, 122 Cal.Rptr. 918.) Although limited to the amount needed for beneficial use, irrigation for agriculture is clearly such a use, and respondents did not claim otherwise. (City of Pasadena v. City of Alhambra, supra, 33 Cal.2d 908, 925, 207 P.2d 17; Wat.Code, § 106; Cal.Code Regs., tit. 23, §§ 659, 661.)

        Thus, "[a]n overlying right is dependent upon land ownership overlying groundwater and is exercised merely by extraction and use of the water." (Littleworths&sGarner, Cal. Water, supra, p. 50.) Having shown ownership, extraction and beneficial use of the underground water here, the Cardozo Appellants established overlying rights, and the contrary finding of the trial court is without evidentiary or legal support.         With regard to Jess Ranch, the evidence also showed overlying rights, i.e., ownership of the property and pumping from wells for agricultural and other beneficial uses. Although there may have been no need for the trial court to consider the other claims of Jess Ranch to riparian and appropriative rights, it is clear that it at least has overlying rights. However, as explained below, it was not necessary to delineate the water rights of Jess Ranch because it need not rely on those rights to participate in the stipulated judgment.

        We repeat the guiding principle: "Under California law, '[p]roper overlying use, ... is paramount, and the right of an appropriator, being limited to the amount of the surplus, must yield to that of the overlying owner in the event of a shortage unless the appropriator has gained prescriptive rights through the taking of nonsurplus waters.' [Citation.]" (Hi-Desert County Water Dist. v. Blue Skies Country Club, Inc., supra, 23 Cal.App.4th 1723, 1730-1731, 28 Cal.Rptr.2d 909. Emphasis in original.) Thus, while the rights of all overlying owners in a groundwater basin are correlative, and subject to cutbacks when the basin is overdrafted, overlying rights are superior to appropriative rights. Here, the trial court did not attempt to determine the priority of water rights, and merely allocated pumping rights based on prior production. This approach elevates the rights of appropriators and those producing without any claim of right to the same status as the rights of riparians and overlying owners. The trial court erred in doing so.

THE REMEDY FOR THE CARDOZO APPELLANTS

        Having established that the Cardozo Appellants had overlying water rights that were not respected by the trial court, we must consider whether the entire judgment should be reversed, or only that portion that affects the Cardozo Appellants.

        The Cardozo Appellants argue that the entire judgment should be reversed. They contend that a reversal limited to them will not protect them from indirect effects of the trial court's physical solution. The main such effect cited by the Cardozo Appellants is the right, given by the judgment, of other producers to transfer overlying and/or riparian rights by sale of their free production allowance.

        While we share the Cardozo Appellants' doubts as to the legal propriety of various aspects of the trial court's physical solution, such as allowing transfer of water produced in accordance with riparian or overlying rights to nonriparian or nonoverlying lands, we do not need to consider those aspects of the physical solution. We see no reason why the parties cannot stipulate to a judgment incorporating the physical solution, nor do we see any reason why a stipulated judgment entered into by a large number of water producers in the Mojave Basin should be totally reversed when the rights of the Cardozo Appellants can be fully protected by appropriate trial court orders on remand. (City of Pasadena v. City of Alhambra, supra, 33 Cal.2d 908, 924, 207 P.2d 17 ["Since the stipulation made by the other parties as to the reduction in pumping by each is not binding upon appellant, it is necessary to determine appellant's rights in relation to the other producers in the same manner as if there had been no agreement."]; United States v. State Water Resources Control Bd., supra, 182 Cal.App.3d 82, 100-101, 227 Cal.Rptr. 161 ["It is a fundamental principle of water law that one may not withdraw water from its  source without first acquiring

For example, the Mojave Water Agency argues that the specific elements of the physical solution are valid and enforceable. It thus discusses the provisions for makeup assessments, water storage, transfers, the failure to include minimal producers, and biological resource assessments. The Cardozo Appellants argue that these elements of the physical solution violate established principles of water law.

As noted in footnote 12, such stipulated judgments have been used in adjudicating groundwater basin water rights. The only difference is that, in this case, nonstipulating parties have objected and asserted their water rights. We find that the water rights of the Cardozo Appellants cannot be modified by a judgment which has been stipulated to by other water producers in the basin and adopted by the trial court for all producers in the basin.

        Thus, we protect the rights of the Cardozo Appellants while also respecting the rights of the stipulating parties to agree to a judgment which waives or alters their water rights in a manner which they believe to be in their best interest.

THE CARDOZO APPELLANTS' APPEAL FROM POST-JUDGMENT ORDERS

        The Cardozo Appellants also appeal from a minute order filed May 6, 1996, which required them to post an undertaking to guarantee the payment of water assessments provided for in the judgment.

With regard to the costs of the action, we note that the trial court awarded costs to respondents as the prevailing party at trial. Since we have determined that the Cardozo Appellants should have been excluded from the judgment, respondents are no longer the prevailing party and the award of costs is also reversed.

        The trial court relied on Code of Civil Procedure section 917.9. That section provides, in relevant part: "(a) The perfecting of an appeal shall not stay enforcement of the judgment or order ... if the trial court, in its discretion, requires an undertaking and the undertaking is not given, in any of the following cases ... [p] (2) Appellant is required to perform an act for respondent's benefit pursuant to judgment or order under appeal."

         The trial court found that appellants were required to perform acts for the benefit of respondent Mojave Water Agency, including the filing of annual production reports and the payment of four types of assessments set forth in the judgment. The trial court order refers to a stipulation dated April 10 and 11, 1996, but the text of the stipulation is not in our record. The record furnished by the Cardozo Appellants also does not contain the motion of the Mojave Water Agency for an undertaking, or the accompanying declarations.

        The Cardozo Appellants contend that the trial court abused its discretion because the judgment does not require them to perform any act for the benefit of the water agency. Specifically, they argue that the water assessments were not for the benefit of the agency, but for the mutual benefit of water producers in the basin. They also argued that the water assessments might never become payable because appellants could lessen production to avoid the assessments.

        Given the state of the record, we are unable to say that the trial court was incorrect. The decision was clearly a discretionary one, and we find no basis in this record for concluding that the trial court abused its discretion in requiring an undertaking. However, since we have found that the Cardozo Appellants are not subject to assessments levied under the stipulated judgment, the trial court         THE JESS RANCH APPEAL

        The appeal of Jess Ranch Water Company presents different issues. Jess Ranch essentially wants to participate in the stipulated judgment, and it contends that it has been prevented from doing so on terms offered to all other water producers in the Mojave Basin.

1. The Stipulated Judgment.

        The stipulated judgment sets a free production allowance for each party. The free production allowance is the amount of water that may be produced from a subarea each year without incurring a replacement water obligation. A producer's base annual production is the maximum annual production that the producer produced for the five-year period 1986-1990. The base annual production right is the relative right of each producer to the free production allowance within a given subarea, expressed as a percentage of all producers' base annual production in the subarea. Any base annual production right may be sold or otherwise transferred in accordance with the transfer provisions of the stipulated judgment. The stipulated judgment does not place restrictions on the quantity of water a producer may pump.

         Obviously, the higher the base annual production right, the more water that the producer can profitably sell under the transfer provisions, and the more water that can be produced free of a replacement assessment. " After all is said and done in the legal arena, it is apparent that money is the real issue here: who must pay for the cost of importing water to replenish amounts taken in excess of the safe yield." (Hi-Desert County Water Dist. v. Blue Skies Country Club, supra, 23 Cal.App.4th 1723, 1736, 28 Cal.Rptr.2d 909.)

        The stipulated judgment relies on the highest year of production in the years 1986-1990 in determining base annual production, and the base annual production right. It is undisputed that Jess Ranch produced 18,625 acre-feet of water in 1986. It therefore claims that that number should be the basis for determining its base annual production right.

2. The Trial Court's Decision.

        The trial court found that analysis of the water rights claimed by Jess Ranch was unnecessary, and that, under the stipulated judgment, Jess Ranch's base annual production right had to be determined on an equitable apportionment basis.

        The trial court considered the uses to which the water produced by Jess Ranch had been put and found that Jess Ranch failed to establish that its use of 18,625 acre-feet in 1986 was a reasonable and beneficial use. It specifically found that Jess Ranch was in the process of changing the uses of its property from agricultural to commercial and residential, and that its eventual consumptive use would be only 1,300 acre-feet per year. It also found that, during the period from 1986-1990, water uses included trout production. It said: "The water application on the Jess Ranch results in two types of water use. One is for aquaculture which consists primarily of recirculated water: a large amount of water is pumped into the trout lakes and flows through at a rapid rate as is necessary to raise the trout. This results in very little consumptive use and/or evaporation off the surface of the lakes. The remainder flows out the other end of the lakes. [p] The drainage of tail water coming off the lakes is applied to irrigation. [Citation.] The amount of water applied to irrigation was not established by the evidence."

        The trial court also considered the agricultural lands irrigated by the trout lakes and considered the amount of water used to produce the crops. It found that Jess Ranch had failed to prove that the use of 18,625 acre-feet in 1986 was a reasonable and beneficial use. It therefore calculated a base annual production of 7,480 acre-feet on a consumptive use basis.

        The judgment thus contains a provision for Jess Ranch as an aquaculture user. It shows total water production of 18,625 acre-feet, base annual  production of 7,480 acre-feet, and the difference of 11,145 acre-feet as recirculated water. The judgment allows Jess Ranch the right to continue to produce recirculated 3. Standard of Review.

        The trial court's approval of the stipulated judgment was an exercise of its equitable powers. Of course, the standard of review of such an equitable decision is abuse of discretion. (In re Marriage of Doud (1986) 181 Cal.App.3d 510, 524-525, 226 Cal.Rptr. 423.) " 'The abuse of discretion standard ... measures whether, given the established evidence, the act of the lower tribunal falls within the permissible range of options set by the legal criteria.' [Citation.] A logical concomitant of our review is that there must be sufficient evidence for us to conclude that the action of the trial court was within the permissible range of options set by the legal criteria...." (Dorman v. DWLC Corp. (1995) 35 Cal.App.4th 1808, 1815, 42 Cal.Rptr.2d 459. Emphasis in original.)

4. The Issues Presented.

        In the first part of this opinion, we hold that neither an equitable apportionment nor a physical solution can ignore the water rights of the Cardozo Appellants, because those nonstipulating parties elected to assert their water rights instead of electing to be bound by the provisions of the stipulated judgment.

        The first part of this opinion also recognizes that stipulating parties could agree to be bound by the judgment regardless of whether they have any water rights. Thus, any person or entity that produced more than a minimal amount of water in the 1986-1990 period was allowed to stipulate to the judgment, regardless of whether they had any provable water rights. Essentially, they could waive their existing water rights and agree to be bound by the terms of the stipulated judgment, so long as the rights of the nonstipulating parties were respected. (City of Pasadena v. City of Alhambra, supra, 33 Cal.2d 908, 924, 207 P.2d 17.)

        In this portion of the opinion, we consider whether Jess Ranch was entitled to participate in the stipulated judgment on the same terms as other water producers and, if so, whether it was treated equitably. Although we consider the claim of Jess Ranch under the rubric set forth in the stipulated judgment, we emphasize that we are not endorsing the stipulated judgment, but merely determining whether Jess Ranch had the right to be included in the stipulated judgment on the same terms as other stipulating parties.

5. Jess Ranch was Entitled to Equitable Treatment.

        Equity dictates that all persons in the same position be treated alike. (Civ.Code, § 3511 ["Where the reason is the same, the rule should be the same."].)

        The question of whether a party to a lawsuit must be offered the opportunity to stipulate to judgment on the same terms as are available to other parties is a novel one. The briefs of the parties do not shed light on this issue, and our research has not disclosed a factually comparable situation. The issue is also complicated by the questionable legality of some of the provisions of the judgment, as discussed above. In effect, Jess Ranch is seeking to participate in the stipulated judgment in order to obtain transfer rights that might be found improper if the transfer and other provisions had not been the subject of stipulation.

        Notwithstanding these difficulties, we emphasize that the decision made by the trial court was an equitable one. Accordingly, the trial court should have been guided by equitable principles and it abused its discretion if it treated Jess Ranch inequitably.

6. Jess Ranch Water Rights.

        As noted above, the trial court found it unnecessary to characterize the water rights held by Jess Ranch. Jess Ranch contends that it proved its water rights at trial, and that the trial court erred in ignoring and failing to take account of its proven water rights.

        We agree that it is unnecessary to establish the water rights of Jess Ranch,  7. Jess Ranch was Treated Inequitably.

        Jess Ranch essentially contends that the trial court should have treated it like all other stipulating parties and awarded it a base annual production right based on its maximum annual production during the five-year period preceding the filing of the complaint. It argues that there was no supportable justification given for treating Jess Ranch differently from the other stipulating parties.

        Specifically, it contends that no other producer was required to establish that its production was put to a beneficial use, that its circumstances were not unique, and that the physical solution does not even allow it to continue its prior operations.

        Examining these contentions in the light of the whole record, we find that the basic definition of free production allowance was the maximum annual water production during the five-year period prior to the filing of the complaint. With few exceptions, other producers were assigned a base annual production amount based on their actual production during this time period. We also find that Jess Ranch was not given a base annual production amount based on its actual production, and that no reasonable explanation was given for this differential treatment of Jess Ranch.

        First, it is clear that the physical solution was based on water production, not water use. An engineer who participated in the drafting of the physical solution testified that the parties to the physical solution were given a base annual production right that was based on their maximum annual water production for the years 1986 to 1990. In other words, "the guiding principle of the proposed physical solution was that everyone was to receive base annual production based on maximum annual production."

        The trial court found that "[t]he Base Annual Production figures in Table B-1 of the Judgment Pursuant to Stipulation were based upon analyses performed by the firm of James C. Hanson, Consulting Civil Engineers ... [and t]he determination of water production for the various production facilities for the years 1986 through 1990 were conducted on a fair, equitable and comprehensive basis."

        Second, although base annual production was the basis for the physical solution, Jess Ranch was not given a base annual production number calculated on the basis of its verified production. Mr. Hanson, the engineer responsible for verifying water production figures, testified that the verified production number for Jess Ranch was 19,790 acre-feet. Mr. Wagner, the engineer in the Hanson firm who did the actual production verification work, testified that he verified production on the facilities included in the stipulated judgment, and that he verified Jess Ranch's water production at 19,790 acre-feet. In other words, he reported and verified actual production data for each water producer, including Jess Ranch.

        Instead of 19,790 acre-feet, Jess Ranch was assigned a free production allowance of 7,480 acre-feet. The reasons given for this reduction are the heart of the issue.

        The first reason given is the reasonable and beneficial use limitation. Respondent Mojave contends that the trial court properly applied the constitutional limitation and lowered the Jess Ranch production number to 7,480 acre-feet to reflect the reasonable and beneficial consumptive use of water at Jess Ranch. It quotes the trial court: "No matter what the claimed right, only reasonably beneficial uses qualify." However,         Respondents contend that it was proper to consider reasonable and beneficial use in setting the free production allowance for Jess Ranch. However, under the physical solution, base annual production does not represent an amount of water that may be produced for reasonable and beneficial use. Instead, it basically represents the amount that can be produced free of assessment and the amount which can be sold or otherwise transferred. The effect of reducing the free production allowance attributable to Jess Ranch is to substantially decrease the income available to Jess Ranch from sale or transfer of this asset.

        Jess Ranch was the only water producer subject to this alleged reasonable and beneficial use limitation. It cites a study of its water production that states: "However, as far as the [study] group was aware, no other producer was asked to justify its future or past beneficial use. Each producer merely had to show that water was used in some fashion during the 1986-1990 period." There were therefore no studies of water use to determine efficiency of use.

        We therefore conclude that the constitutional limitation of reasonable and beneficial use does not provide justification for treating Jess Ranch differently than other water producers.

         The second reason given by respondent Mojave for the disparate treatment of Jess Ranch is that the amount assigned to Jess Ranch as its base annual production is a factual question, and that we must accept the number found by the trial court under the substantial evidence rule. Specifically, respondent argues that the trial court made a factual determination as to the amount of water which was reasonably and beneficially used by Jess Ranch, and that the trial court limited the base annual production of Jess Ranch by the doctrine of reasonable and beneficial use, and that all stipulating parties were so limited.

        We would be inclined to agree with respondent if the evidence showed that all stipulating parties were limited by the reasonable and beneficial use standard. However, as discussed above, the record is quite clear that the criteria used was water production during the 1986-1990 period, and the uses made of the water by individual producers were not considered to determine if the uses were reasonable and beneficial uses. Instead, the trial court determined, in effect, that all uses in the basin were unreasonable because "[t]he overdraft of an entire, inter-related water basin cannot be held to be a reasonable use of water." In addition, as noted above, the physical solution does not place any restrictions on the quantity of water a producer may pump. It is therefore clear that no reasonable and beneficial use limitation was applied to other water producers.

        Since other water producers were not evaluated on the basis of reasonable and beneficial consumptive use, Jess Ranch was clearly treated differently. Jess Ranch was evaluated on the basis of consumption; other water producers were assigned base annual production rights on the basis of production alone. Since the criteria applied were different, the issue is not a substantial evidence issue.

        The third reason given for the differential treatment of Jess Ranch is that the base annual production number assigned to it was a compromise number arrived at by the drafting committee. Although a Jess Ranch representative testified that he was initially assured that Jess Ranch would be treated like all other producers, the situation changed when the issue was considered by the joint engineer/attorney drafting committee.

        The undisputed evidence shows that the base annual production of 7,600 acre-feet in the interlocutory judgment was based on a compromise proposal of the drafting committee. The number was not verified by the engineers, but was nevertheless reported as the base annual production assignable to Jess

        The fourth justification offered for the differential treatment of Jess Ranch is that Jess Ranch offered no evidence to show that it was treated differently from any other producer with similar operations, i.e., producers with lakes in which fish were raised.

        Jess Ranch responds that the evidence showed that other producers who raised fish did not have their base annual production reduced: "700 acre-feet of Hesperia's Base Annual Production are attributable to its trout farm, but none was assigned to the aquaculture category. [Record citations.] Southwestern Portland Cement Company maintains unlined ponds that contain fish. [Record citations.] None of its production was assigned to aquaculture. Therefore, the fact that Jess Ranch raised fish in its lakes is no justification for reducing its Base Annual Production."

        Jess Ranch also cites testimony of regarding Silver Lakes Association. That producer also had fish in two lakes, and it used water from the lakes to water a golf course. All of its production was used as its base annual production.

        Additionally, Jess Ranch contends that the fact that it was conducting a trout raising operation in 1986 was irrelevant because, even though the water it produced initially flowed through the trout lakes, all of its water was used for irrigation purposes.

        While the trial court was free to reject the proffered evidence, the fact remains that Jess Ranch did produce evidence to show that it was treated differently from other water producers in similar situations and it is undisputed that Jess Ranch was not given its 1986 production as its base annual production.

        In addition, we agree with Jess Ranch that the judgment prevents the existing use of lake water for flood irrigation because it provides that all Jess  Ranch recirculated water from the trout lakes shall be discharged immediately and directly to the Mojave River. No other producer was required to waste water in this manner.

        We agree with Jess Ranch that this differential treatment is inequitable to it because no reasonable justification for it has been shown. We therefore find that Jess Ranch was not given an equal opportunity to stipulate to a judgment on the same terms as were offered to other water producers in the Mojave Basin. Since it was entitled to equitable treatment, the trial court abused its discretion in failing to apply the same criteria to Jess Ranch as to other water producers. Such differential treatment has not been shown to be within the permissible range of options available to the trial court in exercising its equitable discretion. After all, an inequity cannot be equitable. We therefore find that the trial court abused its equitable discretion in its treatment of Jess Ranch.

THE POST-TRIAL ORDER AFFECTING JESS RANCH

        Jess Ranch also appeals from a post-trial order filed on June 7, 1996, which denied its motion for clarification of the judgment. The specific issue arose because Jess Ranch sought to transfer some of its base annual production right under the terms of the stipulated judgment.

        Mojave Water Agency, acting as watermaster, refused to allow any transfer on grounds that Jess Ranch was appealing the judgment. It argued that the judgment would be stayed against Jess Ranch while this appeal was pending pursuant to section 916 of the Code of Civil Procedure. That section provides: "(a) Except as provided in Sections 917.1 to 917.9, inclusive, and in Section         In response, Jess Ranch offered to waive any benefits that might be conferred by the automatic stay rule of Code of Civil Procedure section 916.

        The trial court denied the motion to clarify. Citing the general rule that the perfecting of an appeal stops proceedings in the trial court, the trial court found that the proposed transfer of water rights related to issues decided by the court. It therefore found that it had lost jurisdiction notwithstanding the offer of Jess Ranch to be bound by the judgment pending the appeal.

        Jess Ranch now contends that it had the right to transfer free production allowance in accordance with the terms of the judgment while its appeal was pending. It cites In re Marriage of Horowitz (1984) 159 Cal.App.3d 377, 381, 205 Cal.Rptr. 880: "The purpose of the rule depriving the trial court of jurisdiction pending appeal in civil actions is to protect the jurisdiction of the appellate court; the rule prevents the trial court from rendering the appeal futile by changing the judgment into something different. [Citations.] Accordingly, whether a matter is 'embraced' in or 'affected' by a judgment within the meaning of Code of Civil Procedure section 916 depends on whether post judgment proceedings on the matter would have any effect on the 'effectiveness' of the appeal." The trial court relied on Betz v. Pankow (1993) 16 Cal.App.4th 931, 938, 20 Cal.Rptr.2d 841, which cites and relies on Horowitz.

        The trial court found that the proposed transfer of a portion of Jess Ranch's base annual production right related to the issue decided by the court as to Jess Ranch. Accordingly, it found that the automatic stay provision applied and that it was without jurisdiction to act on the request for clarification.

        Although the issue is a close one, the trial court apparently found that further proceedings on the right of Jess Ranch to use the transfer provisions of the judgment would impact on the effectiveness of the appeal, i.e., a decision on the request for clarification could change the judgment under appeal so as to impact the effectiveness of the appeal. (Elsea v. Saberi (1992) 4 Cal.App.4th 625, 629, 5 Cal.Rptr.2d 742.) After all, the amount of Jess Ranch's base annual production right was the key issue on its appeal and, to some extent, the motion for clarification attacked the trial court's determination of that issue. We therefore conclude that the trial court did not err in denying the motion on grounds that the general automatic stay rule of Code of Civil Procedure section 916 was applicable.

DISPOSITION

We dispose of other pending matters as follows: (1) The motion of the City of Barstow to correct the caption filed on May 19, 1997, is granted; (2) The request of amicus curiae California Farm Bureau Federation that we take judicial notice of exhibits attached to its brief is denied on relevancy grounds; (3) The request of Mojave Water Agency received on February 9, 1998, to take judicial notice of the California Farm Bureau Federation's request to take judicial notice which was filed in the trial court on September 2, 1993, is granted.

        The judgment is reversed with regard to the Cardozo Appellants and the trial court is directed to enter its order excluding those parties from the judgment, including its assessment and injunctive provisions, and, based on the evidence previously submitted, to grant the Cardozo Appellants injunctive relief to protect their riparian and overlying water rights to the current and prospective reasonable and beneficial need for water on their respective  properties. (Tehachapi-Cummings County Water Dist. v. Armstrong, supra, 49 Cal.App.3d 992, 1001, 122 Cal.Rptr. 918. )

As Tehachapi-Cummings states, each overlying owner has a correlative right to available water: "if the quantity is insufficient, each [overlying owner] is limited to his proportionate fair share of the total amount available based upon his reasonable need." (Tehachapi-Cummings County Water Dist. v. Armstrong, supra, 49 Cal.App.3d 992, 1001, 122 Cal.Rptr. 918.) In considering the total amount available, the trial court should consider that riparian and overlying rights have priority over appropriative rights. (California Water Service Co. v. Edward Sidebothams&sSon, supra, 224 Cal.App.2d 715, 725, 37 Cal.Rptr. 1.)

        The award of costs against the Cardozo Appellants in the trial court's order of May 6,         Since Jess Ranch should have been allowed to join in the stipulated judgment on the same terms as those offered to other parties, we reverse the judgment insofar as Jess Ranch is concerned and remand the issue to the trial court with directions to modify the stipulated judgment, without further trial, to include Jess Ranch on an equitable basis, i.e., a basis consistent with the treatment of other stipulating parties and in accordance with the views expressed herein. The modified stipulated judgment will, of course, be subject to further appellate review. The order of June 7, 1996, is affirmed as to Jess Ranch Water Company.

        The Cardozo Appellants and Jess Ranch Water Company to recover their respective costs on appeal.

        RAMIREZ, P.J., and McKINSTER, J., concur.

However, although it allocated priorities between states, the court did not adjudicate the relative rights of appropriators between themselves: "The standard of an equitable apportionment requires an adaptation of the formula to the necessities of the particular situation. We may assume that the rights of the appropriators inter se may not be adjudicated in their absence. But any allocation between Wyoming and Nebraska, if it is to be fair and just, must reflect the priorities of appropriators in the two States." (Nebraska v. Wyoming, supra, 325 U.S. 589, 627, 65 S.Ct. 1332, 1355.)

The three cases involved the Santa Ana River system and the Chino Basin. One or more of these cases apparently was used as the model for the physical solution in this case. However, as Mr. Littleworth notes, each of the cases was settled or disposed of by stipulation, so there was no appeal. In other words, the parties, by stipulation, apparently elected to accept the benefits of the proposed physical solution rather than assert their water rights. The distinctive feature of the present appeal is that the Cardozo Appellants have elected to contest the judgment by asserting their individual water rights. Thus, the other cases have no precedential value in the present situation.

In addition, the Chino Basin adjudication was aided by a statutory system of production assessments which accomplish by statute what the trial court here attempted to establish by fiat. (Wat.Code, § 72140 et seq.) The statute applicable in the Mojave Basin provides that the adjudication of water rights shall be recognized by an exemption from assessments against pumping. (Wat.Code Appen., § 97-37, subd. (b).)

The Mojave Basin statute also provides special provisions, enacted in 1994, to implement the trial court decision in this case. (Stats.1994, ch. 505.) The validity of those statutes is not directly in issue in this appeal.

Thus, so long as the water is being beneficially used, the principle stated in the Irrigation District case would still apply if the public agency desired to take all of the Cardozo Appellants' water rights. (In re Waters of Long Valley Creek Stream System, supra, 25 Cal.3d 339, 158 Cal.Rptr. 350, 599 P.2d 656.)


Summaries of

City of Barstow v. Mojave Water Agency

California Court of Appeals, Fourth District, Second Division
Jun 1, 1998
75 Cal. Rptr. 2d 477 (Cal. Ct. App. 1998)
Case details for

City of Barstow v. Mojave Water Agency

Case Details

Full title:City of Barstow v. Mojave Water Agency

Court:California Court of Appeals, Fourth District, Second Division

Date published: Jun 1, 1998

Citations

75 Cal. Rptr. 2d 477 (Cal. Ct. App. 1998)

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City of Barstow v. Mojave Water Agency

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