Judgment: IN RE: SAN DIEGO COUNTY WATER AUTHORITY

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                                KEKER, VAN NEST & PETERS LLP
JOHN W. KEKER - # 49092
jkeker@keker.com

DAN JACKSON - #216091
djackson@keker.com

WARREN A. BRAUNIG - #243884
wbraunig@keker.com

NICHOLAS S. GOLDBERG - # 273614
ngoldberg@keker.com

633 Battery Street

San Francisco, CA 94111- 1809

Telephone: (415) 391-5400
Facsimile: (415) 397-7188

MARK J. HATTAM - # 173667
mhattam@sdewa.org

General Counsel

SAN DIEGO COUNTY WATER AUTHORITY
4677 Overland Avenue

San Diego, CA 92123-1233

Telephone: (858) 522-6791

Facsimile: (858) 522-6566

Attorneys for Petitioner, Plaintiff, and Cross-Defendant

SAN DIEGO COUNTY WATER AUTHORITY

FILED

San Francisco County Superior Court
- JUN a4 2022
URT

Le Clie
Deputy Clerk

EXEMPT FROM FILING FEES
[GOVERNMENT CODE § 6103]

SUPERIOR COURT OF TH

E STATE OF CALIFORNIA

IN AND FOR THE COU}

SAN DIEGO COUNTY WATER
AUTHORITY,

Petitioner, Plaintiff and Cross-
Defendant,

v.

METROPOLITAN WATER DISTRICT OF
SOUTHERN CALIFORNIA; ALL
PERSONS INTERESTED IN THE
VALIDITY OF THE RATES ADOPTED
BY THE METROPOLITAN WATER
DISTRICT OF SOUTHERN CALIFORNIA
ON APRIL 8, 2014 TO BE EFFECTIVE
JANUARY 1, 2015 AND JANUARY 1,
2016; and DOES 1-10,

Respondents, Defendants and
Cross-Complainant.

ITY OF SAN FRANCISCO

Lead Case No. CPF-14-514004

Consolidated with Case Nos. CPF-16-515282
& CPF-18-516389

SAN DIEGO COUNTY WATER
AUTHORITY’S MOTION FOR PARTIAL
JUDGMENT (CODE CIV. PROC. § 631.8.)

306

Dept.:
Hon. Anne-Christine Massullo

Judge:
Date Filed: May 30, 2014
Trial Dates: May 16-June 24, 2022

SAN DIEGO’S MOTION FOR PARTIAL JUDGMENT (CODE CIV. PROC. § 631.8.)
Lead Case No. CPF-14-514004; Consolidated with CPF-16-515282 & CPF-18-516389

1860661@ ®
L INTRODUCTION

San Diego County Water Authority (San Diego) moves for partial judgment pursuant to
Code of Civil Procedure section 631.8.' This motion is limited to four discrete issues on which
Metropolitan Water District of Southern California (Metropolitan) failed to carry its burden of
proof, as Metropolitan’s own witnesses admitted: (a) Metropolitan’s affirmative defense under
the Exchange Agreement’s dispute resolution provision (Paragraph 11.1 Defense); (b) its
affirmative defenses of waiver and consent; (c) its cross-claims for reformation and related
affirmative defenses of mistake; and (d) its cross-claim for a declaration about cost-causation.
Resolving these issues now will clear the way for the post-trial briefs to focus on issues that still
matter in this case. The affirmative defenses and cross-claims addressed in this motion do not fall
into that category; instead, they should fall out of the case entirely under section 631.8.

I. ARGUMENT

Section 631.8 allows either party to bring a motion for judgment—cr, as here, partial
judgment—after the other party “has completed his presentation of evidence in a trial by the
court,” which “as trier of the facts shall weigh the evidence.” (§ 631.8, subd. (a); see also id.,
subd. (b) [judgment may be partial and, if so, “the final judgment in such action shall, in addition
to any matters determined in the trial, award judgment as determined by the motion herein
provided for”].) Such a motion may be made and granted as to affirmative defenses and/or cross-
claims. (See ibid.; Glendale Fed. Sav. & Loan Assn. v. Marina View Heights Dev. Co. (1977) 66
Cal.App.3d 101, 155-158 (Glendale) [affirming judgment on cross-complaint under § 631.8].)
The Court’s review is “not limited to the legal sufficiency of the opposing party’s evidence (i.e.,
whether there is evidence of each essential element of the opposing party’s claim or defense).
Rather, the motion empowers the judge to decide issues of credibility and preponderance of
evidence.” (Wegner et al., Cal. Prac. Guide: Civ. Trials & Evid. (The Rutter Group 2021) 16:22
(Rutter Guide), italics in original.) Thus, this Court’s decision under section 631.8 will be

entitled to deference in any appeal. (See, e.g., Glendale, supra, 66 Cal.App.3d at p. 157.)

1 Subsequent statutory citations are to the Code of Civil Procedure unless otherwise indicated.

2A motion for judgment is usually made orally and without prior notice to the party against
whom it is directed.” (Rutter Guide, supra, { 16:38.) As the Rutter Guide states: “Although not
I

SAN DIEGO’S MOTION FOR PARTIAL JUDGMENT (CODE CIV. PROC. § 631.8.)
Lead Case No. CPF-14-514004; Consolidated with CPF-16-515282 & CPF-18-516389
1860661A. The Court should grant judgment in San Diego’s favor on Metropolitan’s
Paragraph 11.1 Defense (5th affirmative defense) in the 2014 & 2016 actions.

This Court granted summary adjudication on Metropolitan’s Paragraph 11.1 Defense in
the 2018 action, but found that there were triable issues in the other actions on this 5th affirmative
defense. (May 11, 2022 Order at pp. 1-2, 20-21.) At trial, however, Jeffrey Kightlinger—
Metropolitan’s General Manager in the relevant years—admitted unequivocally that San Diego

complied with Paragraph 11.1. (See Ex. A, May 26, 2022 Tr. at pp. 1485:15-1489:19
(Kightlinger).)

Q. And you would agree that the Water Authority complied with Paragraph 11.1 of
the exchange agreement with respect to Metropolitan’s charges in 2015 and
2016?

A. Yes.

Q. And you would agree that the Water Authority complied with Paragraph 11.1 in
connection with the rates that Metropolitan charges under the exchange
agreement in 2017 and 2018?

A. Yes.

Q. So you would agree with me that the Water Authority complied with Paragraph
11 of the 2003 exchange agreement related to these lawsuits at issue in this case?

A. Yes.
(Ud. at pp. 1485:15-18, 1487:17-21, 1489:15—-19.) Maureen Stapleton likewise testified that San

Diego complied with Paragraph 11.1. (See Ex. B, May 19, 2022 Tr. at pp. 766:19-785:18.) And
the documentary evidence further confirms Mr. Kightlinger’s admissions and Ms. Stapleton’s
testimony. (See, e.g., PTX886; PTX892; PTX915; PTX918; PTX925; PTX926; PTX1097.)

“Tt is the general rule that the uncontradicted testimony of a witness to a particular fact
may not be disregarded, but should be accepted as proof of the fact.” (Joseph v. Drew (1950) 36
Cal.2d 575, 579 (Joseph), internal quotation marks and citation omitted; accord Rutter Guide,
supra, J 16:52.) Here, Metropolitan’s own witness—its General Manager in the very years at
issue—admitted that its Paragraph 11.1 Defense must fail. That dispositive admission was
confirmed by Ms. Stapleton’s uncontradicted testimony and the unrebutted trial exhibits. Thus,

the Court should grant judgment in San Diego’s favor on Metropolitan’s Paragraph 11.1 Defense

required, written points and authorities are often helpful to the judge, especially where the case
involves complex legal issues.” (Id., { 16:39, italics in original.) The issues presented here are
not complex. Nonetheless, San Diego provides this written motion for the Court’s convenience.

2

SAN DIEGO’S MOTION FOR PARTIAL JUDGMENT (CODE CIV. PROC. § 631.8.)
Lead Case No. CPF-14-514004; Consolidated with CPF-16-515282 & CPF-18-516389
1860661@ @

(5th affirmative defense) in the 2014 and 2016 actions. (See ibid.; § 631.8.)

B. The Court should grant judgment in San Diego’s favor on Metropolitan’s
11th affirmative defense of waiver and 17th affirmative defense of consent.

Paragraph 13.9 of the Exchange Agreement provides:

No waiver of a breach, failure of condition, or any right or remedy contained in or
granted by the provisions of this Agreement is effective unless it is in writing and
signed by the Party waiving the breach, failure, right, or remedy. No waiver of a
breach, failure of condition, or right or remedy is or may be deemed a waiver of any
other breach, failure, right or remedy, whether similar or not. In addition, no waiver
will constitute a continuing waiver unless the writing so specifies.

(PTX65, § 13.9.) Similarly, paragraph 12.5 provides that, even if San Diego “fails to exercise or
delays in exercising any such right or remedy, [it] does not thereby waive that right or remedy,”

and “no single or partial exercise of any right, power, or privilege precludes any other or further
exercise of a right, power, or privilege granted by this Agreement or otherwise.” (Id., J 12.5.)

Consent is “an aspect of waiver.” (2 Cal. Affirmative Def. (2d ed. 2022), Consent, § 47:19.)

Metropolitan’s witnesses have admitted, and San Diego’s witnesses have confirmed, that
there is no signed waiver—much less a signed continuing waiver—by San Diego, as required for
any alleged waiver or consent to be effective under the Exchange Agreement:

Q. In the course of your role administering the exchange agreement, you’re not
aware of any writing in which anyone from the Water Authority has waived any
right or remedy pertaining to the exchange agreement; correct?

A. Not that I recall.
(Ex. C, May 25, 2022 Tr. at p. 1297:11—16 (Upadhyay).)

Q. ...{[A]re you aware of whether there was any signed writing by -- from the
Water Authority waiving any rights as it relates the 2003 exchange agreement?

A. I’m not aware.
(PTX1148 at p. 116:7-12; id. at pp. 111:10-21, 112:13-15, 114:1-21 (Hasencamp Dep.)
[Metropolitan’s § 2035.230 designee on waiver and consent admitting the absence of any factual
basis for these defenses]; Ex. D, May 18, 2022 Tr. at pp. 581:20-583:3 (Slater) [no waiver].)
Thus, the Court should grant judgment in San Diego’s favor on Metropolitan’s 11th

affirmative defense of waiver and its 17th affirmative defense of consent.

Cc. The Court should grant judgment in San Diego’s favor on Metropolitan’s
cross-claims for reformation and its affirmative defenses of mistake.

Metropolitan’s 9th and 11th cross-claims in the 2014 and 2016 actions, its 11th and 13th
3

SAN DIEGO’S MOTION FOR PARTIAL JUDGMENT (CODE CIV. PROC. § 631.8.)
Lead Case No. CPF-14-514004; Consolidated with CPF-16-515282 & CPF-18-516389
186066110
1

@ _@
in the 2018 action, are for reformation of the Exchange Agreement based on Metropolitan’s
alleged “mistake.” (E.g., 2014 XC, § 121, 133.) Metropolitan’s 27th and 28th affirmative
defenses likewise allege mistake of fact and law. (E.g., 2014 Answer, 27th & 28th Aff. Def.)
“The purpose of reformation is to correct a written instrument in order to effectuate a
common intention of both parties which was incorrectly reduced to writing.” (Lemoge Elec. v.
San Mateo County (1956) 46 Cal.2d 659, 663 (Lemoge).) “In order for [Metropolitan] to obtain

this relief there must have been an understanding between the parties on all essential terms,

otherwise there would be no standard to which the writing could be reformed.” (Jbid.) “Section

3399 of the Civil Code incorporates this principle by providing that, under specified conditions, a
written contract which does not truly express ‘the intention of the parties’ may be revised so as to
set forth ‘that intention.’” (Jbid., quoting Civ. Code, § 3399.) “Although a court of equity may
revise a written instrument to make it conform to the real agreement, it has no power to make a
new contract for the parties, whether the mistake be mutual or unilateral.” (Jd. at pp. 663-664.)
And the Court certainly has no power to reform the contract where, as here, even the party
seeking reformation admits that there was “no mistake.” (Everett v. State Farm General Ins. Co.
(2008) 162 Cal.App.4th 649, 664 (Everett).) Likewise, there can be no affirmative defense of
mistake of fact or law where, as here, there was “no mistake.” (Hedging Concepts, Inc. v. First
Alliance Mortgage Co. (1996) 41 Cal.App.4th 1410, 1421 (Hedging).)

Bill Hasencamp, Metropolitan’s designated witness on its mistake defenses (see PTX1148

at p. 111:10-21 (Hasencamp Dep.)), admitted that there was no mistake:

Q. Does Metropolitan believe that there was a mistake made in the nego- -- in the
writing of the 2003 exchange agreement?

A. No.

Q. Does Metropolitan believe both parties made a mistake in writing the 2003
exchange agreement? ...

A. I’m not aware of any mistake made by any party.
(Cd. at pp. 119:25-120:15.) In fact, Metropolitan admits that the Exchange Agreement is not even

ambiguous, much less “incorrectly reduced to writing.” (Lemoge, supra, 46 Cal.2d at p. 663; see
PTX1177 (Resp. to Form Interrog. 50.6); Ex. A, May 26, 2022 Tr. at p. 1407:15-17

(Kightlinger).)
4

SAN DIEGO’S MOTION FOR PARTIAL JUDGMENT (CODE CIV. PROC. § 631.8.)
Lead Case No. CPF-14-514004; Consolidated with CPF-16-515282 & CPF-18-516389
1860661Moreover, Metropolitan has failed to prove any “understanding between the parties on all
essential terms” that is different from what is written in the Exchange Agreement. (Lemoge,
supra, 46 Cal.2d at p. 663.) Metropolitan simply disagrees with San Diego’s contract
interpretation—and with the binding interpretation of this Court and the Court of Appeal, as
already established in the prior cases. Putting aside issue preclusion and the parol evidence
rule—which bar Metropolitan’s misinterpretations—a disagreement over contract interpretation is
no basis for reformation. If it were, every party that loses a contract case because it advanced a
contract interpretation that the courts rejected would have a claim for reformation. As a matter of
law, Metropolitan’s interpretation of the Exchange Agreement is no basis for reforming it, and no
basis for Metropolitan’s mistake defenses. (See, e.g., ibid.; Hedging, supra, 41 Cal.App.4th at p.
1421; Everett, supra, 162 Cal.App.4th at p. 664; Stermer v. Board of Dental Examiners (2002) 95
Cal.App.4th 128, 134; Guthrie v. Times-Mirror Co. (1975) 51 Cal.App.3d 879, 884-885.)

Thus, Metropolitan’s reformation cross-claims and mistake defenses would fail as a
matter of law even in a garden-variety contract case. And the Exchange Agreement is no garden-
variety contract. The Exchange Agreement is an essential, inextricable component of the thirty or
so Quantification Settlement Agreements (QSA): the historic set of contracts that “involved seven
states, spanned two federal administrations, two governors, involved specific legislation on
several counts, multiple negotiations among multiple agencies, daily, for -- nonstop almost in the
governor’s office, for almost a year.” (Ex. D, May 18, 2022 Tr. at pp. 575:15-576:3 (Slater).) As
Metropolitan’s own witnesses admitted, the QSA is a “complete package” that is all “tied
together” such that “you change one[;] you got to change many of them.” (Ex. A, May 26, 2022
Tr. at p. 1420:14-23 (Kightlinger); accord PTX1148 at pp. 32:21-35:24 (Hasencamp Dep.).)
“Such a result would not only be contrary to settled legal principles, but it would also create
uncertainty and confusion” (Lemoge, supra, 46 Cal.2d at p. 665), undermining the vital and
inextricably interconnected agreements among the myriad parties to the QSA. The Court should

not entertain Metropolitan’s meritless reformation cross-claims and mistake defenses any further.

D. The Court should grant judgment for San Diego on Metropolitan’s cross-
claim for declaratory relief regarding cost causation.

Finally, Metropolitan’s Sth cross-claim in the 2014 and 2016 actions and its 7th in the
5

SAN DIEGO’S MOTION FOR PARTIAL JUDGMENT (CODE CIV. PROC. § 631.8.)
Lead Case No. CPF-14-514004; Consolidated with CPF-16-515282 & CPF-18-516389
18606612018 action are for declaratory relief regarding “cost causation.” But Metropolitan failed to
“demonstrate its action presented two essential elements: (1) a proper subject of declaratory
relief, and (2) an actual controversy involving justiciable questions relating to [Metropolitan’s]
rights or obligations.” (Wilson & Wilson v. City Council of Redwood City (2011) 191
Cal.App.4th 1559, 1582, quotation marks omitted.) Where there is no controversy, no declaratory
relief may be granted and judgment should be entered accordingly. (Gillette v. Gillette (1932)
122 Cal.App. 640, 642 (Gillette); accord, e.g., 2 Witkin, Cal. Proc. 6th Jurisd., § 418 (2022) [“If
there is no controversy at all, declaratory relief is as improper as any other kind.”].)

If Metropolitan simply seeks a declaration that the principle of “cost causation” applies,
there is no controversy. That is already established by this Court’s rulings in the prior cases as
affirmed in SDCWA v. Metropolitan (2017) 12 Cal.App.5th 1124 (SDCWA I):

The trial court analyzed the validity of Metropolitan’s water rates under the
wheeling statutes and other legal standards jointly, reasoning that “the core inquiry”
was the same: “whether the costs of services (e.g., wheeling) are reasonably related
to the costs of providing those services.” While there are some differences among
the legal standards, we agree that the “core” issue as determined under the wheeling
statutes does, as a practical matter, dictate the conclusion that must be reached under
the other provisions of law.

(Ud. at p. 1144.) And it was confirmed by Metropolitan’s purported cost-causation expert,
Richard Giardina. (See Ex. E, May 27, 2022 Trial Tr. at 1697:11-28, 1698:12-21 (Giardina).)

To the extent Metropolitan seeks a declaration that it complied with cost causation, there
is still no controversy: the now-uncontroversial answer is that Metropolitan did not comply with
cost causation with regard to its Water Stewardship Rate (WSR). Indeed, during the cross-
examination of Mr. Giardina, Metropolitan’s counsel objected to any inquiry about “the WSR.
issues” on the basis that those issues “have already been resolved.” (See id. at p. 1700:9-17.)
This Court agreed that those issues have “been resolved by Judge Karnow and now the Court of
Appeals,” and then invited Metropolitan’s counsel to stipulate that “Courts can disagree with a
process -- or the end result of the process that complies with the M1” manual (id. at p. 1701:11-
15), which was Mr. Giardina’s sole basis for his opinions about cost causation (id. at p. 1649:2-
4). Metropolitan’s counsel so stipulated. (Jd. at p. 1701:5-6.)

Because there is no longer any live controversy regarding cost causation, Metropolitan has

6

SAN DIBGO’S MOTION FOR PARTIAL JUDGMENT (CODE CIV. PROC. § 631.8.)
Lead Case No. CPF-14-514004; Consolidated with CPF-16-515282 & CPF-18-516389
1860661failed to establish the essential element of its cause of action for declaratory relief, and judgment
should be “rendered accordingly.” (Gillette, supra, 122 Cal.App. at p. 642.)
Ii. CONCLUSION
For the foregoing reasons, the Court should grant partial judgment for the Water Authority
under section 631.8 on (a) Metropolitan’s Paragraph 11.1 Defense; (b) its affirmative defenses of
waiver and consent; (c) its reformation cross-claims and related affirmative defenses of mistake;

and (d) its cross-claim for a judicial declaration about cost-causation.

Respectfully submitted,
Dated: June 24, 2022 KEKER, VAN NEST & PETERS LLP

By:
DAN IN

Attorneys for SAN DIEGO COUNTY
WATER AUTHORITY

7

SAN DIEGO’S MOTION FOR PARTIAL JUDGMENT (CODE CIV. PROC. § 631.8.)
Lead Case No. CPF-14-514004; Consolidated with CPF-16-515282 & CPF-18-516389
1860661oOo oe ND

PROOF OF SERVICE

I am employed in the City and County of San Francisco, State of California in the office of a
member of the bar of this court at whose direction the following service was made. I am over the
age of eighteen years and not a party to the within action. My business address is Keker, Van
Nest & Peters LLP, 633 Battery Street, San Francisco, CA 94111-1809.

On June 24, 2021, I served the following document(s):

SAN DIEGO COUNTY WATER AUTHORITY’S MOTION FOR PARTIAL JUDGMENT
(CODE CIV. PROC. § 631.8.)

eS
M_ by PERSONAL DELIVERY, by personally delivering Original to addressees as shown

below. :
Barry W. Lee Attorneys for Defendant and Respondent
Justin Jones Rodriguez The Metropolitan Water District of
Manatt, Phelps & Phillips, LLP Southern California

One Embarcadero Center, 30‘ Floor
San Francisco, CA 94111

Email: bwlee@manatt.com
jjrodriguez@manatt.com

Marcia Scully Attorneys for Defendant and Respondent
Heather C. Beatty The Metropolitan Water District of

Patricia Quilizapa ees
The Metropolitan Water District of Southern Southern California

California

700 North Alameda Street

Los Angeles, CA 90012-2944
Email: mscully@mwdh2o0.com

hbeat mwdh20.com

pquilizapa@mwdh20.com

Executed on June 24, 2022, at San Francisco, California.

I declare under penalty of perjury under the laws of the State of California that the above is true

and correct.
(Q—Ga0s

WARREN A. BRA’

1

SAN DIEGO’S MOTION FOR PARTIAL JUDGMENT (CODE CIV. PROC. § 631.8.)
Lead Case No. CPF-14-514004; Consolidated with CPF-16-515282 & CPF-18-516389

1860661Exhibit AREPORTER'S TRANSCRIPT OF PROCEEDINGS ~ May 26, 2022

THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE COUNTY OF SAN FRANCISCO
BEFORE THE HONORABLE ANNE-CHRISTINE MASSULLO, JUDGE
DEPARTMENT NO. 306

u PF WN PR

---000---

7 SAN DIEGO COUNTY WATER Case No.

AUTHORITY, CPF-14-514004
8 (Consolidated With
Plaintiff, Case Nos.
9 CPF-16-515282
v. CPF-18-516389)

METROPOLITAN WATER DISTRICT,
11 et al.,

12 |. Defendants.

weve eee eve ve ye eee

Pages 1351 - 1552

16 REPORTER'S TRANSCRIPT OF PROCEEDINGS
17 May 26, 2022

22 | OFFICIAL REPORTER PRO TEM:
23| HEATHER J. BAUTISTA, CSR No. 11600, CRR, RPR, CLR

25 JAN BROWN & ASSOCIATES
26 WORLDWIDE DEPOSITION & VIDEOGRAPHY SERVICES
27 701 Battery St., 3rd Floor, San Francisco, CA 94111

28 (415) 981-3498 or (800) 522-7096
1351

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096

|

|
|
uB WN Ee

REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 26, 2022

APPEARANCES OF COUNSEL:

For Plaintiff:

Keker Van Nest & Peters
BY: WARREN BRAUNIG, ESQ.
NICHOLAS S. GOLDBERG, ESQ.
DAN JACKSON, ESQ.
JULIA L. GREENBERG, ESQ.
MAXWELL ALDERMAN, ESQ.
633 Battery Street
San Francisco, California 94111-1809
Tel: 415.391.5400
Email: wbraunig@keker.com
Email: ngoldberg@keker.com
Email: djackson@keker.com
Email: jgreenberg@keker.com
Email: malderman@keker.com

For Defendant:

Manatt Phelps & Phillips
BY: BARRY W. LEE, ESQ.

JUSTIN JONES RODRIGUEZ, ESQ.
One Embarcadero Center, 30th Floor
San Francisco, California 94111
Tel: 415.291.7450 Fax: 415.291.7474
Email: bwlee@manatt.com
Email: jjrodriguez@manatt.com

Metropolitan Water District of Southern

California:

PATRICIA QUILIZAPA, ESQ.
Email: pquilizapa@mwdh2o.com
HEATHER C. BEATTY, ESQ.
Email: hbeatty@mwdh2o0.com
MARCIA L. SCULLY, ESQ.
Email: mscully@mwdh2o.com

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096

_———————E—E ———SS SSSREPORTER'S TRANSCRIPT OF PROCEEDINGS - May 26, 2022

INDEX
INDEX OF EXAMINATION

Examinations
JEFFREY KIGHTLINGER

Continued Direct By MR. LEE

Cross By MR. GOLDBERG

Re-Direct By MR. LEE
BRIAN THOMAS

Direct By MR. RODRIGUEZ

Cross By MR. BRAUNIG

Reporter's Certificate

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096TRANSCRIPT OF PROCEEDINGS -.May 26, 2022

REPORTER'S

EXHIBITS

Plaintiff's Description Marked Rec'd

PTX 1097 MWD letter re Rejection of © 1488
Claim for San Diego County
Water Authority

5

6

7 Defendant's Description Marked Rec'd
8 DTX 2529 8/18/2020 Board Meeting Minutes 1503
9| DTXx 3009 11/29/2017 San Diego County 1396

Water Authority report to the
Imported Water Committee

a1 DTX 3013 7/26/2018 Kightlinger letter to 1390
Stapleton
12
DTX 3014 8/3/2018 Stapleton letter to 1396
13 Kightlinger
14] pDtTx 3018 10/29/2018 Kightlinger letter 1470

to Jones and Hunter

1354

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096N

REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 26, 2022

1 Q. There's an integration clause in the 2003
2 Exchange Agreement; correct?

3 A. Correct.

4 Q. And you would agree with me that the contract
5 itself is the final, complete, and exclusive statement

6 of the terms of the agreement pertaining to the parties;
7 correct?

8 A. Yes.

9 Q. And you would also agree that Metropolitan was
10 not induced to enter into the 2003 Exchange Agreement,
11 nor is -- was it relying on any representation or
12 warranty by the Water Authority outside of those
13 expressly set forth in the contract; correct?

14 A. Correct.

(45) Q.) (nd_you'd also agree with me that the exchange)
(16)|} (agreement is not ambiguous; correct?)

Yes.

18 Q. Okay.

19 Let's look at the price term, then.

20 MR. GOLDBERG: Paragraph 5.2. Maybe we can put
21 it up so the -- I know it spills onto two pages, but if
22 we can get it on the same screen, that would be great.
23 That's fine. We can take it as two.

24 Q. (By Mr. Goldberg) This is the price term that
25 Metropolitan agreed to; correct?

26 A. Yes.

27 Q. And if I understand your testimony on direct
28 examination, it was, in sum or substance, the Water

1407REPORTER'S TRANSCRIPT .OF PROCEEDINGS - May 26, 2022

1 Colorado River Aqueduct, there was a recognition at
2 Metropolitan that bringing in water to move through the
3 Colorado River Aqueduct and fill that shortfall would be
4 a beneficial thing to Metropolitan? :
5 A. Yes.
6 Q. And, ultimately, the parties did reach
7 agreement on the QSA, I think you said, in October 2003?
8 A. Yes.
9 Q. And the exchange agreement is one. of those
10 agreements that is part of the QSA?
11 A. Yes.
12 Q. And the allocation agreement as well?
13 A. Yes.
@ Q:) G@nd_without the exchange agreement and the)
@5)| @llocation agreement, the QSA would not have happened;)
.
(7) (a.). Without any of the agreements, it was a)
9} @Q.) ‘@hey_all are tied together?)
2) .-) (And you change one, you got to change many of)
(22)| (them? .
24 Q. You also, testified on direct examination about
25 the Water Authority's communications to Metropolitan
26 leading up to the execution of the 2003 Exchange
27 Agreement. Do you have that subject in mind?
28 A. Yes.

1420

JAN BROWN & ASSOCIATES (415): 981-3498 (800), 522-7096on / {4

,

REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 26, 2022

she states that the Water

in the second sentence,
Authority's objections to Metropolitan's 2015 and 2016
rates are the same as the objections presented in the
trial before Judge Karnow, the prior cases; xight?

A. Yes.

Q. And you're familiar with that trial; you

testified?
A. Yes.
Q. And then she invites a meeting under

Paragraph 11.1; correct?

A. Yes.

Q. And those meetings, to the extent they
occurred, did not resolve or reach a resolution; right?

A. That's correct.

@.). @nd_you would agree that the Water Authority)

BP Pw BP BP bw
7A id ® Wy FO ®© © YA HA HW we WN eB

(complied with Paragraph 11.1 of the exchange agreement)

(with respect to Metropolitan's charges in 2015 and 2016?)

@:) Gray).

(let's take a look at PTX 915.) (This is a)

(similar -~ let me know when you're there.) (And I think)

(this is in evidence.)

@

@4) Q.) (his is a similar letter that Ms. Stapleton)
(25)| (Sent you in May of 2016; correct?)

9) @-) @gain, inviting negotiations under)

(28) (Paragraph 11.1; correct?)

1485

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-70968 @O@rx as wae wn eye

te .

REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 26, 2022

That's right.

MR. LEE: And I want to caution the witness not
to disclose the contents of what was discussed. I know
you're a lawyer and already know that, but just want to
make sure.

THE WITNESS: Understood.”

@.) (By Mr. Goldberg)) @nd, Mr. Kightlinger, you)
(participated both in the negotiations under) :

(Paragraph 11.1 and in these settlement discussions;)

correct?

fa.) (Correct).

Q. And, again, lots of things were discussed. I

don't want you to get into the substance, but those did
not produce a resolution. Otherwise, we obviously
wouldn't be here.

A. Exactly.

Q.) (nd_you would agree that the Water Authority)

(Complied with Paragraph 11.1 in connection with the)

(cates that Metropolitan charges under the exchange)

{agreement in 2017 and 2018?)

Q. And if you just take a look at PTX 1097 which I

don't think is in evidence yet.
THE COURT: It's not in evidence. -
MR. GOLDBERG: It's not; right? Okay.
THE WITNESS: Yes, I'm here.
(By Mr. Goldberg) Okay.

Have you seen this document before?

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096oN,

REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 26, 2022

Q. (By Mr. Goldberg) Do you recall some testimony
earlier this morning about a letter in March of 2018
from the Water Authority requesting offsetting benefits?

A. They requested a number of things in the
letter; among them, offsetting benefits.

Q. Okay.

And this letter, in 2018, was after the Water
Authority had sent that letter in March of 2018;
correct?

A. Yes.

Q. And Metropolitan rejected the Water
Authority's claim and waived further negotiations
under Paragraph 11.1; correct?

A. Correct.

Q.) (eo you would agree with me that the Water)

(Authority complied with Paragraph 11 of the 2003)

(Exchange Agreement related to these lawsuits at issue in)

Q. Sorry. I couldn't hear you.

A. Yes.
THE COURT: Follow-up question on PTX 0892:
These discussions, under Paragraph 11.1 in May of 2014,
do you remember if there was any discussion raised by
San Diego about offsetting benefits under whatever
statute or regulation at that time?
THE WITNESS: No, there was no discussion of

offsetting benefits. In fact, the first time I saw it
1489

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096eo oO 3 A HW FW dK KB

RoR BOR
®Y NR FO

14
15
16
17
18

19
20

21
22

23
24

25
26
27

28

REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 26, 2022

STATE OF CALIFORNIA )

COUNTY OF SANTA CLARA )

I, HEATHER J. BAUTISTA, HEREBY CERTIFY THAT:

The foregoing is a full, true, and correct
transcript of the testimony given and proceedings had in
the above-entitled action taken on May 26, 2022; that it

is a full, true, and correct transcript of the evidence

offered and received, acts and statements of the Court,

also all objections of counsel, and all matters to which
the same relate; that I reported the same in stenotype \
to the best of my ability, being the duly appointed and
acting official stenographic reporter of said Court, and '
thereafter had the same transcribed into typewriting as |

herein appears.

Dated: June 10, 2022

autista’,
CSR License #11600
CRR/RPR Certificate #852251
Certified Livenote Reporter
Realtime Systems Administrator

ATTENTION:

CALIFORNIA GOVERNMENT CODE

SECTION 69954(D) STATES:

"ANY COURT, PARTY, OR PERSON WHO HAS PURCHASED A TRANSCRIPT
MAY, WITHOUT PAYING A FURTHER FEE TO THE REPORTER, REPRODUCE
A COPY OR PORTION THEREOF AS AN EXHIBIT PURSUANT TO COURT
ORDER OR RULE, OR FOR INTERNAL USE, BUT SHALL NOT OTHERWISE
PROVIDE OR SELL A COPY OR COPIES TO ANY OTHER PARTY OR
PERSON."

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096OC

Exhibit Boy

9 C

REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

SUPERIOR COURT OF THE STATE OF CALIFORNIA

\

COUNTY OF SAN FRANCISCO

SAN DIEGO COUNTY WATER
AUTHORITY,

Plaintiff, Case No. CPF-14-514004

vs. Consolidated with
Case Nos. CPF-16-515282
METROPOLITAN WATER DISTRICT, and
et al., CPF-18-516389)

Defendants. VOLUME IV
PAGES 618 - 839

REPORTER'S TRANSCRIPT OF PROCEEDINGS
BEFORE HON. ANNE-CHRISTINE MASSULLO, JUDGE PRESIDING
DEPARTMENT 306

THURSDAY, MAY 19, 2022

Reported by:

Cynthia F. Dammann, CSR # 10610

JAN BROWN & ASSOCIATES
WORLDWIDE DEPOSITION & VIDEOGRAPHY SERVICES
701 Battery Street, 3rd Floor, San Francisco, CA 94111
(415) 981-3498

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096{
\

REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

APPEARANCES
FOR PLAINTIFF:

KEKER VAN NEST & PETERS

633 Battery Street

San Francisco, California 94111-1809

Telephone: (415) 391-5400

BY: WARREN BRAUNIG, ESQ.
wbraunig@keker.com
NICHOLAS S. GOLDBERG, ESQ.
Ngoldberg@keker.com
DAN JACKSON, ESQ.
Djackson@keker.com
JULIA L. GREENBERG, ESQ.
MAXWELL ALDERMAN, ESQ.

FOR DEFENDANT METROPOLITAN WATER DISTRICT:
MANATT PHELPS & PHILLIPS
One Embarcadero Center, 30th Floor
San Francisco, California 94111
Telephone: (415) 291-7450
BY: BARRY W. LEE, ESQ.
bwlee@manatt.com
JUSTIN JONES RODRIGUEZ, ESQ.
Jjrodriguez@manatt.com

METROPOLITAN WATER DISTRICT OF SOUTHERN
CALIFORNIA
BY: PATRICIA QUILIZAPA, ESQ.

HEATHER C. BEATTY, ESQ.

MARCIA L. SCULLY, ESQ.

FOR REAL PARTIES IN INTEREST LAS VIRGENES MUNICIPAL WATER
DISTRICT, MUNICIPAL WATER DISTRICT OF ORANGE COUNTY, WEST
BASIN MUNICIPAL WATER DISTRICT, FOOTHILL MUNICIPAL WATER
DISTRICT, WESTERN MUNICIPAL WATER DISTRICT, EASTERN
MUNICIPAL WATER DISTRICT:

ALESHIRE & WYNDER, LLP

2361 Rosecrans Avenue

El Segundo, California 90245-4916

(310) 527-6660

BY: CHRISTINE M. CARSON, ESQ.
ccarson@awattorneys.com

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096—
REPORTER'S TRANSCRIPT OF PROCEEDINGS -—- May 19, 2022

THURSDAY, MAY 19, 2022
TRIAL - VOLUME 4
PROCEEDINGS

WITNESS: SCOTT SLATER

Cross-Examination Resumed by MR. LEE

Redirect Examination by MR. GOLDBERG
Recross-Examination by MR. LEE
WITNESS: MAUREEN STAPLETON
Direct Examination by MR. GOLDBERG
P.M. SESSION
Direct Examination Resumed by MR. GOLDBERG

Cross~Examination by MR. RODRIGUEZ

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096REPORTER'S TRANSCRIPT OF PROCEEDINGS —- May 19, 2022

INDEX OF
EXHIBITS
PLAINTIFF'S

(All Exhibits were pre-marked.)
Description

Phase I Post-Trial Brief
(2010/2012 Action)

5/2/14 letter from Stapleton to
Kightlinger re Compliance with
Paragraph 11.1 of 2003 Exchange
Agreement

5/2/16 letter from Stapleton to
Kightlinger re Compliance with
Paragraph 11.1 of 2003 Exchange
Agreement

3/11/18 SDCWA letter to MWD re
Proposed Water Rates and Charges
for 2019 and 2020

3/23/18 letter from Breaux and
Scully to Hattam re responses to
3.11.18 email

3/11/20 IID Invoice re 2020 Net
Additional OM&R and Environmental
Costs for AACLP

---000---

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096— f
REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022
DEFENDANTS!

(All Exhibits were pre-marked.)

Number Description In Evid

DTX .2514 4/2/09 MWD-SDCWA Memorandum of
Points and Authorities ISO
Joint Motion

DTX 2516 1/7/11 SDCWA-CVWD-MWD Joint

Combined Appellants Reply Brief
and Cross-Respondents' Brief

---000---

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096o oO TY DOD VU F W ND BF

PP PR RP BP BR BR oe
Io VW &®B WN RPO

H
oo

oO Cc

4 } .
REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

the court at that point needs to take judicial notice of
the record. You can argue about the arguments later.

MR. RODRIGUEZ: That's fine, Your Honor.

THE COURT: All right. Thank you. So I will
take judicial notice, and pursuant to judicial notice,
PTX 0886 will be admitted.

(Whereupon Exhibit PTX 0886 was admitted

into evidence.)

MR. GOLDBERG: Thank you, Your Honor.

BY MR. GOLDBERG:

Q. Ms. Stapleton, before you retired from the
Water Authority in 2019, did you have any involvement in
these current lawsuits for 2015 through 2020?

A. Yes.

Q. What was your role?

A. Being -- remaining as general manager, I
continue to manage the staff and -- related to the
overall litigation.

@RAYD Glesse Turn backainey
Clainuisi vs Trlal Exnibre 65.

GavagGERapn

8

SESE

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096co

TRANSCRIPT OF PROCEEDINGS - May 19, 2022

»

REPORTER"

wn

@) (tis thé provision related to the process and)

{obligations to resolve disputes of the contract.)

@) Oid the-Watér, Authority make any é€ffort before)

@iling thesé lawsuits to résolve its disputes with

Metropolitan régarding offsetting benefits?)
@)

€ did’ you “do®

@.) Over this’ périod of time, we made presentations)

(to_the board of directors at Met, wé participated in the)

(gate-setting processes that Met had laid out, and we)

Provided written documentation.) At “one point, as.T)

GRESseaeaeeaase

recall, we actually hired’ a rates analyst to go through)
Y ig:

(the Met“ rates to look at what would -- what their)

(pinion was regarding what the appropriate cost)

@Okay.) @nd wéye- you personally involved in)

those efforts?)

@®.) (oversaw the staff who were personally)

involved in them.)

SSESSEREEEE

@) Okay) @léasé turn-in your bindér to PTX 892.)
have it.

@D Gayé You-séén this document béforé?

@) (tis a letter from me to Jeff Kightlinger, the)

767

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096o™
oo foN

REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

(General manager of Metropolitan.)
@)
(@:) Gt_is dated May“ 2nd," 2014.):

a

@. What _is“the re: Tine of your letter to

M Rig q

@ (Compliance with) paragraph 11.1 of the amended)
fand_ restated agreement between: MWD and the Water}

@uthority for exchange of water, dated October 10, 2003.)

@} Wid you writé this létter in the scope of youxy)

duties as thé Water Authority’s general managér?)

What raté years aré at isSsué-in this letter)

(A) Rate years 2015 and 2016.)

A
©)

@}) Oid you" write this létter at or néar the time)

(Of the 2014 rate-setting events that you weré writing)
@3 Wes.) Ghey were --"Met (was expected to present)

(to its board for approval of the rates in June of the)

SSSSSSEEEEESESESseseaeane

@R._GOLDBERG:) Move it into evidence as a

Cord Of a plblic employee under Evidence Codé Section)

@280.)

MR. RODRIGUEZ?) (Wo _objéction:
(HE COURT:) Wo obyjectiony @rx 0892 fs)
@dmitted:)

768

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096\/ ~
REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

(WHérétpon Exhibit PTX 0892" was admitted
(into. éviderce: ))

@) Gn this Tétter, Ms. Stapleton, that is PTX 892,)

@id_you “inform Metropolitan that the Water Authority

' @byécted to its Sxchange agreement price for 2015 and
@0re?)
@3 @ust;_is that the language —= well, why don't)

(You_tell the Court where that language is?)

("The Water Authority presented its objections to’ these)

(cates at the March 10th and Iith and April 7th and 8th)

(board of directors and has exhausted all administrative)

(@pportunities available’to it pursuant to Met's public)

GBESERBRBEESsseaeaaeenes

Okay.) @nid in the sentence above that paragraph)

Where You write “"Theréfore thé price to be charged td

Che Water Authority under-the exchange agréement fon

(hesé years violates and will violate paragraph 5:2 of)

(Che exchange agreement; " “what did you mean there?)

A.) Wes.) (That sentence and the sentence above it)

SSCRESB

@eally talks about how we believed that the rates that)

(were being proposed vidlated all ‘applicable laws and)

769

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096i ™ 7
L) we
REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

(egulations regarding the. setting of the wheeling rate.)

@)
(THE COURT:) (frthe Court. may inquire?) Go thé
@Paxagraph that you just read about the March 2nd

D Grap
(HE _COURT:) C=" the last sentence reads "The)
Water Authority's objéctions to Metropolstan's 2015 and

Q016 rates aré thé Same7objéctions presented in tha

@ecent trial before thé. San Francisco Superior Judge

Curtis :

MR. GOLDBERG?) @lwas =5
(THE COURT:) G6."ahead)
MRI GOLDBERG?) OF 7course:)
(@HE COURT!) Could you follow up. with that)
(UR. GOLDBERG:) (was just about to finish that.)
GYMRT GOLDBERG)
Q@:) What did’ you méan. there?)

(2 @asically, it was another mechanism to)

(articulate what our objections were and to point them to)

Ni
H

(@_“documént. that basically stated those objections.)

@.) G@nd_to “your undérstanding, was one of those)

(objections, 6£fsétting benefits. not being credited)

SSBSSEBSCEESRBBREBssesaseeass

@2) @ake_a-I6ok. atu the: next paragraph.)

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096OO) ~
REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

id your speciftreally réquést negotiation with)

@etropolitan undér paragraph IT.1- of the™exchang6
@2 es, we did.)

@hy?)
@) Gt _was "not only: an obligation of the 11.1)

(Provision in the exchange agreement, but also it was)

(another “opportunity for the two parties to make an)

@ffort to find a Sweet spot where we could both agree to)

fa modification in the éxchange agreement -- in the)

@.) @kay.) Gn_your Téettéer, you specifically propose)

(Some dates” fora negotiation between May. o and May -2T.)

Why did you: propose specific datés?

(A) We_wanted to make“ sure there was adequate time)

(6etween when we negotiated with Met and when their board)

(ef directors was being asked to approve the rates.)

@Qn_the next. page, you: asked for Metropolitan's)

@eésponse by no latér than May T5th,.)

@:) @€gain, ‘we needed to know what their position)

(Was and “were they going to agree to négotiaté.) We knew)

that if -- if they did adopt the new rates in June, the
it ey. OP:

Water Authority only had”a specific amount’ of time in)

SSSSSBSSEERBRBBERBBsseaapeeanse

(which"to file any challenge to those rates that were)

771

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

(@dopted’) We wanted: to make sure “that we had adequate)

@D Gad Metropolitan préviously argued that the

@:) Oo. you Fecall réceiving-any written response €0d)

@) Qo you recall Metropolitan, in. 2014, taking you)

@} Okay.) @lease turn in your bindér to PTX 915.)

@> MS. Stapleton, Have you” seén this documénd

@.) @his “isa letter from me-to Jeff Kightlinger,)

®

(| (€ime to“negotiate if there was the possibility of an)
g

®

®)| Water Authority's prior lawsuits were untimely?
© es, “they had.)

@

®] Wotir May"2; 20TT Tettér, "that is PTx 892, from

©) GeEroporreanD

10) @) {I_don't believe they responded.)

ay

(12)\| @p_on your offer to negotiate in gGdod faith undéy
(@3)| @aragraph Iivt with respéct to the rates_in 2015 and
@Ore?)

(£5) @.) Wo, they did not.)

8)

(f7}| @ell me when” you're there.)

8) @.) (“am there:)

@0)| GstoTED

2)

@3

(24)| Général Managér Of Metropolitan.)

(25) @. What _is-the subject of Your letter?)

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096as

© 0
REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

@.) (tis in” compliance with paragraph Ti-1 or .1
(@£_the amended and restated agreement between)

(Metropolitan and the Water Authority for the exchange of}
(water, datéd October 10, 20037}

@.) What isthe date?)

@.) (tis May 2nd, 2016.)

@) What rate yedrs are at issue in this létter

€hat_is PTX 9159
fA.) Gt isthe 2017 and 2018 rates.)

©.) Mid you write this [etter in the scope of youy)

@fficial duties as the general manager of the Watey
(_did.)

@.) @Mid you write this letter at or néar the time

@£ the 2016 rate-setting évents you aré writing abouts)

G@:) @es:) G@gain, we “expected that MND would ask)

BESSESSESSRBSREBseasssune

(the ==" their board of directors ‘to approve it in the)

@R._GOLDBERG:) (will move PTX 915 into

vidence as a record by a4 public émplovyee wndér Evidencé)
(HE COURT:) G@ny-objectiony
UR.“ RODRIGUEZ?) Wo objéction:)
(THE COURT:) (GTX 0915 is admitted.

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096o™ : cy

{

REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

CWhéréupon Exhibit” PTX 0915 was admitted

into evidence. }))

MR. GOLDBERG?

@.) Why did you sénd this létter ta

A.) Because we objected tothe proposed wheeling)
@ate that’ Met had developed for 2017 and 2018.)
@) Okay.) G@id in particular, if I focus youn

@ttention” on the sécond full paragraph of your ITéttér,}

a@dain theré"s some: reference to the trial before

dge" Kk

What_were you éxpressing there?

es.) G@gain, we were trying to point)

(édausé Somé had been decided --"I'm sorry.) @écause)

(time had passed, there was a judgment that was entered)

y_ Judge Karnow, and we “thought that may have influenced)

Metropolitan in reconsidering the wheeling rate.) (We)

(wanted to be crystal clear of what our concerns were.)

@) A@nd_did Metropolitan appeal that judgment; to

(your knowledgé, around this time?

SSBSSESECESEREEREBsesaseaaese

@.) Mid the “Water Authority's cbjéctions that id

@aised betore Judge Karnow at trial include. the

(@ffisetting benéfits: TssueD

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096Qo

REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

Q@gain, did you request’ negotiations with)

Metropolitan in 2016 undér paragraph IT.1 of tho

exchange agréément ?
@.) fes-) Weidid- request negotiations.)

9

(O_ you recall if Metropolitan respondéd to.youy
(etter “in 2016?

Yes, they did.

@ (éE"S Cake a Took at PTX 918.) Tell md
@hén_you're there)

fA.) (_am_ there:

@.) Gave you. Séen Ehis document before?)
@.) (t is a letter from Marcia Scully, general)

(Counsel of Metropolitan, £6 mé as general managér, and

(ark Hattam, as our géneral counsel of the Water)

@) WHSE “iS thé date of MSs. Scully's _IStESTD

@.) Gane 16720163)

@) (here's a Stamp in the right-hand corner of thé

What doés" that dénoted

@.) (hat notes when the general manager's office)

SSSOSBSBREEEREEEBERBEBseanesans

factually recéived the letter.)

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096~ {f*
(CN :

REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

QS GS _thatwyour SEErcey
@R. GOLDBERG:) Move this” into evidence.)
GRE RODRIGUEZ?) Wo objection.)
(HE COURT!) @IX0998 is admitted)
(Whéretpon Exhibit “PTX 0998" was admitted
@) Okay; What_is“the subject line of Ms. Scully's)
(AL Rejection of Glain: for San Diego County's Water)

@} Gow did you understand: that?)

@:) What. they == that Metropolitan. rejected’ the)

I think it's’ the Government: Claims}

BI

7

(¢laim” under” the?
(Code -}

@.) Okay:) @irecting your attention to the lash

entenceiin the first full paragraph of Ms. Scully's)

@etter; VAdditionally,.per my letter of May 16; 2016,)

@na Subsequent: email: correspondence, Metropolitan will)

Participate in thé: negotiation meeting scheduled for
@Guly T4 2016, pursuant to: paragraph IT.t oF the)

SSSSRBBEEEERREEESEBseaaeeeaanes

exchange agreements. wy

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096) Me
REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

@) Was there a meeting with Metropolitan in the)

Gummer of 2016 tinder paragraph. If .1?)

@5 Mid you participate in those méétingS

@enefits issue-in those meetings.)

es, we. did.

© What was’ Metropolitan"s responseD

@.) @hat “they did not change their mind and did not)

(agree. to provide: any credit’ to the Water Authority.)

QD Mid the Water Authority ‘Specifically ask for a)

(Yedit “for offsetting benefits in, the meétings in 20169

@) Gnd what "was the “Metropolitan Water District's)

(@esponsé: to that?)
&.) Ghat MWD, would Hot provide offsetting benefit)

SSSBSBSEEEEEEEREOsasaesaees

@3 yUdidthey say

@idon't recall; other than them saying. youre)

fot getting the money.)

@D Okay) Get ST Iook at the next” == well; Ter me

JAN BROWN & ASSOCIATES (415) 981-3498: (800) 522-7096© CO
REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

Were négotiations-in 2016 successful undex

They were not:
©). Oid the water: Authority; in your “view, -6xercise

@easonable best efforts *to- negotiate with Metropolitan?)

@.) Wes:) Elthought we did=)

@lease turn in your binder to PTx 925.)

(Yes.

@éllmée= when youre there.)
(i'm _ there?

(lave you" Séén" this” document” befored

Bebe

3

g

Yes.

@his isa letter from our general counsel, Mark)

Bee

@attam,;"to Randy Record, chairman of the board o£)

@irectors of Metropolitan.)

@3 Get's” take a ‘Tookvat the page’ -="I'm sorry.)

@here ts no. actual >=“oh, théré is: a pagéhumber.) @age 6)
@f the letter, Bates Stamp: ending. 7849.

Do you S66 that)

@} Gnd if you just? Look at the: cer Line; my

Question is_-going-to bé;~ did you ‘receives this Tétterd

@) Ges, tdids)
QQ) What == nif you go, back. to, the £irst page, whab)

SSBESESBEEERBEBEEESsssaaeen8

778

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

@sS the date of the Téttera

fA.) March Lith, 2018.)
©} Guid what"is thé subjéct of the Water
@uthority’s letter on March Ilth,. 20187

(@.) March 12th finance and insurance committee)

(budget and rates: workshop number three; agenda item)

fhumber Sight, budget and rates workshop number three;)

@nd then the March 13th board of directors agenda; ‘Ttem)

our public hearings; and then public hearing to}

2S

(Considering whether ‘to continue spending the tax rate)

(imitations in section 124.5 of Metropolitan to maintain)

(the actual going tax rate for fiscal year 2018/19 and)

(£19720, and a public hearing on proposed fates and)

(Charges for calendar year 2019 and 2020 to meet revenue)

QQ) Gorry to make “you do that.)

Was this létter written at-or néar the time of)

(he March 12” and 13 board workshop meetings reférenced

in Mr. Hattam's Tetter?
@.) @™m sorry.) March 12 and March 13, 2018 —= I'm”
QD
(RZ GOLDBERG:) (‘II move it into evidence).

SSSSBSEERBEEECRESCsseaseaane

779

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096C) . fy

7 :
REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

MR. RODRIGUEZ:) Wo objection.)
(THE COURT:) (Véry _wellT:) (@TX_0925 is admitted:
Wéenééd to take a break.) WetlI be back on thé record in

@S“minutés, pléasé, 3700 o'clock.) (Hank you.)

Whéreupon Exhibit PTX was admitte
(Break, 2:44 p.m. to 3702 p.m. ))
(COURT CLERK?) We're back on the record.)

(ir. Goldberg, you may Continué your direct éxamination)

E$Seeeaeaeuaee

8

(ef Ms. Stapleton.)
(@R:_GOLDBERG:) (hank you, Your Honor.)
(®Y-MR= GOLDBERG:

b

© Us. Stapleton; right at thé bréak we were)
Tooking at PTX 0925.

(@o “you have: that_in front. of 7you?)

@) @his is the March 1ith, 2018 letter from the)

Watér Authority to Metropolitan.) May"I pleasé direct)

(Your attention to page 5 of the letter, Bates number on)

(Ché bottom Fight ending 78482 (et me know when you're)

©.) @nd there is a séction. héading "Requést for

Calculation Gf Ofrsétting Benefits under thé wheeling)

SGESESRESEEEEERE

JAN BROWN & ASSOCIATES (415) 981-3498 (800) 522-7096O

REPORTER'S TRANSCRIPT OF PROCEEDINGS - May 19, 2022

Do you see that?
@.) Yes, 1 .dos)

@) Gf youd just read through that paragraph,)

Which goes 6n to the néxt page, 7849, T will just _ask

(You "for your understanding of what the Watér Authority
Was” requesting there.)
@.) We_were “requesting --)
(IR. RODRIGUEZ?) Gorry.) C didn" realize hé was)
done.) Objection, lacks. foundation.)
(HE COURT!) GUSEaIned.) Gay the foundation.)
(@R._GOLDBERG:) Guré.
®Y MR. GOLDBERG:
@.) (think we covered t