Preview
1 KEKER, VAN NEST & PETERS LLP
JOHN W. KEKER - # 49092
2 jkeker@keker.com
DAN JACKSON - # 216091 ELECTRONICALLY
3 djackson@keker.com
WARREN A. BRAUNIG - # 243884 F I L E D
Superior Court of California,
4 wbraunig@keker.com County of San Francisco
NICHOLAS S. GOLDBERG - # 273614
5 ngoldberg@keker.com 02/22/2022
633 Battery Street Clerk of the Court
BY: YOLANDA TABO-RAMIREZ
6 San Francisco, CA 94111-1809 Deputy Clerk
Telephone: (415) 391-5400
7 Facsimile: (415) 397-7188
8 MARK J. HATTAM - # 173667
mhattam@sdcwa.org
9 General Counsel
SAN DIEGO COUNTY WATER AUTHORITY
10 4677 Overland Avenue
San Diego, CA 92123-1233
11 Telephone: (858) 522-6791
Facsimile: (858) 522-6566
12
Attorneys for Petitioner, Plaintiff, and Cross-Defendant EXEMPT FROM FILING FEES
13 SAN DIEGO COUNTY WATER AUTHORITY [GOVERNMENT CODE § 6103]
14
15 SUPERIOR COURT OF THE STATE OF CALIFORNIA
16 IN AND FOR THE COUNTY OF SAN FRANCISCO
17
SAN DIEGO COUNTY WATER Lead Case No. CPF-14-514004
18 AUTHORITY,
Consolidated with Case Nos. CPF-16-515282
19 Petitioner, Plaintiff, and Cross- & CPF-18-516389
Defendant,
20 EXHIBITS 38-49 TO DECLARATION OF
v. DAN JACKSON IN SUPPORT OF SAN
21 DIEGO COUNTY WATER
METROPOLITAN WATER DISTRICT OF AUTHORITY’S MOTIONS FOR
22 SOUTHERN CALIFORNIA; ALL SUMMARY ADJUDICATION
PERSONS INTERESTED IN THE
23 VALIDITY OF THE RATES ADOPTED
BY THE METROPOLITAN WATER Date: April 13, 2022
24 DISTRICT OF SOUTHERN CALIFORNIA Time: 2:00 p.m.
ON APRIL 8, 2014 TO BE EFFECTIVE Dept.: 306
25 JANUARY 1, 2015 AND JANUARY 1, Judge: Hon. Anne-Christine Massullo
2016; and DOES 1-10,
26 Date Filed: May 30, 2014
Respondents, Defendants, and
27 Cross-Complainant. Trial Date: May 16–27, 2022
28
EXHIBITS 38-49 TO DECLARATION OF DAN JACKSON IN SUPPORT OF SAN DIEGO COUNTY
WATER AUTHORITY’S MOTIONS FOR SUMMARY ADJUDICATION
Lead Case No. CPF-14-514004; Consolidated with CPF-16-515282 & CPF-18-516389
1831367
Index of Exhibits 38-49 Attached to Declaration of Dan Jackson In Support of San Diego
County Water Authority’s Motions for Summary Adjudication
Exhibits 38-49
Exhibit Description Page
38 Letter from Marcia Scully to Maureen Stapleton and Mark Hattam, 1
dated December 3, 2018.
39 Water Authority’s First Amended Petition for Writ of Mandate and 5
Complaint for Determination of Invalidity and Declaratory Relief, Case
No. CPF-18-516389, filed on January 31, 2019.
40 Water Authority’s Second Amended Petition for Writ of Mandate and 44
Complaint for Determination of Invalidity, Damages, and Declaratory
Relief, Case No. CPF-18-516389, filed on April 21, 2021.
41 Metropolitan’s Answer, Case No. CPF-18-516389, filed July 29, 2021. 72
42 Metropolitan’s Cross-Complaint, Case No. CPF-18-516389, filed July 114
29, 2021.
43 Order Denying Metropolitan Water District of Southern California’s 158
Motion for Judgment on the Pleadings in San Diego County Water
Authority v. Metropolitan Water District of Southern California, Case
No. CPF-10-510830, issued on September 19, 2013.
44 Metropolitan’s Resolution 8796, produced as part of Metropolitan’s 163
Administrative Record and Bates-stamped
MWDRECORD2014_0012543–0012546.
45 Metropolitan’s Board Meeting Action document for January 8, 2002, 168
produced as part of Metropolitan’s Administrative Record and Bates-
stamped MWDRECORD2014_0012150–0012206.
46 Metropolitan’s Board Meeting Minutes for January 8, 2002, produced as 226
part of Metropolitan’s Administrative Record and Bates-stamped
MWDRECORD2014_0012607–0012623.
47 Metropolitan’s Board Meeting Action document for January 14, 2003, 244
produced as part of Metropolitan’s Administrative Record and Bates-
stamped MWDRECORD2014_0013331–0013415.
Exhibit Description Page
48 Excerpts from Metropolitan’s Board Meeting Action document for April 330
10, 2012, produced as part of Metropolitan’s Administrative Record and
Bates-stamped MWDRECORD2014_0022848–0022851, 0022928,
0022992.
49 Excerpts from the American Water Works Association (AWWA) 337
Manual, produced as part of Metropolitan’s Administrative Record and
Bates-stamped MWDRECORD2014_0010241–0010242, 0010561–
0010562.
Exhibit 38
1
THE M ETROPOLITAN WATER DfSTRlCT
OF SOUTHERN CALIFORNIA
Office of the General Counsel
Via Electronic Mail and U.S. Mail
December 3, 2018
Maureen A. Stapleton, General Manager
Mark J. Hattam, General Counsel
San Diego County Water Authority
4677 Overland Avenue
San Diego, California 92123-1233
Dear Ms. Stapleton and Mr. Hattam:
RE: Rejection of Claim for San Diego County Water Authority and
Waiver of Paragraph 11. l of Exchange Agreement
As you know, the San Diego County Water Authority ("SDCWA") seeks to file an amended
complaint in its pending 2018 rate litigation. Moreover, because that case has now been
transfen-ed to San Francisco Superior Court, we understand that the pa1ties are in agreement on
entering into a stipulation and proposed couti order that pem1 its SDCWA to file the amended
complaint, for the case to be stayed upon that filing, and for Metropolitan's responsive pleadi ng
to be due after the stay is lifted. Before SDCWA may file its amended complaint, Metropolitan
must respond to SDCWA's recent Government Code claim or the claim must be deemed rejected
by operation of law; and also, because SDCWA is asserting disputes under the parties' Exchange
Agreement, the parties must satisfy Paragraph 11. l of the Exchange Agreement.
To facilitate the above-described stipulation and proposed order, Metropolitan herein rejects the
Government Code claim and waives further negotiation under Paragraph 11.1 before the
amended complaint's filing.
Rejection of Claim
This responds to SDCWA' s "Claim for Damages and Losses Pursuant to Metropolitan
Administrative Code§ 9302 and California Government Code§§ 900 et seq.," dated November
9, 2018 and received by Metropolitan on November 13, 2018. As you know, the submission of a
claim to Metropolitan triggers a timeline and procedure pursuant to the Government Code and
Metropolitan's Administrative Code. We are therefore responding to the claim at this time.
700 N. Alameda Street, Los Angeles, California 90012 • Mailing Address: Box 54153, Los Angeles, California 90054-0153 • Telephone (213) 217-6000
2
THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA
Ms. Maureen A. Stapleton
Mr. Mark J. Hattam
Page2
December 3, 2018
Notice
Notice is hereby given that the above referenced claim, which was presented to The
Metropolitan Water District of Southern California (Metropolitan) on November 13, 2018, has
been rejected.
The law requires that we give you the following warning:
WARNING
Subject to certain exceptions, you have only six (6) months from the date this
notice was personally delivered or deposited in the mail to file a court action on
this claim. See Government Code Section 945.6 .
This time limitation applies only to causes of action arising under California law,
for which a claim is mandated by the California Government Tort Claims Act,
Government Code Sections 900 et seq ., or the Metropolitan Administrative Code
Sections 9300, et seq.
You may seek the advice of an attorney of your choice in connection with this
matter. If you should desire to consult an attorney, you should do so immediately.
Waiver of Paragraph 11.1 of Exchange Agreement
Mark H attam's April 27, 2018 letter referenced SDCWA's previously-stated objections to
Metropolitan's 2019 and 2020 rates, and asked Metropolitan to agree that the agencies need not
further comply with Paragraph 11.1 of the Exchange Agreement. Paragraph 11.1 requires the
parties to exercise reasonable best efforts to resolve all disputes aris ing under the Exchange
Agreement through negotiation; and provides that, in the event negotiation is unsuccessful, the
parties reserve their legal and equitable remedies. My May 7, 2018 response letter stated that
Metropolitan requests negotiation pursuant to Paragraph 11.1 in order to clarify and understand
the full range of SDCWA 's objections.
The parties have had discussions which to date have not resulted in resolution. Recently,
Metropolitan received SDCWA's above-referenced claim, which adds additional disputes. While
the parties' discussions continue, and Metropolitan still seeks claiity including on additional
matters included in the above-referenced claim, in order to facilitate th e above-described
stipulation and proposed order, Metropolitan waives further negotiation under Paragraph 11.1
w ith respect to S DCWA's amended complaint.
3
THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA
Ms. Maureen A. Stapleton
Mr. Mark J. Hattam
Page 3
December 3, 2018
If you should have any questions regarding this matter, please contact me at (213) 217-6115.
Very truly yours,
Marcia Scully
General Counsel
cc: Jeffrey Kightlinger, General Manager
Drew Boronkay, Risk Manager
4
Exhibit 39
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Exhibit 40
44
1 KEKER, VAN NEST & PETERS LLP EXEMPT FROM FILING FEES
JOHN W. KEKER - # 49092 [GOVERNMENT CODE § 6103]
2 jkeker@keker.com
DAN JACKSON - # 216091 ELECTRONICALLY
3 djackson@keker.com
WARREN A. BRAUNIG - # 243884 F I L E D
Superior Court of California,
4 wbraunig@keker.com County of San Francisco
NICHOLAS S. GOLDBERG - # 273614
5 ngoldberg@keker.com 04/21/2021
633 Battery Street Clerk of the Court
BY: BOWMAN LIU
6 San Francisco, CA 94111-1809 Deputy Clerk
Telephone: (415) 391-5400
7 Facsimile: (415) 397-7188
8 MARK J. HATTAM - # 173667
mhattam@sdcwa.org
9 General Counsel
SAN DIEGO COUNTY WATER AUTHORITY
10 4677 Overland Avenue
San Diego, CA 92123
11 Telephone: (858) 522-6791
Facsimile: (858) 522-6566
12
Attorneys for Petitioner and Plaintiff
13 SAN DIEGO COUNTY WATER AUTHORITY
14 SUPERIOR COURT OF THE STATE OF CALIFORNIA
15 IN AND FOR THE COUNTY OF SAN FRANCISCO
16
SAN DIEGO COUNTY WATER Case No. CPF-18-516389
17 AUTHORITY,
SAN DIEGO COUNTY WATER
18 Petitioner and Plaintiff, AUTHORITY’S SECOND AMENDED
PETITION FOR WRIT OF MANDATE
19 v. AND COMPLAINT FOR
DETERMINATION OF INVALIDITY,
20 METROPOLITAN WATER DISTRICT OF DAMAGES AND DECLARATORY
SOUTHERN CALIFORNIA; ALL RELIEF; EXHIBITS A–E
21 PERSONS INTERESTED IN THE
VALIDITY OF THE RATES AND
22 CHARGES ADOPTED BY THE
METROPOLITAN WATER DISTRICT OF Date Filed: June 8, 2018
23 SOUTHERN CALIFORNIA ON APRIL 10,
2018 TO BE EFFECTIVE JANUARY 1,
24 2019 AND JANUARY 1, 2020; and DOES
1-10,
25
Respondents and Defendants.
26
27
28
SDCWA’S SECOND AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR
DETERMINATION OF INVALIDITY, DAMAGES AND DECLARATORY RELIEF
CASE NO. CPF-18-516389
1666659 45
1 Petitioner and Plaintiff San Diego County Water Authority (“Petitioner” or “the Water
2 Authority”) brings this Second Amended Petition for Writ of Mandate, and Complaint for
3 Determination of Invalidity, Damages, and Declaratory Relief (“Amended Complaint”), alleging
4 as follows:
5 I. INTRODUCTION
6 1. The Water Authority brings this action for writ of mandate, determination of
7 invalidity, damages, and declaratory relief, challenging rates and charges adopted by Respondent
8 and Defendant Metropolitan Water District of Southern California (“Metropolitan”) on April 10,
9 2018, to be effective January 1, 2019 and January 1, 2020. The Water Authority also brings a
10 claim for Metropolitan’s breach of the Amended and Restated Agreement for the Exchange of
11 Water (“Exchange Agreement”), entered into by the Water Authority and Metropolitan on
12 October 10, 2003, and seeks damages for such breach.
13 2. The Water Authority is a public agency that provides water to 24 local agencies in
14 San Diego County. Since 2003, the Water Authority has funded vital conservation projects in the
15 Imperial Valley in exchange for a share of the Colorado River water conserved through these
16 efforts. The only way to transport the Water Authority’s conserved Imperial Valley water to San
17 Diego is through the Colorado River Aqueduct, which is owned and operated by Metropolitan.
18 The Water Authority pays Metropolitan to transport this conserved water to the Water Authority
19 pursuant to the Exchange Agreement. This type of transportation service is generally referred to
20 as “wheeling.” A copy of the Exchange Agreement is attached hereto as Exhibit A.
21 3. Metropolitan’s rates for transporting the Non-Metropolitan Water1 acquired by the
22 Water Authority violate cost-of-service requirements imposed by the California Constitution,
23 California statutory law, and common law, and are not in accord with a binding Court of Appeal
24 decision invalidating the transportation and wheeling rates Metropolitan charged from 2011 to
25 2014. Specifically, Metropolitan’s transportation and wheeling rates include demand
26 management and water conservation costs, which the Court of Appeal held they could not do in
27 1
In this Amended Complaint, the water acquired by the Water Authority and other member
28 agencies from third-party sources is referred to as “Non-Metropolitan Water.”
2
SDCWA’S SECOND AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR
DETERMINATION OF INVALIDITY, DAMAGES AND DECLARATORY RELIEF
CASE NO. CPF-18-516389
1666659 46
1 two prior cases challenging Metropolitan’s rates for calendar years 2011–2014 (the “2010 and
2 2012 Cases”). See San Diego Cty. Water Auth. v. Metro. Water Dist. of S. Cal., 12 Cal. App. 5th
3 1124 (2017) (“SDCWA v. MWD”). Metropolitan cannot charge any more to deliver wheeled
4 water than “fair compensation,” as defined in Water Code Section 1811(c). The Court of Appeal
5 ruled that Metropolitan’s wheeling rate violated Water Code Section 1811 because it includes
6 costs incurred not for water conveyance, but to pay for demand management and water
7 conservation programs. See 12 Cal. App. 5th at 1150–1152.
8 4. Tacitly acknowledging the illegality of its transportation and wheeling rates under
9 the Court of Appeal’s decision, Metropolitan “suspended” collection of demand management
10 costs recovered by the Water Stewardship Rate for deliveries under the Exchange Agreement for
11 calendar years 2019 and 2020. In January 2020, Metropolitan stated that it would not seek to
12 recover from the Water Authority these suspended demand management and water conservation
13 costs. Nevertheless, Metropolitan continued to include demand management and water
14 conservation costs recovered by the Water Stewardship Rate in its published wheeling rate, in
15 violation of the Court of Appeal’s decision in SDCWA v. MWD.
16 5. Metropolitan’s wheeling rate also is unlawful because Metropolitan has failed to
17 comply with its statutory obligation to provide the Water Authority with “reasonable credit for
18 any offsetting benefits for the use of [Metropolitan’s] conveyance system.” Water Code §
19 1811(c). Metropolitan acknowledged in the Board resolution that it relies on to support its
20 wheeling rate that Metropolitan is legally required to account for such “offsetting benefits.” But
21 Metropolitan has refused to comply with this statutory requirement and, in connection with its
22 2019 and 2020 rates, failed to analyze any offsetting benefits or provide any such credits to the
23 Water Authority.
24 6. Additionally, some portion of Metropolitan’s 2019 and 2020 rates and charges are
25 unlawful because Metropolitan charged costs of the previously proposed California WaterFix
26
27
28
3
SDCWA’S SECOND AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR
DETERMINATION OF INVALIDITY, DAMAGES AND DECLARATORY RELIEF
CASE NO. CPF-18-516389
1666659 47
1 project (“WaterFix”)2 to wheelers, and thus to the Water Authority, as transportation costs.
2 Under the terms of the longstanding water supply contract between the California Department of
3 Water Resources (“DWR”) and Metropolitan (“DWR Contract”), and according to DWR’s
4 invoices to Metropolitan, WaterFix costs are supply costs, not transportation costs. But in setting
5 its 2019 and 2020 rates, Metropolitan allocated its WaterFix costs to transportation rather than
6 supply. The 2010 and 2012 Cases, and thus the Court of Appeal’s decision in SDCWA v. MWD,
7 did not address Metropolitan’s allocation of WaterFix costs under the DWR Contract. The Water
8 Authority in this action is not challenging Metropolitan’s separate decision, also on April 10,
9 2018, to support implementation of WaterFix, but rather is challenging the allocation of
10 Metropolitan’s WaterFix supply costs to transportation rates in its 2019 and 2020 rates.
11 7. Metropolitan also has breached the parties’ Exchange Agreement. The Exchange
12 Agreement requires Metropolitan to deliver the Water Authority’s Non-Metropolitan Water for
13 no more than a lawful conveyance (i.e., wheeling) rate. Specifically, “the Price” for transporting
14 the Water Authority’s Non-Metropolitan Water “shall be equal to the charge or charges set by
15 Metropolitan’s Board of Directors pursuant to applicable law and regulation and generally
16 applicable to the conveyance of water by Metropolitan on behalf of its member agencies.” The
17 Price Metropolitan charges under the Exchange Agreement fails to provide a reasonable credit for
18 the offsetting benefits of the Water Authority’s Non-Metropolitan Water and improperly charges
19 the Water Authority supply costs for the WaterFix.
20 8. Accordingly, the Water Authority brings this action, requesting relief as set forth
21 in the remainder of this Amended Complaint.
22
23
24
25 2
The WaterFix was a proposed conservation project intended to restore California’s Bay Delta
26 and ensure water supply reliability by diverting water supplies under the Bay Delta in twin
tunnels. Although the WaterFix project was largely scrapped by Governor Newsom’s
27 administration, Metropolitan expended funds for this former project in rate years 2019–2020.
The project also continues to move forward in a modified form. The term “WaterFix” is used
28 herein to refer to both proposed Bay-Delta projects.
4
SDCWA’S SECOND AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR
DETERMINATION OF INVALIDITY, DAMAGES AND DECLARATORY RELIEF
CASE NO. CPF-18-516389
1666659 48
1 II. PARTIES
2 9. Petitioner and Plaintiff San Diego County Water Authority is, and at all times
3 mentioned herein was, a county water authority organized under the laws of the State of
4 California and located in the County of San Diego, California.
5 10. Respondent and Defendant Metropolitan is, and at all times mentioned herein was,
6 a public agency of the State of California organized pursuant to the Metropolitan Water District
7 Act (Stats. 1969, ch. 209 as amended; West’s California Water Code Append. §§ 109-134
8 (2010)), the principal offices of which are located in Los Angeles, California.
9 11. The true names and capacities of the Respondents and Defendants identified as
10 DOES 1-10 are unknown to Petitioner, and Petitioner will amend this Amended Complaint to
11 insert the true names and capacities of those fictitiously named Respondents and Defendants
12 when they are ascertained. Petitioner is informed and believes, and on that basis alleges, that at
13 all times relevant to this action, each of the Respondents and Defendants, including those
14 fictitiously named, was the agent or employee of each of the other Respondents and Defendants,
15 and while acting within the course and scope of such employment or agency, took part in either
16 the acts or omissions alleged in this Amended Complaint.
17 III. SERVICE OF PROCESS
18 12. Petitioner will serve Metropolitan and all other Respondents and Defendants who
19 answered the Water Authority’s original complaint in the manner provided by law.
20 13. In conjunction with the filing of the original complaint, the Water Authority
21 published notice of this action in newspapers of general circulation in the six counties served by
22 Metropolitan, pursuant to the Los Angeles County Superior Court’s June 18, 2018 Order for
23 Publication of Summons. Those counties are Ventura, Los Angeles, Riverside, San Bernardino,
24 Orange, and San Diego. As this Amended Complaint does not add any new causes of action that
25 may be subject to the validation statutes (Code Civ. Proc. § 861 et seq.), and reduces the scope of
26 the claims at issue in this lawsuit, no further publication of a validation summons is necessary.
27
28
5
SDCWA’S SECOND AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR
DETERMINATION OF INVALIDITY, DAMAGES AND DECLARATORY RELIEF
CASE NO. CPF-18-516389
1666659 49
1 IV. JURISDICTION AND VENUE
2 14. This Court has jurisdiction over this matter pursuant to Code of Civil Procedure
3 Section 1085, Code of Civil Procedure Section 410.10, and, with respect to the Third Cause of
4 Action, Code of Civil Procedure Sections 860 et seq., and Government Code Section 66022.
5 15. The original complaint was filed in Los Angeles County Superior Court on June 8,
6 2018. The Los Angeles County Superior Court transferred the action to this Court on October 3,
7 2018, pursuant to Code of Civil Procedure Section 394(a). Venue therefore is proper in this
8 Court.
9 V. FACTUAL ALLEGATIONS
10 A. The Water Authority funded vital conservation efforts in the Imperial Valley
to obtain a reliable, independent supply of water.
11
12 16. The Water Authority is one of the major public water agencies in Southern
13 California, providing water to 24 local agencies that supply San Diego County’s 3.3 million
14 residents and its $245 billion economy. With very little local groundwater and limited rainfall,
15 local sources of water are scarce in San Diego County. To meet demand, the Water Authority has
16 historically purchased between 75 and 95 percent of its water from Metropolitan.
17 17. Metropolitan is a regional water agency that imports, stores, transports, and treats
18 water throughout the Southern California counties of Ventura, Los Angeles, Riverside, San
19 Bernardino, Orange, and San Diego. Metropolitan has 26 member agencies, including the Water
20 Authority. Metropolitan currently pays its costs, in large part, by imposing volumetric (per-acre-
21 foot) rates for the services it claims to provide to its member agencies, including transportation,
22 treatment, and supply. In addition to obtaining and delivering imported water for sale to its
23 member agencies, Metropolitan also subsidizes some member agencies’ demand management and
24 water conservation programs. Metropolitan imposes a Water Stewardship Rate on all water sales
25 and wheeling transactions, including the transportation of the Water Authority’s Non-
26 Metropolitan Water under the Exchange Agreement, and uses these funds to pay for its demand
27 management and water conservation programs.
28
6
SDCWA’S SECOND AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR
DETERMINATION OF INVALIDITY, DAMAGES AND DECLARATORY RELIEF
CASE NO. CPF-18-516389
1666659 50
1 18. Although the Water Authority is one of Metropolitan’s largest customers, the
2 Water Authority has developed, and is continuing to develop, its own independent sources of
3 water supplies. As noted above, since 2003, the Water Authority has funded vital water
4 conservation projects in the Imperial Valley in exchange for a share of the Colorado River water
5 conserved through these investments. Specifically, the Water Authority contracted with the
6 Imperial Irrigation District to purchase up to 200,000 acre-feet per year of Colorado River water
7 for a 45-year period, plus a 30-year extension with mutual consent. The Water Authority also
8 obtained the right to 80,000 acre-feet of water conserved by the lining of the All-American and
9 Coachella Canals, projects that were implemented by the Water Authority. This independent
10 conserved water procured by the Water Authority is referred to herein as the Water Authority’s
11 “Non-Metropolitan Water,” to distinguish it from the water that the Water Authority continues to
12 purchase directly from Metropolitan.
13 B. The Water Authority entered into an Exchange Agreement with Metropolitan
to transport its conserved Imperial Valley water to San Diego.
14
15 19. Because Metropolitan owns the only water distribution facilities linking the
16 Colorado River to the Water Authority’s service area, the Water Authority and Metropolitan
17 negotiated the 2003 Exchange Agreement for delivery of the Water Authority’s Non-
18 Metropolitan Water to the Water Authority’s own distribution and water storage facilities. The
19 Water Authority “has no means of transporting” its conserved Imperial Valley water to San Diego
20 “other than over Metropolitan’s [Colorado River] aqueduct.” SDCWA v. MWD, 12 Cal. App. 5th
21 at 1135.
22 20. Metropolitan’s basic entitlement to Colorado River water is only 550,000 acre-feet
23 per year. Under the “Law of the River,”3 however, California is entitled to one-half of the surplus
24 water available to the Lower Basin states—namely, Arizona, California, and Nevada. For many
25 years, Metropolitan benefitted from the availability of hundreds of thousands of acre-feet of water
26 above its basic entitlement, because the Secretary of Interior declared surplus conditions on the
27 3
The “Law of the River” is a series of compacts, federal laws, court decisions, contracts, and
28 regulatory guidelines that govern the management and operation of the Colorado River.
7
SDCWA’S SECOND AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR
DETERMINATION OF INVALIDITY, DAMAGES AND DECLARATORY RELIEF
CASE NO. CPF-18-516389
1666659 51
1 Colorado River. But, as other states exercised their rights to Colorado River water,
2 Metropolitan’s Colorado River Aqueduct, which has the capacity to move 1.2 million acre-feet of
3 water annually, was left half empty. A half-empty Colorado River Aqueduct left Metropolitan’s
4 member agencies highly vulnerable to drought and would have required Metropolitan to incur the
5 cost of purchasing or conserving replacement water elsewhere. The Water Authority’s agreement
6 to incur water supply costs for its Non-Metropolitan Water benefitted Metropolitan and all of
7 Metropolitan’s member agencies, which did not have to incur additional costs in order to fill the
8 substantial unused capacity in Metropolitan’s Colorado River Aqueduct.
9 21. “Unable to agree upon the long-term price the Water Authority would be charged
10 for water received under the [Exchange Agreement], the parties agreed to an initial price with
11 future prices linked to standard water rates, lawfully set.” SDCWA v. MWD, 12 Cal. App. 5th at
12 1136. Specifically, pursuant to Section 5.2 of the Exchange Agreement, Metropolitan agreed that
13 the Price for transporting the Water Authority’s Non-Metropolitan Water “shall be equal to the
14 charge or charges set by Metropolitan’s Board of Directors pursuant to applicable law and
15 regulation and generally applicable to the conveyance of water by Metropolitan on behalf of its
16 member agencies.”
17 C. The Wheeling Statutes require Metropolitan to charge only “fair
compensation” and provide reasonable credit to the Water Authority for the
18 offsetting benefits from the Water Authority’s wheeling.
19 22. As discussed, in addition to selling water to its member agencies, Metropolitan is
20 required to provide wheeling service to transport Non-Metropolitan Water to third parties,
21 including the Water Authority’s Non-Metropolitan Water under the Exchange Agreement.
22 “Wheeling” is the industry term of art for the “use of a water conveyance facility by someone
23 other than the owner or operator to transport water.” SDCWA v. MWD, 12 Cal. App. 5th at 1135
24 (citation omitted).
25 23. Under the Wheeling Statutes (Water Code § 1810 et seq.), Metropolitan cannot
26 charge more than “fair compensation” for the conveyance of Non-Metropolitan Water. The
27 statutory definition of “fair compensation” allows Metropolitan to recover “reasonable charges
28 incurred by the owner of the conveyance system, including capital, operation, maintenance and
8
SDCWA’S SECOND AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR
DETERMINATION OF INVALIDITY, DAMAGES AND DECLARATORY RELIEF
CASE NO. CPF-18-516389
1666659 52
1 replacement costs, [and] increased costs from any necessitated purchase of supplemental power.”
2 Id. § 1811(c). That statutory definition also expressly requires Metropolitan to give wheele
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Jul 12, 2024 |
CGC23609755
Matter on the Law & Motion calendar for Friday, July 12, 2024, Line 12. DEFENDANT ARLENE TASIM AND ALI TASIM'S Motion For Sanctions Against A A General Building Construction Inc. Pursuant To Code Of Civil Procedure Section 1281.99. Defendants and Cross-Complainants' unopposed Motion for Sanctions in the amount of $8350.00 is granted (CCP section 1281.99), payment to be made within 30 days of the filing of this order. Friday's Law & Motion Calendar will be called out of Dept. 301. Anyone intending to appear in person should report to Dept. 301. However, anyone intending to appear remotely should use the regular Zoom information for Dept. 302's Law & Motion Calendar for 9:30 a.m. To appear remotely at the hearing, go to the court's website at sfsuperiorcourt.org under "Online Services," navigate to "Tentative Rulings," and click on the appropriate link, or dial the corresponding phone number. Any party who contests a tentative ruling must send an email to contestdept302tr@sftc.org with a copy to all other parties by 4pm stating, without argument, the portion(s) of the tentative ruling that the party contests. The subject line of the email shall include the line number, case name and case number. The text of the email shall include the name and contact information, including email address, of the attorney or party who will appear at the hearing. Counsel for the prevailing party is required to prepare a proposed order which repeats verbatim the substantive portion of the tentative ruling and must email it to contestdept302tr@sftc.org prior to the hearing even if the tentative ruling is not contested. The court no longer provides a court reporter in the Law & Motion Department. Parties may retain their own reporter, who may appear in the courtroom or remotely. A retained reporter must be a California certified court reporter (CSR), for only a CSR's transcript may be used in California courts. If a CSR is being retained, include in your email all of the following: their name, CSR and telephone numbers, and their individual work email address. =(302/RCE)
Ruling
YOLANDA JONES ET AL VS. GENERAL MOTORS, LLC ET AL
Jul 10, 2024 |
CGC23609805
Matter on the Law & Motion calendar for Wednesday, July 10, 2024, Line 10. 2 - DEFENDANT GENERAL MOTORS, LLC's MOTION TO STRIKE 1ST Amended COMPLAINT. Off calendar. The Quezada declaration fails to show that the parties met and conferred "in person, by telephone, or by video conference" in compliance with CCP 435.5. The parties are ordered to comply with the code. The response to the complaint is now due August 7, 2024. For the 9:30 a.m. Law & Motion calendar, all attorneys and parties may appear in Department 302 remotely. Remote hearings will be conducted by videoconference using Zoom. To appear remotely at the hearing, go to the court's website at sfsuperiorcourt.org under "Online Services," navigate to "Tentative Rulings," and click on the appropriate link, or dial the corresponding phone number. Any party who contests a tentative ruling must send an email to contestdept302tr@sftc.org with a copy to all other parties by 4pm stating, without argument, the portion(s) of the tentative ruling that the party contests. The subject line of the email shall include the line number, case name and case number. The text of the email shall include the name and contact information, including email address, of the attorney or party who will appear at the hearing. The court no longer provides a court reporter in the Law & Motion Department. Parties may retain their own reporter, who may appear in the courtroom or remotely. A retained reporter must be a California certified court reporter (CSR), for only a CSR's transcript may be used in California courts. If a CSR is being retained, include in your email all of the following: their name, CSR and telephone numbers, and their individual work email address. =(302/RBU)
Ruling
EDWARD WESTERMAN VS. FTI CONSULTING, INC. ET AL
Jul 09, 2024 |
CGC24615152
Matter on the Law & Motion Calendar for Tuesday, July 9, 2024, Line 12. PLAINTIFF EDWARD WESTERMAN's Motion To Seal. Plaintiff's unopposed motion to seal is granted. For the 9:30 a.m. Law & Motion calendar, all attorneys and parties may appear in Department 302 remotely. Remote hearings will be conducted by videoconference using Zoom. To appear remotely at the hearing, go to the court's website at sfsuperiorcourt.org under "Online Services," navigate to "Tentative Rulings," and click on the appropriate link, or dial the corresponding phone number. Any party who contests a tentative ruling must send an email to contestdept302tr@sftc.org with a copy to all other parties by 4pm stating, without argument, the portion(s) of the tentative ruling that the party contests. The subject line of the email shall include the line number, case name and case number. The text of the email shall include the name and contact information, including email address, of the attorney or party who will appear at the hearing. Counsel for the prevailing party is required to prepare a proposed order which repeats verbatim the substantive portion of the tentative ruling and must email it to contestdept302tr@sftc.org prior to the hearing even if the tentative ruling is not contested. The court no longer provides a court reporter in the Law & Motion Department. Parties may retain their own reporter, who may appear in the courtroom or remotely. A retained reporter must be a California certified court reporter (CSR), for only a CSR's transcript may be used in California courts. If a CSR is being retained, include in your email all of the following: their name, CSR and telephone numbers, and their individual work email address. =(302/RBU)
Ruling
CLEAR HOMES LLC, A NEW MEXICO LIMITED LIABILITY VS. BRENDAN MICHAEL WEE ET AL
Jul 11, 2024 |
CGC23607972
Real Property/Housing Court Law and Motion Calendar for July 11, 2024 line 2. DEFENDANT BRENDAN WEE, ERIKA HILTON MOTION FOR JUDGMENT ON THE PLEADINGS is Off Calendar - Per request of moving party. =(501/HEK) Parties may appear in-person, telephonically or via Zoom (Video - Webinar ID: 160 560 5023; Password: 172849; or Phone Dial in: (669) 254-5252; Webinar ID: 160 560 5023; Password: 172849). Parties who intend to appear at the hearing must give notice to opposing parties and the court promptly, but no later than 4:00 p.m. the court day before the hearing unless the tentative ruling has specified that a hearing is required. Notice of contesting a tentative ruling shall be provided by sending an email to the court to Department501ContestTR@sftc.org with a copy to all other parties stating, without argument, the portion(s) of the tentative ruling that the party contests. A party may not argue at the hearing if the opposing party is not so notified and the opposing party does not appear.
Ruling
ELIANE DOS SANTOS VITAL, AN INDIVIDUAL ET AL VS. AMERICAN HONDA MOTOR CO., INC., A CALIFORNIA ET AL
Jul 12, 2024 |
CGC22601133
Matter on the Discovery Calendar for Friday, Jul-12-2024, Line 2, PLAINTIFFS ELIANE DOS SANTOS VITAL, AN INDIVIDUAL, and WIDES VITAL DA SILVA'S, AN INDIVIDUAL, Motion To Compel Further Responses To Plaintiffs Request For Production Of Documents, Set Two. Pro Tem Judge William Lynn, a member of the California State Bar who meets all the requirements set forth in CRC 2.812 to serve as a temporary judge, has been assigned to hear this motion. Prior to the hearing all parties to the motion will be asked to sign a stipulation agreeing that the motion may be heard by the Pro Tem Judge. If all parties to the motion sign the stipulation, the hearing will proceed before the Judge Pro Tem who will decide the motion with the same authority as a Superior Court Judge. If a party appears by telephone, the stipulation may be signed via fax or consent to sign given by email. If not all parties to the motion sign the stipulation, the Pro Tem Judge will hold a hearing on the motion and, based on the papers submitted by the parties and the hearing, issue a report in the nature of a recommendation to the Dept. 302 Judge, who will then decide the motion. If a party does not appear at the hearing, the party will be deemed to have stipulated that the motion will be decided by the Pro Tem Judge with the same authority as a Superior Court Judge. The Pro Tem Judge has issued the following tentative ruling: Parties to appear if the motion remains unresolved. For the 9:00 a.m. Discovery calendar, all attorneys and parties are required to appear remotely. Hearings will be conducted by videoconference using Zoom. To appear at the hearing, go to the court's website at sfsuperiorcourt.org under "Online Services," navigate to "Tentative Rulings," and click on the appropriate link (DISCOVERY, DEPARTMENT 302 DAILY AT 9:00 A.M.), or dial the corresponding number and use the meeting ID, and password for Discovery Department 302. Any party who contests a tentative ruling must send an email to williamclynn@gmail.com with a copy to all other parties by 4pm stating, without argument, the portion(s) of the tentative ruling that the party contests. The subject line of the email shall include the line number, case name and case number. If the tentative ruling is not contested, the parties are deemed to have stipulated to the Pro Tem hearing the motion and the Pro Tem will sign an order confirming the tentative ruling. The prevailing party is required to prepare a proposed order repeating verbatim the substantive portion of the tentative ruling and must e-mail it to the Judge Pro Tem. The court no longer provides a court reporter in the Discovery Department. Parties may retain their own reporter, who may appear remotely. A retained reporter must be a California certified court reporter (CSR), for only a CSR's transcript may be used in California courts. If a CSR is being retained, include in your email all of the following: their name, CSR and telephone numbers, and their individual work email address. =(302/JPT)
Ruling
Y.P. VS. WELLS FARGO & COMPANY, ET AL
Jul 10, 2024 |
CGC24613065
Matter on the Law & Motion calendar for Wednesday, July 10, 2024, Line 12. DEFENDANT EARL IGNACIO AND WELLS FARGO BANK, N.A.'s Motion To Compel Arbitration. Defendants Wells Fargo Bank, N.A. and Earl Ignacio's motion to compel arbitration and stay is denied. (The Court's complete tentative ruling has been emailed to the parties.) For the 9:30 a.m. Law & Motion calendar, all attorneys and parties may appear in Department 302 remotely. Remote hearings will be conducted by videoconference using Zoom. To appear remotely at the hearing, go to the court's website at sfsuperiorcourt.org under "Online Services," navigate to "Tentative Rulings," and click on the appropriate link, or dial the corresponding phone number. Any party who contests a tentative ruling must send an email to contestdept302tr@sftc.org with a copy to all other parties by 4pm stating, without argument, the portion(s) of the tentative ruling that the party contests. The subject line of the email shall include the line number, case name and case number. The text of the email shall include the name and contact information, including email address, of the attorney or party who will appear at the hearing. Counsel for the prevailing party is required to prepare a proposed order which repeats verbatim the substantive portion of the tentative ruling and must email it to contestdept302tr@sftc.org prior to the hearing even if the tentative ruling is not contested. The court no longer provides a court reporter in the Law & Motion Department. Parties may retain their own reporter, who may appear in the courtroom or remotely. A retained reporter must be a California certified court reporter (CSR), for only a CSR's transcript may be used in California courts. If a CSR is being retained, include in your email all of the following: their name, CSR and telephone numbers, and their individual work email address. =(302/RBU)
Ruling
MARY ELIZABETH LEMASTERS VS. SCHOENBERG FAMILY LAW GROUP P.C. ET AL
Jul 09, 2024 |
CGC22600572
Matter on the Law & Motion Calendar for Tuesday, July 9, 2024, Line 4. PLAINTIFF MARY LEMASTERS' MOTION FOR WITHDRAWAL OF ATTORNEY OF RECORD. Hearing required. For the 9:30 a.m. Law & Motion calendar, all attorneys and parties may appear in Department 302 remotely. Remote hearings will be conducted by videoconference using Zoom. To appear remotely at the hearing, go to the court's website at sfsuperiorcourt.org under "Online Services," navigate to "Tentative Rulings," and click on the appropriate link, or dial the corresponding phone number. Any party who contests a tentative ruling must send an email to contestdept302tr@sftc.org with a copy to all other parties by 4pm stating, without argument, the portion(s) of the tentative ruling that the party contests. The subject line of the email shall include the line number, case name and case number. The text of the email shall include the name and contact information, including email address, of the attorney or party who will appear at the hearing. The court no longer provides a court reporter in the Law & Motion Department. Parties may retain their own reporter, who may appear in the courtroom or remotely. A retained reporter must be a California certified court reporter (CSR), for only a CSR's transcript may be used in California courts. If a CSR is being retained, include in your email all of the following: their name, CSR and telephone numbers, and their individual work email address. =(302/RBU)
Ruling
JOHN P BERNARD VS. BMW OF NORTH AMERICA, LLC ET AL
Jul 10, 2024 |
CGC23608339
Matter on the Law & Motion calendar for Wednesday, July 10, 2024, Line 8. PLAINTIFF JOHN BERNARD's Motion For Award Of Attorneys Fees, Costs, And Expenses. Off calendar for noncompliance with Local Rule 2.7(B) (courtesy copies). The motion may be re-set for a Mon.-Thurs. after July 24, with papers to bear new hearing date. In meantime, counsel shall meet and confer to resolve their differences. For the 9:30 a.m. Law & Motion calendar, all attorneys and parties may appear in Department 302 remotely. Remote hearings will be conducted by videoconference using Zoom. To appear remotely at the hearing, go to the court's website at sfsuperiorcourt.org under "Online Services," navigate to "Tentative Rulings," and click on the appropriate link, or dial the corresponding phone number. Any party who contests a tentative ruling must send an email to contestdept302tr@sftc.org with a copy to all other parties by 4pm stating, without argument, the portion(s) of the tentative ruling that the party contests. The subject line of the email shall include the line number, case name and case number. The text of the email shall include the name and contact information, including email address, of the attorney or party who will appear at the hearing. The court no longer provides a court reporter in the Law & Motion Department. Parties may retain their own reporter, who may appear in the courtroom or remotely. A retained reporter must be a California certified court reporter (CSR), for only a CSR's transcript may be used in California courts. If a CSR is being retained, include in your email all of the following: their name, CSR and telephone numbers, and their individual work email address. =(302/RBU)
Preview
1 KEKER, VAN NEST & PETERS LLP JOHN W. KEKER - # 49092 2 jkeker@keker.com DAN JACKSON - # 216091 ELECTRONICALLY 3 djackson@keker.com WARREN A. BRAUNIG - # 243884 F I L E D Superior Court of California, 4 wbraunig@keker.com County of San Francisco NICHOLAS S. GOLDBERG - # 273614 5 ngoldberg@keker.com 02/22/2022 633 Battery Street Clerk of the Court BY: YOLANDA TABO-RAMIREZ 6 San Francisco, CA 94111-1809 Deputy Clerk Telephone: (415) 391-5400 7 Facsimile: (415) 397-7188 8 MARK J. HATTAM - # 173667 mhattam@sdcwa.org 9 General Counsel SAN DIEGO COUNTY WATER AUTHORITY 10 4677 Overland Avenue San Diego, CA 92123-1233 11 Telephone: (858) 522-6791 Facsimile: (858) 522-6566 12 Attorneys for Petitioner, Plaintiff, and Cross-Defendant EXEMPT FROM FILING FEES 13 SAN DIEGO COUNTY WATER AUTHORITY [GOVERNMENT CODE § 6103] 14 15 SUPERIOR COURT OF THE STATE OF CALIFORNIA 16 IN AND FOR THE COUNTY OF SAN FRANCISCO 17 SAN DIEGO COUNTY WATER Lead Case No. CPF-14-514004 18 AUTHORITY, Consolidated with Case Nos. CPF-16-515282 19 Petitioner, Plaintiff, and Cross- & CPF-18-516389 Defendant, 20 EXHIBITS 38-49 TO DECLARATION OF v. DAN JACKSON IN SUPPORT OF SAN 21 DIEGO COUNTY WATER METROPOLITAN WATER DISTRICT OF AUTHORITY’S MOTIONS FOR 22 SOUTHERN CALIFORNIA; ALL SUMMARY ADJUDICATION PERSONS INTERESTED IN THE 23 VALIDITY OF THE RATES ADOPTED BY THE METROPOLITAN WATER Date: April 13, 2022 24 DISTRICT OF SOUTHERN CALIFORNIA Time: 2:00 p.m. ON APRIL 8, 2014 TO BE EFFECTIVE Dept.: 306 25 JANUARY 1, 2015 AND JANUARY 1, Judge: Hon. Anne-Christine Massullo 2016; and DOES 1-10, 26 Date Filed: May 30, 2014 Respondents, Defendants, and 27 Cross-Complainant. Trial Date: May 16–27, 2022 28 EXHIBITS 38-49 TO DECLARATION OF DAN JACKSON IN SUPPORT OF SAN DIEGO COUNTY WATER AUTHORITY’S MOTIONS FOR SUMMARY ADJUDICATION Lead Case No. CPF-14-514004; Consolidated with CPF-16-515282 & CPF-18-516389 1831367 Index of Exhibits 38-49 Attached to Declaration of Dan Jackson In Support of San Diego County Water Authority’s Motions for Summary Adjudication Exhibits 38-49 Exhibit Description Page 38 Letter from Marcia Scully to Maureen Stapleton and Mark Hattam, 1 dated December 3, 2018. 39 Water Authority’s First Amended Petition for Writ of Mandate and 5 Complaint for Determination of Invalidity and Declaratory Relief, Case No. CPF-18-516389, filed on January 31, 2019. 40 Water Authority’s Second Amended Petition for Writ of Mandate and 44 Complaint for Determination of Invalidity, Damages, and Declaratory Relief, Case No. CPF-18-516389, filed on April 21, 2021. 41 Metropolitan’s Answer, Case No. CPF-18-516389, filed July 29, 2021. 72 42 Metropolitan’s Cross-Complaint, Case No. CPF-18-516389, filed July 114 29, 2021. 43 Order Denying Metropolitan Water District of Southern California’s 158 Motion for Judgment on the Pleadings in San Diego County Water Authority v. Metropolitan Water District of Southern California, Case No. CPF-10-510830, issued on September 19, 2013. 44 Metropolitan’s Resolution 8796, produced as part of Metropolitan’s 163 Administrative Record and Bates-stamped MWDRECORD2014_0012543–0012546. 45 Metropolitan’s Board Meeting Action document for January 8, 2002, 168 produced as part of Metropolitan’s Administrative Record and Bates- stamped MWDRECORD2014_0012150–0012206. 46 Metropolitan’s Board Meeting Minutes for January 8, 2002, produced as 226 part of Metropolitan’s Administrative Record and Bates-stamped MWDRECORD2014_0012607–0012623. 47 Metropolitan’s Board Meeting Action document for January 14, 2003, 244 produced as part of Metropolitan’s Administrative Record and Bates- stamped MWDRECORD2014_0013331–0013415. Exhibit Description Page 48 Excerpts from Metropolitan’s Board Meeting Action document for April 330 10, 2012, produced as part of Metropolitan’s Administrative Record and Bates-stamped MWDRECORD2014_0022848–0022851, 0022928, 0022992. 49 Excerpts from the American Water Works Association (AWWA) 337 Manual, produced as part of Metropolitan’s Administrative Record and Bates-stamped MWDRECORD2014_0010241–0010242, 0010561– 0010562. Exhibit 38 1 THE M ETROPOLITAN WATER DfSTRlCT OF SOUTHERN CALIFORNIA Office of the General Counsel Via Electronic Mail and U.S. Mail December 3, 2018 Maureen A. Stapleton, General Manager Mark J. Hattam, General Counsel San Diego County Water Authority 4677 Overland Avenue San Diego, California 92123-1233 Dear Ms. Stapleton and Mr. Hattam: RE: Rejection of Claim for San Diego County Water Authority and Waiver of Paragraph 11. l of Exchange Agreement As you know, the San Diego County Water Authority ("SDCWA") seeks to file an amended complaint in its pending 2018 rate litigation. Moreover, because that case has now been transfen-ed to San Francisco Superior Court, we understand that the pa1ties are in agreement on entering into a stipulation and proposed couti order that pem1 its SDCWA to file the amended complaint, for the case to be stayed upon that filing, and for Metropolitan's responsive pleadi ng to be due after the stay is lifted. Before SDCWA may file its amended complaint, Metropolitan must respond to SDCWA's recent Government Code claim or the claim must be deemed rejected by operation of law; and also, because SDCWA is asserting disputes under the parties' Exchange Agreement, the parties must satisfy Paragraph 11. l of the Exchange Agreement. To facilitate the above-described stipulation and proposed order, Metropolitan herein rejects the Government Code claim and waives further negotiation under Paragraph 11.1 before the amended complaint's filing. Rejection of Claim This responds to SDCWA' s "Claim for Damages and Losses Pursuant to Metropolitan Administrative Code§ 9302 and California Government Code§§ 900 et seq.," dated November 9, 2018 and received by Metropolitan on November 13, 2018. As you know, the submission of a claim to Metropolitan triggers a timeline and procedure pursuant to the Government Code and Metropolitan's Administrative Code. We are therefore responding to the claim at this time. 700 N. Alameda Street, Los Angeles, California 90012 • Mailing Address: Box 54153, Los Angeles, California 90054-0153 • Telephone (213) 217-6000 2 THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA Ms. Maureen A. Stapleton Mr. Mark J. Hattam Page2 December 3, 2018 Notice Notice is hereby given that the above referenced claim, which was presented to The Metropolitan Water District of Southern California (Metropolitan) on November 13, 2018, has been rejected. The law requires that we give you the following warning: WARNING Subject to certain exceptions, you have only six (6) months from the date this notice was personally delivered or deposited in the mail to file a court action on this claim. See Government Code Section 945.6 . This time limitation applies only to causes of action arising under California law, for which a claim is mandated by the California Government Tort Claims Act, Government Code Sections 900 et seq ., or the Metropolitan Administrative Code Sections 9300, et seq. You may seek the advice of an attorney of your choice in connection with this matter. If you should desire to consult an attorney, you should do so immediately. Waiver of Paragraph 11.1 of Exchange Agreement Mark H attam's April 27, 2018 letter referenced SDCWA's previously-stated objections to Metropolitan's 2019 and 2020 rates, and asked Metropolitan to agree that the agencies need not further comply with Paragraph 11.1 of the Exchange Agreement. Paragraph 11.1 requires the parties to exercise reasonable best efforts to resolve all disputes aris ing under the Exchange Agreement through negotiation; and provides that, in the event negotiation is unsuccessful, the parties reserve their legal and equitable remedies. My May 7, 2018 response letter stated that Metropolitan requests negotiation pursuant to Paragraph 11.1 in order to clarify and understand the full range of SDCWA 's objections. The parties have had discussions which to date have not resulted in resolution. Recently, Metropolitan received SDCWA's above-referenced claim, which adds additional disputes. While the parties' discussions continue, and Metropolitan still seeks claiity including on additional matters included in the above-referenced claim, in order to facilitate th e above-described stipulation and proposed order, Metropolitan waives further negotiation under Paragraph 11.1 w ith respect to S DCWA's amended complaint. 3 THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA Ms. Maureen A. Stapleton Mr. Mark J. Hattam Page 3 December 3, 2018 If you should have any questions regarding this matter, please contact me at (213) 217-6115. Very truly yours, Marcia Scully General Counsel cc: Jeffrey Kightlinger, General Manager Drew Boronkay, Risk Manager 4 Exhibit 39 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 Exhibit 40 44 1 KEKER, VAN NEST & PETERS LLP EXEMPT FROM FILING FEES JOHN W. KEKER - # 49092 [GOVERNMENT CODE § 6103] 2 jkeker@keker.com DAN JACKSON - # 216091 ELECTRONICALLY 3 djackson@keker.com WARREN A. BRAUNIG - # 243884 F I L E D Superior Court of California, 4 wbraunig@keker.com County of San Francisco NICHOLAS S. GOLDBERG - # 273614 5 ngoldberg@keker.com 04/21/2021 633 Battery Street Clerk of the Court BY: BOWMAN LIU 6 San Francisco, CA 94111-1809 Deputy Clerk Telephone: (415) 391-5400 7 Facsimile: (415) 397-7188 8 MARK J. HATTAM - # 173667 mhattam@sdcwa.org 9 General Counsel SAN DIEGO COUNTY WATER AUTHORITY 10 4677 Overland Avenue San Diego, CA 92123 11 Telephone: (858) 522-6791 Facsimile: (858) 522-6566 12 Attorneys for Petitioner and Plaintiff 13 SAN DIEGO COUNTY WATER AUTHORITY 14 SUPERIOR COURT OF THE STATE OF CALIFORNIA 15 IN AND FOR THE COUNTY OF SAN FRANCISCO 16 SAN DIEGO COUNTY WATER Case No. CPF-18-516389 17 AUTHORITY, SAN DIEGO COUNTY WATER 18 Petitioner and Plaintiff, AUTHORITY’S SECOND AMENDED PETITION FOR WRIT OF MANDATE 19 v. AND COMPLAINT FOR DETERMINATION OF INVALIDITY, 20 METROPOLITAN WATER DISTRICT OF DAMAGES AND DECLARATORY SOUTHERN CALIFORNIA; ALL RELIEF; EXHIBITS A–E 21 PERSONS INTERESTED IN THE VALIDITY OF THE RATES AND 22 CHARGES ADOPTED BY THE METROPOLITAN WATER DISTRICT OF Date Filed: June 8, 2018 23 SOUTHERN CALIFORNIA ON APRIL 10, 2018 TO BE EFFECTIVE JANUARY 1, 24 2019 AND JANUARY 1, 2020; and DOES 1-10, 25 Respondents and Defendants. 26 27 28 SDCWA’S SECOND AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DETERMINATION OF INVALIDITY, DAMAGES AND DECLARATORY RELIEF CASE NO. CPF-18-516389 1666659 45 1 Petitioner and Plaintiff San Diego County Water Authority (“Petitioner” or “the Water 2 Authority”) brings this Second Amended Petition for Writ of Mandate, and Complaint for 3 Determination of Invalidity, Damages, and Declaratory Relief (“Amended Complaint”), alleging 4 as follows: 5 I. INTRODUCTION 6 1. The Water Authority brings this action for writ of mandate, determination of 7 invalidity, damages, and declaratory relief, challenging rates and charges adopted by Respondent 8 and Defendant Metropolitan Water District of Southern California (“Metropolitan”) on April 10, 9 2018, to be effective January 1, 2019 and January 1, 2020. The Water Authority also brings a 10 claim for Metropolitan’s breach of the Amended and Restated Agreement for the Exchange of 11 Water (“Exchange Agreement”), entered into by the Water Authority and Metropolitan on 12 October 10, 2003, and seeks damages for such breach. 13 2. The Water Authority is a public agency that provides water to 24 local agencies in 14 San Diego County. Since 2003, the Water Authority has funded vital conservation projects in the 15 Imperial Valley in exchange for a share of the Colorado River water conserved through these 16 efforts. The only way to transport the Water Authority’s conserved Imperial Valley water to San 17 Diego is through the Colorado River Aqueduct, which is owned and operated by Metropolitan. 18 The Water Authority pays Metropolitan to transport this conserved water to the Water Authority 19 pursuant to the Exchange Agreement. This type of transportation service is generally referred to 20 as “wheeling.” A copy of the Exchange Agreement is attached hereto as Exhibit A. 21 3. Metropolitan’s rates for transporting the Non-Metropolitan Water1 acquired by the 22 Water Authority violate cost-of-service requirements imposed by the California Constitution, 23 California statutory law, and common law, and are not in accord with a binding Court of Appeal 24 decision invalidating the transportation and wheeling rates Metropolitan charged from 2011 to 25 2014. Specifically, Metropolitan’s transportation and wheeling rates include demand 26 management and water conservation costs, which the Court of Appeal held they could not do in 27 1 In this Amended Complaint, the water acquired by the Water Authority and other member 28 agencies from third-party sources is referred to as “Non-Metropolitan Water.” 2 SDCWA’S SECOND AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DETERMINATION OF INVALIDITY, DAMAGES AND DECLARATORY RELIEF CASE NO. CPF-18-516389 1666659 46 1 two prior cases challenging Metropolitan’s rates for calendar years 2011–2014 (the “2010 and 2 2012 Cases”). See San Diego Cty. Water Auth. v. Metro. Water Dist. of S. Cal., 12 Cal. App. 5th 3 1124 (2017) (“SDCWA v. MWD”). Metropolitan cannot charge any more to deliver wheeled 4 water than “fair compensation,” as defined in Water Code Section 1811(c). The Court of Appeal 5 ruled that Metropolitan’s wheeling rate violated Water Code Section 1811 because it includes 6 costs incurred not for water conveyance, but to pay for demand management and water 7 conservation programs. See 12 Cal. App. 5th at 1150–1152. 8 4. Tacitly acknowledging the illegality of its transportation and wheeling rates under 9 the Court of Appeal’s decision, Metropolitan “suspended” collection of demand management 10 costs recovered by the Water Stewardship Rate for deliveries under the Exchange Agreement for 11 calendar years 2019 and 2020. In January 2020, Metropolitan stated that it would not seek to 12 recover from the Water Authority these suspended demand management and water conservation 13 costs. Nevertheless, Metropolitan continued to include demand management and water 14 conservation costs recovered by the Water Stewardship Rate in its published wheeling rate, in 15 violation of the Court of Appeal’s decision in SDCWA v. MWD. 16 5. Metropolitan’s wheeling rate also is unlawful because Metropolitan has failed to 17 comply with its statutory obligation to provide the Water Authority with “reasonable credit for 18 any offsetting benefits for the use of [Metropolitan’s] conveyance system.” Water Code § 19 1811(c). Metropolitan acknowledged in the Board resolution that it relies on to support its 20 wheeling rate that Metropolitan is legally required to account for such “offsetting benefits.” But 21 Metropolitan has refused to comply with this statutory requirement and, in connection with its 22 2019 and 2020 rates, failed to analyze any offsetting benefits or provide any such credits to the 23 Water Authority. 24 6. Additionally, some portion of Metropolitan’s 2019 and 2020 rates and charges are 25 unlawful because Metropolitan charged costs of the previously proposed California WaterFix 26 27 28 3 SDCWA’S SECOND AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DETERMINATION OF INVALIDITY, DAMAGES AND DECLARATORY RELIEF CASE NO. CPF-18-516389 1666659 47 1 project (“WaterFix”)2 to wheelers, and thus to the Water Authority, as transportation costs. 2 Under the terms of the longstanding water supply contract between the California Department of 3 Water Resources (“DWR”) and Metropolitan (“DWR Contract”), and according to DWR’s 4 invoices to Metropolitan, WaterFix costs are supply costs, not transportation costs. But in setting 5 its 2019 and 2020 rates, Metropolitan allocated its WaterFix costs to transportation rather than 6 supply. The 2010 and 2012 Cases, and thus the Court of Appeal’s decision in SDCWA v. MWD, 7 did not address Metropolitan’s allocation of WaterFix costs under the DWR Contract. The Water 8 Authority in this action is not challenging Metropolitan’s separate decision, also on April 10, 9 2018, to support implementation of WaterFix, but rather is challenging the allocation of 10 Metropolitan’s WaterFix supply costs to transportation rates in its 2019 and 2020 rates. 11 7. Metropolitan also has breached the parties’ Exchange Agreement. The Exchange 12 Agreement requires Metropolitan to deliver the Water Authority’s Non-Metropolitan Water for 13 no more than a lawful conveyance (i.e., wheeling) rate. Specifically, “the Price” for transporting 14 the Water Authority’s Non-Metropolitan Water “shall be equal to the charge or charges set by 15 Metropolitan’s Board of Directors pursuant to applicable law and regulation and generally 16 applicable to the conveyance of water by Metropolitan on behalf of its member agencies.” The 17 Price Metropolitan charges under the Exchange Agreement fails to provide a reasonable credit for 18 the offsetting benefits of the Water Authority’s Non-Metropolitan Water and improperly charges 19 the Water Authority supply costs for the WaterFix. 20 8. Accordingly, the Water Authority brings this action, requesting relief as set forth 21 in the remainder of this Amended Complaint. 22 23 24 25 2 The WaterFix was a proposed conservation project intended to restore California’s Bay Delta 26 and ensure water supply reliability by diverting water supplies under the Bay Delta in twin tunnels. Although the WaterFix project was largely scrapped by Governor Newsom’s 27 administration, Metropolitan expended funds for this former project in rate years 2019–2020. The project also continues to move forward in a modified form. The term “WaterFix” is used 28 herein to refer to both proposed Bay-Delta projects. 4 SDCWA’S SECOND AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DETERMINATION OF INVALIDITY, DAMAGES AND DECLARATORY RELIEF CASE NO. CPF-18-516389 1666659 48 1 II. PARTIES 2 9. Petitioner and Plaintiff San Diego County Water Authority is, and at all times 3 mentioned herein was, a county water authority organized under the laws of the State of 4 California and located in the County of San Diego, California. 5 10. Respondent and Defendant Metropolitan is, and at all times mentioned herein was, 6 a public agency of the State of California organized pursuant to the Metropolitan Water District 7 Act (Stats. 1969, ch. 209 as amended; West’s California Water Code Append. §§ 109-134 8 (2010)), the principal offices of which are located in Los Angeles, California. 9 11. The true names and capacities of the Respondents and Defendants identified as 10 DOES 1-10 are unknown to Petitioner, and Petitioner will amend this Amended Complaint to 11 insert the true names and capacities of those fictitiously named Respondents and Defendants 12 when they are ascertained. Petitioner is informed and believes, and on that basis alleges, that at 13 all times relevant to this action, each of the Respondents and Defendants, including those 14 fictitiously named, was the agent or employee of each of the other Respondents and Defendants, 15 and while acting within the course and scope of such employment or agency, took part in either 16 the acts or omissions alleged in this Amended Complaint. 17 III. SERVICE OF PROCESS 18 12. Petitioner will serve Metropolitan and all other Respondents and Defendants who 19 answered the Water Authority’s original complaint in the manner provided by law. 20 13. In conjunction with the filing of the original complaint, the Water Authority 21 published notice of this action in newspapers of general circulation in the six counties served by 22 Metropolitan, pursuant to the Los Angeles County Superior Court’s June 18, 2018 Order for 23 Publication of Summons. Those counties are Ventura, Los Angeles, Riverside, San Bernardino, 24 Orange, and San Diego. As this Amended Complaint does not add any new causes of action that 25 may be subject to the validation statutes (Code Civ. Proc. § 861 et seq.), and reduces the scope of 26 the claims at issue in this lawsuit, no further publication of a validation summons is necessary. 27 28 5 SDCWA’S SECOND AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DETERMINATION OF INVALIDITY, DAMAGES AND DECLARATORY RELIEF CASE NO. CPF-18-516389 1666659 49 1 IV. JURISDICTION AND VENUE 2 14. This Court has jurisdiction over this matter pursuant to Code of Civil Procedure 3 Section 1085, Code of Civil Procedure Section 410.10, and, with respect to the Third Cause of 4 Action, Code of Civil Procedure Sections 860 et seq., and Government Code Section 66022. 5 15. The original complaint was filed in Los Angeles County Superior Court on June 8, 6 2018. The Los Angeles County Superior Court transferred the action to this Court on October 3, 7 2018, pursuant to Code of Civil Procedure Section 394(a). Venue therefore is proper in this 8 Court. 9 V. FACTUAL ALLEGATIONS 10 A. The Water Authority funded vital conservation efforts in the Imperial Valley to obtain a reliable, independent supply of water. 11 12 16. The Water Authority is one of the major public water agencies in Southern 13 California, providing water to 24 local agencies that supply San Diego County’s 3.3 million 14 residents and its $245 billion economy. With very little local groundwater and limited rainfall, 15 local sources of water are scarce in San Diego County. To meet demand, the Water Authority has 16 historically purchased between 75 and 95 percent of its water from Metropolitan. 17 17. Metropolitan is a regional water agency that imports, stores, transports, and treats 18 water throughout the Southern California counties of Ventura, Los Angeles, Riverside, San 19 Bernardino, Orange, and San Diego. Metropolitan has 26 member agencies, including the Water 20 Authority. Metropolitan currently pays its costs, in large part, by imposing volumetric (per-acre- 21 foot) rates for the services it claims to provide to its member agencies, including transportation, 22 treatment, and supply. In addition to obtaining and delivering imported water for sale to its 23 member agencies, Metropolitan also subsidizes some member agencies’ demand management and 24 water conservation programs. Metropolitan imposes a Water Stewardship Rate on all water sales 25 and wheeling transactions, including the transportation of the Water Authority’s Non- 26 Metropolitan Water under the Exchange Agreement, and uses these funds to pay for its demand 27 management and water conservation programs. 28 6 SDCWA’S SECOND AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DETERMINATION OF INVALIDITY, DAMAGES AND DECLARATORY RELIEF CASE NO. CPF-18-516389 1666659 50 1 18. Although the Water Authority is one of Metropolitan’s largest customers, the 2 Water Authority has developed, and is continuing to develop, its own independent sources of 3 water supplies. As noted above, since 2003, the Water Authority has funded vital water 4 conservation projects in the Imperial Valley in exchange for a share of the Colorado River water 5 conserved through these investments. Specifically, the Water Authority contracted with the 6 Imperial Irrigation District to purchase up to 200,000 acre-feet per year of Colorado River water 7 for a 45-year period, plus a 30-year extension with mutual consent. The Water Authority also 8 obtained the right to 80,000 acre-feet of water conserved by the lining of the All-American and 9 Coachella Canals, projects that were implemented by the Water Authority. This independent 10 conserved water procured by the Water Authority is referred to herein as the Water Authority’s 11 “Non-Metropolitan Water,” to distinguish it from the water that the Water Authority continues to 12 purchase directly from Metropolitan. 13 B. The Water Authority entered into an Exchange Agreement with Metropolitan to transport its conserved Imperial Valley water to San Diego. 14 15 19. Because Metropolitan owns the only water distribution facilities linking the 16 Colorado River to the Water Authority’s service area, the Water Authority and Metropolitan 17 negotiated the 2003 Exchange Agreement for delivery of the Water Authority’s Non- 18 Metropolitan Water to the Water Authority’s own distribution and water storage facilities. The 19 Water Authority “has no means of transporting” its conserved Imperial Valley water to San Diego 20 “other than over Metropolitan’s [Colorado River] aqueduct.” SDCWA v. MWD, 12 Cal. App. 5th 21 at 1135. 22 20. Metropolitan’s basic entitlement to Colorado River water is only 550,000 acre-feet 23 per year. Under the “Law of the River,”3 however, California is entitled to one-half of the surplus 24 water available to the Lower Basin states—namely, Arizona, California, and Nevada. For many 25 years, Metropolitan benefitted from the availability of hundreds of thousands of acre-feet of water 26 above its basic entitlement, because the Secretary of Interior declared surplus conditions on the 27 3 The “Law of the River” is a series of compacts, federal laws, court decisions, contracts, and 28 regulatory guidelines that govern the management and operation of the Colorado River. 7 SDCWA’S SECOND AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DETERMINATION OF INVALIDITY, DAMAGES AND DECLARATORY RELIEF CASE NO. CPF-18-516389 1666659 51 1 Colorado River. But, as other states exercised their rights to Colorado River water, 2 Metropolitan’s Colorado River Aqueduct, which has the capacity to move 1.2 million acre-feet of 3 water annually, was left half empty. A half-empty Colorado River Aqueduct left Metropolitan’s 4 member agencies highly vulnerable to drought and would have required Metropolitan to incur the 5 cost of purchasing or conserving replacement water elsewhere. The Water Authority’s agreement 6 to incur water supply costs for its Non-Metropolitan Water benefitted Metropolitan and all of 7 Metropolitan’s member agencies, which did not have to incur additional costs in order to fill the 8 substantial unused capacity in Metropolitan’s Colorado River Aqueduct. 9 21. “Unable to agree upon the long-term price the Water Authority would be charged 10 for water received under the [Exchange Agreement], the parties agreed to an initial price with 11 future prices linked to standard water rates, lawfully set.” SDCWA v. MWD, 12 Cal. App. 5th at 12 1136. Specifically, pursuant to Section 5.2 of the Exchange Agreement, Metropolitan agreed that 13 the Price for transporting the Water Authority’s Non-Metropolitan Water “shall be equal to the 14 charge or charges set by Metropolitan’s Board of Directors pursuant to applicable law and 15 regulation and generally applicable to the conveyance of water by Metropolitan on behalf of its 16 member agencies.” 17 C. The Wheeling Statutes require Metropolitan to charge only “fair compensation” and provide reasonable credit to the Water Authority for the 18 offsetting benefits from the Water Authority’s wheeling. 19 22. As discussed, in addition to selling water to its member agencies, Metropolitan is 20 required to provide wheeling service to transport Non-Metropolitan Water to third parties, 21 including the Water Authority’s Non-Metropolitan Water under the Exchange Agreement. 22 “Wheeling” is the industry term of art for the “use of a water conveyance facility by someone 23 other than the owner or operator to transport water.” SDCWA v. MWD, 12 Cal. App. 5th at 1135 24 (citation omitted). 25 23. Under the Wheeling Statutes (Water Code § 1810 et seq.), Metropolitan cannot 26 charge more than “fair compensation” for the conveyance of Non-Metropolitan Water. The 27 statutory definition of “fair compensation” allows Metropolitan to recover “reasonable charges 28 incurred by the owner of the conveyance system, including capital, operation, maintenance and 8 SDCWA’S SECOND AMENDED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DETERMINATION OF INVALIDITY, DAMAGES AND DECLARATORY RELIEF CASE NO. CPF-18-516389 1666659 52 1 replacement costs, [and] increased costs from any necessitated purchase of supplemental power.” 2 Id. § 1811(c). That statutory definition also expressly requires Metropolitan to give wheele