County Water District’s Suits Against Regional Water Quality Control Board Cover Range of Legal Issues

Malaga County Water District v. Central Valley Regional Water Quality Control Board
(2020) 58 Cal.App.5th 396

Malaga County Water District v. Central Valley Regional Water Quality Control Board
(2020) 58 Cal.App.5th 418

Malaga County Water District v. Central Valley Regional Water Quality Control Board
(2020) 58 Cal.App.5th 447

In a series of three published decisions, the Court of Appeal for the Fifth District reviewed Malaga County Water District’s (“Malaga”) claims challenging the issuance of a discharge permit and administrative civil liability penalty levied by the Central Valley Regional Water Quality Board (“Board”).  These three decisions discuss various legal issues, ranging from improper delegation to underground regulations.  When viewed collectively, the three decisions illuminate a series of errors made by the Board in administering its regulatory responsibilities.

Delegation by the Board

In the first case,[1] Malaga challenged its discharge permit, arguing it was wrongfully modified by the Board’s executive officer, resulting in improper delegation under Water Code section 13223.  The provision in the discharge permit at issue was one that allowed the executive officer of the Board to increase the effluent discharge limitation in the permit from 0.49 mgd to 0.85 mgd.  Water Code section 13223 allows the Board to delegate authority to its executive officer, but prohibits delegating authority to issue, modify, or revoke any waste discharge requirement.  Relying on federal case law, the Court determined that changes to effluent discharge limitations in a discharge permit are “modifications” to a permit.  Thus, the executive officer’s authority to change the effluent discharge limitation on Malaga’s permit was improper delegation under Water Code section 13223.

Hearing Procedures as an Improper Underground Regulation

In the second case,[2] Malaga sought review of an administrative civil liability penalty imposed on it by the Board, arguing that the Hearing Procedures document (“Procedures”) used to govern the administrative hearing was an improper underground regulation.  The Procedures at issue contained information regarding the structure and procedure of the administrative hearing, including sections titled Introduction, Hearing Participants, Hearing Time Limits, Documents in Evidence and Availability of Board Files, Submittal of Evidence, Prohibition on Surprise Evidence, Contact Information, and Important Deadlines.  The Procedures stated generally, “[w]ith the exception of the ‘Hearing Time Limits’ section, the Board Chair has approved this Hearing Procedure for the adjudication of [administrative civil liability] matters.”

To determine whether the Procedures were an underground regulation, the Court considered two factors: (1) whether the Board intended the Procedures to apply generally; and (2) whether the Procedures governed the agency’s procedure.  Here, the Court concluded that because the majority of the Procedures were pre-approved and based on a preexisting template, the Procedures were intended to apply generally.  As for the second factor, the Board argued the Procedures merely implemented already adopted regulations.  The Court disagreed, finding that the Procedures governed the agency’s procedure because the Procedures did not specifically implement or utilize the only reasonable reading of the already adopted statutory regulations.

Laches in Administrative Proceedings

In the third case,[3]  Malaga argued the Board wrongly determined that laches was not a defense to the administrative proceeding.  The Court reviewed this purely legal issue under the de novo standard of review.  First, the Court established that laches is an equitable defense that can apply in administrative proceedings when two requirements are met: unreasonable delay and prejudice from that delay.  Second, the Court determined that the three-year statute of limitations that exists for similar water-related claims could be used here to establish a three-year time period before allowing the burden to shift to the agency to demonstrate delay in enforcement.  In other words, after three years elapses, the burden to prove there was unreasonable delay shifts from the party raising the laches defense to the agency.  In this case, over three years had passed before agency enforcement of administrative liability.  Therefore, the Court held the Board wrongly determined laches could not be asserted as a defense in this administrative proceeding even if Malaga would have a hard time proving, and ultimately succeeding, on the defense.

[1]           Malaga County Water District v. Central Valley Regional Water Quality Control Board (2020) 58 Cal.App.5th 396.

[2]           Malaga County Water District v. Central Valley Regional Water Quality Control Board (2020) 58 Cal.App.5th 418.

[3]           Malaga County Water District v. Central Valley Regional Water Quality Control Board (2020) 58 Cal.App.5th 447.

[This alert does not constitute legal advice and no attorney-client relationship is created by viewing or responding to this alert.  Legal counsel should be sought for answers to specific legal questions.]