Summary
The California Court of Appeal, Fifth Appellate District, grants the State Water Resources Control Board writ relief after concluding that the trial court improperly overruled the Board’s demurrer to several claims arising from the probationary designation of the Tulare Lake groundwater subbasin under the Sustainable Groundwater Management Act. The opinion addresses alleged underground regulations, extraction fees, and declaratory-relief claims. An order filed November 24, 2025, modifies specified portions of the opinion filed October 29, 2025, without changing the judgment.
Topics
Practice areas
Questions Presented
- Whether the Sustainable Groundwater Management Act exempts State Board actions under Water Code sections 10735.2 and 10735.8 from the Administrative Procedure Act, defeating the alleged underground-regulations claim.
- Whether the constitutional pay-first rule bars a declaratory challenge to State Board extraction fees characterized by the plaintiffs as an unlawful tax before the fees are paid.
- Whether declaratory relief is available to review State Board administrative decisions when Water Code section 1126 provides a writ-of-mandate remedy and bars untimely judicial review.
Holdings
- All activities taken by the State Board under Water Code sections 10735.2 and 10735.8 are exempt from the Administrative Procedure Act, including activities that imply the use of an underground regulation, unless the State Board exercises its discretion to adopt applicable procedural regulations under the APA. The sixth cause of action therefore fails as a matter of law and cannot be amended.
- The pay-first rule under article XIII, section 32 of the California Constitution bars the Farm Bureau's declaratory challenge to the State Board's extraction fees before payment. By challenging the fees under constitutional tax principles and seeking relief that would prevent their collection, the Farm Bureau triggered the pay-first rule, and no exception applies.
- Declaratory relief is unavailable because the Legislature provided a specific writ-of-mandate procedure under Water Code section 1126 for reviewing State Board decisions and made decisions unreviewable if no timely writ petition is filed. The ninth cause of action therefore fails as a matter of law.
Key quotations
“Under this reading, if the State Board finds the action is needed—in this case that there is a need for formal regulations regarding procedures for adopting a determination or plan—the State Board may choose to adopt those regulations through the APA. Should the State Board not wish to create formal regulations (i.e., where the State Board decides to act in line with its general exemption to the APA), it remains exempt from the APA for all acts pursuant to sections 10735.2 and 10735.8 even where its conduct implies an underground regulation is in use.” (23-24)
“Here, although the structure of the statutory scheme clearly indicates a fee was intended, the Farm Bureau chose to attack that fee as if it were a tax. In doing so, it triggered the protections of article XIII, section 32, as the challenge is now regarded as attacking a potential tax.” (32)
“Under well settled law, then, declaratory relief is unavailable where “as here, the Legislature has designated a remedy by which to review an administrative action.”” (41)
Factual background
The State Board designated the Tulare Lake groundwater subbasin a probationary basin in April 2024 after the Department of Water Resources determined that the basin's groundwater sustainability plan was inadequate. The designation triggered statutory monitoring, reporting, and fee provisions under the Sustainable Groundwater Management Act. Kings County Farm Bureau and others challenged the State Board's actions, alleging, among other things, that the State Board used underground regulations, imposed an unconstitutional tax, and acted unlawfully in a manner warranting declaratory relief.
Procedural history
Kings County Farm Bureau and other real parties filed a writ petition and complaint challenging the State Board's designation of the Tulare Lake groundwater subbasin as probationary and related monitoring, reporting, and fee requirements. The superior court granted a preliminary injunction and partially sustained and partially overruled the State Board's demurrer, overruling it as to claims alleging underground APA regulations, an unconstitutional tax or fee, and general declaratory relief. The State Board sought writ relief, and the Court of Appeal ordered the superior court to sustain the demurrer without leave to amend as to those three causes of action.
Remand instructions
A writ of mandate shall issue ordering the superior court to vacate its order overruling the demurrer and enter an order granting the demurrer without leave to amend as to the sixth, seventh, and ninth causes of action. The ruling on the third cause of action is unaffected. Costs are awarded to the State Board.