Filed 8/6/26 South Yuba Water District v. Dept. of Fish and Wildlife CA3
NOT TO BE PUBLISHED
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Sacramento)
SOUTH YUBA WATER DISTRICT et al., C102212
Plaintiffs and Appellants,
(Super. Ct. No.
v. 34201800235837CUWMGDS)
DEPARTMENT OF FISH AND WILDLIFE et al.,
Defendants and Respondents.
South Yuba Water District (District), Michael Rue, Jerry Norene, Victor Graf,
Morrison Graf, Gary Miller, and John Belza (together, appellants) appeal from a
judgment entered after a bench trial. This appeal arises out of agreements entered into
between the District and the Department of Fish and Wildlife (Department) in 1984
regarding a planned water diversion project. In 2018, a dispute arose over the continuing
applicability of a permit for routine maintenance (also known as a streambed alteration
agreement) originally issued as part of these agreements.
On appeal, appellants assert: (1) numerous challenges to the trial court’s
conclusion that a new streambed alteration agreement is now required under Fish and
Game Code former section 16011 (Stats. 1976, ch. 603, § 2; former section 1601); (2) the
1 Undesignated statutory references are to the Fish and Game Code.
1
trial court erred in concluding the Department did not breach the 1984 agreements; (3)
the Department was required to commence a condemnation action; (4) the Department
was required to petition the Yuba County Superior Court for relief from the 1984
stipulated judgment (the stipulated judgment); (5) the Department’s claims are barred by
collateral estoppel and res judicata; (6) the trial court erred in sustaining a demurrer to
appellants’ cause of action for inverse condemnation; and (7) the trial court erred in
awarding costs to the Department.
We will affirm the judgment.
I. BACKGROUND
A. Legal Background
Because this appeal requires us to examine the interplay between the requirements
for a streambed alteration agreement under former section 1601 and the 1984 agreements,
we will begin by reviewing the relevant provisions of this statute before we summarize
the relevant portions of the agreements.2
Former section 1601 requires an agency to submit to the Department “general
plans” for “any project which will divert, obstruct or change the natural flow or bed,
channel or bank of any river, stream or lake designated by the department in which there
is at any time an existing fish or wildlife resource or from which these resources derive
benefit, or will use material from the streambeds designated by the department.” (Stats.
1976, ch. 603, § 2, pp. 1447-1448.) “When an existing fish or wildlife resource may be
substantially adversely affected by” the project, the Department “will propose reasonable
modifications in the proposed construction as would allow for the protection and
2 Former section 1601 applies to this appeal because it was in effect at the time the
streambed alteration agreement at issue in this proceeding was entered into: “Any
agreement or any memorandum of understanding executed by the department pursuant to
this chapter prior to January 1, 2004, shall be subject to, and shall be governed by, the
provisions of this chapter that were in existence prior to that date.” (§ 1616.)
2
continuance of the fish or wildlife resource, including procedures to review the operation
of such protective measures.” (Id., p. 1448.) If the agency and the Department cannot
agree on proposals, a panel of arbitrators is established. (Ibid.) The agency proposing
the project “shall not commence such operations until the department has found that such
project will not substantially adversely affect an existing fish or wildlife resource or until
the department’s proposals, or the decisions of a panel of arbitrators, have been
incorporated into such projects.” (Id., p. 1449.) “The department shall determine and
specify types of work, methods of performance or remedial measures which shall be
exempt from the operation of this section.” (Ibid.) Critical to this appeal, former section
1601 provides that “[w]ith regard to any project which involves routine maintenance and
operation of water supply … facilities, notice to and agreement with the department shall
not be required subsequent to the initial notification and agreement unless the work as
described in the agreement is substantially changed, or conditions affecting fish and
wildlife resources substantially change, and such resources are adversely affected by the
activity conducted under the agreement.” (Stats. 1976, ch. 603, § 2, p. 1449.)
B. Factual Background
In the 1980s, the District and non-party Brophy Water District began carrying out
a plan to divert water from the Yuba River near Daguerre Point Dam and convey it to a
distribution system to irrigate land in southern Yuba County. The water would be
supplied under contract by the Yuba Water Agency,3 which held the rights to divert the
river water. To reach the distribution system and users in southern Yuba County, the
water would have to cross land south of the Yuba River known as the Goldfields. The
planned diversion facility would be off the south bank of the Yuba River near Daguerre
Point Dam.
3 The Yuba County Water Agency changed its name in 2018 to the Yuba Water Agency.
We refer to the agency by its current name.
3
In 1983, the District entered into an agreement with Yuba Natural Resources, the
owner of the Goldfields, to allow and facilitate conveyance of water across its land.
Specifically, the District acquired a license and easement for purposes of installation,
operation, and maintenance of river diversion facilities.
The Department filed an action challenging the District’s compliance with the
California Environment Quality Act (CEQA) for the project. The lawsuit was resolved in
1984 by a settlement agreement. The trial court in this proceeding referred to the first of
the 1984 agreements as the “Master Agreement” because it attached other agreements.
We will do the same.
The Master Agreement provided that the parties would file a motion for a
stipulated judgment in the CEQA action and agreed that the materials attached to the
Master Agreement provided the Department with the information necessary to evaluate
the project’s effects on fish and wildlife, and adequately mitigated significant adverse
impacts. The parties acknowledged that part of the project could involve construction of
a direct diversion channel into the Yuba River. If the diversion channel was constructed,
the District agreed to provide for one of the four alternative fish screening devices
described in attachments to the Master Agreement and thereafter reasonably operate and
maintain the screen.
Each design provided that “[i]t will be necessary to maintain a cross river channel
to direct water from the north side of the river to the irrigation diversion and fish screen
located along the south bank of the Yuba River.” Further, each design anticipated annual
maintenance.
In recognition of the “District’s need for certainty in the amount of water it is
entitled to divert and deliver to its service areas,” the Department “agree[d] to take no
action, direct or indirect, aside from those necessary to achieve adequate fish screening,
which would prevent the South Yuba and Brophy Districts from diverting 600 [cubic feet
4
per second] from the Yuba River into the river diversion facilities contemplated in this
[a]greement.”
The Master Agreement provided it “shall constitute an irrevocable permit to
operate and maintain, repair and reconstruct, the [four] alternative facilities described in
Exhibit ‘D’ including the issuance of a 1601 agreement authorizing District to reasonably
relocate materials in the River restricting water flowing to the river diversion works.”
The agreement explained the Department had concurrently “issued a 1601 Permit,
attached as Exhibit ‘E’, and included herein, for portions of the South Yuba Project
which might be subject to that requirement.”
The permit mentioned was the agreement for routine maintenance.” It recognized
the District and Brophy Water District “must perform certain routine maintenance tasks
on their canals and fish screen” in order to provide irrigation services for Yuba County.
It recited:
“Whereas, pursuant to [former s]ection 1601 …, the Districts must notify the
Department of its intention to substantially divert or obstruct the natural flow of; or
substantially change the bed, channel, or bank; or use material from streambeds
designated by the Department[.] [¶] Therefore, this Agreement for routine maintenance
project of the Districts’ water distribution system and fish screen … will satisfy the
requirements of [former s]ection 1601 …. The Department … and Districts hereby agree
to accept and abide by the following terms and conditions necessary to protect fish and
wildlife.
“1. This agreement shall serve as a vehicle to allow Districts to make
modifications to the streambed of the Yuba River adjacent to, upstream, immediately
below and access from Districts’ diversion works necessary to deliver 600 [cubic feet per
second] of water to Districts’ diversion.
“2. The Districts shall, prior to commencing work in the river channel, describe to
the Department the work proposed.”
5
The agreement for routine maintenance set forth only general guidelines for the
work. The work had to be “conducted in a reasonable fashion so as to combine the
objectives of, a) providing for the functioning of the Project of the Districts and not
unnecessarily burdening that operation, and b) providing for the reasonable protection of
fish and wildlife habitat.” The agreement for routine maintenance also stated broadly that
“[m]aintenance work shall not result in conditions which violate current water quality
standards as described in the Basin Plan or as may be further established by the Central
Valley Regional Water Quality Control Board.” The agreement for routine maintenance
closed by providing that “[d]isputes regarding Districts’ activities pursuant to this
Agreement shall be resolved by procedures set forth in [former s]ection 1601.”
The District and the Brophy Water District finished the project in 1985. A
channel was excavated through a gravel bar in the bed of the Yuba River to bring water
flowing in a northern channel of the river to the project on the south bank. The channel
allowed water to flow through a dry rock bar, and then along the face of a fish screen that
was one of the alternatives approved in 1984. An outlet allowed some of the water to
flow back into the river about 200 feet upstream of the dam. Given enough flow, most of
the water delivered by the channel would go through the fish screen and be drawn into
gated inlets to be conveyed across the Goldfields.
The more extensive operation of the project contemplated by the District and the
Brophy Water District in 1984 did not occur. The 600 cubic feet per second diversion
rate mentioned in the 1984 agreements was an estimate of the irrigation and other water
supply needs of southern Yuba County served by other districts and municipalities.
Excavation of deposits ended up being required about every other year.
In 1990, the Yuba Water Agency entered into a facilities agreement (the facilities
agreement) with the District regarding the project. It provided for the transfer of
ownership of the District’s portion of the project, except for the diversion works on the
Yuba River and the 1983 conveyance agreement with the owner of the Goldfields. The
6
facilities agreement gave the Yuba Water Agency the exclusive right to use and operate
the entire project facilities, including the diversion works and conveyance system. The
District assigned to the Yuba Water Agency its benefits and duties under its 1984
agreements with the Department. Thereafter, the Yuba Water Agency operated the
project, including performing periodic maintenance excavation work in the riverbed
under the District’s permit.
The Yuba Water Agency supplied water to the District under a separate contract
that expired in 2016. In 2017, the parties signed a new water supply contract with a
maximum rate of diversion during irrigation season of 150 cubic feet per second. During
this time period, the facilities agreement had also expired and the relationship between
the District and the Yuba Water Agency was adversarial.
In 2017, high river flows caused flood damage to the diversion facilities, rendering
them inoperable. In April 2017, the Yuba Water Agency submitted a notification of
emergency work regarding the diversion project to the Department pursuant to section
1610. In November 2017, the Department notified the Yuba Water Agency it believed
the agency had completed the emergency work and the current work being performed
was a new, non-emergency project that required the agency to obtain a streambed
alteration agreement.
While the Yuba Water Agency worked on obtaining a streambed alteration
agreement, the District started corresponding with the Department and arguing it was
entitled to conduct the excavation maintenance under the 1984 agreements.
In June 2018, the District conducted two days of excavation in the river. The
Department ordered the District to cease work. The work stopped when the Department
sent its law enforcement to the site.
A few days later, the Department issued a notice of violation of section 1602 for
the District’s excavation. In response to the District’s further attempts to conduct
excavation and requests to arbitrate their disputes under the agreement for routine
7
maintenance, the Department took the position the agreement for routine maintenance
was no longer valid due to changed conditions and a new streambed alteration agreement
was required. It also noted it had already given the Yuba Water Agency a streambed
alteration agreement for similar activities.
The Department first issued a streambed alteration agreement to Yuba Water
Agency in August 2018, and the agreement prohibited work prior to July 1. The current
five-year streambed alteration agreement permits the Yuba Water Agency to “initiate
work beginning April 1 in consultation with” the Department.
C. Procedural Background
Appellants filed the underlying action against the Department and its director
(together, respondents) in 2018. Appellant Morrison Graf is a holder of a beneficial
interest in land within the District. The other individual plaintiffs are directors of the
District and also hold an ownership interest in land within the District. The first amended
complaint added the Yuba Water Agency as a defendant. Appellants’ second amended
complaint alleges causes of action for breach of contract, issuance of a writ of mandate
pursuant to Code of Civil Procedure section 1095, inverse condemnation, and declaratory
relief. The court sustained respondents’ demurrer to appellants’ inverse condemnation
claim without leave to amend. The Department filed a cross-complaint against the
District alleging it violated section 1602 by excavating and removing gravel from the
Yuba River in 2018 without a streambed alteration agreement, and seeking a declaration
that the agreement for routine maintenance was void due to changed conditions.4
In 2024, a trial was held regarding appellants’ contract claims and the District’s
and the Department’s declaratory relief claims. The Department dismissed its section
1602 claim after trial. The trial court issued a lengthy final statement of decision.
4 The Yuba Water Agency also filed a cross-complaint. The District and the Yuba
Water Agency settled their claims against each other.
8
The court concluded: “[The District] cannot “read the ‘substantially changed’
clause and its requirement of a new notification and agreement out of [former] section
1601 just because the parties agreed in advance in 1984 to consult regarding any
conditions on periodic maintenance and resolve or arbitrate any differences. If the 1984
agreements are interpreted as contracting away [the Department]’s obligation to require a
new notice and agreement if conditions substantially change adversely to fish and
wildlife, they would be impermissibly contracting away the state’s police power.
[Citation.] [¶] However, the court finds that the agreements must be interpreted as
incorporating, not negating, this provision.”
The trial court’s ruling made findings of fact under former section 1601 regarding
whether conditions affecting fish and wildlife have substantially changed, and whether
these resources are adversely affected by the excavation in the riverbed.
The court explained how in the decades after construction of the cross channel and
diversion works, the river channels carrying water during irrigation season fundamentally
changed and the flood events of 2017 “drastically changed the geomorphology of the
riverbed, requiring reconstruction of the levee, fish screen rock wall, and channel
bringing water to them.”
After construction of the diversion works, the cross channel that was excavated
brought water from the north side of the riverbed to the south side at a 90-degree angle to
the river. Over the years, a second south river channel developed. The cross channel still
crossed a wide, dry gravel bar, though the gravel bar and the cross channel were eroding.
Until 2017, the presence of the cross channel and its angle still rendered the works an off-
river diversion.
The trial court found the high river flows in early 2017 rendered the works
inoperable and forced the Yuba Water Agency to reconstruct them. The channel
morphology had changed dramatically. “The gravel bar between the south river channel
and the fish screen was essentially gone and part of the levee had eroded away. The
9
[Yuba Water Agency] had to reconstruct the levee in front of the fish screen, making it
wider, and the agency had to excavate the river channel upstream of the previous location
of the cross channel.” The court found “the facility has become an ‘on river’ facility,
with the south braid of the Yuba River now flowing directly into the opening in the levee
and along the fish screen in front of the diversion gates.” Based on these changes to the
channels, the trial court explained that the periodic excavation of gravel now takes place
in the flowing river itself. Further, the new south river channel is wider than the previous
cross channel and more prone to accumulate debris due to the difference in angles.
“Now, a major channel of the Yuba River flows all year directly into the fish screen, as
well as directly past the other side of the levee and the outlet of the bypass channel. As a
result, debris deposited by flows now have to be cleared from this river channel as it
flows as a wider channel towards and into the fish screen.”
The court explained that the south river channel is now the most attractive
pathway for migrating salmonids, which increases the chance of salmonid migration
through the channel and past the diversion works. The court found there were adverse
impacts on sturgeon spawning through turbidity from the excavation flowing down the
south channel of the Yuba River and being deposited on eggs below Daguerre Point
Dam. Based on these findings and the evidence of potential for harm to juvenile
salmonids and redds5 from excavation, both directly and resulting from turbidity, the
court found conditions affecting fish resources had substantially changed by 2017 and
that those resources were adversely affected by the change.
The court found that, “as to the periodic maintenance of the channel bringing
water to the project, conditions affecting fish and wildlife resources have substantially
changed and such resources are adversely affected by those activities. This change
5 A redd is essentially a nest certain fish create when they spawn.
10
occurred, at the latest, in 2017. As of that date, [the District] was required to provide
notice and seek a new agreement with [the Department] to obtain authority to conduct
that work.” Further, “[the Department]’s obligations under the 1984 agreement,
including to negotiate and arbitrate the conditions on routine maintenance, were no
longer in effect in 2018 when [the District] sought to invoke them.”
The court found the Department did not breach the 1984 agreements.
The trial court entered judgment in favor of the Department and against appellants.
The trial court awarded the Department $71,210.56 in costs. Appellants filed a timely
appeal.
II. DISCUSSION
A. Standard of Review
Appellants assert the issues on appeal are subject to de novo review because they
involve questions of statutory interpretation, contract interpretation, and the legal
question of whether demurrer was properly sustained. This is only partially correct. In
particular, appellants’ assertion that there is no substantial evidence to support the trial
court’s finding in favor of the Department under former section 1601 is not subject to de
novo review.
“In reviewing a judgment based upon a statement of decision following a bench
trial, we review questions of law de novo. [Citation.] We apply a substantial evidence
standard of review to the trial court’s findings of fact. [Citation.] Under this deferential
standard of review, findings of fact are liberally construed to support the judgment and
we consider the evidence in the light most favorable to the prevailing party, drawing all
reasonable inferences in support of the findings. [Citation.]
“A single witness’s testimony may constitute substantial evidence to support a
finding. [Citation.] It is not our role as a reviewing court to reweigh the evidence or to
assess witness credibility. [Citation.] ‘A judgment or order of a lower court is presumed
to be correct on appeal, and all intendments and presumptions are indulged in favor of its
11
correctness.’ [Citation.] Specifically, ‘[u]nder the doctrine of implied findings, the
reviewing court must infer, following a bench trial, that the trial court impliedly made
every factual finding necessary to support its decision.’ ” (Thompson v. Asimos (2016) 6
Cal.App.5th 970, 981.)
“In reviewing an order sustaining a demurrer, we examine the operative complaint
de novo to determine whether it alleges facts sufficient to state a cause of action under
any legal theory.” (T.H. v. Novartis Pharmaceuticals Corp. (2017) 4 Cal.5th 145, 162.)
“ ‘[E]rror must be affirmatively shown.’ ” (Denham v. Superior Court (1970) 2
Cal.3d 557, 564.) “To demonstrate error, appellant must present meaningful legal
analysis supported by citations to authority and citations to facts in the record that support
the claim of error. [Citations.] When a point is asserted without argument and authority
for the proposition, ‘it is deemed to be without foundation and requires no discussion by
the reviewing court.’ [Citations.] Hence, conclusory claims of error will fail.” (In re
S.C. (2006) 138 Cal.App.4th 396, 408.)
We note that at times, appellants provide citations to authority that lends no
support to their arguments. Other times, appellants cite cases without providing “jump
cites to the pages of those cases where pertinent holdings purportedly exist.” (In re S.C.,
supra, 138 Cal.App.4th at p. 411.) “[I]t is not the role of an appellate court to carry
appellate counsel’s burden.” (Id. at p. 412.)
B. The 1984 Agreements Do Not Override the Substantially Changed Conditions
Provision of Former Section 1601
1. The 1984 Agreements
Appellants argue the District’s agreements and rights to conduct excavation and
maintenance are irrevocable. Specifically, they disagree with the trial court’s holding
that the agreement for routine maintenance and “any provision of the Master Agreement
(such as ¶¶ 3.0 or 10.0) that also could be interpreted as being a streambed alteration
12
permit” are no longer valid due to substantially changed conditions under former section
1601. The referenced paragraphs of the Master Agreement state in pertinent part:
“This agreement shall constitute an irrevocable permit to operate and maintain,
repair and reconstruct, the alternative facilities described in Exhibit ‘D’ including the
issuance of a 1601 agreement authorizing District to reasonably relocate materials in the
River restricting water flowing to the river diversion works.”
“[The Department] has, concurrent with the execution of this Agreement, issued a
1601 Permit, attached as Exhibit ‘E’, and included herein, for portions of the South Yuba
Project which might be subject to that requirement. This Agreement shall constitute an
irrevocable permit to operate, maintain, repair or reconstruct all portions of the South
Yuba Project, including any drains, all as described in Exhibit B-1 and C.”
Appellants argue the Master Agreement states that it, together with the
incorporated agreement for routine maintenance, constitutes an irrevocable permit, and
that the District has an irrevocable contractual right to conduct excavation. The trial
court found that the parties intended the agreement for routine maintenance to be the
permit issued in 1984 that covered maintenance of the project following its construction.
It states that it satisfies the requirements of former section 1601 and does not itself use
the word “irrevocable.” “Only the Master Agreement [citation], which addressed
construction of the diversion facilities and attached their proposed plans, uses the term
‘irrevocable.’ ” The trial court found that reference to an irrevocable permit in paragraph
3.0 of the Master Agreement “anticipated that maintenance of the channel would be
covered by a distinct ‘issuance of a 1601 agreement.’ ” It explained that paragraph 10.0
also indicates it is the Master Agreement, and not the attached agreement for routine
maintenance, that is irrevocable. The court found the 1984 agreements “should not be
interpreted as overriding the ‘substantially changed conditions’ provision of former
section 1601 … and that any such interpretation would be void as contracting away [the
Department]’s police powers.” The court determined the agreements must be interpreted
13
as incorporating, not negating this provision of former section 1601. It noted the parties
are presumed to have known and had in mind the applicable laws. (Miracle Auto Center
v. Superior Court (1998) 68 Cal.App.4th 818, 821.) The court stated that a District
official “admitted that the changed circumstances provision of [former] section 1601 was
incorporated in the agreement.” We agree with the trial court that the 1984 agreements
do not override the substantially changed conditions provision of former section 1601.
The Master Agreement states that it is “an irrevocable permit to operate and maintain”
the project, “including the issuance of a 1601 agreement.” It does not suggest the
limitations set forth in former section 1601 do not apply.
Appellants argue former section 1601 does not require a new streambed alteration
agreement if conditions affecting fish resources substantially change and the resources
are adversely affected by activity under the agreement. Rather, appellants assert former
section 1601 contemplates what it contends the agreement for routine maintenance and
Master Agreement contemplate—subsequent notice and agreement to “account for
changed conditions” and, if an agreement cannot be reached, arbitration. We disagree to
the extent appellants interpret an agreement as something short of a new streambed
alteration agreement. Former section 1601 provides: “With regard to any project which
involves routine maintenance and operation of water supply … facilities, notice to and
agreement with the department shall not be required subsequent to the initial notification
and agreement unless the work as described in the agreement is substantially changed, or
conditions affecting fish and wildlife resources substantially change, and such resources
are adversely affected by the activity conducted under the agreement.” (Stats. 1976, ch.
603, § 2, p. 1449.) The agreement described in former section 1601 is what the Master
Agreement referred to as a “1601 agreement” and “1601 Permit,” and what is now
specifically defined as a “streambed alteration agreement.” (§ 1601, subd. (a)
[“ ‘Agreement’ means a lake or streambed alteration agreement”]; see Siskiyou County
Farm Bureau v. Department of Fish & Wildlife (2015) 237 Cal.App.4th 411, 442
14
[explaining term “streambed alteration agreements” was added in 2003 amendments]; see
also Environmental Protection Information Center v. California Dept. of Forestry & Fire
Protection (2008) 44 Cal.4th 459, 518, fn. 22 [explaining entire statutory scheme for
streambed alternation agreements was amended in 2003].) Former section 1601 provides
that notice and agreement subsequent to the initial notice and agreement as set forth in its
provisions are not required unless there was a substantial change in conditions. Thus,
when there is a substantial change in conditions, the converse is true: notice and a new
streambed alteration agreement is required to cover the new conditions. We disagree
with appellants’ suggestion to the contrary. As the trial court explained, “[t]he parties’
1984 agreement to resolve or arbitrate disputes about routine maintenance activities must
be differentiated from the statutory mandate to renew the application process and obtain a
new streambed alteration agreement if conditions substantially change.”
Appellants note the agreement for routine maintenance states it “will satisfy the
requirements of [former s]ection 1601.” (Italics added.) This immediately follows the
recital, “Whereas, pursuant to [former s]ection 1601 …, the Districts must notify the
Department of its intentions to substantially divert or obstruct the natural flow of; or
substantially change the bed, channel, or bank; or use material from streambeds
designated by the Department.” Former section 1601 also provides that “[t]he
department shall determine and specify types of work, methods of performance or
remedial measures which shall be exempt from the operation of this section.” (Stats.
1976, ch. 603, § 2, p. 1449, italics added.) Appellants argue “the parties agreed that
District’s agreements and rights therein would be exempt from any authority that could
render them revocable or the diversion of water or functioning of the fish screen
interruptible, including any such clause of former [section] 1601.” We do not agree that
the agreement for routine maintenance’s reference to satisfying the requirements of
former section 1601 is an exemption thereto. In particular, it is not an exemption to the
concept that a new agreement is required when conditions have substantially changed.
15
Rather, it recognizes that the requirements of former section 1601 applied to the
agreement. Moreover, we do not read the statements in the Master Agreement regarding
irrevocability as creating an exception to former section 1601.
2. Police Powers
Appellants contend the agreements comply with the reserved powers doctrine.
This is a disagreement with the trial court’s statement that “[i]f the 1984 agreements are
interpreted as contracting away [the Department]’s obligation to require a new notice and
agreement if conditions substantially change adversely to fish and wildlife, they would be
impermissibly contracting away the state’s police power.” (Italics added.) The trial court
cited County of Ventura v. City of Moorpark (2018) 24 Cal.App.5th 377, 390, which
explained that “[a] government entity may not surrender, for a potentially indefinite
period of time, its authority to exercise discretion on matters within its police power.”
There, the appellate court found sections of a settlement agreement void because they
surrendered the Broad Beach Geologic Hazard Abatement District’s discretion to alter
haul routes in the future. (Ibid.) “[I]t is settled that the government may not contract
away its right to exercise the police power in the future.” (Avco Community Developers,
Inc. v. South Coast Regional Com. (1976) 17 Cal.3d 785, 800, superseded by statute on
other grounds as stated in Davidson v. County of San Diego (1996) 49 Cal.App.4th 639,
646-647.) Therefore, even assuming the Master Agreement included a promise by the
Department not to require a new streambed alteration agreement due to substantially
changed conditions in the future, “the agreement would be invalid and unenforceable as
contrary to public policy.”6 (Ibid.)
6 Appellants incorrectly rely on arguments pertaining to voidable contracts. “Black’s
Law Dictionary (12th ed. 2024) defines ‘void ab initio’ as ‘[n]ull from the beginning, as
from the first moment of a contract is entered into. A contract is void ab initio if it
seriously offends law or public policy, in contrast to a contract that is merely voidable at
16
Appellants contend the agreements do not impermissibly contract away the state’s
police power because police power is the broad authority to enact legislation for good,
and the Department “does not have power to legislate,” and the agreements do not
expressly bargain away the power to legislate. We are unpersuaded. “The police power
is ‘the power of sovereignty or power to govern—the inherent reserved power of the state
to subject individual rights to reasonable regulation for the general welfare.’ [Citation.]
The police power extends to legislative objectives in furtherance of public peace, safety,
morals, health and welfare.” (Massingill v. Department of Food & Agriculture (2002)
102 Cal.App.4th 498, 504.) With respect to the statutory scheme surrounding streambed
alteration agreements, our Legislature has explained “the protection and conservation of
the fish and wildlife resources of this state are of utmost public interest. Fish and wildlife
are the property of the people and provide a major contribution to the economy of the
state, as well as providing a significant part of the people’s food supply; therefore their
conservation is a proper responsibility of the state. This chapter is enacted to provide
conservation for these resources.” (§ 1600; accord Stats. 1976, ch. 603, § 2, p. 1447.)
The Department is part of the Natural Resources Agency (§ 700) and is tasked with
administering the Fish and Game Code (§ 702). It “is the agency of the state charged
with conservation and maintenance of the wildlife resources of the state.” (Sierra Club v.
State Bd. Of Forestry (1994) 7 Cal.4th 1215, 1234; see also § 712.1, subd. (a)(1) [“The
department’s mission is to manage California’s diverse fish, wildlife, and plant resources,
and the habitats upon which they depend, for their ecological values and for their use and
enjoyment of the public”].) Requiring a new streambed alteration agreement under
former section 1601 by the Department is an exercise of its regulatory police powers.
(See Siskiyou County Farm Bureau v. Department of Fish & Wildlife, supra, 237
the election of one party to the contract.’ ” (Picayune Rancheria of Chukchansi Indians
v. North Fork Rancheria of Mono Indians (2025) 117 Cal.App.5th 91, 108, fn. 5.)
17
Cal.App.4th at p. 446 [interpreting section 1602 and explaining that “[i]f a given
diverter’s usage is found to be substantial, requiring compliance with mitigation measures
or halting such usage would not be a taking, but a proper exercise of regulatory police
powers”].)
Appellants also argue the agreements do not impermissibly contract away the
state’s police power because the Department can engage in arbitration and it is the
arbitration panel that “makes the final determination.” Appellants contend the arbitration
provision in the agreement for routine maintenance renders County of Ventura v. City of
Moorpark, supra, 24 Cal.App.5th 377 distinguishable. Appellants assume arbitration can
compel modifications to the agreement. As previously set forth, the agreement for
routine maintenance provides that disputes regarding the District’s “activities pursuant
to” the agreement for Routine Maintenance are to be “resolved by procedures set forth
in” former section 1601. This language does not expressly provide that the agreement
itself can be modified through arbitration. Moreover, to the extent appellants argue that
portions of the Master Agreement render the Department unable to ever require a new
streambed alteration agreement based on substantially changed conditions despite
statutory authority to the contrary, we agree that would be an impermissible contracting
away of the state’s police power. Further, we should “not read into the contracts an
abrogation of the potential future exercise of the sovereign police power.” (Professional
Engineers v. Department of Transportation (1993) 13 Cal.App.4th 585, 591.) “[T]he
reservation of this power is implicit in all government contracts and private parties take
their rights subject to it.” (Ibid.) Thus, we find no error in the trial court’s conclusion
that in the event of substantially changed circumstances under former section 1601, a new
streambed alteration agreement was required.
C. The Department Is Not Obligated to Arbitrate Under the Old Agreement
Appellants argue the Department is obligated to engage in arbitration. As
previously set forth, the agreement for routine maintenance provides that “[d]isputes
18
regarding Districts’ activities pursuant to this Agreement shall be resolved by procedures
set forth in” former section 1601. The District requested arbitration under this provision
and the Department took the position the agreement for routine maintenance was invalid
due to substantially changed conditions. We agree with the trial court that “[t]he parties’
1984 agreement to resolve or arbitrate disputes about routine maintenance activities must
be differentiated from the statutory mandate to renew the application process and obtain a
new streambed alteration agreement if conditions substantially change.” The trial court
explained that “the parties’ agreement in 1984 to agree upon (or arbitrate) annual
conditions on the inherently variable channel maintenance was subject to the caveat that
new notice and agreement for a permit was required if conditions substantially changed.”
The trial court found the Department’s obligations under the 1984 agreement, including
to negotiate and arbitrate the conditions on routine maintenance, were no longer in effect
in 2018 when the District sought to invoke them. Appellants essentially argue the parties
agreed on arbitration rather than a new agreement as the mechanism to deal with
substantially changed conditions. Similarly, they argue the prior agreement cannot be
invalidated until the District presents a list of the protective measures it seeks and
engages in arbitration of any disputes. These arguments are unpersuasive. Whether or
not the original agreement contained vague terms because of the inherent variability of
the contemplated maintenance work, here the trial court found, “as to the periodic
maintenance of the channel bringing water to the project, conditions affecting fish and
wildlife resources have substantially changed and such resources are adversely affected
by those activities.” Under former section 1601, the old streambed alteration agreement
no longer applies, and a new agreement is required. This is not, as appellants suggest,
inconsistent with any legislative directive that arbitration be used to resolve disputes
because former section 1601 directs that a new streambed alteration agreement process be
commenced—not merely arbitration. The trial court did not err in concluding the
19
Department was not obligated to arbitrate outside of a new streambed alteration
agreement process.
D. The Department Did Not Breach the 1984 Agreements
Appellants argue the court erred in concluding the Department did not breach the
1984 agreements.7 As previously set forth, the Department was under no obligation to
arbitrate without a new streambed alteration agreement process. As such, the trial court
did not err in concluding the Department did not breach an obligation to arbitrate
conditions on routine maintenance.
Appellants assert the Department did not adhere to section 1612 before suspending
an agreement, but even assuming this statute applies to streambed alteration agreements
entered into in 1984, it would only apply if the agreement was suspended because it was
not complied with: “The department may suspend or revoke an agreement at any time if
it determines that an entity is not in compliance with the terms of the agreement or fails
to provide timely status reports as required by subdivision (g) of Section 1605. The
department shall adopt regulations establishing the procedure for suspension or
revocation of an agreement. The procedure shall require the department to provide to the
entity a written notice that explains the basis for a suspension or revocation, and to
provide the entity with an opportunity to correct any deficiency before the department
suspends or revokes the agreement.” (§ 1612.) These provisions are inapplicable to the
situation where a new agreement is required due to changed conditions.
7 Lurking under this heading is an undeveloped argument that the trial court’s decision is
incompatible with due process. “Failure to provide proper headings forfeits issues that
may be discussed in the brief but are not clearly identified by a heading.” (Pizarro v.
Reynoso (2017) 10 Cal.App.5th 172, 179.) Additionally, the authorities cited by
appellants do not demonstrate any basis for concluding the fact a new streambed
alteration agreement is required by former section 1601 violates due process.
20
As the trial court explained, appellants’ other claims for breach of contract are
based on paragraph 4.0 of the Master Agreement, in which the Department recognized
the “District’s need for certainty in the amounts of water it is entitled to divert and deliver
to its service areas, and the Department … agrees to take no action, direct or indirect,
aside from those necessary to achieve adequate fish screening, which would prevent the
South Yuba and Brophy Districts from diverting 600 [cubic feet per second] from the
Yuba River into the river diversion facilities contemplated in this [a]greement.” The trial
court found the Department had not breached this provision, either in the past or by
repudiating future performance. The trial court found the District has a contract with the
Yuba Water Agency to divert 150 cubic feet per second for its use “and [the Yuba Water
Agency] has never been unable to do so because of the actions of” the Department.
Appellants argue the Department has established it is prohibiting future excavation
before July 1, and this is an anticipatory breach of the Master Agreement and stipulated
judgment regardless of the validity of the agreement for routine maintenance.
“Repudiation of a contract, also known as ‘anticipatory breach,’ occurs when a party
announces an intention not to perform prior to the time due for performance.” (Stephens
& Stephens XII, LLC v. Fireman’s Fund Ins. Co. (2014) 231 Cal.App.4th 1131, 1150.)
Appellants argue no temporal limitation is found in the Master Agreement or stipulated
judgment, and maintenance before July 1 is required for certainty in the amount of water
that can be diverted. As appellants acknowledge, the trial court found that, since 2018,
the Department “has allowed routine maintenance prior to July 1 when needed. While
the conditions in the [Yuba Water Agency] permits speak for themselves and require that
concurrence from [the Department], there was no evidence that [the Department] will
discontinue that practice.” Appellants have failed to establish that any of the trial court’s
findings were not supported by substantial evidence or any error in the trial court’s
rejection of its breach of contract claim.
21
E. The Department Was Not Required to Commence a Condemnation Proceeding
Appellants make an underdeveloped argument that the Department was required to
commence a condemnation proceeding to escape its contractual obligations. They cite no
authority that actually supports this assertion. As such, appellants have failed to establish
any error on this point.
F. The Trial Court’s Findings Under Former Section 1601
1. The Trial Court Did Not Misapply the Law
As previously set forth, former section 1601 provides that “[w]ith regard to any
project which involves routine maintenance and operation of water supply … facilities,
notice to and agreement with the department shall not be required subsequent to the
initial notification and agreement unless the work as described in the agreement is
substantially changed, or conditions affecting fish and wildlife resources substantially
change, and such resources are adversely affected by the activity conducted under the
agreement.” (Stats. 1976, ch. 603, § 2, p. 1449.) The court quoted this statutory
requirement and explained that its “findings of fact [] focus on whether ‘conditions
affecting fish and wildlife [have] substantially change[d], and such resources are
adversely affected by the activity conducted,’ namely the excavation in the river bed.”
Nonetheless, appellants proffer various arguments that the trial court misapplied the law
in conducting this analysis. As we will explain, we find each of these arguments
unpersuasive.
Appellants contend the trial court misinterpreted and misapplied former section
1601 because, even where conditions have substantially changed, the resources must be
adversely affected by the activity conducted under the agreement. This argument is
unavailing because the court understood the law and made the necessary finding. The
court found that, “as to the periodic maintenance of the channel bringing water to the
project, conditions affecting fish and wildlife resources have substantially changed and
such resources are adversely affected by those activities.” Appellants’ arguments are
22
based on instances in which the court phrased the requirement differently: “The court
therefore finds that conditions affecting fish resources have substantially changed (at the
latest by 2017) and those resources are adversely affected by the change.” (Italics
added.) In context, it is clear the court applied the proper analysis. This statement
followed the trial court’s discussion of the resulting impacts on fish due to the activity
conducted under the agreement and not merely the substantial changes to the
geomorphological conditions above the dam. Indeed, appellants’ next argument
contradicts the assertion that the trial court omitted a finding of adverse effect from the
activity conducted under the agreement by challenging this finding as being based on
potential rather than actual adverse effects. We turn now to this assertion.
Appellants contend the trial court misinterpreted former section 1601 because
there must be actual as opposed to potential adverse effects and harm to fish from the
activities conducted under the agreement. The court discussed the evidence of potential
adverse effects before making the finding required by statute. Ultimately, the court found
“there were adverse impacts on sturgeon spawning, through turbidity from the excavation
flowing down the south channel of the Yuba River and being deposited on eggs below
Daguerre Point [D]am. The evidence showed current potential for harm generally to
juvenile salmonids and redds from excavation, both directly and from resulting turbidity.
Though [the District]’s fish biologist found none in the areas surveyed on two dates in
June, 2018, the court finds that they are now more likely to be present in the south
channel in the area of the excavation as it is flowing water into the diversion facilities and
downstream of that area, including as to the channel flows to and over Daguerre Point
Dam. [¶] The court therefore f[ound] that conditions affecting fish resources have
substantially changed (at the latest by 2017) and those resources are adversely affected by
the change.” We are unpersuaded the trial court misinterpreted the statute by considering
evidence of the probability of adverse impacts alongside evidence of actual impacts in
23
making its factual findings that there were adverse effects. And once again, we now turn
to an argument that essentially disproves the one we just rejected.
Apparently recognizing the trial court found actual adverse impacts on sturgeon,
appellants contend that because the court did not make findings that conditions affecting
sturgeon (including spawning sturgeon eggs) have substantially changed, any alleged
impacts to sturgeon and the court’s statements regarding sturgeon are not sufficient as a
matter of law to meet the requirements of former section 1601. This argument relies in
part on a misunderstanding of the trial court’s ruling. The court found that the listing of a
certain type of sturgeon was not a changed condition; it did not find that there were no
changed conditions as to sturgeon. Appellants argue the changed conditions found by the
trial court—geomorphological changes above Daguerre Point Dam—do not substantially
affect sturgeon and spawning sturgeon eggs, because they cannot swim past the dam to
the area where excavation work is conducted under the agreements. This is irrelevant
because the court found there were adverse impacts on sturgeon through turbidity from
the excavation flowing down the south channel and being deposited on eggs below the
dam.
Appellants contend the trial court improperly relied on hypothetical excavation
activities in the flowing river without protective measures and when species are present
rather than the actual activity conducted under the agreement at issue. The trial court did
consider the effects of the activity conducted under the agreement at issue. Moreover,
appellants’ argument essentially asks us to reweigh the evidence, which we cannot do.
(Thompson v. Asimos, supra, 6 Cal.App.5th at p. 981.) Further, appellants’ suggestion
that because the Yuba Water Agency has a streambed alteration agreement, the
Department could have engaged in arbitration to obtain the same protective measures and
therefore there can be no harm as a matter of law under the old streambed alteration
agreement is unavailing.
24
Appellants assert the court erred as a matter of law in its analysis because the trial
court failed to account for “baseline conditions” in making its determination. We again
conclude appellants essentially ask us to reweigh the evidence under the guise of
asserting legal error. The trial court detailed both the project plans and the cross channel
that was originally constructed before explaining the substantial changes that occurred.
Appellants suggest the agreement for routine maintenance anticipated the river’s
geomorphology would change through its sparse terms, and thus geomorphological
changes in the river cannot be used to invalidate the agreement for routine maintenance.
We disagree with the suggestion that the language of the agreement for routine
maintenance anticipated the changes at issue here such that the court’s analysis of
substantial change amounted to legal error.
We reject each of appellants’ assertions that the trial court’s findings under former
section 1601 were based on any legal error.
2. The Trial Court’s Findings Were Supported By Substantial Evidence
Alternatively, appellants argue there is no substantial evidence to support a finding
in favor of the Department under former section 1601. This argument is equally
unpersuasive. Again, we do not reweigh the evidence in conducting a substantial
evidence review. Appellants cite testimony that the original design of the cross-river
channel was not at a 90-degree angle with the river and was in that way similar to the
current south channel. Nonetheless, the same witness testified the cross-river channel, as
designed, differed from the current south channel because it was not a branch of the river
and would not continue down to the dam as the south channel does. Moreover, there was
substantial evidence that the new channel carries more sediment to the fish screen and is
a migratory pathway for fish. Further, the operation of heavy equipment in the channel
would disturb fish and suspend fine sediment. There was evidence to support the trial
court’s conclusion the excavation work harmed fish. Substantial evidence supported the
25
trial court’s finding of a factual basis for requiring a new streambed alteration agreement
under former section 1601.
G. The Stipulated Judgment Did Not Preclude the Trial Court’s Findings
Appellants argue the Department must petition the Yuba County Superior Court to
be relieved of its obligations. The stipulated judgment entered by the Yuba County
Superior Court in 1984 states that the water diversion project “when constructed
substantially in accordance with the project descriptions above set forth or referred to,
including the standards and the mitigation measures therein described, will adequately
mitigate … any adverse fishlife impacts on downstream migrant salmon and steelhead in
the Yuba River that might result from such river diversion facilities.” Appellants argue
invalidating the agreement for routine maintenance “effectively extinguishes the
Stipulated Judgment” and also “violates the CEQA findings in the Stipulated Judgment.”
The trial court found the stipulated judgment did not preclude the Department from now
contending the conditions, as they affect fish and wildlife resources, have changed.
Appellants have failed to demonstrate any error in this conclusion. Moreover, appellants
have failed to demonstrate the Department was required to petition the Yuba County
Superior Court for relief from the stipulated judgment.
H. Res Judicata and Collateral Estoppel Do Not Apply
Appellants argue the Department’s claims are barred by res judicata and collateral
estoppel because the validity of the District’s agreements and alleged changed
circumstances were litigated in a 2012 proceeding. Our Supreme Court has “frequently
used ‘res judicata’ as an umbrella term encompassing both claim preclusion and issue
preclusion, which [it] described as two separate ‘aspects’ of an overarching doctrine.”
(DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 823.) The primary aspect is now
referred to as “claim preclusion” rather than “res judicata.” (Id. at p. 824; Samara v.
Matar (2018) 5 Cal.5th 322, 326.) The secondary aspect is now referred to as “issue
preclusion” rather than “collateral estoppel.” (DKN Holdings, supra, at p. 824; Samara,
26
supra, at p. 326.) Appellants’ briefing fails to acknowledge or discuss the requirements
for applying either issue or claim preclusion. (See DKN Holdings, supra, at pp. 824-825
[outlining requirements for issue and claim preclusion].) Regardless, neither type of
preclusion applies because the changes the trial court in this proceeding found substantial
had not yet occurred at the time of the prior proceeding. (See Planning & Conservation
League v. Castaic Lake Water Agency (2009) 180 Cal.App.4th 210, 227 [res judicata
“may not apply when ‘there are changed conditions and new facts which were not in
existence at the time the action was filed upon which the prior judgment is based’ ”].)
I. Appellants’ Inverse Condemnation Claim Is Moot
As previously set forth, the court sustained respondents’ demurrer to appellants’
cause of action for inverse condemnation without leave to amend. This cause of action
alleged the District has “contractual rights to utilize and enjoy property and to continue to
operate, maintain and utilize that property as set forth in” the 1983 agreement with Yuba
Natural Resources, the Master Agreement, and the agreement for routine maintenance.
The trial court sustained the demurrer to this cause of action on the basis that a political
subdivision of the state such as the District does not possess the legal standing necessary
to prosecute on behalf of its constituent landowners and water users a claim for inverse
condemnation against the state. Additionally, the trial court explained that “the right to
operate the subject water diversion facility and to excavate the river to ensure water flow
(which right was allegedly taken by the Department) arose from contract,” and a
constitutionally-protected property interest must support a cause of action for inverse
condemnation. Appellants contend the trial court erred in sustaining respondents’
demurrer to their cause of action for inverse condemnation. Relatedly, they argue they
alleged sufficient facts to establish they have standing to maintain a claim for inverse
condemnation.
Respondents argue the inverse condemnation claim is moot because it was
premised on the agreement for routine maintenance and the provisions of the Master
27
Agreement that the trial court determined to be invalid. (Behr v. County of Santa Cruz
(1959) 172 Cal.App.2d 697, 713-714.) On reply, appellants argue they also had rights
under other parts of the 1984 agreements as well as the 1983 agreement with Yuba
Natural Resources, including the right to operate and maintain the diversion and to divert
water, and an exclusive license and easement. The parties disagree whether the 1983
agreement between the District and Yuba Natural Resources that granted the District the
exclusive right to use the land for water diversion facilities could support the inverse
condemnation claim. We agree with respondents that because this agreement does not
authorize unrestricted excavation of the Yuba River, it cannot form the basis for a cause
of action for inverse condemnation. Furthermore, to the extent appellants’ claims are not
already mooted by the trial court’s determination of their obligations under the referenced
agreements, their arguments conflict with the factual findings the trial court made in the
context of denying their breach of contract claims. As such, we agree with respondents
that the issue is moot.
J. The Trial Court Did Not Err by Awarding Costs to the Department
Appellants argue the trial court erred by awarding costs to the Department because
it unsuccessfully prosecuted a claim for a violation of section 1602. They also assert the
cost award under Code of Civil Procedure section 998 is improper because it was
unreasonable and had no realistic prospect of acceptance.
“The general cost recovery rule in California entitles the prevailing party in a civil
action or proceeding to recover its litigation costs as a matter of right. Code of Civil
Procedure section 1032 sets out the rule and defines who qualifies as a ‘prevailing party.’
… [¶] [Code of Civil Procedure s]ection 998 modifies [Code of Civil Procedure] section
1032’s general rule. To encourage the settlement of cases before trial, [Code of Civil
Procedure] section 998 shifts the liability for costs under some circumstances. As
relevant here, when a plaintiff rejects or fails to timely accept a qualifying defense offer
(section 998 offer), and then ‘fails to obtain a more favorable judgment or award,’ the
28
plaintiff is not entitled to its postoffer litigation costs and must pay some or all of the
defendant’s postoffer costs.” (Madrigal v. Hyundai Motor America (2025) 17 Cal.5th
592, 599, fn. omitted.)
The authorities relied upon by appellants do not establish any error. (See Carver
v. Chevron U.S.A., Inc. (2002) 97 Cal.App.4th 132, 151 [“it was not an entire action that
was voluntarily dismissed, but only one cause of action among many”].)
III. DISPOSITION
The judgment is affirmed. Respondents Department of Fish and Wildlife and its
director shall recover their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (2).)
/S/
RENNER, J.
We concur:
/S/
MAURO, Acting P. J.
/S/
FEINBERG, J.
29