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Kern Pistachio Grower Ordered to Pay $30 Million in Groundwater Pumping Case
SJV-Water
By SJV Water
Published 4 weeks ago on
June 20, 2024

An Orange County court last week approved an injunction mandating that Mojave Pistachios LLC pay $30 million in back fees owed to the Indian Wells Valley Groundwater Authority for pumping groundwater without an allocation in Kern County’s eastern desert. (Shutterstock)

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An Orange County court last week approved an injunction mandating that Mojave Pistachios LLC pay $30 million in back fees owed to the Indian Wells Valley Groundwater Authority for pumping groundwater without an allocation in Kern County’s eastern desert.

Lois Henry portrait

Lois Henry

SJV Water

That $30 million is the accumulation of a $2,130-per-acre-foot fee for non-allocated pumping that was established by the authority in its groundwater sustainability plan and approved by the state back in 2022.

Mojave Pistachios objected to the fee and never paid it while it sued over the groundwater plan and continued pumping between 6,000 and 7,200 acre feet a year to irrigate 215,000 pistachio trees.

An Orange County court and later an appellate court both ruled that Mojave had to pay the fee before suing under the state’s “pay now, litigate later” rule even if the fee and groundwater plan were later found to be improper. The California Supreme Court declined to review Mojave Pistachio’s petition seeking an exception to the rule.

The authority then filed an injunction asking the Orange County court to force the farming operation pay the back fees as well as fees for current pumping. It won that injunction on Friday despite Mojave Pistachios’ insistence the fee would put it out of business.

‘Pay Now, Litigate Later’

“It’s tough,” acknowledged Orange County Superior Court Judge William Claster. “And if it ends up putting Mojave in bankruptcy, even that’s been held to be an acceptable result of this (pay now, litigate later) doctrine.”

A press release sent two days before the hearing, defined the stakes for Mojave Pistachios as “a battle for its very existence” and that if the injunction were granted it would “directly cause the death of 1,600 acres of trees and shutter a locally owned, private farming operation.”

An email to the spokesperson listed on the press release asking about next steps for the company and whether it would continue pursuing its other legal actions against the authority was not returned.

An attorney for the authority didn’t foresee Mojave Pistachios paying the $30 million in arrears plus ongoing fees.

“What we’ll likely got out of this is that they will stop pumping,” said Phillip Hall, an attorney with the Kern County Counsel’s office who represents the groundwater authority.

Mojave Pistachios Believes It Has Water Rights

The farming company is still pursuing an “illegal taking” action against the authority over what it believes are its water rights, according to a transcript of Friday’s hearing.

As for the other legal actions Mojave Pistachios is involved in, Hall said, the most relevant is the basin adjudication filed by the Indian Wells Valley Water District and several others against all pumpers in the valley.

“The water district, Searles (Valley Minerals), Meadowbrook (Dairy) and Mojave (Pistachios) want to replace the groundwater plan through adjudication,” Hall said.

This is where it gets even more complicated.

People have the right to petition a court to comb through and assign rights in groundwater basins. But under the Sustainable Groundwater Management Act, groundwater agencies are mandated to stem over pumping and maintain a balanced aquifer, meaning more water isn’t perpetually taken out than goes back in. The agencies are empowered to set fees and enforce pumping allotments in order to achieve that balance by 2040.

Indian Wells Valley Is Severely Overdrafted

The Indian Wells Valley is severely overdrafted with only about 7,600 acre feet of natural inflow every year and 28,000 acre feet of annual demand. Mojave Pistachios and others dispute those numbers, claiming there’s far more water in the basin than the authority has acknowledged.

“They (the plaintiffs) want to use adjudication to override the groundwater plan, act like it’s not even there. But that’s not what’s supposed to happen under SGMA,” Hall said. The state’s existing water code and SGMA should be “harmonized,” he said.

Judge Claster is trying to figure out how to navigate those two sets of statutes as the adjudication proceeds.

Meanwhile, the groundwater authority is proceeding under its plan.

It severely restricted pumping for most users with the exception of the U.S. Navy, which operates the China Lake Naval Weapons Base in the basin. The Navy got the lion’s share of pumping. Agricultural users, such as Mojave Pistachios, which started planting in the high desert around 2011, received zero pumping allocation.

Mojave Pistachios and other users, including the water district, which serves the majority of residents in the region, incur the $2,130-per-acre-foot “replenishment fee” under the authority’s plan. That fee is intended to raise $50 million so the authority can buy and import water from elsewhere in the state through a pipeline it’s also planning to build.

It is pursuing a water purchase from the Palmdale area and is moving forward with $8 million in fees and grants that have helped it complete the state and federal environmental reviews for the pipeline as well as the final construction design, Hall said. The authority anticipates two more rounds of federal funding in the near future, he said.

About SJV Water

SJV Water is an independent, nonprofit news site dedicated to covering water in the San Joaquin Valley. Get inside access to SJV Water by becoming a member.

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