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San Diego County Water Authority v. Metropolitan Water District of Southern California

California Court of Appeals, First District, Third Division

June 21, 2017

SAN DIEGO COUNTY WATER AUTHORITY, Plaintiff and Appellant,
v.
METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA et al., Defendants and Appellants.

         San Francisco County Nos. CFP-10-510830, CFP-12-512466 Superior Court Honorable Richard A. Kramer Curtis E.A. Karnow Trial judge

          Counsel for Plaintiff and Appellant Metropolitan Water District of Southern California: QUINN EMANUEL URQUHART & SULLIVAN, LLP John B. Quinn Eric J. Emanuel Valerie Roddy MORGAN LEWIS & BOCKIUS LLP Colin C. West Thomas S. Hixson QUINN EMANUEL URQUHART & SULLIVAN, LLP Kathleen M. Sullivan THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA Marcia Scully Heather C. Beatty Joseph Vanderhorst John D. Schlotterbeck

          THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA Marcia Scully Heather C. Beatty Joseph Vanderhorst John D. Schlotterbeck Michael N. Feuer, City Attorney Joseph A. Brajevich, General Counsel Julie C. Riley, Deputy City Melanie Tory, Deputy City Attorney MEYERS, NAVE, RIBACK, SILVER & WILSON Amrit S. Kulkarni Gregory J. Newmark

          MEYERS, NAVE, RIBACK, SILVER & WILSON Amrit S. Kulkarni Gregory J. Newmark MEYERS, NAVE, RIBACK, SILVER & WILSON Amrit S. Kulkarni Gregory J. Newmark

          City of Torrance: John L. Fellows III, CITY ATTORNEY Patrick Q. Sullivan, ASSISTANT CITY ATTORNEY

          Las Virgenes Municipal Water District, Eastern Municipal Water District, Western Municipal Water District, Foothill Municipal Water District, and West Basin Municipal Water District: LEMIEUX & O'NEILL Steven P. O'Neill Michael Silander

          Three Valleys Municipal Water District: BRUNICK, MCELHANEY & KENNEDY Steven M. Kennedy

          Counsel for amicus curiae Upper San Gabriel Valley Municipal Water District: LEMIEUX & O'NEILL Steven P. O'Neill

          Counsel for Defendants and Appellants San Diego County Water Authority: KEKER, VAN NEST & Peters LLP John W. Keker Daniel Purcell Dan Jackson Warren A. Braunig SAN DIEGO COUNTY WATER AUTHORITY Mark J. Hattam

          Pollak, J.

         Metropolitan Water District of Southern California (Metropolitan) appeals a judgment holding that the rate it charges for transporting water, or “wheeling, ” violates numerous provisions of law and awarding the San Diego County Water Authority (Water Authority) substantial damages for having charged that rate in breach of a water exchange agreement between the two agencies. The Water Authority cross-appeals, disputing the trial court's decision upholding a provision in water conservation program contracts between the two parties that penalizes it for participating in litigation or supporting legislation to challenge or modify Metropolitan's existing rate structure.

         The central issue in dispute is one of cost allocation: May the charge Metropolitan imposes for wheeling water purchased from a third party include an amount calculated to recover Metropolitan's allocable transportation costs over the California Aqueduct, part of the State Water Project, or must the charge be limited to costs allocable to transportation costs over those parts of its system that it owns and utilizes in the particular transaction? In Metropolitan Water Dist. v. Imperial Irrigation Dist. (2000) 80 Cal.App.4th 1403 (Imperial Irrigation) it was held, and the parties do not dispute, that the “wheeling statutes” (Wat. Code, § 1810 et seq.) do not as a matter of law prohibit the allocation of system-wide transportation costs to reasonable wheeling charges, so that wheeling rates need not be limited to the marginal cost of transporting water over the facilities used in a particular transaction. The trial court here held that although Metropolitan is required to pay its pro rata share of the costs of maintaining the California Aqueduct, these costs may not be considered in calculating Metropolitan's wheeling charges, essentially because Metropolitan does not own the aqueduct. We conclude this was error. The inclusion of Metropolitan's system-wide transportation costs, including transportation charges paid to the State Water Project, in the calculation of its wheeling rate does not, as the trial court held, violate the wheeling statutes, Proposition 26 (Cal. Const., art. XIIIC, § 1, subd. (e)), Government Code section 54999.7, subdivision (a), the common law, or the terms of the parties' exchange agreement.[1] We do agree with the trial court that the allocation of “water stewardship” charges to the wheeling rate is improper and that the Water Authority is entitled to recover the overcharges that resulted from inclusion of those charges in the rate charged by Metropolitan.

         With respect to the cross-complaint, we conclude that the trial court correctly held that the condition in the water conservation program contracts penalizing the Water Authority for exercising its right to seek judicial relief from the imposition of unlawful rates is an unconstitutional condition, but that the court erred in holding that the Water Authority lacks standing to challenge that condition.

         Therefore, it is necessary to remand the matter to the trial court for further proceedings consistent with this opinion.

         I. Factual Background[2]

         Metropolitan imports water from Northern California and the Colorado River along hundreds of miles of aqueducts and delivers it to a voluntary collective of public agencies, including the Water Authority. The Water Authority, in turn, delivers the water to retail water agencies serving households and businesses in San Diego County. To put the present controversy between the two agencies in proper perspective, it is necessary to begin with some history and an explanation of the manner in which the fixing of wholesale water rates has evolved.

         A. California's Water Supply

         “The history of California water development and distribution is a story of supply and demand” marked by an “uneven distribution of water resources” by region and season. (United States v. State Water Resources Control Bd. (1986) 182 Cal.App.3d 82, 98.) Regionally, most of California's rain and snow falls in the north while most of the demand arises in the south. (Ibid.) There is also an unequal distribution by season as precipitation occurs in the winter while demand is highest in the hot and dry summer months. (Ibid.) Precipitation also varies widely year to year. California has addressed its variable and uneven distribution of water resources by establishing an extensive water supply system to store and move water where and when it is needed. (Assoc. of Cal. Water Agencies, California's Water: California Water Systems <http://www.acwa.com/content/california-water-series/californias-water-california-water-systems> [as of June 21, 2017].) Over 1, 000 reservoirs, “dozens of local and regional water conveyance systems” and “[s]even major systems of aqueducts and associated infrastructure exist today to capture and deliver water within the state.” (Ibid.) This water supply system is managed by a network of agencies on federal, state, regional and local levels.

         B. Metropolitan

         Metropolitan was established by the California Legislature in 1928. (Imperial Irrigation, supra, 80 Cal.App.4th at p. 1415.) “Its mission is to combine the financial resources of cities and communities in Southern California and to bring supplemental water to the area.” (Ibid.) Initially, Metropolitan was formed “to construct and operate the 242-mile Colorado River Aqueduct” to transport Colorado River water to the area. (The Metropolitan Water Dist. of So. Cal., Who We Are, MWD ACT & Code <http://www.mwdh2o.com/WhoWeAre/MWDAct/Pages/default.aspx> [as of June 21, 2017].) “Concurrent with the enactment of the Metropolitan Act, the U.S. Congress passed the Boulder Canyon Project Act, authorizing construction of Hoover Dam, which provided power to pump water to Southern California.” (Ibid.) Today, Metropolitan imports water from two principal sources, the Colorado River, using its Colorado River Aqueduct, and Northern California via the state-owned California Aqueduct.

         Metropolitan delivers water to a voluntary collective of “26 member public agencies - 14 cities, 11 municipal water districts, [and] one county water authority, ” the San Diego County Water Authority. (The Metropolitan Water District of So. Cal., Who We Are, Overview & Mission <http://www.mwdh2o.com/WhoWeAre/Mission/Pages /default.aspx> [as of June 21, 2017].) Metropolitan's member agencies provide “water to more than 19 million people in Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties.” (Ibid.) “Metropolitan currently delivers an average of 1.5 billion gallons of water per day to a 5, 200-square-mile service area.” (Ibid.)

         The board of directors “sets policy and guides the actions” of Metropolitan. (Imperial Irrigation, supra, 80 Cal.App.4th at p. 1416.) The member agencies govern Metropolitan through their representatives on its board, with each agency appointing its own representatives. (See Wat. Code Appen., §§ 109-50, 109-51, 109-55.) Representation is proportional based on the taxable property value in each member agency's service area, although each agency is entitled to a minimum of one board seat. (Wat. Code Appen., §§ 109-51, 109-52.) The City of Los Angeles has the most directors with the Water Authority close behind. (Metropolitan Water Dist., supra, at pp. 1415-1416.)

         C. The Water Authority

         As noted, the Water Authority is one of Metropolitan's member agencies. It “is an independent public agency that serves as San Diego County's regional water wholesaler. It is not part of either the city or county of San Diego governments. The mission of the Water Authority is to provide a safe and reliable supply of water to its 24 member agencies serving the San Diego region's $222 billion economy and its 3.3 million residents.” (San Diego County Water Authority, About Us, Frequently Asked Questions and Key Facts <http://www.sdcwa.org/frequently-asked-questions-and-key-facts> [as of June 21, 2017].) The Water Authority stores, treats, and transports imported water to its member agencies, the retail water providers in the region. (Ibid.) It operates and maintains dams, a water treatment facility, and “the San Diego region's aqueduct delivery system, which consists of approximately 300 miles of large-diameter pipeline in two aqueducts, 1, 600 aqueduct-related structures, and over 100 flow-control facilities, occupying 1, 400 acres of right-of-way.” (San Diego County Water Authority, Construction, Facilities & Operations <http://www.sdcwa.org/facilities-operations> [as of June 21, 2017].)

         D. The State Water Project

         One of the two primary sources of water for Metropolitan is the State Water Project. The State Water Project “consists of a series of 21 dams and reservoirs, 5 power plants, and 16 pumping plants which stretch from Lake Oroville in Butte County to Lake Perris in Riverside County. Project water flows from the Feather River to the Sacramento River and then into the Sacramento-San Joaquin Delta. It is lifted by the Delta Pumping Plant into the California Aqueduct, and the aqueduct conveys it south.” (Goodman v. County of Riverside (1983) 140 Cal.App.3d 900, 903.) The California Aqueduct is approximately 444 miles long and conveys water to four delivery points near the northern and eastern boundaries of Metropolitan's service area.

         Metropolitan has access to the State Water Project conveyance system and an annual allotment of Northern California water through a contract with the California Department of Water Resources, which manages the system. The department “has entered into 31 such water contracts with local governmental entities.... The contracts require regular payments to the state in return for participation in the [State Water Project] System. Not all the districts actually receive water, but all must make payments according to their respective maximum annual water entitlements and the portion of the System required to deliver such entitlements. Those which actually receive water also pay amounts attributable to the water received.” (Goodman v. County of Riverside, supra, 140 Cal.App.3d at pp. 903-904, fn. omitted.) The payments under these contracts pay for project operating costs and the public bonds issued to build the system. (Id. at p. 905.)

         E. The Colorado River

         The Colorado River is the other of Metropolitan's primary water sources. The river “rises in the mountains of Colorado and flows generally in a southwesterly direction for about 1, 300 miles through Colorado, Utah, and Arizona and along the Arizona-Nevada and Arizona-California boundaries, after which it passes into Mexico and empties into the Mexican waters of the Gulf of California.... The river and its tributaries flow in a natural basin almost surrounded by large mountain ranges and drain 242, 000 square miles, an area about 900 miles long from north to south and 300 to 500 miles wide from east to west-practically one-twelfth the area of the continental United States excluding Alaska. Much of this large basin is so arid that it is, as it always has been, largely dependent upon managed use of the waters of the Colorado River System to make it productive and inhabitable.” (Arizona v. California (1963) 373 U.S. 546, 552.)

         In 1929, a federal act authorized construction of Hoover Dam to generate electricity, regulate the Colorado River's flow, and apportion the river's water among the several states claiming rights to it. (Arizona v. California, supra, 373 U.S. at pp. 560-561.) Metropolitan built the Colorado River Aqueduct to take delivery of its Colorado River water at Arizona's Lake Havasu and transport it to Southern California. Disputes among the states over Colorado River water continued until 1963, when the United State Supreme Court held that California was entitled to a basic allotment of no more than 4.4 million acre-feet per year.[3] (Id. at p. 565.) “[T]he court's resolution of the dispute between the states-which limited California's share of the river to far less than the state can use-ensured the fight would continue within the state for years to come.” (Quantification Settlement Agreement Cases (2011) 201 Cal.App.4th 758, 772 (QSA Cases).)

         “In 1929, the year after the Boulder Canyon [Hoover Dam] Project Act took effect, the Secretary of the Interior requested from California's Division of Water Resources a recommendation of the proper apportionments of California's share of Colorado River water among the various applicants and water users within the state. This request led to the ‘Seven-Party Agreement' of August 1931. The terms of this agreement, which apportioned a total of 5.362 million acre-feet of water annually between the parties, were incorporated into contracts between the Secretary of the Interior and various California water users for delivery of Colorado River water under the Boulder Canyon Project Act.” (QSA Cases, supra, 201 Cal.App.4th at p. 783.) The Seven-Party Agreement apportioned more than California's basic allotment because, “for years after the United States Supreme Court determined that California's share of the water from the Colorado River was to be only 4.4 million acre-feet during normal water years, California was nonetheless able to use much more than that because Arizona and Nevada were not yet able to use their full entitlements.” (Id. at p. 773.)

         Parties to the Seven-Party Agreement included Metropolitan and the Imperial Irrigation District (Imperial). (QSA Cases, supra, 201 Cal.App.4th at p. 784 & fn. 8.) The agreement “apportioned Colorado River water among the various parties by priority but without quantifying exactly how much water each party was entitled to receive.” (Id. at p. 785.) Under the agreement, Imperial was the largest single holder of water rights with priority over Metropolitan. (County of Imperial v. Superior Court (2007) 152 Cal.App.4th 13, 19.) Of the 4.4 million acre-feet of water allocated to California, Metropolitan was entitled to only 550, 000 acre-feet. The Water Authority possessed no Colorado River rights. (Ibid.) This priority system led to conflicts among the water agencies. (Ibid.) Imperial, which had more water than it needed, sought to sell its excess water to others while Metropolitan maintained that any excess should be made available to it under the priority system. (Id. at pp. 19-20.) Ultimately, Imperial's position prevailed, permitting Imperial to sell its excess water to other agencies, such as Metropolitan and the Water Authority.

         “Although the state has broad power under the public trust and reasonable use doctrines to order the reallocation of water, it has exercised this power sparingly.” (Gray, The Modern Era in California Water Law (1994) 45 Hastings L.Rev. 249, 272.) California has, instead, adopted a policy of voluntary water transfers. (Id. at pp. 273-278.) Thus, water-rights holders may transfer surplus or conserved water. (Wat. Code, §§ 382, 1001.)

         “In the 1980's, the [State Water Resources Control] Board found some of Imperial's water use practices unreasonable and wasteful. The Board directed Imperial to increase water conservation. One suggested measure by which Imperial could increase conservation was to transfer conserved water to a willing purchaser in exchange for funding to support Imperial's conservation efforts.” (County of Imperial v. Superior Court, supra, 152 Cal.App.4th at p. 20.) The initial purchaser of Imperial's conserved water was Metropolitan. In 1988, Metropolitan agreed to pay for various projects to conserve water in exchange for which Imperial transferred the conserved water to Metropolitan. In 1998, a decade later, Imperial and the Water Authority entered a similar agreement.

         F. Exchange agreements between Metropolitan and the Water Authority

         The Water Authority has no means of transporting Colorado River water other than over Metropolitan's aqueduct and thus opened negotiations with Metropolitan to transport, or “wheel, ” Imperial water. “Wheeling” is the industry term for “[t]he use of a water conveyance facility by someone other than the owner or operator to transport water.” (Imperial Irrigation, supra, 80 Cal.App.4th at p. 1407.) California law mandates that the owner or operator of a water conveyance facility allow others to use up to 70 percent of the facility's unused capacity to transport water upon payment of “fair compensation.” (Wat. Code, §§ 1810, 1814; QSA Cases, supra, 201 Cal.App.4th at pp. 840-841.)

         Metropolitan and the Water Authority failed to reach a wheeling agreement but they did reach a functionally related water exchange agreement. In 1998, the parties agreed that Metropolitan would receive the water conserved by Imperial and promised to the Water Authority under those parties' transfer agreement in exchange for which Metropolitan would provide the Water Authority with a like quality and quantity of water.

         In any water transfer, whether by wheeling or an exchange agreement, there is a physical intermingling of the purchased water with water from other sources. As the Water Authority's assistant general manager testified, a direct water delivery could be accomplished only with an empty aqueduct and pipeline from source to buyer, which does not occur in California where water from different sources is intermingled as it moves through an array of reservoirs, aqueducts, and pipelines to reach multiple agencies. Metropolitan cannot deliver “the same molecules” of Colorado River water the Water Authority acquires from Imperial because that water is commingled with “other water Metropolitan has taken off the Colorado River” at Lake Havasu for sale to other member agencies.[4]

         While functionally related, wheeling and exchange agreements are not the same. A wheeling agreement calls for the transportation of water when there is available capacity in the water conveyance system. An exchange agreement promises the delivery of a specified quantity of water. Water is not wheeled unless available, but an exchange agreement requires delivery of an agreed-upon quantity of water every month. Recipients under a wheeling agreement receive less than the transfer amount due to evaporation and other transit losses, but the conveyance system operator bears transit losses under an exchange agreement. As the trial testimony in the present case established, the parties here preferred an exchange agreement to a wheeling agreement. The Water Authority wanted guaranteed delivery and Metropolitan wanted the greater operational flexibility of an exchange agreement that permits the use of available facilities and supply sources.

         After entry of the 1998 exchange agreement, disputes continued among the water agencies over Colorado River water allocations that prevented water deliveries. (QSA Cases, supra, 201 Cal.App.4th at p. 788.) Negotiations ensued to settle competing claims to Colorado River water, resulting in a number of related agreements, including a 2003 “quantification settlement agreement.” (Id. at pp. 773, 789.) In those agreements, Metropolitan, the Water Authority, Imperial and other water agencies settled several disputes over the priority, use and transfer of Colorado River water. (Id. at p. 789.)

         Contemporaneously, in 2003, Metropolitan and the Water Authority executed an amended exchange agreement that is the subject of this appeal. Unable to agree upon the long-term price the Water Authority would be charged for water received under the agreement, the parties agreed to an initial price with future prices linked to standard water rates, lawfully set. The parties agreed: “The price on the date of execution of this agreement shall be two hundred fifty three dollars ($253.00) [per acre-foot]. Thereafter, the price shall be equal to the charge or charges set by Metropolitan's board of directors pursuant to applicable law and regulation and generally applicable to the conveyance of water by Metropolitan on behalf of its member agencies.” The Water Authority promised not to challenge conveyance charges set by Metropolitan for five years following execution of the 2003 exchange agreement but reserved the right thereafter to contest the rates as contrary to “applicable law and regulation.”[5]

         G. Metropolitan's Rate-setting Process

         Metropolitan is required by statute to establish rates that will generate sufficient revenue to pay its expenses. (Wat. Code Appen., § 109-134.)[6] For years Metropolitan utilized a single water service rate. In 1998, Metropolitan began a lengthy process to replace the single rate with a new rate structure allocating charges to separate cost components, including water supply and transportation. In adopting the new rate structure, effective 2003, Metropolitan represented that it was designed to create “a cost of service approach consistent with industry guidelines, ” “[e]nsure that users, including member agencies and other entities, pay the same rates and charges for like classes of services and provide fair allocation of costs through rates and charges, ” and “[o]ffer choices for services to member agencies and accommodate the development of a water transfer market.”

         Metropolitan followed a four-step “cost of service process” in setting rates for different service components: (1) estimation of revenue requirements to meet expenses, including operating costs and debt service; (2) allocation of revenue requirements to “different categories based on the operational functions served by each cost, ” for example revenue necessary to pay for water supply, conveyance and storage; (3) allocation of costs based on their causes and characteristics; and (4) “allocation of costs to rate design elements.”

         H. Metropolitan's Component Rates

         Metropolitan's water service rates are now a combination of component rates calculated to recover its costs incurred in purchasing and transporting water to its member agencies. The rate components, with limited exceptions inapplicable here, are volumetric-the rate is a dollar amount per acre foot.

         Metropolitan's “supply” rates are calculated to recover costs incurred in purchasing water supply from the State Water Project and Colorado River and in maintaining and developing additional water supplies through transfers and other transactions. There are two tiers of supply rates, depending on the volume of water provided.

         Metropolitan's transportation rates are designed to recover the costs of operating and maintaining its vast water conveyance infrastructure. The transportation rates consist of three subcomponents. A “system access rate” is designed to recover the capital, operating, and maintenance costs associated with transportation facilities, including “conveyance” facilities that transport water from the State Water Project and Colorado River Aqueduct and “distribution” facilities that transport water within Metropolitan's service area. (Admin. Code, § 4123) A “system power rate“ recovers the cost of pumping water through the State Water Project and Colorado River Aqueduct to Southern California. (Admin. Code, § 4125.) A “water stewardship rate” is designed to recover the costs of conservation programs and other water management programs that reduce and defer system capacity expansion costs. (See Admin. Code, § 4124.) The transportation rates are so-called postage-stamp rates, which are the same no matter how far the water is transported or which transportation facilities are used.

         Metropolitan provides both full service, in which it supplies and transports water, and wheeling service, in which it transports water supplied by others.[7] The rates for full-service and wheeling are comprised of different combinations of the component rates set out above. The full-service rate includes the supply rate, system access rate, system power rate, and water stewardship rate. The wheeling rate includes the system access rate and water stewardship rate. (Admin. Code, § 4405.) A recipient of wheeling service does not pay the system power rate but pays only the actual cost of the power used to transport the water it receives from a third party.

         Under the exchange agreement as amended in 2003, the Water Authority agreed to pay charges “generally applicable to the conveyance of water by Metropolitan on behalf of its member agencies” which, the parties agree, are the system access rate, water stewardship rate and, unlike the situation under a standard wheeling agreement, the system power rate.

         During the administrative process in which Metropolitan's rates were established, the Water Authority challenged the propriety of applying the system access and water stewardship rates to the wheeling service. Metropolitan's general manager responded that a system access rate was adopted, rather than individual aqueduct access rates, because “Metropolitan's system is not a point-to-point service, but an interconnected regional system.” “Operational flexibility has been achieved by creating an interconnected regional delivery network integrating the State Water Project... and the Colorado River Aqueduct... conveyance systems with the in-basin distribution system. This integrated network allows Metropolitan to incorporate supply from the [project] and the [aqueduct] with a diverse portfolio of geographically dispersed storage programs.... This integrated, regional network allows Metropolitan to move supplies throughout the system in response to supply availability and operational needs.” Metropolitan's general manager asserted that its “integrated, flexible system directly benefits all agencies... as to all services, including wheeling and exchange services.”

         As to the water stewardship rate-“a volumetric charge upon all water moved through the system that provides a dedicated source of funding for conservation and local resources development”-Metropolitan's general manager asserted that all users benefit from water conservation and thus all users are properly charged for it: “conservation, recycling, and groundwater recovery decrease the region's overall dependence on imported water supplies from environmentally sensitive areas like the Bay-Delta; increase the overall level of water supply reliability in Southern California; reduce and defer system capacity expansion costs; and create available space to be used to complete water transfers. Because conservation measures and local resource investments reduce the overall level of dependence on the imported water system, more capacity is available in existing facilities for a longer period of time. The space in the system made available by conservation and recycling is open to all system users.”

         II. Trial Court Proceedings

         In June 2010, the Water Authority filed its initial action challenging the water rates Metropolitan adopted in April 2010 for 2011 to 2012. In June 2012, the Water Authority filed a second action challenging Metropolitan's 2013-2014 rates.[8] The Water Authority also sought damages for breach of the provision in the amended water exchange agreement providing that “the price shall be equal to the charge or charges set by Metropolitan's Board of Directors pursuant to applicable law and regulation and generally applicable to the conveyance of water by Metropolitan on behalf of its member agencies.” The Water Authority maintained that Metropolitan's rates are not lawful conveyance rates and, thus, not properly charged under the amended agreement. The Water Authority also challenged Metropolitan's method for calculating the extent of its right to Metropolitan supplied water in the event of a water shortage. By statute, the Water Authority has a “preferential right” to Metropolitan water based on its “total payments” to Metropolitan “excepting purchase of water.” (Wat. Code Appen., § 109-135.) The Water Authority maintains that, contrary to the position taken by Metropolitan, its payments under the exchange agreement must be included in the calculation of its “preferential rights.”

         In pretrial proceedings, the court overruled Metropolitan's demurrer based on the statute of limitations. The court also granted Metropolitan's motion for summary adjudication rejecting the Water Authority's claim that Metropolitan imposed an unlawful condition on the water agency's right to petition the courts by precluding member agencies challenging ...


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