MPWMD prevails in lawsuit against LAFCO.

In the Monterey Peninsula Water Management District’s pursuit of buying out California American Water’s system on the Monterey Peninsula, a small but notable victory was meted out Oct. 25 with a ruling from Monterey County Superior Court Judge Thomas Wills. 

The ruling came out of a lawsuit the district filed against the Local Agency Formation Commission of Monterey County in April 2022, centered around a decision LAFCO’s board made in December 2021 in which the board voted 5-2 to deny granting the district the “latent powers” to be a retail water provider.

That decision went against LAFCO staff’s recommendation, and the agency declined the district’s request for a rehearing on the matter. 

The crux of MPWMD’s lawsuit is that the decision ran counter to the evidence before the board, and that at least some commissioners showed bias in making their decision, and asked that the LAFCO board’s decision be vacated, and that three commissioners be forced to recuse themselves from voting if the matter comes before them again. 

LAFCO’s attorneys, and attorneys for Cal Am—which later became a party to the case—pushed back on that assertion, and all parties laid out their arguments before Wills in a hearing in Monterey on Sept. 21.

While Wills’ ruling—which totals 34 pages—is a clear victory for MPWMD, it’s also nuanced. In short, it sets aside the LAFCO decision, but Wills wasn’t persuaded by the district’s arguments that any commissioners acted with bias. 

The evidentiary standard, he noted, was limited to public statements made by the commissioners, and in every case, he found there were arguments to be made given their statements that they were acting in what they believed to be the public good. 

One question not addressed by Wills was whether the district actually needs to be granted “latent powers” by LAFCO to be a retail water provider (Cal Am’s attorney’s had asked that Wills rule on the matter, but his ruling states that the question was outside of the matter at hand). MPWMD has long contended it didn’t actually need that approval, as the district is already a retail water provider on a small scale, but sought LAFCO’s approval regardless because it had other matters before the agency.

Per MPWMD General Manager Dave Stoldt, it’s an open question as to when the district will come back to LAFCO for another hearing.