California’s Water Crisis Forces Court to Rescind $4.6 Million Water Extraction Fee Refund

California’s Water Crisis Forces Court to Rescind $4.6 Million Water Extraction Fee Refund

It looks as if Nestle’s illegal extraction of water from the San Bernardino National Forest in California isn’t the only water battle raging in the face of California’s water crisis. A Northern California water district legally charged a smaller competitor millions in extraction fees for drawing water from wells on its own property, a state appeals court ruled Tuesday.

This was a reversal of an earlier court decision passed in 2010 which awarded the Great Oaks Water Company a $4.6 million dollar refund after the Santa Clara Valley Water District billed them for extracting water. The latest court decision states that the water district does not need voted approval to charge for groundwater extraction.

The three-judge appellate panel ruled that one of the water district’s main responsibilities is preventing the depletion of groundwater supplies in Santa Clara County, and that the extraction fee is a constitutional property-related charge.

The Great Oaks Water Company lost their case even with the argument that the fee was ‘not based on the delivery of the water,’ and thus wrongly charged. The 3-judge panel made its decision saying the fee was for the accumulation measurement, treatment, and distribution of the groundwater that then needed to be replenished – and with California’s latest lack of rainfall, the replenishment of said water hasn’t been so easy.

The Santa Clara Valley Water District manages the water resources for the county’s 1.8 million residents, including the cities of San Jose and Santa Clara. Great Oaks, meanwhile, says it serves just 20,000 customers and has 17 employees.

Great Oaks vice president and general counsel, Timothy Guster said he was not surprised by the ruling, but plans to take it to the Supreme Court.

Even with Californians reducing their overall water usage by more than 25%, the state is still drier than ever, with groundwater supplies being dangerously low.