Court rules against LADWP in Owens Lake fee case

A press release from the Great Basin Unified Air Pollution Control District this week announced, “In another setback for the Los Angeles Department of Water and Power, the Kern County Superior Court ruled on Monday that LADWP must pay more than $1 million in fees that it deliberately withheld related to air pollution control measures for the dried Owens Lake bed. LADWP’s water diversions from the Owens Valley cause the air pollution at Owens Lake.”

In December 2011 and May 2012, Great Basin ordered LADWP to pay fees associated with the development of dust control measures and legal costs to enforce Owens Lake air pollution control requirements. Great Basin is incurring these legal expenses in its defense against the City’s continued efforts to avoid constructing the control measures required to meet air quality standards.LADWP adopted a budget of over $2.5 million to pay two law firms to represent its Owens Lake matters, in addition to a number of City attorneys working on these issues. In 1997, the California Air Resources Board (CARB) held that Great Basin was also entitled to retain lawyers, and that those legal costs were properly assessed to the City as part of the development of the air pollution control measures. The duty of the City to pay those fees prior to appealing District orders was established in 1997 by Court Orders against the City.

“Today’s decision is important to protect the environment and public health,” said Ted Schade, Great Basin’s Air Pollution Control Officer on Monday. “Hopefully it sends a message to leaders in the City of Los Angeles that its Department of Water and Power must comply with the law and its past agreements, that they must obey regulatory orders and, most importantly, that they must finish controlling the air pollution caused by their water diversions from the Eastern Sierra.”

In addition to refusing to pay fees, the LADWP is opposing existing federal, state and local air pollution control laws that require additional air pollution controls at Owens Lake. LADWP’s drying of Owens Lake created the largest single source of particulate matter air pollution in the country. Over the past year, LADWP’s water diversions have created dust storms that exceeded the federal standard on 25 separate days resulting in the issuance of local health alerts.

Last month, the State Air Board issued its decision that carefully considered and rejected all of LADWP’s challenges to the air pollution measures. This week, Kern County’s Judge Sidney P. Chapin ordered the LADWP to immediately pay the fees of over $1.1 million. For its failure to comply with the Court Orders and pay the fees, the City now faces a trial to determine a civil penalty of up to $30,000 per day for each day of its violation. The penalties associated with this willful violation of court orders could exceed $6 million.

In a follow up email to Schade this week, he clarified all the different DWP issues flying around the Great Basin offices at this time.

“Monday’s ruling from the Kern County Court was in response to a lawsuit Great Basin filed against DWP for failure to pay ordered fees. DWP is trying to ‘starve us out’ by not paying fees. The Kern judge called them on their mischief and ordered them to pay. However, DWP is appealing the reasonableness of our fees to the CARB (as allowed by law), but they have to ‘pay first, then appeal.’ We will have a hearing before the CARB this spring on the fees, but for now, we will have the money to continue to pay our attorneys.

“With regard to the federal lawsuit filed by DWP, we (Great Basin, Calif. Air Resources Board, State Lands Commission, US EPA and US BLM) submitted briefs to the federal court yesterday [Tuesday] asking it to dismiss the DWP’s federal lawsuit. There are no federal issues at stake and there is a state process underway. The federal court is very likely to dismiss the suit. DWP can then pursue their claims in state court.

“There are 5 lawsuits/appeals underway at this time:

“1. DWP’s imminent lawsuit against CARB disputing its decision last month regarding additional controls (2.86 sq.mi.) on the lake bed. This order for more controls used data we [Great Basin] collected between 2006 and 2010. DWP is required to file this suit today [Wednesday].

“2. DWP’s appeal to CARB of yet more required controls (0.76 sq.mi.) based data collected in 2011. We are currently in a mandatory 60-day mediation process on this. It would then go to CARB for a hearing (probably this summer).

“3. DWP’s appeal to CARB of the reasonableness of our fees. DWP does not like the fact that we have an expensive lawyer and that they pay 90 percent of our budget (they cause 90 percent of our air pollution). We are briefing this issue and the hearing will be held this spring.

“4. Great Basin’s lawsuit against DWP for failure to “pay first, then appeal.” This was Monday’s win. This case will now go into the penalty phase. DWP could owe as much as $7 million in penalties. This case will likely be heard in the fall of 2013.

“5. The federal suit filed by DWP, which could be dismissed by the end of January.” –Press Release/LAK