SWRCB Authority & SGMA Enforcement: Appellate Court Dissolves Tulare Lake Injunction and Guts Farm Bureau’s Lawsuit

10.30.2025

On October 29, 2025, the Fifth Appellate District Court of Appeal issued two decisive, companion opinions that have significant implications for the legal landscape for SGMA enforcement in California. In a general victory for the State Water Resources Control Board (State Board), the appellate court reversed a preliminary injunction that had completely halted state intervention in the Tulare Lake Subbasin. Simultaneously, the court ordered the trial court to grant the State Board’s demurrer, gutting the Kings County Farm Bureau’s (Farm Bureau) core civil claims against the state.

These rulings generally affirm the State Board’s authority under SGMA, clarify the path for challenging its decisions, and have immediate, significant implications for all Groundwater Sustainability Agencies (GSAs), landowners, and water users in basins facing a potential probationary determination and state intervention.

I. The Court Guts the Farm Bureau’s Civil Lawsuit

The Farm Bureau’s legal challenge was a two-pronged attack: a petition for a writ of mandate (to review the State Board’s administrative decision) and a separate civil complaint for declaratory relief (to have the State Board’s actions declared illegal on their face). In its first opinion, the appellate court effectively dismantled the civil complaint, ordering three key claims to be dismissed without a chance to amend them.

First, the court rejected the claim that the State Board’s procedures and requirements were illegal “underground regulations”. The Farm Bureau argued these procedures violated the Administrative Procedure Act (APA), but the court pointed to an exemption in the Water Code itself. It held that Water Code section 10736, subdivision (d)(1), explicitly states that the APA does not apply to the State Board’s actions when designating a subbasin probationary. This holding gives the Board significant flexibility in its proceedings.

Second, the court dismissed the claim that the State Board’s new extraction fees were an unconstitutional “tax”. The court invoked the “pay first” rule, enshrined in the California Constitution. This doctrine holds that a challenger cannot ask a court to block the collection of an alleged tax. Instead, they must pay the disputed amount first and then file a separate lawsuit seeking a refund.

Finally, the court dismissed the Farm Bureau’s general claim for declaratory relief, opining that this was the wrong legal tool for the job. The court affirmed that the Legislature has provided an exclusive remedy to challenge a final State Board decision: a petition for a writ of mandate under Water Code section 1126.

II. The Court Dissolves the Injunction That Halted State Intervention in the Tulare Lake Subbasin

With the civil complaint’s foundation removed, the court turned to the preliminary injunction that had been barring the State Board from acting pursuant to its probationary determination in the Tulare Lake Subbasin. In its second opinion, the court found the trial court had abused its discretion in granting the injunction because its analysis of the Farm Bureau’s “likelihood of success” was fatally flawed.

The appellate court found no substantial evidence to support the claim that the State Board had failed to notify all “known” extractors as required by law. The appellate court’s reasoning was that the Farm Bureau’s evidence was focused on the wrong set of notices, complaining about post-hearing compliance notices sent in May 2024 rather than the legally required pre-hearing notice for the April 2024 hearing. Furthermore, the Farm Bureau’s claim was legally insufficient because it never proved that any landowner who didn’t receive notice was actually “known to the [State Board]” as an extractor. Lastly, the court found that uncontested evidence indicated it had notified over 2,000 known parcel owners.

The court also found the trial court erred in finding the State Board “exceeded its authority”; the court held the State Board does have the implicit authority to review revised GSPs to determine if a basin can exit probation. And, citing its companion opinion, it confirmed the underground regulation claim was legally without merit.

III. A Silver Lining for GSAs: The “Good Actor” Exclusion is a Viable Claim

The Farm Bureau did prevail on one critical point—the appellate court found the challenge to the State Board’s denial of the “Good Actor” exclusion did have merit.

The State Board had argued that because the single, unified GSP for the basin was inadequate, no portion of the basin could qualify for the exclusion. The appellate court flatly rejected this “all-or-nothing” approach. It found that the statute allows “any portion of a basin” to be excluded. Just because a unified plan fails as a whole does not mean a specific Groundwater Sustainability Agency’s (GSA) local efforts are not successfully meeting the sustainability goal. The court found the State Board “wholly failed to consider” the evidence presented by two GSAs that requested this exclusion, and that this failure was a valid basis for a legal challenge.

Based on the court's opinion, the process for the “good actor” exemption requires two main steps:

1. The GSA Must Request It: The court found that the plain language of the statute places the burden on the GSA to request the exclusion and “demonstrate compliance with the sustainability goal”.

2. The Board Must Grant It If Proven: If the GSA successfully makes this demonstration, the State Board has an “affirmative mandate” (it “shall exclude”) to grant the exemption for that portion of the basin.

IV. Why the Injunction Failed: Overbreadth

If the Farm Bureau had a valid claim, why was the injunction dissolved? In short, because it was overbroad.

The trial court’s injunction stopped the State Board’s actions across the entire Tulare Lake Subbasin. However, the only valid claim the court identified applied just to the specific GSAs that had requested the “Good Actor” exclusion. An injunction must be “tailored to the harm at issue”. Because the basin-wide injunction was far broader than the narrow, specific harm that the court found likely to be proven, it was an abuse of discretion and reversed.

V. What This Means for Water Users: Key Policy and Legal Takeaways

This pair of rulings impacts the landscape for SGMA implementation and future legal challenges.

1. The State Board’s Authority is Affirmed: The “state backstop” is real, and its core legal underpinnings have been affirmed. This ruling dissolved the injunction that “effectively halted the State Board’s plans”. The State Board may move forward with its probationary designation. This includes imposing monitoring and reporting requirements and collecting fees, although the question of timing for these actions is not certain.

2. Litigation is Now Narrower: The court limited the challenge to a writ of mandate, which is generally more deferential to the agency and is limited to the administrative record. Furthermore, the “pay first” ruling means challengers must pay the disputed fees upfront and then bring a challenge to the propriety of the fees, increasing the financial burden of a challenge.

3. The “Good Actor” Exclusion Remains a Battleground: This is the key takeaway for GSAs. The fight is not over, but it has moved to a new field. The court has signaled that the State Board must take “Good Actor” requests seriously and cannot simply deny them because a basin-wide plan is deficient. This places a premium on developing a robust, data-driven record at the GSA level to prove that your portion of the basin is meeting its sustainability goals, which can then be used to petition for exclusion from state intervention.

For questions or additional information regarding either of these two opinions, please reach out to the authors of this Alert of your regular AALRR counsel.