Environmental Law & Policy Alert – Update from Somach Simmons & Dunn

March 22, 2024

California Appellate Court Determines That the “Pay First” Rule Applies to SGMA Fee Lawsuits

The Fourth District Court of Appeal has ruled in Mojave Pistachio, LLC et al. v. Superior Court of Orange County, Indian Wells Valley Groundwater Authority (Case No. G062327, opinion published Feb. 8, 2024) that the “pay first, litigate later” rule applies to fees imposed by a local groundwater sustainability agency under the Sustainable Groundwater Management Act (SGMA) (Wat. Code, § 10720 et seq.). In accordance with the court’s holding, a groundwater user is required to pay an outstanding fee imposed under SGMA before commencing an action to challenge the fee and to obtain a refund. (Wat. Code, §10726.6(d)). As a result of this ruling, water users must pay a fee currently due before bringing a legal challenge against a groundwater sustainability agency for imposition of the fee. Further, this ruling requires water users to pay any fee that becomes due during litigation in order to maintain an action before the court … Read More

Written by Krisha Yadav-Ranjan