July 16, 1998

Mr. Tim O’Laughlin

O’LAUGHLIN & PARIS

870 Manzanita Court, Suite B

Chico, CA 95926

Dear Mr. O’Laughlin:

BAY-DELTA WATER RIGHTS HEARING:  RULING ON MOTION FOR CHANGES IN PROCEEDING

This responds to your motion dated June 30, 1998.  You raised two issues addressing:  (1) the procedures to be followed for Phase 2 of the Bay-Delta Water Rights Hearing (hearing), and (2)whether new evidence may be presented during rebuttal.  You have argued that it is necessary to rule on your motion before starting Phase 2 of the hearing.  Other parties, however, objected to the State Water Resources Control Board (SWRCB) making a ruling before receiving oral and written arguments from the other parties.  Accordingly, your motion was heard on July 15, 1998, at the beginning of Phase 2 of the hearing. 

This ruling considers your initial motion, briefs by others, your subsequent brief, and all comments made on July 15, 1998.

I.  The Procedures for Phase 2

     A.  The June 11 letter

On June 11, 1998, the SWRCB responded to a number of procedural questions from the parties with a letter that included the following statements:

[1.b.]  “. . . Evidence that does not address the SJRA [San Joaquin River Agreement] should be presented at a later time during the hearing.  General evidence regarding the application of alternatives other than the SJRA to these parties may be relevant in determining whether the SWRCB should adopt a decision implementing the responsibilities proposed in the SJRA.  Parties should not, however, present detailed evidence about the other flow alternatives during Phase 2 of the hearing.”

[1.c.]  “As I stated in my letter to Allen Short dated June 4, 1998, adversarial evidence and legal argument regarding the responsibilities of the proponents of the SJRA may be withheld during Phase 2 and presented later in the hearing.  A party withholding evidence and legal argument should tell the hearing officer on the record the nature and scope of the evidence and argument, and that the evidence and argument is being withheld.  The SWRCB will receive any relevant adversarial evidence and legal argument from parties proposing alternatives to the SJRA before taking action to approve any of the alternatives.  Also, whenever such evidence is relevant in other phases, parties will be allowed to present evidence about the responsibilities of the proponents of the SJRA or other parties.”

B.  Your request

You expressed concern that the above direction would preclude the SWRCB from receiving enough evidence to be able to act on the responsibilities proposed in the SJRA until after Phase 8 of the hearing.  Accordingly, you asked that the SWRCB make further changes in the proceeding to ensure that adequate evidence is received during Phase 2 or a continuation of Phase 2.  You modified the part of your motion addressing the Phase 2 procedures when you filed your brief on July 9, and further refined it when you made your oral presentation on July 15.  You indicated that your modifications are a result of discussions with other parties in the Bay-Delta Water Rights Hearing. 

Several of the parties filed briefs supporting or opposing your motion, and several parties presented oral arguments during the hearing on your motion, supporting or opposing it.  Comments included the relationship of Phase 5 with Phase 2, the appropriateness of phasing the hearing, whether it would be appropriate to bifurcate the decisionmaking for this hearing, whether a workshop or other forum should be provided to discuss the process that would be needed in order for the SWRCB to legally issue an order prior to completion of the full hearing, and when evidence relevant in both Phase2 and Phase 5 should be presented. 

C.  The effect of the June 11 letter

Paragraphs 1.b. and 1.c. in the June 11 letter narrow the scope of Phase 2 of the hearing to evidence addressing the SJRA, allowing the SWRCB and the parties an opportunity to review the SJRA in depth before the SWRCB decides if it is necessary to receive extensive evidence regarding the individual responsibilities of the parties signing the Statement of Support for the SJRA.  The June 11 letter also allowed all parties to postpone their presentation of adversarial evidence and argument against the SJRA, but did not specify when the SWRCB would receive the adversarial evidence.  The June 11 letter indicates that the SWRCB will receive adversarial evidence regarding the responsibilities of the parties who have signed the Statement of Support for the SJRA before taking action to approve this alternative.

D.  The ruling

          1.  The evidence for Phase 5 will be due on August 4, 1998.

2.  To ensure that all parties are treated fairly and accorded due process, the SWRCB will allow the parties who have withheld their adversarial evidence and argument in Phase 2, to present that evidence in a later phase if necessary.  Accordingly, the two paragraphs quoted above from the June 11, 1998, letter are affirmed as further clarified in paragraph I.C. above.  Phase 2 of the hearing, which commenced with a hearing on your motion, will continue on July 21, 1998, and on following hearing dates until it is completed.  During Phase 2, the SWRCB wishes to hear evidence that addresses the SJRA.  This should not include detailed evidence about the other flow alternatives that could be imposed on the parties who are jointly proposing the SJRA.  As soon as each of the parties who presubmitted their case in chief evidence on or before June15, 1998, have completed their direct testimony, their witnesses have been cross-examined, and any rebuttal is completed, the SWRCB will receive oral argument regarding the merits of the SJRA.  The SWRCB will consider all evidence and arguments presented, including the question submitted by many of the parties as to whether implementing the SJRA will provide environmental benefits in the lower San Joaquin River and the southern Delta at a level of protection equivalent to the level of protection in the 1995 Bay-Delta Plan. 

3.a.  If, after hearing the evidence and arguments during Phase 2, the SWRCB finds that the SJRA merits further consideration, it will schedule an additional phase, termed Phase 2A, in which to receive evidence from parties opposing the SJRA. In Phase 2A, the SWRCB will receive the adversarial evidence and legal argument of parties opposing setting responsibilities as proposed in the SJRA.  Evidence in Phase 2A should address the responsibilities of the parties who are jointly proposing the SJRA, the Department of Water Resources, and the U.S. Bureau of Reclamation, including any relevant adversarial evidence supporting alternatives to the SJRA applicable to the affected water right holders or other options.

3.b.  If, after concluding Phase 2, the SWRCB does not find that the SJRA merits further consideration, the SWRCB will proceed with the remainder of the hearing as noticed. 

4.  Upon concluding Phase 2, the SWRCB will take up the subsequent phases.  If the SWRCB thereafter gives notice of a date to submit evidence for Phase 2A, the SWRCB will, before conducting Phase 2A, take up other phases of the hearing for which evidence has been presubmitted for at least three weeks.  If it is held, Phase2A will follow Phase 5.  The SWRCB could postpone hearing Phases 6 and 7 in order to get to Phase 2A earlier.

5.  The members of the San Joaquin River Group Authority, who have exercised their opportunity under the Revised Notice of Public Hearing dated May 6, 1998, to limit their evidence during Phase 2 to evidence in support of the SJRA, will not forfeit the opportunity to present alternative adversarial evidence and legal argument against each other, or against other parties in the hearing, later in the hearing.  These parties also will be allowed to limit their evidence during Phase 5 to evidence in support of the SJRA, without forfeiting the opportunity to present alternative adversarial evidence and legal argument against each other, and against other parties, later in the hearing.  The SWRCB recognizes that such evidence is unlikely to be presented if the SWRCB approves the responsibilities proposed in the SJRA. 

6.  As a number of the parties have pointed out, the issues for Phases 2A and 5 overlap, particularly with respect to southern Delta salinity standards.  Therefore, parties are seeking direction as to the phase in which to present the bulk of the evidence regarding the overlapping issues.  The SWRCB hereby requests that the parties present their evidence regarding flow standards for fish protection during Phase 2 and 2A, as appropriate to the party making the presentation.  The parties should present their evidence regarding implementation of southern Delta salinity standards (including the Vernalis salinity standard) discussed in Chapters 8 and 9,  and regarding the dissolved oxygen standards discussed in Chapter 10 of the draft EIR, in Phase 5. 

7.  Some of the parties have requested that the SWRCB provide a forum for discussing the process for issuing an order prior to the completion of the Bay-Delta Water Rights Hearing.  If such a forum is provided, it will be scheduled later.

II.  Rebuttal of Evidence Presented in Cases in Chief

You argued that the Revised Notice of Hearing requires all evidence, including rebuttal evidence, to be submitted to the SWRCB and the other parties on the date designated for submittal of evidence for each phase of the hearing.  You also questioned what is meant by “rebuttal evidence”. 

The hearing notice provides, in Enclosure 1, paragraph 6, as follows:

“6.   Rebuttal:  Rebuttal evidence will be allowed in each phase after all parties have presented their cases in chief and their witnesses have been cross-examined.  At the end of the cases in chief, the hearing officers will set a schedule for parties to submit their rebuttal evidence and for the conduct of rebuttal.” 

Evidence for all cases in chief must be presubmitted on or before the specified date.  This allows other parties an opportunity, before the hearing phase commences, to prepare their cross-examination of the other parties’ evidence and to prepare any rebuttal evidence they consider necessary. 

Rebuttal evidence has its ordinary meaning.  It may include new testimony, documents, or both testimony and documents.  It consists of new evidence used to rebut evidence presented by another party in the other party’s case in chief.  New witnesses and exhibits may be presented at this stage without previous notice.  Rebuttal evidence is limited to evidence that is responsive to evidence presented in a case in chief in the phase being heard, and it must not bring in evidence that should have been presented during the presenter’s case in chief.  Cross-examination of rebuttal witnesses will be limited to the scope of the witness’ rebuttal testimony. 

If you have any questions or comments, please call Barbara J. Leidigh, Senior Staff Counsel in the Office of Chief Counsel, at (916) 657-2102.

Sincerely,

/s/

John Caffrey

Hearing Officer and Chairman

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