Blogs

By: @Mustafa Hessabi, CSDA Chief Counsel 

As 2025 drew to a close, CSDA continued to represent the voice of special districts in the courts. As part of CSDA’s efforts to represent the interests of independent special districts wherever law or policy is made – including the courts – CSDA has tracked dozens of cases and has acted in key cases described below that may influence the revenues, operations, or governance of public agencies. CSDA receives insights on its amicus efforts from the Legal Advisory Working Group, comprised of attorneys throughout the state with experience serving the unique needs of special districts and the communities they serve.

For more information on other important cases that prompted CSDA action earlier this year, review our previous updates in the CSDA eNews from April and October. All amicus briefs filed by CSDA can be found in the Legal Tracking Library on the CSDA website: https://csda.net/viewdocument/2025.

Details regarding recent actions CSDA has taken on cases in the appeals process are provided below:

1. Hiller v. Marin Municipal Water District (First District Court of Appeal)

This case is among the first to test the provisions of SB 323 (Caballero), a fairly recent statute passed to establish reasonable limitations on judicial challenges to water and sewer rates. Marin Municipal Water District ("MMWD") is a self-supporting water district with revenues derived almost solely from the rates it collects, which fund the cost of providing service.  In 2022, MMWD conducted a comprehensive cost of service analysis, and in May 2023, adopted an ordinance setting new rates, in compliance with the procedural and substantive requirements of Proposition 218.

The appellant filed a writ of mandate challenging the ordinance and the rates. MMWD demurred on two grounds: (1) Appellant is barred from challenging the rates and fees because they were previously validated by court judgment pursuant to Gov. Code 53759 (in accordance with SB 323); and (2) even if there were no validation judgment, the trial court lacked jurisdiction to hear Appellant's challenge because Appellant failed to comply with the mandatory reverse validation requirements by timely bringing her claims.  The trial court sustained the demurrer in favor of the district on both grounds, without leave to amend. The case is now pending in the appellate court.

The legislature enacted Gov. Code 53759 (i.e., SB 323), to apply the Code of Civil Procedure’s validation statutes to actions challenging the setting of water rates and charges.  The validation statutes allow agencies to proactively seek judicial validation of rates and charges and set an abbreviated statute of limitations for the public to challenge. Although section 53759 is relatively new, it has already proved invaluable in expediting litigation and the defense of water rates, as demonstrated in the trial court’s opinion in the present case.

CSDA joined an amicus brief to increase the likelihood of a favorable and published appellate decision in this matter, which in turn would provide precedent favoring section 53759’s protections.  The amicus brief articulated the essential nature of the validation statutes for public finance, highlighted the appellant’s failure to act in a timely manner, and underscored how essential revenue stability is for maintaining water infrastructure.

2. Garst v. Tehama County Flood Control and Water Conservation District (Third District Court of Appeal)

Tehama County Flood Control & Water Conservation District has power as a Sustainable Groundwater Management Act (SGMA) agency, under its principal act, and pursuant to JPA with the County to regulate groundwater It imposed an initial fee of 29-cents-per acre for three years as a SGMA regulatory fee to fund a well registration program to gather data to establish a more nuanced fee and to fund groundwater management. In part because of its “flat-fee” nature, the class of plaintiffs alleged that the well-registration fee is a special tax in violation of Proposition 26. Unfortunately, the trial court agreed, invaliding the fee as a special tax due to its flat-fee nature and because nearly all landowners pay it, ignoring the plaintiff class's failures to (i) file a Government Claims Act claim, (ii) exhaust the SGMA refund remedy, or (iii) comply with SGMA's 180-day statute of limitations. It ruled the fee does not exceed the cost of service in total but objected to the failure to allocate the fee on the basis of water use – despite the fact that the agency needs to establish the well registration program in the first place in order to get data about water use.

CSDA joined an amicus brief in an effort to support a reasonable degree of flexibility when adopting regulatory fees, particularly on an initial basis to better develop the fee structure. The amicus brief highlighted the importance of protecting revenues for developing and implementing groundwater management practices, as well as the importance of statutory limits to challenging fees for the purpose of maintaining fiscal integrity and revenue stability.