In what may be the most significant California water rights proceeding since Decision 1275 granted the original State Water Project permits in 1967, Hearing Officer Nicole L. Kuenzi has issued a procedural ruling to protect the integrity of the Delta Conveyance Project hearing process. The May 2, 2025 ruling directly addresses the Department of Water Resources’ (DWR) attempt to assert a voluntary, conditional waiver to an alleged conflict of interest– a strategy the ruling warned “would invite future gamesmanship.”
Strategic Conflict Claims
The Delta Conveyance Project Change in Point of Diversion hearing potentially rivals the significance of the hearing for the original State Water Project permits. With such high stakes, the procedural integrity of the hearing process is paramount.
DWR notified the Administrative Hearings Office (AHO) on April 11, 2025, of an alleged conflict involving an attorney at Somach Simmons & Dunn (SSD). The law firm is representing the County of Sacramento, Sacramento County Water Agency, Sacramento Area Sewer District, the City of Stockton, and Byron-Bethany Irrigation District. DWR alleged the attorney had a conflict from previously representation on “substantially related” matters while at another firm. Despite claiming the conflict, DWR never filed a formal motion for disqualification and waited eight months after Notices of Intent to Appear explicitly listed the attorney as one of SSD’s counsel for the hearing.
DWR’s Conditional Waiver Approach
During oral argument on May 1, DWR reiterated its offer of a voluntary, conditional waiver, stating,
If the Administrative Hearing Officer allows the CPOD hearing to timely proceed in accordance with the existing schedule, DWR will waive any remedies it could pursue against [SSD] with respect to the conflict in this CPOD hearing and any subsequent appeal or litigation resulting from this CPOD hearing. DWR will not object to any CPOD record evidence being cited by other parties in any other proceeding on the basis of this conflict issue, but DWR retains its right to object on any other basis.
While waiving specific objections and remedies, this conditional waiver still allowed DWR to “continue to pursue its rights and remedies with respect to this conflict with [SSD] in other appropriate forums,” as stated in their original email to the AHO.
The Hearing Officer’s Response
After briefing and oral argument, Hearing Officer Kuenzi directly addressed the problematic nature of allowing a party to maintain such a reservation of rights without promptly seeking resolution:
In addition to DWR’s voluntary proffer of a conditional waiver of its right to a remedy in this proceeding, I find that DWR will have waived its right to object to SSD’s participation in this proceeding if it does not indicate in writing, before this hearing reconvenes at 9:00 a.m. on Monday, May 5, an intent to seek a remedy.
The ruling clearly identified the legal risks, stating that “without any intent to impugn the professionalism of DWR’s management or legal team, allowing DWR to maintain an inchoate right to object to the validity of the hearing and its outcome would invite future gamesmanship.”
Preventing Cross-Forum Issues
The Hearing Officer recognized that even with DWR’s conditional waiver regarding the current proceeding, their reservation of rights to pursue the conflict elsewhere could still cast a shadow over the administrative record.
By requiring DWR to either pursue the conflict issue formally or permanently waive it, the ruling:
- Prevents DWR from maintaining strategic ambiguity about the validity of the administrative record
- Protects the integrity of what could be California’s most significant water rights proceeding in over half a century
- Ensures all parties’ substantial investments in the complex hearing process won’t be undermined by unresolved conflict claims
Broader Implications for Water Board hearings
The ruling’s importance extends beyond this specific hearing, establishing a principle that parties to Water Board proceedings cannot use alleged conflicts to create uncertainty across different forums. It confirms that the Water Board’s hearing officers have both the authority and the duty to act to protect the integrity of Board hearings, particularly in complex proceedings with significant public resource implications.