## Facts

- The dispute involved groundwater extraction from the Raymond Basin, an alluvial groundwater basin of about forty square miles.
- The City of Pasadena, a major producer in the basin, sued to adjudicate groundwater rights and enjoin an alleged annual overdraft threatening depletion.
- The trial court referred the matter to the Division of Water Resources under the Water Commission Act to determine hydrologic and pumping facts; the agency prepared a report that was received in evidence.
- Most non-disclaiming parties, including municipalities and other pumpers, stipulated to a judgment allocating pumping and limiting total production to the basin’s safe annual yield; the California-Michigan Land & Water Company (a public utility) did not stipulate.
- The superior court entered a comprehensive decree adjudicating pumping rights in the basin, restricting total withdrawals to safe annual yield, and allocating permissible extractions among users.
- California-Michigan appealed, challenging the reference procedure and the substantive allocation (including use of correlative-rights principles, pumping limits, and treatment of prescriptive rights).

## Issues

1. Whether the trial court validly referred the case to the Division of Water Resources for fact determination and could receive and rely on the agency report as evidence.
2. How rights should be determined and allocated among competing pumpers in a defined groundwater basin experiencing chronic overdraft.
3. Whether, and to what extent, pumping in excess of safe yield can ripen into prescriptive rights against other basin users.
4. Whether a court in equity may restrict basin-wide extraction to safe annual yield and apportion permissible pumping among users.

## Decision

- The California Supreme Court affirmed the judgment.
- The Court held the statutory reference to the Division of Water Resources for factfinding was authorized and did not improperly delegate judicial power; the trial court retained ultimate adjudicatory authority.
- The Court approved a basin-wide decree limiting total production to safe annual yield to prevent depletion and protect the common supply from a “race of the pumps.”
- The Court upheld allocating groundwater rights on a correlative basis among basin users, with pumping reductions required to bring total withdrawals within safe yield.
- The Court recognized that prescriptive rights may arise from overdraft pumping under appropriate conditions, but such claims are not measured solely by a party’s maximum past pumping and may be incorporated into an overall equitable allocation.

## Legal Principles

- In complex water-rights litigation, a trial court may use an authorized administrative factfinding reference; the resulting report may be admitted in evidence subject to contest, while the court makes the final findings and judgment.
- In a defined groundwater basin subject to chronic overdraft, equity permits a comprehensive adjudication that limits total withdrawals to the basin’s safe annual yield and enjoins extractions beyond adjudicated amounts.
- Overlying groundwater users hold correlative rights in a common supply; when supply is inadequate, each user’s right is mutually limited to a reasonable share in relation to others and to the basin’s capacity.
- Prescriptive rights based on excessive pumping may be recognized against competing users, but are evaluated in light of basin conditions and may be adjusted within a basin-wide decree rather than treated as an unlimited entitlement to continue historical excess.

## Conclusion

The court sustained a comprehensive groundwater adjudication for the Raymond Basin, approving statutory agency-assisted factfinding and affirming equitable authority to cap basin-wide pumping at safe annual yield, allocate correlative shares, and accommodate prescriptive claims within an integrated decree.


City of Pasadena v. City of Alhambra, 33 Cal. 2d 908, 207 P.2d 17 (Cal. 1949)