## Facts

- North Gualala Water Company (NGWC) held an appropriative right to divert surface water from the North Fork Gualala River.
- To supplement supply, NGWC developed two groundwater wells in alluvium adjacent to the river at Elk Prairie.
- NGWC did not seek a water-right permit for the wells, asserting the wells produced unregulated percolating groundwater outside the Board’s jurisdiction.
- The State Water Resources Control Board (Board) asserted the wells diverted from a “subterranean stream flowing through known and definite channels,” which is subject to the Water Code permitting system.
- In an administrative order, the Board used a four-factor test to identify a subterranean stream: (1) a subsurface channel, (2) relatively impermeable bed and banks, (3) a known or determinable course, and (4) groundwater flowing in the channel.
- Applying hydrologic and geologic evidence, the Board concluded the wells intercepted a subterranean stream hydraulically connected to the river and required a permit.

## Issues

1. Whether the Board’s four-factor test is a permissible interpretation of “subterranean streams flowing through known and definite channels,” and thus a proper definition of the Board’s permitting jurisdiction over certain groundwater.
2. Whether substantial evidence supported the Board’s finding that NGWC’s Elk Prairie wells diverted from a subterranean stream rather than percolating groundwater.

## Decision

- The Court of Appeal affirmed the superior court’s denial of NGWC’s writ petition and upheld the Board’s order.
- The court approved the Board’s four-factor test as a reasonable construction of the statutory phrase and consistent with California authority distinguishing subterranean streams from percolating groundwater.
- The court held substantial evidence supported the Board’s determination that the Elk Prairie wells tapped a subterranean stream meeting all four criteria.
- The court rejected the claim that the Board’s approach improperly expanded agency jurisdiction, characterizing the test as an administrable articulation of existing statutory limits.

## Legal Principles

- The Water Code subjects “subterranean streams flowing through known and definite channels” to the state’s appropriative-right permitting requirements; percolating groundwater outside such streams is generally not within the Board’s permitting system.
- An agency’s construction of a technical statute it administers is entitled to considerable weight, particularly where the statute uses imprecise terms requiring application to complex hydrologic conditions.
- A subterranean stream may be identified by evidence of: (1) a subsurface channel, (2) relatively impermeable bed and banks (not absolute impermeability), (3) a known or reasonably determinable course, and (4) groundwater flowing in that channel.
- On judicial review of an administrative water-right determination, courts apply substantial-evidence review and do not reweigh competing expert testimony if the agency’s finding is reasonably supported by the record.

## Conclusion

The court upheld the Board’s permit jurisdiction over NGWC’s wells by approving the Board’s four-factor test for subterranean streams and finding substantial evidence that the Elk Prairie wells intercepted a definable, confined subsurface channel hydraulically connected to the river rather than unregulated percolating groundwater.


N. Gualala Water Co. v. State Water Res. Control Bd., 139 Cal. App. 4th 1577, 43 Cal. Rptr. 3d 821 (Ct. App. 2006)