August 2011

Hotly Contested Challenge to the Department of Fish and Game's Authority to Regulate Streamflow Diversions

In March 2011, the Department of Fish and Game was sued in Siskiyou County by the local farm bureau who claims the Department has improperly expanded its authority to regulate substantial diversions or obstructions of stream flow under Fish and Game Code Section 1602.  (Siskiyou County Farm Bureau v. California Department of Fish and Game, Case No. SCSCCVCV 11-00418.)  In 2005, coho salmon in the Klamath Basin were listed as threatened under the California Endangered Species Act ("CESA").  The Department has since interpreted its authority under Section 1602 and CESA to require all agricultural streambed diversions in the Klamath Basin to obtain the necessary permits or authorizations to comply with Section 1602. 

Termo v. Luther Epilogue- Exhaustion of Administrative Appeal Process Required Before Court Challenge of DOGGR Order

In its unpublished June 28, 2011 decision in Angus Petroleum Company v. Luther, 2011 Cal. App. Unpub. LEXIS 4835 (2011), the California Court of Appeal for the Fourth Appellate District held that the new statutory administrative hearing procedures of the Division of Oil, Gas and Geothermal Resources of the California Department of Conservation (“DOGGR”) enacted by the Legislature in 2010 toaddress the constitutional criticisms of DOGGR’s prior appeal process by the same court in Termo Co. v. Luther, 169 Cal.App.4th 394; 86 Cal.Rptr.3d 687 (2008), required an oil and gas operator to first pursue its administrative appeal remedies before filing a lawsuit challenging an order by DOGGR.

The earlier case, Termo Co. v. Luther, addressed the enforceability of an order under Public Resources Code § 3237 by the DOGGR Supervisor to an operator to abandon 28 oil wells. The Court of Appeal held in that case that "the right to continue to operate existing oil wells and to extract oil is a fundamental right, of particular importance in the current economic climate" and that the right to continue oil production operations was constitutionally protected. In deciding that the operator was entitled to a review of the DOGGR's administrative decision under the  “independent judgment” standard, rather than the more deferential “substantial evidence” standard, the Court also held that the administrative review process set forth in the Public Resources Code for handling challenges to a DOGGR order did not satisfy constitutional due process requirements.

California Supreme Court Holds that Overtime Regulations Apply to Non-Resident Employees Temporarily Assigned to Work In CA

California’s recent increase in oil and gas drilling and development activity as well as the boom in renewable energy projects has resulted in many energy companies temporarily assigning employees based in their out of state offices to work in California on short term projects. Given the nature of these temporary assignments, employees often find themselves working longer hours than they might otherwise at their permanent workplace. Often, not much regard has been given to whether the California Labor Code and associated regulations apply to those non-resident employees. The June 30, 2011 decision by the California Supreme Court of California, in Sullivan v. Oracle Corporation, 51 Cal. 4th 1191 (2011), may cause companies to reassess their temporary assignment practices based on the Court’s holding that California overtime laws applied to nonresident employees.