Battle Springs Up Over Water Rights

For the Morongo Band of Mission Indians, obtaining water rights to a small spring in the San Gorgonio Pass presented a terrific opportunity.

Bottling the pristine waters from the old SP Spring that once filled the boilers of Southern Pacific steam locomotives would create jobs and diversify the tribe’s gambling-dependent economy.

The Indians had a deep- pocketed partner to help slake Californians’ growing thirst for healthful, fresh-tasting water: Swiss food-processing giant Nestle invested $26 million in a 383,000-square-foot plant on the Morongo reservation to bottle its popular Arrowhead brand of spring water. A bevy of dignitaries, including Lt. Gov. Cruz Bustamante and Rep. Mary Bono (R-Palm Springs), attended the groundbreaking in January 2002.

But the promising partnership and the Morongos’ economic development plans are being jeopardized by a government agency, the state Water Resources Control Board. Last year, the board’s staff moved to revoke the tribe’s license to tap the spring, threatening part of the plant’s bottling source -- and perhaps Nestle’s ability to market water from the area as “mountain spring water.”

The Coachella Valley Water District is backing the board, hoping to redirect the spring water from Arrowhead bottles and jugs to the cities it serves: La Quinta, Palm Desert, Rancho Mirage, Indian Wells and part of Cathedral City.

“Every bit counts” in the Mojave Desert, where just three inches of rain falls each year and an aquifer, an underground source of water, is being depleted, said Steve Robbins, general manager of the Coachella Valley district, which serves about 120,000 households and a number of large farming operations in the Mojave Desert north and east of Palm Springs.

The conflict over the spring about 85 miles east of Los Angeles is shaping up as a classic California water war, said John Husing, a Redlands-based consultant who has worked for the Morongos in the past. It has the potential to affect economic development in one of the state’s most parched and rapidly expanding areas.

“Water is for fighting,” Husing said. This spat “raises all the fundamental issues: water, Indian rights, prosperity and job creation.”

The seeds of the dispute were planted when a routine records check in 1996 revealed that a previous permit holder for the spring had failed to use the water for its legally mandated purpose -- irrigating 13 acres of nearby farmland.

Under state law, if water isn’t being used for its permitted purpose, it should automatically go to the Coachella Valley Water District and other parties to a 1938 surface water rights settlement, the water resources board contends.

“You have to use it or lose it,” said Samantha Olson, an attorney for the water resources board. “It’s a bedrock principle of Western water law.”

Lawyers for the tribe and Nestle have sued the board, alleging conflicts of interest. They also argue that the water board doesn’t have authority over the spring.

Stuart Somach, the tribe’s veteran water lawyer, denounced Olson as “one very zealous and aggressive staff attorney, a couple of years out of law school, who is pushing for a fight.”

“The whole process is much ado about nothing,” he said.

Olson counters that “it would be a dereliction of duty not to follow the law.” The Morongos and Nestle, she said, “should have secured up their water rights” before spending millions of dollars building a bottling plant.

The spring has a rich history. Drilling holes in nearby boulders indicates that the site was heavily used by native Californians long before the arrival of Spanish explorers in the 16th century. Southern Pacific Railroad acquired the water source in the late 1800s to service trains climbing through the San Gorgonio Pass on the route now followed by Interstate 10.

In 1917, Southern Pacific Land Co. applied for the first water use permit for the spring. Twenty-one years later, a state judge included the spring in the settlement of a disagreement over rights to surface water in the Whitewater River basin draining to the Coachella Valley.

The SP Spring permit later passed through a succession of owners. The water resources board was notified in May 2003 that the Morongos had acquired the permit -- more than a year after construction began on the Arrowhead bottling plant.

Nestle and the Morongos “are making a ton of money off this stuff,” said Gerald Shoaf, attorney for the Coachella Valley Water District. “That’s our water.”

It’s clear why the district covets the water. The population of the Coachella Valley has soared almost 50% to about 340,000 in the last decade and is expected to expand at the same rate over the next 10 years.

The Morongos declined to talk about details of their financial agreement with Nestle, which includes payments for the water and leasing fees for the plant. The Nestle facility employs 260 workers on two production lines. Plans call for expansion to as many as 10 lines, creating more jobs and making it the largest water bottling plant in the U.S., the tribe said.

The tribe, with its gambling, retail and water bottling operations, is a major employer in the area, Husing, the consultant, noted. The water battle is a threat to jobs at the bottling plant, he said, “and it’s a threat to the Morongos in terms of diversifying their portfolio to use their land for things other than casinos.”

For now, the case is on hold in Sacramento because of a two-pronged legal strategy the Morongos are pursuing against the state water board.

The tribe filed a lawsuit in state court accusing Olson and the board’s staff of conflicts of interest.

The allegation is based on the fact that staff members at various times serve both as enforcement officers and as advisors to the board, which makes the rulings on which enforcement actions are based. The next hearing on the matter is scheduled for July 22.

At the same time, tribal attorney Somach is crafting a narrow defense of the tribe’s right to the spring that boils down to a war over words. Somach said the water being bottled at the Nestle plant, though identified on the Arrowhead label as “spring water,” actually is “percolating groundwater.” And groundwater isn’t subject to state regulation, he contends.

“The bottling operation takes water before it comes to the surface -- it’s taken from underground,” Somach said.

In fact, according to Nestle’s water attorney, Rob Saperstein, some of the water in question doesn’t come from the spring at all but is pumped out of a nearby bore hole.

The argument places the bottling partners in a bit of a semantic bind, according to Coachella Valley officials. They “have to walk a very fine line,” Shoaf said, to avoid raising questions about whether their product can be marketed as spring water.

Saperstein scoffed at that notion, contending that Arrowhead water -- from a quality perspective -- still is “properly characterized as spring water.”

In any case, a 2001 study conducted for the state Department of Health Services identifies all the SP Spring water that feeds the plant as “spring water.” And Olson said she, for one, wasn’t swayed by the tribe’s arguments.

“A spring,” she said, “is a spring.”