Validation Action Judgments Bar Later Water-Rate Challenges
A ratepayer cannot challenge water rate changes if it did not file a reverse validation action or contest a public agency’s validation action. In Hiller v. Marin Municipal Water District, the California Court of Appeal ruled that challenges to increased water rates are foreclosed by final judgment in a water district’s validation action and any Proposition 218 or constitutional challenges must be raised during the validation proceeding.
Validation actions are expedited judicial processes for public agencies to have a court validate certain acts, including rate adjustments. Crucially, if the validation judgment is not appealed or if the judgment is later affirmed, the validated action is binding and conclusive.
The Court of Appeal concluded that a ratepayer has two statutory options to challenge water rate increases: file a reverse validation action within the statutory 120 day challenge period and before the public agency’s filing of a validation action, or appear in the validation action to contest the increase. Proposition 218 and other constitutional claims cannot be brought after these opportunities have elapsed. This both provides certainty for water-agency revenue streams and helps avoid later litigation over adopted rates.
With rate increases, a validation judgment can efficiently provide certainty and foreclose later litigation. It can be beneficial to the public agency to frame the legal issues in a validation action, rather than waiting for a legal challenge.
This E-Alert was prepared by Alex Kurlan, an RWG Summer Associate. If you have any questions, please contact a member of RWG’s Public Law Department.
