Press Release: Sweeping Legal Victories for Cadiz Water Project Stand


LOS ANGELES, CA – Cadiz Inc. [NASDAQ:CDZI] (“Cadiz”, the “Company”) is pleased to announce that the available time period for further review of administrative decisions and judicial opinions validating the Cadiz Valley Water Conservation, Recovery & Storage Project (“Cadiz Water Project,” the “Project”) by the California State Supreme Court expired yesterday, July 11th, 2016. As a result, all challenges to the environmental review and approval of the Cadiz Water Project under the California Environmental Quality Act (“CEQA”), the toughest environmental law in the U.S., are now final having withstood scrutiny by state superior and appellate courts.

“After comprehensive scientific study, thorough independent peer review, public agency approval and validation in California’s Superior and Appellate Courts, the Project has fully demonstrated that it can conserve enough water for 400,000 people without harming the environment,” said Scott Slater, Cadiz CEO & President. “We have been steadfast in our commitment to do things the right way, in accordance with the law, and we look forward to implementing the project with our public agency partners as soon as possible.”

The Cadiz Water Project is a public-private partnership designed to conserve groundwater presently lost to evaporation and high-salinity in the Mojave Desert’s Cadiz Valley and deliver it to Southern California communities. Over the 50-year term of the Project, an average of 50,000 acre-feet of water per year, enough for 400,000 people, will be delivered across the region in compliance with a comprehensive, state-of-the-art groundwater management program that will be enforced by San Bernardino County. In a second phase, the Project would store up to 1 million acre-feet of imported water for use in future dry years. The Company developed the Cadiz Water Project in partnership with the Santa Margarita Water District (“SMWD”), Orange County’s second largest water agency, as well as water providers that serve seven Southern California counties.

“After 5 years of extremely dry weather and ongoing challenges to our traditional water supplies from the Bay-Delta and the Colorado River, we must continue to invest in supplemental water supplies,” said SMWD General Manager Dan Ferons. “We are pleased that any questions about SMWD’s certification of the Cadiz Water Project’s EIR have been put to rest and we will move forward expeditiously with the final discussions needed to transport Cadiz water to SMWD and the project’s other participating water providers throughout Southern California.”

Beginning in 2009, the Project started a multi-year scientific evaluation, followed by independent peer review, and then a public environmental review in accordance with CEQA, led by SMWD. In July 2012, the SMWD Board unanimously certified the Project’s final Environmental Impact Report, which concluded that operations would not cause any significant adverse environmental impacts to water resources or the desert environment. San Bernardino County independently reached the same conclusion later that year in October and approved the Project’s groundwater management plan. These public agency approvals were challenged in nine separate lawsuits filed in 2012. One of these disputes was dismissed following independent hydrological study in 2013 that summarized that alleged environmental impacts, including impacts to desert springs and water resources, would be “impossible.”

Six lawsuits brought by two petitioners, the Center for Biological Diversity, et. al. and Tetra Technologies, Inc., however, proceeded to trial in December 2013. In September 2014, the trial court issued judgments that denied all claims against the Cadiz Water Project and upheld all public agency approvals. The petitioners appealed these judgments to the California Court of Appeal in late 2013. In May 2016, after Cadiz, SMWD and San Bernardino County were joined by 11 ‘Friends of the Court’ Amicus Briefs in defense of the lower court rulings, California’s Fourth District Court of Appeal sustained the six trial court decisions and validated the public agency environmental review and approvals of the Project.

Following the sweeping May 2016 Appellate Court victories, petitioners had the right to request that the California State Supreme Court take up the cases. However, no Petitions for Review were filed by petitioners during the available time period and the opportunity for the California State Supreme Court to independently review the six Appellate Court opinions on its own motion has also now passed.

During the judicial reviews both in trial court and the Court of Appeal, no additional studies were ordered, nor any language changed in any of the environmental documents. The EIR, groundwater management plan and all supporting studies were upheld in their entirety.

“The Cadiz Project has passed multiple tests under our state’s stringent regulatory framework affirming that it can reliably deliver new water, while protecting the local environment and supporting good-paying jobs,” said U.S. Congressman Paul Cook (R-Apple Valley). “We’re in a drought that isn’t going away, and California must do all it can to ensure we have secure water supplies. It’s time to move ahead with this carefully planned project and bring more water and more jobs to our communities.”

U.S. Congressman Tony Cardenas, (D-San Fernando Valley) said “Access to new water supplies is extremely critical to the continued vitality of our cities and agricultural communities, and we should do all we can to implement solutions like the Cadiz Project when they have been found under our state’s strong environmental laws to be safe and sustainable. With the CEQA litigation concluded, it’s time to add Cadiz to our region’s water supply portfolio.”

US Congresswoman Mimi Walters (R-Mission Viejo) added “I have long supported the sustainable design of the Cadiz Water Project and am very pleased that all legal challenges to the project’s environmental approvals have come to an end in the project’s favor.”

“Addressing our region’s water reliability issues will be critical to ensuring a prosperous economy and opportunities for all Southern California residents, so we congratulate the Cadiz Water Project for successfully completing an extensive environmental review and CEQA process – not an easy feat in California – and we look forward to the project’s implementation as a new, innovative and sustainable water supply for our region’s communities and businesses,” said Tracy Hernandez, CEO of Los Angeles County Business Federation.

“The end of litigation in this matter is very good news indeed,” added Lucy Dunn, CEO of Orange County Business Council. “The Cadiz project is the innovative approach Southern California needs for a reliable water supply and now that the project has overcome all legal hurdles, OCBC calls on federal officials to act quickly and allow Cadiz to begin construction.”

“Southern California’s economic wellbeing and quality of life depend on having a reliable water supply. Local and regional water projects such as Cadiz are evidence that the water community knows how to develop new supplies in ways that are sustainable and protect the environment,” stated Southern California Water Committee Executive Director Charles Wilson.

“The Building Industry Association of Southern California (BIASC) has long supported the Cadiz Water Project as the sort of inventive and sensitively designed new water supply project our region needs,” added Michael Battaglia, President of BIASC. “Opponents have used the CEQA process to tie up the project in the courts for nearly four years, and now that litigation has been exhausted, we hope California’s federal representatives will do their part to help Cadiz quickly provide a new and sustainable water supply to more than 100,000 Southern California households.”

“The decision by opponents of the Cadiz Water Project not to appeal the project’s numerous court victories is the right one for all water users in Southern California and shows that sound science can prevail over rhetoric,” said Paul Simonds, President of South Orange County Economic Coalition. “We hope our elected officials will work to ensure the project delivers a needed new water source to 400,000 Southern Californians as soon as possible.”

“A reliable, affordable water supply is critical to sustaining the family-supporting jobs we continue to need across our region. With all CEQA challenges now behind it, the exhaustively studied Cadiz Project should be part of any regional water supply strategy, and we encourage our elected officials to do all they can to support the project’s immediate construction and implementation,” stated Dave Sorem P.E., Immediate Past President, Engineering Contractors’ Association

With legal review of the Project under CEQA exhausted, the Company and its supporters will now turn to confirming its rights to convey water via a 43-mile pipeline from Cadiz to the Colorado River Aqueduct and then into the service areas of Project participants. The pipeline will be located within a disturbed railroad corridor and will further a number of railroad purposes in addition to providing nearly a billion dollar economic stimulus to the Southern California economy. The colocation of the pipeline in this route was studied in the public CEQA review process and approved as the environmentally preferred route for the pipeline.

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