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Horvitz & Levy defended a decades-long practice that allowed its client, a group of water producers and rights holders, to form contracts and otherwise act on behalf of the client’s members. Horvitz & Levy defeated an aggressive attempt by a minority group of entities to transform the client into a mere advisory body.
Horvitz & Levy’s client, Chino Basin Appropriative Pool (AP), is one of three pools or groups of water producers and rights holders in the Chino Groundwater Basin. The pools were created by a 1978 stipulated judgment, which identified the pools’ members, established their powers, and detailed their voting systems. The superior court exercises continuing jurisdiction over the pools and their activities.
Based on a majority vote of its members, the AP settled an ongoing dispute over its obligations toward another pool. A minority group of members refused to abide by the AP’s decision. The trial court upheld the AP’s authority to enter the settlement, and the minority members appealed.
Horvitz & Levy represented AP in the Court of Appeal, opposing the minority members’ argument that AP lacked authority to bind appellants to a settlement contract to which they did not individually consent. The Court of Appeal soundly reaffirmed the AP’s decisionmaking and governance structure, including its voting system. The court’s ruling will help to ensure efficient management of the groundwater basin as provided for in the judgment, for the benefit of all water producers and rights holders in the basin.
