13-year Lawsuit with Steinbeck Vineyards Resolved

Author: Executive Office
Date: 10/2/2026 10:32 AM

Santa Clara Superior Court issued its final judgment in Steinbeck Vineyards v. County of San Luis Obispo

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On September 24, 2026, the Santa Clara Superior Court issued its final judgment in Steinbeck Vineyards #1, LLC, et al. v. County of San Luis Obispo, et al. (Steinbeck litigation).  This judgment represents the culmination of nearly 13 years of litigation involving quiet title claims asserted by hundreds of landowner parties against several water suppliers, including the County of San Luis Obispo, City of Paso Robles, San Miguel Community Services District, Templeton Community Services District and Atascadero Mutual Water Company as well as the County Flood Control District.  The County was a defendant based on its ownership and operation of water systems in Shandon and Santa Margarita, collectively serving over 800 customers.

The Steinbeck litigation was heard in Santa Clara County to avoid local conflicts of interest and was conducted in six separate phases of trial due to the complex nature of the issues.

The final judgment primarily reiterates the separate decisions rendered in each phase of trial as well as other related orders.  For instance, one order established the geographical boundaries of the basin. Another phase of trial resulted in the public water suppliers establishing prescriptive rights to groundwater based on the volume of groundwater they pumped for non-overlying use during a historical period of overdraft (1981 – 1990).  For example, the County established a prescriptive right to 310 acre-feet per year in connection with its service to Shandon and Santa Margarita.  During a subsequent phase, a limited group of landowners produced sufficient evidence that they also pumped during the 1981 – 1990 period to establish “self-help” as a defense to the established prescriptive rights.  The court suggested this would give these landowners an equal priority with the prescriptive users during times of shortage but made no official determination because of the nature of the action.  Specifically, the Steinbeck litigation was a limited quiet title action that did not assess the current status of the groundwater supply or allocate pumping rights.

Notably, the final judgment does not require the County or the water suppliers to take any actions nor does it inhibit any agency from continuing to manage the basin.  In short, the final judgment does not dictate any changes with respect to implementation of the Sustainable Groundwater Management Act.

Frequently Asked Questions

Q1       Did the County bring this lawsuit against landowners overlying the Paso Robles Groundwater Subbasin?

No.  The County was a defendant in this lawsuit. The plaintiffs were a collection of landowners owning land in or around the basin who filed this quiet title action against water suppliers and public agency defendants.

Q2       Did the plaintiffs “win” the lawsuit?

No.  As reflected in the final judgment, the history of this complex litigation does not support this simple conclusion.  For instance, the case contained multiple phases, including one in which a jury found in favor of the water suppliers—specifically, that each public water supplier proved it has a prescriptive right to pump a certain amount of water with the exception of the County Flood Control District and Atascadero Mutual Water Company who did not assert prescription based on their groundwater use or lack thereof (e.g. Atascadero Mutual Water Company exercises overlying rights).

Q3       Does this lawsuit allocate groundwater pumping rights within the Paso Robles Groundwater Subbasin? 

No.  This lawsuit does not allocate groundwater pumping rights in the basin; as a limited quiet title action between the plaintiffs and the defendants, it is not a comprehensive groundwater basin adjudication.  As noted by the court in its phase 5 statement of decision, the action does not quantify or allocate current pumping rights or create a physical solution but only concerns the plaintiffs’ title to the groundwater rights associated with their specific lands and only as of November 25, 2013, the date they filed suit. 

Since no allocations or other actions were imposed, the court did not issue injunctive relief or order the parties to take any specific actions whatsoever.  The final nature of this decision is reflected in the fact that, despite the plaintiffs’ request, the Court did not retain any continuing jurisdiction over basin groundwater matters.

Q4       Does the final judgment affect any groundwater sustainability agencies or the Paso Robles Area Groundwater Authority with respect to any of their powers under the Sustainable Groundwater Management Act?

No.  As indicated above, this was a limited quiet title action rather than a comprehensive adjudication to determine current pumping rights.  The final judgment makes no holdings related to the Sustainable Groundwater Management Act, basin management or the imposition of basin management fees; and the Sustainable Groundwater Management Act was only peripherally discussed during the litigation, specifically concerning the State’s recognition of the Atascadero Groundwater Subbasin as a separate basin from the Paso Robles Groundwater Subbasin under the Act.

Q5       Can Groundwater Sustainability Agencies or the Paso Robles Area Groundwater Authority still impose groundwater pumping restrictions and fees to fund implementation of the Groundwater Sustainability Plan?

Yes. The Sustainable Groundwater Management Act makes clear that its provisions do not modify rights or priorities to groundwater or determine or alter groundwater rights; rather, it authorizes groundwater sustainability agencies to implement groundwater sustainability programs and adopt fees to fund those programs consistent with applicable constitutional requirements (see e.g. Water Code sections 10720.5 and 10730). 

In short, the final judgment does not impact implementation of the Sustainable Groundwater Management Act or the Groundwater Sustainability Plan. 

Q6       Are plaintiffs excused from paying the Paso Robles Area Groundwater Authority’s groundwater charge or from otherwise complying with groundwater management actions under the Sustainable Groundwater Management Act?

No.  The final judgment says nothing about groundwater management fees or groundwater management actions under the Sustainable Groundwater Management Act.  Separately, courts have held that any person challenging any groundwater fee imposed under the Act must pay the fee before bringing an action for a refund (Mojave Pistachios, LLC v. Superior Court of Orange (2024) 99 Cal.App.5th 605).  Nothing in the Court’s decision or applicable statute suggests that plaintiffs would be entitled to such a refund. 

To read the final judgement, click here