Court rejects Surfrider's lawsuit over Carlsbad Desalination Project

The San Diego Superior Court has issued a final ruling rejecting a lawsuit that challenged the California Coastal Commission's approval of a Coastal Development Permit for the Carlsbad Desalination Project...

SAN DIEGO, CA, May 12, 2009 -- On the eve of the Regional Water Quality Control Board project hearing, Poseidon Resources announced that the San Diego Superior Court has issued a final ruling rejecting a lawsuit that challenged the California Coastal Commission's approval of a Coastal Development Permit for the Carlsbad Desalination Project (Project).

Opponents of seawater desalination, led by Surfrider Foundation lawyer Marco Gonzalez, have an extensive and unsuccessful history of filing legal challenges and appealing Project permit approvals. Six legal challenges have been filed since 2006; four have been dismissed and two are pending before the San Diego Superior Court, the same court that dismissed the petition against the Coastal Commission.

The Surfrider Foundation petition challenged the Coastal Commission's approval of the Project on the grounds that the Commission failed to appropriately interpret and apply California Water Code, which requires that the Project must "use the best available site, design, technology, and mitigation measures feasible in order to minimize and intake and mortality of all forms of marine life"; and on the grounds that the Commission's approval was expressly conditioned upon the Post Hoc submission of marine life mitigation plans.

The Court found no merit in the petitioner's arguments and denied the petition (see attached Superior Court ruling) on all grounds.

"We're pleased that the court has rejected the latest attempt to derail the Carlsbad Desalination Project by a narrow special interest opposed to seawater desalination," said Poseidon Resources' Vice President Scott Maloni. "The Court found that the Coastal Commission acted with proper authority and within its jurisdiction when it issued a permit to the Project," said Maloni. "The arguments made by Project opponents have been rejected by every legal authority that has reviewed -- and ultimately approved -- the Carlsbad Desalination Project. We hope Surfrider Foundation will decide to put the interests of the San Diego region first and direct its lawyer to stop his futile legal assault," said Maloni.

Since 2003, the Project has undergone a six-year permitting process that has included over fourteen public hearings covering 70 hours of public testimony and deliberation. Over this period, the City of Carlsbad, California Coastal Commission, State Lands Commission and the San Diego Regional Water Quality Control Board have all approved the Project despite worn-out claims by Project opponents that the approval process was somehow flawed. The Regional Board alone has held five public hearings on the Project since 2006, each time the board acted to advance the Project.

"Each time a state regulatory agency has approved the Project Mr. Gonzalez has leveled a claim of misconduct. This has gone on for six years," said Maloni. "Today's court ruling confirms once again that this tired accusation lacks merit. Sound science and the law are not on his side, yet Mr. Gonzalez has chosen to continue his legal charade in order to delay the Project in hopes that it will ultimately fail. It's not Poseidon that is bearing the brunt of Mr. Gonzalez's reckless deception, it's the residents of San Diego County that are in dire need of a new, local water supply," Maloni said.

The San Diego County Water Authority recently declared a Stage 2 Drought Alert and voted to cut back water allocations by 8% to San Diego County. The desalination Project is capable of producing 56,000 acre feet per year, enough water to offset the current supply deficit and eliminate the need for water rationing. The Project was originally scheduled to be on line in 2009. "If not for obstructionist tactics, the Carlsbad Desalination Project could have been operational today, in which case San Diego County and its economy would have been completely inoculated against the cuts to imported water," said Maloni.

In October 2008, Poseidon proposed to settle the outstanding lawsuits against the Carlsbad Desalination Project (see October 31, 2008 settlement letter attached). In return for litigants withdrawing the lawsuits filed against the state agencies that approved the Project, Poseidon proposed to provide $800,000 to backfill state funds that had been cut from the budget for water quality monitoring in the County of San Diego. The settlement offer was rejected by the litigant's lead attorney Marco Gonzalez. "Instead of spending funds on a legal defense, we preferred to put our money towards a worthwhile environmental cause," said Maloni. "We thought we shared a mutual interest with the Surfrider Foundation in healthy beaches and a clean watershed, and we hoped they would see the value in this settlement. We were wrong," said Maloni.

Denial of the lawsuit challenging the Coastal Commission's approval of the desalination plant removes the last remaining legal hurdle to the start of Project construction. "The outstanding litigation and any additional legal challenges to come do not impact our ability to start Project construction," Maloni said.

Poseidon has worked in partnership with the City of Carlsbad since 1998 to build the desalination plant, which will have the capacity to produce 50-million-gallons-per-day of high quality drinking water and serve 300,000 residents annually. Once operational, the Carlsbad Desalination Project will provide enough drinking water to serve 300,000 residents annually. The facility is scheduled to begin construction this year and be operational in 2012.

Poseidon Resources specializes in developing and financing water infrastructure projects, primarily seawater desalination and water treatment plants. These projects are implemented through innovative public-private partnerships in which private enterprise assumes the developmental and financial risks.

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