(September 19) The California State Water Resources Control Board (SWRCB) approved a cease & desist order forcing BlueTriton, the bottler of Arrowhead Mountain Spring Water, to stop the removal of tens of millions of gallons of water annually from a San Bernardino National Forest spring complex that gave the Arrowhead brand its name.
Under the order adopted Tuesday, BlueTriton is required to allow the bulk of the water it currently removes to bypass its collection facilities – a series of tunnels, boreholes and a pipeline that occupy public lands – by November 1, 2023.
Water originating in the San Bernardino Mountains and using the Arrowhead brand in one form or another had been marketed at least since 1909. Questions have long existed, however, as to whether the water rights originally claimed, attributed or granted to Arrowhead Puritas, the corporate predecessor to Arrowhead Spring Water, pertain to the current source of the water drawn at the 5,200-foot elevation level from Strawberry Creek in what is known as Strawberry Canyon rather than water drawn farther down the mountain at around the 2,000-foot above sea level.In 1929, the California Consolidated Waters Company was formed to merge three Los Angeles-based companies that bottled and distributed “Arrowhead Water,” “Puritas Water” and “Liquid Steam.” The property, bottling operations, water distribution and administration of Arrowhead Springs Company, Puritas of California Consumers Company and the water bottling division of Merchants Ice and Storage were all administered by California Consolidated Waters Company. In August 1930, California Consolidated Waters, on the basis of a single pipeline permit that was not based on any water rights and without having obtained a diversion permit or any further valid authorization or rights, started diverting spring water from a single “bedrock crevice” spring in the San Bernardino National Forest along Strawberry Creek at an elevation of 5,600 feet. Subsequently, in 1933 and 1934, the company put in place tunnels, ultimately accompanied by holes and horizontal wells at or near the headwaters of Strawberry Creek in Strawberry Canyon. Strawberry Creek was noted in maps and springs studies prior to the diversion to be a perennial stream which was fed by abundant flowing headwaters springs. The Arrowhead Water Bottling Company, under various names and corporate configurations, including divisions of Standard Oil of California and Rheem Manufacturing, continued to operate, drawing water from Strawberry Canyon throughout the 20th Century. In 1969, the Arrowhead Water Bottling Company was acquired by the Coca Cola Bottling Company of Los Angeles and in 1978, Chicago-based Northwest Industries acquired Arrowhead Puritas when it bought Coca Cola Bottling of Los Angeles. In 1982, Northwest Industries unloaded Coca-Cola Bottling of Los Angeles to Beatrice Foods. BCI subsequently acquired Beatrice in a leveraged buyout. While under BCI’s control, the U.S. Forest Service-issued Arrowhead Puritas water drafting permit in Strawberry Canyon expired, and the BCI-Arrowhead Drinking Water Company applied to extend the permit. In 1987, while that application was still pending, Perrier purchased the BCI-Arrowhead Drinking Water Company.
The then-pending water extraction permit renewal required a U.S. Forest Service review of the water drafting arrangement and its environmental/ecological impact, which the U.S. Forest Service then did not have the immediately available resources to carry out. In a gesture of compromise, Perrier was allowed, pending the eventual Forest Service review, to continue to operate in Strawberry Canyon by simply continuing to pay the $524-per year fee to perpetuate the water extraction under the terms of the expired permit. In 1992, when Nestlé acquired the Arrowhead brand from Perrier, it inherited the Strawberry Canyon operation and continued to pay the $524 annual fee without renewing the permit, which at that time existed under the name of the “Arrowhead Mountain Spring Water Co,” one that was never listed legally in corporate filings, but which operated under Nestlé Waters of North America, Inc. until it was acquired by BlueTriton Brands
Nestlé’s intensive water-drafting activity, which has long been decried by environmentalists, came under increasing fire as a statewide drought, which lasted for more than five years after it first manifested in 2011, advanced. In 2015, environmental groups were gearing up to file a lawsuit claiming the U.S. Forest Service had violated protocols and harmed the ecology of the mountain by allowing Nestlé Waters North America to continue its operations in Strawberry Canyon for 28 years after its permit expired. At that point, the Forest Service moved to make an environmental review. In the meantime, Nestlé continued its water extraction, pumping an average of 62.56 million gallons of water annually from the San Bernardino Mountains. Environmentalists lodged protests with the water rights division of the California Water Resources Control Board, alleging Nestlé was diverting water without rights, making unreasonable use of the water it was taking, failing to monitor the amount drawn or make an accurate accounting of the water it was taking, and wreaking environmental damage by its action.
Following a two-year investigation, state officials arrived at a tentative determination that Nestlé could continue to divert up to 26 acre-feet of water (8.47 million gallons) per year. Nestlé had gone far beyond the water drafting limit the company was entitled to, the State Water Resources Control Board said, and was actually drafting 192 acre-feet (62.56 million gallons), such that 166 acre-feet (54.09 million gallons) the company was taking on an annual basis was unauthorized, according to a report released on December 21, 2017.
In March 2021, Nestlé’s parent company, Nestlé S.A., a corporate conglomerate headquartered in Vevey, Vaud, Switzerland, sold its Nestlé Waters North America division, with the exception of its bottling rights to Perrier, to One Rock Capital Partners, LLC, in partnership with Metropoulos & Company.
Nestlé Waters North America existed as Nestlé’s operations pertaining to bottling drinking water in the United States and Canada, including eight of the leading water bottling operations in the United States. Upon the sale being completed to One Rock Capital and Metropoulos, Nestlé Waters North America was redubbed BlueTriton Brands.
Arrowhead Mountain Spring Water is among the most iconic of the brands now in the possession of BlueTriton. To the chagrin of the company, the California State Water Resources Control Board’s finalized determination on September 19 to issue the cease & desist order entails a finding that “BlueTriton does not have any water rights that authorize these diversions and uses.”
Numerous complainants, including Story of Stuff Project Executive Director Michael O’Heaney and local residents and whistleblowers Steve Loe, Amanda Frye and Hugh Bialecki, offered testimony before the state water board Tuesday, urging its approval of the order. O’Heaney also submitted a petition signed by 25,000 global citizens gathered by his organization and corporate accountability campaigner Eko calling upon the board to act. The petition stated that “one cannot sell what it does not own. And BlueTriton does not own, nor does it hold a right to, the water in Strawberry Creek.”
O’Heaney, an environmental advocate, said, “Eight years after the first complaint about Nestle’s questionable claim to water from the Strawberry Creek watershed, the state has finally taken action against its successor BlueTriton and none too soon. BlueTriton, Nestlé and their predecessors were able to hoodwink state and federal regulators for too long – more than 90 years – but we’re incredibly pleased this unlawful removal of the public’s water from public lands will finally end.”
Lacey Kohlmoos, Ekō’s senior water campaign manager, reacted, saying, “The groundswell of public support and relentless pressure has been a driving force in compelling the California Water Board to do the right thing. As more and more communities around the world are experiencing water scarcity, it is inspiring to see these decision-makers saying ‘no more’ to BlueTriton’s water theft. The board’s historic decision today is yet another nail in the coffin of the unethical bottled water business.”
Amanda Frye, a Redlands resident, retired nutritionist, textbook author, and prime mover in lodging the complaint with the State Water Board, said, “The public prevailed. The State of California has shown itself to be taking a tougher stand on water rights and recognizing that corporations are not above the law. My hope is that the stream in Strawberry Creek can be returned to a perennial flow year-round.”
Hugh Bialecki, a San Bernardino Mountain Community resident and the president of the Save Our Forest Association, said, “This decision by the State Water Resources Control Board, a unanimous vote, is testimony to the power of citizens standing up for our San Bernardino National Forest and natural resource protection as well as not being intimidated by a multi-national corporation illegally stealing water for decades and fraudulently claiming to have water rights. The people of California have won today.”
Anthony Serrano, a Highland resident who advocated against the diversion of water from the San Bernardino Mountains, said he was cautiously optimistic about Tuesday’s ruling, though he indicated his belief that BlueTriton will not give up the ghost that easily.
“It appears the water board voted 5-to-0 in favor of the recommendations the State Water Board’s enforcement staff made based on its investigation,” Serrano said. “We’ll see how it shapes out.”
The Cease & Desist Order the board approved was drafted by the board’s administrative hearings office, including Administrative Hearing Office Allen Lilly, who presided over a nearly year-long hearing in 2021 and early 2022 into BlueTriton’s appeal of the findings of the State Water Board’s enforcement staff following an extensive investigation. In addition to prosecutors from the Water Board and attorneys for BlueTriton, both the Story of Stuff Project and multiple other complainants were able to introduce evidence and call witnesses during the hearings and to participate in a site visit to the springs in February 2022.
The order concludes that the water in question, because it originates from springs, even if it is intercepted prior to expressing at the surface, falls under the jurisdiction of the State Water Board, which by law regulates surface water and not groundwater. Further, according to the order, BlueTriton did not perfect an appropriative right to the water it removes and in particular, did not perfect a pre-1914 right, considered to be California’s inviolable gold standard in terms of water rights, as it has long claimed.
The order is silent on the removal of water from three of the spring sources BlueTriton taps at a lower elevation in Strawberry Canyon and allows the company to divert water from the springs to the owners of the Arrowhead Hotel property for riparian uses. Nevertheless, environmentalists have indicated they will importune the Forest Service to deny BlueTriton’s application for a new special use permit for the operation on public lands without proof of a valid water right.
-Mark Gutglueck