In newly enacted Senate Bill 104 (Stats 2014, ch 3, §1), approved by the governor in March and effective immediately, the legislature declared that California "is experiencing an unprecedented dry period and shortage of water for its citizens, local governments, agriculture, environment, and other uses." Although SB 104 has implications for all types of California water rights, this alert focuses on the potential impact to appropriative water rights, since much of the state's water supply depends on appropriative water rights.
In American Master Lease LLC v Idanta Partners, Ltd. (2014) 225 CA4th 1451, as modified (May 27, 2014, No. B244689) 2014 Cal App Lexis 460, the Second District Court of Appeal held that a defendant can be liable for aiding and abetting a breach of fiduciary duty if the defendant either (i) knew that the other person's conduct constituted a breach of fiduciary duty or (ii) substantially assisted or encouraged the breach. As the court explained, civil liability for aiding and abetting a breach of fiduciary duty does not require that the defendant owe an independent duty to the plaintiff. Unlike liability based on a conspiracy, liability for aiding and abetting is distinct from primary liability for breach of duty. Liability attaches because the defendant behaves in a way that enables the primary violator to commit the underlying tort. 225 CA4th at 1476.