High court to consider Nestle case

The California Supreme Court could decide next month on a tricky conflict-of-interest charge that, if upheld, could give the green light to a $120 million Arrowhead water bottling plant in McCloud. ("If only you could bottle the stuff…,” CN&R Cover Story, by Josh Indar, July 21, 2005.)

The proposed plant has divided the citizens of the small, scenic town at the base of Mt. Shasta, with some believing it will provide a welcome economic infusion to the struggling community and others that Arrowhead and its parent company, Nestle Waters North America, are taking the town to the cleaners. The McCloud Community Services District, they say, messed up when it agreed to sign a 50-year contract for up to 521 million gallons of water for just $300,000 a year.

In March 2005, Superior Court Judge Roger Kosel ruled in favor of a lawsuit, brought by the group Concerned McCloud Citizens, that asked that the deal be junked because the contract was signed before Nestle completed an environmental-impact report.

Meanwhile, in December 2005, Arrowhead learned that Kosel was a $100-a-year contributor to the Mount Shasta Bioregional Ecology Center, an environmental group that was discovered to have a possible financial link to Concerned McCloud Citizens. Arrowhead requested a hearing on whether Kosel’s decision should be overturned because of the possible conflict.

An appellate court turned down Arrowhead’s request, so the company appealed it to the Supreme Court.

The information about Kosel’s donation to the bioregional center should have been revealed, David Palais, the project manager of the plant, told CN&R: “That way the judge would have known to recuse himself.”

Representatives at the bioregional center could not be reached for comment.