Valley Water Agrees to $8.25M Settlement with Coyote Creek Residents for Flood Damages

Valley Water, the Santa Clara Valley Water District, announced it has reached a settlement agreement that will pay landowners along Coyote Creek $8.25 million for damages from 2017 flooding along the Creek at the southern boundary of San Jose.

The lawsuit was set to go to trial this month.

“The $8.25 million settlement was reached because Valley Water and those affected by the flood event engaged in good-faith settlement discussions,” the district said in a May 21 statement.

“From the onset, both sides sought to resolve this case fairly,” the district said.

Last November, the San Jose City Council approved a $750,000 settlement with residents who claimed the city had failed to give them warning about flood dangers along the creek.

Valley Water also said it is working with the community to develop a Coyote Creek Flood Protection Project and Coyote Creek Flood Management Measures Project along 9 miles of flood-prone areas.

“Once completed, these two projects will help protect homes, businesses and major roads and highways from floods.” Valley Water said in its statement.

The lawsuit that was settled this month with Valley Water was filed by more than 200 property owners along Coyote Creek, where heavy rainfall in February 2017 caused the Anderson Dam in Morgan Hill South San Jose to overflow, flooding areas of South San Jose.

The resulting flood displaced approximately 14,000 residents in neighborhoods around Coyote Creek, including Naglee Park, Rock Springs and the South Bay Mobile Home Park.

Some people who were forced to flee rising water said they never received warnings from the city or other government agencies.

The flooding caused approximately $100 million in damages, according to local officials. Valley Water in 2020 offered flood victims a $5,000 payout that would have required residents to forfeit their ability to sue for damages.

Some residents sued the water district, which is in charge of managing the Coyote Creek watershed, for failing to take adequate flood control measures. The residents also sued the city of San Jose. Valley Water reported that it received 423 flood claims from Coyote Creek property owners, and said 162 claims were settled in 2019 for approximately $700,000.

Valley Water had unsuccessfully sought to dismiss the lawsuit, but that motion was rejected in January, prompting the settlement talks.

“Valley Water shares responsibility with every fee owner throughout the watershed,” a district spokesperson told San Jose Inside. “While we have a stewardship role, it is certainly not our sole responsibility."


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