California town loses decade-long fight to seize private water utility in 7-0 ruling
In a landmark decision, California's Supreme Court dismissed a town's claim regarding the use of eminent domain for utility purposes. The judges emphasized the need for a thorough, independent evaluation of necessity declarations before any utility can be seized. This shift significantly impacts how courts will weigh municipal efforts to take over private utility companies, allowing private…
The California Supreme Court has ruled 7-0 against a decade-long effort by the town of Apple Valley to seize control of its local water system. The unanimous decision, issued on August 24, rejected the town's argument that its public necessity declaration should receive limited judicial review. Writing for the court, Associate Justice Leondra Kruger stated that judges must independently examine the facts in such cases, rather than automatically deferring to local governments.
The case originated in 2010 when Carlyle Infrastructure Partners purchased the Apple Valley Ranchos Water Company, which served approximately 65,000 people. The town later sought to take over the privately owned utility, arguing that it was necessary for public safety. However, Liberty Utilities, a subsidiary of Algonquin Power & Utilities Corp, strongly opposed the takeover.
In a 2015, a Superior Court judge ruled against the town, finding that public ownership was not necessary. The appeals court later upheld this ruling, establishing a "gross abuse of discretion" standard for reviewing municipal attempts to seize private utilities. The Supreme Court's decision changes how courts evaluate such municipal actions, potentially making it easier for private utility companies to challenge government seizures.
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