The Arizona Corporations Commission has authority to regulate the sale, lease, assigning, mortgage of a public utility’s assets, including when those assets are “otherwise dispose[d] of.” These transactions need the Commission’s approval.
The city intended to exercise eminent domain to take the assets of a water utility. This sure looked like a “friendly” condemnation: the city and the utility entered into a letter of intent “documenting the City’s intent to condemn substantially all the assets” of the utility, and “negotiations between the City and [the utility] were intended to result in condemnation, not a sale.”
But the city and the utility did not seek Commission approval. A developer objected, asserting the municipality’s condemnation of the utility was covered by the “otherwise dispose of” language. The Commission agreed, concluding that it could regulate the condemnation, and ordered it to be halted until the Commission approved it.
In City of Surprise v. Arizona
Continue Reading Arizona: Eminent Domain Isn’t Voluntary (Even A “Friendly” Condemnation)


