The first sign that the opinion wasn't going the way of the Golden State Water Company -- a private utility that provides water to the City of Ojai, California -- was right there in the first paragraphs, which contain the one-two punch of labeling the company both a monopolist, and one that price gouges about California's most sensitive subject these days, water.
The opinion is infused with the flavor that Golden State positively deserved to have its property taken by eminent domain:Monopolists have long been unpopular in this country. When King George III's choke hold on government led to intolerable levels of taxation, he was forced to divest his holdings. At the end of the nineteenth century, Congress passed the Sherman Antitrust Act with only a single dissenting vote. (26 Stat. 209, as amended, 15 U.S.C. §§ 1-7.) Introducing his landmark bill, Senator Sherman summed up the prevailing sentiment: "If we will not endure a king as a political power we should not endure a king over the production, transportation, and sale of any of the necessaries of life." (21 Cong. Rec. 2457 (1890).)Nothing is more necessary to life than water. Residents of Ojai, fed up with sky high water bills, voted to oust appellant Golden State Water Company (Golden State), the private utility that monopolizes water service to their city, and replace it with respondent Casitas Municipal Water District (Casitas), a municipal utility that they hope will be more responsive to their concerns. They plan to finance this transaction by selling bonds pursuant to the Mello-Roos Community Facilities Act of 1982 (Mello-Roos Act or Act). (Gov. Code, § 53311 et seq.)
Golden State Water Co. v. Casitas Municipal Water District, No. B255408 (Apr. 14, 2015).
From that inauspicious piece of judicial advocacy (Professor Shaun Martin, who pens the California Appellate Report blog wrote, "It's almost as though [the justice who authored the opinion] believes respondents' position even more than they do.... And Justice Perren seems affirmatively enthusiastic about it."), the opinion goes on to analyze the issue of whether California's "Mello-Roos" statute, which enables "Communities Facilities Districts" (special taxation districts) to be formed by local governments to set up funding for public works and public service projects, prohibited the voters of Ojai from forming such a district to pay the just compensation for the taking of Golden State's rights for transfer to the Casitas Municipal Water District.
The court's short answer: no.
The statute allows funding for "purchases," and eminent domain qualifies even if it is not a voluntary transaction. Slip op. at 8 ("The Mello-Roos Act ... authorizes a public agency to 'purchase' real property in order to construct and develop government facilities. Given the obvious practical need in certain circumstances of using eminent domain power to acquire property for this purpose, the word 'purchase' should be construed in its broadest sense, which includes a taking by eminent domain in exchange for just compensation.").
More details on the case here ("Mello-Roos may be used to fund condemnation action of private utility provider") from Brad Kuhn and Rick Rayl of the California Eminent Domain Law Report.
Golden State Water Co. v. Casitas Municipal Water District, No. B255408 (Cal. App. Apr. 14, 2015)