67-day bench trial. 84-page decision. Check out the Superior Court's Tentative Statement of Decision in a case in which a property owner has successfully challenged the Town of Apple Valley's attempt to take a private water company so the Town could operate it itself.
There's a lot going on, and to understand the decision you should understand the statutory requirements under which the case is operating. A California statute sets out the requirements for what we might call "public use" challenges generally (or maybe "power (right)-to-take" challenges):
The power of eminent domain may be exercised to acquire property for a proposed project only if all of the following are established:
(a) The public interest and necessity require the project.
(b) The project is planned or located in the manner that will be most compatible with the greatest public good and the least private injury.
(c) The property sought to be acquired is necessary for the project.
Cal. Code Civ. P. § 1240.030.
You have to curb your enthusiasm, however, because a separate statute says that in most cases the resolution of necessity "conclusively establishes" the three elements. Oof.
But hold on: that same statute also notes that if the property taken is "electric, gas, or water public utility property," the resolution merely creates a "rebuttable presumption." Burden is on the challenging property owner, but at least it has a shot.
Same for the necessity statute:
Any person authorized to acquire property for a particular use by eminent domain may exercise the power of eminent domain to acquire for that use property appropriated to public use if the use for which the property is sought to be taken is a more necessary public use than the use to which the property is appropriated. Where property is sought to be acquired pursuant to this section, the complaint, and the resolution of necessity if one is required, shall refer specifically to this section.
Cal. Code Civ. P. § 1240.610.
In contrast to the public interest statute, the necessity statute doesn't even phrase it as a conclusive presumption, but as an established fact: "[w]here property has been appropriated to public use by any person other than a public entity, the use thereof by a public entity for the same use or any other public use is a more necessary use than the use to which such property has already been appropriated." But also like the above, there's an exception for "electric, gas, or water public utility property," and only a rebuttable presumption is in effect.
So off to trial they went.
And here is what we think is the most interesting finding the court made: that the "project" as the term is used in section 1240.030 means the project established by the condemnor's resolution. Here, the project was to take the private water system and make it publicly-owned, with virtually no changes otherwise. Same customers, same employees, same service. Relying on City of Stockton v. Marina Towers, the court concluded that the project described by the Town in its resolution is the project, not the Town's later attempts to modify it (to further justify the takings, once challenged we presume). It isn't, in the court's words, a "moving target."
The Town also cannot justify its right to take the system based on the possibility of a future plan to modify the system or its operations. That stratagem was attempted and rejected in Marina Towers [barista's note: but not by the Illinois courts in this case]. There, the Court held it was incumbent upon the City to define its project, and "[t]o define it is to limit, and that which is left unlimited, and is to be determined only by such future action as the [c]ity may hereafter decide upon, is not defined."
Slip op. at 17.
The Town asserted all kinds of things it claimed supported its ability to take:
As addressed further below, if generic concepts such as "local control" or a municipality's interest in "controlling its water future" or satisfying its "vision statement" were enough to defeat the objections, the 1992 legislation would be rendered meaningless - because such generic arguments could always be asserted by every public entity that sought to acquire utility property by eminent domain.
Slip op. at 12. No, you don't get rational basis review, and we're going to hold you to your actual words.
The balance of the ruling sets out the evidence showing the property owner rebutted the presumption that the greatest public interest and "more necessity" were served by the taking. Yes, the ruling is long and detailed. But if you are interested in power-to-take and necessity challenges (as we are), you will read it in detail.
