California Supreme Court blocks Apple Valley's bid to seize private water utility

A unanimous ruling by the California Supreme Court has halted the town of Apple Valley's effort to acquire the Apple Valley Ranchos Water Company, a privately held utility serving roughly 65,000 residents. Justice Leondra Kruger wrote that the determination of public necessity belongs to the trial court, which must apply an independent judgment rather than simply accept the municipality's resolution. The dispute traces back to 2010 when Carlyle Infrastructure Partners purchased the water company and sharply raised rates, prompting the town to consider an eminent-domain takeover.

After the utility changed hands to Liberty Utilities, a subsidiary of Algonquin Power & Utilities Corp, the lower court initially sided with the town, but a subsequent appeal reversed that decision. The Supreme Court sent the matter back to the California Court of Appeal, noting that the “gross abuse of discretion” standard cannot override the statutory requirement for a factual finding on necessity. Liberty Utilities had previously secured $13.2 million in attorney fees after proving the town’s claim insufficient. Neither Apple Valley officials nor Liberty Utilities offered comments on the outcome.