Here’s the latest in a case we’ve been following for a long time. See this post about the whopping 67-day trial and this one about the Supreme Court taking up review to resolve a court of appeal split.
In Town of Apple Valley v. Apple Valley Ranchos Water, No. S289391 (Aug. 24, 2026), the California Supreme Court held that the usual uber-deferential standard of review in eminent domain cases to the condemnor’s claim that the taking is necessary does not apply where a government is taking a private utility company to operate itself.
This is one of those government-takings-to-operate-a-utility-itself cases. See, e.g., this case and this one. To get what is 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. Not just a presumption, but conclusively established necessity.
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. After they wrapped sixty-seven days later (whoa), the trial court held that the water company had rebutted the rebuttable presumption and invalidated the attempted taking.
But the Court of Appeal reversed, concluding the trial court should have reviewed the case under the ultra-deferential gross abuse of discretion standard, holding that the utility statute didn’t change that but required the challenger to use evidence outside the administrative record which the utility had not done.
Because this decision conflicted with another recent decision, the California Supreme Court took up the case. Issue: what standard of judicial review governs municipal takeovers of eminent domain of privately-operated water systems?
The Supreme Court reversed, and held that the less deferential standard applies. The resolution turned on the interpretation of the statute, and the court held that the “plain meaning of the statute supplies a clear answer to the question presented.” Slip op. at 12. The legislature meant it when it wrote the statute to carve out these kind of takings from the usual rules.
Held: courts must give a municipality’s conclusion of the necessity of the taking of a privately owned utility–and the facts which support it–only a presumption of correctness. That presumption may be overcome with evidence. Courts, not the government, make the call about the validity of the resolution.
And although there isn’t a discussion of the canon of construction that eminent domain statutes are construed strictly against the condemnor and in favor of the owner, that’s the outcome. Here, the court didn’t need to apply the canon because it held the plain meaning of the statute was plain enough.
Although it does not cite the court’s recent opinion in Shear Dev. Co., LLC v. California Coastal Commission, No. S2284378 (Cal. Apr. 23, 2026), for the principle that courts are the legal experts and owe little deference to the government or an agency (at least where the decision-making authority has not been delegated by the legislature to the government, but, as here, to the courts), the Apple Valley opinion has Shear’s DNA vibe imprinted all over it. Shear concluded that another statute, the California Coastal Act, also did not compel the courts to defer to the government’s conclusion (there, the Commission’s conclusion that Shear’s property was in a super-regulated area).
These two cases should tell California governments and agencies that the courts are looking with a skeptical eye at your claims that the purpose of courts is to rubber stamp decisions and not give them a hard look, especially where as statute says otherwise.
More from Brad Kuhn at the California Eminent Domain Report here: “Supreme Court Delivers Huge Win For Utilities Facing Municipalization.”
Town of Apple Valley v. Apple Valley Ranchos Water, No. S289391 (Cal. Aug. 24, 2026)
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