The California Supreme Court on Monday issued its opinion in the Town of Apple Valley's decade-long water acquisition case against Liberty Utilities seeking to take local control of the city's water supply.
The court held that a trial court must exercise its independent judgment and determine whether the utility company has proven, "by a preponderance of the evidence," that the statutory requirements for the acquisition have not been met, town officials stated.
The court rejected the more deferential standard previously adopted by the Court of Appeal, the town said.
"The Supreme Court did not, however, finally resolve the Town's appeal or determine whether the trial court's judgment should ultimately stand," the town stated. "Instead, it returned the case to the Court of Appeal to reconsider the remaining issues raised by the Town."
The Court of Appeal must now decide whether the other issues it previously identified with the trial court's ruling, including the trial court's reliance on events that occurred after the town adopted its "Resolutions of Necessity," are serious enough to overturn the ruling despite the Supreme Court's decision on the legal standard, the town said.
"We are disappointed that the Supreme Court rejected the legal standard adopted by the Court of Appeal," Mayor Scott Nassif said in a written statement. "But today's opinion does not end the case. The Court of Appeal must still consider the remaining errors identified in the trial court proceedings, and the Town will continue to protect the interests of Apple Valley residents throughout that process."
The town added that the Supreme Court's opinion also does not authorize or prohibit the town's proposed acquisition of the water system.
Further proceedings before the Court of Appeal will determine the next stage of the case.
The Town and its legal team are reviewing the opinion and will evaluate the appropriate next steps.
In Jan. 2025, California's Fourth District Court of Appeals reversed the trial court's decision in the case of the town versus Liberty Utilities.
The announcement came after town officials in September 2024 reported that the court rendered a "tentative decision" in the case.
Town officials in 2024 stated that a three-judge panel issued a "tentative opinion" reversing the trial court's decision against the town and reversing the award of attorney's fees in favor of Liberty.
The appellate court's decision in January 2025 overturned the court's previous ruling, citing two main reasons for its judgment, which include:
Improper Standard of Review: The trial court applied the wrong standard of review, failing to appropriately defer to the findings of the Town Council.
Post-Resolution of Necessity Facts: The trial court improperly based its decision on facts arising after the adoption of the Resolution of Necessity, specifically focusing on the conduct of Liberty Utilities rather than that of the prior owners.
During that time, former Town Manager Doug Robertson said in a written statement, "We are pleased with the appellate court's decision, which reinforces the legitimacy of the town's case and corrects significant errors in the trial court's ruling."
Robertson added that the trial court allowed Liberty to argue using evidence and work completed years after the town committed to acquiring the water system, contrary to the standard that should have been applied.
The recent ruling is part of an effort started in 2011 by town officials to acquire the water system.
The town filed its eminent domain lawsuit in Jan. 2016 when the utility system was owned by Ranchos Water Company in response to what they said was a public outcry over rising water rates, the Daily Press reported.
Apple Valley voters helped pass Measure F in June 2017, earning the town a victory in its struggle to acquire Liberty Utilities' water system, the Daily Press reported.
With 7,200 of 12,438 voters , or 57.89%, casting "yes" ballots, according to the San Bernardino County Registrar of Voters, the town received approval to issue up to $150 million in revenue-bond debt for a potential purchase of the system.
Daily Press reporter Rene Ray De La Cruz may be reached at [email protected]. Follow him on X @DP_ReneDeLaCruz
This article originally appeared on Victorville Daily Press: Town of Apple Valley's water war with Liberty Utilities continues