The Town of Apple Valley sought to take by eminent domain a local investor-owned water system in its area run by Liberty Utilities (Apple Valley Ranchos Water). The Eminent Domain Law provides that the required findings of public necessity and “more necessary public use” for takings of electric, gas, or water utility property are subject to “rebuttable presumption[s] affecting the burden of proof.” The trial court thus ruled the Town’s decision to take the property was not subject to review for substantial evidence under a “gross abuse of discretion” standard, as in most takings cases. Instead, the trial court conducted a 67-day bench trial in which it concluded that Liberty had rebutted the evidentiary presumptions. It thus dismissed the Town’s eminent domain action.
The Town appealed. As respondent, Liberty was represented by other counsel in the Court of Appeal. In a published decision, the Court of Appeal reversed the trial court, ruling that takings of utility property are subject to deferential mandamus-style review and that such decisions by local municipalities can be reversed only for a lack of substantial evidence, i.e., a gross abuse of discretion.
Liberty retained Horvitz & Levy to petition the Supreme Court for review. The Court granted the petition. Horvitz & Levy then prepared merits briefing and presented oral argument in the Supreme Court. In its decision, the Court agreed with Horvitz & Levy that the plain language of the statutes imposing rebuttable evidentiary presumptions requires that utilities be permitted to present evidence in the trial court to rebut them. The Court also ruled that such evidentiary presumptions are illogical and unworkable in connection with deferential review under which a decision to take property is reviewed only for substantial evidence. The court also disagreed with the Court of Appeal’s separation of powers concerns and held that the legislative history of the utility amendments supports Liberty’s position. The Court remanded to the Court of Appeal to decide limited questions regarding the scope of admissible evidence at trial in light of its decision.
Town of Apple Valley v. Liberty Utilities S289391 
