In Town of Apple Valley v. Apple Valley Ranchos Water, __ Cal. 5th __, 2026 WL 2470168 (Aug. 24, 2026), the California Supreme Court held that when a public entity seeks to condemn a privately owned electric, gas, or water utility, the court must independently determine whether the private utility owner has rebutted the statutory presumptions supporting the taking, rather than reviewing the agency’s determination under the deferential gross-abuse-of-discretion standard.
To acquire property under eminent domain, a public entity must establish (1) the public interest and necessity require the project; (2) the project is planned and located in a manner most compatible with the greatest public good and least private injury; and (3) the property to be acquired is necessary for the project. (Code Civ. Proc., § 1240.030.) When the property is already devoted to a public use, the agency also must establish that the proposed use is a more necessary public use than the existing use. (Id., § 1240.610.)
Ordinarily, adoption of a resolution of necessity conclusively establishes the first three elements above, and the statute presumptively establishes the “more-necessary” element in the case of property condemned for the same use. However, the Legislature has created special rules for privately owned electric, gas, and water utilities. For such utilities, a resolution of necessity creates only a rebuttable presumption that the first three elements are satisfied (Code Civ. Proc., § 1245.250(b).), and where public agency intends to continue the same utility use, the statutory presumption that the proposed use is a more necessary public use is likewise rebuttable. (Id., § 1240.650(c).)
The case arose from the Town of Apple Valley’s effort to acquire a privately operated water system. The trial court determined that the utility owner had successfully disproved two of the three section 1240.030 elements, as well as the more-necessary-public-use element. The Court of Appeal reversed, concluding that the trial court should have applied the gross-abuse-of-discretion standard and given greater deference to the Town’s determinations.
The Supreme Court rejected the Court of Appeal’s approach. It drew a critical distinction between a challenge to the validity of the resolution of necessity and a challenge to the agency’s substantive right to take. While a challenge to the validity of the resolution remains subject to gross-abuse-of-discretion review, a utility owner may separately challenge the right to take by disputing whether the agency has established any of the three requirements of section 1240.030, as well as whether the proposed use is a more necessary public use. In deciding those issues, the trial court acts as trier of fact and must independently weigh the evidence. The utility owner has the burden of proving by a preponderance of the evidence that one or more of those requirements is not satisfied.
The Supreme Court left for the Court of Appeal to decide on remand the extent to which a utility owner may rely on post-resolution evidence to rebut the statutory presumptions.
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The opinion establishes an important procedural distinction for condemnation of private utilities: challenging the validity of a resolution of necessity and challenging the substantive right to take are different claims governed by different standards. The decision materially strengthens the position of privately owned utilities facing public acquisition efforts. A resolution of necessity gives the condemning agency an evidentiary advantage, but the utility owner can overcome that advantage by persuading the trial court that the agency has failed to establish one or more of the necessary elements for the taking.
For cities, districts, and other public entities, the case underscores the importance of developing a strong factual basis for acquiring a private utility. The ordinary presumptions that favor the agency’s determinations do not apply, and the trial court must independently weigh the evidence to ensure that key statutory requirements have been met.
