Town of Apple Valley v. Apple Valley Ranchos Water Corp.

Analysis Group was retained on behalf of Liberty Utilities, the owner and operator of Apple Valley Ranchos Water Company, and its counsel Manatt, Phelps & Phillips, LLP, in a successful defense against an attempt by the Town of Apple Valley to take ownership of the water utility by eminent domain. The case, Town of Apple Valley v. Apple Valley Ranchos Water Corp., is only the second right-to-take litigation in California involving an investor-owned water utility, following City of Claremont v. Golden State Water Company. The Town of Apple Valley, California, claimed the proposed change of control to government ownership would result in lower rates to utility customers.

Following a 67-day bench trial, the Superior Court of San Bernardino ruled in favor of the defendant and dismissed the matter entirely, opining that the Town failed to show that Apple Valley ratepayers would be better off under municipal ownership. In his decision, the judge extensively cited testimony from Analysis Group’s academic affiliate Michael Hanemann, who assessed the economic consequences to Apple Valley customers from a Town acquisition of the water system.

Additional testimony was provided by two Analysis Group affiliates. Stephen Peters acted as the defendant’s bond expert, analyzing municipal finance issues, and Bart Hildreth, professor in the Department of Public Management and Policy at the Andrew Young School of Public Policy at Georgia State University, analyzed the budgeting and public finance practices of the Town to understand whether it could successfully meet the monetary obligations required to own and manage the water utility.

In addition, On Amir, professor of marketing in the Rady School of Management at UC San Diego, provided deposition testimony on his evaluation of customer satisfaction surveys with respect to water service provided to the Town. An Analysis Group team led by Principal David Sosa and Vice President Tracy Offner supported the affiliates.