California Supreme Court Reverses Court of Appeal in Major Utility Eminent Domain Case

On August 24, 2026, the California Supreme Court reversed the judgment of the Court of Appeal in Town of Apple Valley v. Apple Valley Ranchos Water, unequivocally clarifying that the “rebuttable presumption” standard applicable to eminent domain cases involving private utility property permits the utility owner to prove at trial that a proposed taking does not meet the requirements for eminent domain. The Supreme Court rejected the holding of the Court of Appeal that private utilities are limited to showing the public entity’s “gross abuse of discretion” in adopting a resolution of necessity, a standard far more deferential to the public entity than a rebuttable presumption.

The question before the Court concerned the interpretation of statutes enacted in 1992 to create special rules that apply when a public entity seeks to take privately owned public utility property. In nearly all other cases, when a public entity seeks to take private property, the public entity’s adoption of a resolution of necessity “conclusively establishes” that the public entity’s proposed taking meets the public interest and necessity requirements of the Eminent Domain Law. But the special rules for private utility takings changed the “conclusive” presumption to merely a “rebuttable” presumption that the public interest and necessity elements are present. In general, outside of the eminent domain context, a “rebuttable presumption” that a fact is true means that a party is entitled to introduce evidence to prove that it is not true, and that a trial court exercises its own judgment evaluating the evidence to decide whether the fact has been proven. In this case, the Court of Appeal had held that the rebuttable presumption for private utility takings did not permit the typical evidentiary challenge; rather, the private utility owner was limited to trying to show that the public entity’s adoption of a resolution of necessity was a “gross abuse of discretion.” 

The Supreme Court disagreed with the Court of Appeal, and held that “the trial court, sitting as trier of fact, must exercise its independent judgment to determine whether the utility owner challenging the taking has rebutted the relevant presumptions and has thus established by a preponderance of the evidence that the taking is not authorized by the Eminent Domain Law.” Therefore, a private utility company challenging a public entity’s right to take its utility property is entitled to present evidence at trial to persuade the trial court that the public interest and necessity elements do not support the taking. The court may disallow the taking if, after weighing the evidence, it determines that the utility has disproved the public entity’s assertions of public necessity.

The Supreme Court’s opinion is a significant win for private utilities because it substantially increases their chances of prevailing in a challenge to a taking.