Court report: Eminent domain trial, March 2

I attended the morning session of the eminent domain trial by which the Town of Apple Valley seeks to seize the Liberty Utilities water system (Town of Apple Valley v. Apple Valley Ranchos Water Corp., CIVDS1600180), in front of Donald Alvarez in Department S-23 of the San Bernardino Justice Center.

While again there were no other residents of Apple Valley in attendance to support the Town’s efforts, besides me there was a couple there to lend moral support to Liberty Utilities. So much for the Town’s repeated claims that the overwhelming outcry by the citizens played a major role in forcing them to take this action.

At this point in the trial, it is the Town’s turn to call witnesses. As anticipated, a major thrust of the Town’s case involves attacks on the California Public Utilities Commission (CPUC), which oversees the operation of water providers such as Liberty Utilities.

Accordingly, the Town called to the stand Mr. Steven Weissman of the UC Berkeley School of Public Policy, where he teaches regulatory law. Mr. Weissman is also affiliated with the Center for Sustainable Energy. He worked at the CPUC for nearly 30 years, 15 years of which he served as an Administrative Law Judge (ALJ). He has been a full-time staffer at UC Berkeley since 2008.

While Mr. Weissman’s credentials seem impressive, perhaps the most interesting factoid about his background is that he also testified for the City of Claremont in their failed effort to seize the water company there via eminent domain. The Town of Apple Valley’s legal team of BB&K was involved in that litigation, too. Some people never learn, but then they are getting paid too handsomely to admit reality.

While one might question the wisdom of attacking the CPUC to show that Liberty Utilities isn’t doing a good job, the truly amazing aspect of Mr. Weissman’s testimony is that anyone was able to stay awake to listen to it. Between the fact that it seems hopelessly off-topic and often mired in technical minutiae, Mr. Weissman’s testimony was a powerful soporific.

The Town’s argument seems to be that because other departments of the CPUC that deal with non-water issues are alleged to be corrupt, therefore the department that deals with water issues is corrupt, as well as understaffed, lacking in knowledge and information, etc., etc. The Town alleges that despite its trappings, the CPUC exists only to give its imprimatur to water utility requests. This allows water utilities to spend extravagantly, knowing that the CPUC will rubber-stamp its gold-plated spending.

It’s easy to counter this argument, and Mr. Weissman did just that while being led through his testimony by the Town’s attorney.

First, Mr. Weissman acknowledged that it can take years for the CPUC to hand down a decision in rate cases. If this represents rubber-stamping rate requests, one can only imagine how long rate cases would take otherwise.

Second, Mr. Weissman testified that the process gives water utilities the incentive to ask for more than they need. This is akin to saying that if you are driving through a known speed trap, the incentive is to drive as fast as possible so you are in the danger zone for the shortest possible time. Mr. Weissman subsequently torpedoed this point by acknowledging that the CPUC never (if ever) approves rate requests as initially submitted; always reducing the amounts requested as part of the review process and with input from the Public Advocates Office (formerly known as the Office of Ratepayer Advocates) and any intervenors.

The one statement that made everyone sit up was Mr. Weissman’s astonishingly mendacious statement that because of the way the rate-approval process is handled, utilities have an incentive to game the system while local authorities (read: Town Hall) would have no such incentive. For left-wing policy wonks such as Mr. Weissman, where Liberty Utilities has extensive oversight by persons with actual knowledge and experience in rate-setting, it is somehow preferable to have local governments set rates to suit themselves with virtually no impediments to raising rates.

Mr. Weissman backed up this fallacious claim by averring that it’s difficult for average citizens to be heard by the CPUC, and local governments always pay close attention to input by those they govern. Anyone who has spent the last few years trying to oppose Town Hall’s insane purchase of the golf course, and/or the jihad against our water company, and/or wasteful spending, and/or lack of transparency, and/or lack of financial controls will take a strong exception to this point of view, which if not naive is something far worse.

Overall, the Town’s argument seems to be that communism is better than fascism (see definitions below).

This phase of the trial is now expected to wrap up by the end of March. However, even if all testimony and oral arguments are done by then, the judge’s decision could take weeks, as could the hearings to determine the actual price the Town will pay should it prevail.

Keep in mind that back in August 2015 Marc Puckett claimed the budget for this endeavor was $3.2 million. According to public records, as of January 2020, the Town has paid in excess of $4.8 million to attorneys for costs and expenses related to this matter.

Year	Legal payments for eminent domain costs and expenses
2015	$265,390.82
2016	$213,515.83
2017	$526,843.72
2018	$1,031,333.99
2019	$2,478,753.26
2020	$331,113.55
Total	$4,846,951.17

Definitions:

Free-market capitalism: Private ownership and private control. The individual is paramount. You keep what you earn. The market is defined by voluntary exchanges among citizens. The state’s role is restricted to preventing citizens from using force or fraud against each other.

Fascism: Private ownership under state control. The remnants of private ownership enable the state to blame problems arising from state control on businesses and businesspeople.

Communism: State ownership under state control. The state ensures that all problems — real or invented — are blamed on individuals and individualism.

Click here to read the full list of definitions.