City, Golden State await judge’s decision in lawsuit

Attorneys representing Golden State Water Company and Claremont pled their final case to a Los Angeles Superior Court judge as they made their closing arguments last week.

The two-day closing argument phase was the culmination of weeks of testimony in the attempt by Claremont to claim eminent domain over the water system, which has been owned and operated by Golden State Water (GSW) since 1929.

Judge Richard Fruin now has 90 days to issue a verdict. If Claremont wins the right-to-take trial, a separate trial will be held to determine the cost of the water system.

The trial is the first of its kind in the state, GSW attorney George Soneff said during his opening statements in June.

Ken MacVey of Best, Best & Krieger, who has represented the city throughout the case, said that the “more necessary use” for Claremont to take over the system amounts to local control and municipal oversight of the system.

“The project is basically taking over the water system and providing water to the Claremont residents,” Mr. MacVey noted.

In eminent domain law, “more necessary use” must be proven for a government entity to take over a system that is already available for public use. In Claremont’s case, that means local control.

Mr. MacVey contended that GSW has a narrow view of the role the city will take in operating the water system. The city won’t just be a water provider, he said, “but one that is going to provide a full spectrum of public benefits,” such as sustainability and municipal planning.

Attorney Edward Burg of Manatt, Phelps & Phillips, who represented GSW at the trial, claimed local control was not an adequate reason to take over the water system and maintained that Claremont does not intend to make any significant changes to the system if they acquire it.

“Local control is nothing more than saying we want it, and under eminent domain, the legal standard is if they need it,” Mr. Burg said.

A main component of Claremont’s plan is to enter into a joint partnership with the city of La Verne if Claremont wins the case—an agreement that allows Claremont to oversee the system and set rates while La Verne handles operations and staffing.

Under the plan, La Verne will net 10 percent of the proposed operating budget of $1.5 million.

GSW attorneys have maintained throughout the trial that La Verne is a risky partner to work with, pointing to a 2011 incident where traces of E. coli were found in the city’s drinking water and higher amounts of lead were found in parts of the water system in 2012. Mr. Burg accused La Verne of manipulating the system to get their lead levels under the 15 parts-per-million limit, retesting nine problem sites and sending results of six of those sites to the state.

But Mr. MacVey said La Verne was never fined by the state for any incidents. In addition, a statement by the city on August 11 noted that both E. coli and lead incidents were not system-wide and were quickly resolved, with the city on a “once every three year” testing schedule that is typically implemented only for cities that consistently meet state standards.

“The statements made by Golden State’s attorneys and representatives during trial are erroneous, sensationalized, and nothing short of fear mongering,” the city of Claremont said in the statement.

Mr. MacVey also outlined a number of additional issues the city has with GSW as a provider, including a lack of transparency and operational issues. He noted that GSW drafted an entire master plan of the water system without notifying the city or allowing input.

“[GSW] doesn’t tell the city before, after and during the time when they’re making the master plans, or what they’re up to,” Mr. MacVey said.

At one point in the trial, Mr. MacVey showed redacted portions of GSW documents to the court, indicating that the company was not transparent with its customers.

Mr. Burg said the master plan was available for the city through the rate case application to the Public Utilities Commission (PUC), and portions that were blacked out were done so to protect the locations of wells and other sensitive sites.

In addition, Mr. Burg noted that GSW’s urban water management plan—which outlines the company’s long-term planning goals—is required to be made available through a public hearing. Mr. Burg called it “a very skewed approach” to claim the master plan wasn’t available when the urban water management plan was.

The integrity of pipelines was also touched upon, with both sides accusing the other of incompetence. Mr. MacVey said that GSW has “long-term deficiencies” within the pipeline system in Claremont, with aging pipes rupturing at a seemingly regular rate.

“[GSW] was talking about pipeline investment, but it has a high number of main breaks compared to La Verne,” he said.

But Mr. Burg argued that La Verne has a problem with older pipes as well, and reportedly plans to replace pipes every 148,000 years, as opposed to GSW’s pipe lifespan of 100 years.

Replacing pipes, Mr. Burg said, is “like painting the Golden Gate Bridge.

“If you don’t replace them, you’ll be at a point where you’ll reach a crisis,” he said.

After weeks of heated back-and-forth accusations between the two sides, it will all come down to Judge Fruin to determine if Claremont has the right to take over the water system.

Mr. MacVey refrained from making a prediction on the case’s outcome, but remains confident. “We put out a really good case,” he said.

—Matthew Bramlett



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