Court report: Eminent domain trial

October 7, 2019

I was present for one day of the continuing eminent domain trial (Town of Apple Valley v. Apple Valley Ranchos Water Corp., CIVDS1600180) Thursday morning in front of Donald Alvarez in Department S-23 of the San Bernardino Justice Center, hoping to get a sense of how the trial was going.

Department S-23 is a medium-size courtroom, which seems small due to the racks and racks of binders of documents from document production and depositions. Each party seemed to have a main set of documents and a backup, and there was a separate copy of each set of documents for the court.

Then there are the attorneys and legal assistants. Kendall Macvey, Guillermo Frias, and Christopher Pisano were there representing the Town. George Soneff, Edward Burg, David Moran, and Lauren Fried were there representing Liberty Utilities (AKA Apple Valley Ranchos Water in these proceedings). Each side had two other members of their respective legal teams in attendance, plus one person per side just to manage and present multi-media information to the court via one large projector and monitors for the witness and the gallery via screen-sharing from laptop computers. Combined with the judge, the clerk, the court reporter, the bailiff, and a couple of visitors, the room seemed packed.

In this action, the defense presents its case first. Wednesday, the defense called as a witness Carol Thomas-Keefer, the capable Operations and Maintenance manager for Liberty Utilities. She had finished her main testimony on Wednesday, so Thursday saw a continuation of her cross-examination by Guillermo Frias.

At first it seemed confusing, coming in mid-stream so to speak, as Frias engaged in a prolonged grilling of Thomas-Keefer on arcane differences between versions of different documents. These documents appeared mostly to have been simply reformatted or revised to take into account the name change from Apple Valley Ranchos Water Company (AVRWC) to Liberty Utilities, but Frias spent the better part of an hour pilpulating over these minor alterations, at one point asking about the old-fashioned (Courier) typeface used in a 1989 version of a document and the modern (Helvetica) typeface used in a 2019 version of that document.

Normally, the expectation would be that Frias was laying groundwork in order to set a trap for Thomas-Keefer, but as the questioning extended beyond anything that could have been groundwork for a further point, it became clear that what Frias was doing was trying to elicit information from Thomas-Keefer that would aid the Town in trying to figure out how properly to run the water system after take-over. Even with all the information already provided the Town by Liberty, the Town still has no plan, which has been one of the main criticisms leveled by concerned citizens over the years.

The cross-examination continued after the morning break, and then after the lunch break, too. Eventually, Frias transitioned from document analysis to presenting photos of various water tanks in the Liberty system. Again, at first it seemed that he was laying the groundwork to trap Thomas-Keefer in some way damaging to Liberty Utilities, but after a while what he was actually doing — although he probably didn’t realize it — was make the case that Liberty Utilities should be allowed to spend more on infrastructure improvements, which of course would entail rate increases to pay for them.

In addition to asking questions related to operations and maintenance, Frias often tried to elicit testimony on engineering, legal, and regulatory aspects, as well as on documents from the American Water Works Association (AWWA). Thomas-Keefer often deferred to others. Frias repeated pointed out that Thomas-Keefer did not have an engineering degree, even though it was established on Wednesday that her position at Liberty Utilities did not require an engineering degree.

Throughout her testimony, Thomas-Keefer kept her composure, answering questions without elaboration, and catching Frias’ many attempts to misrepresent documents and misquote texts that were displayed on the monitors. In one particularly egregious case, Frias showed a photo of a gauge and asked Thomas-Keefer if the water pressure showed by this gauge was proper. Even with the image blown up on the large projection screen in front of him, Frias failed to note that the gauge was clearly labeled as a water level gauge. Thomas-Keefer pointed this out, and Frias was forced to drop the matter.

Eventually, Frias put up images of Ag Well 5, and it appeared that he finally was springing the trap he had been setting. As he did so, however, Liberty Utilities General Manager Tony Penna and one of Liberty’s in-house counsel started bouncing on their seats in excitement.

It soon became evident why: Frias had stepped on a rake, and the handle had hit him in the face. Thomas-Keefer testified that Ag Well 5 is not owned by Liberty Utilities.

Frias wouldn’t let the matter go, though, showing image after image of Ag Well 5, still pursuing the hope that this well’s condition was representative of how poorly Liberty Utilities maintained the water system. Thomas-Keefer assured him again and again that Liberty Utilities did not own it. Frias kept coming back over and over again to step on that same rake, only to get hit in the face with it each time.

Another bizarre line of questioning involved long-term employees of Liberty Utilities, most of whom had worked at the water company for longer than a decade. Frias pointed out that these employees had stayed with the company through at least two prior sales, his point being that they would stay on through another sale. Thomas-Keefer also testified that perhaps half of Liberty employees lived in Apple Valley, which Frias seemed to take as evidence that even after the takeover, the same crew would still be on the job.

During the lunch break, the speculation was that Frias would end his cross-examination without getting the payoff he had apparently sought, but no, after court reconvened he went right back to it. In a further display of the Town’s inability to understand and operate a water utility, he produced a report compiled by Liberty Utilities that showed Ag Well 5 supplying water to Liberty. Thomas-Keefer then dropped a bombshell: Ag Well 5 is owned by Gary Ledford. It provides water to Liberty Utilities, which turns around and provides that water to the Mojave Fish Hatchery. Liberty Utilities has no control over the well, which is even on private property, so Liberty would have to request permission to visit it should the situation arise.

Frias finally pivoted to a chart provided by Liberty Utilities, which is a map showing the outlines of each of the various local water companies, the population served, and the number of water-quality infractions reported. This chart was important to discredit because it showed that Liberty Utilities was the only local water company with no water-quality infractions. Frias asked if Thomas-Keefer had drilled down on these numbers, or had called to find out the cause behind each infraction. She testified that the cause was not important; the chart was to show water-quality infractions. Frias tried to get Thomas-Keefer to testify that water-quality infractions might be excused if the water company had been underfunded or understaffed. Not only did Thomas-Keefer reject any mitigating factors, she repeatedly pointed out that purpose of the chart was to show the number of infractions. Frias would counter with the accusation that Thomas-Keefer didn’t know the cause of the infraction, and she would respond with the cause of the infraction was that either water quality was up to the minimum standard or the water-testing procedures were deficient — as clearly shown on the chart and in the underlying data (which had been provided to the Town).

Frias also revisited his attacks on Thomas-Keefer’s degrees, credentials, and experience, despite the fact that Thomas-Keefer has worked in the water industry for more than 22 years, including a long stint with the Main San Gabriel Basin Watermaster, where in addition to gaining general experience in water system operation she also had to deal with substantial instances of groundwater contamination.

On re-direct questioning, the attorney for Liberty Utilities revisited some of the documentary evidence Frias had examined and showed where Frias has misrepresented each document. He also took the opportunity to drill down on the water-quality infraction chart data, with Thomas-Keefer interpreting the infraction codes and providing context.

This lead to more cross-examination, more re-direct examination, more cross-examination, and more re-direct examination, with Liberty Utilities getting in the final word on a portion of a document Frias had misrepresented as being controlling when it was only a reference in a definition of a term used in the remainder of the document.

After the afternoon recess, the Liberty Utilities called Town of Apple Valley councilman Art Bishop to the stand for the defense. The Town renewed its objections to Bishop being called to testify but the judge allowed it, both as a councilman (as long as the testimony sought did not involve deliberations) and as the chief of the Apple Valley Fire Protection District, a position Bishop had held for 14 years before becoming a town councilman.

They first established Bishop’s bona fides, and that he had given testimony under oath to the California Public Utilities Commission (CPUC) in 2005 in support of AVRWC. His testimony centered around AVRWC upgrading from fire standpipes to fire hydrants, with attendant upgrades in water main size, to help the town maintain a good rating with fire insurers and thus keep fire insurance rates low for town residents.

Bishop started off answering questions in a forthright manner, but with questions that involved portraying AVRWC in a good light, Bishop would try to dig in his heels and downplay AVRWC’s contributions. Unfortunately for Bishop, counsel’s questions were coming directly from a transcript of his 2006 testimony, and many times Bishop was caught misrepresenting his earlier testimony.

Liberty’s counsel then showed video of a portion of a 2017 town council meeting, during which Bishop effusively thanked Chris Schilling of AVRWC and praised AVRWC for their work in upgrading the fire-suppression capabilities of the reservoirs on Bass Hill.

Counsel for the Town, which had earlier objected to several questions, now began objecting in earnest to the questions, to the testimony, and to the very fact that Bishop was on the stand in the first place. Judge Alvarez at first overruled the objections, but then seemed to be getting shell-shock over the number and pace of the objections, and sustained a few. After a few minutes, though Judge Alvarez lost his patience with the objections and started allowing Bishop to answer the questions. One of those was whether Bishop gave any consideration to the cost incurred by AVRWC for these upgrades. Bishop testified he never thought about it.

During one curious exchange, Bishop claimed to have only a vague memory of the pivotal April 28, 2015, meeting at which the town council, town staff, and town attorneys laid out in great detail the reasoning for seizing the water company, including financing. This was especially odd considering that on the campaign trail Bishop has said that everywhere he goes people ask him about water rates and seizing the water company, but yet he barely remembered this huge presentation that ostensibly was the payoff for all that community activism — the formal announcement that the Town was going to do something.

Shortly thereafter, the court adjourned for the day.

As a civilian observer, I would say that nothing the Town presented in any way supported their position that it should take over the water company, or that they could run it in the event of a take-over.

Obversely, Liberty Utilities presented itself as knowledge and capable, and counsel has laid the groundwork showing that both AVRWC and Liberty Utilities have long histories of supporting and benefitting the town and its inhabitants. On this last point, certainly, there is much more evidence to be presented.