Claremont Abandons Condemnation Effort: Millions of Taxpayer Dollars Wasted

In a settlement announced October 10th, the City of Claremont, California, abandoned its failing condemnation effort, ending the City’s attempt to use eminent domain to take over the local water system owned and operated by Golden State Water Company.

The spectacular failure of Claremont’s ill-advised takeover effort should serve as a cautionary tale for other municipalities across the country. Despite activist claims of a quick and easy takeover process, Claremont has spent five years and more than $13 million on lawsuits against Golden State Water with literally nothing to show for it.

In December 2016, a Los Angeles Superior Court judge issued a strong and comprehensive judgement rejecting the City’s attempt to seize the water system Golden State Water has owned and operated since 1929. Judge Richard Fruin ruled, “Golden State is the superior operator of the Claremont water system,” citing the company’s strong record of investment in and operation of the system, as well as the major deficiencies of the proposed government operation.[i]

The ruling not only blocked Claremont’s effort to take over the system, but it also left the City liable for more than $13 million, including $7.6 million for Golden State Water’s legal defense.

The terms of the settlement presented to the Claremont City Council state that Claremont will drop its lawsuit, pay Golden State $4.8 million and give up its condemnation effort for at least 12 years.  In return, Golden State will forgive an additional $5.8 million it is owed by the city.[ii]

In a joint statement, the two sides said they were ready to move on because, “collaboration is better than conflict for the people of Claremont.”[iii]

As this experience in Claremont shows, promises made in condemnation efforts cannot be trusted, and all too often taxpayers pay a steep price when the dust settles.

[i] Statement of Final Decision, Judge Richard L. Fruin, Jr.; City of Claremont v. Golden State Water Company, 9 December 2016.
[ii] Inland Valley Daily Bulletin, “Claremont reaches $4.8 million settlement agreement with Golden State” 10 October 2017.
[iii] Inland Valley Daily Bulletin, “Claremont reaches $4.8 million settlement agreement with Golden State” 10 October 2017.
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