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Consumer Watchdog Challenges City Attorney Mike Feuer To Stand Up For LA Ratepayers Not Politicians In DWP Transfer Case To Be Heard Wednesday

Wed, 02/14/2018 - 00:23
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Santa Monica, CA — Consumer Watchdog has urged LA City Attorney Mike Feuer to oppose a deceptive and inadequate Notice to ratepayers in a class action settlement over the transfer of hundreds of millions of dollars in power rates to City coffers.

Consumer Watchdog’s objection will be heard by an LA Superior Court judge Wednesday and argues the City and DWP deceptively left out key information that could have influenced ratepayers’ decision to opt out instead of waiving their right to sue over a $242 million transfer of ratepayer funds. The nonprofit group challenged Feuer to live up to his promise to protect consumers’ rights and join it in narrowing the scope of the proposed waiver or reissuing the notice.

“This is a litmus test of whether Mike Feuer stands for the ratepayers in this city or its politicians,” said Liza Tucker of Consumer Watchdog.

The letter from Consumer Watchdog follows:

“We write you today reminding you of your own words posted under the consumer protection tab of your own L.A. City Attorney website: ‘My office will always fight back by empowering consumers with the information they need to avoid being victimized and aggressively seeking restitution for those who are harmed.’

This pledge to protect LA consumers should extend to the LADWP ratepayers who were recently deceived by an inadequate and deceptive notice your office approved.

We believe you will agree that it is neither open nor honest to make a legal settlement that does not give consumers proper notice of material information that would inform their decision about whether to accept settlement terms, which amounts to a violation of due process.

Nonetheless, lawyers from the City Attorney’s office approved such a settlement notice that failed to honestly represent to DWP ratepayers the release of their rights in the class action settlement negotiated by the City of Los Angeles in Eck, et al. v. City of Los Angeles, Case No. BC577028.

Your office approved settlement notices asking for a release of ratepayers’ right to sue, but failed to inform them of information critical to deciding whether to opt out of or accept the class action settlement. That critical information was that a planned transfer of $242 million from DWP ratepayers to the City was set to occur shortly after the notices were mailed.

As you will recall, ratepayers sued the city and LADWP for illegally collecting ‘surplus’ power rates from ratepayers between 2012 and 2017 via an 8% surcharge on their bills and then transferring these monies to the City for purposes other than the provision of electric service, which is prohibited without a public vote under 2010’s Prop 26.

The class notice that your office helped draft and signed off on promises a ‘savings’ to ratepayers of $243 million dollars if the settlement is approved by the Court, the dollars saved by ratepayers for deducting the 8% percent surcharge from monies collected under 2016 rates. But the City left out of the notice the cost to ratepayers of what would come soon after: a transfer of $242 million in surplus power rates to the City’s general fund approved by the City Council on December 13, 2017. If that material fact had been included in the notice, ratepayers may well have wanted to ‘opt-out’ of the settlement or object to it.

We ask that you join with Consumer Watchdog at the court hearing on February 14 to narrow the scope of the ‘claims release’ provision, which, as written, purports to bar ratepayers from bringing a legal challenge over the $242 million transfer.”

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