No Deal! Judge Rejects DWP Multi-Million Dollar Overbilling Settlement

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A judge once again Tuesday declined to accept a proposed settlement meant to resolve tens of millions of dollars in overpayment by Los Angeles Department of Water and Power customers amid the agency’s troubled $181 million billing system overhaul.

Los Angeles Superior Court Judge Elihu Berle suggested about a dozen revisions to the settlement deal, which has divided plaintiffs in a class- action lawsuit against the DWP. When the proposed settlement was first submitted to him in September, Berle instructed the plaintiffs to work out a revised deal.

Attorney Jack Landskroner, who negotiated the settlement deal, said he is “confident that with some minor revisions, the settlement will be approved on Dec. 21,” the next scheduled court hearing.

Attorneys for some members of the class-action lawsuit have come out strongly against the settlement terms, saying they contain “fatal flaws” that would limit DWP customers’ ability to challenge the refund amounts, as well as amounts that ratepayers who underpaid may owe.

Consumer Watchdog President Jamie Court, who joined the plaintiffs opposing the deal, said the judge “called the city out for not being more transparent about how consumer ratepayers would have to give up almost all claims against the Department of Water and Power under the settlement,” including ones that go beyond the billing issues themselves.

The judge also pointed out that under the current deal, ratepayers joining the settlement would be giving up their right to sue or litigate, even before knowing if they are getting a refund or would actually owe money, Court said.

The judge also suggested the court should have more say in disputes, according to Court.

“This is the second time the case has been rejected for preliminary approval, which is pretty unheard of,” Court said. “I think the city really needs to be more reasonable before going back for the third time to get approval and needs to give more rights to ratepayers and more due process to ratepayers.”

Tom Merriman, an attorney with Landskroner’s firm, said attorneys who oppose the deal failed in their efforts to “blow up the settlement.”

Some of the judge’s suggested revisions were “procedural,” while “the more substantive revisions were intended to make it clearer to customers what individual claims they would give up by joining the settlement,” Merriman said.

“The key is that the judge only wants to focus on those specific, non- controversial revisions for the next hearing,” he said.

Merriman also said the court always retained the final say under the original settlement terms and Tuesday, Berle requested that point to be made more explicit.

Thousands of DWP customers were issued faulty bills following a problem- filled upgrade of the utility’s billing system, with many of the payment amounts based on estimated, rather than actual, water and electricity use.

The city was hit with several lawsuits by customers contending they were overbilled. Settlement talks led to the proposed deal — announced by one of the attorneys and later confirmed by DWP officials — for distributing credits and refunds to overcharged customers.

But Consumer Watchdog advocates joined attorneys for other members of the class-action lawsuit to push back on the deal proposal, saying it would allow only DWP officials to decide how much to refund ratepayers.

DWP officials and the City Attorney’s Office did not immediately respond to the Consumer Watchdog group’s claims.

Landskroner said the settlement would “not only return 100 percent of the overcharges LADWP billed to customers,” but the amounts would be “verified by an independent court-appointed monitor.”

He added that he sympathizes with the consumer advocacy group’s “distrust of LADWP based on past history,” but thinks the “well-intended grassroots group may have been manipulated and misinformed by trial lawyers who have a personal financial interest in obstructing the settlement.”

Consumer Watchdog officials accuse Landskroner, who would be paid $13 million in legal fees under the settlement, of designing a deal that would be financially lucrative for him despite only having done “87 days of work.”

—City News Service

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