Judge holds off again on preliminary OK for deal on bloated DWP bills

Consumer Watchdog President Jamie Court in 2014. He doesn't think the proposed settlement is good enough.

Nov. 3, 2015 2:12 PM PT

For the second time this year, a Los Angeles Superior Court judge held off on giving preliminary approval to a legal settlement that could credit or refund tens of millions of dollars to Los Angeles Department of Water and Power customers who were overcharged after the bungled rollout of a new billing system.

At a Tuesday hearing, Judge Elihu M. Berle asked attorneys to make a number of revisions to the proposed deal but did not tackle complaints over whether the proposed settlement would give the embattled utility too much control, as some critics have argued.

“I don’t think this is good enough,” said Jamie Court, president of Consumer Watchdog, an advocacy group that had denounced the proposed settlement before the hearing.

However, Court said he was heartened that “clearly this judge isn’t going to sign off on just anything.”

The legal saga stems from billing errors that first erupted two years ago: Aggrieved customers filed several lawsuits against the utility after it started using a new system that spat out thousands of erroneous bills, some of them wildly inflated. In all, the department has said it billed $44 million in excessive charges.

Earlier this year, the department announced it had reached a proposed settlement with one of several residents who had sued over the billing debacle — one they said could also resolve the other lawsuits.

Under that deal, customers would be credited or refunded for the entire amount of the excessive charges, the utility said. Attorney Jack Landskroner, who represented resident Antwon Jones, called it “a home run” when the settlement was announced.

But attorneys for several other residents suing the utility have challenged the deal, arguing that it gives too much power to the department to decide how credits and refunds will be calculated.

In a legal filing, they argued that the methods used to determine how much customers were overcharged are not spelled out in the settlement and would therefore not be enforceable. “This is a settlement by the LADWP, of the LADWP, and for the LADWP, because the LADWP determines everything,” they stated.

The attorneys criticizing the proposed settlement also charged that an outside consultant, described by the utility as an independent monitor overseeing the deal, was actually “an industry insider” inclined to keep a big utility happy.

Their complaints were echoed by Consumer Watchdog, an advocacy group that held a press conference Monday urging Los Angeles Mayor Eric Garcetti and City Atty. Mike Feuer to pull back the deal, calling it “a sweetheart deal” for the DWP that would shortchange ratepayers.

In court filings, Landskroner and other attorneys who back the proposed settlement have countered that the objections are based on “conjecture, a lack of understanding, and incomplete information,” and “should not stand in the way of a settlement agreement that provides 100% recovery.” Landskroner stressed that a retired federal judge endorsed it.

DWP Chief Administrative Officer David Wright said in a statement Monday that the allegations made by Consumer Watchdog “are wrong, both factually and legally.”

In September, Judge Berle held off on granting preliminary approval to the proposed settlement and urged the lawyers to try to work out their differences. But the two sides remained at odds when they returned to court Tuesday.

At the Tuesday hearing, Berle asked for several changes. Some of them addressed concerns raised by Consumer Watchdog and the attorneys critical of the deal, such as making it clearer that customers who got hefty bills after not being billed for months at a time could lose the right to dispute those stale bills.

Tim Blood, one of the attorneys challenging the deal, called such changes “a step in the right direction.” But he said that he hoped the city would make additional changes to address their complaints.

Landskroner, in turn, characterized the changes as mere “clarifications.” The next hearing on the proposed settlement is slated for December, after lawyers submit their suggested revisions.

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