Judge Rejects Proposed Settlement Deal In Class-Action Suit Against LADWP

LOS ANGELES (CBSLA.com) — A judge Tuesday rejected a proposed settlement between the Los Angeles Department of Water and Power and its customers, but suggested about a dozen revisions to the deal that may bring overcharged ratepayers one step closer to getting their money back.

Here is how it is supposed to work: "If you've been over-billed and there will be an independent monitor to determined if that's happened, you will get a credit on your bill. And if you're no longer a Department of Water and Power customer, you'll get a check in the mail. You don't  need to do anything else," said Paul Kiesel, City of L.A. Special Counsel.

But the devil is in the details. Kiesel said "that will provide for 100 percent refunds for every ratepayer, who has been over-billed improperly." Critics question 100 percent of what?

Los Angeles Superior Court Judge Elihu Berle ordered the lawyers to make changes in the settlement that will make it more clear to ratepayers how much money is being offered to them, and their right to disagree or opt out altogether.

"What we're fixing now is just the details to make sure that people have clear notice so they understand what they're getting. And they can understand how they can go about making themselves whole," said plaintiffs' attorney Jack Landskroner.

Landskroner said he is "confident that with some minor revisions, the settlement will be approved on Dec. 21," when both sides return to court for the next court hearing.

If you think you may have some money coming back to you in this settlement, do not expect an early Christmas present because this complicated class-action lawsuit is not expected to be completed until the spring of 2016.

Attorneys for some members of the class-action lawsuit oppose the deal, saying the settlement terms contain "fatal flaws" that would limit customers' ability to challenge the refund amounts.

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.

"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."

Thousands of DWP customers were issued faulty bills following an upgrade of the utility's billing system. Many of the payment amounts were based on estimations rather than actual usage.