L.A. faces lawsuit over trash fees charged to low-income tenants

Three nonprofit groups that represent low-income families intend to file a class action lawsuit alleging that thousands of tenants in Los Angeles housing projects were improperly charged for trash removal by the city.

The lawsuit, slated to be filed Wednesday, contends that residents in 14 housing projects are owed $8 million for payments they made over the last four years.

The Western Center on Law and Poverty, working with two other advocacy groups, said residents at Jordan Downs, Ramona Gardens and a dozen other locations signed leases that identified “rubbish removal” as a service covered by the Housing Authority of the city of Los Angeles. In recent years, tenants have been paying as much as $24.33 a month for that service, said attorney Navneet Grewal.

“Twenty-four dollars can make a huge difference for families who are low-income,” Grewal said. “It’s medical co-pay. It’s food. It’s groceries for a few days. It’s school supplies.”

The lawsuit is the latest headache for the housing authority, which relies on federal funds and has a board selected by Mayor Antonio Villaraigosa.

The board drew fire last year for lavish spending practices by agency employees and for giving a $1.2-million payout to fired top executive Rudolf Montiel. The Los Angeles County district attorney’s office is conducting an inquiry into allegations that former board members violated conflict-of-interest laws and were reimbursed twice for the same expense.

On Monday, two men pleaded guilty to charges that they participated in a bid-rigging scheme involving their brother, a former housing authority official who is described by federal authorities as a fugitive.

Managing Assistant City Atty. Craig Takenaka, who represents the housing authority, had no comment on the tenant allegations, saying only that the matter will be discussed by the board during an upcoming closed-door meeting. Last month, the agency rejected the tenants’ reimbursement claim.

The case comes three months after the City Council tentatively settled a separate class-action lawsuit dealing with trash pickup overbilling allegations. In that lawsuit, officials conceded that thousands of renters had been overcharged, or in some cases, improperly charged, for trash service provided by the Bureau of Sanitation.

The lawsuit was filed by Hollywood resident Lilith Chakhalyan, who found that residents in her eight-unit apartment building were being charged for city trash pickup even though the building relied on a private hauler. Renters in other buildings found they had been charged at the higher rate established for single-family homes — and were overpaying at a rate of roughly $12 a month.

Sanitation officials expect the settlement will cost $6 million, roughly one-third of which has already been paid. So far, 8,400 people have stepped forward to say they are owed money, said attorney Hovanes Margarian, who represents Chakhalyan.

“That number should be growing as people make more claims,” said Margarian, who said Sept. 6 is the deadline to submit a demand for reimbursement.

In the housing authority case, lawyers estimated that tenants have been overcharged millions of dollars since 1983. Because breach-of-contract law permits the case to cover only the last four years, tenants are seeking a smaller amount, Grewal said.

The low-income residents who occupy L.A. housing projects pay rents that are subsidized to ensure that they do not exceed 30% of income.

One plaintiff in the planned case is 65-year-old Marco Galindo, a disabled tenant at Mar Vista Gardens who said he pays $225 a month. The city’s trash fee added $17, the senior discount price, to his monthly housing bill, according to his lawyers.

Another plaintiff is Emma Gullette, a 69-year-old tenant at Pueblo del Rio in South Los Angeles. Gullette saw the housing authority’s trash fee add $24 to her monthly rent of $319 for a three-bedroom apartment.

Tenants were largely unaware of the trash fees until recent years, when they started going up dramatically, Gullette said. The fees have more than tripled over six years as Villaraigosa sought funds to hire more officers for the Police Department.

“Before it was a few dollars, and we didn’t notice it,” Gullette said. “But then the bill started getting bigger.”

david.zahniser@latimes.com