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Judge holds off on approving DWP billing settlement amid legal feud

Department of Water and Power

Several lawsuits were filed against the Los Angeles Department of Water and Power, shown, after the botched rollout two years ago of a new billing system, which spewed out thousands of erroneous bills, some of them wildly inflated.

(Robert Gauthier / Los Angeles Times)

The legal fight over bloated bills from the Los Angeles Department of Water and Power will stretch into fall, after a Superior Court judge held off Friday on giving preliminary approval to a settlement that would credit or refund tens of millions of dollars to customers.

The proposed deal, reached with one of several Los Angeles residents who sued the city over the disastrous rollout of a new billing system, had been challenged by attorneys representing several other customers, who argued that the deal put too much control in the hands of the utility.

Lawyers backing the deal, in turn, countered that it was a solid settlement that would restore 100% of what was owed to customers and impose needed reforms. At a Friday hearing, attorney Jack Landskroner said he could not have gotten a better result if he had kept up the court battle for years.

At the end of the hearing, Judge Elihu M. Berle put off making a decision on whether to give preliminary approval to the settlement. Instead, he told attorneys feuding over the proposed deal to meet and try to hash out their differences before they came back to court.

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By telling the lawyers to meet, “he’s obviously said, ‘You guys need to go back to the drawing board,’” said David Bower, one of the attorneys who objected to the proposed settlement.

Landskroner, in turn, was disappointed that the settlement was not already moving forward, but said it didn’t mean that the judge thought the proposed deal was faulty.

“I think the judge just wants it clarified so that it’s crystal clear,” Landskroner said Friday.

In a written statement, DWP spokesman Joseph Ramallo stressed that the settlement resulted from a mediation conducted by “a highly respected retired federal judge” and said that “although the process will now be briefly delayed, the department remains committed to making whole any customer who was overcharged.”

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The legal drama stems from the botched rollout two years ago of a new billing system, which spewed out thousands of erroneous bills, some of them wildly inflated. The utility says it ended up overbilling Los Angeles residents by $44 million, some of which has already been repaid.

That billing debacle spurred several lawsuits against the utility. Earlier this year, the DWP announced that it had reached a proposed deal in one of those lawsuits -- a sweeping settlement that it said could end all legal battles over the billing errors.

Under the proposed deal, unveiled last month, customers would get credit on their bills for the excessive charges, no matter how small the mistake or whether the customers knew of the errors. If they have shut down their accounts, the utility would mail them a refund check.

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The proposed settlement would also require the DWP to meet standards for how quickly it investigates billing errors and answers customer calls, mandate that it spend $20 million to overhaul the billing system, and install an independent monitor to track its progress.

But attorneys representing plaintiffs in two other billing lawsuits said the settlement was fatally flawed. They argued that under the proposed settlement, the utility itself would decide who got refunds or credits and how much they would get, without revealing how they were calculating the amounts.

The problem with the deal, lawyer Tim Blood said in court, is that it essentially says, “Just trust the DWP, they’ll do all the calculations. There’s no transparency.”

In reaction, Landskroner and other attorneys backing the settlement countered that an independent monitor would be overseeing the process and verifying who would be repaid and how much. In a court filing last week, they accused the other lawyers of trying to derail the settlement in order to get “unjustified” fees.

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Lawyers are scheduled to return to court for a continued hearing over the proposed settlement on Nov. 3.

Follow @latimesemily on Twitter for what’s happening at Los Angeles City Hall.


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