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Protracted Settlement Has Delayed LADWP Mis-billing Reimbursements

LOS ANGELES DAILY JOURNAL

More than a year and multiple failed preliminary approval hearings later, the Los Angeles Department of Power and Water hasn't refunded the almost $50 million it agreed to settle with class members as a result of overcharging customers on their utility bills because of faulty billing software.

Now attorneys involved in the matter say refunds will be distributed during the summer of 2017, two years after the deal was announced.

The protracted settlement has come under fire from customers and consumer advocates, who continue to report receiving incorrect bills and claim the utility does not know how to correct the problem. Antwon Jones v. City of Los Angeles, BC577267 (L.A. Super. Ct., filed Apr. 1, 2015).

"The court was told the case was resolved a year ago and that people would get their refunds starting in February 2016," said Jamie Court, president of Consumer Watchdog, which is considering getting involved in the litigation if delays continue.

The city contracted with Pricewaterhouse Coopers LLP, which sold DWP software for a new billing system, but a flaw in the system spit out miscalculated bills to more than 1.6 million customers. A state auditor said the utility knew there were problems with the system but ignored the issue.

Lawsuits were filed, including one by the city against Pricewaterhouse over the $57 million contract. City of Los Angeles v. Pricewaterhouse Coopers LLP BC574690 (L.A. Super Ct., filed March 6, 2015).

In the class action, Jack Landskroner, who worked on a similar case involving Pricewaterhouse in Cleveland, was brought in as class counsel, while Paul Kiesel of Beverly Hills and counsel from Liner LLP represented the defendants.

Consumer Watchdog contends that the interests of the city in the Pricewaterhouse case, coupled with out-of-state class counsel, has left the class action on the backburner.

Court said it's a conflict that Paul Kiesel is defending the city of Los Angeles in the class action while acting as plaintiff for the city in the suit against Pricewaterhouse. The suit recently survived a demurrer.

"I would rather have Kiesel represent ratepayers. Maybe they would have gotten their money quicker. I think it's wrong for the plaintiff's attorney to turn around and be a defense lawyer. I think it compromises the process," Court said.

Kiesel, meanwhile, said he doesn't defend the city, but DWP specifically. He said Liner LLP defends the city, as does the city attorney. Kiesel deferred comment to the city attorney's office, which did not respond to requests for comment.

The matter had once looked like it was going to a swift resolution. During the summer of 2015, the city announced a settlement promising to fully reimburse ratepayers and hired independent expert Paul Bender of Paul Bender Consulting to handle the disbursement of settlement money. At a preliminary approval hearing the following September, counsel for the city said the settlement would be ready in two weeks, but that was not the case.

Two more preliminary approval hearings went forward into December without any success, including a dressing down of attorneys by Judge Elihu M. Berle, who showed his disproval of a "last-minute flurry" of filings, some more than 200 pages long.

Scheduled hearings in February, April and July this year were all continued.

"A preliminary hearing is not a huge hurdle if you have a settlement. To have two is unusual in a case like this. To have seven shows there is something the matter here," said Court of Consumer Watchdog.

A preliminary approval hearing — the fourth — is now scheduled for Nov. 18.

justin_kloczko@dailyjournal.com