Independent Monitor Verifies $67,500,000 in LADWP Overbilling

Landmark Class Action Settlement Will Continue to Grow

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| Source: Landskroner Grieco Merriman, LLC

LOS ANGELES, Nov. 14, 2016 (GLOBE NEWSWIRE) -- Court-appointed independent monitor Paul Bender has now verified $67,500,000 in charges the Los Angeles Department of Water and Power (LADWP) overbilled its customers.  “But we are not done,” said consumer rights attorney Jack Landskroner of Landskroner Grieco Merriman.  “$67,500,000 is a floor. This amount only addresses the verified credits and refunds customers can automatically receive.” 

Landskroner negotiated the landmark class action settlement which will provide consumers a 100% recovery of any amount LADWP overbilled.  The overcharges were created by a new computer billing system consultant PricewaterhouseCoopers implemented at the utility in 2013. 

“The settlement also creates a process enabling consumers to make claims for additional damages caused by overbilling,” added Landskroner.

Last December, Los Angeles Superior Court Judge Elihu Berle gave conditional preliminary approval to the landmark settlement which was originally estimated to involve at least $44,700,000 in overbillings.    He also appointed Bender, a utility billing expert, to validate the methodology used to identify over-billed customers and how much they are owed.

“Mr. Bender’s team has unrestricted access to the LADWP computer servers,” said attorney Tom Merriman.  “LADWP’s leadership team has fully cooperated, but our commitment is to verification.”

Attorneys from Landskroner’s law firm and analysts from Bender’s consulting firm have spent the past eleven months pouring through data, reviewing internal documents, and questioning LADWP staff about their billing procedures.  The settlement also requires LADWP to spend an additional $20,000,000 to implement reforms set forth in the agreement.  Landskroner has continued to push for further reforms and more extensive oversight by the independent monitor.   

“If you include the cost of reforms, the settlement is now approaching $90,000,000,” said Landskroner.

Following a mediation conducted by U.S. District Judge Dickran M. Tevrizian, attorneys for lead Plaintiff Antwon Jones and the LADWP jointly submitted an updated settlement agreement last week in which:

  • LADWP agreed to adopt a regulatory rule change which will prohibit the department from back billing its customers more than approximately 180 days (depending on billing cycle length).  The reform applies to both residential and commercial customers.  Prior to the settlement, LADWP could back bill customers up to four years.  The original settlement language limited back billing for residential customers to 270 days.     
     
  • Solar customers will no longer have to submit a claim for damages caused by delays in energizing their solar power systems.   Damages will be pre-identified through the computer queries verified by the monitor and customers will receive credits or refunds.
     
  • The monitor will have expanded oversight authority covering both the “Tiger Team” and the claims administration process.  The settlement requires LADWP to create a Tiger Team in the Customer Service Department to respond to complex customer billing issues or concerns.
     
  • The cap on monitoring costs is raised to $2,500,000 to ensure continued independent oversight and compliance.
     
  • Given the substantial increase in financial recovery achieved for consumers and the extensive work required to implement the settlement, LADWP has agreed not to object to initial attorney fee applications up to a combined $19,000,000.   The fee cap applies to all of the law firms whose efforts have benefitted the class of LADWP customers.  Judge Berle will ultimately decide the appropriate attorney fee awards based upon the recovery made by class members and the work performed by counsel.  No attorney fees will be paid until after Final Approval.
     
  • Attorney fee applications to the Court for post-Final Approval legal work will be capped at 29% of the actual amount recovered by consumers through the claims process and completion of field investigations into issues such as faulty meters and water leaks.  The new language ties the cap on fees to actual recovery by class members which cannot be determined until these investigations are complete.  Nevertheless, Judge Berle will ultimately decide all attorney fee awards for post-Final Approval legal work.    

“This is not a drive-by settlement,” said Landskroner.  “We are in this for the long haul.  We are going to continue to push to make sure the mandated reforms are fully implemented.” 

“The monitor’s authority to address the past organizational dysfunction is critical,” added Merriman.  “Mr. Bender’s oversight of the Tiger Team is a big step towards confronting some of the issues which cause consumers the greatest frustration.”

Judge Berle will conduct a preliminary approval hearing at 1:30 pm on November 18, 2016.  If preliminary approval is granted, consumers would receive letters within ninety (90) business days indicating the amount they were overbilled as verified by the Court-appointed monitor.  Consumers would also receive a notice explaining their rights under the terms of the settlement.

Media Contacts:
Jack Landskroner, Esq. (216) 522-9000 Jack@lgmlegal.com  
Tom Merriman, Esq. (216) 522-9000 Tom@lgmlegal.com   
Adam Englander, (213) 741-1500 X 528 Adam@ekapr.com  
Eric W. Rose (805) 624-0572 eric@ekapr.com

Landskroner Grieco Merriman, LLC. is a law firm whose practice areas includes consumer class action litigation and securities fraud.  Jack Landskroner is a board  certified trial advocate by the National Board of Trial Advocacy and has been counsel in class action cases litigated across the country. In 2012, Jack Landskroner was elected national President of the Public Justice Foundation; a 3,000-member organization's that undertakes nationwide efforts to secure court access for ordinary people and justice in civil rights and civil liberties, environmental protection, consumers' rights, food health and safety, and workers' rights cases with widespread impact. Landskroner has repeatedly been honored as a "Super Lawyer" and a "Top-Rated Lawyer" by his peers and has been recognized as a “litigation Star” by Benchmark Plaintiff publication.  For more information, visit www.lgmlegal.com.