Lawsuit Accuses Los Angeles of Overcharging for Electricity

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April 8, 2024

by Brian Eckert

Los Angeles electric customers have filed a class action lawsuit accusing the city of overcharging certain multi-family residential properties for electricity services.

The lawsuit makes claims for breach of contract, money had and received, violation of the California Constitution, and declaratory relief. Any Los Angeles Department of Water and Power electric customer charged an improper rate may be eligible to join as a class member.

What is the Lawsuit About?

The lead plaintiffs in the case include City of Los Angeles homeowners associations and an L.A. resident who are electricity customers of the City. They claim that the Los Angeles Department of Water and Power (DWP) overcharged them for electricity

DWP charges different customers different amounts for electricity services based on the customer’s service classification, including whether the customer is a single-family or multi-family residence.

The complaint describes classifications and service rates that were adopted by ordinance and are effective as of July 1, 2009. Per the ordinance, Schedule R-1 rates apply to single-family homes and Schedule R-3 applies to residential multi-family units.

The City and each Plaintiff had an express and/or implied agreement when each Plaintiff opened and maintained an electricity account that the City would charge and each Plaintiff would pay the proper rate for electricity. Each Plaintiff has paid the rate that it agreed to pay, but the City has overcharged each Plaintiff.

There are High Season and Low Season Rates under the schedules, as well as three tiers. Tier 1 applies to the first 350 kWh, Tier 2 to the next 700kWh, and Tier 3 for anything greater than 1,050 kWh.

Under all version of the relevant ordinances, the complaint states, it is clear that single-family residences must be charged the R-1, single-family rate, while multi-family properties where the individual single-family accommodations are privately sub-metered must be charged the R-3, multi-family rate.

But allegedly, this is not what happened. The plaintiffs claim the City charged them the higher single-family service rate, rather than the correct and more economical multi-family service rate. Therefore, the plaintiffs say, they are owed a refund for the overcharges.

Who Can Join the Class Action?

The lead plaintiffs in the case are the Beverly Glen Homeowners Association, the Greenfield West Homeowners Association, the Wilkins Ave. Homeowners Association, and Michael Cassell. All are DWP electric customers for multi-unit residential units located in Los Angeles.

They seek to establish a class comprised of:

All City of Los Angeles electricity customers who, at any time within the applicable statute of limitations preceding the filing of this action through and including the date of judgment, (a) were properly classified as R-3 multi-family electricity customers, but (b) were improperly charged a R-1 single-family electricity rate.

A previous version of the lawsuit states that “hundreds of thousands of class member” may be affected.

How Much Can Class Member Potentially Recover?

The lawsuit asks for damages, disgorgement, restitution, declaratory and injunctive relief, and attorneys’ fees and costs.

Eligible class members could recover monetary damages in the amount of the overpayment for electricity.

Los Angeles rolled out a glitchy DWP computer billing system in 2013 that overcharged customers at least $67.5 million, according to an independent monitor. One couple was charged nearly $52,000 in inflated bills.

The billing system debacle led to a class action case, Eck v. City of Los Angeles, and a resulting $52 million settlement fund, with refunds available in the form of per kilowatt-hour credits. The settlement also contained guarantees that DWP would reform its billing and metering practices.

Do I Have to Do Anything to Join?

Eligible class members will be automatically added to the lawsuit, pending court certification. Those who meet inclusion criteria will receive notices informing them how the lawsuit affects their legal rights.

There is no need to take any action or hire a lawyer. James R. DeMay  and Hunter Bryson of Milberg have joined with local counsel to represent the class on a contingency-fee basis.

DeMay and Bryson lead the firm’s State & Local Government Practice, which represents individuals and companies disputing unlawful or excessive energy rates charged by public and private utilities. Milberg has brought overbilling class action cases against large energy service companies that include Consolidated Edison of New York.

Since 1965, Milberg has filed thousands of class action lawsuits and recovered billions of dollars for our clients.