Water Otay District and City of San Diego Tiered Water Rates Class Action Lawsuits

On April 5, 2019, Gibbs Mura filed a fifth amended complaint against the City of San Diego, which operates utility systems that provide water services to approximately 1.4 million residential, commercial, and wholesale customers. On November 14, 2016, Gibbs Mura filed a second amended complaint against Otay Water District, the San Diego County Water Authority, the Metropolitan Water District of Southern California, and the City of San Diego.  

The class action lawsuits state that the California Constitution requires public water providers, like the city of San Diego and Otay Water District, to anchor their rates to the actual cost of providing the water service. Article XIII D of the constitution forbids public water agencies from imposing fees for water services that are disproportionate to the costs of actually delivering the water to each residence. Accordingly, the lawsuits allege that the city and water district have overcharged consumers for their water services and seek refunds for consumers, along with court orders requiring the water districts to enact rates that do not violate the constitution.   

Read a copy of the Coziahr v. Otay lawsuit here, which is on behalf of all single-family residential customers of the Otay Water District who received residential water service after July 14, 2014. And read a copy of the Patz v. City of San Diego lawsuit here which is on behalf of all single-family residential customers of the City of San Diego who received water service after August 14, 2014. 

If you meet the class definition, you are eligible for relief if the lawsuit is successful. The Coziahr v. Otay lawsuit  is on behalf of all single-family residential customers of the Otay Water District who received residential water service after July 14, 2014. The Patz v. City of San Diego lawsuit is on behalf of all single-family residential customers of the City of San Diego who received water service after August 14, 2014.  

The Court previously issued rulings on liability and remedies, in favor of the plaintiffs. In the Otay case, the Court determined in March 2021 that Otay Water District has failed to prove that its tiered rates correspond to the actual cost of providing service at a given usage level, among other things. Similarly, in the Patz case, the Court issued a September 13, 2021, Statement of Decision asserting that the City of San Diego “failed to demonstrate by substantial evidence that the tiered water rates imposed by its 2013 and 2015 ratemakings are proportional to the cost of service attributable to each customer’s parcel, as required by Proposition 218.”   

In both cases, the Court ruled that the water rates the defendants charged do not comply with the California constitution and that the city of San Diego and Otay Water District must start using water rates that are consistent with the California Constitution and must award refunds to class members for unconstitutional overcharges. In the Otay case, the Court issued a Statement of Decision ordering Otay Water District to repay class members approximately $24 million. In the San Diego case, the Court issued a Judgment ordering the City of San Diego to repay class members approximately $79 million.   

On April 1, 2022, the City of San Diego filed an appeal in the Patz case challenging the Court’s decisions on liability and remedies. In September 2024, the California legislature enacted Senate Bill No. 1072, a bill drafted by counsel for these water districts, which took effect on January 1, 2025. Our team successfully opposed the City of San Diego’s appeal, and on July 15, 2025, the Court of Appeal affirmed the trial court’s judgment for class members, including the approximately $79 million refund award, but sent the case back to the trial court to determine the impact of Senate Bill 1072 on the Judgment. The City of San Diego asked the California Supreme Court to overturn the Court of Appeal’s decision, which our team successfully opposed.

While litigating the remand action, the parties reached a $40 million settlement, which the Court preliminarily approved on July 31, 2026. Notice of that settlement is ongoing, and a final approval hearing is scheduled for December 11, 2026. All potential payments to class members must wait until the trial court grants final approval of the settlement. More information is available at the San Diego Water Settlement website.

On July 12, 2022, Otay Water District filed a motion for a new trial challenging the Court’s decision to refund class members, and in October 2022, it appealed the Court’s ruling. Our team defeated the motion for new trial and won on appeal, which means the Court of Appeal agreed with us that Otay had to refund its overcharged customers. The Court of Appeal asked the parties to re-calculate the specific amount of money owed to class members. As the parties were working on this question, on November 3, 2025, the parties informed the Court that they had reached a $12 million settlement to provide payments to class members who the evidence showed experienced overcharges. The Court granted final approval of that settlement on July 31, 2026, and payments to class members are currently being distributed. If you are still a customer of Otay Water District, any refund owed to you will be paid as a bill credit on your water bill. If you are no longer a customer of Otay Water District, any refund owed to you will be sent directly by the settlement administrator. More information is available at the Otay Water District Settlement Website.