Tiered Water Rates Class Action Lawsuit

Tiered Rates for Residents may Violate California's Constitution

Our attorneys have filed a class action lawsuit against California water providers alleging that they are violating the state constitution by using tiered water rates to charge customers more to provide water than it actually costs.

According to the lawsuit, the tiered rates charged by Otay Water and the City of San Diego are not anchored to the actual cost to deliver water, as required by California’s constitution. The complaint alleges that these rates are illegal, and seeks damages or a refund for consumers.

The lawsuit is called Coziahr v. Otay Water et al. Case No. 37-2015-00023413, and is  brought by a San Diego resident on behalf of residents and businesses throughout California, including in San Diego County.

Read a copy of the lawsuit here. The plaintiffs will be filing amended complaints soon indicating that the case will proceed against Otay Water and the City of San Diego, not water wholesalers such as San Diego County Water Authority or Metropolitan Water District.

Water Fees under the California Constitution

The class action filed by the firm states that the California Constitution requires public water providers to anchor their rates to the actual cost of water service, and that Article XIII D in particular forbids public water agencies from unilaterally imposing fees for water service that are disproportionate to the cost of service.

As a result, the lawsuit alleges, the agencies’ fees are an unauthorized and impermissible tax on water in violation of the California Constitution.

“As the courts have held time and again, absent voter approval, public water agencies cannot charge Californians excessive fees for water service,” Gibbs Law Group attorney Andre Mura said in a statement to Courthouse News Service.

Water Rate Model may Reward Conservation, Penalize Consumption

The lawsuit further alleges that the public water agencies may have instituted these tiered rate structures to reward water conservation and penalize water consumption. According to the complaint, Otay Water calls its lowest-rate tier for residences its “conservation” tier, and its highest-rate tier its “penalty” tier.

Despite the agencies’ reasoning, however, the complaint states that the agencies lack the authority under the California Constitution to adopt conservation policies that depart from article XIII D’s clear mandate that water conservation be achieved by pricing that reflects the actual cost of service for incremental levels of water usage.

When asked by Courthouse News Service about the need for conservation in California’s severe drought, Mura said:

“The California Constitution expresses the people’s view that water conservation is achieved by pricing that reflects the actual cost of water delivery service to a given property. This suit seeks to enforce the water conservation policies adopted by the people.”

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