(January 22, 2002, posted at 9:45 p.m.) -- In the opening battle of a legal war between LB residents seeking LB consumer rebates for last winter's staggering natural gas bills from their City Hall run utility, and City Hall insisting it's protecting the public treasury from a $30+ million body blow, an L.A. Superior Court has rejected City Hall's effort to kill the lawsuit, ruling the class action can proceed as filed on two of its four causes of action while requiring amendment of its two other causes of action within 30 days.
LB City Hall had asked the Court, in effect, to stop the suit before having to file a formal answer directly admitting or denying the suit's allegations. The Court refused, and among the allegations it left intact is the suit's central contention that LB City Hall violated City Charter section 1502 which requires, "The rates to be charged users for any services or commodities supplied by any public utility owned and operated by the City shall be based upon the prevailing rates for similar services and commodities supplied or sold by other like utilities whether public or private, operating in the Southern California area."
The Court's ruling came in response to Demurrer and Motion to Strike, pretrial motions brought by the City of LB in its first response to the suit filed by members of LB Citizens for Utility Reform (John Donaldson, Adrea & Pete Stoker, Amelia Nieto, Roger Erickson, John R. Deats, Traci Wilson-Kleekamp, Joseph Weinstein, Colette Marie & Richard McLaughlin, Ronald B. Noe) against the City of LB.
In the public interest, LBReport.com posts the Court's verbatim Statement of Decision on a link below.
The ruling by Superior Court Judge Charles W. McCoy analyzed the complaint's four causes of action (allegations on which plaintiffs seek relief) after City Hall filed a Demurrer (a pretrial motion) which contended the allegations were insufficient to justify relief.
The court overruled City Hall's Demurrer on two causes of action, leaving the allegations intact and effectively putting pressure on City Hall to at some point file a sworn answer directly admitting or denying the allegations in these two causes of action.
As previously reported by LBReport.com, City Hall's Demurrer included voluminous materials comparing LB's rates to surrounding areas (and asked the Court to take judicial notice of this) to attack the plaintiffs' central allegations of disproportionate rates, but it did so in the legal context of challenging the allegations themselves as insufficient to justify relief. In comparison, filing a formal answer requires the City to admit or deny the allegations with specificity under oath.
Among City Hall's other options now may be an extraordinary writ for appellate review, although this presumably wouldn't extend the city's time for answering. Or City Hall may do something else we haven't thought of.
The Court sustained City Hall's Demurrer on two other causes of action, giving plaintiffs leave to amend these two other causes of action to cure their deficiencies (or face having these causes of action dismissed).
Assuming the plaintiffs amend these causes of actions and refile them, City Hall could then demur to them again or answer them. Like any defendant, City Hall likely hopes the plaintiffs won't be able to amend these allegations sufficiently to satisfy the Court, which could then dismiss these allegations. (However, the plaintiffs' two causes of action to which the Demurrer was overruled could proceed).
To view the Court's Statement of Decision in pdf form, click on the hyperlink that follows (the key portions are on pages 3-5 of the 5 page document),
Court's ruling on City Hall demurrer in class action suit re LB gas bills.