Some residents in the city of San Juan Capistrano in Orange County, California, have filed a lawsuit against the city seeking millions of dollars in water-rate refunds. The class-action lawsuit filed on Friday last week in Orange County Superior Court by residents Hootan Daneshmand, Lauri McIntosh and Brian Montgomery wants refunds for the money they paid to San Juan Capistrano under tiered rates that were claimed illegal last year.
San Juan Capistrano offered refunds of only 20 percent of overcharges when it was caught of overcharging water rate last year. According to Orange County Register, the Friday lawsuit claims the city's refund program gives residents less than 20 percent of the overcharges and claims that the refund program "was nothing more than a continuance of its illegal conduct."
The 12-page complaint said that San Juan Capistrano attempts to escape the consequences of its illegal conduct by accounting sleight of hand should be rejected. The lawsuit says that the city has "doubled down on its illicit conduct."
The city's water rate refund program was only applied to the overcharge rates that were paid after August 2013, when a Superior Court judge ruled the rates were illegal, while the illegal rates were charged between February 2010 and July 2014.
The California Fourth District Court of Appeals ruled in April 2015 that San Juan Capistrano's 2010 tiered water system was unconstitutional and did not sufficiently show that each tier was based on usage and the actual cost of water delivery, the Capistrano Dispatch reported.
San Juan Capistrano used a rate structure that charged customers who used larger amounts of water a higher rate than customers who used small amounts. The 4th District Court of Appeal struck down the city's fee plan, saying it violated Proportion 218, which prohibits government agencies from charging more for a service than it costs to provide it.
The City Council approved in May 2015 a refund program for the approximately 11,300 water customers who paid the rates during the 10 months after the initial ruling and before the city implemented new rates. The city allotted $4.4 million for the program.
The city said customers who received refunds were required to sign a refund notice forgoing their right to sue. Daneshmand and other residents claim in Friday lawsuit that thousands of residents did not receive the refund notice, Court House News reported.
The residents, who paid for water during entire 4 ½ year period of illegal rates in San Juan Capistrano, seek refunds with interest and damages for breach of contract, breach of faith, and negligence.
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