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Judge awards $8.9 Million in Attorneys¡¯ fees to water authority in MWD rate case
After losing a landmark judgment in 2015, the Metropolitan Water District of Southern California must pay $8.9 million in attorneys¡¯ fees to the San Diego County Water Authority, a San Francisco Superior Court judge ruled Thursday. As the prevailing party, the Water Authority is entitled to its attorneys¡¯ fees, according to the court order; a previous decision awarded the Water Authority more than $320,000 in court costs.
MWD now owes the Water Authority more than $243 million, including damages, costs, interest and attorneys¡¯ fees. The bill, including the award of attorneys¡¯ fees, accrues simple interest of 7 percent annually.
Records disclosed by MWD show that it has spent more than $20 million on its attorney¡¯s fees.
¡°We are pleased that almost all of the attorneys¡¯ fees and court costs incurred by the Water Authority to defend our water ratepayers will be recovered,¡± said Mark Weston, chair of the Water Authority¡¯s Board of Directors. ¡°But at the same time, it is greatly alarming to us that MWD continues to ignore the court¡¯s rulings and overcharge San Diego County ratepayers by setting rates using the same flawed rate allocation that the judge found to be illegal.¡±
Despite the court¡¯s ruling in two cases spanning four years of MWD¡¯s rates - 2011-2014 - MWD is poised to adopt two more years of illegal rates - for 2017 and 2018 - at its April 12, 2016, board meeting. The Water Authority filed suit challenging MWD¡¯s 2015 and 2016 rates, which also use the same illegal rate allocation. That case - which raises the same issues - has been stayed pending the outcome of appeals on the prior two cases.
¡°MWD has a clear obligation to set rates that conform to state law and the California Constitution,¡± said Dan Purcell, special counsel for the Water Authority with Keker & Van Nest, San Francisco. ¡°The law requires it, a judge has ordered it, and the ratepayers of San Diego County deserve it.¡±
The award of attorneys¡¯ fees by Judge Curtis E.A. Karnow follows his final judgment in November 2015 that affirmed victories by the Water Authority in both phases of two landmark lawsuits challenging MWD¡¯s rates. Karnow:
¡¤Invalidated MWD¡¯s transportation rates for 2011-2014, finding that they violated numerous provisions of California law and the state Constitution;
¡¤Ordered MWD to pay the Water Authority $188.3 million in damages and $46.6 million in prejudgment interest; and
¡¤Ordered MWD to recalculate the Water Authority¡¯s statutory right to MWD water supply - a right MWD had illegally under-calculated by tens of thousands of acre-feet annually for more than a decade.
Karnow also mandated that MWD, ¡°Enact only legal transportation and wheeling rates in the future¡± and ¡°set its rates based upon cost causation - that is, Met must charge for its services based only on what it costs to provide them.¡±
MWD is appealing Karnow¡¯s final judgment. That process is expected to continue for at least another year and will significantly delay payment of the Water Authority¡¯s judgment. The Water Authority¡¯s Board of Directors has already determined that any money returned to the Water Authority will be refunded to its 24 member agencies in proportion to their payment of MWD¡¯s illegal overcharges over the four years in dispute, after deducting any litigation expenses that are not recovered.
The Water Authority is represented by Keker & Van Nest, San Francisco, and by Brownstein Hyatt Farber Schreck, a national firm with offices in San Diego.
[Ãâó = Water World / 2016³â 3¿ù 28ÀÏ]
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