City Drops Suit Against PricewaterhouseCoopers Over LADWP Billing Scandal

LOS ANGELES (CBSLA) — The city has dropped its lawsuit against the company accused of being behind a massive billing scandal at the Los Angeles Department of Water and Power that left customers with bills in the thousands of dollars.

Los Angeles City Attorney Mike Feuer filed suit against PricewaterhouseCoopers back in March 2015 alleging that the firm misrepresented its level of experience in handling the rollout, resulting in inaccurate and inflated bills being sent to numerous customers while leaving others with no bill at all.

The company responded with allegations of its own, accusing DWP of running "a deceptive scheme of stunning scope."

Soon after those allegations came to light, agents with the Federal Bureau of Investigation served search warrants at DWP headquarters and at the city attorney's office — investigating allegations that attorneys hired by the city were secretly working with attorneys representing ratepayers who were bringing in millions of dollars in attorney's fees.

The attorneys involved in the federal investigation have now refused to answer questions while possible criminal charges loom. In a statement, the city attorney's office said it was dismissing the suit due to the lack of cooperation.

"DWP's ability to prove damages has been severely undermined by the unavailability of key witnesses who have invoked their 5th Amendment right against self-incrimination."

But Consumer Watchdog President Jaime Court said there was another reason the city decided to drop the lawsuit.

"The city attorney and DWP don't want more damaging evidence to come out in this investigation," he said. "The city wants to shut this down because they don't want the public to learn exactly the level of fraud. They don't want more political harm to the city attorney."

Dismissing the lawsuit could leave the city, and DWP ratepayers, on the hook for those costs and other litigation stemming from the billing rollout.