Split decision in round 1 of MID class-action lawsuits
One of two unrelated class-action lawsuits brought on behalf of the Modesto Irrigation District’s electricity customers might be decided by a jury, but the other likely won’t, a judge said in pretrial rulings.
Both lawsuits ask juries to order that MID stop illegally inflating power bills to subsidize farm water prices, and both seek unspecified refunds for tens of thousands of electricity customers. Although similar and filed within two weeks of each other, the lawsuits were prepared by separate law firms and employ different wording.
The lawsuits respectively were filed by Modesto residents Dave Thomas and Andrew Hobbs, both noting that MID has not asked for voter approval to overcharge power customers. The Hobbs complaint also accuses MID of overcharging homes to subsidize businesses that pay lower rates.
MID continues to impose electric utility rates on its customers that include an embedded utility tax that has never been approved by the voters, in violation of Proposition 218.
Plaintiff’s briefing in Thomas case
If granted class status, the Thomas complaint could draw in 118,000 residential, commercial and industrial power customers, while Hobbs’ might cover 97,000 residential customers.
A technical difference in Thomas’ approach “might entitle him to a jury trial,” Stanislaus Superior Court Judge William Mayhew said Wednesday in a tentative decision, but a judge should decide Hobbs’ case, Mayhew indicated in a separate ruling.
MID on Thursday could try to change Mayhew’s mind in the Thomas case in oral arguments.
The district has balked at pinpointing its electricity profit, which is used to repay debt, build reserves of about $200 million and cover the farm water subsidy, amounting to $17 million this year. Bonding documents last year put the district’s yearly electricity profit at more than $90 million.
MID argued against letting a jury weigh both cases, saying the legal dispute should focus on whether the MID board followed the law when setting prices.
MID and its counsel – who have been involved in many Prop. 218 and Prop. 26 challenges before our appellate courts – are aware of no case where a court has allowed a jury to decide whether a rate is “reasonable.
MID briefing
“It would be impractical to expect a lay jury to review the many hundreds of pages of staff reports, (board) minutes and dense, technical spreadsheets calculating MID’s cost of service to determine if evidence supports those rates,” MID attorneys wrote in a court brief. “This is a matter for a professional trier of fact, not a lay panel.”
Mayhew agreed in the Hobbs case, saying, “Where review is so limited, it requires a judge, not a jury.”
“It’s still a righteous, meritorious case,” said Prescott Littlefield, Hobbs’ attorney. “The judge is an impartial jurist and we’re sure he’ll be thorough and diligent.”
Garth Stapley: 209-578-2390
This story was originally published June 22, 2016 at 4:47 PM with the headline "Split decision in round 1 of MID class-action lawsuits."