LOS ANGELES, Oct. 30, 2020 /PRNewswire/ — Wolf Haldenstein Adler Freeman & Herz LLP and Tostrud Law Group, P.C. announce that a settlement has been reached with the City of Los Angeles (the “City” or “Defendant”) in a class action lawsuit claiming that the City improperly included in its natural gas utility user tax (“GUT”) calculation the Service Establishment Charge (“SEC”) and Customer Charge. The City denies the allegations, and the Court did not issue a final decision in favor of either Plaintiffs or Defendant. Instead, the parties agreed to a settlement to avoid the expense and risk of continued litigation.
You are a “Class Member” if you are a Southern California Gas Company (“SCGC”) natural gas customer who was charged the GUT (described on the SCGC natural gas bill as the line item “Los Angeles City Users Tax”) with a billing period that includes at least one day that falls on or after April 16, 2014 through the present.
As part of the settlement, the City must stop imposing the GUT on the SEC and Customer Charge 70 days after the effective date of the settlement, unless such a tax is approved by applicable voters in the future, if ever. This change will result in an estimated $8.2 million of tax savings per year. The City has also agreed to create a Settlement Fund of $32,500,000 plus 75% of any tax remitted by SCGC on the SEC and Customer Charge after May 1, 2021. After deducting settlement administrative expenses, court approved service awards, payment to non-profit charitable organizations (Alliance for Children’s Rights and The Utility Reform Network), and court approved attorneys’ fees and expenses, the remaining settlement fund will be distributed to SCGC customers by applying a reduced GUT rate.
If you are included in the Settlement, you may choose to do nothing, or object to the Settlement and notify the Court that you or your lawyer intends to appear at the Court’s Final Fairness Hearing, or exclude yourself from the Settlement. To learn more about how to object or exclude yourself, go to www.GasTaxSettlementLA.com. Objections and exclusions are due on December 29, 2020, or by January 18, 2021 if you received a re-mailed notice in the mail.
The Court will hold a hearing in this case, Engquist, et al. v. City of Los Angeles, Case No. BC591331 at 10:30 a.m. on March 17, 2021 at Department SS1 of the Superior Court of California, County of Los Angeles, Spring Street Courthouse, 312 North Spring Street, Los Angeles, California, 90012.
For more information go to www.GasTaxSettlementLA.com or call 1-833-707-1454.
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