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A Los Angeles woman has filed class action lawsuit against Los Angeles, alleging that the Southern California city improperly overcharged residents by using non-gas related fees when calculating its gas utility user tax and, as a result, illegally inflating the charges.
Plaintiff Alexandria Lavinsky alleges in the class action lawsuit that the Los Angeles improperly collected over $30 million from city residents by calculating a gas utility user tax established in 2001 and illegally using non-gas fees to increase the charges.
The LA gas tax class action lawsuit alleges that in 2001 a gas utility tax was imposed on Los Angeles residents by the LA Municipal Code that charged residents a 10 percent fee based on the amount of gas they used. However, the complaint argues that, in practice, the city actually based the fee on gas usage and two other fees unrelated to gas usage, the Public Purpose Surcharge and the State Regulatory Fee, in addition to inflating the charge.
Lavinsky argues that basing the Municipal Code fee off of the other charges violated the law.
“[A]t all times mentioned herein, the [public purpose surcharge] was not a ‘charge made for such gas’ as provided in … the [utility user tax] ordinance,” alleges Lavinsky in her class action, “[i]nstead, the PPS was a charge made to fund low-income programs, energy efficiency and conservation activities.”
The State Regulatory Fee is applied at a rate of $0.00068 per therm and the Public Purpose Surcharge is applied at a rate of $0.097 per therm. A therm is a unit of heat energy used to measure gas use. Lavinski alleges in her LA gas tax class action lawsuit that the gas itself is charge at a rate of $0.78 per therm for the gas itself. Lavinsky used her gas bill from December to show that she paid $11.50 for gas that month, plus $0.79 for the State Regulatory Fee and Public Purpose Surcharge. Lavinski alleges that on that specific bill, she was overcharged 8 cents and paid the city $1.23 instead of $1.15.
Lavinsky became a resident of Los Angeles in December 2011 and alleges she was improperly charged from that time until the present day. Lavinski seeks to represent all LA residents who paid the allegedly inflated charge after December 2012, which she argues totals over 500,000. Lavinsky alleges that those who overpaid will be readily ascertainable by gas bill records kept by gas companies. Lavinsky claims that she sent a letter to the city requesting a refund for the allegedly improper charges in December of 2013, but, as of the date of the complaints, had not received a response.
Lavinsky claims that the city owes over $30 million in damages for the illegal charges to residents. She also seeks injunctive relief, a declaration from the city that the charges were invalid and unlawful, an accounting of all charges, and attorney fees and costs.
The plaintiff is represented by Paul G. Kerkorian.
The LA Gas Tax Class Action Lawsuit is Alexandra Lavinsky v. City of Los Angeles, Case No. BC542245, in the Superior Court of the State of California, County of Los Angeles.
UPDATE: June 2019, the Los Angeles gas tax class action settlement is now open. Click here to learn more.
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