SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF ALBANY . .. In the Matter of the Application of the Index No. COUNTY OF ROCKLAND, a municipal Corporation formed under the laws of the State of New York, on behalf of itself, EDWIN J. DAY in his capacity as County Executive of the County of Rockland, and all other similarly situated ratepayers for water service from SUEZ Water New York, Inc. within Rockland County, VERIFIED CLASS ACTION Plaintiff - Petitioner, -against - PUBLIC SERVICE COMMISSION OF THE STATE OF NEW YORK, NEW YORK STATE DEPARTMENT OF PUBLIC SERVICE and SUEZ WATER NEW YORK, INC., Defendant - Respondent(s), For a Judgment pursuant to Article 78 and for a Declaratory Judgment under Article 30 of the Civil. Practice Law and Rules. . Plaintiff-Petitioner, COUNTY OF ROCKLAND, and EDWIN J. DAY, in his capacity as County Executive of the County of Rockland, by their attorneys, Thomas E. Humbach, County Attorney, Thomas Simeti, Esq. Of Counsel, as and for its Veri?ed Class Action Complaint/Petition for a judgment pursuant to Article 78 and for a declaratory judgment under Article 30 of the New York Civil Practice Law and Rules alleges against Defendant-Respondent(s) PUBLIC SERVICE COMMISSION OF THE STATE OF NEW YORK, NEW YORK STATE DEPARTMENT OF PUBLIC SERVICE and SUEZ WATER NEW YORK, INC., upon information and belief, as follows: PRELIMINARY STATEMENT l. The County of Rockland and Edwin J. Day in his capacity as County Executive of the County of Rockland (the ?County?) commenced this class action/proceeding to . challenge the Order on Rehearing under Case No. (the ?Rehearing Order?) by the Public Service Commission of the State of New York (the ??Commission?) issued and effective . February 25, 2016 denying a petition ?led on December 12, 2014 (the ?Rehearing Petition?) seeking a rehearing and/or clari?cation of the Order issued and effective November 14, 2014 (the ?surcharge Order?) relating to United Water New York Inc. (?United Water?) now known as SUEZ Water New York, Inc. I 2. The Surcharge Order denied without prejudice a petition ?led by United Water (the ?Surcharge Petition?) seeking to implement a new long-term water supply surcharge for expenditures relating to a desalination and puri?cation plant to be located in the Town of Haverstraw,commonly known as the Haverstraw Project. The?Wsed on the fact that construction had not commenced which had been a condition precedent to its implementation. 3; As identi?ed in a Summary of Total Costs. appended to the Surcharge Order, Defendant-Respondent Commission considered as a ?nal position tlE?Lexpen?ditures totaling We Construction Work in Progress (CWIP) balance for the Haverstraw Project. I - At the evidentiary hearing in the Surcharge Petition, United water submitted nine thousand ?ve hundred thirty?two (9,532) pages of copies of schedules and heavily redacted ian-legal expenditures or charges for consultants which lacked suf?cient detail and/or explanatory information purportedly relating to the Haverstraw Project. 5. The Uniform System of Accounts requires utilities to keep their books so as to be able to furnish'readily full information as to any item included in the account. Each entry shall be supported by such detailed veri?cation of all relevant facts. 6. The of Public Service Staff did W1 of the expenditures through an examination of appropriate supporting documentation such as time sheets, trip report's, .f . receipts and other supporting documentation but merely performed a limited or ?sample? audit of - .W . the invoices. 7. In the Rehearing Order, the Commission found that the limited or ?sample? audit of these expenditures performed by the DPS Staff was ?adequate? and determined that these ?expenditures were eligible for recovery? by SUEZ from its ratepayers. .- 8. In addition, the expenditures that were determined to be ?eligible for recovery? was ?adjusted and clari?ed? in the Rehearing Order which reduced the amount by $915,708 from $39,743,603 to $38,827,895. Of those costs, the legal and non-legal expenditures or charges for consultants was reduced by $122,137 from $28,253,414 to $28,131,277. I 9. The County asserts that the Commission violated its statutory responsibility to ensure rates charged for such services are just and reaSOnable in ?nding that the of the DPS Staff?s limited or ?sample? audit was ?adequate? and that the Commission?s determination that the invoices for legal and non-legal expenditures or charges for consultants purportedly relating to the Haverstraw-Project which were heavily redacted, or lacked detail and/or explanatory information were eligible for recovery by SUEZ from ratepayers; the DPS violated its "statutory responsibility by performing the limited or ?sample? audit of the invoices of these expenditures or charges for consultants; and that SUEZ violated its statutory responsibilities for imposing unjust or unreasonable charges on ratepayers for its water service. 1.0. By ?ling this hybrid class action/proceeding, the County seeks judicial review and an Order fromthis Court for inj unctive and declaratory relief: certifying the County and all other . ratepayers within Rockland County Who are customers for water'serVi-ce from SUEZ and who will-be subject to a rate increase for the legal and non-legal expenditures purportedly related to the Haverstraw Project as a Class; adj udging that the determination by the Commission violated its statutory responsibility in the Rehearing Order to ensure that rates charged for water service to the County and all other ratepayers by ?nding that the scope of the DPS Staff?s limited or ?sample? audit of invoices for legal and non-legal expenditures was in violation of its legal duty and/or lawful procedure, in excess of its jurisdiction, was affected by an error of law, was arbitrary and capricious or an abuse of discretion andXor is; on the entire record, unsupported by substantial evidence; I adjudging that the Commission?s determination that'the invoices for legal and non-legal expenditures or charges for consultants purportedly relating to the Haverstraw Project should not be eligible for recovery by SUEZ from ratepayers; adjudging that the DPS violated its statutory responsibility by performing a limited or ?sample? audit of the invoices of these expenditures or _charges for consultants; - I directing the DPS to perform an audit of invoices for legal and non-legal expenditures or charges for consultants made or demanded by and annullng and vacating the Order on Rehearing issued and effective by the Commission on February 25, 2016; declaring that the legal and non-legal expenditures or charges for consultants made or demanded by SUEZ were unjust and unreasonable in violation of New York Public Service Law ?89-b (1). I THE PARTIES 11. Plaintiff-Petitioner County of Rockland (the ?County?), is a municipal COIporation formed and existing by virtue of the laws of the State of New York and has its principal place of business at 11 New Hempstead Road, New City, New York. 12. Plaintiff-Petitioner County is a ratepayer for water service from SUEZ Water New York, Inc. and was a party in the proceeding before the New York Public Service Commission under Case No. 13-W40246. 13. Plaintiff-Petitioner Edwin J. Day is the elected public of?cial for the public offiCe of County Executive and is chief executive of?cer, chief budget officer and chief administrator of the County of Rockland with such other duties as enumerated in Article of the Rockland County Charter Law. I 14. Plaintiff-PetitiOner County, as well as all members of the proposed Class, are ratepayers for water service of SUEZ Water New York, Inc. within Rockland County, New York. 15. Plaintiff-Petitioner County, as a governmental entity, has organization standing to represent ratepayers for water service who reside within the geographic boundaries of Rockland County, New York and is similarly situated with other ratepayers of Defendant-Respondent SUEZ. 16. I Defendant-Respondent Public Service Commission of the State of New York '(the ?Commission?) is administrative body of the State of New York organized under Section 4 of the New York Public Service Law and maintains an office at 3 Empire State Plaza, Albany, New York 12223. The Commission is primarily responsible for the determination of those costs of utility which should be borne by ratepayers and shareholders for the rendition of utility services and for ensuring utility service at just and reasonable rates. 17. Defendant-Respondent New York Department of Public Service (the is an agency of the State of New York organized under Section 3 of the New York Public Service Law and maintains an office at 3 Empire State Plaza, Albany, New York 12223. The DPS is primarily I responsible for ensuring affordable, safe, Secure, and reliable access to electric, gas, steam, telecommunications, and water services for New York State? residential and business consumers, while protecting the natural environment. 18. Defendant?Respondent SUEZ Water New York, Inc. formerly known as United Water New York, Inc., is a water-works corporation with its principal of?ce at 360 West Nyack Road, West Nyack New York. Defendant-Respondent SUEZ is a water utility company. serving approximately 74,000 residential and customers in parts or all of Rockland County and Orange county, New York. I JURISDICTION AND VENUE 19. The Court has jurisdiction over this combined action pursuant to its general. jurisdiction under CPLR 901 et seq., CPLR 3001 et seq., and CPLR-7801 et seq. 20. Venue is pr0per in this county pursuant to CPLR 506(b)(2). because the action/proceeding is against the New York State Public Service Commission. CLASS ACTION ALLEGATIONS 21. This action/proceeding is brought as and may properly be maintained as a class action under the provisions of Article 9 of the CPLR. I 22. The putative class is de?ned. as ratepayers within the geographic boundaries of Rockland County, New York who are customers for water service from Defendant-Respondent SUEZ within the applicable statute of limitations period and who will be subject to a rate increase I for the legal and non-legal expenditures or charges for consultants purportedly relating to the Haverstraw Project. I 23. The members of this putatiye class are so numerous that separate actions or joinder of parties, whether required or permitted, is impracticable. 24. The principal common question of law for the Class is whether Defendant- Respondent Commission?s determination that these legal and non-legal expenditures or charges for consultants purportedly relating to the Haverstraw Project are eligible for recovery by Defendant-Respondent SUEZ from ratepayers was in Violation of its legal duty and/0r lawful procedure, in excess of its jurisdiction, was affected by an error of law, was arbitrary and capricious or an abuse of discretion and/or is, on the entire record, unsupported by substantial evidence. 25. The principal common question of fact for the Class is whether the numerous invoices for legal and non?legal expenditures or charges for consultants purportedly for the Haverstraw Project submitted by Defendant-Respondent SUEZ lacked suf?cient detail and/or lacked explanatory information to support why the expenditure was just and reasonable and should I have been disallowed by Defendant-Respondent Commission. 26. In addition, there is a common question of law and fact for the Class as to what are the rights and liabilities of the ratepayers within Rockland County to Defendant-Respondent SUEZ for these invoices for legal and non-legal expenditures or charges for consultants purportedly relating to the Haverstraw Project. 27. Plaintiff?Petitioner County has no interests antagonistic to the interests of the other members of the Class. There is no con?ict between Plaintiff-Petitioner County and any other member of the Class with respect to this action/proceeding or the claims for?relief herein. 28. Plaintiff-Petitioner County is committed to the vigorous prosecution of this action and has competent in-house and/or retained legal counsel experienced in these claims for that purpose. 29. Plaintiff-Petitioner County is an adequate representative of the Class and, together with its attorneys, is able to, and will fairly and adequately, protect the interests of the Class and its members. 30. In addition, a class action is superior to other available methods for the fair, just, and ef?cient adjudication of the claims asserted herein. Joinder _of all members of the Class is I impracticable and, for ?nancial and other reasons, it would be impractical for individual members . of the Class to pursue separate claims. 31. Moreover, prosecution of separate actions/proceedings by individual members of the Class would create the risk 0f varying and inconsistent adjudications, and would unduly burden the courts. 32. Plaintiff-Petitioner County and its counsel anticipate no difficulty in the management of this litigation as a class action. I FACTS COMMON TO ALL CAUSES OF 33. Defendant-Respondent(s) and DPS have jurisdiction of Defendant- Respondent SUEZ, which is a water-works corporation as that term is de?ned in the New York Public Service Law. I 34. Defendant-Respondent SUEZ owns and operates a water distribution system that provides water service to ratepayers within the geographic boundaries of Rockland County, New York (?Rockland County?). 35. Rockland County includes similarly situated ratepayers for water service from Defendant-ReSpondent SUEZ. 36. On or about June 14, 2013, under Case No. l3-W-0246, Defendant?Respondent SUEZ (formerly known as United Water New York, Inc.) ?led?a petition for ?Implementation of a Long-Tenn Water Supply Surcharge? (the ?Surcharge Petition?) seeking an increase in its water rates to be charged to ratepayers within Rockland County, including Plaintiff-Petitioner County. 37. On or about June 14, 2013, under Case No. 13-W-0246, Defendant-Respondent SUEZ submitted a one hundred seventy-one (171) page stand-alone spreadsheet of its invoices for legal and non-legal expenditures or-charges for consultants purportedly relating to the Haverstraw Project and sought. a protective order from the Administrative Lani Judge for the nine hundred forty-eight (948) pages 'of invoices relating to. those expenditures. A Protective Order was subsequently issued by the Administrative Law Judge relating to certain legal and non-legal I. expenditures pending the conclusion of the evidentiary hearings on the Surcharge Petition. 38. - I On or about November 14, 2014, under Case No. 13-W-0246, Defendant- RespOndent Commission issued its ?Order denying Surcharge and Making Determinations Regarding the Treatment of Certain Long-Tenn Water Supply Development Costs? (the ?Surcharge Order?). A true COpy of the Surcharge Order is attached as-Exhibit 39. On or about December 12, 2014, under Case No. 13-W-0246, a petition was ?led for a rehearing and/or clari?cation (the ?Rehearing Petition?) of the Surcharge Order. A true copy of the petition is attached as Exhibit i 40. On or about April 23, 2015, Defendant-Respondent Commission denied an appeal ?led by Defendant Respondent SUEZ of a ruling by the Administrative Law Judge who presided over the evidentiary hearings to vacate the Protective Order and remove the exemption for the invoices of the legal and non?legal expenditures or charges for consultants purportedly relating to the Haverstraw Project from disclosure. 41. On or about May 27, 2015, under Case No. l3-W-0246, the invoices for the legal and non-legal expenditures or charges for consultants purportedly. relating to the Haverstraw Project sought to be recovered by Defendant-Respondent SUEZ along with other documents were made public. Copies of the spreadsheet and the invoices f0r these expenditures consisting of nine thousand ?ve hundred thirty-two (9,532) pages is attached in a CD as Exhibit ?Cl 42. On or about July 3, 2015, under Case No. l3-W-0246, Plaintiff-Petitioner County ?led a letter in support of the Town?s petition. A true copy of the letter dated July 2, 2015 is attached as Exhibit I 43. In an Order issued and effective on December 18, 2015, under Case No. 0303, - Defendant-Respondent Commission issued ?its ?Order . Adopting Alternatiye Demand/Supply Strategies and Abandoning Haverstraw Project? (the ?Abandonment Order?). In the Abandonment Order, Defendant-Respondent Commission concluded that a long-term water supply source was not needed at that time and directed United Water to abandon its plan to construct the Haverstraw Project. In footnote 40 at page 22 oftheAbandonm'ent Order, Defendant- ReSpondent Commission stated, I I ?Some of the comments submitted in this proceeding claim that the charges incurred by the Company are unreasonable or that the Company?s expenditures were not prudently managed. These latter issues are the subject of the related Case l3?W-0246, and we will address them there in due course.? A truecopy of the Abandonment Order is attached as Exhibit 44. However, the. Surcharge Order which would have address these issues was issued on November 14, 2014 prior to the Abandonment Order. 10. 45. Thereafter, on or about February 25, 2016, under Case No. l3-W-0246, Defendant? Respondent Commission issued the Order on Rehearing (the ?Rehearing Order?) denying the Town?s petition ?led on December 12,2014 seeking a rehearing and/or clari?cation of the Surcharge Order. A true copy of the Rehearing Order is attached as Exhibit As AND FOR A FIRST CAUSE OF ACTION (Article 78 against Defendant-Respondent Commission) 46 Plaintiff-Petitioner County repeats and realleges each and every allegation contained in paragraph(s) through ?45? as if more fully set forth at length herein. 47. Defendant-Respondent SUEZ has made and demanded legal and non-legal expenditures or charges for consultants purportedly relating to the Haverstraw Project from Plaintiff-Petitioner County and all other similarly situated ratepayers. 48. The total amount of these expenditures eligible for recovery is $38,827,895. The total amount of the invoices for the legal and non-legal expenditures or charges for consultants is $28,131,277. Uniust or Unreasonable charges for water are prohibited by law 49. Under New York Public Service Law' Section 89-h (1), Every water-works corporation shall furnish and provide such service, instrumentalities and facilities as shall be safe and adequate and in all respects just and reasonable. All charges made or demanded by any such water-works corporation for water, or for equipment furnished or for any service rendered or to. be rendered shall be just and reasonable and not more than allowed by law or by order of the commission. Every unjust or unreasonable charge made or demanded for water or for equipment furnished or for any such service, or in connection therewith, or in excess of that allowed by law or by the order of the commission is prohibited. ll 50. I In addition, under New York Public Service Law Section 89-c (3), the Defendant- Respondent Commission ?shall have the power, in its discretion, to prescribe uniform methods of keeping accounts, records and books to be observed by water-works corporations.? 51. Rules of Defendant-Respondent Commission are prescribed under Title 16 of the New York Code, Rules and Regulations The rule-regarding records of water utilities is set forth at 16 at 561.2 and provides that: Each utility shall keep its books of account and all other books, records and memoranda which support entries in such books of account so as to be able to furnish readily full information as to any item included in the account. Each entry shall be supported by such detailed veri?cation of .all facts relevant thereto. 52. In addition, the uniform methods for the cost of construction prOperty includible in the water plant accounts is set forth under Title 16 of the at 563.3(a) and, as relevant, states that the direct and overhead costs are as listed and de?ned here: (13) Engineering services includes amounts paid to other companies, ?rms or individuals engaged by the utility to plan, design, prepare estimates, supervise, inspect, or give general advice and assistance in connection with construction work. (15) Law expenditures includes the general law expenditures incurred in connection with construction and the court and legal costs directly related thereto, other than law expenses included in protection [under] paragraph (7) of this subdivision, and in injuries and damages [under] paragraph (8) of this subdivision. 53. Therefore, charges for water must be just and reasonable and the records supporting the legal and non-legal expenditures or charges must be detailed and support each entry in the books of account. Records of Legal and Non-Legal Expenditures Fail to Support the Charges 54. However, at the evidentiary hearing in the Surcharge Petition, Defendant- Respondent United Water submitted nine hundred forty-eight (943) pages of copies of invoices 12 for legal and non-legal expenditures or charges for consultants purportedly relating to the Haverstraw Project which wereheavily redacted, or lacked suf?cient detail and/or explanatory information. 55. The purpose of providing invoices with suf?cient detail and/or explanatory information is 'to test whether the expenditures were actually spent on costs associated with the Haverstraw Project, and properly capitalized, and in addition, whether the hours expended and amounts spent on the services associated with 'the project are reasonable. Invoices lacking sufficient detail and/or explanatory information are insuf?cient for this purpose. 56. Moreover, in the Surcharge Order at page 38, while Defendant-Respondent Commission stated the record in this case ?allows us to con?dently identify some legal I expenditures and non-legal expenditures which are properly included in the Haverstraw Project?, it did not expressly determine these expenditures to be ?just and reasonable?. Adiustments t0 Expenditures made in Rehearing Order Warrants Further Judicial Review 57. In the Rehearing Order, at page 2-3, Defendant-Respondent Commission stated that it ?reaf?rmed its findings and results of the Surcharge Order with two adjustments? by decreasing the amount of the expenditures determined to be eligible for recovery from $39,743,603 to $38,827,895 or by $915,708, and that: ?Of the $39.7 million dollars previously approved by the Commission for future recovery, this order disallows $185,677. We clarify that $730,031 of accrued costs appearing on a schedule appended to the Surcharge Order was understood to be an estimate that has not yet been reviewed and approved for recovery.? 5 8. In the Rehearing Order at page 10, despite the limited or ?sample? audit of the invoices by Defendant-Respondent DPS Staff, Defendant-Respondent Commission stated: 13 ?In the Surcharge Order, the Commission determined what SUEZ expenditures were suf?ciently supported to be allowed recovery and found that the audit of these costs performed by Staff was adequate.? 59. In addition, Defendant-Respondent Commission appended to the Rehearing Order a ?Staff Report on Allegations Raised by Mr. Robert Tompkins? (the ?Staff Audit?) of certain invoices for expenditures sought to be recovered by Defendant?Respondent SUEZ. The Staff Audit addressed the ?eighteen allegations? made by Mr. Tompkins. A true copy of the Staff Audit is attached at page 25-56 of the Rehearing Order. (See Exhibit 60. 1 Speci?cally, in the Rehearing Order, upon a review of the allegations by Mr. Tompkins by Defendant-Respondent DPS, Defendant-Respondent Commission: (1) made a ?downward adjustment? of $164,613 arising from two separate invoices based upon a discovery that several inVoices were improperly charged to the Haverstraw Project (at page 15); (2) made a ?downward adjustment? of $21, 064 arising from three separate invoices which were not suf?ciently supported (at page 15- 16); and (3) ?clarify[ied]? that costs in the amount of $730,031 which were estimates, but were not as yet incurred or actual costs as an accrued expense that were included in a schedule of the costs approved for collection ?have not yet been reviewed and have not yet been permitted recovery? (at page 17). 61. Therefore, despite that it ?reaf?rmed its ?ndings and results of the Surcharge Order with two adjustments? reducing the amount eligible for recovery by $915,708, it is apparent that. I Defendant-Respondent Commission committed an error of law or fact which Warranted a different determination made in the Surcharge Order justifying the ?ling of the Rehearing-Petition. 16 1 1 The legal and non-legal expenditures or charges for consultants was ?adjusted? by a decrease of$l22,l37 from $28,253,414 to $28,131,277. 14 62. As such, Defendant-Respondent Commission?s determination in the Rehearing Order that the invoices for consultants purportedly relating to the Haverstraw Project submitted by Defendant?Respondent SUEZ were eligible for recovery from ratepayers on a limited or ?Sample? audit of invoices that were heavily redacted, or lacked suf?cient detail and/or explanatory information fails to support why the expenditure was just and reasonable was in violation of its legal duty and/or lawful procedure, in excess of its jurisdiction, was affected by an error of law, was arbitrary and capricious or an abuse of discretion and/or is, on the entire record, unsupported by substantial evidence. 63. Pursuant to CPLR 7803(1), (2), (3) and (4), Plaintiff-Petitioner County requests on behalf of itself and all other similarly situated ratepayers for water service within Rockland County that the Court issue an Order declaring thatDefendant-Respondent Commission?s-determination in the Rehearing Order that the invoices for legal and non?legal expenditures or charges for consultants purportedly relating to the Haverstraw 'Project were eligible for recovery by Defendant-Respondent SUEZ from ratepayers was in violation of its legal duty and/or lawful procedure, in excess of its jurisdiction, was affected by an error of law, was arbitrary and capricious or an abuse of discretion and/or is, on the entire record, unsupported by substantial evidence. AS AND FOR A SECOND CAUSE OF ACTION . (Article 78 against Defendant-Respondent DPS) 64. Plaintiff-Petitioner County repeats and realleges each and every allegation contained in paragraph(s) through ?63? as if more fully set forth at length herein. I 65.. In the Surcharge Order, Defendant-Respondent DPS stated that ?it reviewed a sample of invoices? for legal and non-legal expenditures or charges forconsultants purportedly relating to the Haverstraw Project. 15 Different Audit Standard Applied for Ratepaver as Compared to Utility 66. However, Defendant-Respondent DPS applies a different audit standard for invoices from a consultant where a utility is responsible for payment as compared to the ratepayer. When a utility is responsible for payment, a full audit standard is followed to review the invoice before the utility is authorized to make payment. A copy 'of Defendant-Respondent Guide for Consultant?s Submitting Proposals for-Management and Operations Audits and other Investigations? (?The Guide?) is attached as Exhibit 67. As re?ected at page 12 under ?Invoice Approval?, ?The Guide? states, in pertinent part, that: Although the subject of the audit and the party responsible for - payment is the utility, the Commission is the client. Thus, it is Sta??s responsibility to review the consultant?s invoices before authorizing payment by the utility. It is normal practice for Consultants to submit invoices once a month. Firms which have a different practice should explainhow often invoices would be submitted. Sta? will veri?/ the charges through an examination of appropriate supporting documents such as time sheets, trip reports, and other supporting documentation as needed. Copies of these records must be provided to Staff along with the invoice. For billing purposes, the professional billing rate should be an all inclusive rate that captures both the professional fee and out-of- pocket expenses for each individual, as previously mentioned in section II A. 6., and which rolls up to the not-to?exceed project cost. The not- to-exceed project cost should also be inclusive of all expenses associated with the creation of the deliverables, including support services and incidentals. The intended method of billing for clerical, secretarial, research, and all report preparation services must be explained. An example of the invoice detail that is to be reported and billed is shown in Exhibit 2. Staff will audit all invoices and no payment will be made by the utility until authorized by Sta?. (emphasis supplied in italics). 68. The application of a full or limited audit standard to expenditures or charges for consultants directly impacts the determination whether charges are just and reasonable under the 16 New York Public Service Law. 69. Here, Defendant-Respondent DPS applied a limited or ?sample? audit in this circumstances where ratepayer money is paid as compared to where utility money is paid for invoices from consultants. 70. By applying a different audit standard, Defendant-ReSpondent DPS has denied Plaintiff-Petitioner County and all other similarly situated ratepayers of water service Within Rockland County an equal application of law. I I 71. Moreover, Plaintiff-Petitioner County, as well as all. other similarly situated ratepayers for water service in Rockland- County who are customers of Defendant-Respondent SUEZ are substantially harmed by the application of the different audit standard where such limited or ?sample? audit involved invoices for legal and non-legal expenditures or charges for consultants in the amount of $28,131,277. 72. As such, Defendant~Respondent DPS ?5 application of a different audit standard for invoices for legal and non-legal expenditures or charges for consultants purportedly relating to the Haverstraw Project by performing a limited or isample? audit of invoices that were heavily redacted, or lacked suf?cient detail and/or explanatory information and that fail to support why the expenditure was just and reasonable violates their legal duty and/or lawful procedure, was affected by an error of law, was arbitrary and capricious or an abuse of discretion and/or is, on the entire record, unsupported by substantial evidence. 73. Pursuant to CPLR (3) Plaintiff-Petitioner County requests on behalf of itself and all other similarly situated ratepayers for water service within Rockland County that the Court issue an Order declaring that Defendant-Respondent DPS 5 limited or sample? audit of such expenditures was in violation of its legal duty and/or lawful procedure, in excess of its 17 jurisdiction, was affected by an error of law, was arbitrary and capricious or an abuse of discretion and/or is, on the entire record, unsupported by substantial evidence. AS AND FOR A THIRD CAUSE OF ACTION (Declaratory Judgment against Defendant-RespondentSUEZ) 74. Plaintiff-Petitioner County repeats and realleges each and every allegation contained in paragraph(s) through ?73? as if more fully set forth at length herein. 75. New York Public Service Law ?89-b (1) requires that all charges made or demanded by a water-work?s corporation be just and reasonable. Unjust or unreasonable charges are prohibited. I 76. Plaintiff?Petitioner County asserts that these invoices for legal and non-legal expenditures or charges for consultants purportedly relating to the Haverstraw Project made or demanded by Defendant-Respondent SUEZ areunjust and unreasonable. 77. Defendant-Respondent SUEZ asserts that these invoices for legal and non?legal . expenditures or charges for consultants purportedly relating to the Haverstraw Project made or" demanded by Defendant?Respondent SUEZ are just and reasonable. 78. Defendant-ReSpondent SUEZ must establish that the expenditures are just and reasonable under Public Service Law ?89-b (1). 79. There exists a justiciable controversy-as to the rights and other legal relations of the parties. 80. - Pursuant to CPLR 3001 et seq., Plaintiff?Petitioner County seeks a declaration from this Court that the invoices for legal and non-legal expenditures or charges for consultants - purportedly relating to. the Haverstraw Project made or demanded by Defendant-Respondent SUEZ are unjust and unreasonable in violation of New York Public Service Law. 13' PRAYER FOR RELIEF WHEREFORE, Plaintiff?Respondent County requests that the Court as against Defendants-ReSpondent(s) Public Service Commission of the State of New York, New York State Department of Public Service and SUEZ Water New York, Inc., grant an Order in its favor pursuant to CPLR 901 et seq., CPLR 3001 et seq., and CPLR 7801 et seq. for the following injunctive and declaratory relief: A. An Order certifying the Class; B. An Order adjudging that the determination by Defendant-Respondent Commission violated its statutory responsibility in the Rehearing Order to ensure that rates charged for water service to Plaintiff~Petitioner County and all other similarly situated I ratepayers by ?nding that the scope of Defendant-Respondent DPS Staff?s limited or ?sample? audit of invoices for legal and non?legal expenditures was in violation of its I legal duty and/or lawful procedure, in excess of its jurisdiction, was affected by an error of law, was arbitrary and capricious or an abuse of discretion and/or is, on the entire record, unsupported by substantial evidence; C. An Order adjudging that Defendant-Respondent Commission?s determination that the invoices for legal and non-legal expenditures or charges for consultants purportedly relating to the Haverstraw Project were eligible for recovery by Defendant?Respondent SUEZ from ratepayers; D. An Order adj udging that Defendant-Respondent. DPS violated I its statutory responsibility by performing a limited or ?sample.? audit of the invoices of these expenditures or charges for consultants; l9 E. An Order directing Defendant-Respondent DPS to perform an audit of all invoices for legal and non?legal expenditures made or demanded by Defendant-Respondent F. .An Order annulling and vacating the Order On Rehearing issued and effective by I Defendant-Respondent Commission on February 25, 2016; G. An Order declaring that the legal and non-legal expenditures made or demanded by Defendant-Respondent SUEZ were unjust and unreasonable in Violation Of New York Public Service-Law ?89~b I H. An Order awarding Plaintiff?Petitioner County its costs and reasonable attorney?s fees, if applicable; and 1. Such other and further relief as the Court- may deem just and proper under the circumstances. I i I Dated: June23, 2016 New City, New York THOMAS E. HUMBACH, COUNTY ATTORNEY COUNTY OF ROCKLAND By: Thomas Simeti, Esq., Of Counsel Attorney for PlaintiffPett?r?ioners 11 New Hempstead Road New City, New York 10956 [Direct Line] (845) 638-5108 20 VERIFICATION STATE OF NEW YORK ss.s: COUNTY OF ROCKLAND EDWIN J. DAY, being duly sworn, deposes and states: I am the County Executive for the County of Rockland, Plaintiff-Petitioner in the within action/proceeding: I have read the foregoing Veri?ed Class Action Complaint/Petition and know - the contents thereof; the same is true to my own knotvledge, except as to the matters therein that pertain to the other Plaintiff-Petitioners similarly situated as ratepayers in Roekland? County, and as to those matters therein stated to be alleged on information and belief, and as to those matters I believe them to be true. EDWIN J. DAY Sworn to before me this 24th day of June 2016 - NOTARY PUBLIC 21