LAW OFFICE OF PAUL H. NEUHARTH, JR., APC 1 PAUL H. NEUHARTH, JR. (Cal. SBN 147073) 2 pneuharth@sbcglobal.net 402 West Broadway, Suite 720 3 San Diego, CA 92101 Telephone: 619-231-0401 4 Facsimile: 619-231-8759 5 LAW OFFICE OF ROBERT L. TEEL 6 ROBERT TEEL (Cal. SBN 127081) lawoffice@rlteel.com 7 1425 Broadway, Mail Code: 20-6690 Seattle, WA 98122 8 Telephone: 866-833-5529 Facsimile: 855-609-6911 9 10 Attorneys for Petitioner/Plaintiff and the proposed Class 11 SUPERIOR COURT OF THE STATE OF CALIFORNIA 12 FOR THE COUNTY OF SAN DIEGO, CENTRAL DISTRICT 13 14 MILLER MARKS, on behalf of himself, and all others similarly situated, 15 Plaintiff, 16 17 v. Defendant. 22 CLASS ACTION VERIFIED PETITION FOR WRIT OF MANDATE and 18 CITY OF SAN DIEGO, CITY OF SAN DIEGO PUBLIC UTILITIES DEPARTMENT, 19 SAN DIEGO CITY COUNCIL, and DOES 1 20 through 10, 21 Case No.: COMPLAINT FOR: 1. REFUND OF ILLEGAL AMOUNTS PAID; 2. DECLARATORY RELIEF; 3. INJUNCTIVE RELIEF; AND 4. ACCOUNTING DATE: TIME: DEPT: 23 24 I. INTRODUCTION 25 26 27 28 1. Plaintiff Miller Marks (“Plaintiff” or "Petitioner"), individually and on behalf of all other persons similarly situated, by his undersigned attorneys, brings this action on behalf of himself and all sewer enterprise ratepayers and customers of the City of San Diego Public Utilities Department -1- VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 (the "PUD") against the PUD, the City of San Diego (the "City"), a Charter city and municipal 2 corporation, and the San Diego City Council (the "Council"), (the City, PUD, and the Council may 3 be individually and collectively referred to herein as "Defendant" or "Defendants" or "Respondent" 4 or "Respondents"), to: 5 (a) stop illegal payments and appropriations (the "Illegal Financing Scheme") of 6 approximately $33 million from the PUD sewer service ratepayer Muni Sewer Fund 700008 7 (the "Muni Sewer Fund") to the City's water service enterprise for the installation of the PUD 8 water department's Advanced Metering Infrastructure, or "smart meter", project benefitting 9 the City's 277,000 water service ratepayers; 10 (b) seek and obtain refunds of money paid in connection with the sewer ratepayer Illegal 11 Financing Scheme and the amounts expended and appropriated from the Muni Sewer Fund 12 by the City, PUD, and the Council; and 13 (c) 14 provisions of Proposition 218, the California Constitution, and California statutes, codes, and 15 other applicable law. 16 Plaintiff alleges the following based upon personal knowledge, and information and belief as compel the City, the PUD, and the City Council to comply with the applicable 17 to all other matters based upon, inter alia, the investigation of counsel, a review of the Defendant’s 18 public documents, announcements, and wire and press releases, and other information readily 19 obtainable on the internet. II. JURISDICTION AND VENUE 20 21 2. This Court has jurisdiction over all causes of action asserted herein pursuant to 22 California Constitution, Article VI, § 10. Each Defendant is a governmental entity located in the State 23 of California and County of San Diego. Rendering the exercise of jurisdiction over the Defendants by the 24 California courts is consistent with traditional notions of fair play and substantial justice. 25 3. Venue is appropriate in this Court because substantially all, if not all, of the events at 26 issue in this Complaint occurred in San Diego County, and because the Defendants are all part of a 27 governmental entity located in San Diego County. 28 -2- VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT III. PARTIES 1 2 4. Plaintiff Miller Marks lives in, and is a resident of, the City of San Diego in the State 3 of California where the violations occurred. Plaintiff is and has been a sewer ratepayer customer of 4 the PUD during the times alleged herein. As further described herein, Plaintiff has standing to assert 5 all claims set forth herein on behalf of himself and on behalf of a class of similarly situated persons. 6 5. Plaintiff has satisfied all prerequisites and exhausted all administrative and/or other 7 remedies before commencing this action. In addition, Plaintiff has public interest standing to 8 prosecute the claims of all other individuals who have been harmed by the Illegal Financing Scheme. 9 6. Defendant City of San Diego is a California Charter city and municipal corporation. 10 The PUD is the City's proprietary water enterprise (the "Water" or "Water Enterprise"). The PUD 11 also operates the City's wastewater enterprise (the "Sewer" or "Sewer Enterprise"). The PUD is 12 governed by the City Council. 13 7. Plaintiff is ignorant of the true names and capacities of Defendants sued herein as 14 DOES 1 to 10, inclusive, and therefore sues said Defendants by such fictitious names. Plaintiff will 15 amend this Petition and Class Action Complaint to allege the true names and capacities of said 16 Defendants when ascertained. 17 8. Plaintiff is informed and believes, and thereon alleges that each of said fictitiously named 18 Defendants acted unlawfully, intentionally, negligently, and/or recklessly or is responsible in some manner 19 for the occurrences herein alleged, and that each of the damages and violations of Plaintiff's rights as herein 20 alleged were proximately and legally caused by said Defendants’ actions. 21 9. Plaintiff is informed and believes, and based thereon alleges that all of the Defendants 22 identified herein, whether identified by name or by fictitious name, were and are the agents, servants, and 23 employees of each of the remaining Defendants, and that in doing the things alleged herein were acting within 24 the purpose, course and scope of said agency, service, and/or employment and with the permission, consent, 25 authorization, and subsequent ratification of each of the remaining Defendants. 26 10. Plaintiff is informed and believes, and based thereon alleges that Defendants agreed to, 27 cooperated with, aided, abetted, encouraged, ratified, and/or adopted the acts, actions, wrongdoing, and 28 representations of each of the remaining Defendants herein, and that in doing any act alleged herein, were -3- VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 acting in concert and through a civil conspiracy by and among each Defendant to further the interests of 2 each Defendant individually, and all Defendants as a group. For this reason, as well, all Defendants are 3 jointly liable to Plaintiff and the proposed class. IV. SATISFACTION OF GOVERNMENT CLAIM REQUIREMENT 4 5 11. On January 30, 2018, Plaintiff presented to the City and PUD a written claim for a refund 6 (damages) on behalf of himself and all other similarly situated PUD sewer ratepayer customers regarding, 7 in part, the Illegal Financing Scheme and amounts paid and appropriated from the PUD sewer ratepayer 8 customers' Muni Sewer Fund as further set forth below. Those claims complied with all requirements of 9 the Government Claims Act. (Gov’t. Code § 910, et seq.). The City either denied those claims or failed 10 to respond within 45 days. V. SUMMARY AND COMMON FACTUAL ALLEGATIONS 11 12 12. The City entered the municipal water supply business in 1901 following a vote of the 13 people by purchasing the holdings of the San Diego Water Company and the Southern California 14 Mountain Water Company that were within the City limits. Today, the PUD's Water Enterprise 15 provides water and recycled water services to approximately 1.3 million city resident water 16 customers. The PUD's Sewer Enterprise provides wastewater service to approximately 2.2 million 17 sewer customers within the San Diego County region. 18 13. The City owns and operates, through the PUD, two self-supporting enterprises: the 19 Water Enterprise and the Sewer Enterprise. Both utility systems account for revenues and 20 expenditures separately from each other and the other enterprise and General Fund activities. Both 21 utility systems provide service to residential, commercial, and industrial customers as well as several 22 wholesale customers such as California-American Water Company (water service) and the U.S. Navy 23 (wastewater service). The PUD's two separate Water Enterprise and Sewer Enterprise capital 24 improvement programs ("CIP(s)") support the infrastructure for the Water Enterprise's reliable water 25 supply, and the Sewer Enterprise's wastewater collection and treatment. The City's Water Enterprise 26 27 15. The City's Water Enterprise is charged with securing imported water supplies for more 28 than 1.2 million residential, commercial, industrial, and wholesale customers by providing potable -4- VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 water to city residents. Water now has an estimated 288,578 metered service connections two inches and 2 smaller, and 33,826 metered service connections three inches and larger. 3 16. The Water Enterprise extends over 404 square miles with demands of approximately 4 171 million gallons per day (mgd) and includes 49 water pump stations, 29 treated water storage 5 facilities, three water treatment plants, and over 3,000 miles of pipelines. The PUD also manages the 6 recycled water system, which includes three pump stations and over 80 miles of purple pipe delivering 7 an annual average of over 10 mgd for irrigation, manufacturing, and other non-potable uses. 8 17. To serve its customers, water is obtained from two primary sources: local water 9 sources; and purchased water supplies from the San Diego County Water Authority ("CWA"). CWA 10 purchases include treated water delivered to the City’s water distribution system and raw water 11 transported to the City’s water treatment plants. The City has also embarked on a program to acquire 12 water through conservation (a gallon of water saved is a gallon of water acquired for a utility). 13 18. In addition to supplying the over 280,000 metered service connections within its own 14 incorporated boundaries, San Diego conveys and sells water to the City of Del Mar, the Santa Fe and 15 San Dieguito Irrigation Districts, and the California American Water Company, which, in turn, serves the 16 Cities of Coronado and Imperial Beach, and portions of south San Diego. San Diego also maintains 17 several emergency connections to and from neighboring water agencies, including the Santa Fe Irrigation 18 District, the Miramar Water Treatment Plant, Poway Municipal Water District, Otay Water District, and 19 the Sweetwater Authority. The PUD's Sewer Enterprise 20 21 18. The PUD's Sewer Enterprise serves approximately 2.2 million customers with 22 approximately 275,000 connected Sewer customers by providing collection, treatment, and disposal 23 wastewater services. The Sewer Enterprise processes nearly 180 million gallons of sewage daily via 24 a vast network of facilities, which include an extensive collection system, regional wastewater 25 treatment, cogeneration, and a bio-solids production center. The overall Sewer system has been 26 designed to provide service for a regional population in excess of 2.5 million and has a service area which 27 covers approximately 450 square miles. 28 -5- VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 19. The Sewer Enterprise owns and operates sewage treatment plants that serve the City 2 as well as agencies outside the City boundaries. The Sewer system is comprised of two sub-system 3 components: The Metropolitan Sewerage Sub-System ("Metro"), which treats sewage from City 4 customers and from 12 other cities and districts; and the Municipal Wastewater Collection Sub5 System ("Muni"), which is primarily used to collect and convey sewage from residences and 6 businesses in the City of San Diego. 7 20. The Metro system consists of three sewage treatment plants, one bio-solids processing 8 facility, four large pump stations, and two outfalls, and provides treatment and disposal services for 9 the City and 12 other participating agencies and districts within a 450 square mile area stretching 10 from Del Mar to the north, Alpine and Lakeside to the east, and San Ysidro to the south. The Muni 11 system serves approximately 275,000 customers using approximately 3,000 miles of pipelines and 79 12 pump stations to convey approximately 110 million gallons per day of sewage. 13 21. The Point Loma Wastewater Treatment Facility serves as a regional treatment facility 14 handling sanitary waste from City customers as well as Metro customers. Additionally, the Sewer 15 Enterprise operates and maintains two water reclamation plants: North City and South Bay. In 16 addition to the two sub-systems, the PUD manages its Recycled Water Infrastructure and Resources, the 17 scope of which includes: (a) the North City Water Reclamation Plant with a sewage treatment 18 design capacity of 30 million gallons per day with distribution system facilities comprising 83 miles of 19 pipeline, a nine million gallon reservoir, a three million gallon reservoir, three pump stations; and (b) the 20 South Bay Water Reclamation Plant with a sewage treatment design capacity of 15 million gallons per 21 day with distribution system facilities comprising 4,500 feet of 30 inch pipeline, a 750,000 gallon storage 22 tank, and one pump station. Water Enterprise and Sewer Enterprise Operations and Oversight 23 24 22. Under Section 22.1401 of the San Diego Municipal Code, the PUD is responsible for 25 providing both water treatment and distribution services in the City of San Diego, and sewage disposal 26 and treatment services for the City and participating agencies in San Diego County. The administrative 27 head of the PUD (the "Director") is appointed by, and may be removed by, the City Manager. The 28 Director is the appointing authority of all personnel authorized in the department. -6- VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 23. 1 The PUD operates under the direction and authority of the City Council and City Manager, 2 and is responsible for managing water treatment and distribution services; managing and maintaining 3 water infrastructure and facilities; long range planning for the City’s water resources; environmental 4 monitoring and other compliance activities related to the City’s water-related permits and regulatory 5 requirements; and managing sewage collection, treatment, and disposal services 24. 6 Under Section 26.2001 of the San Diego Municipal Code, the Council established an 7 Independent Rates Oversight Committee ("IROC") to serve as an official advisory body to the Mayor of 8 San Diego and the Council on issues relating to the oversight of the City's water and sewer services. IROC 9 consists of eleven members appointed by the Mayor and confirmed by the Council, a majority of whom 10 must be residents of the City. The IROC tracks and reviews the use of rate proceeds to advance the capital 11 improvements related to the rate packages and work programs adopted by the Council. 25. 12 The IROC is charged with, amongst other tasks, reviewing factors, drivers, and cost 13 structures of any proposed changes to City Water or Sewer rates, and reviewing cost allocation models 14 that may be included in cost of service studies of the water and sewer systems. The IROC provides an 15 annual report to the Mayor and City Council discussing its activities, concerns, conclusions and 16 recommendations. The Advanced Water Metering Project 17 18. 18 On November 28, 2012, the Council passed Resolution No. 307885 authorizing the 19 approval of an agreement for the installation of an Advanced Metering Infrastructure System ("AMI") 20 allowing Water Enterprise meters to be read electronically rather than through direct visual inspection by 21 field staff. According to the IROC, PUD Staff recommended the AMI system because it is driven by the 22 City's desire for better Water management, Water billing, and other Water benefits rather than Sewer 23 needs. 24 19. PUD Staff justified its recommendation of the AMI project because, inter alia, time-of- 25 use data can be used to monitor use of water and participate in conservation of water resources, manage 26 and analyze customer consumption patterns, and identify and alert staff and customers of unusual 27 consumption patterns which could indicate leaks or meter tampering on a customer’s property. The 28 -7- VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 citywide deployment of the AMI project includes additions to approximately 270,000 bimonthly 2 meters that cover all customer classes throughout San Diego. 3 20. On March 3, 2016, PUD Staff estimated the total cost of the AMI project at $60,046,060. 4 To pay for the AMI system, the PUD recommended the City authorize an application for financing be 5 submitted to the State Water Board for Clean Water State Revolving Fund in the amount of $42,032,242. 6 At the time, the $42 million financing represented 70% of the total AMI project cost and was to be repaid 7 from rate hikes through the Water Utility Fund (Acct. 700010). The PUD Staff recommended the 8 remaining $18,013,818 cost (30% of the AMI project cost) was to be paid through the Muni Sewer Fund 9 700008 ($18,013,818). 10 21. However, in December 2016, just 10 months later, when questioned as to the funding of 11 the program, the PUD staff reported to the IROC that now half (50%) of the cost was going to be paid by 12 Sewer Enterprise ratepayers instead of the Water Enterprise ratepayers. The reason given the IROC for 13 this was that Water usage is used for Sewer system billing. 14 22. As of July 26, 2017, the City's Fiscal Year 2018 Adopted Budget (the "2018 Budget") 15 stated in connection with the AMI Project that, inter alia, 16 17 18 19 20 21 "Description: This project will deploy Advanced Metering Infrastructure technology to approximately 270,000 water meters citywide. This will allow meters to be read electronically rather than by direct visual inspection by field staff. Justification: This project will streamline the collection of water meter information, provide near real time data, assist with promptly solving water usage and billing questions, and provide customers with a tool to conserve and manage their water consumption. 22 Summary of Project Changes: The total project cost increased by $7.5 million in Fiscal Year 2018 due to revised requirements." 23 23. The City went on to report that the AMI Expenditure by Funding Source: (a) was being 24 split 50%-50%; (b) reflected "Exp./Enc." (expenditures and encumbrances) to date of $12,841,632; (c) 25 "Con Appn" (continuing appropriations) of $25,533,957; (d) "FY 2018" expenditures of $27,411,444; 26 and (e) "FY 2019" expenditures of $1,781,864, for a new Project Total cost of $67,569,898. Thus, the 27 28 -8- VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 Sewer Enterprise ratepayers are and will be bearing approximately $33.8 million of the costs (50%) for 2 the AMI system rather than the original $18 million of costs (30%) recommended by PUD Staff.1 24. 3 Applying half of the cost to the Sewer system constitutes a violation of cost of service 4 principles dictated by Proposition 218. Proposition 218 mandates that funds derived from Sewer fees, 5 charge, and revenues cannot be used for any purpose other than the conveyance and delivery of Sewer 6 and wastewater services. In other words, any charges to the Sewer Enterprise ratepayers for the AMI 7 must reasonably represent only the cost or burden of providing only the Sewer service. 25. 8 In its December 19, 2016 annual report, the IROC found that even if the PUD's 50-50 9 logic regarding use of the AMI for Sewer billing applied, the Sewer bills are calculated from only two bi10 monthly water bills, compared to the six that are used for water billing. Thus, by logic and proportionality, 11 the IROC further determined that not more that 25 percent (and likely less)2 of the AMI system cost should 12 be assigned to Sewer customers. The IROC found the Sewer Enterprise ratepayers are being overcharged 13 for the AMI by at least $16.5M, and the Water Enterprise is being undercharged by the same amount. Legal and Industry Standards for Cost of Service Determination and Rate Setting 14 26. 15 Rate-setting procedures in California require that agencies responsible for imposing 16 property-related charges must demonstrate a sufficient nexus between the cost of providing services 17 and the services or benefits received, and that revenues derived from the fee or charge are not used 18 for any other purpose other than for which the fee or charge was imposed for. The state of California 19 considers water and wastewater services as property-related fees, and as such, are subject to state 20 constitutional and statutory requirements. Cal. Const. Art. XIII D, § 2(h). 27. 21 Under Government Code § 54999.7, rate-setting activities by public agencies are 22 directed to follow cost-of-service principles. Section 54999.7 states that fees “… for public utility 23 service, other than electricity or gas, shall not exceed the reasonable cost of providing the utility 24 25 26 27 28 As of June 30, 2017, the Sewer Enterprise ratepayers have paid approximately $19.2 million of the costs (50%) for the AMI system rather than what would have been the original amount of $11.4 million (30%). The City estimates the Sewer Enterprise ratepayers total cost will be over $33 million rather than the originally stated $18 million. 1 Using the 20% ratio of expenditures in the 2018 Budget from the Muni Sewer Fund compared to all other 2018 allocations from City and PUD CIP funds, Enterprise funds, and other City funds in the PUD's budget, the proportionate cost to the Sewer Enterprise ratepayers should in any event not exceed $13.5 million rather than $33.8 million, a difference of over $20 million to the Sewer Enterprise's detriment, and a windfall in the same amount to the Water Enterprise. 2 -9- VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 service.” It also provides that these fees will be “established in consideration of service 2 characteristics, demand patterns, and other relevant factors.” Government Code § 50076, adopted in 3 1979 (Proposition 13), provides that a levy or charge is a "special tax" unless the "fee does not exceed 4 the reasonable cost of providing the service or regulatory activity for which the fee is charged and 5 [which] is not levied for general revenue purposes.” [Emphasis added.] 6 28. California voters approved Proposition 218 in November 1996. This voter-approved 7 initiative added Articles XIII C and D to the California Constitution. Article XIII D, § 2(e) defines a 8 “fee” as “any levy other than an ad valorem tax, a special tax, or an assessment, imposed by an agency 9 upon a parcel or upon a person as an incident of property ownership, including a user fee or charge 10 for a property related service.” 11 29. Sewer charges and water charges are considered property-related services because 12 they are public services having a direct relationship to property ownership, and any existing, new, or 13 increased Sewer or Water charges must comply with the substantive and procedural requirements of 14 Proposition 218. Cal. Const. Art. XIII D, § 2(h). The substantive requirements include: (a) revenues 15 derived from the fee or charge cannot exceed the funds required to provide the property related 16 service; (b) revenues derived from the fee or charge cannot be used for any other purpose other than 17 for which the fee or charge was imposed for; and (c) a property-related fee or charge cannot exceed 18 the proportional cost of service attributable to the parcel. Cal. Const. Art. XIII D, § 6(b)(1)-(3). 19 30. The City, through the PUD, imposes on its Water and Sewer customers, including 20 Plaintiff, fees and charges for property related services as an incident of ownership. The fees and 21 charges for Water service are maintained in and accounted for in a Water Fund. The fees and charges 22 for Sewer service are maintained in and accounted for in a Sewer Fund. 23 31. There is a propensity for local governments to overreach in situations in which legal 24 restrictions on authority are blurred or unclear. California courts recognize the inherent danger that 25 legislative bodies might circumvent constitutional constraints on illegal financings and levying charges 26 like the Illegal Financing Scheme. 27 32. The solution is provided by the clarity of Cal. Const. Art. XIII C, § 1, to wit: 28 - 10 - VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT "The local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity.” Cal. Const. Art. XIII C, § 1. 1 2 3 4 Sewer Ratepayer Funding of the AMI Project is an Illegal Tax 5 32. 6 A fee or cost may only be used for the purpose it was charged. Cal. Const. Art. XIII 7 D, § 6(b)(2). The City doesn't claim that 50% of the AMI project costs approximates the cost of 8 Sewer services for, or the benefit to, the Sewer Enterprise ratepayers.3 If the City seeks to recover 9 any of the AMI system costs from the Sewer Enterprise ratepayers' Muni Sewer Fund, it must 10 reasonably determine the unbudgeted AMI costs of, and benefit to, the Water Enterprise versus the 11 Sewer Enterprise, and then recover those costs through the rate setting process in an amount 12 proportional to the cost of providing each separate service.4 33. 13 Here, 50% of the charges at issue are paid from the Sewer Enterprise ratepayers' Muni 14 Sewer Fund. The City may not spend any of the Muni Sewer Fund's money on anything unrelated to 15 the Sewer Enterprise. In calculating the proportional cost of, and benefit to, the Sewer Enterprise 16 ratepayers, all the required costs of providing Water versus Sewer service, short-term and long-term, 17 including operation, maintenance, financial, and capital expenditures, must be considered. When 18 taking all the factors into account, a 50-50 split of the AMI costs is per se unreasonable. 35. 19 To show the appropriation and payments from the Muni Sewer Fund are not illegal, 20 the City must prove: (a) the reasonable costs of the service or regulatory activity; and (b) the basis for 21 determining the manner in which the costs are apportioned so that charges allocated to a payor bear 22 a fair or reasonable relationship to the payor's burdens on or benefits from the regulatory activity. Cal 23 Const. XIII C, §1. In this case, the AMI project's 50-50 cost allocation shows that the Sewer rates for 24 fees and charges have not been tied to the amounts needed to run the Sewer Enterprise as required by 25 26 27 The actual amount of water used by a Water customer that is discharged into the Sewer system is never 100%, and thus a 50-50 allocation by definition could never be reasonable. 3 4 Similar to the 20-80% CIP ratio for all capital costs between Sewer and Water in the 2018 Budget, the operation and 28 maintenance costs for the Sewer Enterprise are roughly half that of the Water Enterprise (33.6% Sewer v. 66.4% Water). - 11 - VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 Cal. Const. Art. XIII D, § 6(b)(1)(2) and (3). Otherwise, there would not be excess funds in the Muni 2 Sewer Fund available for the Water Enterprise ratepayer's benefit. And if there are excess funds in 3 the Sewer Enterprise's Muni Sewer Fund, the City simply cannot lawfully raid those funds for the benefit 4 of the Water Enterprise ratepayers. 5 36. The Water Enterprise ratepayers, including persons other than Sewer Enterprise 6 ratepayers, are benefitting from the AMI project in ways that have nothing to do with providing Sewer 7 services. Because the cost of operating, maintaining, and improving the Sewer system is a proprietary 8 function for the benefit of the Sewer Enterprise customers, the City cannot lawfully use excess amounts 9 from the Muni Sewer Fund to benefit Water ratepayers in connection with the AMI project. 10 37. If the City seeks to finance the cost of the AMI project, it needs to obtain financing from 11 a third party, as originally recommended by PUD Staff in the amount of $42,032,242 (at that time 70% 12 of the project cost) from the State Water Board for Clean Water State Revolving Fund, and recover it 13 through the rate setting mechanism. Under California law, this how the City is required to finance the 14 cost of its AMI project, not by forcing the Sewer Enterprise ratepayers to foot half the bill for the benefit 15 of the Water ratepayers. 16 38. Forcing the Sewer Enterprise ratepayers and customers to pay a disproportionate amount 17 of the AMI costs with excess funds from the Muni Sewer Fund is an Illegal Financing Scheme by which 18 Defendants have levied, imposed, increased, charged, and extended taxes, and continue to levy, impose, 19 increase, charge, and extend taxes in violation of the California Constitution. The charges and benefits 20 for services and products provided directly to the Water ratepayers are being disproportionately paid for 21 by the Sewer Enterprise ratepayers. The costs paid for the AMI project are primarily, if not exclusively, 22 for the benefit of the Water ratepayers. The excess funds in the Sewer Enterprise ratepayers' Muni Sewer 23 Fund is being used to foot a disproportionate amount of the bill for the AMI system delivered to, and 24 benefits directly conferred on, the Water ratepayers. 25 35. The Illegal Financing Scheme and disproportionate amount of the AMI system funded by 26 Sewer Enterprise ratepayers from the Muni Sewer Fund date is illegal because: (a) the monies being spent 27 for the AMI project come from, and are imposed on, the Sewer Enterprise ratepayers for the 28 disproportionate benefits provided to the Water ratepayers who are not being charged the reasonable cost - 12 - VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 of such benefits; (b) there is no direct relationship between the amounts being paid from the Muni Sewer 2 Fund and the service and benefits received by the Sewer Enterprise ratepayers versus the Water 3 ratepayers; (c) the appropriation of the amounts being paid from the Muni Sewer Fund, and the amount 4 of the benefits to the Water ratepayers disproportionately paid from the excess money in the Sewer 5 Enterprise ratepayers' Muni Sewer Fund, directly benefits the Water Enterprise ratepayers through, 6 without limitation, water acquisition by conservation; (d) the fact that the cost being paid by the Sewer 7 Enterprise ratepayers exceeds the reasonable cost of any benefit; and (e) the fees, charges, and payments 8 from the Sewer Enterprise ratepayers' Muni Sewer Fund violate the California Constitution and Gov't 9 Code §§ 54999.7 and 50076. 10 36. The AMI system is provided for the primary, if not exclusive, benefit of the Water 11 ratepayers, at the discretion of the City, and not for the Sewer Enterprise ratepayers. There is no direct 12 relationship between the price for the AMI project and the price for the Sewer Enterprise ratepayers' sewer 13 services. Even if there were, the burden of the amounts borne by the Sewer Enterprise ratepayers exceeds 14 any benefit to them. 15 37. The AMI Illegal Financing Scheme shifts a disproportionate burden of the AMI project 16 cost from the Water ratepayers to the Sewer Enterprise ratepayers and increases net revenue and capital 17 available for the Water Enterprise while decreasing net revenue and capital available for the Sewer 18 Enterprise. The benefits to the Water Enterprise are paid by, but not directly conferred on, the Sewer 19 Enterprise ratepayers. Defendants are therefore engaged in an Illegal Financing Scheme in violation of 20 California Constitutional and statutory provisions. 21 22 The Water Enterprise Should Pay Market Rates at Market Terms For Financing 38. The City originally claimed that 70% of the originally estimated $60 million overall costs 23 for the AMI project would be financed and funded through State Water Board for Clean Water State 24 Revolving Fund financing in the amount of $42,032,242, and would be recouped through increased Water 25 rates. The remaining 30% ($18,013,818) was going to be paid through the Muni Sewer Fund. 26 39. Unfortunately, the City's current disclosures are too opaque to determine the true and full 27 annualized cost of the AMI project in order to determine whether a 30-70, 20-80, or a 0-100 split of the 28 AMI project cost is reasonable. What is known, however, is the IROC told the City a 25-75 split was - 13 - VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 more appropriate. Using that split, the City's unlawful tax financing scheme overcharged the Sewer 2 Enterprise ratepayers' Muni Sewer Fund by at least $16.5 million which benefits the Water Enterprise, 3 not the Sewer Enterprise ratepayers. 4 40. The benefits conveyed on the Water ratepayers by the Illegal Financing from the Sewer 5 Enterprise ratepayers' Muni Sewer Fund, and the cost of the AMI project, are not being paid for by at their 6 true and full value. The Water Enterprise is financially benefitting from the Illegal Financing scheme for 7 the AMI project by using Sewer ratepayers' Muni Sewer Funds which have been entrusted to the PUD 8 exclusively for the support and benefit of the Sewer Enterprise customers. That money belongs to the 9 Sewer Enterprise, not the Water Enterprise. 10 41. If the City Water Enterprise needs to finance the AMI project, there are numerous potential 11 sources of funding other than the Muni Sewer Fund that can and should be used and considered, such as: 12 (a) issuing bonds or arranging financing through private capital markets; (b) government grants and low 13 interest loan programs; (c) contractor financing of the project; and (d) negotiated financing with 14 manufacturers willing to help finance their projects by accepting payments over several years. Two or 15 even three of these options could be combined to achieve a favorable and legal financing package for the 16 AMI project. The City must finance the AMI project in a way that meets the requirements of California 17 law, such as borrowing or obtaining funds at market rates, terms, and conditions from third party lenders 18 or investors in accordance with state law governing local government accounting practices rather than 19 raiding the Muni Sewer Fund. 20 42. When the City chose to fund the cost of the AMI project 50-50 from the Muni Sewer 21 Funds using the Illegal Financing Scheme, it broke the law. If the City wants to finance the AMI project, 22 it should obtain third party financing on commercially reasonable terms and deposit them into one or more 23 separate Water Enterprise public improvement account(s) or subfund(s) and pay the AMI project costs 24 from its own CIP funds instead of entering into the Illegal Financing Scheme using the Sewer Enterprise 25 ratepayers' Muni Sewer Fund. VI. CLASS ACTION ALLEGATIONS 26 27 45. Plaintiff brings this action pursuant to California Code of Civil Procedure § 382, on behalf 28 of himself and a Class of all others similarly situated consisting of: - 14 - VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 All current and former Sewer Enterprise customers who paid for fees, rates, and charges for sewer services at any time from October 30, 2011 through the date of final disposition of this action. 46. Excluded from this Class are Defendants, any entity in which Defendant has a controlling interest or which has controlling interest in any Defendant, any employees of Defendants, and Defendants' legal representatives, assignees and successors. Also excluded from the Class are: (a) any officers and council members/commissioners of the Defendants; (b) any judge assigned to hear this case (or spouse or immediate family member of any assigned judge); (c) any employee of the Court; (d) any juror selected to hear this case; and (e) any attorneys of record and their employees. 47. Plaintiff reserve the right to modify, expand, or amend the above Class definition or seek certification of a Class that is defined differently than above before any court determines whether certification is appropriate and following discovery. 48. Members of the Class are so numerous that their individual joinder herein is impracticable. The Class is estimated to include over 100,000 current and former PUD Sewer customers. 49. The community of interest among the Class Members in the litigation is well-defined and the proposed Class is ascertainable from objective criteria. The identities of Class Members can be obtained from Defendants’ business records. Class members can be notified of the pendency of this Action by mail or published / Internet notice. If necessary to preserve the case as a class action, the Court can redefine the Class and/or create subclasses. 50. Plaintiff’s claims are typical of the claims of the members of the Class because Plaintiff is a PUD Sewer Enterprise customer and ratepayer who, like the members of the Class, sustained damages arising out of Defendants' common course of illegal conduct and violations of law. 51. Plaintiff will fairly and adequately protect the interests of the Class members. Plaintiff has retained counsel competent and experienced in class action litigation. Plaintiff is an adequate representative of the Class because his interests do not conflict with the interests of the other putative Class Members. 52. Common questions of law and fact exist as to Plaintiff and all members of the Class and predominate over any questions solely affecting individual members of the Class. Among the questions of law and fact common to the Plaintiff and the Class are: - 15 - VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 a. Whether the AMI project is a Sewer Enterprise function; 2 b. Whether the use of Muni Sewer Funds to pay for the AMI project is for the benefit of 3 PUD Sewer Enterprise ratepayers; 4 c. Whether the payments made by the PUD from the Muni Sewer Funds, and the cost to 5 Plaintiff and Class members to fund the AMI project, is a regulatory fee authorized and 6 validly imposed under applicable law; 7 8 9 10 d. Whether the Illegal Financing Scheme and Sewer ratepayer funding used to finance the AMI project violates applicable law; e. Whether the Water Enterprise is paying true and full value to fund and finance the AMI project using the Muni Sewer Funds; 11 f. Whether there is any benefit to Plaintiff and the Class members for the Illegal Financing 12 Scheme and the funding and financing activities for the support of the Water Enterprise's 13 AMI project; 14 g. Whether the cost of any benefits to the Plaintiff and Class members for the Illegal 15 Financing Scheme and Sewer Enterprise ratepayers funding and financing activities for 16 the AMI project is proportional and reasonable; 17 18 19 20 h. Whether the Defendants are charging Sewer Enterprise ratepayers excessive fees, rates and charges in an amount that exceeds the cost of providing Sewer services; i. Whether the Illegal Financing Scheme and amount of the AMI project being paid by Sewer Enterprise ratepayers from Muni Sewer Funds violates Cal. Const. XIII C and D; 21 j. Whether the payments made by the PUD from the Muni Sewer Fund and the cost to 22 Plaintiff and Class members to fund the AMI project are for an unauthorized, illegal, or 23 unlawful purpose; 24 k. Whether the Defendants are charging and collecting an unlawful tax; 25 l. Whether Plaintiff and Class members are entitled to a writ of mandate; 26 m. Whether Plaintiff and Class members are entitled to a refund; 27 n. Whether Plaintiff and Class members are entitled to declaratory relief; 28 - 16 - VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 o. Whether Plaintiff and Class members are entitled to an order enjoining the Defendant 2 from continuing and engaging in and conducting an Illegal Financing Scheme for the AMI 3 project; 4 p. Whether Plaintiff and Class members are entitled to an accounting; 5 q. Whether Plaintiff and the Class members have been damaged by Defendant's actions or conduct; and 6 r. the proper measure of damages. 7 8 53. Class action treatment is superior to the alternative for the fair and efficient adjudication 9 of the controversy alleged herein. Such treatment will permit a large number of similarly situated persons 10 to prosecute their modest economic and common claims in a single forum simultaneously, efficiently and 11 without duplication of effort and expense that numerous individual actions would entail. No difficulties 12 are likely to be encountered in the management of this class action that would preclude its maintenance 13 as a class action, and no superior alternative exists for the fair and efficient adjudication of this 14 controversy. The Class is readily identifiable from Defendants' records. 15 54. A class action is superior to other available methods for the fair and efficient adjudication 16 of this controversy since joinder of all matters is impractical. Class adjudication will conserve judicial 17 resources and will avoid the possibility of inconsistent rulings. Moreover, there are Class members who 18 are unlikely to join or bring an action due to, among other reasons, their reluctance to sue Defendants 19 and/or their inability to afford a separate action. 20 55. Equity dictates that all persons who stand to benefit from the relief sought herein should 21 be subject to the lawsuit and hence subject to an order spreading the costs of the litigation among the Class 22 members in relation to the benefits received. Furthermore, the amounts at stake for many Class members, 23 while substantial to them, are not great enough to hire a lawyer to prosecute individual suits. 24 56. The damages, restitution, and other potential recovery for each individual member of the 25 Class are modest relative to the substantial burden and expense of individual prosecution of these claims. 26 Given the amount of the individual Class members’ claims, few, if any, Class members could afford to 27 seek legal redress individually for the wrongs complained of herein. Individualized litigation presents a 28 potential for inconsistent or contradictory judgments. Individualized litigation increases the delay and - 17 - VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 expense to all parties and the court system presented by the complex legal and factual issues of the case. 2 By contrast, the class action device presents far fewer management difficulties, and provides the benefits 3 of single adjudication, economy of scale, and comprehensive supervision by a single court. 4 FIRST CLAIM FOR RELIEF 5 (PETITION FOR WRIT OF MANDATE) 6 (On Behalf of Petitioner and the Proposed Class Against All Respondents) 7 57. Plaintiff refers to and incorporates herein by reference the allegations set forth above. 8 58. Respondents have a duty to comply with Article XIII D, § 6(b)(1)(2) and (3) of the 9 California Constitution (Proposition 218) in connection with Respondents' funding, and fee and rate 10 setting processes, in connection with the use of the Sewer Enterprise's Muni Sewer Fund and the Sewer 11 Enterprise's fees and charges. 12 59. Petitioner has a clear, present, and beneficial right to the performance of those duties. 13 60. Petitioner does not have an adequate remedy at law. 14 61. Accordingly, Petitioner is entitled to a writ of mandate pursuant to Code of Civil 15 Procedure §1085. 16 SECOND CLAIM FOR RELIEF 17 (REFUND OF AMOUNTS PAID) 18 (On Behalf of Plaintiff and the Proposed Class Against All Defendants) 19 62. Plaintiff refers to and incorporates herein by reference the allegations set forth above. 20 63. The PUD's payment of proceeds and value from the Muni Sewer Funds have not been 21 used, and are continuing not to be used, exclusively or proportionately for the benefit of Sewer Enterprise 22 ratepayers and are instead being used for the disproportionate benefit of the City Water Enterprise 23 ratepayers in violation of California law. 24 64. The PUD is using, and will continue to use, proceeds in the Muni Sewer Funds other than 25 for the exclusive or proportional benefit of the Sewer Enterprise ratepayers in violation of California law. 26 65. The City's and PUD's use of the Muni Sewer Funds proceeds and value for the AMI 27 project unlawfully benefits the Water Enterprise ratepayers, is other than for the benefit of Sewer 28 Enterprise ratepayers and is not for the exclusive or proportionate benefit of Sewer Enterprise ratepayers. - 18 - VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 66. Defendants unlawful use of the Muni Sewer Funds constitutes an illegal financing from 2 the Sewer Enterprise. Since October 30, 2011, Defendant has continuously imposed, extended and/or 3 increased and collected illegal charges, payments, and funding as set forth above. The Illegal Financing 4 Scheme is unlawful because the reasonable costs of the service or regulatory activity, and the basis for 5 determining the manner in which the AMI project costs are apportioned and allocated to the Sewer 6 Enterprise ratepayers, does not bear a fair or reasonable relationship to the burden on or benefits from the 7 regulatory activity as required by the Article XIII D, § 6(b)(1)-(3) of the California Constitution and 8 Gov't Code §§ 54999.7 and 50076. 9 67. The Sewer Enterprise ratepayers' Muni Sewer Fund has paid, and continues to pay, 10 amounts to fund the Illegal Financing Scheme to the harm and detriment of Plaintiff and the Class. 11 68. Plaintiff and the Class are entitled to a refund of any illegally charged Sewer rates since 12 October 30, 2011 used for the AMI project and the funding of the Illegal Financing Scheme. Plaintiff 13 and the Class may obtain a refund of the amounts paid since October 30, 2011 to fund the Illegal Financing 14 Scheme pursuant to the Government Claims Act, Cal. Const. Art. XIII, § 32, and other applicable law. 15 69. Plaintiff seeks a judgment directing Defendants to refund the amounts paid to fund the 16 Illegal Financing Scheme and the value from the Muni Sewer Funds used for the AMI project. 17 THIRD CLAIM FOR RELIEF 18 (DECLARATORY RELIEF) 19 (On Behalf of Plaintiff and the Proposed Class Against All Defendants) 20 70. Plaintiff refers to and incorporates herein by reference the allegations set forth above. A 21 present dispute and controversy now exists between Plaintiff and Defendants in that Plaintiff contends the 22 Defendants are engaged in an Illegal Financing Scheme as set forth above. 23 71. Specifically, Defendants have transferred and intend to continue to unlawfully fund the 24 Water Enterprise's AMI project with an Illegal Financing Scheme paid by the Sewer Enterprise ratepayers' 25 Muni Sewer Fund by using excess proceeds and value from the Muni Sewer Fund to pay for a 26 disproportionate cost of the AMI project. These elective transfers deprive the Sewer Enterprise ratepayers 27 of funds that could otherwise be used to benefit the Sewer Enterprise ratepayers, and also trigger the 28 mechanism by which the City will unlawfully impose, levy, charge, and collect monies from the Sewer - 19 - VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 Enterprise ratepayers. The City disputes those contentions and claims that the Illegal Financing Scheme 2 and funds paid by from the proceeds and value of the Muni Sewer Funds for the AMI project fund, and 3 other Sewer Enterprise fund transfers, are valid, lawful, and fully enforceable in all respects, and that they 4 have no unsatisfied or further duties under the California Constitution or any other California statutory or 5 common law. 6 72. Plaintiff seeks a declaration as to the validity and enforceability of the Illegal Financing 7 Scheme, the financing and funding of the AMI project from Sewer Enterprise transfers of proceeds and 8 value from the Muni Sewer Funds, the Constitutional and legal issues in connection with the Sewer rates 9 charged since October 30, 2011, and the validity and enforceability of the Illegal Financing Scheme and 10 other funds paid for the Water Enterprise ratepayers' benefit collected from Plaintiff and the proposed 11 Class of Sewer Enterprise ratepayers. A judicial declaration is necessary and appropriate at this time so 12 that Plaintiff and the proposed Class may determine their ongoing rights and obligations with respect to 13 the Illegal Financing Scheme, the validity of any Sewer Enterprises ratepayers' Muni Sewer Fund's 14 funding of the AMI project, and the Sewer charges that Plaintiff and the proposed Class are subject to pay 15 indefinitely into the future. 16 73. An actual, present, and substantial controversy exists between Plaintiff and Defendants. 17 Plaintiff contends that Defendants have violated and will continue to violate Article XIII D, § 6(b)(1)(2) 18 and (3) of the California Constitution. Defendants contend they have complied, and will continue to 19 comply, with all constitutional restrictions and requirements. 20 74. Plaintiff is entitled to a judicial declaration declaring that Defendants' acts violate Article 21 XIII D, § 6(b)(1)(2) and (e) of the California Constitution, and Government Code § 54999.7. 22 FOURTH CLAIM FOR RELIEF 23 (INJUNCTIVE RELIEF - CCP § 526(a)) 24 (On Behalf of Plaintiff and the Proposed Class Against All Defendants) 25 75. Plaintiff refers to and incorporates herein by reference the allegations set forth above. 26 76. Plaintiff has no adequate remedy at law and therefore seeks a permanent injunction 27 directing Defendants to cease its Sewer ratepayer Illegal Financing Scheme and unlawful levy and 28 - 20 - VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 taxation since October 30, 2011 unless and until the levies and taxes are approved by express 2 Constitutional or legislative authority. 3 77. Plaintiff and the proposed Class are entitled to and seek an injunction under California 4 Code of Civil Procedure § 526(a) to enjoin Defendants from illegally transferring funds from the Sewer 5 Enterprise ratepayers' Muni Sewer Fund and any other Sewer Enterprise funds to pay for the AMI project, 6 and to restore to the Sewer Enterprise all Sewer ratepayer funds paid for the AMI project from any source 7 through the date of trial. 8 FIFTH CLAIM FOR RELIEF 9 (ACCOUNTING) 10 (On Behalf of Plaintiff and the Proposed Class Against All Defendants) 11 78. Plaintiff refers to and incorporates herein by reference the allegations set forth 12 above. Since at least July 11, 2016, Defendants' Water Enterprise has received money from the Sewer 13 Enterprises ratepayers' Muni Sewer Fund from excess Sewer rates charged since October 30, 2011 for the 14 Illegal Financing Scheme as alleged herein at Plaintiff's, and the proposed Class' expense, and some or all 15 such money is rightfully due to Plaintiff and the proposed Class. 16 79. The identities of the proposed Class members, and the amount of illegal transfers and 17 funding in connection with the Sewer Enterprise ratepayers' Muni Sewer Fund funding and Illegal 18 Financing Scheme for the AMI project, and the unlawful amounts appropriated and paid, and due to be 19 refunded to Plaintiff and the proposed Class from Defendant, cannot be ascertained without a full 20 accounting of Defendants’ conduct. Plaintiff and the proposed Class are entitled therefore to a 21 full accounting and the records of Defendants’ unlawful activities as described herein. PRAYER FOR RELIEF 22 23 80. WHEREFORE, Petitioner/Plaintiff, individually and on behalf of the proposed Class, 24 prays for relief and judgment against Defendants/Respondents, jointly and severally, as follows: 25 a. For a writ of mandate directing Respondents to: 26 i. cease the Illegal Financing Scheme, and the appropriating and transferring funds, from 27 the Sewer Enterprise ratepayers' Muni Sewer Fund to pay for any illegal portion of the 28 Sewer rates charged for the AMI project; - 21 - VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 ii. cease the imposition of excess Sewer fees and charges that include amounts designed 2 to replace funds appropriated in connection with the Illegal Financing Scheme and 3 any amounts paid from the Sewer Enterprise ratepayers' Muni Sewer Fund for the 4 AMI project costs.; 5 iii. restore to the proposed Class, all amounts that have been misappropriated from the 6 Sewer Enterprise ratepayers' Muni Sewer Fund to pay for any illegal portion of the 7 AMI project and any illegal Sewer rates charged during the Class Period; 8 b. Certify this case as a Class action on behalf of the Class defined above, appoint Miller Marks 9 as Class representative, and appoint the undersigned attorneys as Class counsel; 10 c. Award declaratory, injunctive, and other equitable relief declaring that Defendants’ practices 11 have violated, and will continue to violate, without limitation, substantive and procedural 12 directives of the Article XIII D, § 6(b)(1)(2) and (3) of the California Constitution, California 13 statutory law, and applicable legal authority as is necessary to protect the interests of Plaintiff 14 and Class members; 15 d. Order a permanent injunction enjoining Defendants from further transfers of value and 16 proceeds from the Muni Sewer Funds and other Sewer funds to pay for the AMI project; 17 e. Order Defendants to provide information sufficient to identify each proposed Class member, 18 the amount of payment or transfers from the Muni Sewer Funds or other Sewer Enterprise 19 funds in connection with the AMI project, and the amounts paid for the illegal funding of the 20 Illegal Financing Scheme by the Sewer Enterprise ratepayers' Sewer Muni Fund; 21 f. Order Defendants to restore to the Sewer Enterprise and the Sewer Enterprise ratepayers all 22 illegally charged and paid Sewer rates, and amounts paid to fund or finance the AMI project; 23 g. Refund to Plaintiff and the Class all unlawful amounts paid from the Sewer Muni Fund in 24 connection with the Illegal Financing Scheme, and other amounts unlawfully paid to the 25 Defendants and/or the Water Enterprise in connection with the AMI project and/or the Sewer 26 ratepayer Illegal Financing Scheme, in an amount to be proven at trial; 27 28 h. Award restitution and damages to Plaintiff and Class members in an amount to be determined at trial; - 22 - VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT 1 i. Order disgorgement of the Water Enterprises', and/or Defendants' unjustly acquired revenue, 2 profits, and monetary benefits resulting from their unlawful conduct for the benefit of Plaintiff 3 and Class members in an equitable and efficient manner; 4 j. Order the imposition of a constructive trust upon the Water Enterprise and/or the Defendants 5 such that the amounts paid in connection with the Illegal Financing Scheme, amounts paid for 6 the AMI project, and unauthorized amounts and benefits received by the Water Enterprise 7 and/or Defendants may be recovered, allocated, and distributed equitably by the Court to and 8 for the benefit of Plaintiff and Class members; 9 k. Award Plaintiff and Class members reasonable litigation expenses and attorneys’ fees as 10 allowed, including those recoverable under Cal. Code Civ. Proc. § 1021.5, any common law 11 "private attorney general" equitable doctrine, any “common fund” doctrine, any "substantial 12 benefit" doctrine, and/or any equitable principles of contribution and/or other methods of 13 awarding attorneys' fees and costs; 14 l. Award pre-judgment and post-judgment interest as allowable; and 15 m. Award such other and further relief as equity and justice may require and as this Court may 16 17 18 19 20 21 22 23 24 25 26 27 28 find just and proper. Dated: March 20, 2018 /s/ Robert L. Teel By: Robert L. Teel LAW OFFICE OF ROBERT L. TEEL ROBERT L. TEEL (Cal. SBN 127081) lawoffice@rlteel.com 1425 Broadway, Mail Code: 20-6690 Seattle, Washington 98122 Telephone: 866-833-5529 Facsimile: 855-609-6911 LAW OFFICE OF PAUL H. NEUHARTH, JR., APC PAUL H. NEUHARTH, JR. (Cal. SBN 147073) pneuharth@sbcglobal.net 402 West Broadway, Suite 720 San Diego, CA 92101 Telephone: 619-231-0401 Facsimile: 619-231-8759 Attorneys for Petitioner/Plaintiff and the proposed Class - 23 - VERIFIED PETITION FOR WRIT OF MANDATE AND CLASS ACTION COMPLAINT Seattle, Washington Telephone: Facsimile: L AW OFFICE OF PAUL H. PAUL H. NEUHARTH, JR. (Cal. pneuharth@sbeglobal.n 402 West Broadway. San Diego, Telephone: Facsimile: Attorneys. for Pelition!r/Plaintiff (Intl the VERIFICATIO I, MILLER MARKS, am the Petitioner/Plaintiff in this action. I have read the Petition For Writ O f Mandate and Complaint for Refund o f Illegal Amounts Paid. Relief, Injunctive Relief, and Accounting. T h e same is true o f my own knowledge, except matters stated on information and belief, and as to them I believe them to be true. I declare of perjury that the foregoing is true _et Executed in S r 3 Miller C a l i f o i m i a on Marcia- V - 24 VERIFIED PETITIONFOR WRITOFMANDATEAND CLASS