Engquist, et al. v. City of Los Angeles
Gas Tax LA Settlement
Case No. BC591331

Frequently Asked Questions

 

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  • The Court authorized this Notice because you have a right to know about a settlement of this class action lawsuit, including the Settlement benefits and about all of your options under the Settlement.

    The persons who filed this class action are called the “Plaintiffs” and the City of Los Angeles is the “Defendant.” The Plaintiffs filed the class action lawsuit in the Superior Court of California, for the County of Los Angeles. The lawsuit is called Engquist, et al. v. City of Los Angeles, Case No. BC591331.

     
  • The lawsuit alleges that the City improperly included in its GUT calculation the Service Establishment Charge (“SEC”) and the Customer Charge. The lawsuit contends that the City may only calculate the GUT on the line item for the gas commodity. The City denies the allegations. The parties have agreed to a settlement to avoid the expense, delay, and risk of continued litigation.

    More information can be found on this website, by calling 1-833-707-1454, or by writing to Class Counsel, whose addresses may be found below in FAQ 9

  • In a class action, one or more people called “Class Representatives” sue on behalf of themselves and all other persons or entities with similar claims. All of these persons or entities together are called a “Class” or “Class Members.” The Court appointed three plaintiffs (Lorin M. Engquist, Angelica G. Divinagracia dba Fun Fit Factory, and David Bernstein) as the Class Representatives for purposes of this Settlement.

  • The Court did not issue a final decision in favor of either Plaintiffs or Defendant. Instead, both sides agreed to a settlement. The Class Representatives and the attorneys that have been appointed by the Court to represent the Class believe that the Settlement is in the best interests of all Class Members.

  • You are a Class Member and part of the Settlement if you were a natural gas customer of Southern California Gas Company at any time during the billing period that includes at least one day that falls on or after April 16, 2014 through the present.

  • If you are not sure whether you are included in the Settlement, you may visit the Important Documents page for more information and to access a copy of the First Amended Stipulation of Settlement and other important documents. You may also call 1-833-707-1454 or e-mail info@GasTaxSettlementLA.com and ask for assistance.

  • The Settlement provides the following benefits:

    First, beginning 70 days after the settlement is final, the City will no longer impose the natural gas utility user tax (“GUT”) on the Service Establishment Charge ("SEC") or Customer Charge, unless it is approved by voters in the future, if ever. It is estimated that this change in the GUT will result in a cumulative yearly tax savings for natural gas customers who are subject to this tax of approximately $8.2 million dollars.

    Second, the City has agreed to establish a “Settlement Fund” in an amount of $32,500,000, plus 75% of any GUT collected by Southern California Gas Company on the Customer Charge and SEC after May 1, 2021, until such time as the City may obtain applicable voter approval to amend the Utility Ordinance, or any other regulation, to permit taxation of the SEC and Customer Charge. After making deductions for settlement administration and data compilation expenses (estimated to be $913,483), court approved service awards totaling a maximum of up to $40,000 for the three Class Representatives, a $400,000 payment to a non-profit charitable organization called Alliance for Children’s Rights,* a $100,000 payment to a non-profit charitable organization called The Utility Reform Network,* and court approved attorney’s fees and expenses of up to 25% of the Settlement Fund (e.g., if the Settlement Fund is $32,500,000, then attorneys’ fees of up to $8,125,000), the balance of the Settlement Fund will be distributed to Southern California Gas Company customers who are residents of the City of Los Angeles and subject to the GUT. Distributions will be made by applying a reduced Los Angeles City Users Tax rate for retail customers of Southern California Gas Company (who are subject to the tax) beginning no sooner than 90 days after the Settlement becomes final and continuing for up to six years (the “Abatement Period”) or within three years of completion of the abatement period in the Lavinsky v. City of Los Angeles lawsuit, whichever is shorter, by which time all distributions must be complete.

    * Alliance for Children’s Rights and The Utility Reform Network are 26 U.S.C § 501(c)(3) non-profit charitable organizations. These payments are intended to provide indirect compensation to Class Members who will no longer be subject to the GUT during all or a portion of the Abatement Period and Class Members who paid the SEC during the Class Period. If you are not subject to the GUT during all or a portion of the Abatement Period, you will not directly receive the full benefits of the Settlement through the distribution method described above.

  • If you are a Class Member, and you do not opt out of the Settlement, and the Settlement becomes final, you will be releasing Defendant from any liability regarding any and all claims associated with this case. You will give up your right to be part of any another lawsuit against the City regarding the claims resolved by the Settlement and released by the First Amended Stipulation of Settlement. The specific claims you will release are specified in the First Amended Stipulation of Settlement as follows:

    In consideration for the Settlement it is hereby agreed that, upon the Effective Date, Class Representatives and each Class Member, on behalf of themselves and any other legal or natural persons who may claim by, through or under them, shall be deemed to have fully, finally and forever released and discharged the Released Parties from any and all Released Claims arising during the Class Period, whether known or unknown, suspected or unsuspected, contingent or non-contingent, derivative or direct, asserted or unasserted, whether based on federal, state or local law, statute, ordinance, regulation, code, contract, common law, or any other source, or any claim of any kind. Class Representatives and Class Members expressly agree that this Release, the Final Order, and/or the Final Judgment are, will be, and may be raised as a complete defense to, and will preclude any action or proceeding encompassed by, this Release.

    Class Representatives and Class Members shall not, now or hereafter, institute, maintain, prosecute, and/or assert any suit, action, and/or proceeding, against the Released Parties, either directly or indirectly, on their own behalf, on behalf of a class or on behalf of any other person or entity with respect to the claims, causes of action, and/or any other matters released through this Settlement.

    In connection with this Agreement, Class Representatives and Class Members acknowledge that they may hereafter discover claims presently unknown or unsuspected, or facts in addition to or different from those that they now know or believe to be true concerning the subject matter of the Action and/or the Release herein. Nevertheless, Class Representatives and Class Members intend to, and do hereby, fully, finally, and forever settle, release, discharge, and hold harmless the Released Parties from all such matters, and all claims relating thereto which exist, hereafter may exist, or might have existed (whether or not previously or currently asserted in any action or proceeding) with respect to the Action.

    Without in any way limiting its scope, and, except to the extent otherwise specified in the Agreement, this Release covers by way of example and without limitation, any and all claims for attorneys’ fees, costs, expert fees, consultant fees, interest, litigation fees, costs or any other fees, and/or disbursements incurred by any attorneys, Class Counsel, Class Representatives, Settlement Administrator, or Class Members who claim to have assisted in conferring the benefits under this Settlement upon the Class.

    The Class Period is April 16, 2014 through the date of entry of the Judgment.

    The Released Claims are:

    Any claims that were asserted, or that could reasonably have been asserted in the Action (based upon and/or arising out of the facts alleged in the Complaint), against the Released Parties, and that arise out of, or relate in any way to, any or all of the acts, omissions, facts, matters, transactions, or occurrences that were alleged in the Action (based upon and/or arising out of the facts alleged in the Complaint).

    The Released Parties are:

    Defendant, and each of its past, present, and future employees, officials, agents, attorneys, administrators and advisors, including, but not limited to, the Mayor of the City of Los Angeles, Members of the City Council for the City of Los Angeles, Managers of the City of Los Angeles, Clerks of the City of Los Angeles, and Finance Directors for the City of Los Angeles.

  • Yes. The Court has appointed the following firms as Class Counsel to represent you and the other Class Members. If you want to be represented by your own lawyer, you may hire one at your own expense.

    Wolf Haldenstein Adler Freeman & Herz LLP
    750 B Street, Suite 1820
    San Diego, CA 92101

    Tostrud Law Group, P.C.
    1925 Century Park East, Suite 2100
    Los Angeles, CA 90067

     

  • Class Counsel asked the Court at the Final Fairness Hearing to award attorneys’ fees in an amount not to exceed 25% of the Settlement Fund and reimbursement of expenses incurred in litigating this case up to a maximum of $200,000. These fees and expenses requested will be paid from the Settlement Fund before providing benefits to Class Members. 

  • The Class Representatives Lorin M. Engquist, Angelica G. Divinagracia dba Fun Fit Factory, and David Bernstein asked the Court at the Final Fairness Hearing to award them service awards of up to a cumulative total of $40,000 for their efforts in initiating and prosecuting this case. The Court determined the amount of each service award which will be paid from the Settlement Fund before providing benefits to Class Members.

  • The parties have retained a third-party Settlement Administrator to assist them with certain administrative functions associated with the implementation of this Settlement, including the mailing and publication of the Class Notice, responding to requests for information from Class Members, maintaining a website that publishes information about this Settlement, and managing opt-outs and objections from Class Members. The Settlement Administrator’s fees will be paid from the Settlement Fund before providing benefits to Class Members.

  • The deadline to exclude yourself or “opt out” of the Settlement was December 29, 2020 and has passed. If you received a re-mailed Postcard Notice, the deadline to submit your exclusion request was January 18, 2021 and has passed.

  • If you did not opt out by December 29, 2020 (or by January 18, 2021 if you received a re-mailed Summary Notice) and the proposed Settlement is approved and becomes final, you will release all claims that you may have now against the City with respect to claims or allegations that Defendant improperly calculated its natural gas utility user tax and illegally charged tax on the Service Establishment Charge and Customer Charge. If you did not opt out, these claims will be WAIVED AND RELEASED, and you will be prohibited from bringing any such claims in the future on your own behalf.

  • The deadline to object to the settlement was December 29, 2020 and has passed. If you received a re-mailed Postcard Notice, the deadline to submit your objection was January 18, 2021 and has passed.

     

  • Objecting is simply telling the Court that you do not like something about the Settlement. You can object only if you stay in the Settlement Class (i.e., do not opt out). Opting Out of the Settlement is telling the Court that you do not want to be part of the Settlement. If you opt out, you cannot object because the Settlement no longer affects you.

  • The Court held a Final Fairness Hearing on March 17, 2021, and the Court granted final approval of the Settlement on the same day.

  • No. Class Counsel answered any questions that Judge Buckley may have. 

  • The deadline to submit a Notice of Intention to Appear was December 29, 2020 and has passed.

     

  • If you think you may be a Class Member and would like more information about the lawsuit or the terms of the Settlement, you may review the pleadings, records and other papers on file in this lawsuit, including the Court’s Preliminary Approval Order and the First Amended Stipulation of Settlement, which may be inspected at the Clerk’s Office of the Superior Court of California, County of Los Angeles, Spring Street Courthouse, 312 North Spring Street, Los Angeles, California, 90012. You must make an appointment with the Clerk’s Office by calling 213-310-7000. All services – telephonic and in-person – will be provided in non-English speaking languages. Face masks and/or facial coverings are required and mandatory at all times to enter any courthouse or courtroom and must be worn covering the nose and mouth. This policy applies to attorneys, parties, witnesses, court staff, Judges, Commissioners, vendors and the general public. The only exceptions to this policy will be for a documented medical condition or excuse, or an ADA accommodation approved by the Court. If an exception is granted, admittance into the courthouse may be restricted to a specific time of the day. If necessary, the time allotted for any granted exception may require the individual to wait until later in the day or schedule an appointment for admittance. For up-to-date information on the Court’s facial coverings and social distancing requirements, please visit: http://www.lacourt.org/newsmedia/ui/HfySfy.aspx.

    The Preliminary Approval Order and the First Amended Stipulation of Settlement are also available on the Important Documents page. Additional information is available by calling 1-833-707-1454, or by writing to Class Counsel at the addresses in FAQ 9.

DO NOT CONTACT THE COURT OR THE CITY ABOUT THE NOTICE.
THEY CANNOT ANSWER ANY QUESTIONS ABOUT THE SETTLEMENT.

For More Information

Visit this website often to get the most up-to-date information.

Mail

Engquist v. City of Los Angeles
c/o JND Legal Administration
PO Box 91010
Seattle, WA 98111