XML 121 R16.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Contingencies
12 Months Ended
Dec. 31, 2019
Legal Proceedings [Abstract]  
Contingencies
Contingencies
Class Action Suits Related to the merger with CTWS
On June 14, 2018, certain shareholders of CTWS (the “Plaintiffs”) filed two nearly identical class-action complaints in Connecticut state court against the CTWS board of directors, SJW Group, Eric W. Thornburg, Chairman, President and Chief Executive Officer of SJW Group, and CTWS (the “Defendants”). The complaints, as amended on September 18, 2018 and September 20, 2018, allege that the CTWS board breached its fiduciary duties in connection with the Merger, that CTWS’s preliminary proxy statement, filed with the SEC on August 20, 2018, omitted certain material information and that SJW Group and Mr. Thornburg aided and abetted the alleged breaches by the CTWS board of directors. Among other remedies, the actions sought to recover rescissory and other damages and attorney’s fees and costs. SJW Group believed the claims in these complaints were without merit and vigorously defended against such complaints. The parties to the lawsuits agreed in principle to settle the lawsuits in exchange for the issuance of additional disclosures by CTWS. Pursuant to the agreements to settle the lawsuits, the Plaintiffs reserved the right to seek a mootness fee from CTWS. The parties moved to stay proceedings, other than fee-related proceedings, until the closing of the merger with CTWS, and the court initially granted the parties’ motion to stay on November 14, 2018. The initial stay of proceedings had expired on February 28, 2019 and after multiple motions by the parties and granting of extensions, the stay of the proceedings continued until November 11, 2019. On November 20, 2018, the Plaintiffs filed an opening brief in support of their mootness fee demand of $1,500. The merger with CTWS closed on October
9, 2019, and pursuant to the agreement in principle to settle the litigation, the complaints would be dismissed after the closing. On November 12, 2019, the Defendants filed an opposition to the Plaintiffs’ fee demand.  On November 27, 2019, the Plaintiffs filed a reply brief in further support of their mootness fee demand. On January 8, 2020, the court entered an order dismissing Plaintiffs’ complaints. On January 10, 2020, the parties entered into an agreement pursuant to which the Defendants would pay a mootness fee amount of $325 in exchange for the release of all of the Plaintiffs’ claims.
Billing Practice OII with CPUC
On September 14, 2018, the CPUC issued OII No. 18-09-003 to which SJWC was named as Respondent. The OII will determine whether the company unlawfully overcharged customers over a 30-year period by failing to pro-rate service charges when increases occurred during a billing period, and whether the company double-billed service charges during one billing period when allegedly switching from billing such charges in advance to billing in arrears. By a decision adopted November 29, 2018, in SJWC’s then-pending GRC, the CPUC approved a settlement to resolve the alleged overcharging issue for the period since June 2011 by requiring customer credits to customers totaling $2,020. That amount was refunded to customers pursuant to SJWC’s Advice Letter No. 530, effective February 8, 2019. See discussion on the matter in Note 1, “Regulatory Rate Filings.” On July 24, 2019, SJWC and CPED jointly filed a motion for CPUC approval of a Settlement Agreement (“Agreement”) over SJWC’s past customer billing practices. The Agreement requires the company to pay approximately $2,100 in additional customer refunds, consisting of $1,757 for refunds during the period from 1987 to 2011 and $350 in customer credits to low income water customers, and invest $5,000 in utility plant that is not allowed an investment return or rate recovery. SJWC recorded the $2,100 customer credit expense as an offset to revenues during the second quarter of 2019. The $5,000 commitment to invest in utility plant will be recognized as plant in service on the company’s financial statements once invested. A CPUC Presiding Officer’s Decision approved the Agreement in December 2019, but an appeal was filed in January 2020 by a group of SJWC customers. On February 27, 2020, the CPUC adopted a modified version of the Agreement, which found the appeal to be without merit and approved the Agreement. The CPUC’s adopted decision is scheduled to become final on March 28, 2020.
SJW Group is subject to ordinary routine litigation incidental to its business. There are no pending legal proceedings to which SJW Group or any of its subsidiaries is a party, or to which any of its properties is the subject, that are expected to have a material effect on SJW Group’s business, financial position, results of operations or cash flows.