T. Scott Pernici, Michael Jones, and Mark Defatta, Individually and on Behalf of a Class of Similarly Situated Persons v. City of Shreveport, Louisiana

Judgment rendered September 21, 2022.
Application for rehearing may be filed
within the delay allowed by Art. 2166,
La. C.C.P.

No. 54,474-CA

COURT OF APPEAL
SECOND CIRCUIT
STATE OF LOUISIANA

*****

T. SCOTT PERNICI, MICHAEL Plaintiffs-Appellees
JONES, AND MARK DEFATTA,
INDIVIDUALLY AND ON
BEHALF OF A CLASS OF
SIMILARLY SITUATED
PERSONS
versus

CITY OF SHREVEPORT, Defendant-Appellant
LOUISIANA

*****

Appealed from the
First Judicial District Court for the
Parish of Caddo, Louisiana
Trial Court No. 599,698

Honorable Michael A. Pitman, Judge

*****

PETTIETTE, ARMAND, DUNKELMAN, Counsel for Appellant
WOODLEY, BYRD & CROMWELL, L.L.P.
By: Joseph S. Woodley
Edwin H. Byrd, III
Marshall L. Perkins

HARPER LAW FIRM, APLC Counsel for Appellees
By: Jerald R. Harper
Anne E. Wilkes

*****

Before MOORE, THOMPSON, and MARCOTTE, JJ.

MARCOTTE, J.

This appeal arises from the First Judicial District Court, Caddo Parish,

the Honorable Michael Pitman presiding. Defendant, the City of Shreveport,

appeals the trial court’s June 28, 2021, partial final judgment. For the

following reasons, we reverse.

On March 29, 2017, plaintiffs T. Scott Pernici, Michael Jones, Mark

DeFatta, and others similarly situated (“plaintiffs”), approximately 65,000

people, filed a class action petition for the recovery of overpayment of water

and sewerage charges by and from defendant, the City of Shreveport,

Louisiana (“the City”). Plaintiffs consisted of persons who: (1) were current

or former residents of the City and/or Caddo Parish from March 29, 2007,

(2) were or are residential customers of City water and sewerage services

from March 29, 2007 to the present; (3) were, between March 29, 2007 and

the present, subject to paying residential sewerage service charges under

Shreveport, La., Ordinance § 94-165(2)(a) (1994), (the “Ordinance”); and

(4) were overcharged for their residential sewerage usage and/or service

charges as a result of the City’s failure to properly compute their customers’

average monthly water usage in compliance with the Ordinance.1

The Ordinance stated during the relevant time period:

Quantity charges for metered residential customers shall be
based on 100 percent of water consumption unless the
individual customer’s average monthly water usage is less for
the months of November, December, January and February,
calculated after the month with the highest metered water usage
and the month with the lowest metered usage have been
eliminated.

1
Plaintiffs filed supplemental and amended class action petitions which further
specified the class, accounted for additional damages to the class as a result of the City
continuing to use “unlawful” billing methods, and added additional causes of action
detailed below.

More specifically, plaintiffs stated that the City failed to properly compute

average winter consumption (“AWC”) for residential sewerage usage based

on the formula provided in the Ordinance. Plaintiffs alleged that their water

and sewer bills were consistently inaccurate and that customers inside the

city limits had been charged at most $31.48 more monthly, while customers

outside the city limits had been charged up to $62.94 more monthly.

Plaintiffs stated that the designated winter months of November,

December, January, and February have a total of 120 days, except in a leap

year when the total number of days is 121. Plaintiffs explained that the

water usage for those four winter months is used to determine the AWC

under the Ordinance, and that the average is used, starting the next

succeeding May of each year, as the customer’s sewerage rate for each of

the following 12 months unless the customer’s actual water usage in any

given month is less than the AWC. In that case, the customer is billed a

sewerage rate based on the actual water usage in that month. The rationale

for calculating sewerage rates in such a manner is that the water used in

hotter, dryer months for irrigation purposes does not enter the sewerage

system and does not require processing by the City; thus, it is eliminated

from customers’ water bills.

Plaintiffs stated that the City used an excessive number of days in

computing customers’ AWC. Plaintiffs contended that as far back as 2007,

the City used numbers in excess of 120 days (121 in a leap year) to calculate

customers’ AWC and sewerage rates. The inclusion of extra days in one or

more of the four winter months sometimes created false high consumption

months which resulted in an inaccurate, higher AWC number.

2

Plaintiffs complained that the City used days in computing the AWC

that were not included in the four winter months delineated in the Ordinance,

while excluding days that should have been included. Plaintiffs stated that

the City used November water bills in its AWC calculation that included

water usage for all or part of October, and it used February water bills in its

AWC calculation that did not reflect all of the water consumed by a

particular residence in February. Plaintiffs argued that water consumption

for October was not enumerated in the Ordinance and water consumption for

all of February was supposed to be included in the AWC calculation.

Plaintiffs claimed this led to overcharges in customers’ AWC calculations.

In calculating the AWC, the City discounted the two winter months

with the highest and lowest water usage, averaged the usage for the two

remaining months, and then rounded that figure up to the nearest whole

thousand gallons. Plaintiffs complained that since at least 2007, the City

improperly truncated its monthly water consumption to the nearest whole

thousand gallons and did not use 100 percent of the actual water consumed

in calculating the AWC. Plaintiffs acknowledged that the City’s ordinances

“may be read” to permit the City to bill residential customers per 1,000

gallons of water used, but plaintiffs also claimed the City did not have

authority to round the AWC up to the nearest whole thousand gallons.

Plaintiffs stated that this resulted in sewerage rate overcharges to a

significant percentage of its residential customers. Plaintiffs claimed that the

residential water meters the City utilizes have the capacity to account for

water usage to the gallon and truncating and/or rounding is not necessary.

Plaintiffs also raised claims of overbilling for those residential customers

3

who have older hundred cubic feet meters to track their water usage, which

are different from newer meters which measure water usage in gallons

Plaintiffs also brought claims for breach of contract, unjust

enrichment, payment of a thing not due, and a request for a declaratory

judgment that plaintiffs have a right to offset their future water bills with any

damages the court deemed they were owed due to their claims. Plaintiffs

asked for a permanent injunction prohibiting the City from (1) using in

excess of 120 days of actual water consumption in determining customers’

AWC; (2) using water consumption from any days not falling in November,

December, January, and February in calculating customers’ AWC; and/or

(3) from truncating and/or rounding up in computing customers’ AWC.

Plaintiffs also requested a permanent injunction to prevent the City

from turning off water services of residents for failure to pay for water and

sewerage services. Plaintiffs asked for a writ of mandamus directing the

City to set sewer rates in accordance with the Ordinance. Plaintiffs sought a

customer-by-customer accounting in order to determine the identity of

residential customers and the amounts they were each overbilled or

underbilled, as well as damages, fees, and costs. The City answered the

petitions and denied all claims.

The trial court ultimately divided the classes into two sub-classes:

(1) the “rounding” subclass, which included class members who were

overcharged for sewerage when their AWC was calculated which resulted

from the City’s practice of (“after ‘truncating’ when reading the meter and

only reading the ‘thousands’ of gallons”) by rounding up to the nearest

“whole thousand gallons,” and using that rounded amount to calculate

customers’ sewerage charges; and (2) the “days-months” sub-class, which
4

included class members who were overcharged for sewerage when their

AWC was calculated by utilizing an amount of days in excess of 120 (121 in

a leap year) and/or the class members’ AWC was calculated by using days

that were not in the months of November, December, January, and

February.2

On May 3, 2019, plaintiffs filed a motion for partial summary

judgment on the issue of liability. In their motion, plaintiffs argued that

there were no disputed issues of material fact, that the City had

acknowledged its billing practices, and that the only issue to be decided by

the court was a matter of statutory interpretation, an issue of law. Plaintiffs

argued that the use of the City’s methods was an intentional effort by the

City to generate greater revenue.

More precisely, plaintiffs argued that the Ordinance is unambiguous.

Plaintiffs asserted that the Ordinance provides that the charges will be based

on the customer’s “water consumption,” which is understood to mean the

actual amount of water consumed, which is better understood by the phrase

“100 percent.” Additionally, plaintiffs argued that the meaning of the word

“month” is clear and unambiguous, as well as the meanings of “November,”

“December,” “January,” and “February,” respectively. Thus, they argued

that because the Ordinance only provides for AWC water consumption to be

calculated in the four designated months, there could be no other meaning.

Plaintiffs surmised that the Ordinance intended for the AWC to be calculated

from 100 percent of water actually consumed in November, December,

2
The parties later settled plaintiffs’ claims related to rounding, and those claims
are not at issue in this appeal.

5

January, and February. Those months only account for 120 days (121 in a

leap year).

Plaintiffs further argued that the Ordinance’s AWC calculation did not

include water consumption during the “billing cycles” of those months,

which would include both October and March, and neither did it include

discretionary days. Plaintiffs alleged that the word “average” means to add

the two middle months and divide them by two. Plaintiffs concluded that

because the statute is unambiguous, the City’s interpretation is irrelevant and

inapplicable. Plaintiffs lastly argued that even if the City’s interpretation

were given great weight, it still fails. Plaintiffs asked the court to enter a

judgment in their favor as to liability.

On July 31, 2019, the City filed its own motion for summary

judgment.3 The City detailed the process by which residential water meters

are read and customers are then billed. The City stated that its code of

ordinances provides authority for the Department of Water and Sewerage

(“DOWAS”) to promulgate rules (the “Rules”) for the method and timing of

water meter reading. The City uses water meters to measure water

consumption, but meters are not available to measure sewer consumption,

the portion of the water used that enters the sewer and is processed. Because

of that, sewer consumption is based on water consumption.

For the purposes of measuring water consumption and determining

sewerage charges, the City is divided into 19 geographic billing cycles,

which are further divided into 10 to 13 routes per cycle. Each route has up

3
The parties made several filings in opposition to opposing parties’ motions and
in support of their own motions, making arguments similar to those made in their
respective motions for summary judgment.
6

to 550 active and inactive meters. The meters are read manually and in

sequence by a private company, which, according to the Rules, is required to

read at least one cycle per day. Meters in each cycle are to be read and

billed approximately once each month, but in no case more than 12 times a

year.

The water meters measure in gallons, but the City utilizes thousand-

gallon increments, and does not read or bill to the single gallon. Therefore,

whether a customer uses 1,100 gallons or 1,900 gallons, the customer is

charged for 1,000 gallons of water usage and his or her sewerage charges are

calculated based on that whole thousand gallons number. Only the

thousands’ place displayed on the meter is recorded, and the increase from

the thousands’ place from the last meter reading is what constitutes the

metered water consumption for the applicable billing period.

The City argued that the Ordinance and Rules do not reference

“calendar months,” but rather billing cycles. The City contended that the

Rules contemplate one meter reading approximately once per month, and not

on the same day for everyone in the City. The City argued that the

Ordinance must be read in pari materia with its other laws, which

demonstrates that a requirement cannot be in place to read meters on a

precise calendar month basis. Such a result would be inconsistent with the

Rules setting forth that all meters are read sequentially on different days in

the 19 regions, and only 12 times per year. The City stated that in order for

all of the City’s residential meters to be read on the first and last day of each

calendar month, “an army of meter readers would be required.”

Plaintiffs replied to the opposition and argued that the Rules

promulgated by DOWAS do not have the same authority as the Ordinance,
7

which was legislatively enacted. Plaintiffs again asserted that because the

City did not dispute that its practice did not comply with the plain language

of the Ordinance, the matter should be concluded.

On September 3, 2019, a hearing on the cross-motions for summary

judgment was held. No new arguments were raised. Both sides

acknowledged that there were no material facts at issue and the matters for

the trial court to determine were solely questions of law.

On October 14, 2019, a second hearing on the cross-motions for

summary judgment was held in order for the City to answer the trial court’s

question regarding the rounding issue. Following arguments, the trial court

stated, regarding the days-months issue:

With regard to the other issue, the Ordinance clearly shows that
quantity charges for metered residential customers shall be
based on a 100 percent of water consumption, unless the
individual customers average monthly water usage is less for
the months of November, December, January, and February,
emphasize those four months, calculated after the months with
the highest metered water usage have been eliminated, period.
As plaintiffs have pointed out, that the City is actually using
October and March in those calculations as well, something that
the Ordinance does not provide for.

On November 26, 2019, the trial court signed a judgment granting

plaintiffs’ motion for partial summary judgment on liability and denying the

City’s motion for summary judgment. The City sought supervisory review

with this Court, which was denied.

On October 20-21, 2020, a bench trial was held on the quantum of

damages on the days-months issue.4 Plaintiffs called an expert witness,

Ronald Gagnet (“Gagnet”), over the City’s objection. Gagnet was accepted

4
On November 23, 2020, the trial court signed an order granting final approval of
a partial class action settlement. The scope of the settlement included resolution of only
the rounding issue. The parties reserved the days-months and truncation issues for future
litigation.
8

as an expert in certified public accounting, certified financial forensics, and

damages calculations. Plaintiffs submitted Gagnet’s expert report and

spreadsheets prepared by him to estimate damages to the days-months

subclass. The City objected to Gagnet’s method of calculating damages and

to his providing allegedly new opinions at trial.

The City called Barbara Featherston (“Featherston”), an engineer and

the former head of DOWAS, and Robert Hanisee (“Hanisee”), a business

analyst with the City’s information technology department. Featherston and

Hanisee each testified about how the City computes residential AWC rates

and the method in which it quantifies, logs, and bills for residents’ water

usage and sewerage.

On March 10, 2021, the trial court signed an opinion awarding

damages to plaintiffs. The trial court summarized the testimony of Gagnet,

Featherston, and Hanisee, and noted, “The City did not present an expert

witness, nor any other evidence, to contradict Mr. Gagnet’s opinion.” The

trial court also noted that Gagnet’s expert report was provided to the City

more than two months prior to trial. The trial court determined that the

days-months sub-class were entitled to damages in the principal amount of

$9,626,894 with interest due from the date of judicial demand. On March

29, 2021, the trial court signed a judgment awarding same.

On June 28, 2021, the trial court signed a partial final judgment which

stated that the parties stipulated that the amount of interest due from the date

of judicial demand through June 28, 2021, was $1,773,047.20. The trial

court then stated that having ruled on plaintiffs’ motion for partial summary

judgment as to liability, the City’s motion for summary judgment, the issue

of quantum as to the days-months subclass, and the amount of interest, it
9

designated its order as an appealable partial final judgment. The City now

appeals.

DISCUSSION

The City raises the following assignments of error:

1. Whether the trial court erred in finding the City liable to the
days-months subclass at the summary judgment stage of the
proceedings.

2. Whether the trial court erred in awarding damages to the
days-months sub-class, since the evidence failed to establish
damages to a reasonable certainty.

3. Whether the trial court erred in allowing a CPA to offer
expert opinion on damages modeling.

4. Whether the trial court erred in allowing a CPA to offer
“new” opinions during the trial.

The City argues that the trial court did not consider legislative intent

in analyzing the City ordinance at issue. The City contends that the

Ordinance must be read and reconciled with the rest of the statutory scheme

and to do otherwise leads to absurd results. The City states that plaintiffs

failed to prove special damages to a reasonable degree of certainty and that

the trial court essentially found that, because the City did not call an expert

witness, it could award any amount that plaintiffs’ expert supplied. The City

points out that there is no requirement in the law that one expert witness

must be countered by another. The City claims that Gagnet’s testimony was

speculative and theoretical and he did not attempt to calculate individual

damages despite admitting he could have done so. The City asks that this

Court reverse the trial court’s rulings.

Plaintiffs argue that the Ordinance is clear and unambiguous, and the

trial court’s rulings are correct. Plaintiffs state that DOWAS does not read

meters and issue bills at precise intervals and that the City’s meter-reading
10

and billing practices resulted in an inflated AWC for each class member.

Plaintiffs argue that the Rules created by DOWAS are not of equal dignity

with the City’s code of ordinances, because the Rules were not accepted by

the city council. Plaintiffs state that the executive branch is not tasked with

creating or interpreting the laws, but that is the designated work of the

legislature and the courts, respectively. Plaintiffs argue that the words of the

Ordinance must be given their plain meaning.

With respect to the damages awarded, plaintiffs argue that the City:

(1) failed to offer any expert witness testimony on damages; (2) failed to

assert a timely motion pursuant to Daubert v. Merrell Dow Pharms., Inc.,

509 U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993); (3) failed to show

at trial and preserve for appeal evidence of factual errors by plaintiffs’

expert; and (4) is unable to show any manifest error in the trial court’s

exercise of its discretion in awarding damages. Plaintiffs ask that the trial

court’s rulings be affirmed.

The City filed a reply brief, but did not assert new arguments.

The denial of a motion for summary judgment is an interlocutory

judgment and is appealable only when expressly provided by law.

However, where there are cross-motions for summary judgment raising the

same issues, this court can review the denial of a summary judgment in

addressing the appeal of the granting of the cross-motion for summary

judgment. See Gray v. Am. Nat. Prop. & Cas. Co., 07-1670 (La. 2/26/08),

977 So. 2d 839; see also Waterworks Dist. No. 1 of Desoto Par. v. Louisiana

Dep't of Pub. Safety & Corr., 16-0744 (La. App. 1 Cir. 2/17/17), 214 So. 3d

1, writ denied, 17-0470 (La. 5/12/17), 219 So. 3d 1103. Furthermore, the

denial of supervisory writs does not bar a different conclusion or
11

reconsideration of the same issue argued in the writ application when an

appeal is taken from a final judgment. Levine v. First Nat. Bank of

Commerce, 06-394 (La.12/15/06), 948 So. 2d 1051.

When summary judgment is granted in the context of statutory

interpretation, there are no material issues of fact in dispute and the sole

issue before us is a question of law as to the correct interpretation of the

statute at issue. Milbert v. Answering Bureau, Inc., 13-0022 (La. 6/28/13),

120 So. 3d 678. Appellate courts review motions for summary judgment de

novo, using the same criteria that govern the trial court's consideration of

whether summary judgment is appropriate. Peironnet v. Matador Res. Co.,

12-2292 (La. 6/28/13), 144 So. 3d 791; Culberson v. Wells Fargo USA

Holdings, Inc., 54,545 (La. App. 2 Cir. 6/29/22), 342 So. 3d 451.

After an opportunity for adequate discovery, a motion for summary

judgment shall be granted if the motion, memorandum, and supporting

documents show that there is no genuine issue as to material fact and that the

mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(A)(3).

The procedure is favored and shall be construed to secure the just, speedy,

and inexpensive determination of actions. La. C.C.P. art. 966(A)(2).

The statutory and jurisprudential rules for statutory construction and

interpretation apply to ordinances. Par. of Caddo v. Durham, 35,557 (La.

App. 2 Cir. 5/8/02), 817 So. 2d 1173, writ denied, 02-1635 (La. 9/30/02),

825 So. 2d 1199. The starting point in the interpretation of any statute is the

language of the statute itself. City of Shreveport v. Shreveport Mun. Fire &

Police Civil Serv. Bd., 52,410 (La. App. 2 Cir. 1/16/19), 264 So. 3d 643.

Words and phrases shall be read with their context and shall be construed

according to the common and approved usage of the language; technical
12

words and phrases, and such others as may have acquired a peculiar and

appropriate meaning in the law, shall be construed and understood according

to such peculiar and appropriate meaning. La. R.S. 1:3. When a law is clear

and unambiguous and its application does not lead to absurd consequences,

the law shall be applied as written and no further interpretation may be made

in search of the intent of the legislature. La. C.C. art. 9.

When the wording of a section is clear and free of ambiguity, the

letter of it shall not be disregarded under the pretext of pursuing its spirit.

La. R.S. 1:4. When the language of the law is susceptible of different

meanings, it must be interpreted as having the meaning that best conforms to

the purpose of the law. La. C.C. art. 10. When the words of a law are

ambiguous, their meaning must be sought by examining the context in which

they occur and the text of the law as a whole. La. C.C. art. 12. Laws on the

same subject matter must be interpreted in reference to each other. La. C.C.

art. 13.

The Louisiana Supreme Court has stated, “[T]he plain meaning of

legislation should be conclusive, except in the ‘rare cases [in which] the

literal application of a statute will produce a result demonstrably at odds

with the intentions of its drafters’ [in which case] the intention of the

drafters, rather than the strict language controls.” State v. Benoit, 01-2712, p.

3 (La. 5/14/02), 817 So. 2d 11, 13, quoting United States v. Ron Pair Enters.

Inc., 489 U.S. 235, 242, 109 S. Ct. 1026, 103 L. Ed. 2d 290 (1989).

The following scholarship makes clear why strict statutory

construction may be inappropriate:

Considerations of text for statutory construction purposes must
conceptually distinguish “ambiguous” text from text that results
in an “absurd consequence” in application. The distinction is
13

important, as an “absurd consequence” may arise from the
literal application of text that is clear and unambiguous in
meaning and otherwise valid.

Questions of “ambiguity” generally seek the meaning of text in
order to determine its proper application or constitutional
validity. In contrast, questions of “absurd consequences” posit
a specific application of text arising from its literal language,
and ask whether the factual results of such application can be
recognized as so inappropriate (even if constitutionally valid) as
to be considered legally “absurd.” In situations where the
application of statutory or constitutional text is judicially
determined to create an “absurd consequence,” the literal
language of the law need not be followed (emphasis in
original).

20 P. Raymond Lamonica & Jerry G. Jones, La. Civ. L. Treatise § 7.4 (2ed.

2021).

The Ordinance reads:

Quantity charges for metered residential customers shall be
based on 100 percent of water consumption unless the
individual customer’s average monthly water usage is less for
the months of November, December, January and February,
calculated after the month with the highest metered water usage
and the month with the lowest metered usage have been
eliminated.

The Shreveport City Charter states in part, “It is the intent of this

Charter that the water and sewerage systems shall be operated together as a

single self-supporting business enterprise, hereinafter in this section referred

to as ‘the utility.’” Shreveport, La., Charter § 12.03 (1990). The City’s

charter goes on to state:

The council shall from time to time, upon the recommendation
of the mayor, fix the rates to be charged for water which need
not be uniform for all consumers but shall be the same for each
class of consumers, based upon the amount of water consumed
during the billing period.

Shreveport, La., Charter § 12.03(c) (1990).

The liability of the City regarding the days-months issue relies upon

the trial court’s interpretation of the words “monthly water usage” found in
14

the Ordinance. The term “monthly,” has the following definitions: (1)

occurring, appearing, or coming due once a month; (2) continuing or lasting

for a month; (3) once a month; and (4) every month. Webster’s II New

College Dict., 711 (2001). The term “monthly” does not refer to the specific

days contained within a calendar month.

The City’s charter and ordinances make it clear that water and

sewerage utilities are meant to be considered as one “enterprise.” Sewerage

charges are dependent upon water meter readings. Therefore, the sewerage

billing system is dependent upon the water billing system, which is not

billed on a calendar month basis, but uses monthly billing periods. The

City’s water and sewer bills are distributed to its customers together on a

single bill.

To interpret the Ordinance to mean that only the water used in the

calendar months of November, December, January, and February must be

used in calculating the AWC is illogical given that the residential water

meters in Shreveport are read manually. When the Shreveport City Council

passed the Ordinance, they did so with the understanding that the City’s

water meters were, and continue to be, read by a person who follows a route,

going residence by residence to read water meters. To expect all manually

read water meters in the City, consisting of tens of thousands of residences,

to be read on the last day of every month is impossible given the system for

reading water meters that the City has in place. When a law is clear and

unambiguous and its application does not lead to absurd consequences, then

it is interpreted as written. To so strictly construe the Ordinance as the trial

court did here leads to such absurd consequences. Therefore, the trial

court’s rulings are reversed.
15

CONCLUSION

Accordingly, the judgment granting partial summary judgment in

favor of appellees on the days-months issue is reversed. The judgment

denying appellant’s motion for summary judgment on the days-months issue

is reversed. Based on the aforementioned, the rulings on damages and

judicial interest for the days-months issue are also reversed, and the case is

remanded for further proceedings. Costs are assessed to appellees.

REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.

16