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L.A. Sues Price Waterhouse for Millions

LOS ANGELES (CN) - Los Angeles sued Price Waterhouse Coopers on Friday, claiming it fraudulently misrepresented its ability to set up a new $70 million water-billing system, costing the city hundreds of millions of dollars.

City Attorney Mike Feuer said in a statement that Price Waterhouse's botched system made the L.A. Department of Water and Power unable to bill 180,000 customers, many of them for a year and a half, costing the city millions of dollars a month.

Feuer said that Price Waterhouse misled the city in responding to a 2009 request for proposals to modernize the water department's nearly 40-year-old billing system.

Price Waterhouse claimed, falsely, that it had a "100% success rate" in implementing the new billing system, "falsely touting the success of similar work performed for the Cleveland Water Department," Feuer said in the statement. He added: "In fact, Price Waterhouse's failure at Cleveland Water caused the company to incur severe financial losses as a result of improper billing of customers."

The city attorney said that the economic damage was exacerbated by the city's needing to hire other tech companies and consultants to do the work Price Waterhouse was paid to do, but failed to perform.

PwC's outside counsel, Daniel J. Thomasch, with Gibson, Dunn & Crutcher, called the lawsuit "a transparent attempt by LADWP to shift blame away from the Department for its self-inflicted billing problems. The facts make clear that the announced litigation is meritless: LADWP acknowledged in writing last year that PwC fulfilled each one of its contractual obligations and paid PwC in full."

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