City of San Diego $40 Million Water Rate Settlement, Check If You Qualify — Patz v. City of San Diego, No. 37-2015-00023413-CU-MC-CTL

There’s up to $40 million set aside for San Diego water customers — if you had single-family residential service between August 14, 2014, and December 1, 2023. The City of San Diego agreed to pay after courts ruled its tiered water rates broke the state constitution. The claims site just went live and is still under construction, so here’s everything confirmed so far.

City of San Diego Water Rate Settlement — Key Facts

Settlement Amount	Up to $40 million
Claim Deadline	UNVERIFIED — official notice not yet published; settlement website (sdwatersettlement.com) is under construction as of this writing
Who Qualifies	Single-family residential water customers of the City of San Diego, Aug. 14, 2014 – Dec. 1, 2023 (owners and tenants who paid the bill)
Estimated Payout	UNVERIFIED — depends on individual usage history and total valid claims; no per-person figure has been published in a source we can confirm
Proof Required (Yes/No)	UNVERIFIED — pending official claim form
Settlement Status	Reached; awaiting court approval
Court & Case Number	San Diego Superior Court, No. 37-2015-00023413-CU-MC-CTL
Law Alleged	California Constitution, Article XIII D, Section 6(b)(3) (Proposition 218)
Administrator	CPT Group, Inc.
Official Claim Site	sdwatersettlement.com (under construction)
Last Updated	September 2, 2026

Who Is the City of San Diego and Why Was It Sued Over Water Rates?

The City of San Diego’s Public Utilities Department supplies water to roughly 1.4 million people, and for single-family homes, it charged more per gallon the more a household used. That’s a tiered rate. Proposition 218 says a government can’t charge a property more than its actual share of the cost of service — and a San Diego court found the city never proved its tiers matched that cost.

What Happened Between 2014 and 2023?

Homeowners Daniel Patz and Joan Mann Chesner sued in 2015, arguing the city’s tiered rates overcharged single-family customers to subsidize water delivered to everyone else. In September 2021, the trial court agreed, ruling the city “failed to demonstrate by substantial evidence that the tiered water rates imposed by its 2013 and 2015 ratemakings are proportional to the cost of service attributable to each customer’s parcel.” The court ordered a refund of roughly $79 million.

The city appealed — and while that appeal was pending, its lawyers helped write Senate Bill 1072, a law that changed how Proposition 218 refund remedies work statewide. It took effect January 1, 2025. On July 30, 2025, California’s Fourth District Court of Appeal affirmed the $79 million judgment on liability — but sent the case back to the trial court to decide whether the new law could shrink or eliminate that refund.

That’s the part most coverage of this case skips. The city didn’t win on the law. It changed the law while the case was still open, then used the new version to negotiate the refund down. What started as a $79 million court judgment became a $40 million settlement — roughly half — after that legislative maneuver played out.

Are You Part of the City of San Diego Water Rate Settlement?

Here’s exactly how to know if this case includes you.

• Homeowners who paid a City of San Diego water bill for single-family residential service between Aug. 14, 2014, and Dec. 1, 2023
• Tenants who were personally responsible for paying the water bill during that period, even if they didn’t own the property
• Anyone who has since moved but held a qualifying account during the class period
• Both current and former customers, as long as service fell inside the class dates

This settlement does not cover commercial, multi-family, or wholesale water customers — the case was built specifically around single-family residential tiered rates. It also doesn’t cover Otay Water District customers, who have a separate, related settlement moving through a different court.

San Diego Water Customers Outside the City — Are You Still Covered?

No. This settlement is specific to the City of San Diego’s Public Utilities Department. If your water comes from Otay Water District, Helix Water District, or another regional provider, this case doesn’t apply to your account — check with your own provider or the Otay case separately.

Not sure if your account qualifies? A consumer fraud attorney can review your water billing history against the class definition before the claims process opens.

How Much Can You Get From the San Diego Water Settlement?

The total fund is up to $40 million, but nobody has an official per-person number yet, because the notice describing exactly how refunds get calculated hasn’t been published. What we do know: the more valid claims that come in, the smaller each individual refund gets — that’s how a shared settlement fund always works. Payments over $600 may be reported on a 1099. Check with a tax professional before you count on the full amount.

The honest note here: $40 million sounds like a lot until you remember it’s split among hundreds of thousands of accounts across nine years of billing. Don’t assume a specific dollar figure until the administrator publishes one.

What Should San Diego Water Customers Do Right Now?

1. Confirm you had single-family residential water service from the City of San Diego between Aug. 14, 2014, and Dec. 1, 2023
2. Save old water bills or account records from that period if you still have them
3. Watch sdwatersettlement.com — it’s live but still under construction, meaning claim details haven’t posted yet
4. If you received a notice by mail with an ID and passcode, keep it — you’ll likely need it once the claims portal opens
5. Contact the settlement administrator directly with questions: CPT Group, Inc., 1-888-903-0334, SDWaterSettlement@cptgroup.com
6. Don’t pay anyone who contacts you claiming they can “guarantee” or speed up your payout — legitimate settlement administrators don’t charge upfront fees

City of San Diego Water Settlement — Frequently Asked Questions, No. 37-2015-00023413-CU-MC-CTL

Do I need to file a claim to get money from the San Diego water settlement?

 That isn’t confirmed yet. The official claims site is still under construction, so we can’t verify whether this will be an automatic-refund settlement or one that requires a claim form. Check sdwatersettlement.com directly before relying on any other source for this detail.

Why did the San Diego water settlement drop from $79 million to $40 million?

 A trial court ordered a $79 million refund in 2021, upheld on appeal in 2025. But San Diego’s lawyers helped draft Senate Bill 1072, a state law that changed Proposition 218 refund rules after the judgment but before it was paid. The case went back to the trial court to sort out how the new law applied, and the parties settled at roughly half the original judgment.

Is the City of San Diego admitting it broke the law?

 No. The city has denied wrongdoing throughout the case and agreed to settle to avoid further litigation costs, even after losing on liability in both the trial court and the Court of Appeal.

Is this the same as the Otay Water District lawsuit? 

No. Otay Water District customers have a separate, related Proposition 218 case moving through its own settlement process. If you’re an Otay customer, this settlement does not cover you.

When will the court decide whether to approve the $40 million settlement? 

Not yet confirmed from a source we can verify. Check the settlement website or contact CPT Group directly for the current hearing schedule.

What law does this case say San Diego violated? 

Article XIII D, Section 6(b)(3) of the California Constitution — the part of Proposition 218 that requires property-related fees, including water rates, to match the actual cost of providing that service to each parcel.

Sources Used in This San Diego Water Settlement Article

• Settlement Administrator Site — CPT Group, Inc., Patz v. City of San Diego: https://www.sdwatersettlement.com/
• California Fourth District Court of Appeal — Patz v. City of San Diego, No. E083543M, July 30, 2025: https://courts.ca.gov/opinion/published-extended-post/2025-08-27/e083543m
• Class Counsel — Gibbs Mura, A Law Group, “Water Otay District and City of San Diego Tiered Water Rates Class Action Lawsuits”: https://www.classlawgroup.com/water-otay-district-and-city-of-san-diego-tiered-water-rates-class-action-lawsuits
• California State Assembly — Legislative analysis of Senate Bill 1072: https://alcl.assembly.ca.gov/media/2322

Researched and written by Israr Ahmad, legal content researcher and founder of AllAboutLawyer.com. All facts verified against the settlement administrator’s website, the California Fourth District Court of Appeal’s published opinion, and class counsel’s official case page, as of September 2, 2026. Last Updated: September 2, 2026.

This article is for informational purposes only and does not constitute legal advice. Laws vary by state and individual circumstances differ. For advice about your specific situation, consult a qualified attorney.