$4 Million Water Bill Shock: NJ Town Alleges Utility Giant Veolia Overcharged Them for Years with Defective Meters
the staff of the Ridgewood blog
Saddle River NJ, the Core of the Dispute: $4 Million in Alleged Overcharges. The wealthy New Jersey municipality of Saddle River has dropped a legal bombshell, filing a lawsuit that accuses major utilities management company Veolia (formerly known as Suez Water NJ) of systematically overcharging the borough by a staggering $4 million. The core of the allegation? Years of using defective water meters that supposedly inflated the town’s water usage figures.
The suit, filed on October 1st in state Superior Court against Veolia New Jersey Inc., Veolia Environment, and Veolia North America, contends that the company knowingly used the faulty meters to drastically misrepresent the amount of water flowing through the pipes.
Inflated Usage & Contract Amendments
According to the lawsuit, Veolia’s readings indicated that Saddle River was using up to three times the amount of water the municipality’s utility was actually consuming. The suit outlines two specific ways the meters allegedly failed:
- Measuring more water than what actually came through the pipes.
- Charging Saddle River for water supplied to two other municipalities that passed through the borough’s infrastructure.
Saddle River asserts that these inflated usage numbers led the borough to agree to several costly amendments to its wholesale water agreement, beginning in 2010. The town claims it relied on this “faulty information” when it agreed to major increases in the minimum amount of water the borough was required to purchase monthly—a move officials claim was detrimental to the borough and a clear benefit to Veolia.
For instance, the minimum required purchase was allegedly increased by four times the original agreement following the first amendment. While later amendments lowered the minimum, the lawsuit claims even these subsequent changes were based on those same “faulty numbers.”
How the Alleged Fraud Was Discovered
The alleged overcharging continued for approximately 15 years, according to the suit, with the borough remaining unaware of the discrepancies. The truth reportedly surfaced only around 2023 when Saddle River began considering the sale of its water system.
To conduct due diligence, the municipality compared the cumulative readings from individual residential and commercial meters against the bulk purchase readings supplied by Veolia. The comparison revealed a major gap, leading Saddle River to request the immediate replacement of all the main bulk-purchase meters owned and maintained by the company.
The lawsuit alleges that Veolia’s “exclusive control over the relevant portions of the borough’s water system” prevented the town from discovering the alleged “fraudulent misrepresentations” and contract breaches sooner.
Veolia’s Response: Lawsuit Unfortunate
Veolia, which provides water to Saddle River via several North Jersey reservoirs through the Saddle River Water Utility, has responded to the filing.
Adam Lisberg, a spokesperson for Veolia, stated that officials have not yet been served the suit and could not comment on specifics. However, he confirmed the company has been discussing the issue with the borough for years and a mediation session is already scheduled for later this month.
“It is unfortunate that the borough chose to pursue a lawsuit that will add cost, complexity and delay to resolving this dispute,” Lisberg said. He added that regardless of the resolution, Veolia will continue to supply the town with high-quality, regulatory-compliant water.
The Legal Charges
Saddle River is not just seeking to recoup the $4 million. The lawsuit is leveled with serious allegations against the utility giant, including:
- Breach of Contract
- Violation of the Covenant of Good Faith and Fair Dealing
- Unjust Enrichment
- Fraud
- Conspiracy
The lawsuit paints a picture of a municipality being intentionally misled and forced into financial agreements based on fabricated usage data. While Veolia prepares for mediation, the public awaits a legal battle that could have significant implications for how municipalities nationwide monitor and rely on data from their utilities management partners.
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Since 2010 Saddle River never reconciled amount of water purchased from Veolia against what they were billing customers?
Who was running the clown show?