The Guam Waterworks Authority has dropped the civil lawsuit against Badger Meter, Inc filed in local court and is pursuing the matter on the federal level.
GWA provided notice of the removal of the action against Badger Meter and its insurers in the Superior Court of Guam conveying to the District Court of Guam that jurisdiction over the matter falls under the federal court.
The utility claims that a breach of contract occurred related to the professional services provided by Badger Meter, which violates the Deceptive Trade Practices Act. GWA is seeking $18 million in damages.
The action arises out of a contract between GWA and Badger Meter under which GWA purchased LP water meters, registers and endpoints from Badger Meter.
Court documents state that from 2008-2010, GWA experienced severe system-wide failure of its existing residential water meters and in 2011, GWA management made the decision to do a total meter replacement. That meant purchasing 37,474 LP meters between 2012 and 2014.
Badger Meter was awarded the contract under the representations of being the expert in suitable water meters which would properly function in Guam’s environment, avoiding loss of revenue to GWA.
However, this was not the case. The LP meters sold to GWA failed at alarming rates, GWA says in 2017, a report showed 1500 LP meter failures in one month.
GWA also reported an $8 million loss in revenue the previous fiscal year.
GWA claims Badger sold and delivered faulty LP meters and is in breach of contract to provide working and accurate meters. Further breaching the contract by not replacing the defective LP meters as agreed.
The failure has racked up $3.9 million in costs for replacement meters, $2.4 million in labor costs, $12 million in lost income and $18,900 in costs for expert and testing services.