The Georgia Supreme Court has ruled against Cobb and Gwinnett counties in their legal appeal to collect millions in 911 fees they claim telephone companies didn’t charge to their customers.
The court on Monday dismissed claims made by Cobb and Gwinnett counties that several telephone companies were not collecting fees levied by local governments to pay for 911 services. Monday’s ruling reverses a Georgia Court of Appeals decision, and sends the case back to the trial court to dismiss the counties’ claims of damages.
The court ruled the 911 fee is actually a tax and is therefore not something counties can sue to collect.
David Worley, an attorney on the team representing Cobb and Gwinnett counties, said the court’s decision comes down on the side of “special interests.”
“The Court is saying that a fee that no one, including the General Assembly, ever thought was a tax is now a tax so it can’t be collected because the General Assembly didn’t put it in the tax code,” he said in a statement. “As a result of this Court-ordained catch-22, Georgia 911 systems (statewide) are losing $100 million a year that is badly needed to upgrade 911.”
This case dates back to 2015 when the two counties filed a suit seeking more than $38 million in damages alleging several telecommunications companies “purposely did not bill certain kinds of customers enough 911 charges” under the 911 Act established in 1977. State law allows governments to collect fees to cover 911 services, deduct the cost of administration and pass the remainder of the fee collected to local governments.
The phone companies filed to dismiss the charges, arguing that monies collected are a form of taxes and counties don’t have the authority to sue to collect those taxes.
A Gwinnett County Superior Court dismissed the companies’ claims and ruled in favor of the counties. However, the telephone companies appealed the decision, and the Georgia Court of Appeals said that the 911 Act doesn’t allow counties to use lawsuits to collect back fees.
However, the Court of Appeals also said the counties can go after the telephone companies under existing Georgia laws.
In its ruling, the state Supreme Court agreed with the telephone companies, and ruled that since the revenue collected is a tax, the 911 Act doesn’t give counties the right to collect those funds. Only the state Legislature can determine how much in taxes are owed and the process of collecting those taxes, the court said.
Worley told The Atlanta Journal-Constitution that the original suit filed in 2015 sought $38.9 million dating back about three years. As of today, he estimated that figure has swelled to about $80 million in uncollected revenue for Cobb and Gwinnett.
When the suit began, 15 lawsuits were filed in U.S. District Court in Atlanta and in the Superior Courts of Fulton and Gwinnett counties. Some of the companies the counties sought payment from include AT&T Georgia, Verizon, Earthlink and Windstream Communications, just to name a few.
Since the court’s ruling pertained to a state law, Worley said the case could not be appealed further. For now, Worley said the Georgia Supreme Court’s ruling “has the final word” in this case.
“At this point we are examining the decision and trying to figure out what our options would be,” he added.
Frank Lowrey, an attorney with Bondurant Mixon & Elmore, the firm representing some of the defendants in the case, issued a statement commending the court’s ruling. The companies his law firm represents, Lowrey said, have always followed state law when it comes to collecting 911 taxes, and they should not have been named a party to the suit.
Lowrey’s firm represents EarthLink, Inc.; EarthLink, LLC; Deltacom, LLC; and Business Telecom, LLC
“Further, our clients are pleased with the unanimous ruling of the Georgia Supreme Court, which should put an end to this unauthorized and meritless litigation,” he said.
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