Hamilton County 911 fee lawsuit adds allegations

Hamilton County 911 fee lawsuit adds allegations

January 22nd, 2012 by Todd South in News

Lawyers for Hamilton County 911 have added new allegations and another county to a federal lawsuit against AT&T/BellSouth that seeks a decade's worth of unpaid fees.

The fees could total between $4.5 million and $9 million for Hamilton County 911. If the court were to award the fees under a legal request known as "treble damages," the amount could triple to between $13.5 million and $27 million.

Both sides in the lawsuit met Friday to set a trial date. The date had not been posted in court records as of Friday evening.

A planning report filed Thursday by Hamilton County 911 attorney Frederick Hitchcock estimated that attorneys would be ready for a trial by September 2013.

Tom Greenholtz, one of four attorneys representing Hamilton County 911, said Friday that he could not comment on the case.

Cathy Lewandowski, the AT&T/BellSouth spokeswoman in Nashville, said the company representatives "do not comment on active litigation matters."

The original lawsuit, filed in November, alleges that, from at least 2001 until 2011, BellSouth neglected to pay fees to Hamilton County 911 that are required by state law.

An amended complaint filed against BellSouth on Jan. 1 claims the company also used a second method to underpay 911 fees.

Under Tennessee law, telephone companies are supposed to charge subscribers the fee then pay, or remit, the money to 911 districts. The remittance fee ranges from $1.50 for each residential line to $3 for each business line.

The lawsuit claims BellSouth didn't collect the fee or collected a reduced fee in order to undercut competitors' prices.

In court papers, Hamilton 911 lawyers point to at least one month's bill which shows BellSouth charged the county for 90,000 lines, but the same 230-page bill also shows the company paid for 64,636 lines in remittance fees.

If other bills between BellSouth and Hamilton 911 show similar patterns, the company may have underpaid by as many as 25,000 lines each month over the 10-year period. Under that scenario, between $4.5 million and $9 million was underpaid, based on representations in court documents.

Hamilton 911 lawyers also say that, by providing false billing statements, AT&T/Bellsouth violated the Tennessee False Claims Act, a violation that could bring up to $10,000 in civil penalties for each false report, or $1.33 million for the 10-year period.

Earlier this month, attorneys for Hamilton County 911 filed another lawsuit on behalf of Bradley County 911, which they also represent.

The Bradley County lawsuit alleges the same underpayment of fees and undercounting lines for remittance fees. The monthly bill cited in court documents states that BellSouth charged Bradley for 26,000 lines of service but remitted fees on only 20,806 lines.

Using the same per-line fee estimate for a 10-year period translates to between $936,000 and $1.87 million potentially owed to Bradley County by BellSouth.

In both the Hamilton and Bradley filings, attorneys for the 911 districts have requested "treble damages," which are allowed under the false claims act. Treble damages are meant "to punish the wrongdoer in addition to compensating the injured party," according to Barron's Dictionary of Legal Terms.

The law firm of Chambliss, Bahner and Stophel represents both Hamilton and Bradley County 911 districts.