Battle between Tennessee 911 districts and telephone companies over millions of dollars set for trial

FILE - In this Oct. 17, 2012, photo, an AT&T logo is displayed on an AT&T Wireless retail store front, in Philadelphia. U.S. regulators are calling out AT&T and Verizon for exempting their own video apps from data caps on customers’ cellphones. The Federal Communications Commission sent letters to the country’s biggest wireless carriers Thursday, Dec. 1, 2016, saying the way they handle the practice, known as “zero rating,” can hurt competition and consumers. The agency had warned AT&T in November and said Friday, Dec. 2 that AT&T’s response did not ease its concerns. (AP Photo/Matt Rourke, File)

A legal claim that telephone companies shortchanged Hamilton County 911 and nine other Tennessee communities of millions of dollars in fees they collected from consumers is now scheduled for trial in 2019.

Apart from the date, attorneys had little else to agree on during a status hearing Thursday in Chattanooga's U.S. District Court.

"I'm not suggesting bad faith, your honor, but the strategy is to delay," said attorney Rick Hitchcock, who has represented Hamilton County 911 since 2011. Hitchcock wants AT&T, BellSouth and other companies to turn over decades of billing information so he can prove the telecom giants knew they were pocketing fees in violation of a 911 law.

"The simple calculation is, how many lines were in service and how many 911 charges did they collect to distribute?" Hitchcock asked. "It's A minus B. And if it equals zero, then they have nothing to worry about. But it doesn't."

But company attorneys rejected that equation, pointing to the enormous amount of data.

"We're talking about hundreds of thousands of bills in more than a dozen counties going back to 1984," said attorney Misty Kelly. "We would have to identify what historical records exist for several companies."

The sparring went on.

Hitchcock wanted one deposition for each potential witness to avoid repeat questions under oath. Corporate attorneys countered that each company has unique legal strategies. Hitchcock wanted to be able to request evidence sooner to keep the case moving. Company attorneys countered they preferred not to exchange anything until U.S. District Court Judge Curtis Collier ruled on a new motion to dismiss, which he plans to do within 90 days.

By the end of the hearing, Collier had a scheduling order in place that gives the telephone company attorneys another 22 months to exchange evidence related to billing, liability, and potential damages. Everyone agreed on a Nov. 4, 2019, trial date.

The 911 fees at the center of the argument are included on customer phone bills. Citizens help fund 911 centers by paying a minor surcharge added to their residential and business line bills. Phone companies are then supposed to collect that fee and give the money to 911 districts.

Collier ruled in January 2016 that AT&T was not liable to pay the 911 districts. And in a 55-page opinion, he pointed out that any undercharges should have been corrected by audits reviewed by the Tennessee Regulatory Authority.

"None of the plaintiff districts ever sought to exercise its audit right under the 911 law," Collier said at the time.

Earlier this year, however, U.S. Court of Appeals for the Sixth Circuit reversed Collier's decision and sent the case back to Chattanooga. "Districts' funding is utterly dependent on BellSouth's proper billing, collecting and remitting of the 911 Charges," the ruling said. "Therefore, the Districts' very existence depends upon BellSouth's proper compliance with the 911 Law."

Since 2011, court records show, Hitchcock and his legal team have gone after multiple different telephone companies, including CenturyLink Communications, Deltacom LLC, Windstream Nuvox Inc. and Level 3 Communications.

And they're not alone.

Madison, County, Ala.'s, 911 district settled with BellSouth for an undisclosed amount in 2009, news archives show. In 2011, the Davidson County 911 district settled for $1 million. In 2015, Delaware County, Penn., accused 19 agencies of violating state law by failing to collect and return $41 million in 911 call fees, news accounts show. And this year alone, districts in Alabama and Georgia filed suits, too.

Contact staff writer Zack Peterson at or 423-757-6347. Follow him on Twitter @zackpeterson918.