Georgia counties file lawsuits against telephone service providers over millions in unpaid 911 charges

By Jessica Karmasek | Jan 6, 2016

ATLANTA (Legal Newsline) - Two of the largest counties in Georgia recently filed a string of lawsuits in federal court against various telephone service providers, seeking to recover millions in 911 charges that they allege have gone unpaid.

Cobb County filed eight separate lawsuits in the U.S. District Court for the Northern District of Georgia, Atlanta Division, Dec. 16. Gwinnett County joined in filing seven of the suits, also claiming unpaid charges.

The lawsuits seek to recover more than $50 million for three years of alleged unpaid fees.

One of the suits, filed against Earthlink LLC, has since been voluntarily dismissed and terminated, according to court records. Amended complaints have been filed in two of the cases, one against Network Telephone LLC and CBeyond Communications LLC.

Under Georgia law, funding for Emergency 911 Systems comes from assessing a charge on exchange access lines and lines that allow for voice over Internet protocol, or VoIP, telephone service.

“Plaintiffs rely on 911 charges to provide their emergency, often life-saving, services,” Cobb County wrote in a Dec. 28 amended complaint.

The county argues that state law -- the “E911 Statute” -- requires telephone service suppliers, such as the defendants, to bill, collect, report and remit 911 charges for every telephone subscriber, excluding those persons or entities otherwise exempt from taxation.

“Defendants, and/or persons or entities acting on their behalf during the relevant periods, have failed to bill, collect, report and remit 911 charges in accordance with the law,” the county alleges.

In particular, suppliers are required to bill, collect, report and remit to the local governments operating Emergency 911 systems 911 charges of up to $1.50 per month for every exchange access line, channel or pathway.

Under state law, such receipts, less a 3-percent administrative fee, are to be remitted to the local governing authority each quarter.

The plaintiffs contend the suppliers’ under-billing, under-collecting and underpayment was “purposeful.”

“By not billing and collecting all the required 911 charges, Defendants are able to provide telecommunication services at prices that are cheaper than their competitors, particularly to business customers, and, thereby, gain a competitive advantage,” Cobb County wrote in a complaint.

“The above-described practices deprive Plaintiffs’ Emergency 911 Systems of critical financial resources.”

The counties are seeking: a record of the defendants’ accounts; judgment entered against the defendants, including damages; a declaration that the suppliers are obligated to bill, collect and turn over the 911 charges under state law; an order enjoining the suppliers from failing to fully and truthfully bill, collect and remit the 911 charges; and costs, including attorneys’ fees.

The counties have hired private attorneys to represent them in the matter, including the Barnes Law Group in Marietta and Harris Penn Lowry LLP in Atlanta.

According to a copy of the firms’ engagement letter with the counties -- as provided by the Cobb County Attorney’s Office through an open records request -- the firms are entitled to a 35 percent contingency fee.

“If no Fee Deficiency Proceeds are recovered, the County shall not be indebted to the Firms for any attorneys’ fees whatsoever,” the letter states.

When contacted about the lawsuits, Cobb County refused to comment, saying it “does not comment on pending legal cases.”

“These suits are necessary because the telephone service providers have a statutory and fiduciary responsibility under Georgia law to properly bill, collect and remit 911 fees,” Roy E. Barnes, counsel for the counties, said in a statement.

“We believe, based on the evidence we have received, that responsibility has not been met. These monies need to be paid for the benefit of the counties’ 911 systems.”

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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Barnes Law Group Cobb County Harris Penn Lowry LLP

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