West County communities face off against AT&T in class action suit

Another round of a major class action lawsuit is under way – a legal tussle that could cost West County communities and a total of 263 Missouri cities an estimated $14 million if they lose.

At issue is money the cities collected from a tax charged to customers by AT&T’s wireless unit on data plans for the users’ cell phones and other devices. The Missouri cities received proceeds from that tax and the customers want it back, claiming the levy should not have been assessed due to a federal law that prohibits most taxes on Internet access until late in 2014.

The Missouri-related aspects of the case are only part of a massive lawsuit that began with the filing of similar complaints in more than two dozen states and Puerto Rico some four years ago. All but one of those legal actions were combined in a federal class action lawsuit assigned to the eastern division of the U.S. district court of Northern Illinois.

And while the dollar amount in Missouri is substantial, the aggregate in all the states has been estimated in court documents at “hundreds of millions.”

Settlement of the original battle resulted in a demand from the communication giant that the cities return the tax revenues AT&T had collected and distributed to them. The cities have balked at the command, resulting in the latest lawsuit filed on behalf of AT&T customers in January.

The issue was discussed at the Ballwin Board of Aldermen’s March 11 meeting as part of a proposal that was approved to join with other members of the St. Louis County Municipal League in hiring the law firm of Curtis Heinz Garrett & O’Keefe (CHG) in Clayton to represent them in the lawsuit.

According to a Municipal League spokesman, the law firm will work with attorneys representing other communities around the state in coordinating the cities’ defense.

Robert Jones, Ballwin’s city attorney who is part of the CHG firm, said the amount the lawsuit is seeking from Ballwin is nearly $144,000.

While Ballwin has insurance providing coverage for various liability issues, a claim filed by the city for the amount AT&T has demanded was denied, Jones said.

Spearheading the legal actions against AT&T is the Kansas City-based law firm of Bartimus Frickleton Robertson & Gorny.