Bradley, BellSouth lawsuit headed for trial


Posted 3/1/18

A lawsuit involving Bradley County and BellSouth – and how the company figured 911 fees distributed to emergency communications centers – is slated to go to trial in May.

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Bradley, BellSouth lawsuit headed for trial


A lawsuit involving Bradley County and BellSouth — and how the company figured 911 fees distributed to emergency communications centers — is slated to go to trial in May.

The case began in 2011 when several communications districts sued BellSouth to recover tens of millions of dollars in 911 charges they believed should have been billed, collected and remitted.

Michael Mann, the attorney representing the Bradley County Emergency Communications District, met in closed session with the 911 Board of Directors during its meeting Wednesday morning. Afterward, he said the company has requested to “participate in mediation” in the next few weeks.

During that closed session, Mann said the 911 Board approved giving Chairman Troy Spence the authority to accept or reject any settlement offer, in the event such an offer is made.

Mann said the district has been in litigation with BellSouth since November 2011, and the trial is scheduled for this May.

In March 2017, the Sixth Circuit Court of Appeals ruled to reverse the district court's judgments and remanded the case to the federal court "for further proceedings consistent with this opinion."

The court ruled, in an appellate review of a summary judgment, that BellSouth (doing business as AT&T) "did not include all of the lines that should have been billed" when figuring the 911 fees to be distributed to the local agencies.

The Bradley County Emergency Communications District joined Blount, Bedford, Coffee, Roane, Franklin, Giles, Cheatham and Knox counties in the suit concerning the 911 fees.

The districts alleged the phone company "engaged in a covert practice of omitting fees mandated by Tennessee statute" and sought compensation under that statute.

Also alleged was that, while concealing this practice, the company violated the Tennessee False Claims Act.

BellSouth moved to dismiss the first claim, arguing the statute contained "no implied right of action" – and the district court agreed.

The company then moved for summary judgment on the second claim, arguing that "its statements were not knowingly false."

The court agreed with BellSouth again, thereby ending the action.

However when the districts appealed, the appellate court found the district court "erred in both the dismissal and the summary judgment."

In March 2017, the appellate court found that the 911 Law "commands BellSouth to bill, collect and remit the 911 charges and it bestows that money on the districts."

"This scheme which makes the districts so inescapably dependent on BellSouth, also makes the districts an intended beneficiary of BellSouth's obligations," the opinion read.

The appellate court also concluded the 911 Law "implies" a private right of action by the districts against a service supplier such as BellSouth "to effectuate its requirements and serve its purposes."

The opinion also disagreed with the district court's view of the relationships between the local agencies and BellSouth.

"These two parties were not engaged in an autonomous or reciprocal relationship; they were 'captive' co-participants in the 911 program under the 911 Law. Each acted independently under express statutory mandate," the opinion states.

"The only 'relationship' was that dictated by the 911 Law, which empowered the districts to seek funding from BellSouth and ordered BellSouth to provide it. There was no negotiation between them, no contract, no business transaction, and no reciprocation. The districts could not fire BellSouth and hire someone else to collect the 911 charge, or collect the 911 charge themselves. BellSouth could not demand better compensation, petition the districts for better terms or conditions, or even quit."

The appellate court found BellSouth's reports "did not identify any of the lines that BellSouth had chosen not to bill based on its statutory interpretation."

The ruling also accepted the inference that the purpose of BellSouth representing that its reports "contained a listing of every telephone line in that county subject to 911 charges under the 911 Law" was to "mislead the districts into believing that BellSouth was billing all the lines (or at least to pacify the districts and avoid any such questions), so as to conceal that it was not billing some lines and not collecting all the charges it should have."

"We agree with the districts that, at least for the purpose of surviving summary judgment, they have alleged and supported an actionable misrepresentation by BellSouth," the appellate court opined.


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