$92.5 Million Settlement for Overcharged LA Taxpayers

Wolf Haldenstein recovers over $92.5 million for overcharged taxpayers while also setting precedent

Wolf Haldenstein recouped in a class action law suit over $92.5 million for families, small businesses and individuals in the City of Los Angeles community who were improperly taxed for over two and a half years. While serving as co-counsel on behalf of a City of Los Angeles resident in the matter of Ardon v. City of Los Angeles, Case No. BC363959, the Firm pressed claims in state court that the City of Los Angeles was improperly collecting Telephone Users’ Tax (TUT)  on long distance and bundled telephone services, and successfully argued before the California Supreme Court that taxpayers have the right to file a class action lawsuit seeking refunds when local governments inappropriately collect taxes.

Eligible families, businesses and individuals that were improperly taxed, were able to recover for taxes improperly collected on their residential landline, business landline and mobile telephone services.

As co-counsel, Wolf Haldenstein not only successfully secured a $92.5 million settlement against the City of Los Angeles but also obtained a landmark decision that established the right of California taxpayers to file a claim for tax refunds from governmental entities on behalf of a class in the absence of a specific statute prohibiting it.  Commentators at the time termed the California Supreme Court’s decision a “fundamental shift in court precedent” in the generally accepted understanding of the law that class claims against governmental entities were not permissible.  See a copy of the Settlement Agreement.

On October 25, 2016, Judge Lisa Hart Cole of the Los Angeles Superior Court issued an Order granting final approval of the $92.5 million settlement with the City of Los Angeles in a class action arising from claims that the City had improperly collected its 10% telephone utility users tax during a Class Period extending from October 19, 2005 through March 15, 2008. Judgment was entered on December 8, 2016.  See Order Granting Final Approval.

In the final Settlement Order, Judge Cole commended the skill displayed by counsel and the results achieved on behalf of taxpayers.  For information about this matter please contact Rachele Byrd.

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