Class Certification Obtained in Unlawful Taxation Case

San Diego – May 25, 2017- Wolf Haldenstein Adler Freeman & Herz LLP (“Wolf Haldenstein”) is pleased to announce a successful milestone in the Firm’s Unlawful Taxation practice area concerning telephone user taxes assessed against residents and businesses in the County of Los Angeles.

On May 23, 2017, California Superior Court Judge Maren E. Nelson granted an order certifying a class in Granados v. County of Los Angeles, Case No. BC361470, which concerns the County of Los Angeles’ improper assessment and collection of the Los Angeles County Telephone Utility Users’ Tax (TUUT) between August 25, 2005 and November 4, 2008 (the Class Period).  In the Complaint against the County of Los Angeles, Plaintiff sought declaratory and injunctive relief preventing further improper collection of the TUUT, and alleged unjust enrichment, violations of the due process clause of the Fifth and Fourteenth Amendments to the United States Constitution, and a claim for Writ of Mandamus.

Members of the certified class include businesses and individuals who paid TUUT to the County of Los Angeles on telephone service during the Class Period and have not received a refund.  The County imposed a 5% tax on amounts paid for interstate, intrastate, and international calls, teletypewriter exchange services, and cellular telephone services used by class members located within unincorporated areas in the County.  According to the then-operative County of Los Angeles TUUT ordinance, telephone services that that were not taxable under the Federal Excise Tax (FET) were also not taxable under the TUUT.  The Complaint contends that the County ignored this limitation and collected tax on telephone services not taxable under either the FET or its own ordinance.

Wolf Haldenstein partner Rachele Byrd, one of the attorneys representing Plaintiff and the class, said, “The Court’s decision will now allow those businesses and individuals who for years were improperly overtaxed to move closer to recovering long-overdue refunds. Wolf Haldenstein is thankful for the Court’s ruling so that all eligible class members will receive their day in court.”

In a related unlawful taxation class action, Wolf Haldenstein recouped over $92.5 million for businesses and individuals in the City of Los Angeles 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 TUUT on long distance and bundled telephone services, and successfully argued before the California Supreme Court that taxpayers had the right to file a class claim under the Government Claims Act, in the absence of a statute prohibiting it, and then file a lawsuit seeking refunds when local governments inappropriately collect taxes.  Commentators at the time called the California Supreme Court’s decision a “fundamental shift in court precedent” concerning the viability of class claims against governmental entities.

Founded in 1888, Wolf Haldenstein has extensive experience in the prosecution of complex class actions in state and federal trial and appellate courts across the country.  The firm’s attorneys have expertise in various practice areas, including Unlawful Taxation.  Wolf Haldenstein’s reputation and expertise in class litigation has been repeatedly recognized by the courts, which have appointed it to major positions in complex multi-district and consolidated litigations.