Wolf Haldenstein Obtains a Total of $33.5 Million in Settlements in Unlawful Taxation Class Actions Against the County of Los Angeles and the City of Long Beach
San Diego – May 14, 2018 – Wolf Haldenstein Adler Freeman & Herz LLP (“Wolf Haldenstein”) is pleased to announce two settlements in Unlawful Taxation class action lawsuits: a $16.9 million settlement in a case against the County of Los Angeles and a $16.6 million settlement in a case against the City of Long Beach. The lawsuits are based upon telephone user’s taxes (“TUT”) the defendants assessed against residents and businesses located in the unincorporated areas of the County of Los Angeles and within the City of Long Beach.
The Complaints, filed on November 6, 2006, contend that the County of Los Angeles and the City of Long Beach imposed a 5% tax on amounts paid for interstate, intrastate and international calls as well as teletypewriter exchange and cellular telephone services. According to the then-operative County and City TUT ordinances, telephone services that were not taxable under the Federal Excise Tax (FET) were also not taxable by the County or the City. The complaints allege that the County and City ignored these limitations and collected tax on telephone services not taxable under either the FET or their own ordinances.
On May 23, 2017, California Superior Court Judge Maren E. Nelson certified a class in Granados v. County of Los Angeles, Case No. BC361470, and on March 6, 2018 the parties reached a $16.9 million settlement. In McWilliams v. City of Long Beach, No. BC361469, the parties reached a $16.6 million settlement on July 17, 2017. Members of the classs that will benefit from the settlement include businesses and individuals located in the unincorporated areas of the County of Los Angeles and within the City of Long Beach who paid TUT to the County of Los Angeles from August 25, 2005 to November 4, 2008, and to the City of Long Beach from August 11, 2005 to December 19, 2008, and have not received a refund. The full notices containing more information about the settlements, the settlement agreements, and the claim forms are available at: www.lacountytaxrefund.com and www.longbeachtaxrefund.com.
Wolf Haldenstein partner, Rachele Byrd, one of the attorneys representing Plaintiffs and the classes, said, “We are pleased with the settlements that will now allow those businesses and individuals who for years were improperly overtaxed to finally recover long-overdue refunds.”
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 TUT 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.