Bellsouth Telecommunications, LLC et al. v. Cobb County et al.
The Supreme Court of Georgia held that Cobb and Gwinnett counties did not have the legal authority to bring a lawsuit to collect a charge imposed on subscribers to offset the costs of E-911 services. State law provided that service suppliers, on behalf of local governments, were required to collect an E-911charge from telephone subscribers and were entitled to retain an administrative fee on the amounts collected. At the time the lawsuit was filed, state law provided that local governments could initiate a collection action but did not state as to whom such collection action could be brought against. The statute also provided that local governments could audit telephone companies with respect to the collection and remittance of the E-911 charge.
Cobb and Gwinnett counties filed suit against a number of telephone companies claiming estimated damages of nearly $39 million, alleging violations of the E-911 Act, and seeking to enforce the laws auditing provisions. The various telephone companies moved to dismiss, arguing that the counties did not have a right of action to enforce the E-911 Act. The trial court denied the motion and held that the E-911 charge was a fee and not a tax. The Georgia Court of Appeals, on interlocutory appeal, vacated the trial court's finding that the E-911 charge was a fee and remanded for further consideration of the issue. The Supreme Court of Georgia granted cert to the telephone companies and held that the E-911 charge was a tax and not a fee. Furthermore, the Court held that the E-911 Act did not give counties the right of action to collect the tax from telephone companies.