Bellsouth Telecomms., LLC v. Cobb Cnty.
305 Ga. 144
Ga.2019Background
- Cobb and Gwinnett Counties sued several telephone companies alleging undercollection of monthly 911 charges under the Georgia Emergency Telephone 911 Service Act (the 911 Act), seeking over $38.9 million and statutory audit relief.
- At the time of suit (filed 2015–2016), the 911 Act authorized local governments to impose a uniform monthly charge (capped at $1.50) and directed service suppliers to collect the charge, with an administrative retention allowed; the Act referenced a possible "collection action" but identified subscribers as "liable."
- The trial court held the 911 charge was a fee (not a tax) and allowed common-law and statutory tort claims under OCGA §§ 51-1-6 and 51-1-8 to proceed; the Court of Appeals disagreed in part, concluding there was no implied statutory right of action and remanding to develop facts on whether the charge was a tax or fee.
- The Supreme Court granted certiorari to decide, among other things, whether the 911 charge is a tax or a fee and whether the counties may sue the telephone companies to recover it.
- The Supreme Court held the 911 charge is a tax as a matter of law (applying a four-factor test) and that, because tax collection must be authorized by statute, the counties lack statutory authority to pursue damages claims against the telephone companies; it reversed and instructed dismissal of the suits for recovery of taxes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the 911 charge a tax or a fee? | Counties: it is a fee for 911 services; funds are dedicated and beneficiaries receive special services. | Telcos: it is a tax because it raises revenue, is mandatory, and does not correlate to individual use/benefit. | Charge is a tax as a matter of law. |
| Does the 911 Act or other law give counties an implied or statutory right to sue telcos to recover unpaid charges? | Counties: OCGA §§ 51-1-6 and 51-1-8 (general tort statutes) and the Act's collection language allow suits against telcos. | Telcos: Act contains no express right to sue telcos; counties cannot collect taxes absent explicit statutory authorization. | No implied right; general tort statutes do not supply the necessary express authority to collect a tax. |
| May counties pursue common-law tort claims (breach of fiduciary duty, fraud, negligence) to recover alleged undercollections if the charge is a tax? | Counties: Tort claims are available because they seek to enforce intermediaries' duties to remit public funds, not to levy taxes on taxpayers. | Telcos: Allowing tort recovery would be an unauthorized judicial method of tax collection; tax collection methods must be provided by statute. | Tort claims to recover a tax are barred absent explicit statutory authority; dismissal required. |
| Does the statutory arrangement permitting telcos to collect and retain an administrative fee convert the charge into a fee or otherwise authorize county suits? | Counties: Collection-by-telco provisions indicate enforceability and administrative mechanism supporting recovery. | Telcos: Collection-by-telco and retention provisions do not change the tax character; later/specific statute controls. | Collection-by-private-entity provisions do not change tax characterization nor imply judicial collection authority for counties. |
Key Cases Cited
- Gunby v. Yates, 214 Ga. 17 (Ga. 1958) (defines tax vs. fee; an enforced legislative contribution for public purposes is a tax)
- McLeod v. Columbia County, 278 Ga. 242 (Ga. 2004) (articulates multi-factor test distinguishing taxes from fees; fees tied to services/benefit)
- Kirk v. Bray, 181 Ga. 814 (Ga. 1935) (judicial branch may not collect taxes absent statutory provision; tax collection methods reserved to legislature/administrative officers)
- M'Culloch v. Maryland, 17 U.S. 316 (U.S. 1819) (famous articulation that the power to tax can be destructive and must be circumscribed)
- Farmers Bank of Forsyth v. Harrison, 182 Ga. 623 (Ga. 1936) (separation-of-powers limits courts from assuming functions of tax collection where legislature provided administrative remedies)
- Clayton County v. City of College Park, 301 Ga. 653 (Ga. 2017) (addressed sovereign immunity issue; did not authorize tax-collection suits by plaintiffs in that posture)
- Fulton County v. T-Mobile South, LLC, 305 Ga. App. 466 (Ga. Ct. App. 2010) (treated 911 charge as a tax; no unique benefit conferred to payers)