Hamilton County Emergency Communications District v. BellSouth Telecommunications, LLC
154 F. Supp. 3d 666
| E.D. Tenn. | 2016Background
- Tennessee ECDs (Emergency Communications Districts) levy a per-line 911 surcharge; service suppliers must bill, collect and remit those charges to districts under Tenn. Code Ann. ch. 7-86 and TRA rules.
- After the 1996 Telecommunications Act, CLECs (facility-based, UNE-P, and resellers) began using ILEC (BellSouth) facilities; TRA issued rules allocating 911 billing responsibilities among providers.
- Plaintiffs (multiple county ECDs) sued BellSouth alleging it underbilled/remitted 911 charges: (a) failed to bill certain categories of lines it provided or enabled (e.g., multiplex/PRI, Centrex, federal, and lines subject to the 100-line cap), and (b) should be liable for non-reseller CLEC customer lines because BellSouth provided the underlying facilities.
- Plaintiffs asserted tort claims (breach of fiduciary duty, fraudulent misrepresentation/concealment, negligent misrepresentation) and TFCA (reverse false claim) liability based on BellSouth’s monthly/annual remittance reports.
- District Court granted BellSouth summary judgment on all claims: declaratory/injunctive relief moot after 2014 statute, BellSouth not liable for CLEC lines under the 911 Law or TRA Rule, no fiduciary or confidential relationship, and TFCA/fraud/neg. misrep. claims fail because disputes were reasonable interpretive disagreements and plaintiffs’ reliance was unjustified.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Declaratory/injunctive relief on statutory duties | Court should declare BellSouth’s duties under prior 911 law and enjoin noncompliance | New 2014 statute resolves disputed questions; relief is moot | Denied for Plaintiffs; granted to BellSouth (mootness) |
| Statute of limitations | Claims within limits or saved by sovereign exception | Many claims time-barred | Tolling under Tenn. Code Ann. § 28-1-113 (nullum tempus) applies to non-TFCA claims; TFCA still subject to its own limitations |
| Whether BellSouth is liable for non-reseller CLEC customer lines (joint liability) | Non-reseller CLECs are “service users” of BellSouth because BellSouth provides lines; BellSouth must bill/remit for those lines | Statute/regulation contemplate one service supplier per subscriber; CLECs are service suppliers to their own end users; TRA Rule assigns CLECs responsibility | BellSouth not liable for non-reseller CLEC customers; summary judgment for BellSouth |
| Existence of fiduciary duty (per se agency or confidential relationship) | Statutory collection role and control over rates creates agency/confidential relationship; analogous sales-tax precedents | No sufficient control; relationship was arm’s-length; no evidence of dominion or trust to create fiduciary duty | No fiduciary duty; summary judgment for BellSouth |
| TFCA (reverse false claim) based on remittance reports | Compliance statement certified BellSouth billed all required lines and concealed obligations to remit | Reports accurately reported numbers billed; differences reflect reasonable interpretive disputes and timing/counting methods; no knowing falsehood | Summary judgment for BellSouth — plaintiffs failed to show objective falsity or bad faith |
| Fraudulent misrepresentation / concealment / negligent misrepresentation | Reports knowingly misrepresented billing and deprived districts of funds; concealment duty under statute/common law | Disputes stem from differing statutory interpretations; no fiduciary duty or affirmative statutory duty to disclose unbilled categories; districts could have audited but did not | Summary judgment for BellSouth — insufficient evidence of knowing falsity, duty to disclose, or justifiable reliance |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden allocation)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (summary judgment and drawing inferences)
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment, reasonable jury standard)
- Chesbrough v. VPA, P.C., 655 F.3d 461 (6th Cir. 2011) (false-certification/condition-of-payment analysis under False Claims Act)
- U.S. ex rel. Southland Mgmt. Corp. v. 326 F.3d 669 326 F.3d 669 (5th Cir. 2003) (good-faith interpretive disputes defeat FCA liability)
- AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366 (Telecommunications Act background on ILEC/CLEC duties)
- Eastman Chemical Co. v. Johnson, 151 S.W.3d 503 (Tenn. 2004) (statutory construction—plain meaning rule)
- Bituminous Cas. Corp. v. J & L Lumber Co., Inc., 373 F.3d 807 (6th Cir. 2004) (factors for declaratory relief/mootness)
- Givens v. Mullikin, 75 S.W.3d 383 (Tenn. 2002) (elements of confidential/fiduciary relationship)