BELLSOUTH TELECOMMUNICATIONS, LLC et al. v. COBB COUNTY et al.
S17G2011
Supreme Court of Georgia
February 18, 2019
305 Ga. 144
PETERSON, Justice.
FINAL COPY
Cobb and Gwinnett Counties have sued telephone companies for their failure to collect and remit to the Counties a charge imposed on subscribers to offset the cost of 911 services. The telephone companies have raised various defenses to the Counties’ suits, including that the 911 charge is a tax that the Counties are not allowed to collect by a lawsuit like this one. The trial court rejected that argument and allowed the cases to proceed, but the Court of Appeals vacated that aspect of the trial court‘s ruling and remanded because further development of the record was needed to determine whether the charge is a tax. We conclude, however, that the charge is a tax regardless of more factual development, and we conclude that the Counties lack legal authority to collect that tax in this lawsuit. We reverse.
This case finds its roots in the Georgia Emergency Telephone Number 911 Service Act,
Telephone companies are intermediaries in the statutory scheme. The statute provides that “[e]ach service supplier shall, on behalf of the local government, collect the 9-1-1 charge from those telephone subscribers . . . .”
The Counties sued Bellsouth Telecommunications, LLC and Earthlink,
The Telephone Companies moved to dismiss the Counties’ complaints, arguing that the Counties do not have a right of action to enforce the 911 Act. The Telephone Companies also argued that a common law claim was not available because the 911 Act imposes a tax, and a common law action for recovery of taxes does not lie where a statute provides remedies for collections of taxes that do not include an action at law. The trial court denied the motion. It held that the 911 charge is a fee, not a tax, and that the 911 Act, read in
On interlocutory review, the Court of Appeals affirmed in part, reversed in part, and vacated in part. Bellsouth Telecommunications, LLC v. Cobb County, 342 Ga. App. 323, 323-324 (802 SE2d 686) (2017). The Court of Appeals held that the trial court erred in finding that the 911 Act provided an implied right of action for a violation of the statute. Id.. But the Court of Appeals agreed that OCGA §§ 51-1-6 and 51-1-8 allow the Counties to pursue claims against the Telephone Companies based on the companies’ failure to comply with the 911 Act. Id.. The Court of Appeals vacated the trial court‘s finding that the 911 charge is a fee as a matter of law, remanding for further consideration of that issue following development of a record as to whether the Counties provide a 911 service that differs from that of other counties. Id..7
We granted the Telephone Companies’ petition for certiorari, directing the parties to address several questions, including whether the 911 charge is more properly characterized as a tax or a fee. We conclude that the charge is a tax, and that the 911 Act does not give the Counties a right of action to collect that tax from the Telephone Companies. We reverse the Court of Appeals and remand with instructions for the Court of Appeals to direct the trial court to dismiss the Counties’ actions.
1. “A tax is an enforced contribution exacted pursuant to legislative authority for the purpose of raising revenue to be used for public or governmental purposes, and not as payment for a special privilege or a service rendered.” Gunby v. Yates, 214 Ga. 17, 19 (102 SE2d 548) (1958); see also McLeod v. Columbia County, 278 Ga. 242, 244 (2) (599 SE2d 152) (2004) (“A
The Counties next argue that the 911 charge is not mandatory because people may opt to not receive telephone service and avoid the charge. But the charge is mandatory in the way we have used that term in determining whether something is a tax.10 In considering whether a charge is mandatory for this purpose, we have considered not whether someone may theoretically continue to live a lawful existence without using a particular service at all, but whether someone may obtain that service by way of an alternate route that avoids paying the charge. See McLeod, 278 Ga. at 245 (2) (utility charge not a tax because property owners could reduce the amount of the charge by creating and maintaining private stormwater management systems, and ordinance did not permit imposition of a lien directly against the property of those who fail to pay the charge); Luke v. Ga. Dept. of Natural Resources, 270 Ga. 647, 648 (1) (513 SE2d 728) (1999) (fee for participation in underground storage tank trust fund not a tax given that storage tank owner may demonstrate evidence of financial responsibility as required by statute by means other than participation in fund). Here, people cannot opt out of the emergency services system by subscribing to an alternative phone service, so the charge is mandatory.
Although the Counties suggest that we have held that a charge — in particular, a solid waste disposal charge — may be a fee even where a payer is bound to pay it despite declining the service provided, the case they cite did not address that question. See Mesteller v. Gwinnett County, 292 Ga. 675, 678 (4) (740 SE2d 605) (2013) (rejecting property owner‘s argument that solid waste fee is an unlawful tax because garbage collection services were carried out by private companies, because Court previously has held such charges are not taxes). And our prior decisions deeming garbage collection charges to be fees, not taxes, also do not discuss property owners’ ability to opt out of the services. See Levetan v. Lanier Worldwide, Inc., 265 Ga. 323, 324-325 (2) (454 SE2d 504) (1995) (sanitation assessments are not taxes within meaning of state Constitution and thus need not be collected by county tax commissioner); Crestlawn Memorial Park, Inc. v. City of Atlanta, 235 Ga. 194 (219 SE2d 122) (1975) (sanitary assessment not a tax for which plaintiff could obtain an exemption for the cemetery he operated; Court noted finding that leaves falling into street from cemetery property are cleaned up by the city but did not discuss plaintiff‘s ability to opt out of city sanitation services).11
Finally, there is no relationship between the obligation to pay the charge and the burden the payer places on emergency services systems in Georgia, and those who pay the charge receive no special access to emergency services. A person who pays the charge year after year might well never make a 911 call on the associated telephone line, while another person may use a public phone or borrowed phone to summon emergency services (or others may summon emergency services on their behalf) on a regular basis. Although a person with active telephone service may be able to dial 911 more easily than one who does
The Counties suggest that the 911 charge cannot be a tax because, if it is, the 911 Act‘s provision for collection by telephone service suppliers is invalid. They cite
2. While maintaining that the 911 charge is not a tax, the Counties argue that they may pursue tort remedies to recover taxes even in the absence of express statutory authority. We disagree.
This rule applies to counties, as “[a] county is a mere political division of the State[,]” Penick v. Foster, 129 Ga. 217, 219 (58 SE 773) (1907), and “the burden is upon every political subdivision of the State which demands taxes from the people to show authority to exercise [the power to levy taxes] in the manner in which it has been imposed by a valid law of this State.” City of Atlanta v. Gower, 216 Ga. 368, 370 (116 SE2d 738) (1960). Such authority must be “plainly and unmistakably granted by the State[.]” Id. (attorneys’ lawsuit challenging city‘s tax on licensed professionals may proceed, as state
Notwithstanding these principles, the Counties argue that even if the 911 charge is considered a tax, the Counties do not need express statutory authorization to recover the charge in a tort action. Citing Clayton County v. City of College Park, 301 Ga. 653 (803 SE2d 63) (2017), Ga. Power Co. v. City of Decatur, 179 Ga. 471 (176 SE 494) (1934), reversed sub nom Ga. R. & Elec. Co. v. Decatur, 295 U. S. 165 (55 SCt 701, 79 LE 1365) (1935), Coca-Cola Co. v. City of Atlanta, 152 Ga. 558 (110 SE 730) (1922), and Citizens and Southern Bank v. State of Ga., 151 Ga. 696 (108 SE 161) (1921), the Counties argue that they may pursue these actions because they are not trying to “levy taxes” on a taxpayer but instead are enforcing an intermediary‘s duty to collect the funds. The Counties are wrong.
Three of the cases cited predate Kirk and do not control this case for the reasons stated in Kirk. As we noted in Kirk, although we held in Coca-Cola Co. that the action was not subject to dismissal, it involved a “petition . . . brought for the purpose of discovery” that was “preliminary to an effort to collect taxes.” Kirk, 181 Ga. at 824; see also Coca-Cola Co., 152 Ga. at 566 (2) (“This petition seeks no recovery of taxes, but is in aid of and ancillary to other proceedings to
The Counties rely heavily on Citizens and Southern Bank, wherein we upheld a trial court‘s refusal to dismiss a lawsuit by the state and a county over taxes owed by a liquidating bank. The suit sought to recover taxes that became due by the liquidating bank after a tentative agreement between it and the defendant bank was reached but before the transfer of assets took place. 151 Ga. at 696-697. Acknowledging that the suit could “not be maintained as one at law to collect taxes,” we nonetheless said a court could “require the defendants, who are essentially trustees of the property misapplied, and who have misappropriated the funds of the selling bank, a part of which should have gone to the payment of these taxes, to respond to the injured party in a sum equal to the amount misappropriated.” Id. at 702 (3). In Kirk we distinguished Citizens and Southern Bank as “a proceeding in equity to reach a particular fund, rather than to collect a tax[.]” Kirk, 181 Ga. at 826. And this case involves no claim
As for our recent ruling in Clayton County, it considered no issue other than whether the city-plaintiff‘s claims against a county were barred by sovereign immunity, ultimately remanding the case for further consideration of that issue by the trial court. See 301 Ga. at 657 (3). Thus, even if the defendants in that case would have been properly characterized as “middlemen,” rather than taxpayers,15 our decision does not stand for the proposition that the city‘s lawsuit was authorized by statute. See Gibson v. Gibson, 301 Ga. 622, 625 (1) n.3 (801 SE2d 40) (2017) (“Questions which merely lurk in the record, neither brought to the attention of the court nor ruled upon, are not to be considered as having been so decided as to constitute precedents.” (citation and punctuation omitted)). In sum, the cases cited by the Counties do not undermine our conclusion that, if the 911 charge is a tax, the Counties must have express
The 911 Act does not itself provide that express authorization. At the time these lawsuits were filed, the 911 Act provided that “[a] collection action may be initiated by the local government that imposed” the 911 charges, but described only the “telephone subscriber” as “liable” for the charge and provided that “[a] service supplier shall have no obligation to take any legal action to enforce the collection of the” charge.
To the extent the Counties suggest that
The Counties argue that, as “sovereign” government entities, they “‘inherently’ have all remedies not relinquished and must be allowed to pursue
Concluding that the 911 charge is a tax as a matter of law, and the Counties’ lawsuits thus are precluded, we reverse the Court of Appeals. That court is directed to remand the case to the trial court with instructions to grant the Telephone Companies’ motions to dismiss the Counties’ claims for damages.17
Judgment reversed and case remanded with direction. Melton, C. J., Nahmias, P. J., Benham, Blackwell, Boggs, Bethel and Ellington, JJ., and Judge
Decided February 18, 2019.
Certiorari to the Court of Appeals of Georgia — 342 Ga. App. 323.
Kilpatrick Townsend & Stockton, J. Henry Walker IV, John P. Jett, Adam H. Charnes; Bondurant, Mixson & Elmore, Frank M. Lowrey IV, Amanda K. Seals; Alston & Bird, Mark A. McCarty, Kara F. Kennedy; Kellogg, Hansen, Todd, Figel & Frederick, Scott H. Angstreich, Collin R. White, for appellants.
Barnes Law Group, Roy E. Barnes, John R. Bevis, Benjamin R. Rosichan; Harris Lowry Manton, Jeffrey R. Harris, Madeline E. McNeeley; Evangelista Worley, James M. Evangelista, David J. Worley; Penn Law, Darren W. Penn, for appellees.
Pierson Law, Holly A. Pierson; Robbins Ross Alloy Belinfante Littlefield, Joshua B. Belinfante; Kasowitz Benson Torres & Friedman, Michael E. Hutchins, David E. Spalten; Eversheds Sutherland (US), Jonathan A. Feldman, Maria M. Todorova; Kelly L. Pridgen, G. Joseph Scheuer, Larry W. Ramsey, Jr., Susan J. Moore, Rusi C. Patel, amici curiae.