6th Circuit Rules Against AT&T on Tenn. 911 Fee Remittance

and get more customers. In an opinion Friday, the 6th U.S. Circuit Court of Appeals reversed a lower court’s decision to dismiss the local 911 programs’ lawsuit and judge in AT&T’s favor on whether the company violated the Tennessee False Claims Act (TFCA). U.S. District Court in Chattanooga said the 911 programs lacked private right of action under the state law, but the appeals court disagreed. The programs’ “funding is entirely dependent on the service suppliers’ proper billing, collecting, and remitting of the 911 charges; hence, the Districts’ continued viability -- indeed, their very existence -- necessarily depends on BellSouth’s proper compliance with the 911 Law,” wrote Judge Alice Batchelder for the 6th Circuit. “It is therefore fully consistent with the underlying purpose that the Districts have a means of compelling BellSouth to properly bill, collect, and remit the 911 charges in accordance with the 911 Law. Moreover, because the 911 Law contains no other regulatory system, governmental overseer, criminal or administrative enforcement provisions, or express penalties for violation, the Districts’ most expedient and effective means of compelling the phone companies is a private right of action.” The 6th Circuit said the programs supported their claim that AT&T made misrepresentations, and disagreed with the lower court that they also had to prove those falsehoods were made in bad faith. Because it said the lower court asked the wrong question, the 6th Circuit remanded the matter for further proceedings. Judge Karen Moore concurred that the 911 programs had a private right of action, but said she would have also reversed the lower court’s opinion dismissing the 911 programs’ claim that AT&T owes them a fiduciary duty. The district court found no fiduciary relationship between the programs and company, but Moore disagreed. “Although the 911 Law does not expressly state that telecommunications providers like BellSouth are agents or fiduciaries of the Districts, agency can be implied under Tennessee law,” she said. The programs presented evidence “from which a reasonable juror could conclude” that the telco didn’t make full disclosure of facts that would benefit the programs, she said. Judge Deborah Cook joined the majority opinion. The company didn’t comment.