US Supreme Court refuses to hear AT&T's appeal, class-action moves

OKLAHOMA CITY (AP) -- The U.S. Supreme Court has upheld an Oklahoma court's decision to allow people to sue AT&T in a class action suit over charges on their phone bills.<br><br>Without comment, the

Wednesday, April 28th 2004, 12:00 am

By: News On 6

OKLAHOMA CITY (AP) -- The U.S. Supreme Court has upheld an Oklahoma court's decision to allow people to sue AT&T in a class action suit over charges on their phone bills.

Without comment, the high court refused to hear an appeal from AT&T, which argued that Oklahoma courts shouldn't have approved a class-action lawsuit because the case involved the authority of other states to settle tax disputes, The Oklahoman's Washington bureau reported.

The suit was originally brought in 1999 by two residents who live outside the Muskogee city limits. Now the case involves consumers in 28 states who have been charged a city tax by AT&T even though they live outside municipal limits and legally are exempt from the tax.

Bobby Gene Allen and Deborah Jane Allen said they had been charged "local taxes" on their phone bill -- a 4.5 percent state tax and a 3.25 percent Muskogee city tax.

The Allens say they shouldn't be charged because they don't live in the city limits.

Oklahoma law allows municipal taxes only on those people living within the taxing jurisdiction.

The Allens' lawsuit also includes customers from 27 other states that allow city sales taxes on long distance calls.

Janet Varnell, a Florida attorney who is part of the legal team representing consumers, said Tuesday the U.S. Supreme Court's decision not to hear AT&T's appeal "was one of those quiet but pivotal victories for consumers."

Varnell said the case can move forward in Muskogee County on the complex issue of how to identify people who may be part of the class-action suit.

An attorney for AT&T could not be reached for comment Tuesday. A company spokesman did not respond to a request for comment.

Attorneys for the consumers said the case involves "millions of AT&T customers" who had been overcharged. Varnell would not discuss how many people or how much money is involved.

The lawsuit, which alleges fraud and breach of contract, seeks restitution and damages. The suit blames the company's internal billing system for the problems, and attorneys claim "it is virtually impossible for a consumer to realize when he or she is being overcharged."

A Muskogee County district judge first ruled that a class-action suit against AT&T could go forward. The Oklahoma Court of Civil Appeals upheld that ruling last year. The Oklahoma Supreme Court declined to hear an appeal.

AT&T's appeal to the U.S. Supreme Court didn't challenge the authority of the Oklahoma courts to settle the claims brought by state residents, but contended that they couldn't hear out-of-state tax collection claims.

The phone company's position is supported by the Multi-State Tax Commission and the Council on State Taxation, which has argued that states should resolve their own tax cases.