SAN DIEGO, Calif. (June 23, 2011) — The San Diego-based law offices of Casey Gerry Schenk Francavilla Blatt & Penfield, LLP and Newport Beach-based Capretz & Associates have filed a class action lawsuit against the City of Chula Vista, Calif., demanding restitution as a result of continued collection of a controversial tax on cell phone calls.
According to co-lead counsel Thomas D. Penfield, a partner with Casey Gerry, the lawsuit was filed in the San Diego Superior Court on behalf of Chula Vista residents seeking a refund of taxes arising from the City of Chula Vista’s improper collection and administration of a “Utility Users Tax” (UUT) collected on mobile phone use.
“Through this class action, we seek a refund from the City for back taxes unlawfully collected over the years from Chula Vista residents,” Penfield said. Added attorney James Capretz, with Capretz & Associates, “we believe all Chula Vista taxpayers are clearly entitled to a refund of all UUTs improperly collected for the maximum period permissible, along with the legal rate of interest.”
Penfield said the controversy stems from a now outdated tax, levied on users of telephones, electricity and other utilities, which was introduced in 1970 and accounts for more than $9 million in revenue for the city each year — $5.6 million of that from cell phone users.
In simple terms, Penfield said, the tax on cell phones is “illegal, as the law introducing it was passed before the invention of cell phones.” Moreover, “the UUT is automatically added to the monthly charges and embedded in billing statements, so most tax payers are not even aware of the tax – or the fact that it has been illegally collected.”
Additionally, in 2006, said Penfield, the I.R.S. acknowledged that bundled service, where local and long distance are not separately billed (including landline and cellular telephone service), and all long distance service are also non-taxable.
Realizing that there are a host of thorny legal – and financial — issues related to the tax, The City of Chula Vista last year introduced a ballot proposition, Proposition H, which if passed and the UUT found to be constitutional, would have legalized the City’s right to collect fees on cell phone calls. The proposition, which Capretz called “a failed attempt to retroactively authorize UUTs” did not pass, intensifying the controversy and solidifying the illegal status of cell phone taxes.
Despite the conclusive defeat of Proposition H, the City continues to date to levy and collect the UUT — and taxes continue to flow into the City’s coffers.
“These monies belong to the cell phone using residents of Chula Vista, and in all fairness, should be returned,” said Penfield. “The City has no legal or equitable right to retain these funds.”
About Casey Gerry
San Diego’s oldest plaintiff’s law firm, Casey Gerry was founded in 1947, and since then has worked to help recover hundreds of millions of dollars for families and individuals who have suffered serious injury or lost loved ones. The firm’s 13 attorneys practice in numerous areas, including asbestos, personal injury, product liability and pharmaceutical litigation. Located at 110 Laurel St. in the Banker’s Hill neighborhood of San Diego, the firm also has a satellite office in Carlsbad, Calif. For more information, call (619) 238-1811 or visit the website at www.caseygerry.com.
About Capretz & Associates
James T. Capretz is the principal of the Newport Beach law firm of Capretz & Associates, a firm that emphasizes complex civil and multidistrict litigation in its practice. He is consistently listed in the Martindale-Hubbell Bar Registry of Preeminent Lawyers. He was the only attorney in private practice named in the initial publication of the top 50 most influential business people in Orange County by the Orange County Business Journal. He has served as Special Counsel in the seminal national product liability class action entitled Bowling vs. Pfizer, et al. in federal district court in Cincinnati, Ohio since 1992 and he has held positions of responsibility in several other federal class action lawsuits across the United States. He is a charter member of the prestigious Santa Monica-Base RAND Institute for the Civil Justice, So Cal 50 Executive Committee. His contact number is 949-724-3000 and website is www.capretz.com.