Cell Phone Lawsuit Settled for $8 Million

Because the tax is automatically added to monthly bills, many Chula Vista residents did not realize they were paying the tax.

CaseyGerry and Capretz & Associates have obtained preliminary approval of an $8 million settlement in a class action lawsuit against the City of Chula Vista. Under the settlement, eligible Chula Vista residents can claim refunds of certain taxes paid between April 2010 and April 2013. The refunds will range from a guaranteed minimum of $35 to hundreds of dollars. In addition, Chula Vista will lower the tax rate and will take appropriate steps to bring the tax in compliance with the law.

According to CaseyGerry’s Jeremy K. Robinson, the case involves Chula Vista’s Telephone User’s Tax (TUT), a part of the City’s Utility User’s Tax scheme. The TUT was originally introduced by the City in 1970 and later collected at the City’s request by cellular providers, including Verizon and AT&T. CaseyGerry and Capretz & Associates challenged the collection of the tax on cell phones as being unauthorized by the City’s ordinance. The city attempted to update and fix the taxing ordinance in 2010 via Proposition H, but the voters defeated the proposition.

Because the tax is automatically added to monthly bills, many Chula Vista residents did not realize they were paying the tax.

CaseyGerry and Newport Beach-based Capretz & Associates joined forces in the lawsuit in 2011 and succeeded in having the case certified as a class action case in Sept. 2012. It had been set for trial in Feb. 2013 but negotiations led to the settlement, which was preliminarily approved by Judge Richard Strauss in San Diego Superior Court on April 5, 2013.

Settlement: $8 Million