Utility customers of the City of Billings will receive a notice in their bills sometime in the next few weeks informing them that they may be part of a class action suit against the city regarding the imposition of “franchise fees”, which the Montana District Court has since declared to have been an illegal sales tax.
Judge Michael Salvagni of the 13th District Court has ordered the City to make the notifications to past ratepayers.
The suit was initially filed by six impacted Billings ratepayers in the spring of 2018. The court expanded the case into a class action suit in April 2019. A sub-group of ratepayers has emerged from the broader group of ratepayers, given the city’s claim that they should be considered separately because they became ratepayers as property owners in subdivisions that were later annexed into the city under a different contract. The first class of ratepayers are referred to as the Houser Group, in court documents, and the subdivision group as the McDaniels Group, which has not been recognized by the court as being a separate class.
The court has instructed that notices shall be sent to all ratepayers in both groups.
A draft of the notice that the city will send out must be submitted to the court by March 28, 2022. After the court’s approval, the city will have 45 days in which to mail out the notices.
It is estimated that the number of ratepayers who must be notified is about 37,000 persons who paid monthly bills to the city for water, wastewater or solid waste disposal over a period of 26 years, which included the “franchise fee.” The notice will provide information about the nature of the suit and include an opt-out form. “…the court will exclude from the class any member who requests exclusion.”
While the court has not issued an order determining liability, the court it is expected to render an opinion in the future about whether the city is obligated to make restitution of payments, pay legal fees or what action should occur, considering the illegality of the city’s actions.
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