The City of Billings has lost a case filed against it for charging illegal franchise fees for 26 years on utility services it provides city residents. Filed by six city ratepayers, the case has been on-going for over three years, after having been a contentious issue since the city imposed the fees in 1992. Both residents of the city and some public officials frequently challenged — to no avail — the fees before a city council which kept re-imposing the 4 percent charge on bills for water, sewer, garbage, etc., collecting an estimated $50 million over the years.
As soon as the Plaintiffs filed their suit in 2018, the City ceased collecting the fees.
The decision of the Thirteenth Judicial District Court, this past week, may cost the city many millions of dollars in legal fees and reimbursement costs – a far cry from an offer made early on, by plaintiffs, to settle for $20,000 and a promise to never do it again. Resistant to making such a promise, the city continued the case. Represented by Doug James of Moulton Bellingham, the City has remained resistant through several court-ordered mediation efforts.
To never do it again is part of the decision handed down by Judge Mike Salvagni, in ruling that the Plaintiffs in the suit are entitle to “partial summary judgment” regarding the charging of what was demonstrated to the court to be an “illegal sales tax” rather than a fee for services, which the City claimed it was. (Salvagni is a retired Gallatin County judge who was assigned to the case since judges residing in Billings recused themselves as having conflicts of interest.)
The City failed to provide any evidence, beyond “mere denial, speculation, or conclusory assertions” that the Plaintiffs are incorrect, said the judgement.
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