BILLINGS — After five years of back-and-forth litigation, a settlement has tentatively been agreed upon for Billings residents who were charged illegal fees by the city beginning in 1992. Notifications were sent out to residents informing them they were qualified to receive the settlement, but they weren't sent to the right people.
Those entitled to money are customers who paid the city for water, wastewater, and/or solid waste disposal services between Feb. 2, 2015, and June 30, 2018. The total amount of $3.6 million will be shared, in the form of a rebate deducted from a future utility bill that will likely be between $50 and $100. Or, if you’re no longer a customer, a check will be mailed to you after you fill out a claim form.
“Approximately 12,000 people received what are called 'excluded customer notices'. Unfortunately, the class administrator that was hired to handle this in California mixed up the current customer postcards with the excluded customer postcards," said Matthew Monforton, the attorney representing the plaintiffs, on Thursday. "Each set of postcards went to the wrong group."
And now Monforton, a Bozeman-based attorney practicing law for nearly 26 years, is attempting to set the record straight. He urges residents to check the informational website if they have any questions.
“What’s going to happen, is the city attorney, along with our folks on our end, we’re working together to prepare corrected notices. Those corrected notices will be submitted to the court on Monday for the court’s review," Monforton said. "And assuming that the court approves of those notices, a new set of notices will go out in the next two to three weeks alerting all of the customers what they need to do in terms of preserving any claims that they might have.”
According to Monforton, this settlement agreement has been a long time coming.
“In 1992, the Billings City Council enacted what it refers to as ‘franchise fees’, which amounted to a 4% payment required of water customers, waste water customers, and garbage customers. That went on until 2018. Before that, some citizens in Billings contacted us and told us they believed these were illegal sales taxes. We did some research into that and determined these franchise fees were indeed sales taxes and therefore prohibited under Montana law," Monforton said. "So we filed suit in District Court in Billings. The lawsuit turned into a Class Action Lawsuit, and we’re happy to say we reached a tentative settlement a few months ago, and now we are making sure that customers have notice of that settlement so that all Billings residents know about the terms of the settlement."
Monforton explained the difference between the two main groups of class members.
“People who are current customers who were customers between 2015 and 2018, those are the customers who are entitled to a rebate. After 2018 the city stopped imposing illegal sales taxes, so customers who joined after 2018 will not be entitled to a rebate,” Monforton said. “There may be some people who are considered 'excluded customers' after 2018 because they moved to a different location within the city. Or because of marriage or divorce or the death of a spouse, there was a name change on the account. The city’s software may treat them as a new customer and therefore excluded from rebates, even though they may have a valid claim. So we want to make sure those folks are included as well, and that’s why we’re asking those folks to fill out a claim form and fill those out as well.”
And those that have moved out of town will need to do some extra work.
"It’s important to note that they will need to file an actual claim with the class administrator if they’ve moved out of the city of Billings. Because since they’re no longer customers, we don’t necessarily have a record of where those folks are, so they’ll need to file a claim," Monforton said. "If they do file a claim, those claims will be verified by the class administrator, and if those claims are valid, then they will receive the same amount that they would have if they remained in the city."
According to Monforton, corrected notices will be sent out soon. In November, a fairness hearing will be held to determine whether to approve the settlement and class counsel’s attorney fees—a hearing that could be contested.
"If customers have questions, the first and best place to look is our website. Check with the website, and there are phone numbers that customers can use," Monforton said. "If the website doesn’t answer the question, they can call the class administrator. If the class administrator’s not able to answer those questions, they’re welcome to call me and I would be able to answer those questions as well."
MTN News reached out to the City of Billings for comment, but it declined.
To learn more about the settlement or to fill out a claim, click here.
“Our clients are very grateful that after five years of litigation we’ve been able to reach a successful settlement. A settlement that we think is fair not only for the city, but for all of the residents who were assessed illegal sales taxes for many years," Monforton said. "We can’t get all of those illegal taxes returned, but we can at least get some of those taxes returned. And we’re happy to be able to accomplish that."
