Dear Sir or Madam. I write to you about an exciting opportunity.
No, it's not a scam. If you lived in Los Angeles between October 2005 and March 2008, and you owned a telephone, the city, more than likely, owes you $50. And that's just if you owned a cellphone at the time. If you had a landline, they owe you $30. If you had a business landline, they owe you $50. If you had all three, you are owed the entire $130 payback.
OK, so this won't exactly kick you into a higher tax bracket. But hey, how often do you get to stick it to the City of L.A., instead of the other way around?
In order to collect, all you have to do is go to this website and file a claim, which is easy to do. You'll have to remember your address from back then, as well as your telephone number or numbers. The rest of the form is fairly easy to fill out. The deadline for filling out the form is Feb. 20, 2016.
This is all thanks to a settlement from a lawsuit filed all the way back in 2006 by a guy named Estuarado Ardon, who appears to be, I don't know, just some guy.
Class-action lawsuits are generally driven by lawyers who then pick out clients to fit the lawsuit, but the lawyer we talked to wouldn't confirm or deny that.
“The city has been taxing you illegally for years,” says Rachele Rickert, one of the plaintiff's dozen or so lawyers.
Ardon and his rather large team of lawyers sued L.A. based on city officials' failure to abide by their very own fine print.
The federal government has taxed telephone service, on and off, since the Spanish-American War in 1898, when telephones looked like this. The provisions of that tax required that it be based on both the duration of the call and the distance between the two phones. Made sense at the time — duration and distance were how phone calls were billed.
A hundred years later, we had all sorts of modern conveniences — homes powered by electricity, digital phones, cellphones, “Thong Song” ringtones, apps that sent the word “Yo” to people. Point being, most telephone service was nationwide — phone companies no longer cared if you called next door or across the country.
Then, government starting taxing phone service using a flat rate — Los Angeles residents paid 10 percent — but the government never changed the laws to make its charging of a flat rate tax legal.
“Technology changed, but the statutes and the ordinances did not change with it,” Rickert says.
In 2005, a bunch of large companies, including Office Max, sued the federal government for acting outside of the law, and won. So in 2006, the federal government repealed its telephone excise tax on all service except local calls and handed out around $15 billion in rebates.
That same year, Ardon filed a similar class-action lawsuit applying to the City of Los Angeles. Nine years and six mediators later, they finally settled the thing.
“If the government wants to tax its people, it needs to enact statutes properly, and follow statutes specifically,” Rickert says. “The City of L.A. has not done that, and it hasn’t been a secret that technology’s been changing for years.”
L.A. changed its tax laws in 2008 to be in compliance.
Both Ardon and his lawyers can expect a healthy payday from the settlement, though it's not clear how much. As for Angelenos who were living here between 2005 and 2008, we're due 50 to 80 bucks — when exactly?
Payments cannot be made until the settlement is approved by the Court, becomes final pursuant to its terms, and the claims process and administration process is complete. Please be patient.