Class Action Challenges Phone Bill Surcharge

A Kentucky telecommunications provider is unlawfully charging its customers a gross receipts surcharge, according to a federal class-action lawsuit.

State and federal law bar the surcharge imposed by Windstream Communications Inc. and its affiliates, plaintiff Dana Bowers alleges.

According to the complaint, filed in the U.S. District Court for the Western District of Kentucky, the filed-rate doctrine prohibits Windstream from charging rates to customers other than those filed with the Federal Communications Commission and the state regulatory agency.

Under the doctrine, carriers and customers alike are normally bound by the filed tariffs and may not challenge them in court.

Bowers alleges, however, that Windstream has been systematically including charges of up to 2.6 percent of the total bill, labeled as "KY gross receipts surcharge" and identified as "regulated."

Windstream may only use the word "regulated" to describe charges that are government-mandated or -approved, the complaint says, and the receipts surcharge is neither.

Rather, the surcharge is an attempt by Windstream to recover operating expenses incurred under a Kentucky tax law that became effective in 2006.

Bowers acknowledges that Windstream may recover the tax expense through rates it charges to its customers. However, she alleges the company may only do so by modifying its filed fee schedules.

Windstream's existing schedule includes surcharges to recover costs from some of its taxes, but not the 2006 tax, Bowers says.

Without modifying its filed rates, Windstream violated several provisions of the federal Communications Act of 1934 and Kentucky's consumer protection law, the complaint alleges.

Bowers seeks injunctive relief against Windstream, damages and attorney fees.

To comment, ask questions or contribute articles, contact West.Andrews.Editor@ThomsonReuters.com.

She is represented by Douglas F. Brent and D. Randall Gibson of Stoll Keenon Ogden in Louisville, Ky.