Phone Recovery Services, LLC v. Qwest Corp.Annotate this Case
The Supreme Court affirmed the judgment of the district court dismissing this qui tam action filed under the Minnesota False Claims Act, Minn. Stat. 15C.02 (MFCA), claiming that Respondents intentionally failed to pay fees and surcharges due to the State, holding that Appellant failed to state a claim as a matter of law.
The fees and surcharges that were the subject of this litigation were imposed by statute for 911 services, the Telecommunications Access Minnesota (TAM) program, and the Telephone Assistance Plan (TAP) program. Respondents, telecommunications carriers, moved for dismissal, arguing that the 911, TAM, and TAP charges were all taxes and, therefore, dismissal was warranted because the MCFA does not allow qui tam actions based on “claims, records, or statements made under portions of Minnesota Statues relating to taxation,” Minn. Stat. 15C.03. The court of appeals agreed that the 911, TAM, and TAP surcharges were taxes, and therefore, this claim was prohibited by the tax bar provided in the MFCA. The Supreme Court affirmed, holding that, as the statutes at issue are currently written, the 911 fee, TAM charge, and TAP surcharges are taxes, and therefore, this action was barred.