Paying taxes is a staple in American society. Paying illegal taxes is a different story.
Ocala resident Dale Birch and small business Discount Sleep of Ocala filed a lawsuit against the city on Feb. 20 over emergency fire service user fees.
Derek Schroth, the plaintiff’s attorney, said the fees are illegal under Article 7 of the Florida Constitution because they are being charged in addition to taxes. General public services are already funded by taxes, making the fees unauthorized and therefore illegal, he said.
Ocala residents are not the only community that are pushing back on these types of fees. Schroth is also involved with a similar lawsuit representing residents of Wildwood.
About $49 million in fees appeared on residential and commercial utility bills from 2007 to 2011. Residents were charged $12 a month in 2007. The amount eventually grew to $15.20 a month. The monthly charge to business owners varied based on the square footage of their building.
City Attorney Patrick Gilligan said in a July 2006 city council memorandum that after consulting with Lewis, Longman &Waler, P.A., he believed the fee to be legally valid under Florida law.
To be a lawful user fee certain criteria must be met. One of those criteria is that the fee is voluntary.
According to the same memorandum, the fee is arguably voluntary because property owners could avoid the fee by not developing the property or by renting the property out.
Nothing is said about what people who already live in the area could do to avoid the fee.
Gilligan was unavailable for comment but Ocala City Manager Matthew Brower said the city had this fee examined by a legal team before charging it.
“This opinion, of course, has never been tested in the courts, and I guess that’s what ultimately will be tested here,” Brower said.
In 2011, Ocala filed a lawsuit for $572,265.70 against the Marion County School Board for refusing to pay the user fee, according to Exhibit J of the lawsuit
The school board is exempt from tax assessments but not from user fees.
Kevin Christian, spokesman for the Marion County School Board, said they’re not backing down.
“The school board is holding fast that it’s not responsible for these fees,” Christian said.
Schroth said the mixture of these two cases could be a real mess for Ocala.
“The same judge will be handling both of these cases, and it’s going to be interesting,” Schroth said.
A class-action lawsuit is defined as a small group of people acting on behalf of a larger group. Schroth said this qualifies as a class-action lawsuit because all Ocala utility customers were similarly affected.
The next step would be for a judge to approve the lawsuit, Schroth said. Though he isn’t sure when that will happen, it could be about six months from now.
“The obvious reason they’re a part of this is because they don’t want the city to continue to charge them an unlawful tax,” Schroth said.
Schroth said his clients had an additional incentive to file a claim because class representatives can be awarded more than someone who filed independently. The additional money serves as compensation for any inconveniences to the class representatives, such as depositions and court hearing attendance.
If the class is certified, all who paid this fee would be considered a class member unless they opt out.
According to the lawsuit, about 50,000 utility customers have been paying these fees. The lawsuit requests all amounts paid are refunded with interest less attorney’s fees.