T-Mobile Urges Court: Reject Repeat Litigant’s City Tax Class-Action Claims

The Aug. 9 class action in U.S. District Court for Western Missouri in which plaintiff Michelle Blankenship alleges T-Mobile collected from customers a “city license” or "utility” tax it wasn't authorized to collect (see 2308100031) is “the exact same lawsuit” she filed nearly a year ago in which a state court compelled her claims to arbitration, said T-Mobile’s motion to dismiss Tuesday (docket 4:23-cv-00561).

Blankenship now files the same claims in Kansas City federal court “with the hope that a different decision-maker will give her a different ruling,” said T-Mobile’s motion. The court should dismiss the lawsuit in its entirety under Federal Rule 12(b)(6) and 12(b)(1), based on issue preclusion and the Rooker-Feldman doctrine, it said. The American Bar Association says the doctrine holds that a litigant shouldn’t be able to challenge state court orders in federal courts as a means of relitigating matters that already have been considered and decided “by a court of competent jurisdiction.”

The court, in the alternative, should compel arbitration as the state court did in 2022, said T-Mobile’s motion. Its other option is to dismiss the case as “time-barred,” because the allegations relate to events from 2008 to 2010, it said.

Blankenship alleges T-Mobile’s services aren't subject to the tax it describes in its statements as a city license tax because the scope of the various ordinances by which Missouri municipalities assess and collect those taxes doesn't "describe or encompass the services provided by T-Mobile." The tax, therefore, is “illegal and unauthorized,” she alleges.

But Blankenship’s lawsuit is the “latest affront” in a 13-year “crusade” by her counsel, GM Law PC in Kansas City, “to attempt to sidestep T-Mobile’s customer contract in the name of pursuing meritless claims on a putative class basis,” said T-Mobile’s motion. “Numerous judges” have repeatedly held that her claims can’t proceed on a class basis, it said.

A Jackson County, Missouri, jury also “roundly rejected” Blankenship’s claims “after a mere 40 minutes of deliberation, in the context of a small claims trial de novo,” said T-Mobile’s motion. T-Mobile asks the court to do what “so many” Missouri state court judges have done, and “reject Blankenship’s attempt to pursue putative class action claims,” it said.

Blankenship’s “saga” relates to charges T-Mobile imposed on certain customers in Jackson County beginning more than 15 years ago, said T-Mobile’s motion. “The charges in question relate to a tax that certain municipalities in Jackson County levied on wireless carriers, including T-Mobile, the cost of which T-Mobile passed through to its customers on their monthly bills,” it said. This “was and is expressly permissible” under T-Mobile’s agreements with its customers, it said.

T-Mobile initially had disputed these taxes “were due to the municipalities, but it later dropped the dispute and never received a refund of the taxes,” said T-Mobile’s motion. Blankenship’s “core theory” is that it was wrongful for T-Mobile to charge its customers for these taxes, “while at the same time pursuing a dispute about whether the taxes were owed,” it said.

Based on that theory, Blankenship asserts two counts against T-Mobile, for unjust enrichment, and for alleged violations of the Missouri Merchandising Practices Act, said T-Mobile’s motion: “Both claims are governed by a five-year limitations period that long ago expired.” The sort of “gamesmanship” and waste of judicial resources being practiced by Blankenship and her attorneys “has long been disallowed,” and the court should rule that both issue preclusion and the Rooker-Feldman doctrine “prohibit it here,” it said.