$14 Billion Lawsuit Filed Against AT&T

Tuesday, June 17th 2014, 5:56 pm
By: News 9

Two local AT&T customers have filed a lawsuit against the telecommunications giant, seeking damages that could top $14 billion.

The plaintiffs, Nichols Hills Mayor Sody Clements and former Tinker Air Force Base commander Lt. Gen. (USAF Ret.) Dick Burpee, allege that, if not for a court-proven bribery scheme, AT&T would have had to reimburse its Oklahoma customers tens of millions of dollars more than it did each year, dating back to 1987 -- and that money should be paid back now.

"It's been bothering me for a long time," said Clements, the current Mayor of Nichols Hills.

Clements says filing the petition today in Oklahoma County District Court had nothing to do with her current position, but everything to do with the fact, she says, that she worked at the Oklahoma Corporation Commission back when this issue first arose.

In 1989, the state's three corporation commissioners were considering a rate matter involving what was then Southwestern Bell Telephone Company (SBTC). They were trying to determine how much excess revenue SBTC was taking in each year, as a result of a 1987 reduction in the corporate income tax rate from 46 percent to 34 percent.

In September 1989, by a vote of 2 to 1, the Commission approved Order No. 341630, which estimated the utility's annual excess revenue at $7.8 million. SWBT reduced its rates, in accordance with that estimate.

Five years later, federal prosecutors were able to prove that one of the commissioners, Robert E. "Bob" Hopkins, had accepted a bribe from SBTC attorney William L. Anderson in exchange for voting in favor of the 1989 order.

Without Hopkins' vote, the measure would not have been approved.

"It really bothered me that the utilities were able to take my money and keep it," Clements said, "even if they owed me a refund."

And Clements says the evidence is clear that a very large refund is owed. In 1992, the Corporation Commission took another look at SBTC's annual revenue excess and, by a unanimous vote, agreed that it was actually $100 million.

"When it was discovered that one of the people that decided the case had been bribed," Clements exclaimed, "it just seemed to obvious to me that the decision would be thrown out and it hasn't been."

Tuesday's filing (Clements; Burpee v. AT&T) is the first step toward changing that.

"If you were in a murder trial and found out that one of jurors had been bribed, they would throw the verdict out," stated Clements, "and that's what's happened here."

But Marty Richter, an AT&T spokesperson, said, "This issue has been thoroughly reviewed and resolved numerous times by the Oklahoma Corporation Commission and by the Oklahoma Supreme Court. This should be a closed issue."

The plaintiffs argue that, even though it's been 25 years, the Order No. 341630 should be declared unconstitutional and void.

According to court documents, this action is on behalf of all plaintiffs "similarly situated" and, pursuant to a 1967 Oklahoma Supreme Court ruling, relief is mandatory and should be extended to "all those who are determined by the Oklahoma Corporation Commission to be entitled to a refund of 'excess revenues' collected by SBTC since July 1, 1987."

The plaintiffs calculate that amount, with compound annual interest, to be $14.3 billion.

"One would hope that there would be a large cash refund to all the customers," said Clements. "It's gonna be tricky to find out exactly which customers deserve the refund, but that would be the ideal."