February 07, 2007
Abbott sues Sprint

Following on the heels of the complaint by Comptroller Susan Combs about the business tax surcharge that Sprint is attempting to levy on its customers, Texas Attorney General Greg Abbott has filed suit against the company to make it stop.

"Texans will not tolerate Sprint Nextel's unlawful business practices," Texas Attorney General Greg Abbott said in a statement announcing the lawsuit, which contends the way the wireless company labels the surcharge and its name both are deceptive.

The legal action was filed against Sprint Spectrum, L.P., a subsidiary of Sprint Nextel Corp. doing business as Sprint PCS.


[Abbott] contends Sprint's label on its surcharge, the "Texas Margin Fee Reimbursement," is illegal because it "causes confusion as it implies that the state of Texas has imposed this fee on the consumers of Texas" or endorsed Sprint's decision.

"In truth and in fact, 'Texas Margin Fee' refers to a discretionary cost recovery fee which Sprint has elected to add to consumers' bills in order to recover part of its cost of doing business," the lawsuit said.

The suit asks for an injunction to stop Sprint from labeling its surcharge as the "Texas Margin Fee Reimbursement" or "representing ... that the state of Texas obligates consumers to pay any specific fee or tax."

The attorney general asks that Sprint pay civil penalties of $20,000 per violation and credit accounts of Texas consumers who have already paid.

A copy of the lawsuit is here (PDF). Any legal eagles want to take a crack at evaluating its merits?

Posted by Charles Kuffner on February 07, 2007 to Budget ballyhoo

Too many lawyers, not enough work.

Apparently Sprint is not contributing to any political campaigns.

Posted by: Charles Hixon on February 7, 2007 12:06 PM

I find it hard to imagine that our AG is suddenly interested in consumer protection. Do you suppose he someday wants to be governor?

Posted by: Dennis on February 8, 2007 5:42 AM

Well if he is shooting for gov, then he might start by cleaning up his own house of frivolous lawsuits and cut expenses by discharging his bloated cache of lawyers looking for work in all the wrong places.

Posted by: Charles Hixon on February 8, 2007 12:46 PM