Class action against the city of Ocala over fire fees can proceed, appeals court rules

By Dee Thompson | Jan 22, 2018

The 5th District Court of Appeals on Jan. 5 overturned the decision of a Marion County judge who had denied class certification in a case against the city of Ocala over fire user fees.

DAYTONA BEACH — The 5th District Court of Appeals on Jan. 5 overturned the decision of a Marion County judge who had denied class certification in a case against the city of Ocala over fire user fees.

In 2014, Discount Sleep of Ocala LLC, doing business as Mattress Warehouse, and Dale W. Birch filed the case against the city of Ocala, claiming Ocala’s fire user fees are illegal and unconstitutional.

The original lawsuit, which asked for $49 million in refunded fees, sought to have the city stop adding fire user fees to utility bills, according to background information in the ruling. The practice started in 2006 when Ocala had a shortfall in funding for fire-protection services. Customers must pay the fees to get utilities such as water. 

Derek A. Shroth, the attorney for the plaintiffs, argued that the term “user fee” is a mischaracterization because it’s not a voluntary fee. It’s actually a tax, he argues, and it makes up 55 percent of the funding for fire services.

The case was dismissed by Circuit Judge Edward Scott in February 2015 because he said the four-year statute of limitation had passed. The city began collecting user fees in 2006.

In June 2016, however, that decision was reversed by an appellate court, which said in October 2009 the city repealed the fees, then reinstated them in October 2010. The 2010 date was used to calculate the statute of limitations, and the lawsuit was then allowed.

The plaintiffs then filed a second amended complaint “seeking a declaration that the fire service user fee enacted by the City and collected from them and all other City utility customers as part of the monthly utility bill is invalid, illegal, and unconstitutional,” the court’s decision states. They also asked the court to order the city to refund the fees collected. 

Additionally, they filed a second motion seeking class certification.

In January 2017, Circuit Court Judge Lisa Herndon denied class certification. She wrote that the case could be litigated without it, and the plaintiffs had failed to provide proof of city residency. She also concluded that the judgment would apply to all who paid the fire fees and therefore there was no need for a class action.

In March, the attorneys for the city offered a settlement proposal to the plaintiffs, but it wasn’t accepted.

The 5th District concluded that class certification made more sense in this instance than individual claims for several reasons, noting, “There are potentially more than 22,000 class members. Their individual claims, which are as small as $14.30 per month (amounting to $171.60 a year), would not justify filing separate actions. Allowing Appellants to proceed with a class action provides an economically feasible remedy, given the modest potential individual damage recovery for each class member.”

The opinion was authored by Judge Richard B. Orfinger. Judges Vincent G. Torpy and Eric J. Eisnaugle concurred.

Attorneys for the city of Ocala are George Franjola and Patrick G. Gilligan of Gilligan, Gooding, Franjola & Batsel P.A.

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