Qwest owes City Fees For Operating In Nogales

Nogales, AZ – City Attorney P. Lawrence Klose, announced today that on Friday, January 13, 2006 the Federal 9th Circuit Court of Appeals affirmed the Cities’ position in the lawsuit entitled Qwest Corporation v. City of Surprise, et. al. (including the City of Nogales).

Case Background: in 2002 Qwest challenged the validity of the Telecommunications License and Franchise Ordinance of Nogales and several other cities, which imposed a fee for telecommunications services provided by the Plaintiff.  The challenge was based on claims that a Federal telecommunications act preempted the City from charging the fees.  The Federal district court upheld the fee ordinances and ruled that the fees were proper as taxes, and thus not made invalid by the Federal law.  Qwest appealed that decision to the Court of Appeals.

Last Friday the Court of Appeals upheld the district court’s decision and on a slightly different basis than the lower court, held that the fees were taxes and thus immune by law from challenge in Federal Court.  The fees had previously been challenged and upheld in Arizona state courts.

Qwest will be required to pay unpaid fees for the company’s operations in Nogales after the case is finalized.  In late 2004, the amount due was in excess of $900,000 and currently the City’s Finance Department is computing the exact amount due with penalties and interest up until the present.  

Qwest has thirty days to request reconsideration, review by a full panel of the Court of Appeals or to submit a petition to the U. S. Supreme Court for review.

“This opinion was unanimous, soundly reasoned and very strong in favor of the cities; therefore, I hope that any further effort by Qwest will be abandoned,” said Klose.  He added, “I would like to take this opportunity to congratulate the Mayor and Council Members for deciding to follow through on the case.  Also, my most sincere gratitude goes to Thomas Irvine of the Irvine Law Firm, P.A., who represented Nogales and several of the other cities in the case.”

For more information please contact the City of Nogales Public Information Specialist Juan Pablo Guzman, at (520) 285-5613, or by email.