We are issuing this statement in response to the extremely negative and incorrect information being given by members of the Jefferson County Commission regarding the recent opinion of the Alabama Supreme Court in the case of Edwards, et al., v. Jefferson County – the occupational tax lawsuit.  As class counsel, we find it important that the information presented to the public is accurate and not misleading.  It is our goal that the refund process moves forward efficiently and with as little confusion as possible. 

On May 14, 2010, the Alabama Supreme Court entered its second opinion in this case, affirming that the money currently held in escrow from collections under the old illegal occupational tax is due to be refunded to the taxpayers.  The Supreme Court made clear that the disbursement of the escrow account to the taxpayers was to move forward.  The opinion also reiterated the well established rule of Alabama law that the Alabama Legislature has the power to enact retroactive taxes.  What the opinion did not do was award the escrow account to the Jefferson County Commission, nor did it order the Jefferson County Commission to enact any new ordinances to try to collect these funds after the refund was processed.  

The Supreme Court stated that, after striking language that violated Alabama law, Act 2009-811 (the new occupational tax) would allow for a retroactive tax.  The Supreme Court did not find that ACT 2009-811 in fact enacted one or that any ordinance existed to collect one.  There are serious questions as to whether the provisions of that Act would still allow for such an ordinance, as the new occupational tax took effect on January 1 of this year and all remnants of the old occupational tax are now dead.  The validity of the new tax, and any ordinances enacted under it, is the subject of a lawsuit currently pending in the Circuit Court for Jefferson County, Alabama, in the case of Weissman v. Jefferson County.   Those questions are not part of the Edwards lawsuit. 

The Edwards lawsuit was filed on May 11, 2007.  The case was litigated heavily through the years of 2007 and 2008.  This case was taken on because the Jefferson County Commission tried to skirt a valid enactment by the Alabama Legislature and Governor that repealed the old occupational tax.  Hundreds of millions of dollars were illegally collected.  On January 12, 2009, Judge David Rains entered an Order that confirmed that we were correct – Jefferson County had been collecting an illegal tax.  Judge Rains took into consideration that ordering the County to fully pay back all the taxes illegally collected would be devastating to the County.  He crafted a very thoughtful remedy – the escrow account which now has a balance of approximately $37.8 million.  Since the entry of that Order in January of 2009, the County has fought long and hard to keep this money from being refunded to the taxpayers. There have been two full appeals on the merits of this case to the Alabama Supreme Court.  And after each of those appeals, the County has been told by the Supreme Court that this is the taxpayers’ money and that it is due to be refunded.

As a result of this lawsuit, the old occupational tax has been finally laid to rest and $37.8 million is coming back to the local economy – the Alabama Supreme Court has clearly and unequivocally said so.  This case demonstrated the mismanagement of the County, and after a special session was called by Governor Riley last summer to address the occupational tax, a new occupational tax (at a 10% lower rate and without the exclusions of the prior tax) was passed – along with a bill that required Jefferson County to hire a county manager.  In short, the County did not win the Edwards lawsuit – the taxpayers did. 

Members of the Jefferson County Commission have raised angry protest to the possibility of our being awarded an attorneys’ fee for prosecuting this case over the last three years.  The issue of the payment of our fee is currently pending before Judge Rains.  Pursuant to Alabama law, our firms submitted a request for attorneys’ fees in December.  Lawyers for Jefferson County responded and a hearing was held.  Currently, Judge Rains has the matter under consideration.  We do not know what the amount of fee will be awarded to our firms for the work we have done these last three years.  However, we do know that members of the Commission are very publicly decrying the award of any fee for our work on behalf of the working people of Jefferson County who paid the old illegal tax.

The Court has appointed an escrow agent to process the refunds, and more information will be coming from the escrow agent to employers and the public in the very near future.  We appreciate the public’s concerns regarding the refunds that the Supreme Court has affirmed.  We will stand by the taxpayers and continue to fight to make sure that those refunds are processed as quickly as possible and that the money stays in the hands of the people who it belongs to – the taxpayers of Jefferson County.