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HomeMy WebLinkAboutEx. 1 to SJ Recon Ruling4/19/2021 Gmail - Re: In re TracFone Wireless, Inc. https://mail.google.com/mail/u/0?ik=bf094191aa&view=pt&search=all&permthid=thread-f%3A1696420081300613181%7Cmsg-a%3Ar8818110666074…1/2 Phil Olbrechts <olbrechtslaw@gmail.com> Re: In re TracFone Wireless, Inc. 1 message Phil Olbrechts <olbrechtslaw@gmail.com>Wed, Apr 7, 2021 at 8:18 PM To: "Craig, Angela" <CraigA@lanepowell.com> Cc: CityClerk <CityClerk@rentonwa.gov>, Cynthia Moya <CMoya@rentonwa.gov>, "ksand@omwlaw.com" <ksand@omwlaw.com>, "Kenya C. Owens" <kowens@omwlaw.com>, "Edwards, Scott M." <EdwardsS@lanepowell.com>, "Degginger, Grant" <DeggingerG@lanepowell.com>, Docketing <Docketing@lanepowell.com>, "Tsuboi, Norma" <TsuboiN@lanepowell.com> Supplementing my prior email, I neglected to mention that I didn't find Mr. Malone's Fred Meyer purchase very illuminating on the issue, since I understood him to be just adding airtime to a handset that already had its own minutes. I don't believe there was anything from the description of that event that would preclude that understanding. On Wed, Apr 7, 2021 at 8:06 PM Phil Olbrechts <olbrechtslaw@gmail.com> wrote: Thank you for the reconsideraon briefing. I will likely need at least a week to carefully go through the arguments presented by the pares. In the meanme, in lieu of oral argument, I’m hoping we can resolve the ambiguies of the handset issue by email. In clarifying the handset issue in my reconsideraon decision, I would like to give the pares an opportunity to idenfy where in the administrave record it is established that the handsets are sold and charged separately from airme. My understanding of the handsets sales was that Tracfone handsets include Tracfone airme rights to the same extent as airme cards, in a sense being “preloaded” with airme in the same fashion as airme cards. In this scenario the phones simply serve as a more expensive and funconal version of plasc airme cards. It was also my understanding that the handsets were sold to the consumer via one charge. This is why I found the Acvate case pernent. In its reconsideraon request, Tracfone argued that the handset sales are not subject to the ulity tax because handset sales qualify as compeve telephone service. The Acvate court held that sales of handsets do not qualify as compeve telephone service if they are not charged separately from network telephone service. The evidence presented by the City le a very strong impression that the handsets were “loaded” with airme in the same fashion as the airme cards. The most detailed rendion of how handsets are sold and acvated was in the 1/29/21 Ashpaugh declaraon. Paragraph 10 of his declaraon states that both airme cards and handsets will be referenced as “equipment.” Paragraph 12 states that when “equipment” (which includes handsets) is scanned for purchase by a consumer, Tracfone is nofied electronically. Mr. Ashpaugh goes on to declare that once the “equipment ” (which includes handsets) is purchased, it (the handset, without an airme card) doesn’t become acvated unl the consumer contacts TracFone via website or phone number. So from the Ashpaugh declaraon, it was reasonable to conclude that a handset could be purchased without an airme card and then acvated for use. Under such a scenario there would be no basis for concluding that any airme “loaded” into the handset would be charged separately from the phone itself. Indeed, my one me experience with prepaid airme was the purchase of a disposable phone when I forgot to pack my cell phone on a business trip. As best as I can recall, there was only one charge for that phone. The City’s request for summary judgment relief also made no disncon between airme card sales and handset sales. In its Statement of Facts, the City idenfied that Tracfone sells wireless services and handsets directly and to retail agents. The City then framed its second queson presented as “Is TracFone’s gross income from its retail agents properly included within the City’s tax base…” Nowhere in its summary judgment argument did the City disnguish between gross income generated from handset sales and that generated from airme cards. Aer being presented with the record and arguments described above, I’m now told that the City’s sj moon was only advocang for applicaon of the ulity tax to airme card sales and also that handsets are not “acvated” in the fashion described in the Ashpaugh declaraon. I am happy to accommodate the pares’ request on this issue since both pares are in agreement. However, it would be helpful to be able to idenfy something in the record and/or briefing that clearly idenfies that all handsets are sold separately from airme and also that the City had limited is sj request to gross sales of airme. On the laer issue, simply stang that the City was only asking for ulity tax on network telephone service doesn’t resolve the situaon, since handsets that serve as glorified airme cards arguably qualify as network telephone service if the airme is not separately charged. 4/19/2021 Gmail - Re: In re TracFone Wireless, Inc. https://mail.google.com/mail/u/0?ik=bf094191aa&view=pt&search=all&permthid=thread-f%3A1696420081300613181%7Cmsg-a%3Ar8818110666074…2/2 If the pares have any references they ’d like to make to the record to clarify the handset issue, please do so by email by next Tuesday. I’ll try to get my ruling out shortly thereaer. On Wed, Apr 7, 2021 at 2:51 PM Craig, Angela <CraigA@lanepowell.com> wrote: Good afternoon. Attached for filing in the above matter, please find the following: Reply in Support of TracFone’s Motion for Reconsideration Please confirm receipt. Thank you. ANGELA CRAIG Legal Assistant craiga@lanepowell.com D 206.223.6138 LANEPOWELL.COM This message is private or privileged. If you are not the person for whom this message is intended, please delete it and notify me immediately, and please do not copy or send this message to anyone else.