Connecticut Satellite Tax Leads to DirecTV Class Action Lawsuit

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Last week, a class action lawsuit accusing DirecTV LLC of making customers pay for a 5 percent satellite tax using unfair and deceptive practices was filed in Connecticut federal court.

Lead plaintiff Jonathan Ferrie alleged in his class action lawsuit that DirecTV hides the required 5 percent satellite sales tax required in Connecticut from its customers and fails to disclose that customers will be required to pay the tax, making their television bill higher than the rate DirecTV quotes and advertises. Ferrie argues that DirecTV should absorb that tax as a cost of doing business rather than passing the buck onto the consumer.

Ferrie further alleges that when DirecTV customers realize they are footing the tax for the company, they are unable to get out of the DirecTV’s long-term contacts without paying steep cancellation fees. “By unfairly and deceptively hiding the true price of DirecTV’s goods and services to Connecticut residents, DirecTV has taken steps to unfairly trick Connecticut customers into selecting DirecTV services so that they become trapped into a deceptive and onerous long-term contract,” argues Ferrie in his DirecTV class action lawsuit.

Just one week ago, the Federal Trade Commission accused DirecTV of deceptively advertising a discounted 12-month programming package because it doesn’t clearly disclose that the package requires a two-year contract.

DirecTV is the largest satellite television services provider in the country with more than 20 million subscribers throughout the country. Thousands of customer complaints have been lodged over its allegedly deceptive marketing practices, according to the Federal Trade Commission.

The class action lawsuit also argues that, under state law, DirecTV should have to pay the quarterly tax of 5 percent upon gross earnings from the transmission of video programming by satellite to its Connecticut subscribers.

In the DirecTV class action lawsuit, Ferrie alleges that he purchased a DirecTV package, including services and equipment, in July of 2013. He claims he was surprised when his monthly bill came to more than he alleges DirecTV representatives quoted him when he decided to make the purchase. Ferrie also alleges that DirecTV further misled him by indicating that the extra fee was a state tax.

According to the class action lawsuit, the sample bills state, “This amount reflects the total package and programming costs you can expect to see on your first month’s bill statement,” but do not include the satellite tax surcharge. DirecTV itemizes the tax along with other “taxes” on customer’s monthly bills, Ferrie alleges. This makes consumers believe that the state requires the customer pay the tax, he argues.

Ferrie seeks to represent a Class of thousands of Connecticut residents who have bought the defendant’s satellite TV goods or services from March 19, 2012 to the present as well as a permanent injunction stopping DirecTV from passing the tax on to its consumer surcharge. He also wants DirecTV to allow customers to withdraw from long-term contracts without getting charged cancellation fees.

Ferrie is represented by John R. Horvack Jr., David S. Hardy and John L. Cordani Jr. of Carmody Torrance Sandak & Hennessey LLP.

The DirecTV Satellite Tax Class Action Lawsuit is Jonathan Ferrie, et al. v. DirecTV LLC, Case No. 3:15-cv-00409, in the U.S. District Court for the District of Connecticut.