Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca6-16-05156/USCOURTS-ca6-16-05156-0/pdf.json

Parties Involved:
Bellsouth Telecommunications
Appellee
Giles County Emergency Communications District
Appellant

Document Text:

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit I.O.P. 32.1(b)

File Name: 17a0067p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

HAMILTON COUNTY EMERGENCY COMMUNICATIONS 

DISTRICT (16-5149); BRADLEY COUNTY 

EMERGENCY COMMUNICATIONS DISTRICT (16-

5150); BLOUNT COUNTY EMERGENCY 

COMMUNICATIONS DISTRICT (16-5151); BEDFORD 

COUNTY EMERGENCY COMMUNICATIONS DISTRICT

(16-5152); COFFEE COUNTY EMERGENCY 

COMMUNICATIONS DISTRICT (16-5153); ROANE 

COUNTY EMERGENCY COMMUNICATIONS DISTRICT 

(16-5154); FRANKLIN COUNTY EMERGENCY 

COMMUNICATIONS DISTRICT (16-5155); GILES 

COUNTY EMERGENCY COMMUNICATIONS DISTRICT 

(16-5156); CHEATHAM COUNTY EMERGENCY 

COMMUNICATIONS DISTRICT (16-5157); KNOX 

COUNTY EMERGENCY COMMUNICATIONS DISTRICT 

(16-5158),

Plaintiffs-Appellants,

v.

BELLSOUTH TELECOMMUNICATIONS LLC, dba 

AT&T Tennessee,

Defendant-Appellee.

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Nos. 16-5149/5150/5151/5152/

5153/5154/5155/5156/5157/5158

Appeal from the United States District Court 

for the Eastern District of Tennessee at Chattanooga.

Nos. 1:11-cv-00330; 1:12-cv-00003; 1:12-cv-00056; 1:12-cv-00131; 

1:12-cv-00138; 1:12-cv-00139; 1:12-cv-00149; 1:12-cv-00166; 

1:12-cv-00176; 1:12-cv-00186—Curtis L. Collier, District Judge.

Argued: September 14, 2016

Decided and Filed: March 24, 2017

Before: BATCHELDER, MOORE, and COOK, Circuit Judges.

>

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Hamilton Cty. Emer. Commc’ns, et al. v. BellSouth Page 2

_________________

COUNSEL

ARGUED: Frederick L. Hitchcock, CHAMBLISS, BAHNER & STOPHEL, P.C., Chattanooga, 

Tennessee, for Appellants. Scott H. Angstreich, KELLOGG, HUBER, HANSEN, TODD, 

EVANS & FIGEL, P.L.L.C., Washington, D.C., for Appellee. ON BRIEF: Frederick L. 

Hitchcock, Willa B. Kalaidjian, CHAMBLISS, BAHNER & STOPHEL, P.C., Chattanooga, 

Tennessee, for Appellants. Scott H. Angstreich, Jeremy S. Newman, KELLOGG, HUBER, 

HANSEN, TODD, EVANS & FIGEL, P.L.L.C., Washington, D.C., for Appellee. Kate 

Comerford Todd, Steven P. Lehotsky, UNITED STATES CHAMBER LITIGATION CENTER, 

Washington, D.C., Jonathan G. Cedarbau, WILMER CUTLER PICKERING HALE AND 

DORR LLP, Washington, D.C., Brook Hopkins, Sameer Ahmed, WILMER CUTLER 

PICKERING HALE AND DORR LLP, Boston, Massachusetts, Misty Smith Kelley, BAKER, 

DONELSON, BEARMAN, CALDWELL & BERKOWITZ, PC, Chattanooga, Tennessee, 

Gregory L. Skidmore, KIRKLAND & ELLIS LLP, Washington, D.C., for Amici Curiae.

BATCHELDER, J., delivered the opinion of the court in which COOK, J., joined, and 

MOORE, J., joined in part. MOORE, J. (pp. 24–26), delivered a separate opinion concurring in 

part and dissenting in part.

_________________

OPINION

_________________

ALICE M. BATCHELDER, Circuit Judge. In this diversity action, the plaintiff 

municipal corporations operate the local “emergency communications” or “911” programs in 

their respective counties; specifically, the call centers that receive and route the 911 emergency 

calls to the proper emergency responders (e.g., police, fire, ambulance). They allege that the 

defendant telephone company—to reduce costs, offer lower prices, and obtain more customers—

engaged in a covert practice of omitting fees mandated by Tennessee statute, and they seek 

compensation under that statute. They also allege that, while concealing this practice, the 

telephone company violated the Tennessee False Claims Act. The defendant telephone company 

moved to dismiss the first claim, arguing that the statute contained no implied private right of 

action. The district court agreed. The telephone company then moved for summary judgment on 

the second claim, arguing that its statements were not knowingly false. The district court agreed 

again, ending the action. When the plaintiffs appealed, we consolidated their appeals and, finding 

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Hamilton Cty. Emer. Commc’ns, et al. v. BellSouth Page 3

that the district court erred in both the dismissal and the summary judgment, we REVERSE both 

judgments and REMAND for further proceedings consistent with this opinion. 

I.

In 1984, Tennessee passed its Emergency Communications District Law (hereinafter the 

“911 Law”), Tenn. Code Ann. (T.C.A.) § 7–86–101 et seq., to formally establish 911 as the 

primary emergency telephone number for all Tennessee residents.1 The 911 Law created 

municipal corporations for each county, i.e., Emergency Communications Districts (“Districts”), 

to run the 911 programs, specifically including the call centers that receive and route the 911 

emergency calls to the proper emergency service. Id. at §§ 104 to 107. To support these 

functions, the 911 Law empowers the Districts to levy a charge (the “911 charge”) on telephone 

users’ phone lines. Id. at § 108(a). Correspondingly, the 911 Law compels a telephone “service 

supplier” such as BellSouth to bill and collect these 911 charges from their “service users.”2 Id. 

at § 108(d). The 911 Law completes the loop by ordering the service suppliers (phone 

companies) to report and remit the 911 charges to the Districts.3 Id. at § 110(a). 

Beginning in 2011, several Districts sued BellSouth to recover tens of millions of dollars 

in 911 charges that they believe BellSouth should have billed, collected, and remitted. They 

sought recovery on multiple theories, three of which persist to appeal. The Districts sought to 

recover directly under the 911 Law, but the district court dismissed that claim, holding that the 

911 Law does not provide a cause of action against service suppliers such as BellSouth. 

Hamilton Cty. Emergency Commc’ns Dist. v. BellSouth Telecomms., LLC (Hamilton I), 890 F. 

 

1

On April 25, 2014, the governor of Tennessee signed into law a sweeping overhaul of the 911 Law, titled 

“911 Funding Modernization and IP Transition Act of 2014,” 2014 Tenn. Pub. Acts 795. This Act repealed and 

replaced the 911 Law at issue here, such that many of the statutory provisions cited herein have been deleted or 

relocated within the Tennessee Code. This opinion hereafter refers only to the old version of the statute; i.e., the 

“911 Law.”

2

Simply put, a “service supplier” is a phone company, i.e., “any person, corporation or entity providing 

exchange telephone service to any service user.” T.C.A. § 7–86–103(14). A “service user” is a phone company’s 

customer, i.e., “any person, corporation, or entity that is provided 911 service.” Id. at § 103(15).

3

The service suppliers may also charge the Districts on a per line basis for administration and operation of 

the 911 lines but, while that aspect has been occasionally referenced in this case, it is not a material issue. 

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Hamilton Cty. Emer. Commc’ns, et al. v. BellSouth Page 4

Supp. 2d 862, 876 (E.D. Tenn. 2012).4 The Districts also sought to recover for a breach of 

fiduciary duty under an agency construct, but the court granted summary judgment to BellSouth, 

finding a lack of control and an “arm’s-length business relationship,” not an agency relationship 

with fiduciary obligations.5 Hamilton Cty. Emergency Commc’ns Dist. v. BellSouth Telecomms., 

LLC (Hamilton II), 154 F. Supp. 3d 666, 692 (E.D. Tenn. 2016). Finally, the Districts sought 

recovery via the Tennessee False Claims Act (TFCA), T.C.A. § 4-18-101 et seq., but the court 

held that BellSouth’s interpretations of the 911 Law were sufficiently reasonable and the 

Districts could not demonstrate “falsity” under the TFCA. Id. at 700.

II.

Our review in this appeal is de novo. See Hogan v. Jacobson, 823 F.3d 872, 883 (6th Cir. 

2016); Yazdian v. ConMed Endoscopic Techs., Inc., 793 F.3d 634, 644 (6th Cir. 2015).

A.

The Districts contend that the district court erred by holding that the 911 Law implies no 

private right of action, arguing that the court overlooked Tennessee Code § 1-3-119(c)(4) and 

misapplied Brown v. Tennessee Title Loans, Inc., 328 S.W.3d 850 (Tenn. 2010). The district 

court relied on Brown and, after acknowledging that the 911 Law contained no express right of 

action against service suppliers (phone companies), accurately recited Brown’s three-factor 

inquiry into “whether the legislature intended for such a right to be implied”: 

(1) whether the party bringing the action is an intended beneficiary 

within the protection of the statute, 

(2) whether there is any indication of legislative intent, express or 

implied, to create or deny the private right of action, and 

 

4

The ten appeals here came from a single, consolidated case in which the district court first consolidated 

the ten separate district court cases, each with its own docket and case number, on a joint motion by the parties for 

the limited purpose of deciding the motion to dismiss (6/5/12). Shortly after granting that motion in part (8/20/12), 

the district court designated the Hamilton County case as the lead case, but acknowledged that the cases were not 

consolidated (9/26/12). Eventually, the district court formally consolidated the cases “per chambers” (10/7/15), 

though without a formal motion or order, and issued a single opinion and final judgment. All ten plaintiffs appealed 

that judgment and we consolidated those ten appeals on a joint motion by the parties (2/26/16).

5

In this appeal, the Districts have abandoned their “confidential relationship” theory of agency, which gave 

rise to the district court’s finding of an “arm’s-length business relationship.” Therefore, we do not address it.

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(3) whether implying such a remedy is consistent with the underlying 

purposes of the legislation.

Hamilton I, 890 F. Supp. 2d at 874 (formatting modified) (quoting Brown, 328 S.W.3d at 855 

& n.4 (relying on Cort v. Ash, 422 U.S. 66, 78 (1975), which had conceived these factors in the 

federal context)). The district court answered “no” to each query, announcing that: (1) the 

Districts were not the intended beneficiaries, id. at 875 (i.e., “the actual beneficiary of the statute 

is the public” and “[a]lthough [a District] is the conduit through which the public receives 

911 service, it is not the actual beneficiary”); (2) “it is highly likely the Tennessee legislature did 

not intend to create such a right of action” given that “the [911] Law explicitly provides that 

legal action can be taken against service users [but does not include a similar provision for][6]

service suppliers,” id.; and (3) “the primary purpose of the [911 Law] is to establish a uniform 

emergency number for the public” not to “ensur[e] service suppliers properly bill, collect, and 

remit 911 charges,” id. at 876 (touting the applicability of “other available remedies,” 

unspecified).

Brown warrants some further examination before we proceed. The question in Brown

was whether the Tennessee Title Pledge Act (TTPA)7implied a private right of action by a 

borrower against a lender who violated the TTPA by charging excessive interest or unauthorized 

fees. Brown, 328 S.W.3d at 853. In conducting the three-query analysis (supra), the Tennessee 

Supreme Court found that (1) the borrowers were the intended beneficiaries, but that neither the 

(2) legislative intent nor the (3) underlying purpose supported a private right of action. Id. at 

858-61. In its analysis, the Brown court returned repeatedly to the fact that the TTPA had 

specific, express enforcement provisions, operating “entirely through criminal and administrative 

penalties” (e.g., criminal misdemeanor prosecution and license suspension). Id. at 857-60. And 

these governmental-enforcement provisions took on added importance with the court’s 

 

6

The actual, unedited quote says that the 911 Law “explicitly provides that legal action can be taken against 

service users but not service suppliers,” Hamilton I, 890 F. Supp. 2d at 875 (referring to T.C.A. § 7-86-110(c)), 

which could be misread as an assertion that the 911 Law says explicitly that legal action cannot be taken against 

service suppliers. But the 911 Law says nothing at all about the right to take legal action against service suppliers. 

The bracketed replacement language is to avoid any such misreading. 

7

The Tennessee Title Pledge Act, T.C.A. § 45-15-101 et seq., governs “title pledge transactions,” in which 

a borrower secures a short-term loan in exchange for a security interest in the title to his or her motor vehicle.

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proclamation that “where an act as a whole provides for governmental enforcement of its 

provisions, we will not casually engraft means of enforcement of one of those provisions unless 

such legislative intent is manifestly clear.” Id. at 857 (editorial marks omitted) (quoting Premium 

Fin. Corp. of Am. v. Crump Ins. Servs. of Memphis, Inc., 978 S.W.2d 91, 94 (Tenn. 1998)); 

see also Am. Heritage Apts., Inc. v. Hamilton Cty. Water & Wastewater Treatment Auth., 

494 S.W.3d 31, 52 (Tenn. 2016) (adopting the underlying court’s reasoning to hold that 

Tennessee’s Wastewater Treatment Authority Act, T.C.A. § 68-221-601 et seq., creates a private 

right of action (citing Am. Heritage Apts., Inc. v. Hamilton Cty. Water & Wastewater Treatment 

Auth., No. E201400302COAR3CV, 2015 WL 399215, at *10 (Tenn. Ct. App. Jan. 30, 2015), 

which emphasized the absence of any administrative remedy and applied the Brown factors)).8

The 911 Law here, however, contained no such governmental-enforcement provisions 

against a service supplier; no express criminal sanctions for even the most wanton violation, no 

means of imposing any administrative penalty, no governmental oversight at all, in fact. See

T.C.A. § 7-86-110. The 911 Law provided the Districts with no “other” remedy, no other means 

of enforcing the 911 Law’s provisions against the service supplier (i.e., of compelling BellSouth 

to bill, collect, and remit the 911 charges), and no other means of penalizing a service supplier 

 

8

In Hardy v. Tournament Players Club at Southwind, -- S.W. 3d --, No. W2014-02286-SC-R11-CV, 2017 

WL 922482, (Tenn. Mar. 8, 2017), the Tennessee Supreme Court recently held that the “Tip Statute” provision of 

the Tennessee Wage Regulation Act, T.C.A. § 50-2-107, does not imply a private right of action by a waitress 

whose employer had collected her tips from her customers but withheld them from her, in violation of the statute. In 

so doing, the court applied the analysis from Brown and referred numerous times (as many as 15 times) to the 

statute’s inclusion of governmental enforcement provisions and the proposition that such inclusion implies a 

legislative intent to deny a private right of action. The decision’s ultimate purpose, however, was to overrule a 

longstanding appellate case, Owens v. University Club, No. 02A01-9705-CV-00103, 1998 WL 719516 (Tenn. Ct. 

App. Oct. 15, 1998), and reject the “doctrine of legislative inaction” as a means of finding a private right of action in 

the Tip Statute by “presum[ing] that the legislature knew of the Court of Appeals’ holding in Owens.” Id. at *15. 

One part of the Hardy opinion perhaps warrants specific mention here. As part of its analysis of 

Tennessee’s legislative-inaction doctrine, the court announced that “Tennessee Code Annotated section 1–3–119 

(a)-(b) provides that legislation must contain express language to create or confer a private right of action under a 

statute, and that no court may construe a statute to impliedly create a private right of action in the absence of such 

language,” but then recognized an exception under § 1–3–119(c)(1), for “prior judicial decisions” “in which a court 

(prior to the effective date of the statute) ha[d] recognized such a private right of action.” Hardy, 2017 WL 922482 

at *14. The present case falls within a different exception, § 1–3–119(c)(4): “[A court may] [r]ecognize a private 

right of action commenced by a state or local governmental entity to collect any fees owed for a governmental 

service or to recover such fees from a party that is obligated to bill and collect fees owed others for a governmental 

service.” Thus, neither the language nor the reasoning of this part of Hardy affects the present case.

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for failing to do so. This absence of any other enforcement provision in the 911 Law is a 

consummate distinction from the TTPA statute in Brown.

Therefore, in considering the district court’s application of Brown’s three-part inquiry to 

the 911 Law, we begin with the importance Brown placed on the TTPA’s governmentalenforcement provisions when analyzing the “underlying purpose” factor: the 911 Law, unlike the 

TTPA, has no comprehensive regulatory system, no enforcement provisions, no “Commissioner” 

or overseer with “broad enforcement authority,” and no prescribed penalties for violation.9

The district court also deviated from Brown in two significant ways. After stating 

Brown’s three-part inquiry clearly and accurately, Hamilton I, 890 F. Supp. 2d at 874, the court 

altered two of those factors, converting the first factor’s “an” intended beneficiary, Brown, 

328 S.W.3d at 855, into a requirement that the plaintiff be “the” only intended beneficiary; and 

converting the third factor’s “consistent with the underlying purposes,” id., into a limitation that 

the charge at issue be the statute’s “primary purpose.” The court’s conclusion that the Districts 

could not satisfy the factors, and that the 911 Law did not imply a private right of action, 

inescapably relies on these modifications to the factors. See Hamilton I, 890 F. Supp. 2d 875 

(“the actual beneficiary of the statute is the public” and “[a]lthough [a District] is the conduit 

through which the public receives 911 service, it is not the actual beneficiary” (emphasis 

added)); id. at 876 (“the primary purpose of the [911 Law] is to establish a uniform emergency 

number for the public” not to “ensur[e] service suppliers properly bill, collect, and remit 

911 charges” (emphasis added)). Our reading of Brown is, therefore, different from the district 

court’s, which drastically affects the following analysis, given that we review this issue de novo.

 

9

The Tennessee Regulatory Authority (TRA) and Tennessee Emergency Communications Board (TECB) 

did give the Districts a regulatory ability to negotiate an audit of each District’s largest service supplier, such as 

BellSouth. See Tenn. Comp. R. & Regs. 1220-04-08-.13(2)(g) (“For a period of four (4) years from June 6, 1995, 

. . .within each Emergency Communications District, the Incumbent Enhanced 911 Emergency Service Provider 

shall . . . [b]ill, collect and remit the Enhanced 911 fees associated with its subscribers ... to the appropriate 

Emergency Communications District ...; and [] provide a mutually agreeable means of auditing the subscriber base 

by number and type by the Emergency Communications District auditor.”) (expired June 6, 1999); Tenn. Comp. R. 

& Regs. 1220-04-08-.13(4) (“After June 6, 1999, the incumbent Enhanced 911 Service Provider or the dominant 

Local Telecommunications Service Provider within an ECD territory shall be required to offer Enhanced 911 service 

as provided for in Paragraph (2) above,” presumably including audits.). But this was not a regulatory overseer.

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On de novo review, we must decide whether the Tennessee legislature intended the 

Districts to have a private right of action against a service supplier such as BellSouth under the 

911 Law, based on the three-factor inquiry set out in Brown, 328 S.W.3d at 855. 

1. Intended Beneficiary: “whether the party bringing the cause of action is an intended 

beneficiary within the protection of the statute.” Id. The Districts assert that a statute can intend 

multiple beneficiaries and that the 911 Law does just that, intending the general public as the 

ultimate beneficiary of the 911 program overall but the Districts as the specific beneficiary of the 

provisions ordering the service suppliers to bill, collect, and remit the money to the Districts. 

Stated another way, the general public is the direct beneficiary of the Districts’ operating the 

911 program (and the 911 Law’s provisions that order the Districts to do so), whereas the 

Districts are the direct intended beneficiary of BellSouth’s billing, collecting, and remitting of 

the 911 charges (and the 911 Law’s provisions that order BellSouth to do so). 

BellSouth argues that “the 911 Law did not confer upon the [Districts] a benefit; it 

imposed upon them a duty to protect the public,” meaning that the Districts merely fill a 

“functional role”; and even if the Districts “‘may benefit’ in a secondary way” or receive a 

“residual benefit,” that is insufficient to make them an intended beneficiary. [Appellee Br. at 21-

22.] The Districts answer that it is because the 911 Law commands them (i.e., imposes a 

“statutory responsibility” upon them) to operate the 911 program that “[t]hey are the principal 

beneficiary of the 911 Charge revenue that BellSouth is required to properly bill, because they 

cannot fulfill their statutory responsibilities without that revenue.” [Apt. Reply Br. at 9.] 

The 911 Law created a scheme in which the Districts’ funding is utterly dependent on 

BellSouth’s proper billing, collecting, and remitting of the 911 charges; therefore, the Districts’ 

very existence depends on BellSouth’s proper compliance with the 911 Law. But BellSouth is 

not reciprocally beholden to the Districts in any way. These two entities are not collaborators or 

partners, they are wholly unrelated and independent but for this one thing. Each performs its 

ministerial functions as the 911 Law commands, and each receives only as the 911 Law bestows. 

The 911 Law commands BellSouth to bill, collect, and remit the 911 charges and it bestows that 

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money on the Districts. This scheme, which makes the Districts so inescapably dependent on 

BellSouth, also makes the Districts an intended beneficiary of BellSouth’s obligations. 

2. Legislative Intent: “whether there is any indication of legislative intent, express or 

implied, to create or deny the private right of action.” Brown, 328 S.W.3d at 855 (emphasis 

added). The Districts propose three indications of legislative intent, beginning with Tennessee’s 

stand-alone “Private Right of Action” statute:

[A court may] [r]ecognize a private right of action commenced by a state or local 

governmental entity to collect any fees owed for a governmental service or to 

recover such fees from a party that is obligated to bill and collect fees owed others 

for a governmental service.

T.C.A. § 1-3-119(c)(4) (enacted July 1, 2012). This fits our facts: the Districts are municipal 

entities, seeking to recover from BellSouth, a party obligated to bill and collect fees for the 

911 program, a governmental service.10 But as BellSouth explains, this provision “says only that 

a court may (not must) find an implied right of action”; the district court properly exercised its 

discretion in deciding whether to find a private right of action pursuant to Tennessee law 

(Brown); and therefore, this provision does not contravene the district court’s decision. And as 

an indication of legislative intent, it is equally conflicted. This statute, enacted in 2012, does not 

speak to the legislature’s intent when it enacted the 911 Law 28 years earlier. On the other hand, 

it does speak to the present state of mind of the Tennessee legislature.

Next, the Districts—attempting to analogize an Alabama case under Alabama law—also 

point to the fact that the 911 Law created each District as “a ‘municipality’ or public corporation 

in perpetuity,” T.C.A. § 7-86-106, and Tennessee law empowers municipal corporations with the 

inherent right to sue, see Bd. of Park Comm’rs v. City of Nashville, 185 S.W. 694, 700 (Tenn. 

1916). But that reasoning does not extend so far as to provide that the Districts’ right to sue 

includes the specific right to sue BellSouth under the 911 Law. See, e.g., Abel v. Welch, 

 

10In their appellate brief, the Districts discuss some legislative history from the committee meeting on this 

statute’s Senate Bill, to the effect that this provision was intended specifically for their benefit. [Apt. Br. at 17-18.] 

But as BellSouth replies, this history is vague at best and hardly compelling, let alone determinative.

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315 S.W.2d 268, 270 (Tenn. 1958). And neither the Alabama case nor the Alabama law speaks 

to the Tennessee legislature’s intent when enacting the Tennessee 911 Law in 1984. 

Finally, the Districts point to the last provision in § 110, which states: “Good faith 

compliance by the service supplier [phone company] with the provisions of this chapter shall 

constitute a complete defense to any legal action or claim against the service supplier arising in 

connection with this part.” T.C.A. § 7-86-110(e). The Districts argue that this good-faithdefense provision necessarily anticipates that phone companies would be sued, implying some 

legislative intent—or at least expectation—of a private cause of action against them. BellSouth 

reasserts the district court’s conclusion that this good-faith-defense provision was likely intended 

to defend against only countersuits by customers whom BellSouth might have sued to enforce 

the 911 charge: 

[T]his defense was included in the same section [§ 110] as the provision 

authorizing the service supplier ‘to demand payment from any service user who 

fails to pay any proper service charge’ and to ‘take legal action, if necessary, to 

collect the service charge from the service user.’ § 110(c). Hence, one logical 

interpretation of the good faith defense, read together with the aforementioned 

provision, is that the statute protects the service supplier in the event a service 

user takes legal action against it when acting pursuant to [§ 110(c)].

Hamilton I, 890 F. Supp. 2d at 875-76 (citation form modified). While this is a reasonable 

speculation, it begs a counter speculation because this defense was also included in the same 

section (§ 110) as the provision ordering the service supplier (phone company) to remit the 

911 charges to the Districts, § 110(a) (“The service supplier shall remit the funds collected as the 

service charge to the district every two (2) months. Such funds shall be remitted to the district no 

later than thirty (30) days after the last business day of such two-month period.”). Hence, 

another “logical interpretation” of the good-faith-defense provision—which says, “shall 

constitute a complete defense to any legal action or claim against the service supplier arising in 

connection with this part [§ 110],” id. at § 110(e) (emphasis added)—is that it protects the 

service supplier (phone company) in the event a District sues it for violating § 110(a). 

Obviously, the legislature might have intended one or the other or both (or neither) of these 

speculations, but we need not speculate or choose from among these possibilities. 

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BellSouth presses the district court’s other finding of legislative intent, which was that 

the 911 Law granted the Districts an express right of action against the service users (telephone 

customers), T.C.A. § 7-86-110(c), but omitted any corresponding express right of action against 

service suppliers (phone companies), implying—through this exclusion—an intent to deny the 

Districts a private right of action against the phone companies. To be sure, such a scenario can 

be, and often is, read as an indication of legislative intent, but this is not an overpowering 

inference. 

All told, we do not find a compelling indication one way or the other of legislative intent 

either to create or deny the private right of action. We can call this factor a draw.

3. Underlying Purpose: “whether implying such a remedy is consistent with the 

underlying purposes of the legislation.” Brown, 328 S.W.3d at 855. The 911 Law’s professed 

purpose was “the establishment of a uniform emergency number to shorten the time required for 

a citizen to request and receive emergency aid,” T.C.A. § 7-86-102(a), via three conceptual parts. 

The statute: 

(1) established the three-digit number “911” as the universal emergency 

telephone number, id. at §§ 102(a), 107(c); 

(2) authorized the county governments to create the Emergency 

Communications Districts to administer the 911 program, id. at §§ 104-07; 

and 

(3) provided a broad array of funding, §§ 108-51, which therein ordered and 

empowered the phone companies to bill and collect fees from their 

customers and remit those funds to the Districts, id. at §§ 108(d), 110(a), 

110(c). 

The statute does not authorize the Districts to obtain payment directly from telephone customers.

Each of the three parts is equally necessary or important. A “uniform emergency 

number” is insufficient all by itself to shorten the time for a citizen to request and receive 

emergency aid; that number must connect the caller to a call-center employee who can dispatch 

an emergency responder; and funding is necessary to build, staff, operate, and maintain that call 

center, as well as the rest of the 911 program. Hence, “[t]he general assembly f[ound] also that 

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the continued viability of the lifesaving 911 emergency communications service is of the highest 

priority for the health and safety of the citizens of Tennessee.” Id. at § 102(b)(1).

Not to belabor the point, as we have already analyzed this in the “Intended Beneficiary” 

section, supra, but the 911 Law created a particular scheme in which the Districts’ funding is 

entirely dependent on the service suppliers’ proper billing, collecting, and remitting of the 

911 charges; hence, the Districts’ continued viability—indeed, their very existence—necessarily 

depends on BellSouth’s proper compliance with the 911 Law. It is therefore fully consistent 

with the underlying purpose that the Districts have a means of compelling BellSouth to properly 

bill, collect, and remit the 911 charges in accordance with the 911 Law. Moreover, because the 

911 Law contains no other regulatory system, governmental overseer, criminal or administrative 

enforcement provisions, or express penalties for violation, the Districts’ most expedient and 

effective means of compelling the phone companies is a private right of action. 

We conclude that the 911 Law implies a private right of action by the Districts against a 

service supplier such as BellSouth to effectuate its requirements and serve its purposes. We 

REVERSE the district court’s conclusion to the contrary and its dismissal of this claim.

B.

The Districts also appeal the district court’s rejection of their agency theory. They 

contend that BellSouth was their agent for purposes of billing, collecting, and remitting the 

911 charges and, therefore, owed them a fiduciary duty. In denying that Bellsouth was their 

agent, the determinative factor to the district court was whether one party (the Districts as 

principal) had the right to control the actions of another (BellSouth as agent), and the extent of 

that control. See Hamilton II, 154 F. Supp. 3d at 688. The court found a reciprocal relationship 

in which the Districts did not have sufficient control over BellSouth to establish an agency 

relationship.

We disagree with the district court’s basic view of the relationship. These two parties 

were not engaged in an autonomous or reciprocal relationship; they were “captive” coparticipants in the 911 program under the 911 Law. Each acted independently under express 

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statutory mandate. The only “relationship” was that dictated by the 911 Law, which empowered 

the Districts to seek funding from BellSouth and ordered BellSouth to provide it. There was no 

negotiation between them, no contract, no business transaction, and no reciprocation. The 

Districts could not fire BellSouth and hire someone else to collect the 911 charge, or collect the 

911 charge themselves. BellSouth could not demand better compensation, petition the Districts 

for better terms or conditions, or even quit. 

This peculiar relationship fundamentally affects the determination of agency. The district 

court relied on two cases for its extent-of-control approach: White v. Revco Disc. Drug Ctrs., 

Inc., 33 S.W.3d 713, 723 (Tenn. 2000) (a respondeat superior case in which the question was 

whether the principal drug store was liable for the tortious conduct of its de facto agents, off-duty 

police officer security guards), and Gordon v. Greenview Hosp., Inc., 300 S.W.3d 635, 653 

(Tenn. 2009) (a personal jurisdiction case in which the question was whether one company was 

the agent of another for imputing jurisdiction). On appeal, the Districts do not dispute whether 

control is the determinative factor, but merely insist that they had sufficient control (i.e., ordered 

implementation of the 911 charge, when to begin, and how much to charge). 

But this is not a case in which the parties may (or may not) have created agency between 

themselves by their agreement or actions, see Gordon, 300 S.W.3d at 653, White, 33 S.W.3d at 

723. As we just explained, these parties had neither an agreement nor even the authority to 

negotiate one. The present agency relationship (if it is such) was not created by the participants, 

it was created by the State, via statute, namely, the 911 Law, which would also define the scope 

of such agency. Hence, the “extent of control” in this case is not a function of the parties or their 

actions (actions as to which the statute gave them no flexibility or discretion). Rather, the 

911 Law fully and exclusively dictated the extent of control. The determinative analysis is not a 

measure of the Districts’ authority or exercise of control; it is just statutory interpretation. 

The 911 Law does not create an agency relationship expressly and the “control” it gives 

the Districts is both minimal and limited. But, recognizing that “[i]n its broadest sense, the 

concept of agency includes every relation in which one person acts for or represents another,” 

White, 33 S.W.3d at 723 (quotation marks omitted), one might interpret the 911 Law as 

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implicitly making the service supplier (BellSouth) the Districts’ de facto agent for the limited 

purpose of billing, collecting, and remitting the 911 charge. In that role, the service supplier 

would have a fiduciary duty to bill, collect, and remit the charge in accordance with the 911 Law. 

Such an interpretation would permit the Districts to sue for breach of fiduciary duty.

We are aware that the plaintiff is the master of the complaint and may proceed on its 

preferred cause of action, but we are also aware that the Districts raised this agency-based action 

only after and because the district court held that the 911 Law afforded them no statutory private 

right of action. See Gen. Ins. Co. of Am. v. Lamar Corp., 482 F.2d 856, 859 (6th Cir. 1973) 

(“When a statute provides a beneficial right but no civil remedy for its securance, the common 

law on its own hook provides a remedy, thus fulfilling [the] law’s pledge of no wrong without a 

remedy.” (quotation marks and citation omitted)). 

In the present context, however, in which we have already held that the 911 Law gives 

the Districts an implied private right of action, see § II.A., supra, an additional finding that the 

911 Law also implies an agency relationship for the limited purpose of billing, collecting, and 

remitting the 911 charge, and an associated fiduciary duty, would afford the Districts nothing 

more than they already have—the right to sue BellSouth for its failure to bill, collect, and remit 

the 911 charge under the 911 Law. There is no need here for a common law remedy to protect 

an unprotected statutory right. There is no need to construe the statute as implying agency so as 

to create a fiduciary cause of action when we have already construed the statute as implying a 

virtually identical statutory cause of action. In other words, the Districts’ private statutory right 

of action would redress the identical claim the Districts would raise in a breach of fiduciary duty 

action under this unique and limited construction of agency and is therefore unnecessary. 

C.

Finally, the Districts appeal the grant of summary judgment to BellSouth on their action 

under the Tennessee False Claims Act (TFCA), T.C.A. §§ 4-18-101 to 108, contending that the 

district court: (1) misunderstood their TFCA claim, (2) misconstrued the intent behind 

BellSouth’s monthly and annual reports, (3) ignored all the unbilled lines for which BellSouth 

had no explanation, (4) improperly inserted a “bad faith” requirement into the analysis, and 

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(5) decided material factual disputes in accepting BellSouth’s interpretations of the 911 Law as 

“reasonable” explanations for the unbilled lines. We address each of these contentions in turn.

1. TFCA Claim. The Districts’ TFCA claim was based on BellSouth’s monthly and 

annual reports, in which BellSouth asserted that it had billed all the lines it was required to bill. 

See Hamilton II, 154 F. Supp. 3d at 692-93 (“BellSouth represented in each of its monthly 

reports submitted to the Districts along with its remittances that ‘in accordance with the 

Tennessee Legislature, BellSouth has billed and collected [911 Law] Surcharges as stated 

below.’” (editorial mark and footnote omitted)). The Districts’ rather simple TFCA claim was 

that these statements were false, such that BellSouth had knowingly made, used, or caused to be 

made or used a false statement to conceal, avoid, or decrease its obligation to transmit money to 

the Districts (i.e., political subdivisions of the State), in violation of T.C.A. §4-18-103(a)(7). 

The district court construed this as a “false certification theory” claim, which—it stressed 

as “[i]mportantly”—“only applies where the underlying regulation is a ‘condition of payment,’” 

Hamilton II, 154 F. Supp. 3d at 696 (emphasis added), meaning, presumably, that a District 

could not have approved BellSouth’s payment as satisfied without BellSouth’s presenting a 

certification of compliance with the 911 Law, see id. But the 911 Law did not require such 

approval, and certification of compliance was not a “condition of payment.” Instead, the 

“certification” was gratuitous. Nevertheless, from this premise, the court summarized its task:

Assuming BellSouth was certifying compliance, the [c]ourt must determine 

whether there were in fact legitimate grounds for the disagreement.... The 

Districts’ evidence must at least show that BellSouth’s reading [wa]s so 

unreasonable that [BellSouth’s] arguments could not have been made in good 

faith and thus no legitimate grounds for disagreement existed.

Hamilton II, 154 F. Supp. 3d at 697 (citations, editorial marks, and quotation marks omitted; 

emphasis added). Because the court announced that it was beginning with the assumption that 

“BellSouth was certifying compliance,” we must conclude that this assumption had some effect 

on the construction of the test that followed from it. This is an error compounding itself.

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The Districts did not assert a strict “false certification theory”; they simply asserted that 

BellSouth had knowingly used false statements to conceal from them that it had not billed 

(or, therefore, collected and remitted) all of the 911 charges that it was supposed to.

2. Billing Reports. Each month, and again annually, when BellSouth remitted to the 

Districts the 911 fees that it had collected, it attached an accompanying report that said: “In 

accordance with the Tennessee Legislature, BellSouth has billed and collected [the 911 Law] 

Surcharges as stated below.” See Hamilton II, 154 F. Supp. 3d at 692. The Districts said this 

was a misrepresentation by BellSouth that it had “collected and remitted all 911 charges required 

under the 911 Law,” whereas BellSouth said this just reported “the number of lines against 

which it actually assessed a 911 charge.” Id. at 694 (footnote omitted). 

BellSouth argues that its remittance reports did not certify that it had billed all

required 911 charges. Its corporate representative . . . states that in both the preand post-July 2010 forms, BellSouth was representing only that it billed and 

remitted the numbers and amounts in the reports, not that it billed and remitted for 

all eligible lines. In other words, when the reports stated ‘in accordance with the 

Tennessee Legislature, BellSouth has billed and collected [911 Law] Surcharges 

as stated below,’ they meant that, pursuant to the 911 Law, BellSouth reported the 

surcharges ‘billed and collected.’ That is, the reports represented that, in 

accordance with the 911 Law’s requirement to report all charges billed and 

collected, BellSouth provided them as ‘stated below.’

Id. at 694 n.24 (citation and editorial marks omitted; emphasis added). The court concluded:

[T]he facts are as follows: 1) BellSouth represented that the reports contained a 

listing of all 911 charges due under the 911 Law; and 2) BellSouth did not include 

all the lines which the Districts claim should have been billed. This amounts to 

nothing more than a disagreement over statutory interpretation and is thus 

insufficient to establish the ‘knowing falsehood’ element required for TFCA 

liability. There is no evidence that the reports stated BellSouth was collecting and 

remitting on lines which it was not.[11] At most, BellSouth and the Districts had 

different interpretations of the proper approach to [which lines to bill].

 

11To be clear, the Districts never accused BellSouth of reporting that it had been “collecting and remitting 

on lines which it was not [actually collecting and remitting]”; the Districts’ accusation was always and only that 

BellSouth had not billed all the lines that it was supposed to bill.

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Id. at 700-01. The Districts contend that the court’s construction views the facts and draws 

inferences so as to misconstrue the intent behind and effect of BellSouth’s representation in its 

reports. 

In this appellate review of summary judgment, we do not find facts or limit the finder of 

fact on remand. We merely accept the Districts’ proffered facts and draw inferences in the 

Districts’ favor, as we must in deciding summary judgment. Hence, those claims, viewed in the 

light most favorable to the Districts as the non-moving party, look like this:

Fact 1: BellSouth represented that the reports contained a listing of 911 charges 

“in accordance with the Tennessee Legislature” (or as the district court phrased it, 

“a listing of all 911 charges due under the 911 Law”).

Fact 2: The reports did not include all the lines that should have been billed.

Fact 3: The reports did not identify any of the lines that BellSouth had chosen not 

to bill based on its statutory interpretation; moreover, the reports did not reveal 

that BellSouth had engaged in any statutory interpretation to omit lines. 

Fact 4: The reports did not identify any of the lines that BellSouth had not billed 

without explanation. 

Fact 5: The reports did not identify any lines at all that had not been billed; the 

reports presented only lines that had been billed and none that had not been billed.

Inference 1: BellSouth represented that the reports contained a listing of every 

telephone line in that county subject to 911 charges under the 911 Law, omitting 

none, and correspondingly listed the resulting 911 fees from all of those lines, as 

properly billed, collected, and remitted under the 911 Law.

Inference 2: There was no basis for disagreement over statutory interpretation 

inasmuch as the Districts were wholly unaware that BellSouth was omitting lines 

or that it was engaging in statutory interpretation to justify the omission of lines.

Inference 3: The purpose of beginning each report with that statement was to 

mislead the Districts into believing that BellSouth was billing all the lines (or at 

least to pacify the Districts and avoid any such questions), so as to conceal that it 

was not billing some lines and not collecting all the charges it should have. 

Inference 4: BellSouth’s contention that this is merely a disagreement over 

statutory interpretation is an after the fact rationalization, disproven by the simple 

fact that BellSouth concealed (or at least did not disclose) any of this earlier.

We agree with the Districts that, at least for the purpose of surviving summary judgment, they 

have alleged and supported an actionable misrepresentation by BellSouth. 

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3. Unexplained Unbilled Lines. The Districts contend that they have presented a 

genuine issue of material fact concerning the “gap” between the number of lines on which 

BellSouth should have billed and the far fewer lines on which BellSouth actually billed. They 

contend that the district court overlooked or omitted some undetermined number of lines when it 

accepted BellSouth’s assertion that the lines all fall into one of five categories “for which 

BellSouth does not believe it is required to bill and remit 911 charges under the 911 Law,” 

Hamilton II, 154 F. Supp. 3d at 693. The Districts insist that a number of lines did not fall into 

those five categories—unbilled lines for which BellSouth offered no explanation—and there was 

no interpretive dispute concerning their billing, legitimate or otherwise. The Districts contend 

that, at a minimum, this TFCA claim survives for these unexplained unbilled lines.

When the Districts sued in November 2011, accusing BellSouth of failing to bill all of the 

lines it should have, that claim put 120 months of billings into dispute based on the 10-year 

statute of limitations. Early in discovery, the Districts sought to quantify the lines that had been 

billed and those that had not (as well as which lines should or should not have been, and why). 

BellSouth answered that it did not know how many lines it had, how many were billed, or how 

many were not. It denied the Districts’ discovery demands on that basis. Eventually, BellSouth 

hired an outside expert to investigate and prepare a report (hereinafter the “Report” (11/15/13) 

[R. 259-1]). Using data from 11 selected months between December 2009 and February 2013, 

the expert concluded—as the district court put it—“that BellSouth correctly identified eligible 

lines 99.4% of the time and that BellSouth billed and remitted 911 charges on 100.26% of those 

eligible lines,” Hamilton II, 154 F. Supp. 3d at 694 (citing the Report, ¶¶ 11-15, 107-08).

That is, BellSouth’s own paid expert found that BellSouth omitted at least 0.5% of the 

lines without explanation. Given the total volume of lines in any given county, this could be 

thousands of lines and thousands of dollars per month. Nor does BellSouth’s attorney assert on 

appeal that it billed every line that it was supposed to bill even under its version of what it was 

supposed to bill; at best it billed “the overwhelming majority” or “virtually all.” [Ape. Br. at 51, 

52.] And, while arguing the summary judgment motion before the district court, at one point 

BellSouth’s attorney put it this way: “[W]e never claimed, Your Honor, that BellSouth’s billing 

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was perfect. This is not a case about whether Bell[S]outh’s billing was perfect.” [R. 323, 39:9-

12] During an earlier exchange, however, when the Districts’ attorney was discussing the 

Report’s data, the district court had asked: “I take it from looking at the chart [in the Report] that 

there were no instances, at least in earlier years of more [money] being remitted [to the Districts] 

than should have been?” [R. 323, 34:7-9] The Districts’ attorney answered, without objection or 

clarification from BellSouth: “None at all, Your Honor. This is BellSouth’s own analysis. In the 

early years before we filed suit, not a single month in a single district [was there ever more 

money remitted to the Districts than should have been].” [R. 323, 34:10-12] So, while 

BellSouth’s billing wasn’t perfect, it never once managed to err accidentally in the Districts’ 

favor. 

The Districts contest several aspects of the Report, to be sure, but also argue that even 

taken at face value the Report actually proves their claim of numerous unexplained unbilled 

lines. For one thing, the Report itself demonstrates the existence of at least some unexplained 

unbilled lines in each of the months analyzed. Moreover, the substance of the Report (charts, 

graphs, and data) suggests that the number of unexplained unbilled lines is much larger than the 

Report’s conclusion revealed. When tabulating the number of lines that BellSouth should have 

billed but did not, the Report counted only the unbilled lines that BellSouth could not explain; 

for the rest, it had, as the district court noted, “assume[d] BellSouth had the better end of the [] 

interpretive disagreements” over which lines should or should not be billed, Hamilton II, 154 F. 

Supp. 3d at 694 n.23, thereby omitting all the unbilled lines for which BellSouth offered an 

explanation. Admittedly, this approach was clearly favorable to BellSouth, but that is neither 

unexpected nor inappropriate in that this was not an impartial investigation; it was BellSouth’s 

Report prepared by BellSouth’s paid expert. But the Districts argue that, even in its partisan 

form, the data not only fails to support the Report’s conclusion (i.e., 99.4% of lines properly 

billed, 100.26% of charges properly remitted), but so clearly contradicts it as to show its 

“obvious falsity.” Specifically, the Report contains charts and graphs that depict thousands of 

unexplained unbilled lines in each of the five data sets (months) from prior to March 2011, the 

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month when BellSouth changed its billing system.12 The differences in the data from before and 

after March 2011 are stark. See, e.g., R. 271-11 at p. 4, ¶11 and p. 15, Fig. 1 (chart summarizing 

the data collected for and presented in the Report). The Districts contend that these five months 

are representative of the 112 months before BellSouth changed its billing system (November 

2001 to February 2011), which would mean a massive quantity of unexplained unbilled lines.

We agree with the Districts that, at least for the purpose of summary judgment, they have 

identified a genuine dispute of material fact concerning their TFCA claim for the unexplained 

unbilled lines. The Districts survive summary judgment on this issue.

4. Bad Faith. The TFCA imposes liability on a defendant who “[k]nowingly makes, 

uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an 

obligation to pay or transmit money or property to the state or to any political subdivision,” 

T.C.A. § 4-18-103(a)(7) (emphasis added), and defines “knowingly” as “any of the following”:

(i) Has actual knowledge of the information;

(ii) Acts in deliberate ignorance of the truth or falsity of the information; or

(iii) Acts in reckless disregard of the truth or falsity of the information.

Proof of specific intent to defraud is not required.

T.C.A. § 4-18-102(2)(A) & (B). That the section concludes with “[p]roof of specific intent to 

defraud is not required” (emphasis added), is significant; it means that knowing the truth and 

withholding it is enough. In other words, this is not a fraud action, this is a simple 

misrepresentation action. This is, of course, consistent with possibilities (ii) and (iii), “deliberate 

ignorance” and “reckless disregard of the truth,” respectively. 

The district court began by accurately reciting the elements of a false claim, which can be 

paraphrased for our purposes as: (1) a statement that conceals a duty to pay the government; 

(2) the statement was objectively false; (3) the defendant knew the statement was false; and 

(4) the statement was contemporaneous with the duty. See Hamilton II, 154 F. Supp. 3d at 696. 

 

12The Report selected eleven data sets (months) from the pool of 120; five from before the change in 

billing practices and six from after.

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After reiterating the elements, with supporting citation, the court turned to “intent,” an aspect 

absent from those four elements, and said: 

Although the TFCA does not require proof of specific intent,[13]neither errors 

based simply on faulty calculations[,] flawed reasoning[,] imprecise statements[,]

or differences in interpretation growing out of a disputed legal question are false 

under the TFCA.[14] ‘Where there are legitimate grounds for disagreement over 

the scope of a . . . regulatory provision, and the claimant’s actions are in good 

faith, the claimant cannot be said to have knowingly presented a false claim.’ 

United States v. Southland Mgmt. Corp., 326 F.3d 669, 684 (5th Cir. 2003). . . .

The Districts’ evidence must at least show that BellSouth’s reading is so 

unreasonable that the arguments could not have been made in good faith and thus 

no ‘legitimate grounds for disagreement’ existed. Southland, 326 F.3d at 684.

Hamilton II, 154 F. Supp. 3d at 697 (editorial marks, some quotation marks, and certain citations 

omitted; emphasis added). The Southland opinion, relied upon (twice) in the foregoing passage, 

was a concurring opinion to a Fifth Circuit en banc decision. See Southland, 326 F.3d at 677-84 

 

13This statement cited T.C.A. § 4–18–102(2)(B), but omitted “to defraud” from the actual passage, which 

—as just quoted in the foregoing paragraph—says: “Proof of specific intent to defraud is not required.”

14The district court cited, among others, U.S. ex rel. Swafford v. Borgess Medical Center, 24 F. App’x. 

491, 491 (6th Cir. 2001) (per curiam), for the parenthetical quote: “Disputes as to the interpretation of regulations do 

not implicate False Claims Act liability.” In an associated parenthetical, the district court emphasized that Swafford

cited, with approval, Hagood v. Sonoma County Water Agency, 81 F.3d 1465, 1477 (9th Cir. 1996). The Eastern 

District of Tennessee had previously considered this assertion and countered that “Hagood does not stand for the 

proposition that a defendant’s reasonable interpretation of a regulation precludes falsity under the FCA”:

The defendants’ main argument is that a claim is not false under the FCA if there is any 

reasonable interpretation of the statute or regulation under which the claim would be true. Where 

the issue of truth or falsity of a particular statement turns on the meaning and interpretation of a 

regulation, defendants contend the statement is not ‘false’ for purposes of the FCA unless it is 

false under all reasonable interpretations. Defendants rely primarily upon Hagood . . . .

The defendants’ reliance on Hagood, 81 F.3d at 1477, and this line of precedent is 

misplaced. The [c]ourt instead follows the Ninth Circuit’s more recent decision in United States ex 

rel. Oliver v. Parsons Co., 195 F.3d 457 (9th Cir. 1999), cert. denied, 530 U.S. 1228 (2000). In 

Oliver, the Ninth Circuit discusses its prior opinion in Hagood and rejects the same argument 

being raised here by the defendants with regard to the ‘reasonable interpretation’ approach to 

falsity. Oliver . . . explains that Hagood does not stand for the proposition that a defendant’s 

reasonable interpretation of a regulation precludes falsity under the FCA. . . . Oliver recognizes 

there is a critical distinction where the regulations involved are discretionary. Oliver holds that 

where technical and complex administrative regulations are not discretionary, their meaning is 

ultimately a matter of judicial interpretation. It is the defendant’s compliance or lack of 

compliance with the nondiscretionary regulations, as interpreted by the courts, that determines 

whether the defendant’s conduct results in the submission of false claims under the FCA. 

United States v. Estate of Rogers, No. 1:97CV461, 2001 WL 818160, at *4 (E.D. Tenn., June 28, 2001) (citations 

omitted). We conclude that Hagood is of questionable authority.

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(Jones, J., concurring). The Southland majority made no mention of good faith and even the 

cited concurrence mentions it only this once, in passing, without any analysis or further 

consideration.15 Even if this assertion is correct, this one lonely sentence of dicta hardly appears 

sufficient to justify the inclusion of a good faith defense in an action where it does not otherwise 

appear and arguably might have been specifically excluded by the statute.

But the district court went further and transformed Southland’s good-faith defense into a 

requirement that the Districts must demonstrate that BellSouth acted in “bad faith,” analyzing 

individually each of BellSouth’s interpretations for the different types of lines and concluding for 

each that the Districts had not shown “bad faith.” Hamilton II, 154 F. Supp. 3d at 698 (for the 

100-Line Cap: “No evidence has been produced that supports an inference of bad faith on the 

part of BellSouth.”); id. at 698 (for the Centrex Lines: “BellSouth’s interpretation is not so 

unreasonable as to give rise to an inference of bad faith.”); id. at 700 (for the Multiplex Lines: 

“The above undisputed facts tell a familiar story of an interpretive dispute and simply do not 

show that BellSouth acted unreasonably or in bad faith.”); id. at 700 (for the Federal Government 

Lines: “Siding with the Comptroller General of the United States . . . may not always be correct, 

but at least in this context, it cannot be said to be in bad faith or illegitimate.”). 

We cannot agree that the TFCA requires the plaintiff to prove that the defendant acted in 

some form of bad faith, particularly when the statute imposes liability for “deliberate ignorance” 

 

15 BellSouth’s primary cite in its brief (and only other cite) for this proposition is U.S. ex rel. Lamers v.

City of Green Bay, 168 F.3d 1013, 1018 (7th Cir. 1999), which cites as its only authority Hagood. See note 14, 

supra.

The Amicus Chamber of Commerce cites four out-of-circuit opinions, but its lead citation does not actually 

support the proposition that an objectively reasonable interpretation of a statute necessarily disproves falsity:

[The defendant argues] that a defendant cannot be held liable under the FCA so long as it 

has an objectively reasonable interpretation of an ambiguous [statutory] provision. . . . But this 

court, looking to Supreme Court guidance, has held that a jury might still find knowledge if there 

is interpretive guidance that might have warned the defendant away from the view it took. In 

other words, even if the [provision] is ambiguous and [the defendant]’s interpretation is 

reasonable, there remains the question whether [the defendant] had been warned away from that 

interpretation. That question cannot readily be labeled as a purely legal question. Consequently, 

[the defendant] cannot prevail on the basis that the issue of knowledge should never have gone to 

the jury because it was entitled to summary judgment on a pure question of law. 

U.S. ex rel. Purcell v. MWI Corp., 807 F.3d 281, 288 (D.C. Cir. 2015) (citations, quotation marks and editorial 

marks omitted; emphasis added). Therefore, in the D.C. Circuit, an objectively reasonable interpretation of an 

ambiguous provision, standing alone, is not enough to disprove a False Claim Act claim as a matter of law.

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or “reckless disregard for the truth,” and in light of its closing admonition that “[p]roof of 

specific intent to defraud is not required.” T.C.A. § 4-18-102(A)(2)(ii)-(iii), (B). Consequently, 

we conclude that the district court’s granting of summary judgment on the basis that the Districts 

had failed to prove that BellSouth acted in bad faith was in error. While there might be a 

question as to the availability of this particular good-faith defense—whether reasonable disputes 

over regulations necessarily protect a defendant from TFCA claims—the Districts have not 

challenged that in this appeal and we need not decide it now. 

5. “Reasonableness” of BellSouth’s Interpretations. The district court considered 

BellSouth’s statutory interpretation for each type of line and, finding each interpretation 

reasonable, held that the Districts had not shown the “bad faith” necessary to prove a false claim. 

Id. at 697-701. The Districts contend that these interpretations were unreasonable after-the-fact 

excuses, or that whether they were reasonable was a disputed question of fact for a jury.

This is actually the crux of the Districts’ TFCA-claim appeal. But because the district 

court misunderstood the Districts’ actual TFCA claim, see II.B.1 & 2, supra, omitted some lines 

altogether, see II.B.3, supra, and applied the wrong standard, see II.B.4, supra, we are 

confronted with hypothetical rather than concrete questions about the court’s assessment of 

BellSouth’s statutory interpretation. Moreover, we are now confronted with a very different 

dispute from the one that was before the district court. Under a proper construction of the 

Districts’ TFCA claim, considering all the lines, and using a proper standard, BellSouth’s 

statutory-interpretation arguments might be irrelevant, different, or even counterproductive. 

Consequently, we return this question to the district court to reconsider in light of the totality of 

this opinion. 

III.

For the foregoing reasons, we REVERSE the judgments of the district court and 

REMAND for further proceedings consistent with this opinion.

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______________________________________________________

CONCURRING IN PART AND DISSENTING IN PART

______________________________________________________

KAREN NELSON MOORE, Circuit Judge, concurring in part and dissenting in part. 

I concur with the majority opinion that there is an implied right of action under the 911 Law and 

that the Districts’ 911 Law and TFCA claims survive summary judgment. However, I write 

separately to dissent from section II.B of the majority opinion.

The root of my dissent is the axiom, acknowledged by the majority, that “the plaintiff is 

the master of the complaint and may proceed on its preferred cause of action.” See Majority Op. 

at 14; accord Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987). Where I branch off from 

the majority is the application of this axiom. I believe that it is up to the Districts, not us, to 

decide whether they “need,” Majority Op. at 14, count two of their complaint, breach of 

fiduciary duty, R. 61 (2d Am. Compl. ¶¶ 112–21) (Page ID #1503–05). The district court, 

finding no fiduciary relationship among the Districts and BellSouth, dismissed count two. 

Hamilton Cty. Emergency Commc’ns Dist. v. BellSouth Telecomms., LLC, 154 F. Supp. 3d 666, 

692 (E.D. Tenn. 2016). The Districts appealed the district court’s judgment, and we have 

jurisdiction pursuant to 28 U.S.C. § 1291. We ought to give them an answer.

Regarding that answer, I believe that there is a genuine issue of material fact on whether 

BellSouth breached its fiduciary duty to the Districts. Although the 911 Law does not expressly 

state that telecommunications providers like BellSouth are agents or fiduciaries of the Districts, 

agency can be implied under Tennessee law. See Gordon v. Greenview Hosp., Inc., 300 S.W.3d 

635, 653 (Tenn. 2009). Whether a principal-agent relationship exists “hinges on the right to 

control the agent’s actions, and, ultimately, the fact of actual control over the agent.” Id.

(citation omitted). In consideration of this standard, the 911 Law conveys to the Districts 

considerable control over BellSouth; the statute empowers the Districts to set (1) the rate that 

BellSouth charges its customers, Tenn. Code Ann. § 7-86-108(a)(1)(A),161and (2) the date on 

 

1

BellSouth argues that because the Districts cannot charge more than $0.65 for residential customers and 

$2 for business customers without submitting the charge to a referendum vote or to the county legislature, see Tenn. 

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which BellSouth must begin to bill its customers, id. at § 7-86-108(e)(1). The fiduciary question 

in this case is analogous to Edwin B. Raskin Co. v. Johnson, in which a city hired a management 

company to run a golf course. No. 01-A-01-9708-CH-00392, 1998 WL 242605, at *1 (Tenn. Ct. 

App. May 15, 1998). In finding a fiduciary relationship, the Johnson court noted that the 

management company was “hired to operate the City’s golf course” and that “The City retains 

control over [the management’s] operation, exercising that control first through the City Finance 

Committee, and then through the Golf Course Commission,” which was created “to formulate 

policies, rules, and regulations, to set rates and fees, and to provide close supervision for the golf 

course.” Id. at *3. Similarly, the Districts “set rates and fees” in order to “provide close 

supervision” over emergency communications. See id.; Tenn. Code Ann. §§ 7-86-102(d), 106. 

Therefore, by the terms of the 911 Law, I believe that a fiduciary relationship exists among the 

Districts and BellSouth.

The question then becomes whether BellSouth breached its duties under that relationship, 

as the Districts allege in count two. “An agent is under an obligation to make full and complete 

disclosure of facts that will benefit his principal and the relationship is treated in the same 

general manner and with virtually the same strictness as that of trustee and beneficiary.” 

Marshall v. Sevier Cty., 639 S.W.2d 440, 446 (Tenn. Ct. App. 1982). The Districts have put 

forth evidence from which a reasonable juror could conclude that BellSouth did not make full 

and complete disclosure of facts that would benefit the Districts. See R. 271-17 (Shaffer Dep. at 

133) (Page ID #14234) (“Like right now I could not tell you . . . how many lines this company 

has got. They may be paying Bell for one line. They could be paying Bell for five lines, and 

Bell’s paying me for one. No way I would know.”); R. 271-18 (Stuermer Dep. at 135) (Page ID 

#14245) (“[W]e didn’t have access to the information to determine what was going on. So we 

. . . had to trust the vendors to give us that information and we worked off that information.”); 

R. 271-19 (Deford Dep. at 81–82) (Page ID #14255–56) (“[T]he only information we would 

have been able to obtain would have been through BellSouth AT&T employees. And they didn’t 

discuss this type of thing or they won’t discuss it with you.”); R. 271-20 (Coker Dep. at 165) 

 

Code Ann. § 7-86-108(a)(2)(A), their level of control is minimal. See Appellee’s Br. at 31. While this is certainly a 

constraint, it does not alter the power dynamic between the Districts and BellSouth. The point is the Districts’ 

position of power relative to BellSouth, not their absolute power and control.

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(Page ID #14263) (“When people have called and tried to get information, I do not believe 

they’ve got any answers.”). Therefore, I would reverse the district court’s judgment with respect 

to count two and remand for further proceedings on that count as well. I concur with the 

remainder of the majority opinion.

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