LaBorde v. City of Gahanna, Regional Income Tax Agency and Jennifer Teal Website

Welcome to the Gahanna Tax Lawsuit Website

This website contains information regarding a class certification and summary judgment decision and an award of damages to the Class that has been decided by the Court of Common Pleas, Franklin County, Ohio  in the case known as Douglas P. LaBorde, et al., v. The City of Gahanna, et al., Case No. 12 CV 8517, Judge Cocroft.

Douglas and Karla LaBorde (“Plaintiffs”) filed a lawsuit against the City of Gahanna, the Regional Income Tax Agency (“RITA”), and Jennifer Teal (“Teal”) in the Franklin County Court of Common Pleas.  In the lawsuit, the LaBordes claim that Gahanna, RITA, and Teal have miscalculated the income tax credit provided by Gahanna City Code § 161.18(a) to certain Gahanna residents who worked outside Gahanna.  The LaBordes also claim that Gahanna and Teal have not certified, spent, or reserved funds as required by Gahanna City Code § 161.18(c).  Because the Gahanna Tax Code was applied uniformly to thousands of Gahanna residents, the LaBordes also requested that the case be certified as a class action.  The City of Gahanna, RITA and Teal disputed the Plaintiffs’ claims.

On September 11, 2014, Judge Kimberly Cocroft of the Franklin County Court of Common Pleas ruled that the City of Gahanna, RITA, and Teal have, as a matter of law, miscalculated the amount of the “Credit for taxes paid to another municipality” under Gahanna City Code § 161.18(a) and, as a result, that the Class (as defined below) is entitled to have the tax credit properly applied, which may result in a refund of tax-related overpayments, interest, penalties and/or other benefits (such as cancellation of amounts Gahanna claims to be owed for income taxes) to the Class.  

Judge Cocroft has certified this case as a class action. You are a member of the “Class” if you meet all of the following requirements:

• I live or have lived in Gahanna at some time;

• During the time I lived in Gahanna, I worked in another city and paid income taxes to that other city at a rate of more than 1.5%; 

• At some time on or after July 3, 2009, I (or a tax preparer) filed an income tax return with Gahanna or RITA reflecting income taxes withheld or paid to that other city for any tax year prior to the 2015 tax year; and 

• I have not opted-out of the Class.  

Following the damages trial, on October 31, 2018, Judge Cocroft issued findings of fact and conclusions of law awarding the Class tax refunds in the amount of                           1) $10,835,435.03 relating to misapplication of the tax credit;  2) $654,059.85 relating to improperly charged penalties, interest and legal fees;  and 3) $1,780,163.81 in interest, for a total  award of $13,269,658.69 (the "Class Damages Award").  The Defendants appealed to the Franklin County Court of Appeals.  

The parties reached an agreement to settle the class action in exchange for a $9,500,000.00 payment from the Defendants.   Judge Cocroft then granted final approval for the settlement and approval for Plaintiffs' class counsel's attorney's fees and expenses and class representatives' fees.  

After Judge Cocroft approved the settlement, the settlement funds were transferred to the class action administrator, KCC.  However, a dispute arose regarding responsibility for issuing 1099's and reporting the settlement payments to the IRS, and after being unable to resolve these issues with Gahanna, the LaBordes moved to compel enforcement of the settlement agreement.  On January 9, 2020, Judge Cocroft granted the LaBordes' motion to compel enforcement and directed Gahanna to issue all necessary 1099's and to fulfill its reporting obligations to the IRS.  A link to Judge Cocroft's January 9, 2020 decision is available below. 

KCC expects to distribute settlement payments to class members on January 31, 2020.  In accordance with Judge Cocroft's order, Gahanna will be responsible for issuing the applicable 1099's and for reporting payments to the IRS. 

Below are links to additional information regarding this lawsuit, including a copy of the Court approved Class Notice.

Class Notice           Verified Complaint                    Class Certification and Summary Judgment Decision and Entry

Finding of Fact and Conclusions of Law - Damages        Agreed Order Preliminarily Approving Settlement and Settlement Hearing          Decision and Entry Granting the Plaintiffs' Motion to Compel