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# California Not Sold on Wisconsin Bell’s $55 Million Whistleblower Settlement
- URL: https://broadbandbreakfast.com/california-not-sold-on-wisconsin-bells-55-million-whistleblower-settlement/
- Published: 2026-08-19T19:02:01.000Z
- Updated: 2026-09-09T21:48:34.000Z
- Description: The state was involved in a companion case, and feared it would lose the ability to sue again if the suit were dropped
- Author: Jake Neenan
- Tags: USF, Rob Bonta, Todd Heath, AT&T, Wisconsin Bell, anne hayes hartman, Lynn Adelman, E-Rate, #with-siderail, Richard Leon

Aug. 19, 2026 – An AT&T subsidiary agreed to pay $55 million to resolve a nearly two-decade-old whistleblower lawsuit in March.

The case still hasn’t been resolved because of concerns from California Attorney General **Rob Bonta**.

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The settlement would involve whistleblower **Todd Heath** and the Justice Department dismissing two cases, one in the U.S. District Court for the Eastern District of Wisconsin, and another in the U.S. District Court for the District of Columbia, which involved allegations in multiple states and has been paused while the Wisconsin case played out.

Heath, a telecom auditor, accused AT&T and its subsidiaries of illegally overcharging schools and libraries that have part of their broadband and telecom bills covered by the federal E-Rate program. AT&T has denied wrongdoing.

[The settlement](https://broadbandbreakfast.com/at-ts-wisconsin-bell-settles-whistleblower-case-for-55-million/) would involve dropping both cases. **Anne Hayes Hartman**, California’s deputy attorney general, told the D.C. District Court that Bonta’s office worried it wouldn’t be able to bring its own case later if it consented to the suit being dropped.

Hartman said in [a July 29 filing](https://storage.courtlistener.com/recap/gov.uscourts.dcd.150884/gov.uscourts.dcd.150884.101.0.pdf?ref=broadbandbreakfast.com) an order that instead “declined to exercise jurisdiction over the remaining state and local law claims, dismissing them without prejudice on that basis” would solve the issue.

But at an Aug. 19 status conference, Heath’s attorney **Roger Lewis** told District Judge **Lynn Adelman**, who has been overseeing the Wisconsin case, that he intended to file a settlement motion with District Judge **Richard** **Leon** in D.C. that California would object to.

“Our intention is to tee up this issue by approaching Judge Leon. The parties are working to tee that up and get it filed as soon as possible,” he said. “California would presumably object.”

He said Heath and the DOJ would potentially come back to Adelman and ask him to “enforce the settlement.”

“But let’s not go there. We expect it to be resolved with Judge Leon,” he said.

Reuters [reported in June](https://www.reuters.com/legal/legalindustry/ex-att-lawyer-who-raised-compliance-concerns-accused-ethics-violations-2026-06-23/?ref=broadbandbreakfast.com) that a former AT&T attorney, who now works at the Federal Communications Commission, was potentially in hot water with the D.C. Bar Association for [disclosing information](https://www.washingtonpost.com/education/2021/03/18/att-school-internet-pricing/?ref=broadbandbreakfast.com) to Heath's team before he left in 2011.

Heath sued under the False Claims Act, which mandates higher damages for fraudulently seeking government cash and gives whistleblowers a cut of any recovered money.

AT&T’s Wisconsin Bell argued that did apply to E-Rate, which is one of four federal programs funded by fees on interstate voice revenue. The longrunning case was delayed more while the parties argued that issue up to the Supreme Court.

The Supreme Court ultimately [unanimously ruled](https://broadbandbreakfast.com/scotus-false-claims-act-applies-to-e-rate/) that FCA cases could be brought against participants in E-Rate. But the decision was narrow, and hinged on a small portion of that money passing through the Treasury after being collected as delinquent debts or penalties.

The high court left for another day the question of whether the FCA applied to all USF cash.

The Wisconsin case was headed for a trial on the merits of Heath’s claims later this year. Settling the case would avoid that trial, and leave the question of whether the FCA even applies to E-Rate funds partially unanswered.