United States District Court, N.D. Illinois
January 20, 2004.
ANNE FRANCZYK, on behalf of herself and all other similarly situated, Plaintiff,
CINGULAR WIRELESS, LLC, Defendant
The opinion of the court was delivered by: JOHN W. DARRAH, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff, Anne Franczyk, filed a class action suit in state court
against Defendant, Cingular Wireless, alleging "failure to honor its
contractual obligations and its deceptive billing practices" as to its
Regulatory Cost Recovery Fee. Cingular subsequently removed the case to
this Court. Presently before the Court is Franczyk's Motion to Remand.
In August 2003, Franczyk filed suit against Cingular in the Circuit
Court of Cook County, Illinois. Count I of Franczyk's Complaint alleges
that Cingular's policies and practices in connection with the Fictitious
Fee violate the Illinois Consumer Fraud and Deceptive Business Practices
Act. Count II alleges that Cingular breached its contract with Franczyk
by unilaterally increasing Franczyk's monthly rate via the Fictitious
Fee. Count III alleges a claim of unjust enrichment by Cingular via the
Fictitious Fee. Count IV seeks an accounting for all expenses incurred in
connection with the government-mandated initiatives to which the
Fictitious Fee purportedly relates, all funds received and retained
through cost-recovery mechanisms permitted under law, and all revenues
generated by the Fictitious Fee.
A reading of Franczyk's Complaint supports the following summary of the
alleged operative conduct of the parties.
Cingular entered into an agreement with Franczyk whereby it agreed to
provide wireless phone service based upon an agreed-upon monthly rate.
Under the agreement, Cingular was prohibited from unilaterally increasing
the agreed-upon monthly rate, to addition to the monthy rate, Cingular
could charge legitimate, government-mandated taxes, fees, and surcharges
on a monthly basis in connection with wireless phone services. Cingular
and Franczyk entered into such an agreement whereby Cingular promised to
provide wireless phone services for the rate of $19.99 per month plus any
legitimate government-mandated taxes, fees, and surcharges.
In May 2003, Cingular began billing Franczyk for a "Fictitious Cost
Recovery Fee" of $0.60. Cingular disguised the Fictitious Fee as a
government-mandated tax or fee by burying it in a list of
government-mandated taxes, fees, and surcharges. The Fictitious Fee that
appears on Franczyk's monthly bill is not a government-mandated tax, fee,
or surcharge. Instead, the Fictitious Fee is an improper attempt by
Cingular to pass on its cost of doing business as a government-regulated
wireless carrier and an improper unilateral change in the contract
between Cingular and Franczyk.
In September 2003, Cingular removed the instant suit to this Court on
the grounds of complete preemption, substantial federal questions, and
the artful pleading doctrine. Franczyk seeks to have the cause remanded
to state court, arguing that removal was improper under all three
Removal to federal court is proper if the federal court would have had
jurisdiction over the case when originally filed. 28 U.S.C. § 1441.
Federal question jurisdiction exists over cases that "arise under the
Constitution, laws or treaties of the United States."
28 U.S.C. § 1331. Generally,
a court determines whether a federal question exists by examining
the face of the plaintiffs `Veil-pleaded" complaint. See Caterpillar
Inc. v. Williams, 482 U.S. 386, 392 (1987). The plaintiff is the
master of her own complaint and may seek to avoid federal court
jurisdiction by pleading only state law claims. See Franchise Tax Bd.
v. Construction Laborers Vacation Trust for S. Cal., 463 U.S. 1,
10(1983). However, when a complaint can be fairly read to state a federal
question, the defendant may remove the case to federal court.
See 28 U.S.C. § 1441; Bastien v. AT & T Wireless
Serv., Inc., 205 F.3d 983, 986 (7th Cir. 2000) (Bastien).
In some instances, Congress has completely preempted a particular area
where there is no room for any state regulation and the complaint is
"necessarily federal in character." See Metropolitan Life Ins. Co. v.
Taylor, 481 U.S. 58, 63-64 (1987).
The Federal Communications Act of 1934, applicable to the instant case,
provides, in pertinent part, that "no State or local government shall
have any authority to regulate the entry of or the rates charged by any
commercial mobile service or any private mobile service, except that this
paragraph shall not prohibit a State from regulating the other terms and
conditions of commercial mobile services." 47 U.S.C. § 332(c)(3)(A).
The FCA also contains a savings clause that provides that the FCA does
not abridge or alter remedies that existed at common law or by statute.
See 47 U.S.C. § 414.
The Seventh Circuit considered these two statutory provisions and the
complete preemption doctrine in Bastien. The Court found that
"there can be no doubt that Congress intended complete preemption" by
enacting 47 U.S.C. § 332(c)(3), and a plaintiff cannot "use the
`well-pleaded complaint' rule to shield himself from federal court
jurisdiction . . . if his complaint in fact challenges rates or market
entry." Bastien, 205 F.3d at 986-87. Accordingly, if a case
involves the entry of or the rates charged by any mobile service,
complete preemption applies; and the federal court has
jurisdiction to hear the case. See Bastien, 205 F.3d 987.
The Bastien decision "provides district courts in the Seventh
Circuit two points of guidance in determining whether federal
jurisdiction" exists in complaints involving wireless telephone service.
See Alport v. Sprint Corp., 2003 WL 22872134 (N.D. Ill. Dec. 4,
2003) (Alport). The district court must look beyond the state
causes of action and determine what would be the practical effect of
granting relief. Second, federal preemption of wireless telephone service
provider's "rates" encompasses a much broader area of conduct than simply
how much money a provider charges for services. See Alport, 2003
WL 22872134 at * 3.
The courts in this district have applied Bastien when
determining if a case was properly removed to federal court. In
Gilmore v. Southwestern Bell Mobile Sys., 156 F. Supp.2d 916
(N.D. Ill. 2001) (Gilmore), the court found that the plaintiff's
allegation that the defendant breached its contract with plaintiff by
adding a fee to his monthly fee was a challenge to the appropriateness of
the added fee and, therefore, a rate challenge that fell within federal
jurisdiction. See Gilmore, 156 F. Supp.2d at 924. Plaintiff's
unjust enrichment claim was also found to be a challenge to the rate
because it raised the question of whether the fee was unjust. See
Gilmore, 156 F. Supp.2d at 925. However, plaintiff's fraud claim,
based on plaintiff's allegation that the defendant added the fee in an
attempt to hide the increase in charges, was not a challenge to the rate
and was not preempted by Section 332(c)(3). See Gilmore,
156 F. Supp.2d at 924-25. Similarly, a plaintiffs challenge to a wireless
provider's billing practice for roaming charges was found to be preempted
because, in order to resolve the claim, the trier of fact would have to
focus on the appropriateness of the amount defendant charged and whether
that amount was unjust. See Fedor v. Cingular Wireless Corp.,
2001 WL 1465813 (N.D. Ill. Nov. 15, 2001).
On the other hand, plaintiff's claim of fraud, breach of an implied
warranty of fitness for a particular purpose, and breach of an express
warranty, based on alleged misrepresentation concerning the use of a
timer within a wireless telephone, were not preempted by Section
332(c)(3) because the trier of fact would not have to determine whether
the rate was unreasonably, unjustly applied or inappropriate in any way.
See Rosenberg v. Nextel Comm., Inc., 2001 WL 1491501 (N.D. Ill.
Nov. 21, 2001).
In Alport, the plaintiff brought a four-count complaint
against Sprint Corporation based on Sprint's adding a "Federal E911"
charge (fee) on his monthly bill. The plaintiff alleged fraud, breach of
contract, unjust enrichment, and sought an accounting for this improperly
added charge. The Alport court found that removal was proper,
stating, "Given Bastien's mandate that the FCA preempts a wide
variety of state law challenges to wireless service billing practices, we
find Alport's complaint concerning the propriety of the Federal E911
surcharge to be a rate challenge that fits squarely within the scope of
federal jurisdiction." See Alport, 2003 WL 22872134 at *4.
As in Alport, Franczyk alleges fraud, breach of contract,
unjust enrichment, and seeks an accounting for an alleged improperly
added fee to her monthly bill. Looking past the form and language of the
Complaint, the significant issue involved is the validity and legitimacy
of the Fictitious Fee. Such issue is a rate challenge that is within the
scope of this Court's jurisdiction. See Bastien, 205 F.3d at
986-87; Gilmore, 156 F. Supp.2d at 924-25; Alport,
2003 WL 22872134 at * 4. Accordingly, Plaintiff's Motion to Remand is
Franczyk also seeks costs and fees, arguing that Cingular's bases for
removal were contrary to well-settled law. In light of the above
findings, Franczyk's argument is without merit; and costs and fees are
For the reasons stated above, Plaintiffs Motion to Remand is denied.
Plaintiff's request for costs and fees is also denied.