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IN RE WIRELESS TELEPHONE 911 CALLS LITIGATION

June 3, 2005.

In re WIRELESS TELEPHONE 911 CALLS LITIGATION. VISHAL AGGARWAL and BRIDGET BYRNE, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
NOKIA CORPORATION and AT & T WIRELESS SERVICES, INC., Defendants.



The opinion of the court was delivered by: JOHN GRADY, Senior District Judge

MEMORANDUM OPINION

Before the court are several motions: (1) defendants' motion for "partial" summary judgment; (2) defendants' motion to dismiss the amended complaint; (3) the carrier defendants'*fn1 motion to dismiss the amended complaint; (4) defendant Nokia, Inc.'s motion to dismiss the amended complaint; and (5) defendant Nokia Corp.'s motion to dismiss the amended complaint for insufficiency of service of process. For the reasons stated below, defendants' motion for partial summary judgment is granted in part and denied in part; defendants' motion to dismiss is granted in part and denied in part; the carrier defendants' motion to dismiss is granted in part and denied in part; defendant Nokia, Inc.'s motion to dismiss is granted; and defendant Nokia Corp.'s motion to dismiss the amended complaint is denied.

BACKGROUND

  In this multidistrict litigation, plaintiffs contend that the wireless telephones manufactured and sold by defendants fail to comply with the Second Report and Order of the Federal Communications Commission ("FCC") concerning the revision of the FCC's rules to ensure compatibility with Enhanced 911 emergency calling systems.*fn2 In the Second Report and Order, the FCC approved three "call completion" methods for processing wireless calls (in analog mode) to 911. One of those methods is called "Automatic A/B Roaming-Intelligent Retry," also known as "A/B-IR." The FCC required that a handset using the A/B-IR method meet two conditions in order to address the problem of delays in connecting to 911: (1) "provide effective feedback to inform the user when 911 call processing is underway and has not finished"; and (2) "seek to complete the call with the non-preferred cellular carrier if the preferred cellular carrier has not successfully delivered the call to the landline carrier within 17 seconds after the call is placed." (Second Report and Order, ¶¶ 39-41.) The primary contention of plaintiffs' initial class action complaint was that defendants' phones did not comply with the second requirement — the "17-Second Rule."*fn3

  Defendants moved for a stay of this action pursuant to the doctrine of primary jurisdiction, arguing that we should apply the doctrine because the Second Report and Order is ambiguous as to what "call completion" means and therefore ambiguous as to exactly what act must be performed by the handset in 17 seconds. Defendants argued that "call completion" occurs when a handset receives a voice channel assignment. Plaintiffs, however, contended that the Second Report and Order clearly and unequivocally indicates that a call is "complete" when it is delivered to the landline phone system. The relevant language of the Second Report and Order is as follows:
• "In general terms, the handset should seek to complete the call with the non-preferred cellular carrier if the preferred cellular carrier has not successfully delivered the call to the landline carrier within 17 seconds after the call is placed."
• "The 17-second period is also generally consistent with the combined time periods for two basic call processing tasks that must be performed and completed if a call attempt is to be successful after the call is sent: in the first task, a handset waits up to 12 seconds to receive a voice channel assignment from a base station; in the second task, the base station waits up to 5 seconds to receive a voice channel transmission from the handset."
• "After a handset receives a voice channel assignment and begins transmission to a base station on that channel, Conversation State is reached. As noted, however, at this stage, the handset's voice channel transmission has not necessarily been received at the base station, and thus the handset may not necessarily be able to use the voice channel to communicate with the base station (and thence to the landline network). In establishing a time limit for delivering the call to the landline carrier, we are seeking to ensure that communication between the handset and base station on the voice channel goes beyond Conversation State and reaches the point where the handset's voice channel transmission is indeed received at the base station."
(Second Report and Order, ¶ 41 & n. 52.)

  We disagreed with plaintiffs and found that it is not clear from the Second Report and Order exactly what act must be performed by the handset in 17 seconds. The intricacies of cellular call technology led us to conclude that resolving the ambiguities of the Second Report and Order is not within our conventional expertise, but is within the FCC's field of expertise. The FCC was, after all, the author of the very report whose meaning was in dispute. Mindful of the possibility of inconsistent rulings, we reasoned that a consistent and uniform rule is necessary and that judicial economy would be served by having the FCC resolve the issue. Therefore, we granted defendants' motion to stay the action pursuant to the doctrine of primary jurisdiction and referred the issues of what is meant by "call completion" and "delivery of the call to the landline carrier" and exactly what action must be performed by the handset in 17 seconds to the FCC for its consideration and decision.*fn4

  In an order dated July 22, 2004 (the "Clarification Order"), the FCC issued its answers to our questions.*fn5 Thereafter, we asked the parties for statements of their positions regarding the impact of the FCC's order on the further conduct of this litigation. According to defendants, the Clarification Order confirmed their interpretation of the Second Report and Order and warranted dismissal of plaintiffs' cases. Plaintiffs filed a motion for leave to file a consolidated amended complaint, which we granted. In the amended complaint, plaintiffs now allege that defendants' phones fail to satisfy at least one of the following requirements of the Second Report and Order and the Clarification Order: (1) if a cell phone attempting to place a 911 call does not detect a signal from the preferred carrier, it must switch to the nonpreferred carrier and attempt to complete the call; (2) if the cell phone detects a signal from the preferred carrier but is not assigned a voice channel within 17 seconds, it must switch to the non-preferred carrier and attempt to complete the call; and (3) if a wireless 911 call is completed but dropped, the cell phone must automatically retry the call. (Consolidated Amended Class Action Complaint, ¶ 40.)

  We held a status hearing on October 5, 2004 to discuss the impact of the FCC's ruling. We indicated to the parties that even though plaintiffs were filing an amended complaint containing new allegations that were not encompassed by the FCC's Clarification Order, we were inclined to enter some type of order recognizing the FCC's decision as the law of the case and of all the transferred cases in this multidistrict litigation. We suggested that defendants file a motion for partial summary judgment based on the FCC's decision, using the phrase "partial summary judgment" as shorthand for a pretrial order to the effect that the FCC's decision regarding the 17-Second Rule would be the law of the case.*fn6

  Defendants then filed a motion for summary judgment (actually a motion for "partial" summary judgment), which is now pending before us as well as four motions to dismiss the amended complaint.

  DISCUSSION

  A. Defendants' Motion for Partial Summary Judgment

  In response to our referral of the aforementioned issues to the FCC for its consideration and decision, the FCC issued a thoroughly reasoned and detailed order, the Clarification Order. The FCC answered our questions as follows:
1. What is meant by "call completion?"
Within the context of the A/B-IR call processing mode, "call completion" occurs when the handset receives a valid voice or traffic channel assignment and tunes to the assigned channel. If the handset has not received a voice channel assignment within 17 seconds on the preferred carrier's system, the handset must attempt to set up the call on the non-preferred carrier's system.
2. What is meant by "delivery of the call to the landline carrier?"
This refers to the further stage of call processing, after the call is delivered to the wireless carrier's base station, when the call is routed by the wireless carrier through its switch and onto trunks linking that switch to facilities of the local wireline carrier. In the case of 911 calls, the call will typically be routed by the wireline carrier to a switch called a selective router, which identifies the PSAP [Public Safety Answering Point] designated to handle calls from the area where the call was received and delivers the call to that PSAP. The references to "delivery of the call to the landline carrier" in the [Second Report and Order] expressed the Commission's expectation that the A/B-IR mode would improve overall 911 call completion, including improving the likelihood that 911 calls will be received by the PSAP. However, the "delivery of the call to the landline carrier" stage of call processing is not relevant to the operation of A/B-IR mode or to compliance with the 17 second condition.
3. What action must be performed by the handset in 17 seconds?
During the 17 second period, a handset using the A/B-IR method must override any features which prevent scanning of either the A side or B side carrier control channels, and scan the control channels of the handset's preferred carrier setting, either A or B. If the handset does not detect a signal from the preferred carrier, the handset must then retry the call with the non-preferred carrier. If the handset does detect a signal (i.e., forward control channel) from the preferred carrier, the handset must attempt to complete the call with the preferred carrier by requesting assignment of a voice channel. If the handset receives a voice or traffic channel assignment and tunes to the assigned voice channel, the call is deemed completed. If the initial call set-up attempts with the preferred carrier fail, because a voice channel is not assigned within 17 seconds, the handset must terminate its call set-up attempts with the preferred carrier and retry to set up the call with the non-preferred carrier. The handset may meet the 17 second condition in any of several ways, including limiting the number of initial call attempts or setting an overall time limit for initial call attempts to the preferred carrier.
(Clarification Order, ¶¶ 31-33.)

  Defendants argue that the FCC's ruling, which confirms their interpretation of the 17-Second Rule, is binding on this court pursuant to the doctrine of primary jurisdiction, warranting partial summary judgment.*fn7 Plaintiffs, on the other hand, contend that we are not bound by the FCC's ruling, but rather that the ruling is subject to review for reasonableness. In plaintiffs' view, the FCC's answers in the Clarification Order are unreasonable because they contradict the "clear language" of the Second Report and Order. (Memorandum in Opposition to Motion for Summary Judgment at 8.)

  It is not necessary to decide the question of whether we are bound by the Clarification Order;*fn8 assuming we are not bound, and thus required to review the Clarification Order for reasonableness, the Order passes muster. We reject plaintiffs' argument that the Clarification Order is inconsistent with the "unequivocal" Second Report and Order and represents a "change" in FCC rulemaking. In fact, in our previous memorandum opinion that referred these matters to the FCC, we already rejected plaintiffs' argument that the Second Report and Order is "clear." The language of the Second Report and Order is ambiguous regarding what a handset must do in 17 seconds (and we explained the ambiguity in our memorandum opinion); that was the whole point of the referral. To determine what the FCC meant, there was no better resource than the FCC itself.

  In the Clarification Order, the FCC undertook a diligent, reasoned, and comprehensive examination of its own language. Its answers to our questions, quoted supra, make sense to us, especially in light of the FCC's sound analysis of its own language and intent:
[W]e clarify that the 17 second condition requires that the handset retry an initial 911 call attempt with the non-preferred carrier if the handset is not assigned a voice channel by the preferred carrier within 17 seconds.
. . .
[I]n general, under the analog standard . . ., as well as under the A/B-IR algorithm, when the handset receives a valid voice or traffic channel assignment and tunes to the assigned voice channel, call set-up is considered "completed." In other words, the call completion has occurred. In the [Second Report and Order], the Commission did not change this common understanding of when the completion of call set-up occurs, but rather took notice of it as a concern.
. . .
[I]t is reasonable to conclude that the Commission did not mandate that the handset, after completing the call set-up, monitor the channel and ensure that the call indeed transmitted to the landline. Such a requirement would necessitate technical changes to analog operations and existing standards as well as changes to wireline or wireless network control procedures and functions which the Commission clearly did not intend.
. . .
The Commission concluded . . . that "a time limit should be placed on the initial attempt to set-up the call with the preferred carrier," and that 17 seconds would be "a reasonable and achievable maximum time period." . . . The Commission explained that in general, a call would take a maximum of 17 seconds to process, (i.e., 12 seconds to receive a voice channel assignment from the base station and 5 seconds for the base station to receive a voice channel assignment transmission from the handset). Because of that, the 17 seconds is also a sufficient amount of time to adequately determine whether a call could have been delivered to the landline carrier, by the preferred carrier. . . . Accordingly, the Commission found that waiting a maximum of 17 seconds before triggering the obligation to retry the call with the non-preferred carrier is a reasonable and achievable maximum time period.
. . . The 17 second time limit applies to the initial "call set-up" attempts between the handset and the preferred carrier's base station, not to the further stages of call processing (i.e., delivery of the call to the landline from the base station).
. . .
Although the court found that the Second Report and Order is ambiguous, it is reasonable to conclude that the Commission did not mandate that the call must be delivered to the landline carrier within 17 seconds nor require that the handset verify that its voice channel transmission is indeed received at the preferred carrier's base station. The Commission did mention delivery of the call to the landline carrier in two places in the discussion of the A/B-IR method, but in context, those represent general statements describing 911 call completion objectives and the expected effect of the A/B-IR method. At no point, however, do these statements clearly indicate that the Commission was conditioning the approval of A/B-IR method on the successful development and incorporation into the A/B-IR method of all the technical changes necessary for a handset to monitor the call until it is successfully "delivered to the landline carrier."
. . .
In paragraph 41 [of the Second Report and Order], the Commission said that "[i]n general terms, the handset should seek to complete the call with the non-preferred carrier if the preferred cellular carrier has not successfully delivered the call to the landline carrier within 17 seconds after the call is placed." But using the phrase "[i]n general terms" as a preamble indicates that this language is descriptive of what the Commission expected that the A/B-IR call-processing mode would achieve in most circumstances, not a technical prescription of how the 17-second condition must operate. The use of the word "should" in this sentence, rather than "must" or "is required to," further establishes that this sentence was not intended to set a technical requirement for how the 17-second condition was to be met.
Footnote 52 in the [Second Report and Order] also refers to a time limit for delivering the call to the landline network, but this language similarly does not indicate that the Commission was prescribing a specific method by which the 17 second condition is to be achieved. The footnote says that "we are seeking to ensure that communication between the handset and base station on the voice channel goes beyond Conversation State and reaches the point where the handset's voice channel transmission is indeed received at the base station." As discussed before, this language intended to explain the reasonableness of the 17 seconds as a maximum time sufficient to achieve a call set-up, in general, not to set a required technical procedure or method to determine that the call has been delivered to the landline carrier. Furthermore, the Commission expected that A/B-IR, as approved, could be implemented through limited changes in handset programming and operations. In evaluating A/B-IR, the Commission concluded that the method "requires only relatively modest changes in handset software that should not be unduly expensive and should not take long to incorporate into mobile units." In setting an implementation schedule, the Commission similarly understood that it would be relatively easy to begin to manufacture handsets incorporating such minor programming changes. . . . [R]equiring handsets to monitor whether a call has been transmitted and received by the wireline carrier would require substantial revamping of network equipment and practices as well as of wireless handsets. Such changes were neither contemplated nor required by the Commission in its approval of the A/B-IR method.
Although the language in paragraph 41 of the [Second Report and Order] might be considered ambiguous, it is reasonable to conclude that the Commission did not mandate that the call must be delivered to the landline carrier within 17 seconds, or the handset must have capability to verify that its voice channel transmission is indeed received at the base station. Such a requirement might have further improved 911 call completion rate, but the successful implementation of such a method would necessitate changes to wireless and wireline networks. We believe that the controlling language for the 17-second requirement is found in paragraph 38 [of the Second Report and Order] stating that the time limit may be met in several ways including a limit on the number of call attempts, and in paragraph 40 and elsewhere that the Commission sets a time limit (i.e., 17 seconds) "on the initial attempt to set-up the call with the preferred carrier."
(Clarification Order, ¶¶ 9, 15, 17, 19-22, 22 n. 64, 23-24 (citations omitted).) After carefully reviewing both the Second Report and Order and the Clarification Order, we find the FCC's answers to the questions we referred to it to be eminently reasonable.

  Plaintiffs also assert that defendants' motion for summary judgment should be denied pursuant to Federal Rule of Civil Procedure 56(f) because they have not been given the opportunity to take appropriate discovery. Plaintiffs contend that they are "entitled to discovery regarding Defendants' compliance with the 17 Second Requirement" and "wish to examine materials" "to assist in determining if the FCC's Answers to the Court's questions are reasonable." (Memorandum in Opposition to Motion for Summary Judgment at 14.) Plaintiffs are entitled to discovery regarding compliance with the 17-Second Rule, but only in relation to what they allege in the amended complaint about the Rule as it has been clarified in the Clarification Order, and the summary judgment motion does not go to the allegations of the amended complaint. No amount of additional discovery, though, would be appropriate or necessary in relation to our determination of whether the FCC's interpretation of its own language is reasonable. The type of discovery proposed by plaintiffs — documents tending to show defendants' or the FCC's prior "understanding" of the 17-Second Rule — is not material to the issue of the reasonableness of the Clarification Order and would not assist the court. We will adopt the FCC's Clarification Order as the law of the case. Defendants' motion for partial summary judgment thus will be granted to the extent that it relates to the FCC's clarification of the 17-Second Rule, but it will be denied to the extent that it seeks judgment on the abandoned allegations regarding the feedback requirement, see supra n. 2.

  B. Defendants' Motion to Dismiss

  We move on to defendants' motion to dismiss the complaint that is presently pending, the Consolidated Amended Class Action Complaint. The amended complaint contains eleven counts: violation of the Communications Act of 1934 (the "Communications Act"), seeking injunctive relief under 47 U.S.C. § 401(b) (Count I); violation of the Communications Act, seeking damages under 47 U.S.C. §§ 206 and 207 (Count II); violation of California's unfair competition law (Counts III and XI); breach of the implied warranty of merchantability (Count IV); breach of the implied warranty of fitness for a particular purpose (Count V); breach of contract (Count VI); breach of the implied covenant of good faith and fair dealing (Count VII); violation of state consumer fraud statutes nationwide (Count VIII); seeking restitution for unjust enrichment (Count IX); and seeking "injunctive and equitable relief" (Count X).*fn9 1. Injury

  Defendants' first contention is that all of plaintiffs' claims must be dismissed because plaintiffs have failed to allege a legally cognizable injury. Defendants assert that "no plaintiff here alleges that he or she ever even attempted to make a 911 call with a phone manufactured or sold by defendants, let alone suffered an injury as a result of a 911 call that was not processed in the manner required by FCC regulations." (Memorandum in Support of Motion to Dismiss at 8.) In defendants' view, "the Amended Complaint amounts to a request for protection from, and compensation for, possible future harm — the possibility that, one day, a wireless telephone user might attempt to connect to a 911 operator and be unable to complete a call within a particular time frame." (Id. at 3.) Because none of the plaintiffs have alleged that they tried to make a 911 call and failed to get through, the argument goes, plaintiffs have failed to allege that defendants' phones "exhibit" or "manifest" any defect.

  Plaintiffs argue that they have suffered injury under both federal and state law because they "purchased phones that do not function the way they are supposed to function, and an FCC-compliant phone is worth more than an FCC-noncompliant phone. . . . In this case the defect has `manifested' in each and every phone which does not contain the mandated software. The fact that this defect has not resulted in a plaintiff's ...


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