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Brennan v. AT&T Corp.

February 8, 2006

EDWARD BRENNAN, ANNIE CRAWFORD, KATHLEEN MITTELSTEADT, SUZANNE MCGEE, AND DEANE STOKES, JR., ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
AT&T CORP., A NEW YORK CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Herndon, District Judge

MEMORANDUM AND ORDER

I. Introduction

Now before the Court are three motions submitted by Defendant AT&T ("Defendant") (Docs. 85, 96, 108) and one motion submitted by Plaintiffs Edward Brennan, Annie Crawford, Kathleen Mittelstadt, Suzanne McGee, and Deane Stokes, Jr. ("Plaintiffs") (Doc. 133). Defendant makes two motions to dismiss - one for failure to state a claim on which relief can be granted and one based on the doctrine of primary jurisdiction (Docs. 85, 108) - as well as a motion to compel arbitration (Doc. 96). Its motions to dismiss relate only to the claims of Plaintiffs Annie Crawford and Deane Stokes, Jr., while its motion to compel relates to the claims of the remaining Plaintiffs (Edward Brennan, Suzanne McGee, and Kathleen Mittelsteadt). In their motion, Plaintiffs seek to strike Defendant's reply to Plaintiffs' response to Defendant's motion to compel. (Doc. 133.) For the reasons below, the Court grants in part and denies in part Defendant's motion to dismiss for failure to state a claim (Doc. 85), denies Defendant's motion to dismiss under the primary jurisdiction doctrine (Doc. 108), grants in part and denies in part Plaintiff's motion to strike (Doc. 133), and denies at this time Defendant's motion to compel arbitration (Doc. 96).

II. Background

On June 22, 2004, Cheryl Hall, on behalf of others similarly situated, brought an action against Defendant alleging unjust enrichment, money had and received, and various statutory violations related to Defendant's allegedly unfair billing practices. (Doc. 1.) Plaintiffs amended their complaint slightly more than a month later and added Loretta Sanford, Sandra Wiles, and Annie Crawford as named Plaintiffs. (Doc. 6.) On March 1, 2005 the Court granted in part and denied in part Defendant's first motion to dismiss, dismissing Plaintiffs Cheryl Hall and Sandra Wiles. (Docs. 70, 71.) Plaintiffs followed by filing a seven-count second-amended complaint, adding named Plaintiffs Edward Brennan, Kathleen Mittelsteadt, Suzanne McGee, and Deane Stokes, Jr., and dropping Lorretta Sanford. (Doc. 74.) Defendant then filed motions to compel and dismiss. Plaintiffs responded in opposition and filed their own motion to strike one of Defendant's replies.*fn1

Plaintiffs' underlying claim is that Defendant deliberately charged various individuals improper nonusage fees. In their words, Plaintiffs allege that Defendant "engaged in a deliberate scheme to establish accounts and billing plans with recurring non-usage charges for telephone numbers that the [local exchange carriers] computers say are [presubscribed] to AT&T, without verifying whether those telephone numbers are associated with persons who intend to become AT&T long-distance customers." (Doc. 136, p. 7.) Plaintiffs bring their claims under the Federal Communications Act, 47 U.S.C. § 151 et seq.("Communications Act" or the "Act") (Counts (I-III)), the Illinois Uniform Deceptive Trade Practices Act, 815 ILL.COMP.STAT. 510/1 et seq. ("IUDTPA") (Count VI), and the Illinois Consumer Fraud Act, 815 ILL.COMP.STAT. 505/1 et seq. ("ICFA") (Count VII), as well as for unjust enrichment (Count IV) and for money had and received (Count V). Defendant, in response, argues that Crawford's and Stokes's claims should be dismissed both for failure to state a claim and under the primary jurisdiction doctrine, and that arbitration should be compelled as to Brennan's, Stokes's, and Mittelsteadt's claims.

III. Analysis

A. Defendant's Motion to Dismiss for Failure to State a Claim

Defendant first moves, pursuant to Federal Rule of Civil Procedure 12(b)(6), to dismiss claims asserted by Plaintiffs Crawford and Stokes. Defendant argues for dismissal as to Crawford with regard to all seven Counts in the complaint, but only with regard to Count III as to Stokes. Plaintiffs, in response, acknowledge that Crawford cannot succeed on her 47 U.S.C. § 201 (Count I), unjust-enrichment (Count IV), money-had-and-received (Count V), or ICFA (Count VII) claims (Doc. 98, pp. 9, 17-18); however, they oppose dismissal of her remaining Counts.

1. 12(b)(6) Motion to Dismiss Standard

When ruling on a motion to dismiss for failure to state a claim, a court assumes as true all well-pleaded facts, plus the reasonable inferences there from, and construes these in the light most favorable to plaintiff. Fries v. Helsper, 146 F.3d 452, 457 (7th Cir. 1998) (citing Wiemerslage v. Maine Township High Sch. Dist. 207, 29 F.3d 1149, 1151 (7th Cir. 1994)). The question is whether, under those assumptions, the plaintiff has a right to legal relief. Fries, 146 F.3d at 457.

2. Crawford's and Stokes's section 203 Claims (Count II)

47 U.S.C. § 203 prevents carriers from charging rates other than those filed in their tariff with the Federal Communications Commission ("FCC"). 47 U.S.C. § 203(a). In pertinent part, it states that no carrier shall (1) charge, demand, collect, or receive a greater or less or different compensation for such communication, or for any service in connection therewith, between the points named in any such schedule than the charges specified in the schedule then in effect, or (2) refund or remit by any means or device any portion of the charges so specified, or (3) extend to any person any privileges or facilities in such communication, or employ or enforce any classifications, regulations, or practices affecting such charges, except as specified in such schedule. 47 U.S.C. § 203(c). Plaintiffs Crawford and Stokes allege that Defendant violated section 203 by assessing "unauthorized charges that clearly are outside its tariff." (Doc. 98, p. 6.) According to these Plaintiffs, Defendant began improperly assessing these charges in February 2004. (Doc. 74, pp. 8, 10.)

On August 1, 2001 several FCC orders took effect that significantly altered the responsibilities of long-distance telecommunications carriers.*fn2 See Dreamscape Design, Inc. v. Affinity Network, Inc., 414 F.3d 665, 668 (7th Cir. 2005). These orders did away with the tariff system referenced in section 203(c) and instituted a new system under which consumers can either accept or reject the terms of a carrier's contract. Id. Plaintiffs do not dispute this fact. (Doc. 98, p. 8.) They do, however, claim that even though the tariff regime is no longer in force, Defendant still violated section 203, for three reasons: First, they argue without elaboration that "[n]ot all services provided - and charged for - by AT&T were subject to detariffing on August 1, 2001." Second, they state that the class period includes dates prior to the detarrifing date, August 1, 2001. Third, they indicate that "[b]ecause the Consumer Services Agreement references the AT&T tariff, it remains appropriate for Plaintiffs to assert a claim for assessment of unauthorized charges that are outside AT&T's tariff with respect to the time period after detariffing." (Doc. 98, pp. 8-9.)

The Court finds these arguments unavailing. Taking them in turn, Plaintiffs first fail to identify either the services Defendant provided that were not subject to detariffing or the charges allegedly violating section 203. Instead, they make a bald statement that the expired tariff system still applies to some of Defendant's services. (Doc. 98, p. 9.) This statement alone is insufficient, in this context, to withstand a motion to dismiss. Though, as Plaintiffs admit, the tariff regime ended on August 1, 2001 (Doc. 98, p. 8), the improper charges allegedly assessed to Crawford and Stokes did not begin to appear until February 2004. (Doc. 74, Pls. 2d Am. Compl., ¶¶ 34, 50.) Plaintiffs do not attempt to reconcile this conflict, nor do they explain how the now-defunct tariff scheme applies to charges assessed after its expiration. Absent some suggestion of how Defendant managed to violate section 203 post-detariffing, Plaintiffs cannot adequately support Crawford and Stokes's section 203 claims.

Second, although Plaintiffs seek to represent a class of individuals, some of whom allegedly received improper bills from Defendant prior to detariffing, no class has yet been certified, nor is a motion for class certification pending. Defendant's motion to dismiss, instead, relates strictly to the claims of Crawford and Stokes - neither of whom began receiving allegedly improper charges until February 2004, well after the August 2001 detariffing date. Plaintiffs' argument that the "class period" includes dates prior to detariffing, therefore, is of no consequence in the context of this Court's consideration of Defendant's motion to dismiss Crawford's and Stokes's section 203 claims. Neither Plaintiff alleges that improper charges were assessed prior to detarrifing. (Doc. 74, Pls. 2d Am. Compl., ¶¶ 34, 50.)

Third, Plaintiffs provide insufficient support for their argument that because Defendant's Customer Service Agreement ("CSA") defines "services" to include long-distances services that Defendant once provided under the now-defunct tariff regime, the charges assessed to Crawford and Stokes - well after the end of this regime - somehow violate the tariff Defendant was formerly required to file. Plaintiffs, that is, fail to explain why merely because Defendant's CSA references the expired tariff system, Defendant must now provide services pursuant to that system.*fn3 The tariff system, as noted above, ended more than four years ago. Dreamscape Design, 414 F.3d at 668. Whether or not Defendant's contracts mention services formerly provided under that system, it now defunct. Plaintiffs have offered no reason why Defendant should be bound to it.

Therefore, because Crawford and Stokes have provided no basis for holding Defendant to an expired tariff system, id., because the relevant charges were assessed more than two years after that system ended, and because Plaintiffs have identified no services that survived detariffing, the Court grants ...


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