Opposition Brief — AT&T Corp. v. Ting

| aon Court, U.S.

Si Ls D

A MAY 30 2003

No. 02-1521

CLERK

IN THE

Supreme Court of the United States

AT&T CORP.,

Petitioners,

Vv.

DARCY TING, An Individual

And On Behalf of All Others Similarly Situated, And

CONSUMER ACTION, A Non-Profit Membership Organization,

Both as Private Attorneys General,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

RESPONDENTS’ BRIEF IN OPPOSITION

TO PETITION FOR WRIT OF CERTIORARI

F. Paul Bland, Jr. James C. Sturdevant

(Counsel of Record) Karen L. Hindin

Michael J. Quirk The Sturdevant Law Firm

Trial Lawyers for Public Justice, P.C. 475 Sansome Street, Suite 1750

1717 Massachusetts Avenue, NW San Francisco, CA 94111-3141

Suite 800 (415) 477-2410

Washington, D.C. 20036

(202) 797-8600 . Arthur H. Bryant

Kate Gordon

Trial Lawyers for Public Justice

One Kaiser Plaza, Suite 275

Oakland, CA 94612

(510) 622-8150

Attorneys for Respondents/Plaintiffs

DARCY TING and CONSUMER ACTION

TABLE OF CONTENTS

Page(s)

RESTATEMENT OF THE QUESTION PRESENTED ... 1

INTRODUCTION AND SUMMARY OF

po ga ee ae Per erin rey me ey ae ere oe l

SRA RRMMEET ENE LEMS GABE 6 ioc cece ic coenncescsees 6

I. FACTS ABOUT THIS LAWSUIT ...-........... 6

II. THE COMMUNICATIONS ACT AND THE

DETARIFFING EFFORT UNDERLYING AT&T’S

AUGUST 2001 EFFORT TO IMPOSE THE CSA ... 9

REASONS FOR DENYING THE WRIT ............. 15

I. THERE IS NO CONFLICT WARRANTING

eS Wee Be CGE io 6 os pe Read aoe 15

A. The Significant Factual Differences Between

this Case and Boomer Weigh Heavily Against

NN as Cis eae ee Ae baa Whee ken de es 15

B. This Case Is A Poor Vehicle to Address

the Relationship Between Federal and State

Law in this Area Because of the Unique Facts

of Gus Case .....; Pe PEt Pe OEE eee e ey 20

C. Any Split That May Exist Between This

Case and Boomer is Immature .............. 22

-

Il. THE NINTH CIRCUIT’S DECISION DOES

NOT CONFLICT WITH ANY DECISION

CoP TES CRS ok nik Spey oe ee 23

A. There Is No Express or Field Preemption

SUNG os nk Nts 1a ee oe an ee ae 23

B. There Is No Implied Conflict Preemption

SUOOG i wid dia 0k Kak Gad eae eee eee seen eee 24

C. The Decision Below Will Not Harm the

Long-Distance Industry ............000e00. 29

CEPTS sc cuinvonseqnhcdeeocerunmeneey enter 29

LL

TABLE OF AUTHORITIES

Cases:

Armendariz v. Foundation Health Psychare Services,

6 P.3d 669 (Cal. 2000) ..... EE ee cae a ee 18

AT&T v. Central Office Telephone, Inc.,

DERE. 6 oo nikov edocs ceecesers passim

Boomer v. AT&T Corp., 309 F.3d 404

I A passim

Cahnmann v. Sprint Corp., 133 F.3d 484

ae i ee oy ebb ase xo oeives 10

Crosby v. National Foreign Trade Council,

ao ria s hive a eases 23

Fax Telecommunicaciones, Inc. v. AT&T,

1 ee es, fe | ae | 27

Freightliner Corp. v. Myrick, 514 U.S. 280 (1995) ...... 24

Lipton v. MCI Worldcom, Inc., 135 F. Supp. 2d 182

BESTE Ne eC a ae ee ere 11

Miroyan v. U.S., 439 U.S. 1338 (1978) ............... 20

South Dakota v. Kansas City S. Indus., Inc.,

880 F.2d 40 (9" Cir. 1988), cert. denied,

es lab woe ee 18

Sprietsma v. Mercury Marine, 123 S. Ct. 518 (2002) .... 24

iii

Western Union Telegraph Co. v. Esteve Brothers,

SI TEE oc hoo tbe 10, 28

Statutes:

STA. © 1G aa pene. pale Pee 11

if 6 foe ye iientbaemaniongre teens a inrp ree spd passim

ra SE Sb 5 an SE hs apes wea re passim

OF Uae eee ba ves eee Sakae Fed eres 10-12, 24

OT WA. See 5 5 bb. do vos vniwn oto hake ee ee 21, 22,27

WTAE ee Wlwa os i eee ely ee oF

SO. WE Fis wre bes ee eee ee 21

Sh. PEs Fae ec es Sok es ces Fae 24

SUSE BOI as i cee: eas Peeper 17

Federal Boat Safety Act of 1971, 46 U.S.C. 4301 ....... 24

California’s Consumer Legal Remedies Act ............ 2

YE eer Pere Pree rere ee 2

iv

Administrative Decisions:

In the Matter of AT&T, 76 F.C.C.2d kg ty |) aeparee 17

In the Matter of Policy and Rules Concerning

the Interstate, Interexchange Marketplace,

SUE Seed OPER hos oh es ok he 15

In the Matter of Southwestern Bell Mobile

Systems, Inc., 14 F.C.C.R. 19,898 (1999) ...... 13, 26

Interstate Interexchange Marketplace,

Bl FAs OE BRR AIOOED: cio pho ine acnde. passim

Orloff v. Vodafone Airtouch Licenses,

be EA WORT AAONE) ois eke 14, 15, 22, 26

Second Report and Order, 11 FCC Red 20,730

CEPR a eas Ne eae oe phas oaece passim

Other Authorities:

Schenberg, /dentification, Tolerability, and Resolution

of Intercircuit Conflicts, 59 N.Y.U.L. Rev. 1007 . 20

RESTATEMENT OF THE QUESTION PRESENTED

Does the Federal Communications Act preempt the

application of generally applicable state contract and consumer

protection laws to the terms of a de-tariffed long distance

carrier’s proposed contracts with consumers, even when it is

proven that those contract terms would deprive consumers of

any effective remedy in the civil justice system for many illegal,

unfair or deceptive acts the carrier might commit?

INTRODUCTION AND SUMMARY OF ARGUMENT

This lawsuit seeks to prevent AT&T from unilaterally

imposing on its long distance customers unconscionable

contract terms designed to eliminate their rights. Prior to

August 1, 2001, long distance carriers were not required to form

contracts with their customers, because the terms of long

distance service were governed by tariffs filed with the Federal

Communications Commission (“FCC”). When long distance

service was deregulated, however, the FCC ordered long

distance carriers to enter into contracts with their customers

effective August 1, 2001. Accordingly, AT&T drafted the

Consumer Services Agreement (the “Original CSA”), and sent

it to AT&T customers in May and June of 2001.- The evidence

at trial proved — and AT&T does not appeal this finding in its

Petition — that the company purposefully tailored the language

of both the cover letter and the CSA so that customers would

not read them.

The supposed goai of the Original CSA was to require

AT&T’s custome:s « submit all claims too large for small

claims court to binding arbitration. Instead of creating a

contract that vould have legally achieved that goal under

California laws applicable to all contracts, however, AT&T

drafted the Dispute Resolution Provisions of thé Original CSA

to (a) sharply limit the remedies available to consumers even in

cases of intentional wrongdoing by, among other things,

banning punitive damages and remedies provided by state

consumer protection statutes; (b) force its customers to obey

draconian secrecy provisions; (c) impose prohibitive costs upon

many consumers pursuing arbitration; and (d) prohibit its

customers from participating in class actions against it.

Plaintiffs maintained throughout this case that these

provisions were procedurally and substantively unconscionable,

and that they violated several state consumer protection statutes.

Following a full trial, the district court agreed and enjoined

their enforcement. Based upon an extensive evidentiary record,

the district court issued detailed findings and concluded that the

Original CSA would have denied AT&T’s customers any

meaningful means of redress for many valid claims that they

might have under the state’s consumer protection laws. On

appeal, the Ninth Circuit affirmed the declaration that these four

provisions were unconscionable, although that Court reversed

the trial court with respect to one of the two statutory claims,

finding that California’s Consumer Legal Remedies Act was

preempted by the Federal Arbitration Act (“FAA”).'

A few weeks after the issuance of the comprehensive

trial court decision below, AT&T significantly re-wrote the

CSA (“the Revised CSA”). Under the Revised CSA,

' Although it had waived ti:is argument in the trial court, AT&T argued

to the Ninth Circuit that California’s contract law of unconscionability was

also preempted by the FAA. The Ninth Circuit disagreed, and AT&T has

not appealed the decision on this issue in its Petition to this Court. AT&T

also argued unsuccessfully below that the Original CSA was not

unconscionable under California law because it would not deny its customers

the ability effectively to vindicate their rights. AT&T has also failed to

present this issue in its petition.

consumers are able to obtain punitive damages and other

statutory remedies for any intentional wrongdoing, consumers

are not bound by any secrecy provisions unless they choose to

be so bound after a dispute arises, and AT&T will bear nearly

all the costs of arbitration for all consumer claims below

$75,000. Also, within a few weeks of the trial court’s decision,

the American Arbitration Association significantly re-wrote its

rules to shift far more of the costs of arbitration from consumers

to businesses.

AT&T argued in the trial court and in the Ninth Circuit

that the Federal Communications Act (“FCA”) preempts all of

the plaintiffs’ claims in this case. Both courts rejected this

argument. In its Petition, AT&T argues that this Court should

grant certiorari because the Ninth Circuit’s decision on the

question of FCA preemption in this case conflicts with the

decision in Boomer v. AT&T Corp., 309 F.3d 404 (7" Cir.

2002). As this opposition will show, the distinctions between

Boomer and this case do not justify a grant of certiorari.

First, the divergences between these cases is not

sufficient to justify this Court’s jurisdiction because the cases

involved very different contracts. While this case involved the

Original CSA, Boomer involved a challenge to the Revised

CSA. This difference is extremely important for several

reasons. While plaintiffs only raised claims under California

state law, at least two provisions of the Original CSA that were

significantly altered in the Revised CSA violated not only state

law, but the FCA as well. Since federal and state law on these

points are in accord, there can be no implied conflict between

state law and federal law — and thus no implied conflict

preemption of state law — on those issues. Moreover, under

applicable state law, a finding that these two provisions were

unconscionable would justify striking the entire Dispute

3

Resolution Provisions of the Original CSA. Accordingly, even

if the Ninth Circuit erred in its ruling that the FCA does not

preempt California state law with respect to the Original CSA’s

ban on class actions, that error would not change the outcome

in this case.

Second, the supposed conflict between Boomer and this

case is greatly exaggerated by AT&T because the appeals courts

in these two cases shared many precepts, and only disagreed

about fairly narrow aspects of how these applied in the two

cases. In addition, several of the differences in the outcomes of

the two cases may be traced to differences in the factual records

upon which the respective courts premised their reasoning.

Third, facts that are unique to this case render it a poor

vehicle upon which to make broad pronouncements of law. As

noted above, the district court made findings of fact that the

Original CSA would undermine and eviscerate the ability of

AT&T’s customers to effectively vindicate their rights under

the state consumer protection statutes. This is extremely

significant, because several provisions of the FCA, as amended

in 1996, explicitly save and rely upon state consumer protection

statutes. Accordingly, the unusual facts of this case — certain

terms in the Original CSA would have undermined the ability

of consumers to obtain remedies under any and all state contract

and consumer protection laws — raise legal issues unlikely to

surface in many other cases.

Fourth, it is premature for this Court to address any

fissure that may exist between these cases. This case and

Boomer are the only Court of Appeals opinions addressing the

extent of FCA preemption of state law since the FCC

deregulated long distance service. There is significant value in

letting the law on this question further develop and percolate.

4

|

4

PME AONE ITY on alte” Mh *

2

Boomer demonstrates that rushing to decide this issue before

the underlying regulatory scheme has stabilized can lead to

errors and confusion. In Boomer, the Seventh Circuit decided

the case on an unusually expedited basis. The court failed to

consider an extremely important FCC decision issued only a

few weeks prior to that decision that flatly contradicts many of

the premises underlying the court’s opinion.

On the merits, AT&T argues that, even if its conduci

and the contract provisions in the Original CSA were illegal

under California law, AT&T cannot be prevented from

stripping consumers of their statutory rights and remedies

because California’s contract formation and consumer

protection laws (and all other states’ similar contract and

consumer protection laws) are preempted by the FCA. AT&T’s

argument is wrong.

AT&T ignores the historic sea-change brought about by

the recognition of both Congress and the FCC that long-

distance service is no longer a monopoly and that the proper

response to an era of widespread competition was to eliminate

the reliance upon uniform tariffs that carried the weight of law

and instead rely upon market forces (which include the normal

backdrop of state commercial laws that apply to all competitive

markets). AT&T’s interpretation requires a tortured reading of

all of the decisions interpreting and applying the filed rate

doctrine as if they could have been decided just as easily under

other provisions of the FCA.

STATEMENT OF THE CASE

I. FACTS ABOUT THIS LAWSUI7T

The district court’s 74 page opinion exhaustively

describes the facts of this case. Petitioner’s Appendix (“App.”)

44a-109a. Plaintiffs will not replicate that discussion here.

Nonetheless, some of the key facts need to be highlighted.

Under California law, contract terms will be found to be

unconscionable and therefore unenforceable if they are both

formed in a manner that is “procedurally unconscionable” and

if they contain terms sufficiently one-sided, unfair and

unreasonable to be “substantively unconscionable.” App. 35a-

38a, 84a-86a. The district court found that the Original CSA

was p.ocedurally unconscionable because it was a contract of

adhesion and it was communicated to AT&T’s customers in a

manner that ensured that most of them would be “surprised” to

learn of its terms. App. 86a-89a. The trial included extensive

testimony and documentary evidence demonstrating that AT&T

intentionally informed its customers about the Original CSA in

a manner that guaranteed that few of them would notice the

challenged terms. “AT&T characterized the [creation of the

Original CSA] as a non-event,” for example, “thereby

imposing on its customers the artificial notion that they would

be unaffected by the changes resulting from [the Original

CSA].” App. 89a. In one in-house document, an AT&T

official said that the mailing containing the Original CSA

should be crafted so that it was not a “call to action” for

customers. App. 55a. AT&T “downplayed” the Original CSA.

Id. AT&F¥ designed the envelope that contained the Original

CSA so that it would look like “junk mail,” App. 57a, and its

marketing studies showed that many class members would not

even open the mailing. App. 56a. The cover letter for the

6

ee en ©

Original CSA contained a single bolded message telling

consumers that they did not need to do anything, and AT&T’s

own studies revealed that after reading that sentence most

people would stop reading the mailing and throw it out without

learning of the Original CSA’s terms. App. 55a.

The district court found, and the Ninth Circuit agreed,

that four features of the Original CSA were substantively

unconscionable.’ First, by its terms, section 4 of the Original

CSA barred consumers from receiving punitive and other

statutorily-provided damages even if AT&T committed

intentional wrongful acts. AT&T asserts in its Petition that it

had intended that this provision“carry forward” the liability

limitations of its tariff, and that these limitations applied only

to negligence claims but not claims for intentional wrongdoing.

Pet. at 11. As the district court below found, however, in a

lengthy discussion based upon the actual language of this

provision, and in a conclusion that AT&7 does not appeal in its -

Petition, the provision in the Original CSA went far beyond the

earlier tariff. Under the plain language of the provision, the

liability limitations applied not merely to claims for

negligence, but also to “any other claim,” and applied “whether

the claim is based on contract, tort, statute, fraud,

misrepresentation, or any other legal or equitable theory.” App.

77a-83a, 90a. The Ninth Circuit did not need to address this

holding, as AT&T only appealed the district court’s refusal to

rewrite that section. App. 30a, n.13.

Second, the Original CSA included a sweeping

confidentiality provision making secret and requiring secrecy

2 AT&T challenged this determination below, but did not renew that

challenge in its Petition to this Court.

7

about all facts concerning any dispute in arbitration. App. 92a.

The district court concluded that this provision was “one-sided,

oppressive, and devoid of justification ....”. App. 94a. The

court noted (and AT&T does not appeal this finding) that the

secrecy provision would put AT&T “in a vastly superior legal

posture” in litigation with its customers “since as a party to

every arbitration it will know every result and be able to guide

itself accordingly, while each class member will have to operate

in isolation and largely in the dark.” App. 93a. The Ninth

Circuit affirmed the holding that this provision was

unconscionable. App. 42a.

Third, after reviewing extensive evidence about the

magnitude of the costs that consumers would bear under the

Original CSA, App. 62a-66a, 95a-99a, the district court

concluded that “in a number of situations, large arbitration costs

will preclude class members from effectively vindicating their

legal rights.” App. 96a-97a. Again, the Court of Appeals

affirmed the holding that the provisions of the Original CSA

- imposing prohibitive costs upon AT&T’s customers were

unconscionable. App. 40a-41a.

Fourth, the Original CSA prohibited AT&T’ s customers

from bringing or taking part in class actions against the

company. Prior to the Original CSA taking effect, consumers

had successfully prosecuted a number of class actions against

long distance phone carriers. App. 66a-67a. In one case,

AT&T paid 100% of the class members’ damages, App. 67a,

and in another case a class recovered $88 million from another

long distance carrier. App. 67a. The parties here stipulated in

thie district court that none of the lawyers in these earlier cases

could have brought those cases on an individual basis, whether

in court or arbitration. App. 67a-68a. Based on this and other

substantial evidence in the record, the district court found that

“the prohibition on -class action litigation [in the CSA]

functions as an effective deterrent to litigating many types of

claims involving rates, services or billing practices and,

ultimately, would serve to shield AT&T from liability even in

cases where it has violated the law.” App. 68a. The Ninth

Circuit affirmed this finding as well. App. 39a.

Based on the foregoing, the district court concluded that

“AT&T sought to shield itself from liability .... AT&T wants

to make it very difficult for anyone to effectively vindicate her

rights, even in [the arbitral] forum.” App. 105a-106a.

Accordingly, the district court found the challenged provisions

of the Original CSA to be unconscionable and illegal, and

enjoined .nem. Following California’s normal rules for

contract provisions containing “multiple defects,” the district

court struck all of the Original CSA’s “Legal Remedies

Provisions.” App. 100a. The Ninth Circuit also affirmed on

this point. App. 38a, n.13.

Il. THE COMMUNICATIONS ACT AND THE

DETARIFFING EFFORT UNDERLYING AT&T’S

AUGUST 2001 EFFORT TO IMPOSE THE CSA.

Understanding the preemption issues posed by AT&T

requires discussion of the principal terms of the FCA bearing

upon preemption, and an awareness of how the law of FCA

preemption has radically changed as a consequence of the

growth of competition and deregulation.

When long distance telephone service first became

widespread in this nation, it was a natural monopoly. Congress

recognized that if this monopoly was not regulated, the long

distance company would have enormous power that could be

used to give some parties or geographical areas a great

9

advantage over others. A central feature of the Interstate

Commerce Act, which was the forerunner to the FCA, was to

protect the nation from possible abuses of this monopoly power

by ensuring that all phone service was provided to all people on

the same terms. Accordingly, from the early 1900s on, the

terms of phone service were not governed by contract principles

as an agreement between two parties, but by the principle that

the terms themselves became a species of law. See Western

Union Telegraph Co. v. Esteve Brothers, 256 U.S. 566, 571

(1921) (“The Act of 1920 introduced a new principle into the

legal relations of the telegraph companies with their patrons....

The rate became, not as before a matter of contract by which a

legal liability could be modified, but a matter of law by which

a uniform liability was imposed.”).

While no language in the Interstate Commerce Act itself

gave rise to a hard rule of uniformity, that gap was soon filled.

When the FCA was first enacted, tie legal mechanism that was

developed to ensure uniformity was incorporated into § 203.

This section provides that common carriers shall file schedules

with the FCC setting out their rates, as well as “classifications,

practices, and regulations affecting such charges.” 47 U.S.C. §

203. These schedules became known as tariffs. For many

decades, long distance telephone service was governed by these

tariffs, which were filed with and approved by the FCC. The

preemptive force of § 203 was absolute in its scope. “If

approved, the tariff exclusively controlled the rights and

liabilities of the-parties as a matter of law.” App. 46a. The

reason for the absolute preemptive force of these tariffs was

simple: “A tariff filed with a federal agency is the equivalent

of a federal regulation.” Cahnmann v. Sprint Corp., 133 F.3d

484, 488 (7th Cir. 1998).

10

The absolute preemptive scope of § 203 was embodied

in “the filed rate doctrine,” which was the “central principle of

the regulatory scheme for interstate telecommunications

carriers.” Lipton v. MCI Worldcom, Inc., 135 F. Supp. 2d 182,

187 (D.D.C. 2001) (citation omitted). The entire focus of this

Court’s most recent decision dealing with FCA preemption

revo'ves around § 203 and the filed rate doctrine. See AT&T v.

Central Office Telephone, Inc., 524 U.S. 214 (1998).

In 1996, Congress deregulated long distance service. It

did this by amending the FCA to permit the FCC to forbear

from enforcing § 203, and thus to eliminate the filed rate

doctrine. As the Court of Appeals below noted, Congress

envisioned the 1996 Amendments as “a dramatic break with the

past that would revolutionize long-distance service by greatly

decreasing the scope of the FCC’s role.” App. at 26a.

Accordingly, acting pursuant to the 1996 Amendments, 47

U.S.C. § 160(a), the FCC ended the system of tariffs. 11 F.C.C.

Red. 20,730 (1996). In the place of tariffs, the FCC required

that the same backdrop of laws, “incentives and rewards” that

Zovern companies in other fields would apply to carriers. 11

FCC Red. 20,730 at ¥ 4.

AT&T fiercely fought the detariffing movement that

ended that doctrine.’ In this case, however, AT&T argues that

) 203 and the filed rate doctrine were always mere procedural

levices, and that they were superfluous to the Act’s actual

yreemptive force. AT&T now asserts that an absolute

equirement of uniformity, and a sweeping preemptive force,

> AT&T had unsuccessfully opposed complete detarriffing, hoping it

ould continue to “limit [its] liability through tariff provisions.” Interstate

nterexchange Marketplace, 12 FCC Rcd. 15,014 at J 8 (1997).

11

arises from two different provisions of the FCA — 47 U.S.C. §

201 and § 202.

FCA § 201 provides that the terms of long-distance

service must be “just and reasonable.” 47 U.S.C. § 201. AT&T

argues that this section means that state laws of contract

formation and breach, and consumer protection laws generally,

may never render any term of a long distance carrier’s contract

unconscionable.

Section 202 of the FCA provides that long-distance

carriers may not “give any undue or unreasonable preference”

to any particular set of customers. 47 U.S.C. § 202. AT&T

contends that plaintiffs’ claims are preempted by § 202 because

application of California iaw to AT&T’s conduct in California

constitutes “unjust or unreasonable discrimination” that gives

California customers an “undue or unreasonable preference or

advantage.” :

Unlike the absolute language of § 203, §§ 201 and 202

use heavily qualified language. The terms of these provisions

do not speak of complete uniformity, but only bar

" “unreasonable” preferences and “unreasonable” terms. In the

wake of deregulation, these terms cannot be read in the absolute

manner in which § 203 was consistently interpreted for decades.

The withdrawal of FCC regulation was not meant to

herald an era of lawlessness in the telecommunications industry.

Instead, the framers of the 1996 Amendments intended that

state law would play an important role in preserving consumer

protections. See App. 48a (citing comments in legislative

history about the crucial role of state consumer protection”

laws). The FCC concurred. In its statements relating to

detariffing, the FCC said that it would henceforth rely upon the

12

marketplace to ensure that §§ 201 and 202 were enforced. E.g.,

Second Report and Order, 11 F.C.C.R. 20,730, § 4. When the

FCC has used the term “marketplace” in similar contexts, it has

always contemplated that term as including state contract and

consumer protection laws. In Jn the Matter of Southwestern

Bell Mobile Systems, Inc., 14 F.C.C.R. 19,898 (1999), for

example, the FCC agreed with several carriers that the 1996 Act

established a preference for “the competitive forces of the

marketplace, rather than governmental regulation,” but

cautioned that it did not agree with the Petitioner’s arguments

“to the extent that they imply such preference for competition

over regulation results in a general exemption for the [mobile

phone] industry fromthe neutral application of state contractual

or consumer fraud laws.” 14 F.C.C.R. at 19,903. Accordingly,

the FCC’s statements on detariffing spoke of the centrality of

state consumer protection and contract laws. See, e.g., Second

Report and Order, 11 FCC Red 20,730 at 20,753 (1996).

AT&T reacted with alarm to the FCC’s position that, in

the detariffed environment, long distance carriers would be

subject to state consumer protection laws. It filed a petition

requesting that the FCC announce that it was going to continue

to enforce § 201 and § 202 as they related to the terms of long

distance service. AT&T also requested that the FCC make an

express statement that this continued enforcement would

“exclusively” govern the terms of service. AT&T did not get

what it wanted. In its substance, as the district court found, the

FCC “granted in part and denied in part AT&T’s petition. . . .”

App. 50a. The FCC’s Order on Reconsideration provided in

relevant part:

{T]he [FCA] continues to govern determinations

as to whether rates, terms, and conditions for

interstate, domestic, interexchange services are

13

just and reasonable, and are not unjustly or

unreasonably discriminatory. [However,] we

note that the Communications Act does not

govern other issues, such as contract formation

and breach of contract, that arise ina detariffed

environment. As stated in the Second Report

and Order, consumers may have remedies under

state consumer protection and contract laws as

to issues regarding the legal relationship

between the carrier and customer ina detariffed

regime.

12 FCC Rcd 15,014 at | 77 (emphasis added).

Thus, while the FCC clarified that it would continue to

regulate the “rates, terms and conditions” of service, it made

equally clear that issues of contract formation and breach

would now be governed by state law and that consumers would

now have remedies under state consumer protection and

contract laws as to issues regarding the legal relations between

the carrier and customer. The order did not state that any body

of state law was preempted. The FCC subsequently stated

unequivocally that consumers “are protected by the full range

of state laws, including those governing . . . consumer

protection, and deceptive practices.” App. 5la.

In the detariffed environment, the FCC has made clear

that carriers no longer must offer uniform contract terms to all

consumers. Indeed, the FCC has made clear that carriers are

now free under §§ 201 and 202 to offer different terms to

different consumers, and the agency relies upon the marketplace

to ensure that these distinctions are not unreasonable or unjust.

In Orloff v. Vodafone Airtouch Licenses, 17 F.C.C.R. 8987

(2002), for example, the FCC permitted a carrier to negotiate

14

AERIS SEARS

separate and different agreements with each of its consumers.

The FCC held that these contract variations did not violate

section 202(a) of the FCA because market forces would not

permit unreasonable discrimination. 17 F.C.C.R. at 8996-97.

The agency also treated §§ 201 and 202 in the same manner.

See Orloff, 17 F.C.C.R. at 8999 (rejecting Orloff’s § 201(b)

claim simply for “the reasons discussed above [in the dismissal

of his § 202(a) and (b) claims]’”).4

Through this Petition, AT&T asks this Court to adopt

positions that it was unable to convince the FCC to adopt.

REASONS FOR DENYING THE WRIT

i. THERE IS NO CONFLICT WARRANTING

REVIEW BY THIS COURT.

A. The Significant Factual Differences Between

this Case and Boomer Weigh Heavily Against

Review.

AT&T's principal argument that this Court should grant

certiorari relies upon the differing perspectives of the Ninth

4 The Orloff case arose in the cellular phone context. While it is true that

the cellular phone companies were never subject to any tariff, the FCC’s

statements relating to §§ 201 and 202 in that context apply with equal force

in the long-distance context. In its decisions to detariff long-distance

service, the FCC made clear that its goal was to create a system that would

rely upon the same market policing forces for long-distance service as

governed cellular phones. See Jn the Matter of Policy and Rules Concerning

the Interstate, Interexchange Marketplace, 11 F.C.C.R. 7141, 7158 (1996).

In other words, the cellular phone context is the model for the world of

detariffed long distance service, and the FCC’s interpretations of §§ 201 and

202 in cases involving cellular companies are completely applicable here.

15

Circuit in this case and the Seventh Circuit in the Boomer case.

In fact, much of the difference between these decisions may

reflect the great differences in the contracts that the two courts

considered.

As set forth above, the Ninth Circuit affirmed the order

enjoining the Dispute Resolution Provisions of the Original

CSA based upon the unconscionability of four provisions of the

Original CSA: (1) the limitation on liability even for

intentional wrongdoing; (2) the broad secrecy provision; (3) the

prohibitive costs of arbitration; and (4) the prohibition on class

actions. As set forth on the Statement of the Case, however,

AT&T re-wrote the first three of these provisions immediately

after the trial in this case. The Seventh Circuit noted that it was

addressing only the Revised CSA. See Boomer, 309 F.3d at

410 (“AT&T later amended the CSA to further reduce the

potential arbitration expense. . . .”)’ Accordingly, the version

of the CSA that was before the Seventh Circuit in Boomer was

very different from the version at issue here.

The differences between the contracts at issue in this

case and Boomer are particularly significant for two reasons.

First, two of the contract provisions at issue in this case were

illegal under the FCA. As noted above, the courts below found

(and AT&T does not challenge this determination in its

Petition) that the Original CSA would bar consumers from

receiving any consequential or punitive damages, even in the

case of intentional wrongdoing. Under authorities

_ acknowledged by AT&T, however, any provision that would

> The Seventh Circuit did not address the limitations on liability in cases

of intentional wrongdoing that had been contained in § 4 of the Original

CSA, or the secrecy provision of the Original CSA, further demonstrating

that Boomer involved a different set of issues.

16

immunize AT&T from intentional wrongdoing has been

conclusively determined to violate the FCA. See, e.g., In the

Matter of AT&T, 76 F.C.C.2d 195, 197 n. 5 (1980) (“liability

for willful misconduct is borne by the shareholder [of

AT&T]”). In addition, the CSA contained a swceping secrecy

provision. That provision greatly exceeded the limited and

discrete confidentiality provision of the FCA, which provides

limited confidentiality only with the consent of the consumer,

5 U.S.C. § 574(b), and AT&T effectively recognized this fact

when it re-wrote the provision in the Revised CSA to track that

statutory language.

The point here is not that plaintiffs are advancing or

have previously advanced in this case any cause of action under

the FCA — they consistently disclaimed such an intention, and

this case was brought solely on state law grounds.® Instead, the

point is that AT&T cannot claim that state laws applied to these

provisions of the Original CSA are preempted by the FCA,

when those same provisions that were held to violate state law

also violate the FCA. Where both bodies of law would reach

the same result (invalidating the provision), there is no conflict

between them.

The differences between the contracts are also

particularly significant for a second reason. Under California’s

° AT&T states in its Petition that it is “undisputed” that the Original CSA

complies with the FCA. Pet. at 1. This is simply not true. It is true that

plaintiffs did not bring their case under the FCA, but they never agreed that

the Original CSA complied with the FCA. Indeed, plaintiffs pointed to the

plain language of AT&T’s provision to disprove AT&T’s claims that the

limitation on liability provision was not “intended” to restrict damages for

wrongful misconduct (and therefore supposedly complied with the FCA),

and the courts below agreed with plaintiffs on this point.

17

law of unconscionability, where an arbitration clause contains

multiple illegal provisions, that is grounds for a court to strike

the entire arbitration clause. Armendariz v. Foundation Health

Psychare Services, 6 P.3d 669, 775 (Cal. 2000) (presence of

“multiple defects” is grounds for refusing to sever individual

unconscionable provisions, but instead strike the entire

arbitration provision). In this case, AT&T argued below that

under California law, the court should merely strike any

unconscionable terms but leave the remainder of the Original

CSA’s Legal Remedies Provisions in place. The district court

below rejected AT&T’s argument, however, and held that the

permeation of multiple unconscionable provisions required

excising all of the Original CSA’s Legal Remedies Provisions.

App. 99a-100a. The Court of Appeals affirmed. App. 43a.

Accordingly, the presence of the two unconscionable provisions

that also violate the FCA would be sufficient to justify the

entire decision below, even with respect to the other contract

terms which AT&T claims are permitted under the FCA. When

an alternate, exclusively state-law ground exists for affirming

the court of appeals, this Court should deny certiorari. E.g.,

South Dakota v. Kansas City S. Indus., Inc., 880 F.2d 40 (9"

Cir. 1988), cert. denied, 493 U.S. 1023 (1990).

The significance of any legal split between the decision

below and Boomer is also muted in light of the vastly different

factual records before the courts. One of the central holdings of

Boomer was that the FCA preempted any state law that might

apply to the Revised CSA because the application of state law

would increase AT&T’s costs. Boomer, 309 F.3d at 419 This

is, self-evidently, an empirical question of fact, not a legal

issue. The Boomer court does not indicate what admissible

evidence, if any, existed in the record to support its conclusion

on the point. /d. Instead, the Boomer court appears to imagine

that this factual question is one upon which a court might

18

speculate as to the answer. In this case, by contrast, after the

same issue was raised by AT&T, and after evidence was

introduced by each side and the witnesses were cross-examined,

the district court specifically found that AT&T had not

demonstrated that the Original CSA would reduce its costs.

App. 9la. The district court’s factual finding was not

surprising, in light of the extensive evidence of the substantial

transaction costs that would be created by the mechanisms

employed in the Original CSA. E.g., App. 65a (the average

arbitrator in Northern California charges $1,899 for a day of

hearings). As the district court below noted, App. 91a, the FCC

also has explicitly announced a finding of fact that requiring

compliance with state contract and consumer protection laws

will not increase the costs of long distance carriers.

“[{R]equiring nondominant interexchange carriers to conduct

their businesses as do other businesses in unregulated markets

will not substantially increase their costs.” 12 FCC Red. 15,014

at § 15.’ The expert agency’s determination on this point

deserves substantial deference. A divergence among the Courts

of Appeals that is rooted in differing factual conclusions drawn

from different factual records does not justify the exercise of

this Court’s jurisdiction.

AT&T also exaggerates the alleged conflict between the

opinion below and Boomer. In fact, the appeals courts in both

As set forth in the Statement of the Case, the trial court below also

found that the unconscionable terms of Original CSA (such as the provision ~

stripping remedies even for intentional wrongdoing) would prevent many

consumers with valid claims under the state’s consumer protection statutes

from vindicating their rights. The Seventh Circuit, by contrast, did not

consider this factual issue with respect to the Revised-‘CSA. This factual

difference is significant with respect to both FCA preemption and the

supposed split between this case and Boomer, as this Opposition will

establish below in the discussion of the prematurity issue.

19

cases sharé many core precepts. Like the Ninth Circuit, the

Boomer court found no express or field preemption. Boomer,

309 F.3d at 417, 424. Like the Ninth Circuit, the Boomer court

agreed that “state law may determine whether a contract has

been formed,” id. at 423, although it disagreed with the Ninth

Circuit’s view that this rule extends to the contract law doctrine —

of unconscionability. Like the Ninth Circuit, the Boomer court

also agreed that “following detariffing, there appears to be some

role for state law.” Id. at 424. While the courts disagreed upon

the precise contours of the role for state law, and some of the

implications to be drawn from these principles, there is also

much in common in their approaches. In this blurred setting, a

grant of certiorari is not appropriate. See Miroyan v. U.S., 439

U.S. 1338, 1339 (1978) (“[w]hile there is undoubtedly a

difference of approach between the Circuits on [the application

of the Fourth Amendment to tracking beepers], | am not sure

that there is a square conflict . . . .”); Michael S. Schenberg,

Identification, Tolerability, and Resolution of Intercircuit

Conflicts, 59 N.Y.U.L. Rev. 1007, 1013-14 (“when two courts

apply the same legal rule to similar facts and reach different

conclusions, the presumption is that there is no conflict.”).

B. This Case Is A Poor Vehicle to Address the

Relationship Between Federal and State Law

in this Area Because of the Unique Facts of

this Case.

Another factor that argues for allowing this issue to

percolate further in the lower courts is that this case is a very

poor vehicle to address the broad question that AT&T wishes |

this Court to answer. AT&T asks this Court to determine if any

—state laws may ever be applied to any term in a long-distance '

contract, but in fact the state laws at issue here fall within a ©

narrow and unusual category — laws that are necessary toensure |

20

that consumers are not stripped of their ability to effectively

vindicate their rights under any and all state consumer

protection laws. Even AT&T has not claimed that it is exempt

from all state consumer protection laws; it has only claimed that

those laws may not be applied to the terms of their contracts.

With respect to other behavior, however, throughout this

litigation AT&T has acknowledged, as it must, that state

consumer protection laws are not preempted as they apply to

deceptive or false statements about the terms of a contract. In

this case, however, applying state consumer protection and

contract laws to the terms of the Original was necessary to

ensure that those laws are not vitiated with respect to all issues.

As set forth above, after a full trial on the matter, the

trial court below made a finding of fact that the Original CSA

would bar many of AT&T’s customers from effectively

vindicating even valid claims under state consumer protection

acts. This finding, which is entitled to great deference, is not

challenged in AT&T’s Petition. This finding makes the state

laws at issue in this case uniquely consistent with the FCA,

because several provisions of the Act explicitly rely upon state

consumer protection acts to achieve its purposes. See 47 U.S.C.

§ 253 (preserving “consumer protection” laws relating to new

carriers entering the long distance field); 47 U.S.C. § 254

(preserving a role for states in ensuring that universal service is

available at rates that are just, reasonable and affordable); 47

U.S.C. § 261(c) (preserving state laws that further competition

in the provision of phone exchange services). Thus, the state

laws at issue in this case are uniquely essential to the effective

operation in any case of any state laws. Unlike most settings

where the relationship of federal and state law might be

explored, AT&T’s Petition raises the unusual spectre that its

interpretation of §§ 201 and 202 would enable the company to

21

to promulgate contract terms that would vitiate §§ 253, 254 and

261.

This case is also a poor vehicle in light of the fact that

AT&T has re-written three of the contract provisions at issue.

While AT&T surely has a technical right to appeal a judgment

declaring these provisions illegal, in case it might some day

wish to resurrect them, it is a poor use of this Court’s resources

to adjudicate the legality of contract terms that have been

abandoned for more than a year.

c. Any Split That May Exist Between This Case

and Boomer is Immature.

It would also be premature for this Court to review the

alleged conflict at issue here. The FCC only de-tariffed long

distance service on August 1, 2001, and only two courts have

considered this issue since that date. The novelty of this issue

increases the value of allowing the law to develop further in the

lower courts. The Boomer decision was issued only a few

weeks after the FCC handed down its decision in Orloff, for

example, and the Boomer court did not cite to or mention

Orloff. In Boomer, the Seventh Circuit declared that §§ 201

and 202 require service to be uniform to all customers. In

Orloff, however, the FCC made clear that carriers are free to

charge different rates to different customers based on individual

negotiations. This demonstrates the value in allowing the law

to develop here. In its great haste (the Seventh Circuit issued

its decision only about ten weeks after the appeal was filed), the

Seventh Circuit missed the FCC’s clear statement that it would

rely upon competition to enforce §§ 201 and 202, and that

uniformity was no longer required in the detariffed regulatory

scheme. This Court should not repeat the mistake of rushing to

22

resolve the issue even as the FCC’s brand new regulatory

scheme settles in.

II. THE NINTH CIRCUIT’S DECISION DOES NOT

CONFLICT WITH ANY DECISION OF THIS

COURT.

A. There Is No Express or Field Preemption

Here.

This Court has recognized three situations where federal

law preempts state law: where a Congressional Act has “an

express provision for preemption;” where Congress. intends

federal law to “occupy the field,” and “to the extent of any

conflict with a federal statute.” Crosby v. National Foreign

Trade Council, 530 U.S. 353, 372 (2000). None of these

situations applies here.

The FCA does not expressly preempt the plaintiffs’

claims. AT&T relies upon § 201 of the Act, which requires that _

the terms of service be just and reasonable, and § 202, which

forbids unjust or unreasonable preferences in long distance

service. Neither of these provisions purports to preempt any

state laws. Neither provision uses the term preemption, or

speaks of foreclosing state laws of contract formation or

consumer protection statutes.

In addition, the FCA contains a general Saving Clause

(as well as other provisions saving state consumer protection

laws, as noted above). The FCA states that “nothing in this Act

... Shall in any way abridge or alter the remedies now existing

at common law or by statute, but the provisions of this Act...

23

are in addition to such remedies.” 47 U.S.C. § 414.° This

Court has interpreted express preemption provisions narrowly

in statutes where there are Savings Clauses. See Sprietsma v.

Mercury Marine, 123 S. Ct. 518, 526 (2002) (reading express

preemption provision of Federal Boat Safety Act of 1971, 46

U.S.C. 4301 narrowly not to reach common law claims in light

of Act’s savings clause). Accordingly, it is clear that the FCA

does not expressly preempt plaintiffs’ claims.

Nor can it be said that the FCA preempts the entire field

of long distance telephone service. As noted above, the FCA’s

savings clauses carve out important roles for state law. Where

a statute expressly preserves an extensive role for states, any

claim of field preemption is foreclosed.

B. There Is No Implied Conflict Preemption

Here. |

Implied preemption arises only when there is an “actual

conflict” between federal and state law, either because it would

be “impossible for a private party to comply” with both or

because the state law “stands as an obstacle to the

accomplishment and execution of the full purposes of

Congress.” Freightliner Corp. v. Myrick, 514 U.S. 280, 287

(1995). There is no such conflict here.

First, the Ninth Circuit’s decision is entirely consistent

with the FCC’s repeated public statements about the effect of

In Central Office, this Court held that § 414 could not be used to put

the FCA at odds with itself by undermining the uniformity necessarily

required by § 203. In the wake of detariffing, however, and the FCA’s

explicit reliance upon state consumer protection acts in several different

provisions, nothing in §§ 201 or 202 overrides § 414.

24

'

‘

detariffing and the relationship of state and federal law. As

noted in the Statement of the Case, when the FCC announced

its decision to detariff, it declared that consumers would not

only have remedies under the FCA, but would “also be able to

pursue remedies under state consumer protection and contract

laws.” Second Report and Order, 11 FCC Red 20730, 20753 -

(1996). As set forth in some detail above, when AT&T

complained and asked the FCC to reconsider, the FCC’s

response was to agree that it would continue to enforce the

FCA. It did not state that any state laws were preempted or

excluded by the FCA, however, and it did not retract the

Statement that consumers would continue to have remedies

under state contract laws.

AT&T’s argument that state laws of contract formation

and consumer protection are preempted if they would limit the

terms of long distance service contracts is flatly contrary to the

FCC’s statements on this issue. In its Order on

Reconsideration, the FCC stated explicitly that state laws of

contract formation apply to long distance contracts, and that

consumers would have remedies under state laws of contract

and consumer protection regarding the “legal relationship”

between the carrier and consumers. 12 FCC Red 15,014 at

§ 77. Plaintiffs’ claims here are based on precisely these state

laws.

In short, AT&T’s repeated reliance upon the word

“agreed” in the Order on Reconsideration overstates the import

of the ruling. In substance, the FCC agreed with AT&T’s

petition only in part. The FCC agreed with AT&T only to the

extent that it acknowledged that it was not wholly abandoning

its authority under § 20land § 202. But the FCC declined to

take the second and more important step requested by AT&T,

and never claimed to exert exclusive federal authority over long

25

distance contracts. To the contrary, it firmly reasserted the

important role to be played by state law effective August 1,

2001. 3

The FCC’s detariffing orders also state that carriers are

to be treated like all other businesses in unregulated markets, | 1

FCC Red. 20,730 at J 4, further disproving AT&T’s position.

All other unregulated businesses in the U.S. are subject to state

contract law and state consumer protection laws. The FCC

states that AT&T is also subject to these laws.’ As established

in the Statement of the Case, when the FCC states that it is

counting upon “market forces” to ensure that § 20land § 202

are enforced, it has repeatedly stated that those forces include

state contract and consumer protection laws. Indeed, when a

carrier suggested that the FCC’s reliance upon market forces

implied an exemption from “the neutral application of state

contractual or consumer fraud laws,” the FCC -flatly and

explicitly rejected that claim. Matter of Southwestern Bell, 14

F.C.C.R. at 19,903.

As set forth above, in the Orloff case the FCC

completely rejected AT&T’s notion that absolute federally-

imposed uniformity is the rule in the detariffed world. Far from

requiring uniformity, the FCC has permitted a carrier operating

in a deregulated environment to negotiate separate contracts

with each customer.

9 After the Order on Reconsideration, the FCC continued officially to

inform consumers that they are protected by the “full range” of state laws

relating to contracts and consumer protection. App. Sla, 105a. The FCC

also tells consumers that it is not their exclusive remedy: “If you are not

satisfied with the carrier’s response to your complaint, the Commission’s

rules allow you the opportunity to either file a formal complaint or seek

relief through civil court.” App. 27a.

ee en

26

Ee ere

The Ninth Circuit’s decision is also consistent with the

text, structure and purpose of the FCA. When Congress chose

to allow the FCC to detariff long-distance service, and to

require the carriers to form contracts with their customers, it

necessarily chose to permit state contract law to play a

significant role. The filed rate doctrine arises from federal law,

but a contract “is not the filed rate and therefore is not a simple

creature of federal law.” Fax Telecommunicaciones, Inc. v.

AT&T, 138 F.3d 479, 487 (2d Cir. 1998). Given that contracts

— unlike tariffs — are not a species of federal law, it follows that

state law must govern them.

In addition, as set forth by extensive citations in both

opinions below, AT&T’s argument is belied by the legislative

intent underlying the Act. When Congress deregulated the

long-distance market, it drastically de-emphasized the role and

power of the FCC, and frequently expressed concerns for

federalism. App. 5a, 26a-27a, 48a-49a. To treat the 1996

Amendments as having left the FCC’s exclusive authority

entirely intact is to re-write this history.

- Further, AT&T’s interpretation of § 20land § 202

places those provisions at odds with numerous other provisions

of the FCA. As set forth in the Statement of the Case, after

reviewing extensive evidence, the district court made a factual

finding (that AT&T challenged in the Ninth Circuit, but has not

challenged in its Petition) that the Original CSA would prevent

consumers from effectively vindicating their legal rights under

state consumer protection statutes. As also set forth above,

however, the 1996 Amendments added a number of other

savings clauses to the Act, evidencing a Congressional desire to

preserve a meaningful role for the states in this area. E.g. 47

U.S.C. §§ 253(b), 254(1), and 261(c). A decision adopting

AT&T’s argument that § 201 and § 202 implicitly permit it to

27

adopt contract terms that will effectively vitiate those laws

would undermine the overall purposes of the FCA."

None of the authority cited by AT&T to support its

FCA preemption argument withstands scrutiny. AT&T relies

extensively upon the Esteve case from 1922, for example. See

Petition at 2, 4, 20-21. Esteve, however, arose in the entirely

different context where long-distance service was a natural

monopoly and where the federal government could not rely

upon “market forces” (as those have been defined by the FCC).

These very different assumptions are made clear in the opinion

-- the fundamental precept of Esteve was that the terms of long

distance service were not based upon contract principles, but

were instead a matter of law. 25 U.S. at 271. The entire point of

the 1996 Amendments and the FCC’s decision to detariff, by

contrast, is to make clear that now — unlike 1922 — long

distance service is to be governed by contract principles.

AT&T also repeatedly cites Central Office, 524 U.S.

214, Petition at 2, 20, 22, but the holding in Central Office is

driven and bounded by the principles and rationale of the filed

rate doctrine, and does not apply in the detariffed environment.

For example, the Central Office Court concluded that the

plaintiffs’ claims there were barred because they related to

“privileges not included in the tariff,” 524 U.S. at 226, and

repeatedly posed as the determinative issue whether the filed

10 AT&T’s position that § 202 requires that it be allowed to gut state

consumer protection acts is inherently at odds with the language of the

statute. The language of § 202 permits “just” and “reasonable” variations in

service, and does not require absolute uniformity. There is nothing “unjust

or unreasonable” about precluding long distance carriers from stripping

consumers of their rights under state consumer protection laws, and their

ability to effectively vindicate such rights.

28

rate doctrine applied to the claims at issue. 524 U.S. at 216,

221-26. AT&T argues that Central Office could just have well

been decided on the grounds of § 201 and § 202, but as the

Ninth Circuit correctly pointed out, this interpretation of § 201

and § 202 wauld render § 203 superfluous. App. 18a.

AT&T’s claim that the decision below conflicts with this

Court’s decision in Central Office is based upon the faulty

presumption that this Court’s decision on one theory might

instead have been rendered upon a completely different theory

not actually embraced by the Court.

c. The Decision Below Will Not Harm the

Long-Distance Industry.

AT&T asserts in its Petition that the decision below will

adversely affect the entire long distance industry and subvert the

FCC’s regulation of it. Nothing could be further from the truth.

The Ninth Circuit’s decision simpty prevents AT&T from

eliminating its customers’ rights under state law — rights that the

FCC has said those customers may enforce to protect itself.

The FCC has also stated that requiring long distance carriers to

comply with the same laws that govern other competitive

industries will not increase the costs of those carriers oz

otherwise harm them. 12 FCC Red. 15,014 at ['15. In addition,

it is hard to accept AT&T’s Statement that the ruling below was

devastating to its ability to operate its business when AT&T

itself re-wrote three of the four Provisions of the Original CSA

that were struck down more than a year ago, with no apparent

harm to its business.

CONCLUSION

—

For the foregoing reasons, the Petition for Certiorari

should be denied.

29

Oe

Respectfully Submitted,

TRIAL LAWYERS FOR PUBLIC JUSTICE

F. Paul Bland, Jr.

Counsel of Record

Michael Quirk

1717 Massachusetts Avenue, NW

Suite 800

Washington, D.C. 20036

(202) 797-8600

- THE STURDEVANT LAW FIRM

~~ A Professional Corporation

James C. Sturdevant

Karen Hindin

475 Sansome Street

Suite 1750

San Francisco, CA 94111-3141

(415) 477-2410

TRIAL LAWYERS FOR PUBLIC JUSTICE

Arthur H. Bryant

Kate Gordon

One Kaiser Plaza, Suite 275

Oakland, CA 94612

(510) 622-8150

Attorneys for Respondents/Plaintiffs

Darcy Ting and Consumer Action

DATED: May 30, 2003 ;