Petition for Writ of Certiorari — Dreamscape Design, Inc. v. Affinity NetWork, Inc.

5

Affinity filed a motion to dismiss the amended

complaint, arguing that Dreamscape’s claims were preempted

by federal law. On July 12, 2004, the district court entered

an order granting Affinity’s motion to dismiss, on the basis

of the Seventh Circuit's decision in Boomer v. AT&T Corp.,

309 F.3d 404 (7thCir. 2002). Following Dreamscape’s appeal,

the Seventh Circuit affirmed the district court's decision on

July 5, 2005. The Seventh Circuit's mandate was issued on

July 27, 2005. This petition follows. |

REASONS FOR GRANTING THE PETITION

This petition should be granted for two principal reasons.

First, the decision of the Seventh Circuit flatly and expressly

conflicts with the decision of the Ninth Circuit in Ting, and

this Court is respectfully asked to resolve this conflict.

Second, the continued application of federal preemption after

detariffing, in the absence of any constitutional or statutory

basis, flies in the face of federalist principles and judicial

precedent. The resolution of the issues in this case is of great

importance for iciecommunications consumers and carriers,

with national significance for other industries that,

historically, have been regulated pursuant to notions of

federal preemption.

Sections 201(b) and 202(a) of the FCA do not contain

preemptive text, and after detariffing, the tariff-filing

requirement of § 203 (which does contain impliedly

preemptive text) is no longer enforced by the FCC. Thus,

express preemption is not an issue here, and the Seventh

Circuit's decision was not based on express exemption.

Likewise, field preemption (sometimes referred to as

complete preemption) is not germane because state law

unquestionably plays a role in the regulation of long-distance

6

contracts, as the Seventh Circuit itself has acknowledged. See

Boomer, 309 F.3d at 424 (rejecting AT&T's field preemption

argument, and stating that “following detariffing there appears

to be some role for state law”). Thus, if federal preemption under

the FCA is to survive detariffing, and indeed to expand to

market-based contracts, it can only be by way of the third prong

of preemption analysis, i.e., implied conflict pre-emption. See

Pac. Gas & Elec. Co. v. Energy Res. Conservation & Dev.

Comm'n, 461 U.S. 190, 204 (1983), /nt’l Paper Co. v. Ouellette,

479 U.S. 481, 491 (1987).

Five months ago, in its consideration of the scope of

federal preemption in the context of the Federal Insecticide,

Fungicide, and Rodenticide Act (“FIFRA”), this Court had

occasion to confirm its reluctance to expand a federal statute

beyond its ordinary meaning through doctrines of implied

preemption. Bates v. Dow Agrosciences LLC, __ U.S. __,

2005 WL 957193 (April 27, 2005). As observed by Justice

Thomas (joined by Justice Scalia), concurring in part and

dissenting in part, “this reluctance reflects that pre-emption

analysis is not ‘[a] freewheeling judicial inquiry into whether

a State statute is in tension with federal objectives’” (citing

Gade v. National Solid Wastes Management Assn., 505 U.S.

88, 111 (1992), Kennedy, J., concurring in part and concurring

in judgment). Bates at *15. Rather, the proper inquiry is into

“whether the ordinary meanings of state and federal law

conflict.” Id. See Camps Newfound/Owatonna, Inc. v. Town

of Harrison, 520 U.S. 564, 617 (1997). Accordingly, the

determination of the issues in the instant case requires an

examination of the words of the FCA, subject to the

alterations made by Congress in the 1996 Act. Those words

should be assessed according to their ordinary meaning. Bates

at *14 (Thomas, J., joined by Scalia, J., concurring in the

judgment in part and dissenting in part).

7

Prior to 1996, the FCA required long-distance

telecommunications carriers to set forth the rates and other

terms and conditions of their service in tariffs to be filed

with the FCC. This regulatory scheme begat the court-

developed “filed tariff doctrine,” under which carriers were

required to charge rates as set forth in the filed tariffs; carriers

were specifically prohibited from deviating from the tariffed

rates. AT&T v. Cent. Office Tel., Inc., 524 U.S. 214, 221-23

(1998); Metro E. Ctr. for Conditioning & Health v. Qwest

Communications Int'l, Inc. 294 F.3d 924, 925 (7thCir. 2002)

(“[nJo private agreement can displace a tariff’s terms”).

The FCA completely preempted state law challenges to rates

contained in a filed tariff. See, e.g., Cahnmann v. Sprint

Corp., 133 F.3d 484, 489-90 (7th Cir. 1998).

The mandatory tariffing aspect of the regulatory scheme

came to an end following passage of the 1996 Act, which

effectively adopted the free-market approach the FCC had

advocated over the preceding fifteen years, due to increased

competition and technological advances. See MCI

Telecomms. Corp. v. AT&T Corp., 512 U.S. 218, 220-21

(1994); see also MCI Telecomms. Corp. v FCC, 765 F.2d

1186, 1193 (D.C. Cir. 1985) (holding that the FCC lacked

Statutory authority to prohibit the filing of tariffs, as it had

tried to do). Armed with the legislative authority of the 1996

Act, the FCC issued a series of orders mandating detariffing,

and as of July 31, 2001, the tariff requirement was canceled

altogether. See Boomer, 309 F.3d at 408-09.

After detariffing in 1996, the old monopoly-based

regime was replaced with one based on market competition.

Long-distance telephone service for any particular consumer

is now arranged by way of an individual contract between

the consumer and the carrier, often called a “customer service

8

agreement,” or “CSA.” This market-based approach depends

in part on state law for the protection of consumers in the

deregulated and competitive marketplace. See Order on

Reconsideration, 12 F.C.C.R. 15,014, p. 42 (1997)

(after detariffing, consumers will “not only have our

complaint process, but will also be able to pursue remedies

under state consumer protection and contract laws”); Second

Report and Order, 1) F.C.C.R. 20,730, p. 5 (“when interstate

. . . Services are completely detariffed, consumers will be able

to take advantage of remedies provided by state consumer

protection laws and contract law against abusive practices”).

Nevertheless, the Seventh Circuit in Boomer held that, even

after detariffing, federal law continues to govern these

market-based contracts, as it had previously governed filed

tariffs, and that state law cannot be the basis for challenging

a carrier’s conduct if such a challenge might affect the

contractually-stated rates. Boomer, 309 F.3d at 418-19.

One year after Boomer, and expressly contrary to the

Seventh Circuit, the Ninth Circuit concluded in Ting that

the preemptive effect of the filed tariff doctrine did not

survive the passage of the Telecommunications Act of 1996.

Ting, 319 F. 3d at 1135, The Ninth Circuit expressly rejected

Boomer’s preemption analysis, concluding that, in the

detariffed environment, state laws did not obstruct the

operation of the FCA. /d. The Ninth Circuit held that,

with the passage of the 1996 Act, the goals expressed in

Sections 201 and 202 of the FCA (reasonableness and

nondiscrimination) were to be enforced by application of state

contract and consumer protection laws. /d. at 1144-45.

Accotdingly, the Ninth Circuit held that the plaintiffs could

challenge the carrier-drafted CSA under California state law.

9

Two years later, in the case at bar, the Seventh Circuit

considered petitioner Dreamscape’s challenge to the

correctness of Boomer, in the light of Ting. The Seventh

Circuit observed (as Dreamscape readily conceded) that

Dreamscape’s breach of contract claim was a challenge to

Affinity’s rates and terms as set forth in its CSA. However,

the Seventh Circuit rejected Dreamscape’s argument that its

consumer fraud claims were based on pre-contractual

conduct, holding that Dreamscape’s “fraud claims are really

no different than a breach of contract claim.” (App. A at 18a,

16a.) Thus construed, the Seventh Circuit opined that none

of Dreamscape’s claims could survive “unless we ‘revisit’

Boomer — by ‘revisit,’ we assume that Dreamscape is asking

that we either distinguish Boomer or set it aside in favor of

the Ninth Circuit’s Ting decision.” (App. A at 18a.) The

Seventh Circuit saw “no way ... to distinguish Boomer,”

and was “unpersuaded by Ting.” Id.

The Seventh Circuit in Dreamscape expressly rejected

Ting's analysis, stating that “we disagree with [the Ninth

Circuit’s] interpretation [of the FCA],” and noting that in

Boomer, the Seventh Circuit had “rejected the very district

court opinion that Ting affirmed.” (App. A at 19a.) Thus, the

Seventh Circuit restated its holding in Boomer that even after

detariffing, state law cannot operate to alter the rates of a

long-distance service contract. In reaching this conclusion,

the Seventh Circuit in Dreamscape declined to undertake a

comprehensive preemption analysis. Rather, the Seventh

Circuit simply concluded that allowing state law challenges

to contractual rates “would be contrary to Congress’s

intent as expressed in Sections 201 and 202” of the FCA.

(App. A at 19a.)

That Congressional intent, as perceived by the Seventh

Circuit in Boomer, was to favor reasonably uniform rates

10

and to disfavor “unreasonable discrimination,” within the

meaning of §§ 201 and 202. Boomer, 309 F.3d at 419-20.

From those principles, the Seventh Circuit in Boomer crafted

an ongoing federal preemption in a detariffed environment,

even though the filing requirement of § 203 (which was the

source of the filed tariff doctrine and federal preemption

under the FCA) had been legislatively abandoned.

As the Ninth Circuit observed in Ting, “save for Boomer,

no court [had] ever referred to § 201 or § 202 [of the FCA]

in declaring a carrier’s tariff immune from state-law

challenge.” Ting, 319 F.3d at 1138. Rather, federal

preemption, prior to Boomer, derived if at all from the filing

requirement of § 203. See AT&T v. Cent. Office Tel., Inc.,

524 U.S. 214, 223 (1998); Maislin Indus., U.S., Inc. v.

Primary Steel, Inc., 497 U.S. 116, 127 (1990). Now that the

FCC no longer enforces § 203’s filing requirement

(in furtherance of the clear wording of the 1996 Act), the

ordinary meaning of the FCA (notably the ordinary meaning

of §§ 201 and 202) provides no ongoing basis for federal

preemption.

Although §§ 201 and 202 survived the 1996 Act and

detariffing, and thereby continue to provide a basis for the

principles stated therein of reasonableness and

nondiscrimination in connection with telecommunications

services, the same cannot be said of the separate principle of

preemption, which was a judicially-created product of the

filed tariff doctrine — a doctrine that by definition did not

survive detariffing. See Notice of Proposed Rule Making,

11 F.C.C.R. 7,141, p. 31 (“the absence of tariffs would

eliminate possible invocation by carriers of the filed rate

doctrine”).

11

In the final analysis, the Seventh Circuit’s misreading

of the clear language of the FCA has the result that a

long-distance carrier such as Affinity can say one thing, but

do another, with immunity if not impunity. Dreamscape’s

amended complaint states that Affinity promised to charge

by the minute, then sent invoices demanding higher payments

based on the TCU method. Affinity’s position is that, even if

this assertion in the amended complaint is true, Affinity

cannot be sued under Illinois law. Under the FCA as it was

between 1934 and 1996, such protection from state challenge

was the recognized law of the land, according to tariff-based

federal preemption. But as the Ninth Circuit recognized, with

the statutory demise of the mandatory filed tariff, no

legislative language remains in support of federal preemption.

Even more importantly, the ordinary meaning of §§ 201 and

202 of the FCA provides no basis for expanding federal

preemption to commercial dealings between contracting

parties.

Because the Seventh Circuit’s holdings in Boomer and

Dreamscape are contrary to the text of both the FCA and the

1996 Act, and because the ordinary words of the FCA and

the 1996 Act provide no statutory basis for continued federal

preemption in a detariffed environment, the decision below

should be reversed so that Congress’s clear wording is

honored. Federal preemption should not be judicially

resurrected in a market-based telecommunications industry,

let alone expanded to interfere with market-driven contractual

arrangements. Certiorari is warranted to resolve the split

between the Ninth Circuit and the Seventh Circuit as to the

post-tariff viability of federal preemption in the field of

telecommunications. |

12

a

CONCLUSION

For the foregoing reasons, petitioner respectfully requests

that the Supreme Court grant review of this matter.

Respectfully submitted,

Gary D. Forrester

Counsel of Record

JoserH W. PHesus

Puesus & Koester

136 West Main

Urbana, IL 61801

(217) 337-1400

Attorneys for Petitioner

APPENDIX

la

APPENDIX A — OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE SEVENTH

CIRCUIT DECIDED JULY 5, 2005 |

IN THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

No. 04-3035

DrEAMSCAPE DesiGn, INC.,

Plaintiff-Appellant,

V.

' aati EEE

AFFINITY NETWORK, INC.,

Defendant-Appellee.

Appeal from the United States District Court

for the Central District District of Illinois |

No. 02 C 2235—Michael P. McCuskey, Chief Judge |

ArGuep January 5, 2005—-Decipep Jury 5, 2005.

Before Kanne, Rovner, and Sykes, Circuit Judges.

KANneE, Circuit Judge. Dreamscape Design, Inc., sued

Affinity Network, Inc., alleging state law claims of fraud

and breach of contract relating to the cost of long-distance

telephone services provided by Affinity. The district court

concluded that federal law preempted Dreamscape’s claims

and dismissed the complaint. We affirm.

2a

Appendix A

I. Background

In September 2002, Dreamscape filed a class action

complaint in Illinois state court, alleging that Affinity violated

the Illinois Consumer Fraud Act (“ICFA”) by making

misrepresentations about its rates for long-distance telephone

service. Dreamscape claimed that Affinity fraudulently

advertised certain per-minute rates when, in fact, the rates

charged were based upon a wholly different method of

calculation. Specifically, Dreamscape alleges that Affinity

advertised long-distance rates of 5 cents per minute for in-

State service and 8.9 cents per minute for calls from Illinois

to elsewhere in the continental United States. Yet when

Affinity invoiced Dreamscape for services, it billed by

“TCU” instead of by the minute. According to Dreamscape,

Affinity’s use of TCU-based charges resulted in substantially

higher long-distance telephone rates than suggested by the

advertisements. Dreamscape attached to its complaint invoice

examples of TCU-based billing that resulted in charges equal

to more than twice what the perminute charges would have

been. Dreamscape’s complaint sought award of monetary

damages in the amount suffered by the class, punitive

damages, and injunctive relief.

In November 2002, Affinity removed the case to federal

court. Affinity argued that, as an interexchange telephone

communications carrier, it was subject to regulation by the

Federal Communications Commission (“FCC")—

1. ATCU, or “total call unit,” apparently is an abstract measure,

calculated in whole numbers and fractionally in tenths, that Affinity

uses to determine what to charge for its long-distance services.

3a

Appendix A

specifically the so-called “filed tariff”* (or filed rate)

doctrine—pursuant to the Federal Communications Act of

1934 (the “FCA”), as amended, 47 U.S.C. § 203. Thus,

Affinity contended, Dreamscape’s claims challenged

Affinity’s rates, the terms of which were set forth in its

federally mandated tariff filed with the FCC, so Dreamscape’s

claims were necessarily preempted by federal law.

On March 17, 2003, the district court agreed with Affinity

and denied Dreamscape’s motion to remand, concluding that

the bulk of the claims advanced in Dreamscape’s class action

complaint were indeed related to Affinity’s rates for long-

distance service, thus calling for federal preemption under

the filed rate doctrine. The court also granted Affinity’s

motion to compel arbitration in accordance with a clause in

Affinity’s tariff mandating arbitration of disputes.

The arbitrator rendered a decision on April 12, 2004,

concluding that Affinity’s federally filed tariff overrode state

law resolution of Dreamscape’s claims. The arbitrator found

that there was therefore “no remedy for the Plaintiff for any

fraudulent misrepresentations made by the Defendant as

alleged” and dismissed Dreamscape’s claims. But, because

of a recent series of FCC orders calling for “detariffing”

2. As discussed in far greater detail infra, a “tariff” sets forth a

long-distance carrier's rates and other terms of service. Prior to

August |, 2001, under the terms of the Federal Communications Act

of 1934, carriers were required to file their tariffs with the FCC,

which had the power to modify or even disapprove the tariffs.

See Cahnmann v. Sprint Corp., 133 F.3d 484, 487 (7th Cir.1998).

Once the tariffs were filed, the carriers could not deviate from their

terms unless the tariffs were amended, modified, superseded, or

disapproved in accordance with FCC rules. See id.

4a

Appendix A

(cancellation of the requirement to file such tariffs with the

FCC) by July 31, 2001, and because it was unclear whether

Dreamscape’s complaint alleged acts taking place after

detariffing, Dreamscape was granted leave to amend its

complaint to clarify the issue.’

On April 23, 2004, Dreamscape filed an amended class

action complaint, in which it renewed its earlier ICFA claim

regarding rates charged prior to the detariffing deadline of

August |, 2001. Significantly, Dreamscape also added a claim

alleging that it and other putative class members used and

were invoiced for Affinity’s services after detariffing.

Dreamscape purported to be advancing “only state law

claims, which claims are based on conduct of the defendant

occurring after ... July 31, 2001, and accordingly there is

no applicable tariff that . . . could possibly preempt the claims

under federal law [,] and no other federal law question is

raised ... .” Dreamscape also added a claim for breach of

contract, alleging that a contract was formed between Affinity

and Dreamscape (and other putative class members) upon

acceptance of Affinity’s services, and Affinity breached the

contract by charging rates in excess of the agreed rates

“subsequent to July 31, 2001.” Dreamscape in its amended

complaint again sought monetary damages, punitive

damages, and injunctive relief.

3. It is undisputed that prior to August 1, 2001, Affinity charged

Dreamscape in accordance with the terms provided for in its filed

tariff. Affinity gave Dreamscape notice that effective August |, 2001,

its services would be provided in accordance with rates, terms, and

conditions contained in a customer service agreement (“CSA”) that

Affinity posted on its wedsite.

5a

Appendix A

Affinity filed a motion to dismiss the amended

complaint, arguing that Dreamscape’s claims remained

preempted by federal law. For its part, Dreamscape again

filed a motion to remand the case to state court. On July 12,

2004, the district court entered an order granting Affinity’s

motion to dismiss and denying Dreamscape’s motion to

remand as moot. The court concluded that, pursuant to this

court’s opinion in Boomer v. AT & T Corp., 309 F.3d 404

(7th Cir.2002), federal law governs the rates, terms, and

conditions of long-distance service contracts, and state law

cannot operate to invalidate these contracts, even after

detariffing. The court found that Dreamscape’s amended

complaint challenged Affinity’s rates for its long-distance

service, and therefore, consistent with Boomer, the court

concluded that the new claims were likewise preempted by

federal law. Accordingly, the court dismissed with prejudice

Dreamscape’s amended complaint.

On appeal, Dreamscape challenges the district court’s

dismissal of its amended complaint based on its interpretation

of Boomer. In the alternative, Dreamscape urges that we

reconsider our preemption holding in Boomer in light of

conflicting Ninth Circuit precedent.

We review de novo the district court’s order dismissing

Dreamscape’s claims. See Veazey v. Communications & Cable

of Chi., Inc., 194 F.3d 850, 853 (7th Cir.1999), Before

proceeding to the merits, however, we will briefly recap the

aforementioned filed tariff doctrine and related caselaw.

As we indicated earlier vrior to August 1, 2001, the FCA

———

—————— ——— a OQ ee +

6a

Appendix A

required long-distance telecommunications carriers to set

forth the rates and other terms and conditions of their service

in tariffs to be filed with the FCC. 47 U.S.C. § 203(a); 47

C.F.R. § 61.1. This regulatory scheme begat the filed tariff

doctrine,‘ under which carriers are required to charge rates

and otherwise abide by the terms set forth in the filed tariffs.

AT & T v. Cent. Office Tel., inc., 524 U.S. 214, 221-23, 118

S.Ct. 1956, 141 L.Ed.2d 222 (1998); Cahnmann v. Sprint

Corp., 133 F.3d 484, 487 (7th Cir.1998). Carriers are

specifically prohibited from deviating from the tariffed rates

and are not free to negotiate different rates with customers.

See 47 U.S.C. § 203(c); see also Metro E. Ctr. for

Conditioning & Health v. Qwest Communications Int'l, Inc.,

294 F.3d 924, 925 (7th Cir.2002) (“No private agreement

can displace a tariff’s terms.”); Cahnmann, 133 F.3d at 487.

The doctrine also applies to non-rate provisions of a tariff,

such as “provisioning of services and billing,” so carriers

may not depart from non-price terms, either. See 47 U.S.C.

§ 203(c); Cent. Office Tel., 524 U.S. at 224-25, 118 S.Ct.

1956. ,

Although it may be tempting to view a filed tariff as

simply another contract enforceable under state law, this court

and others have recognized that tariffs are something more—

at least the equivalent of federal regulations or law—-so suits

to challenge or invalidate tariffs arise under federal law.

Cahnmann, 133 F.3d at 488-89; see also Qwest, 294 F.3d at

925; accord Hill v. BellSouth Telecomms., Inc., 364

4. The FCA’s filed tariff doctrine is derived from, and a close

cousin to, the tariff provisions of the Interstate Commerce Act. See

AT & T v. Cent. Office Tel., Inc., 524 U.S. 214, 222, 118 S.Ct. 1956,

141 L.Ed.2d 222 (1998).

—_——- --

7a

Appendix A

F.3d 1308, 1315 (11th Cir.2004); Bryan v. Bellsouth

Communications, Inc., 377 F.3d 424, 429 (4th Cir.2004);

ICOM Holding, Inc. v. MCI Worldcom, Inc., 238 F.3d 219,

221 (2d Cir.2001); MCI Telecomms. Corp. v. Garden State

Inv. Corp., 981 F.2d 385, 387 (8th Cir. 1992). Under the filed

tariff doctrine, courts may not award relief (whether in the

form of damages or restitution) that would have the effect of

imposing any rate other than that reflected in the filed tariff.

See Cahnmann, 133 F.3d at 489. This is so even if a carrier

intentionally misrepresents its rate and a customer relies on

the misrepresentation. See Cent. Office Tel., 524 U.S. at 222,

118 S.Ct. 1956 (holding that the carrier cannot be held to the

promised rate even if it conflicts with the published tariff).

The courts have enforced the apparent harshness of the

doctrine because rigorous enforcement of filed tariffs serves

Congress’s goals of ensuring uniformity and preventing

unreasonable prices or service discrimination among long-

distance customers. See 47 U.S.C. §§ 201(b), 202(a); see

also Cent. Office Tel., 524 U.S. at 223, 118 S.Ct. 1956;

Cahnmann, 133 F.3d at 487, 490. Accordingly, pursuant to

the filed-tariff doctrine, courts have unhesitatingly found that

claims purportedly challenging rates or terms of filed tariffs ©

under state law were preempted. See, e.g., Cahnmann, 133

F.3d at 489-90; Bryan, 377 F.3d at 431-32.

The mandatory aspect of the regulatory scheme came to

an end following passage of the Telecommunications Act of

1996. 47 U.S.C. § 160(a). Under the new legislative scheme,

the FCC was empowered to exempt carriers from filing

tariffs—trates, terms, and conditions of long-distance service

would now be governed by individual contracts between each

_——o

8a

Appendix A

carrier and its customers. Pursuant to the act, the FCC issued

a series of orders mandating detariffing, and as of July 31,

2001, the tariff requirement was canceled altogether. See

Boomer, 309 F.3d at 408-09 (describing history of detariffing

and citing FCC orders).

Our opinion in Boomer addressed the preemption

question in the wake of detariffing, when-the terms of

individual contracts or customer service agreements governed

long-distance service. In Boomer, the plaintiff, an AT & T

customer, brought a putative class-action suit alleging that

AT & T overcharged customers in violation of the Illinois

Consumer Fraud and Deceptive Business Practices Act. See

Boomer, 309 F.3d at 408. Like Affinity, AT & T notified its

customers that, after detariffing, all of its rates and conditions

would be set forth in a customer service agreement. /d. at

409. AT & T’s CSA included an arbitration clause, which

the plaintiff challenged as unenforceable under Illinois law.

The district court agreed with the plaintiff and denied AT &

T’s motion to compel arbitration.

We reversed the district court’s order, holding that the

plaintiff's state law challenges to the arbitration clause were

preempted by federal law. Jd. at 418. In so doing, we

reaffirmed our Cahnmann holding that, prior to detariffing,

“the [FCA] completely preempted state law challenges to

the terms and conditions contained in a filed tariff.” Jd. at

424 (citing Cahnmann, 133 F.3d at 489-90). We aiso

concluded, however, that Sections 201 and 202 of the FCA,”

5. Section 201(b) states:

All charges, practices, classifications, and regulations

for and in connection with such communication service,

(Cont'd)

9a

Appendix A

read together, express Congress's intent that long-distance

customers receive uniform and reasonable rates, terms, and

conditions of service. See Boomer, 309 F.3d at 421-22.

Section 203, which required the filing of tariffs, was simply

the express means of effectuating Congress’s intent, which

remained unchanged despite the passage of the

Telecommunications Act of 1996 and the onset of detariffing.

See id. (“{DJetariffing does not alter the fundamental design

of the [FCA], nor modify Congress’s objective of uniformity

in terms and conditions for all localities.”). We also noted

that although the FCC was authorized to dispense with the

tariff-filing requirement, it must first ensure that, consistent

with Congress’s intent, a tariff would “not [be] necessary to

ensure that the charges, practices, classifications, or

regulations ... are just and reasonable and are not unjustly

(Cont’d)

shall be just and reasonable, and any such charge,

practice, classification, or regulation that is unjust or

unreasonable is declared to be unlawfull.]

47 U.S.C. § 201(b). Section 202(a) states:

It shall be unlawful for any common carrier to make

any unjust or unreasonable discrimination in charges,

practices, classifications, regulations, facilities, or

services for or in connection with like communication

service, directly or indirectly, by any means or device,

or to make or give any undue or unreasonable preference

or advantage to any particular person, class of persons,

or locality or to subject any particular person, class of

persons, or locality to any undue or unreasonable

prejudice or disadvantage.

47 U.S.C. § 202(a).

10a

Appendix A

Or unreasonably discriminatory.” /d. at 421 (quoting

47 U.S.C. § 160(a)(1)). Moreover, we recognized that even

the FCC understood that detariffing “did not affect [FCC]

enforcement of carriers’ obligations under [S]ections 201 and

202[,]” which expressed Congress’s intent. /d. at 422 (citation

omitted). Thus, the FCA continues to provide federal

remedies for customers seeking to challenge the justness and

reasonableness of long-distance charges and practices.

47 U.S.C. $§ 207, 208; see also Boomer, 309 F.3d at 422.

We therefore opined in Boomer that allowing a state law

challenge to AT & T’s CSA “would result in customers

receiving different terms based on their locality[,]” and could

thwart Congress’s intent by “creat[ing] a labyrinth of rates,

terms and conditions.” 309 F.3d at 418, 420. We concluded

that state law “cannot operate to invalidate the rates, terms

or conditions of a long-distance service contract[,]” even after

detariffing. /d. at 424. The Boomer plaintiffs challenge to

the validity of AT & T’s arbitration clause amounted to a

challenge of AT & T’s contract and, necessarily, the contract’s

rates, terms and conditions. In sum, we determined that

“{a]llowing [such a] state law challenge[] to the validity of

the terms and conditions contained in [AT & T’s] long-

distance contract[] ... [would] result [] in the very

discrimination Congress sought to prevent.” /d. at 423.

Turning to the merits in the present case, it is undisputed

that Affinity provided its services in accordance with its filed

tariff, and then, after detariffing, in accordance with the terms

of its CSA. The critical question in this case is whether

Dreamscape’s claims are federally preempted as a matter of

law even after detariffing—a result seemingly required by

lla

Appendix A

our holding in Boomer. Dreamscape nevertheless does its

level best to avoid application of Boomer by steadfastly

insisting that its amended complaint in no way challenges

Affinity’s rates or filed tariff and therefore does not invoke

the filed tariff doctrine. According to Dreamscape, Affinity

engaged in pre-tariff (or pre-contract) fraud by inducing

Dreamscape to purchase long-distance services that were not

billed in accordance with the rates advertised in 1999, and

Affinity is therefore liable under Illinois law. Dreamscape

claims to have sustained damages for the alleged fraud after

July 31, 2001, when the tariff was no longer in effect and

Affinity’s rates were thereafter delineated in its CSA.

Perhaps recognizing the uphill battle it faces with respect

to Boomer and other preemption caselaw, Dreamscape styles

this appeal as a simple dispute over the proper interpretation

of its amended complaint—under the well-pleaded complaint

doctrine, Dreamscape advanced only state law claims that

did not challenge Affinity’s rates, and thus federal law is not

implicated at all. Dreamscape therefore argues that Boomer

is not relevant to the present case. But even if Boomer applies,

Dreamscape asks that we reconsider Boomer’s preemption

holding in light of contrary reasoning in Ting v. AT & T, 319

F.3d 1126 (9th Cir.2003).

As for its breach of contract claim, Dreamscape candidly

conceded at argument that the claim necessarily challenged

the rates contained in Affinity’s filed tariff, but nevertheless

suggests that the claim is not necessarily preempted if we

favor Ting over Boomer or otherwise resolve the apparent

conflict between the two cases.

12a

Appendix A

A. Fraud

We first consider Dreamscape’s assertion that the well-

pleaded complaint doctrine saves its fraud claims from

preemption. Under this doctrine, “whether a case is one

arising under the Constitution or a law or treaty of the United

States . . . must be determined from what necessarily appears

in the plaintiff’s [complaint]. . . , unaided by anything alleged

in anticipation or avoidance of defenses which it is thought

the defendant may interpose.” City of Chicago v. Comcast

Cable Holdings, 384 F.3d 901, 904 (7th Cir.2004) (quoting

Taylor v. Anderson, 234 U.S. 74, 75-76, 34 S.Ct. 724,

58 L.Ed. 1218 (1914)).

Dreamscape argues that the doctrine, as employed in our

recent Comcast opinion, applies here, and we should reach

the same result. We disagree. Comcast had nothing to do

with long-distance services or filed tariffs or rates regarding

such service. Instead, at issue in that case was 47 U.S.C.

§ 542, which governs franchise fees relating to cable

operators. We concluded that the plaintiff's claims did not

present a federal question because Congress did not intend

§ 542 “to override state law, let alone to deny states all power

in the field.” Jd. at 905. Indeed, it was clear that Congress

left to the states “most questions about the regulation and

taxation of cable TV franchises.” Jd. Therefore, because

Congress had not indicated its intent that federal law preempt

state regulation of such franchises, the Comcast defendants’

efforts to raise a § 542(b) federal defense to the plaintiff's

action could not invoke federal jurisdiction over the city’s

state law claims. See id. We concluded that, pursuant to the

well-pleaded complaint doctrine, the city pleaded only state-

13a

Appendix A

law claims that did not implicate federal law, so it was

necessary to remand the action to state court. See id.

Comcast is readily distinguishable from the present case,

however. In contrast to § 542, there is no question that

Congress intended the FCA to displace state law with respect

to long-distance telephone service terms and conditions. See

Boomer, 309 F.3d at 423. The only question here is whether

such preemption survived detariffing, which we answered

in the affirmative in Boomer. Comcast says nothing about

that issue, so Dreamscape cannot simply invoke the well-

pleaded complaint doctrine, as applied in Comcast, to save

its claims from preemption here.°

A better case for Dreamcast is /n re Long Distance

Telecommunications Litigation, 831 F.2d 627 (6th Cir. 1987)

(“Long Distance Litigation”), which was decided prior to

detariffing. In Long Distance Litigation, AT & T was alleged

to have fraudulently advertised that its rates were lower than

competitors’ rates but hid the fact that it actually charged for

uncompleted phone calls. 831 F.2d at 628. Among other

claims, the plaintiffs filed various state law claims for fraud

6. For similar reasons, our opinion in Fedor v. Cingular Wireless

Corp., 355 F.3d 1069 (7th Cir.2004), does not help Dreamscape.

That case dealt with a completely different provision of the FCA,

47 U.S.C. § 332(c)(3)(A), which governs mobile communications

and specifically reserves to the states the right to regulate non-rate

“terms and conditions of commercial mobile services.” /d. at 1071.

The plaintiff's claim did not challenge Cingular's rates or their

reasonableness, nor did it challenge market entry as defined in

§ 332. See Fedor, 355 F.3d at 1074. Preemption was therefore not

appropriate under § 332. See id. at 1074-75.

l4a

Appendix A

and deceit, and the Sixth Circuit held that the district court

erroneously found these claims preempted by the FCA.

Id. at 633-34. The court determined that the plaintiffs’ claims

did not relate to long-distance rates or service, but simply

sought damages for AT & T’s failure to disclose its practice

of billing for uncompleted calls. See id. at 634. The court

concluded, however, that if the case had related to such rates

or service, preemption would be likely. See id.

In the present case, Affinity is alleged to have

fraudulently advertised that it billed at per-minute rates, when

in fact it billed by TCU. In certain respects, as Dreamscape

alleges, Affinity’s alleged fraud is facially difficult to

distinguish from AT & T’s. So it is helpful to look not only

to the nature of the claims advanced, but also to the relief

sought in order to determine whether the claims intrude upon

the areas of communications law expressly reserved to the

FCC’s purview. See Bastien v. AT & T Wireless Servs., Inc.,

205 F.3d 983, 989 (7th Cir.2000). If, for example, the Long

Distance Litigation plaintiffs sought rescission of the contract

because of AT & T’s failure to disclose its billing practices,

we agree that preemption would be improper in that case.

After all, such a claim arguably would not seek relief that

would alter or affect AT & T’s rates, terms, or conditions of

service—the sort of requested relief that even the Long

Distance Litigation court recognized as likely to bring a claim

within the bounds of federal jurisdiction. 831 F.2d at 634

(citation omitted).

The precise relief sought by the Long Distance Litigation

plaintiffs is not readily discernible, but it is clear, as we

determined in Cahnmann, that the adjudication of those

15a

Appendix A

plaintiffs’ claims would not have required determining the

validity of AT & T’s tariff. See Cahnmann, 133 F.3d at 488.

This stands in stark contrast to Dreamscape’s claims in the

present case—no matter how Dreamscape attempts to

characterize them—so even Long Distance Litigation cannot

save Dreamscape. Dreamscape does not seek rescission of

the contract, but instead seeks monetary damages for what it

claims to have overspent for long-distance service as a result

of Affinity’s alleged fraud—in other words, payment of the

difference between what Affinity advertised and what

Affinity’s tariff or CSA provided for. We do not see how a

court could possibly grant that form of relief without

invalidating the contracted rates at issue, as delineated first

in the filed tariff and then under the CSA. Payment of such

damages would effectively grant a lower rate to Dreamscape

than to other customers not included in the putative class

and would require the court to determine a “reasonable” rate.

Cf. Bryan, 377 F.3d at 431. Likewise, the special or punitive

damages Dreamscape seeks would amount to a retroactive

rate change as well. To grant any of this requested relief would

be squarely at odds with both the filed tariff doctrine and

our holding in Boomer.

As we noted in Boomer, with the passage of the

Telecommunications Act of 1996, it is clear that Congress

envisioned some role for state law after detariffing, so federal

law no longer completely preempts the entire field. Boomer,

309 F.3d at 424. With respect to long-distance service

contracts, however, we expressly held (and reaffirm now)

that state law cannot operate to invalidate the terms and

conditions of such contracts. Because Dreamscape’s claim

seeks relief that would in effect do just that, we fail to see

OO

16a

Appendix A

how Dreamscape’s claims are not preempted in the same way

the Boomer plaintiff's claims were. In short, we agree with

the district court’s conclusion that even after amending its

complaint, Dreamscape’s claims and the relief it sought

primarily concern the rates Affinity has charged for its long-

distance service and should be preempted.

Nevertheless, Dreamscape argues that it only challenges

Affinity’s pre-contract promises, not the rates or other terms

of Affinity’s tariff or CSA. According to Dreamscape,

“(i]t matters not whether [Affinity] was selling cars or fruit

or refrigerators or long-distance service. The ICFA requires

that [Affinity’s] advertising and solicitations be truthful.”

Dreamscape’s blithe assertion notwithstanding, it does matter

in this case what sort of goods or services Affinity sells,

because that is precisely the point of Boomer and other cases

exploring the bounds of preemption. In this instance,

Congress has clearly indicated its goal of ensuring uniform

and reasonable rates for long-distance service—thus calling

for preemption in this area, if not the unrelated types of

commerce Dreamscape lists.

Although Dreamscape argues that Affinity’s actions

amounted to simple fraud, we find that its fraud claims are

really no different than a breach of contract claim

(notwithstanding that it advances such a claim under a

separate count, as discussed below), in terms of the relief it

seeks. See Cahnmann, 133 F.3d at 490. As we indicated

above, the relief Dreamscape seeks is impossible to grant

without effectively invalidating Affinity’s contractual rates,

terms, or conditions. See Boomer, 309 F.3d at 423; cf. ICOM,

238 F.3d at 222- 23. The substance of Affinity’s contractual

17a

Appendix A

provisions cannot be severed from the alleged fraud that

induced Dreamscape into purchasing Affinity’s long-distance

services to begin with. Cf, Cahnmann, 133 F.3d at 489 (noting

that if the parties’ contract had included a provision entirely

unrelated to the tariff in which the defendant promised

“to sell the plaintiff a bushel of Ugli fruit at market price,”

such a promise might be severable from the defendant’s filed

tariff and thus actionable under state law). Affinity’s alleged

fraud pertained to something, after all, and that “something”

is set forth within Affinity’s filed tariff and CSA, which detail

the rates, terms, and conditions of which Dreamscape

ultimately complains.

Therefore, it is the artful pleading doctrine, not the well-

pleaded complaint doctrine, that properly guides

interpretation of Dreamscape’s amended complaint. See

Bastien, 205 F.3d at 986 (“It is true that a plaintiff is ... master

of his own complaint and may seek to avoid federal

jurisdiction by pleading only state law claims, . . . but when

that complaint, fairly read, states a federal question, the

defendant may rémove the case to federal court.”) (internal

citations omitted). Dreamscape seeks to convince us that its

fraud claims do not touch upon Affinity’s rates and, as the

Cahnmann plaintiff did, “emphatically disclaims any

intention of prosecuting a federal claim.” Cahnmann, 133

F.3d at 489.

We are just as unpersuaded here as we were in

Cahnmann, however. Our interpretation of Dreamscape’s

complaint and conclusion arise from an “uncontroversial

application of the artful pleading doctrine.” Jd. at 490

(quotation marks omitted). Pursuant to Boomer and related

18a

Appendix A

caselaw, we conclude that Dreamscape’s fraud claims are

federally preempted and were properly removed to federal

court. See Boomer, 309 F.3d at 423; see also Cahnmann,

133 F.3d at 490 (“If a claim can arise only under federal law,

because federal law has extinguished the state law basis under

which it might otherwise arise, the case is removable to

federal court even if the plaintiff sedulously avoids mention

of federal law in his complaint.”); see also Bastien, 205 F.3d

at 986 (“[I]n some instances, Congress has so completely

preempted a particular area that. . . removal is proper despite

the well-pleaded complaint rule.”) (citations omitted).

B. Breach of Contract

Dreamscape’s remaining claim alleges that Affinity

breached its contract. But Dreamscape candidly concedes

(as it must) that this claim necessarily challenges Affinity’s

rates and terms as set forth in its tariff and CSA and thus

cannot survive unless we “revisit” Boomer—by “revisit,” we

assume that Dreamscape is asking that we either distinguish

Boomer or set it aside in favor of the Ninth Circuit's Ting

decision. We see no way, however, to distinguish Boomer

and, further, reaffirm it because our analysis in Boomer

remains sound.

We are unpersuaded by Ting. Contrary to Boomer, the

Ninth Circuit held that federal preemption under the filed

tariff doctrine did not survive detariffing. Ting, 319 F.3d at

1135. In fact, the court expressly rejected Boomer’s

preemption analysis, concluding that, in the detariffed

environment, state laws did not obstruct Congress’s intent

with respect to the FCA. See id. The Ninth Circuit concluded

19a

Appendix A

that, with the passage of the Telecommunications Act of 1996,

Congress intended state contract and consumer protection

laws to play a role in governing the carrier-consumer

relationship after detariffing, and preemption did not survive

the passage of the act. See id. at 1144. The court believed

that Congress intended the goals expressed in Sections 201

and 202 to be enforced by application of state law. See id.

at 1144-45. Therefore, the Ninth Circuit held, the plaintiffs

could challenge the carrier’s CSA under California state law.

We disagree with this interpretation. For the reasons we

discussed at length in Boomer, we do not see how Congress’s

clearly expressed intent regarding uniformity and

reasonableness of rates, as demonstrated in Sections 201 and

202 of the FCA, can be squared with Ting’s apparent

conclusion that state contract law can invalidate the terms

or conditions of long-distance contracts after detariffing.

See Boomer, 309 F.3d at 417-23. Indeed, in Boomer we

rejected the very district court opinion that Ting affirmed.

See id. at 422. As indicated in Boomer and in this opinion,

we conclude that even after detariffing, state law cannot

operate to invalidate the rates, terms, or conditions of a long-

distance service contract (which is precisely what

Dreamscape’s amended complaint seeks, whether it admits

it or not) because such a result would be contrary to

Congress’s intent as expressed in Sections 201 and 202.

Dreamscape’s claims are preempted by federal law, and

removal of Dreamscape’s action and dismissal of its amended

complaint were appropriate.

20a

Appendix A

Ill. Conclusion

For the reasons given, we AFFIRM the order of the

district court dismissing Dreamscape’s amended complaint.

A true Copy:

| Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit

2la |

APPENDIX B — ORDER OF THE UNITED STATES

DISTRICT COURT FOR THE CENTRAL DISTRICT

OF ILLINOIS, URBANA DIVISION

FILED JULY 12, 2004

ow

UNITED STATES DISTRICT COURT FOR THE

CENTRAL DISTRICT OF ILLINOIS

URBANA DIVISION

Case No. 02-2235

DREAMSCAPE DESIGN, INC., a corporation,

Plaintiff,

‘ :

AFFINITY NETWORK, INC., a corporation, |

Defendant. |

ORDER |

This case is before the court for ruling on the Motion to

Dismiss Second Amended Class Action Complaint (#54) filed

by Defendant, Affinity Network, Inc., and the Motion to

Remand (#56) filed by Plaintiff, Dreamscape Design, Inc.

Following this court's careful consideration of the arguments

of the parties, Defendant's Motion to Dismiss (#54) is

GRANTED, and Plaintiff's Second Amended Class Action

Complaint is dismissed with prejudice. Therefore, Plaintiff's

Motion to Remand (#56) is DENIED as moot.

22a

Appendix B

BACKGROUND

In September 2002, Plaintiff filed a Class Action

Complaint in the circuit court of Champaign County. Plaintiff

alleged that Defendant violated the Illinois Consumer Fraud

Act by advertising that it provided long distance telephone

service at certain per minute rates when, in fact, Defendant’s

bills were at rates based upon “TCU’s” rather than per minute

charges. According to Plaintiff, this resulted in rates

substantially in excess of the advertised rates. Plaintiff

attached to its Complaint copies of two of Defendant’s

advertisements, which included fax machine dates showing

that they were faxed in 1999, and a copy of a 1999 invoice.

On November 12, 2002, Defendant removed the case to this

court. Defendant contended that Plaintiff's claims were

preempted by federal law.

On March 17, 2003, this court entered an Order (#27)

which denied Plaintiff's Motion to Remand (#8) and granted

Defendant’s Motions to Compel Arbitration and Stay

Proceedings (#5, #24) and Defendant's Cross-Motion to Stay

or Deny the Class Certification Motion as Premature (#17).

This court agreed with the reasoning of Magistrate Judge

David G. Bernthal in his Report and Recommendation (#21).

This court stated that it agreed with the Magistrate Judge

that “a review of the complaint makes it clear that this suit is

primarily about the rates Defendant charged its customers

for service.” This court further stated that it agreed with the

Magistrate Judge’s conclusion that, because a large part of

Plaintiff's claims were related to Defendant’s methods and

rates for billing long-distance service, a subject governed by

Defendant's tariff, the purported state claims at issue in the

23a

Appendix B

suit were preempted by federal law. This court noted that the

tariff requirement was canceled on July 31, 2001, as part of

the detariffmg program of the Federal Communications

Commission (FCC) but that it appeared from the attachments

to the Complaint that “Plaintiff's claims relate to the period

before July 31, 2001, when tariffs were still required.”

This court also noted that the Seventh Circuit, in Boomer v.

AT & T Corp., 309 F.3d 404, 424 (7 Cir. 2002) held that,

even after deregulation, the Communications Act of 1934

preempts state law in cases involving the rates, terms, and

conditions of the contract between a long-distance carrier

and its customers. In addition, this court found that the

arbitration clause contained in Defendant's tariff required

arbitration of Plaintiff's dispute. This court specifically found

that “Defendant's tariff was in force when the dispute arose

and thus governs its resolution.” Plaintiff's Motion to Certify

Class (#14) was stayed pending the outcome of arbitration.’

Subsequently, Plaintiff, on two occasions, asked this

court to reconsider its ruling that its claim was preempted

by federal law and subject to arbitration. On May 9, 2003,

this court entered an Order (#34) which granted Defendant's

Motion to Strike Plaintiffs Amended Motion for

Reconsideration. Although this court struck tne Amended

Moticn for Reconsideration, this court also stated that it had

carefully reviewed the arguments made by Plaintiff and found

them entirely without merit. This court stated, “[bJecause

the terms of service provided to Plaintiff by Defendant were

governed by Defendant’s filed tariff, the filed tariff doctrine

1. Plaintiff's Motion to Certify Class (#14) was later withdrawn

with leave to reinstate at the conclusion of arbitration.

24a

Appendix B

applies and operates to bar Plaintiffs purported state law

claims. Plaintiffs claims are preempted by federal law.”

On January 23, 2004, Plaintiff filed another Motion to

Reconsider (#38). Plaintiff argued that this court should

reconsider its Order denying remand based upon the January

22, 2004, decision of the Seventh Circuit in Fedor v. Cingular

Wireless Corp., 355 F.3d 1069 (7 Cir. 2004). This court

entered an Order (#47) on March 3, 2004, and denied

Plaintiffs Motion. This court concluded that the decision in

Fedor did not apply to the facts of this case and stated that

“this court remains convinced that Plaintiffs claims in this

case are related to Defendant's methods and rates for billing

long-distance service, a subject governed by Defendant's

tariff. Therefore, in this case, the question of ‘whether the

claim necessarily treads upon the federally-reserved areas’

must be answered in the affirmative. See Fedor, 355 F.3d

at 1072.” However, this court denied Defendant’s Motion

for Sanctions in an Order (#49) entered on March 11, 2004.

This court concluded that sanctions against Plaintiff were

not warranted.

Thereafter, the arbitration proceedings continued before

retired Judge Richard E. Neville. On April 12, 2004,

Arbitrator Neville entered a decision in the case. The

arbitrator first found that the dispute was governed by the

arbitration clause in the tariff. The arbitrator next found that

the tariff overrode State law and applied to the dispute

“and that there is no remedy for the Plaintiff for any

fraudulent misrepresentations made by the Defendant as

alleged.” The arbitrator therefore dismissed Plaintiff's claims.

However, the arbitrator noted that July 31, 2001, was the

25a

Appendix B

cancellation date for FCC tariffs and that the record was not

clear regarding whether all of Plaintiffs claims occurred

before July 31, 2001. Therefore, the arbitrator stated that he

would allow Plaintiff to file an amended claim to address

this issue if Plaintiff chose to do so.

On April 23, 2004, Plaintiff filed its Second Amended

Class Action Complaint (#53).? In Count 1, Plaintiff stated

that the Amended Class Action Complaint wis designated

as Count | and was not abandoned. However, Plaintiff

acknowledged that this count was dismissed by the arbitrator

on April 12, 2004. In Counts 2 and 3, Plaintiff alleged that

it, and other putative class members, utilized Defendant's

service subsequent to July 31, 2001. In Count 2, Plaintiff

alleged that Defendant violated the Illinois Consumer Fraud

Act and that “the plaintiff and the putative class members

were damaged in that they paid more for their intrastate and

interstate long distance service than the represented rate of

5 cents per minute for intrastate and 8.9 cents per minute for

interstate long distance subsequent to July 31, 2001.”

In Count 3, Plaintiff alleged that a contract was formed

between Defendant and Plaintiff and the putative class

members upon their acceptance of Defendant's services.

Plaintiff further alleged that the relevant term of this contract

was that Plaintiff and the putative class members would pay

5 cents per minute for intrastate long distance and 8.9 cents

2.- On February 4, 2003, Plaintiff filed an Amended Class Action

Complaint (#22). However, this court noted, in its March 17, 2003,

Order (#27) that it agreed with Defendant that the amended complaint

did not cure the federal preemption of Plaintiff's claims as the “claims

still hinge upon the amounts charged by Defendant, which are

governed exclusively by Defendant's tariff.”

— ——-— er

- ee eee =

26a

Appendix B

per minute for interstate long distance. Plaintiff alleged that

Defendant breached this contract by charging rates in excess

of the contract rates “subsequent to July 31, 2001.” Plaintiff

attached to its Second Amended Class Action Complaint the

same copies of Defendant’s advertisements it attached to its

original Complaint. As noted previously, these copies show

that they were received by fax in 1999.

On May 7, 2004, a status conference was held before

this court. At the conference, this court confirmed that, based

upon the arbitrator’s ruling, Plaintiff's claims were dismissed.

However, this court noted that, since the arbitrator’s ruling,

Plaintiff had filed its Second Amended Class Action

Complaint. This court therefore lifted the stay which had

been imposed pending arbitration and also ruled that Count

1 of Plaintiff's Second Amended Class Action Complaint

was dismissed. Defendant was allowed until June 21, 2004,

to respond to Counts 2 and 3 of the Second Amended Class

Action Complaint.

On ‘une 18, 2004, Defendant filed a Motion to Dismiss

Second Amended Class Action Complaint (#54) and a

Memorandum of Law in Support (#55). Defendant argued

that Plaintiff's claims are still preempted by federal law and

mist be dismissed. On June 28, 2004, Plaintiff filed a Motion

to Remand (#56) and argued that its state law claims should

be remanded back to the circuit court of Champaign County.

On July 2, 2004, Plaintiff also filed a Reply to Defendant’s

Motion to Dismiss (#58). Plaintiff argued that its claims in

Couat 2 and Count 3 allege only state claims based on

services rendered and invoices submitted by Defendant after

July 31, 2001, after detariffing, and are not preempted.

27a

Appendix B

ANALYSIS

In this case, this court previously ruled that Plaintiffs

state law claims, as alleged in its Class Action Complaint

and Amended Class Action Complaint, appeared to relate to

the period before July 31, 2001, when tariffs were still

required, and were therefore preempted by federal law and

subject to arbitration based upon the arbitration clause in

the tariff. The arbitrator concluded that, to the extent

Plaintiff's claims arose before July 31, 2001, the tariff

overrode state law and, thus, “there is no remedy for the

Plaintiff for any fraudulent misrepresentations made by the

Defendant as alleged.” This court agrees with the arbitrator's

conclusion. Prior to 2001, the Communications Act of

1934 (Communications Act), as amended by the

Telecommunications Act of 1996, required long distance

’ carriers to set forth their charges and other terms and

conditions of service in tariffs filed with the FCC. Boomer,

309 F.3d at 408; see also A T & T Co. v. Cent. Office Tel.,

Inc., 524 U.S. 214, 221-23 (1998). In the interest of

preventing unreasonable and discriminatory charges,

the rates a long distance carrier charged had to be the rates

stated in its tariff. See Cent. Office Tel., 524 U.S. at 221-22.

Therefore, “even if a carrier intentionally misrepresents its

rate and a customer relies on the misrepresentation, the carrier

cannot be held to the promised rate if it conflicts with the

published tariff” Cent. Office Tel., 524 U.S. at 222; see also

Boomer, 309 F.3d at 408 (“Under the ‘filed tariff doctrine,’

customers were bound by the terms of the tariff even if they

had never seen the tariff, and even if the consumers had been

promised service under different rates, terms or conditions.”).

This is because “the policy of nondiscriminatory rates is

~— <2 a aE HE oases

= » ; —<--

28a

Appendix B

violated when sirnilarly situated customers pay different rates _

for the same services.” Cent. Office Tel., 524 U.S. at 223.

The issue now before this court, raised by both

Defendant's Motion to Dismiss and Plaintiff's Motion to

Remand, is whether Plaintiff can bring state law claims, based

upon the same alleged misrepresentations, because it has now

alleged that it received invoices from Defendant after July

31, 2001. This court concludes that, based upon the Seventh

Circuit's decision in Boomer, this question must be answered

in the negative.

As noted previously, the tariff requirement was ended,

effective July 31, 2001, by a series of orders from the FCC.

See Boomer, 309 F.3d at 409. Instead of filing tariffs, carriers

were then required to provide customers with notice of the

rates, terms, and conditions of service, and to offer customers

service under those terms and conditions. Boomer, 309 F.3d

at 409; see also Ramette v. AT & T Corp., __ N.E.2d __,

2004 WL 1393613, at * 1 (Ill. App. Ct. 2004). The customers

could, in turn, accept or reject the carrier’s offer. Boomer,

309 F.3d at 409; Ramette, 2004 WL 1393613, at *1. If the

customer accepted the terms of the offer by continuing

service, the terms and conditions set out by the carrier became

the agreement between the customer and the carrier.

See Boomer, 309 F.3d at 409-10. According to Defendant,

on August |, 2001, it provided Plaintiff (and its other long

distance customers) with a notice stating that its services

would be provided according to the terms and conditions

posted on its website.’

3. Plaintiff has not disputed this assertion.

29a

Appendix B

~ In Boomer, a class action suit was filed against A T & T

alleging that it overcharged customers for contributions to

federal universal service funds. In that case, A T & T sent

out Customer Service Agreements to its customers in June

2001. A notice included with the agreements provided that,

“by enrolling in, using, or paying for the services, you agree

to the prices, charges, terms and conditions in this

agreement.” Boomer, 309 F.3d at 409. The agreements sent

out by A T & T included an arbitration clause. Boomer,

309 F.3d at 410. The plaintiffs in Boomer argued that the

arbitration clause was not enforceable under Illinois law.

Boomer, 309 F.3d at 411. However, the Seventh Circuit held

that state law challenges to the validity of the arbitration

clause contained in the agreement were preempted by the

Communications Act. Boomer, 309 F.3d at 418.

In reaching this conclusion, the Seventh Circuit

stated that provisions of the Communications Act, and

the Communications Act in general, “demonstrate a

congressional intent that customers of individual long-

distance carriers receive uniform terms and conditions of

service” and “a congressional intent that individual long-

distance customers throughout the United States receive

uniform rates, terms and conditions of service.” Boomer, 309

F.3d at 418. The Seventh Circuit determined that, allowing a

state law challenge to the arbitration clause in the agreement

“would result in customers receiving different terms based

on their locality.” Boomer, 309 F.3d at 418. The court also

Stated that section 201 of the Communications Act “declares

unlawful rates, terms and conditions which are not just and

reasonable, demonstrating Congress's intent that federal law

govern the validity of the terms and conditions of long-

30a

Appendix B

distance service contracts.” Boomer, 309 F.3d at 418. The

Seventh Circuit noted that allowing state law to determine

the validity of the various terms and conditions would

“create a labyrinth of rates, terms and conditions and this

violates Congress’s intent in passing the Communications

Act.” Boomer, 309 F.3d at 420. The court in Boomer

went on to state that, following detariffing, “there appears to

be some role for state law.” Boomer, 309 F.3d at 424. The

court therefore indicated that, after detariffing, the

Communications Act does not completely preempt state law.

Boomer, 309 F.3d at 424. However, the court specifically

stated that state law “cannot operate to invalidate the rates,

terms or conditions of a long-distance service contract.”

Boomer, 309 F.3d at 424.

In this case, this court has previously found that

Plaintiff's claims are “primarily about the rates Defendant

charged its customers for service” and are related to

Defendant’s methods and rates for billing long-distance

service. The allegations in the Second Amended Class Action

Compiaint demonstrate that is still the case. The Seventh

Circuit has clearly stated that federe law governs the rates,

terms and conditions of long-distance service contracts and

that state law “cannot operate to invalidate the rates, terms

or conditions of a long-distance service contract.” Boomer,

309 F.3d at 418, 420. Therefore, based upon Boomer, this

court agrees with Defendant that Plaintiffs state law claims

are still preempted, even though Plaintiff has alleged that it

received invoices from Defendant after detariffing.

This court finds unavailing Plaintiff's various arguments

regarding why Boomer does not apply to this case. Plaintiff

3la

Appendix B

first argues that Boomer is factually distinct. Plaintiff

contends that Boomer was limited to the narrow issue of the

arbitration clause, an issue no longer present in this case.

However, as already noted by this court, Plaintiff's state law

claims in this case challenge the rates charged by Defendant,

which is a subject the court in Boomer specifically stated is

governed by federal law.

Plaintiff next argues that this court should follow the

decision of the Ninth Circuit Court of Appeals in Ting v.

AT & T Corp., 319 F.3d 1126 (9® Cir. 2003), cert. denied,

124 S. Ct. 53 (2003). The Ninth Circuit, in Ting, disagreed

with the Seventh Circuit's decision in Boomer and found

that the principle of preemption was a product of the filed

rate doctrine and did not survive detariffing. Ting, 319 F.3d

at 1138-46.

This court, however, is bound to follow the rulings of

the Seventh Circuit, the Circuit in which this court is located,

unless powerfully convinced that the Seventh Circuit would

overrule that decision at the first opportunity. See Brenner v.

Brown, 814 F. Supp. 717, 718 (N.D. Ill. 1993), citing Colby

v. J.C. Penney Co., 811 F.2d 1119, 1123 (7* Cir. 1987); see

also McBride » St. Anthony Messenger Magazine, 2003 WL

1903381, at *8 (S.D. Ind. 2003). This court has no reason to

believe that the Seventh Circuit would overrule its decision

in Boomer and follow the reasoning of the Ninth Circuit in

Ting.

Further, this court agrees with a recent decision of the

Illinois Appellate Court which found that Boomer is the

better reasoned of the two decisions. See Ramette, 2004

32a

Appendix B

WL 1393613, at 6-8. The court in Ramette declined to follow

Ting and specifically found that Boomer was “a well-reasoned

opinion that detailed the congressional intent behind the

{Communications Act].” Ramette, 2004 WL 1393613, at *6.

The court also noted that the plaintiff in that case, in arguing

that Boomer was incorrectly decided, failed “to recognize

the purpose of the [Communications Act] was to advance

uniformity in telecommunications services. Allowing state-

law challenges to the [customer service agreement] would

create a diversity in terms and conditions of service.”

Ramette, 2004 WL 1393613, at *6. The Illinois Appellate

Court stated that it found Boomer “to be persuasive in its

logic and reasoning.” Ramette, 2004 WL 1393613, at *8. The

court also noted that Boomer had been followed outside the

Seventh Circuit in In re Universal Serv. Fund Tel. Billing

Practices Litig., 300 F. Supp. 2d 1107 (D. Kan. 2003).

Ramette, 2004 WL 1393613, at *8.

The court in Universal Serv. Fund noted that the FCC

has stated:

We therefore agree with A T & T, Spring, and

WorldCom that the Communications Act

continues to govern determinations as to whether

rates, terms, and conditions for interstate,

domestic, interexchange services are just and

reasonable, and are not unjustly or unreasonably

discriminatory. While the parties only sought

certification that the Communications Act governs

the determination as to the lawfulness of rates,

terms, and conditions, we note that the

Communications Act does not govern other issues,

33a

Appendix B

such as contract formation and breach of contract,

that arise in a 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 in

a detariffed regime.

Universal Serv. Fund, 300 F. Supp. 2d at 1120 (emphasis

omitted), quoting Order on Reconsideration, Interstate

Interexchange Marketplace, 12 F.C.C. Rep. 15014, 15057

(1997); see also Ramette, 2004 WL 1393613, at *9, This

court concludes that the FCC’s statement is entirely

consistent with the Seventh Circuit’s conclusion in Boomer

that the rates, terms and conditions of long distance telephone

service are governed by federal law and are not subject to a

state law attack. The FCC’s remaining statements regarding

the availability of state law challenges of other issues, such

as contract formation and breach of contract, does not help

Plaintiff in this case. Plaintiff has alleged that Defendant

made misrepresentations in its advertisements in 1999, before

detariffing, and alleges that bills it received for services after

July 31, 2001, were contrary to the advertised rates.

Therefore, Plaintiff is not alleging the breach of a contract

which was formed after detariffing.

Accordingly, for all of the reasons stated, this court

agrees with Defendant that the state law claims alleged in

Plaintiff's Second Amended Class Action Complaint are

preempted and must be dismissed. Any relief Plaintiff

believes it is entitled to must begin with a complaint to the

FCC. Ramette, 2004 WL 1393613, at *11; see also Boomer,

309 F.3d at 420 n.9.

34a

Appendix B

IT IS THEREFORE ORDERED THAT:

(1) Defendant's Motion to Dismiss the Second Amended

Class Action Complaint (#54) is GRANTED. Plaintiffs

Second Amended Class Action Complaint (#53) is dismissed

with prejudice.

(2) Plaintiffs Motion to Remand (#56) is therefore

DENIED as moot.

This case is terminated.

ENTERED this 9th day of July, 2004

s/ MICHAEL P. McCUSKEY

U.S. DISTRICT JUDGE

IN THe

Supreme Court of the United Stutes

nt

$$

DREAMSCAPE DESIGN, INC.

P etitioner,

FOR THE SEVENTH Cincurr

__. a

Attorneys for Respondent

ala

(90) 2763321 (do sop. aasy

ee Ee

i

QUESTION PRESENTED

Whether state law challenges to the rates charged by

common carriers for long distance telecommunications

services are preempted by Sections 201 and 202 of the Federal

Communications Act.

i

RULE 29.6 STATEMENT

Respondent Affinity Network Incorporated is a privately

held corporation and has no parent corporation. No publicly

held company owns 10% or more of the stock of Affinity

Network Incorporated.

iii

TABLE OF CONTENTS

Page

QUESTION PRESENTED ..............0eeeeee i

RULE ZO.G STATEMENT cccccccccvcccccccess il

BARES Ce GUUEEITED csccdccceseccesecccce iti

TABLE OF CITEDAUTHORITIES ............ v

SE clieds bnos ncues kedeedenes oa l

COUNTER-STATEMENT OF THE CASE ....... 2

A. Regulatory Background................. 2

B. Factual And Procedural Background ...... 5

1. Proceedings Before The District Court ;

2. Proceedings Before The Court of Appeals

For The Seventh Circuit ............ 8

REASONS FOR DENYING THE PETITION .... 10

I. THERE IS NO CONFLICT WARRANTING

REVIEW BY THIS COURT ............. 10

A. This Court Has Already Declined To

Review The Alleged Split Between The

Courts In Jing And Boomer ......... 10

iv

Contents

B. Significant Factual Differences Between

Boomer And Ting And This Case Weigh

Heavily Against Review ............

1. Boomer And Ting Addressed Non-Rate

Specific Issues, While This Case Directly

a) Re reer

2. This Case Directly Involves Rates And

Is Therefore Distinguishable From Ting,

And Not In Conflict With Ting Or

NS SUS ovis ehh a dia aceasta

Il. This Case Is A Poor Vehicle To Address The

Relationship Between Federal And State Law

In This Area Because Of The Unique Facts Of

TE 0. 0's nc.c0vdd saab epcanavneunaes

Ill. The Petitioner Has Not Presented An

Important Federal Question That Warrants

PEGE UU. 6 cccacvaeeweeei sane

a ee ee ae ae

Page

1]

12

12

15

16

TABLE OF CITED AUTHORITIES

Page

CASES

AT&T v. Central Office Telegraph, Inc., 524 U.S. 214

SEE cdewdia ri ceudeesevevaebenneoectient 3, 13,14

American Broadcasting Cos. v. FCC, 643 F.2d 818

Ch Ge SUED pv cdednesucesdsoonndeesbecs 2,3

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

ED is bed db obaabdehednetoth« taba 1,9, 10, 11, 12

Cahnmann v. Sprint Corp., 133 F.3d 484 (7th Cir.),

cert. denied, $24 U.S. 952 (1998) ............ 13

Louisville & Nashville R. Co. v. Maxwell, 237 U.S.

DOREPEED. cacccvecsidedvescocivaceoveneees 13

MCI Telecommunications Corp. v. AT&T, 512 U.S.

BCE i cddcvdecdvcccbdvsees téebeeedes 3

MCI Telecommunications Corp. v. FCC, 765 F.2d

ft 1.8, 3 ES rere 3

Maislin industrial, U.S., Inc. v. Primary Steel, Inc.,

Se ee MERE ccccceédcdudveneéenuess 3,13

Metropolitan E. Ctr. For Conditioning & Health v.

Qwest Communications International, Inc.,

294 F.3d 924 (7th Cir. 2002) .... 2... cc evenness 14

Ting v. AT & T, 319 F.3d 1126 (9th Cir.), cert. denied,

tf Go OT, rr rye 1, 10, 11,12

vi

Cited Authorities

Page

OTHER AUTHORITIES

Competitive Carrier, Fourth Report & Order,

Sr aene SORGROEED “baccddecsdpocéucdorat 3

Competitive Carrier, Sixth Report & Order,

FD CAAnDe CGO CRSGED ccccccdcucbiccceces 3

Interstate Interexchange Marketplace, \\ F.C.C. Red

PEEP CEN - cbdccene séaudactceresean 4,5, 14, 15

Interstate Interexchange Marketplace, |12 F.C.C. Red

SPORES OEE wv vetdudnd co cdcncdsontoyeet ose 4,14

Interstate Interexchange Marketplace, |14 F.C.C. Red

i PP eer or itt it 4,14

STATUTES

GF Cae BOE covecvecwcicsdedeceudtaeurbes 2

47 U.S.C. § 160 ...... baud: -aeadepdobeedus 4

GF Wn DODO wopcvcrvecceevecvcdecvecvedes passim

Sy ES 6 bc bbiecé debe Wdsceeeswueetes passim

SP ees OE ed 0 wos oenecctnetecunyedsace ts 2,3

i ee 15

l

INTRODUCTION

The question presented by petitioner Dreamscape Design,

Inc. (“Petitioner”) does not warrant review by this Court. First

and foremost, this Court has already declined to review a case

arguing that there is a split between the Court of Appeais for

the Seventh Circuit's decision in Boomer v. AT & T Corp., 309

F.3d 404 (7th Cir. 2002), and the Court of Appeals for the Ninth

Circuit's decision in Ting v. AT & T, 319 F.3d 1126 (9th Cir.),

cert. denied, 540 U.S. 811 (2003). This alleged split between

Boomer and Ting (rather than any alleged split created by this

case) is the sole basis asserted by the Petitioner for review. This

Court declined review in Jing and nc other circuit court has

addressed the issue of federal preemption of claims challenging

long distance telecommunications rates in a detariffed

environment. Thus, there exists no basis to warrant this Court’s

intervention.

Further, significant factual differences between this case

and Boomer and Ting weigh heavily against review by this Court.

Boomer and Ting involved challenges to arbitration clauses

contained in a consumer services agreement, while this case

involves a direct challenge to the rates charged by respondent

Affinity Network Incorporated (“Affinity”) for long distance

telecommunications service. There is no case that holds that a

challenge to such rates is governed by state law. All of the cases

uniformly hold that such challenges fall squarely within the

scope of Section 201(b) and 202(a) of the Communications Act.

In any event, this case is a poor vehicle to address the

relationship between federal and state law in the detariffed

environment because the claims here arose while the tariff- filing

requirement was in place, and therefore are inextricably

connected to the tariff. Finally, given the ample redress available

to consumers of long distance service under federal law,

Petitioner fails to present an important question of federal law

that would require this Court’s intervention.

2

COUNTER-STATEMENT OF THE CASE

A. Regulatory Background

As a provider of interstate telecommunication services,

Affinity is subject to federal regulation as a common carrier

under the Federal Communications Act, 47 U.S.C. § 151

et seq. (the “Communications Act”). Indeed, as a “common

carrier,” the rates, terms, and conditions of interstate

telephone service that Affinity may offer its customers are

subject to the substantive requirements of Sections 201 and

202 of the Communications Act. See 47 U.S.C. §§ 201, 202.

Under these provisions, carriers may impose only those

“charges, practices, classifications, and regulations” that are

“just and reasonable” under Section 201(b)), and may not

engage in any “unjust or unreasonable discrimination™

between customers regarding such rates, terms, or conditions

of service pursuant to Section 202(a). /d. In addition, Section

202(a) bars carriers from making or giving any “undue or

unreasonable preference or advantage to any particular

person, class of persons, or locality.” 47 U.S.C. § 202(a).

Until August | , 2001, Section 203 of the Communications

Act required long distance telecommunications carriers,

including Affinity, to set forth the rates and other terms and

conditions of their service in tariffs filed with the Federal

Communications Commission (the “FCC”). See 47 U.S.C.

§ 203(a). Section 203 provided the FCC with a procedural

vehicle that operated “[{i}Jn furtherance” of the substantive

standards of Sections 201 and 202 of the Communications

Act. American Broadcasting Cos. v. FCC, 643 F.2d 818, 822

(D.C. Cir. 1980). It centralized all determinations of the

lawfulness of the carriers’ rates, terms and conditions at the

FCC and enabled the FCC to review the tariffs under the

standards of Sections 201 and 202. Under Section 203, all

rates, terms, and conditions of interstate long distance service

3

were valid unless and until they were determined by the FCC

(or by a court reviewing an FCC order) to violate the

substantive requirements of the Act and the tariff was changed

appropriately. See id. at 822-823; see aiso 47 U.S.C. § 203.

Under the “filed tariff doctrine,” customers were bound

by the terms of the tariff even if they had never seen the

tariff. See, e.g., Maislin Indus., U.S., Inc. v. Primary Steel,

Inc., 497 U.S. 116 (1990). Customers were conclusively

presumed to have “notice” of whatever rates, terms, and

conditions were contained in the tariffs that were currently

on file (see id.), and to have “accepted” these terms by using

the long distance or other tariffed service. /d. at 127-28; AT&T

v. Central Office Tel., Inc., $524 U.S. 214, 222-24 (1998).

Prior to 1996, the FCC entered orders exempting

“nondominant carners” (defined as those lacking market

power) from the tariff-filing requirements of Section 203 of

the Communications Act. See Competitive Carrier, Fourth

Report & Order, 95 FCC 2d 554 (1983), vacated by MCI

Telecommunications Corp. v. AT&T, 512 U.S. 218 (1994);

see also Competitive Carrier, Sixth Report & Order, 99 FCC

2d 1020 (1985), vacated by MCI Telecommunications Corp.

v. FCC, 765 F.2d 1186 (D.C. Cir. 1985). Notably, the FCC’s

orders provided that the rates, terms, and conditions of these

carriers’ service would continue to be governed exclusively

by the substantive requirements of Sections 201 and 202 of

the Communications Act. See id. These Orders, however,

were vacated on the ground that the FCC lacked the authority

under the Communications Act to exempt certain carriers

from the tariff-filing requirement of Section 203. See MC/

Telecommunications Corp., 512 U.S. at 234 (citing prior

decisions).

When Congress passed the Telecommunications Act of

1996, however, it expressly gave the FCC the authority to

4

forbear from applying the tariff-filing requirement if the FCC

determined that, among other things, the “enforcement of

such regulation or provision is not necessary to ensure that

the charges, practices, classifications, or regulations . . . are

just and reasonable and are not unjustly or unreasonably

discriminatory.” 47 U.S.C. § 160(a)(1). Thus, continued

fulfillment of the substantive requirements of Sections 201

and 202 was an express precondition to any detariffing order.

See id.

Armed with this new authority, the FCC issued a series

of orders providing that long-distance carriers were no longer

required to file tariffs. See /nterstate Interexchange

Marketplace, 11 FCC Red. 20,730 (1996) (“Second Report

and Order’’), Interstate Interexchange Marketplace, \2 FCC

Red. 15,014 (1997); Interstate Interexchange Marketplace,

14 FCC Red. 6004 (1999) (collectively, the “Detariffing

Orders”). The carriers were now required to provide

customers with notice of the rates, terms, and conditions of

service, and to offer customers service under such terms and

conditions. See id. The customers, in turn, could accept or

reject the carrier's offer. See id. The FCC anticipated that

carriers would enter into such contracts through the use of

“short, standard contracts.” Second Report and Order, \\

FCC Red. at 20,736.

The FCC determined that discontinuing the filing of

tariffs would not affect the enforcement of the statutory

standards under Sections 201 and 202 because: (i) customers

retained the right under the “complaint process” of Section

208 of the Communications Act to file claims that a carrier's

rates, terms, and conditions violated the substantive standards

of Sections 201 or 202; and (ii) the development ot fierce

competition in the long distance services market meant that

carriers were unlikely to seek to impose rates and terms of

5

service that violated Sections 201 or 202 and that “any

attempt to do so would cause their customers to switch to

different carriers.” Second Report and Order, || FCC Red.

at 20,743

B. Factual And Procedural Background

Affinity is a telecommunications company offering

interstate service. It is undisputed that from 1999 (when

Petitioner alleges that it became an Affinity customer) until

August |, 2001, Affinity charged Petitioner in accordance

with the terms provided in its federally filed tariff. Appendix

to Petition (“App.”) 4a.

It is also undisputed that Affinity gave Petitioner notice

that effective August |, 2001, its services would be provided

according to the terms and conditions set forth in a Customer

Services Agreement (the “CSA”) that Affinity posted on its

website. See id. It is further undisputed that, boginning on

August |, 2001, Affinity provided its services to Petitioner

in accordance with the terms and rates set forth in its CSA.

App. 10a.

1. Proceedings Before The District Court

The district court’s opinion exhaustively describes the

proceedings before it. App. 2la-34a. Petitioner filed this

putative class action against Affinity on September 26, 2002,

in the Circuit Court of the Sixth Judicial Circuit, Champaign

County, Illinois, alleging that Affinity violated the linois

Consumer Fraud Act (“ICFA”). App. 22a. Petitioner based

its ICFA claim on its contention that, in early 1999, Affinity

sent advertisements to it stating that it provided long distance

telephone service at certain per minute rates when, in fact,

Affinity’s bills were based upon “TCU’s” in accordance with