Opposition Brief — CenturyTel, Inc. v. Beattie (No. 08-414)

(02 D Ree ie

(2) : OCT 17 2008

[OFFICE OF THE CLERK |

IN THE

Supreme Court of the United States

CENTURYTEL, INC.,

Petitioner,

v.

BARBRASUE BEATTIE and JAMES SOVIS,

Respondents.

On PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES CourRT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF IN OPPOSITION

PaTRICK E.. CAFFERTY Exiwoop S. SIMON

CaFFERTY FAUCHER LLP Counsel of Record

101 N. Main Street JOHN P ZUCCARINI

Suite 450 E.Lwoop 8S. SIMON & Assoc. PC.

Ann Arbor, MI 48104 355 S. Old Woodward Ave.

(734) 769-2144 Suite 250

Birmingham, MI 48009

(248) 646-9730

Counsel for Respondents

218862 cr)

COUNSEL PRESS

(800) 274-3321 * (800) 359-6859

i

QUESTION PRESENTED

Whether the petition sets forth any compelling

reasons to review the Sixth Circuit’s decision holding

that the district court acted within its discretion in

entering an interlocutory order certifying a class of

consumers for claims against their telephone company

for unjust and unreasonable billing practices in violation

of the Federal Communications Act of 1934, 47 U.S.C.

§ 151 et seq.

il

TABLE OF CONTENTS

Page

Les og ea gk.) Oy Os 5 ear erreree i

Bere FE CHAPIN SEINE cc vccacnsccvncaveses il

TABLE OF CITED AUTHORITIES ......... iii

COUNTERSTATEMENT OF THE CASE .... 3

REASONS FOR DENYING THE PETITION ... 9

I. THIS COURT RARELY REVIEWS —

INTERLOCUTORY RULINGS. ....... 9

Il. THE UNDERLYING FACTUAL

EVENTS ARE UNLIKELY TO

ED ev sobs navi ces alenhwenhe res 13

Ill. THE SIXTH CIRCUIT RULING IS

NOT IN CONFLICT WITH THE

RULINGS OF ANOTHER CIRCUIT. ... 15

IV. THE SIXTH CIRCUIT CORRECTLY

HELD THAT THE DISTRICT COURT

ACTED WITHIN ITS DISCRETION.... 18

DAEED os oncecacsentavecestnaeukenae 23

Ul

TABLE OF CITED AUTHORITIES

Page

Cases

Amchem Products, Inc. v. Windsor,

ee, ee ewok es eceeses 12

Barnes v. Illinois Bell Telegraph Co.,

DPA. 2G 1287 (PCC TOG) nc cic ccccese 22

Brotherhood of Locomotive Firemen

& Enginemen v. Bangor & Aroostook A. R. Co.,

a es 8 See i ee re 9

Carnegie v. Household Intern., Inc.,

376 F.3d 656 (7th Cir. 2004),

cert. denied, 543 U.S. 1051 (2005) .......... 12

Chamberlan v. Ford Motor Co.,

ee ee es CO TT BO) occ ccc ccc tees 11

Conboy v. AT&T Corp.,

84 F. Supp. 2d 492 (S.D.N.Y. 2000),

aff’d, 241 F.3d 242 (2d Cir. 2001) ........ 16, 17, 18

Conboy v. AT&T Corp.,

241 Fad 242 (2a Cir 2001) ........... 2, 15, 20, 22

Coopers & Lybrand v. Livesay,

te A UE, gona ee vdeevoebdsscvers 9

In re Delta Air Lines,

ae wae See Cee CA, BOGE) 2 n cic ecw cuces 11, 13

iv

Cited Authorities

Edweords Industries

v. Bell Telephone Company of Nevada,

(, Ry et oe eS 3s eS |, | rr

Eisen v. Carlisle & Jacquelin,

ee Ree NE ok nes hhc e cen tsiew sans

Firestone Tire & Rubber Co. v. Risjord,

are I ii Wed wan scckuk Keds cece

Global Crossing Telecommunications, Inc.

v. Metrophones Telecommunications, Inc.,

ee ES a een wee Chee uetions

Goldstein v. Cox,

Ne ei aw habe a oa bee

Holmes v. Sec. Investor Protect Corp.,

Se ee ED ac andessek Os bcuseae vae

Interstate Commerce Commission

v. United States ex rel. Campbell,

ee os ne ae een

Interstate Commerce Commission

v. Transcon Lines,

ee es ES ce cecceuwsevueseen

Johnson v. Jones,

ee ee ee Do Sow eeu ndbece ms bec eee

Page

Vv

Cited Authorities

Page

Klay v. Humana, Inc.,

382 F.3d 1241 (11th Cir. 2004),

cert. denied, 543 U.S. 1081 (2005) .......... 12

In re Lorazepam & Clorazepate Antitrust Litig.,

St PEER, MEP) oo ccc cece c cece 11

Olden v. LaFarge Corp.,

383 F.3d 495 (6th Cir. 2004),

cert. denied, 545 U.S. 1152 (2005) .......... 12

Regents of University of California

v. Credit Suisse First Boston (USA), Inc.,

482 F.3d 372 (5th Cir. 2007), cert. denied,

a ee Ee 12

Statutes, Rules and Regulations

Federal Communications Act of 1934

(47 U.S.C. § 151 et seq.)

Er passim

Te os Si we aacecs esses 3, 9, 20

CTE a Cea kev en ose cos 20

ka eck eeeecesdeceues 2,16

Federal Rules of Civil Procedure

ESS SE en 2,15

EE passim

vi

Cited Authorities

Page

Jurisdiction and Venue

I i OSGi eke ces web ewes 13

Rules of the Supreme Court of the United States

ee ce sv ebceescewee 3, 15

Truth-in-Billing Requirements

for Common Carriers

eh AE ee 3, 5, 13, 19

Legislative Materials

Beimee Bes BRO, T0-2OOU (19S!) ... 0. ccc cc cccnss 20

Miscellaneous

James Wm. Moore, Moore’s Federal Practice

Ne es ie ed 10

In the Matter of Truth-in-Billing and Billing

Format, First Report and Order and Further

Notice of Proposed Rulemaking, In the

Matter of Truth-In-Billing and Billing

Format, 14 F-C.C.R. 7492 (F-C.C. Apr. 15, 1999)

1

Respondents Barbrasue Beattie and James Sovis

(collectively, “respondents”), plaintiffs below, hereby

oppose the petition for a writ of certiorari. None of the

reasons advanced by Petitioner CenturyTel, Inc.

(“CenturyTel” or “petitioner”), defendant below, support

the Court’s review of the court of appeals’ decision to

affirm, in part, and remand, in part, the district court’s

class certification order.

First, and most importantly, this petition relates to

_ the district court’s interlocutory order granting, in part,

respondents’ motion for class certification. On appeal

pursuant to Fed. R. Civ. P 23(f), the Sixth Circuit held

that the district court acted within its discretion in

certifying a class and remanded the matter for further

proceedings. As such, this appeal of an interlocutory

procedural ruling is not a good vehicle for the Court to

address, as petitioner requests, the nature of the

proofs necessary to establish a claim under the

Federal Communications Act of 1934 (“Communications

Act”), 47 U.S.C. § 151 et seg. As CenturyTel readily

acknowledges in its petition, the district court already

concluded that CenturyTel violated 47 U.S.C. § 201(b)

and “CenturyTel does not here challenge that ruling.”

Pet. 7-8. Before engaging in any further appellate review,

the litigation in the district court should be permitted

to proceed to a final judgment. “[T]his Court above all

others must limit its review of interlocutory orders.”

Goldstein v. Cox, 396 U.S. 471, 478 (1970).

Second, the conduct that resulted in this litigation

is unlikely to reoccur. Petitioner is a telephone service

provider that systematically billed its customers for an

optional inside wire maintenance plan (called

2

“WireWatch”) under the description “Non-Regulated

Services.” The Federal Communications Commission

(“FCC”) has made it clear that “a charge described by

what it is not” is “inherently ambiguous and does not

disclose sufficient information.” In the Matter of Truth-

in-Billing and Billing Format, First Report and Order

and Further Notice of Proposed Rulemaking, In the

Matter of Truth-In-Billing and Billing Format,

14 F.C.C.R. 7492, at 7518 (F.C.C. Apr. 15, 1999).

Petitioner itself purportedly ceased its practice of billing

for Wire Watch as “Non-Regulated Services” in January

2002. Given the clarity of the FCC’s position on the

specific challenged practice, it is unlikely that any

telecommunications company would use similar billing

language today. Therefore, a ruling by this Court on class

certification issues is unlikely to have a material impact

on any telecommunication industry billing practices

taking place now or in the future.

Third, there is no conflict among the circuits.

Petitioner’s contention that the Sixth Circuit’s decision

is in conflict with Conboy v. AT&T Corp., 241 F.3d 242

(2d Cir. 2001), is specious. Conboy was filed as a class

action, including claims for violation of Section 222 of

the Communications Act, 47 U.S.C. § 222, but class

certification was never addressed. The case was instead

dismissed pursuant to Fed. R. Civ. PR. 12(b)(6) for failure

to state a claim. Thus, Conboy involved an appeal from

a final judgment that was subjected to de novo review

by the Second Circuit. The Sixth Circuit’s decision

below, in contrast, held that the district court did not

abuse its discretion in certifying a class for truth-in-

billing claims pursuant to Section 201(b).

3

Finally, respondents respectfully submit that the

Sixth Circuit’s interpretation of Section 206 of the

Communications Act, 47 U.S.C. § 206, was correct and

appropriate. Even if the Sixth Circuit had misapplied

the statute in the class context, however, any further

appellate proceedings should await a final judgment on

the merits. See Sup. Ct. R. 10.

These considerations all weigh against further

appellate review of the district court’s interlocutory

order by this Court.

COUNTERSTATEMENT OF THE CASE

On October 28, 2002, respondents commenced this

action against CenturyTel after discovering that they

and other CenturyTel telephone customers had been

unlawfully billed, and had paid such unlawfully billed

charges, for WireWatch. Respondents allege that

CenturyTel’s systematic practice of billing customers a

small monthly fee for WireWatch under the label

“Non-Regulated Services” constituted “unjust and

unreasonable” billing practices in violation of Section

201(b) of the Communications Act, 47 U.S.C. § 201(b),

and the FCC’s related truth-in-billing and Billing Format

regulations, 47 C.F-R. § 64.2401.!

Beginning in at least 1994, CenturyTel’s telephone

billings to respondents and other residential telephone

customers included a monthly charge, generally ranging

1. Respondents allege additional federal and state law

claims that are not at issue in connection with this petition.

4

from $0.50 to $0.99, described in a line item on the bills

as “Non-Regulated Services.” As reflected in an excerpt

from one of respondent Beattie’s telephone bills, these

charges were presented by CenturyTel in the following

manner:

MONTHLY SERVICE DETAIL

LOCAL SERVICE IN

ADVANCE FROM

XXX TO XXX .$ 15.55

SUBSCRIBER LINE

CHARGE - INTER 3.50

SUBSCRIBER LINE

CHARGE - INTRA 3.50

NON-REGULATED SERVICES 99

OTHER CHARGES 07

MONTHLY SERVICE AMOUNT

FOR XXX-XXX-XXXX 23.61

TOTAL MONTHLY SERVICE

AMOUNT 23.61

FEDERAL TAX .68

STATE TAX 1.41

911 EMERGENCY SYSTEM .23

911 OPERATIONAL SYSTEM 2.01

TOTAL OF TAXES 4.33

TOTAL CenturyTel 27.94

(Emphasis added.)

5

In May 2001, CenturyTel increased the charge for

WireWatch to $3.95, which it continued to bill under the

line item description “Non-Regulated Services.” It was

not until January 2002 that CenturyTel reorganized its

billing format and changed the line item description to

reflect that the billed charges were actually for “Inside

Wire Maint. Plan.” It was this change in CenturyTel’s

billing format and description that finally allowed

consumers to recognize that the charge for “Non-

Regulated Services” was actually a charge for

WireWatch. In their complaint, respondents allege that:

(1) by billing for WireWatch along side customers’

regulated telephone transmission charges; (2) by billing

for WireWatch under the description “Non-Regulated

Services” and under the heading “Monthly Service

Detail;” and (3) by keeping the monthly fee relatively

low (.e., $0.50 to $3.95), CenturyTel engaged in “unjust

and unreasonable” billing practices in violation of Section

201(b) of the Communications Act and 47 C.F.R.

§ 64.2401.

Respondents moved for class certification.

On March 10, 2006, the district court denied the request

to certify a mandatory class under Fed. R. Civ. P 23(b)(1)

and (b)(2), but certified an opt-out class under

Rule 23(b)(3), albeit with a substantially narrowed class

definition and limited to the unlawful billing claim. App.

44a-57a.’?

2. The district court defined the class as: “All persons who

have paid CenturyTel, Inc. for charges for an inside wire

maintenance insurance program described in CenturyTel’s

residential telephone bills as “Non-Regulated Services” during

the period beginning October 29, 2000, or such earlier period if

(Cont'd)

6

The district court also granted respondents’ motion

for partial judgment on the pleadings, concluding that,

“based on the allegations and admissions in the

pleadings” (including CenturyTel’s answer),

CenturyTel’s practice of billing charges for WireWatch

under the description “Non-Regulated Services” was

an unjust and unreasonable billing practice that violated

47 U.S.C. § 201(b), as a matter of law. App. 57a-63a.

Petitioner has not sought to appeal the district court’s

ruling that CenturyTel is liable under the

Communications Act to persons who paid for WireWatch

pursuant to such unlawful billings.

On May 2, 2006, the Sixth Circuit granted

CenturyTel’s Fed. R. Civ. P 23(f) petition for leave to

bring an interlocutory appeal of the class certification

order. On December 18, 2007, the Sixth Circuit upheld

class treatment for respondents’ unlawful billing claims

under the Communications Act. App. la. The court

stated, in part, as follows:

[U]nder § 206, Plaintiffs-Appellees must

establish that each class member was injured

by CenturyTel’s violation of § 201(b).

47 U.S.C. § 206 (stating that a “common

carrier shall be liable to the person or persons

(Cont’d)

the charges were not know(n] or reasonably could [not] have

been known by October 29, 2000; but excluding CenturyTel; its

subsidiaries, affiliates, officers and directors; any entity in

which CenturyTel has a controlling interest; and the legal

representatives, heirs, successors and assigns of any such

excluded party.” App. 66a.

7

injured” by its unlawful practice). This can

be done by showing that each class member

paid for WireWatch during the period when

the service was billed under the misleading

description. Before the district court,

CenturyTel admitted that “it did send some

bills to customers that contained this

language,” Beattie, 234 F.R.D. at 173, and an

inventory of CenturyTel’s billing records

could disclose which customers paid their bills

in full, which would include a payment for fees

associated with WireWatch. On appeal, .

CenturyTel argues that “only those customers

who can establish that they did not want or

request the WireWatch service can establish

CenturyTel’s liability. ...” (Appellant’s Br. 40.)

CenturyTel is incorrect. Under § 206,

CenturyTel is liable if it violated § 201(b),

which makes it unlawful for CenturyTe: to bill

for a service under a misleading description,

even where the customer requested the

service. See 47 C.F-R. § 64.2401(b) (“The

description must be sufficiently clear in

presentation and specific enough in content

so that customers can accurately assess that

the services for which they are billed

correspond to those that they have requested

and received... .”). True, each class member

will have to show that she did not enroll in

WireWatch, but that is relevant, as the district

court concluded, to the issue of damages and

not liability. Thus, Plaintiffs-Appellees should

be able to establish liability for the class as a

8

whole because the misleading description used

by CenturyTel violated § 201(b), and class

members were injured by that violation when

they paid their telephone bill, which included

a charge for WireWatch under a misleading

description (a §$ 206 violation).

App. 23a-24a (emphasis added).

The litigation in the district court has continued

throughout the interlocutory appeal process and

remains active today. On June 7, 2006, the district court

denied petitioner’s emergency motion to stay

proceedings pending the decision by the Sixth Circuit.

Thereafter, the parties continued with discovery, and

multiple discovery motions were filed and resolved by

the district court.

On June 18, 2008, the Sixth Circuit denied

petitioner’s Motion for Stay of Mandate Pending Filing

of a Petition for a Writ of Certiorari. The district court

has since complied with the Sixth Circuit’s directive to

address on remand the possible certification of

respondents’ remaining state law claim by denying,

without prejudice and with leave to re-file, respondents’

request to certify the class with respect to claims for

unjust enrichment. The parties continue to engage in

discovery, with deposition discovery commencing in late

October 2008.

9

REASONS FOR DENYING THE PETITION

The petition advances no compelling reason that

warrants review of the Sixth Circuit’s decision below.

This appeal concerns an interlocutory order, reviewed

by the Sixth Circuit under an abuse of discretion

standard, that involves underlying factual conduct that

is unlikely to reoccur. There is no conflict among circuits

in need of resolution. And even if the Sixth Circuit had

misapplied Section 206 (respondents respectfully submit

that it did not), any further appellate review should

await a final judgment on the merits.

I. THIS COURT RARELY REVIEWS INTER-

LOCUTORY RULINGS.

This appeal of an interlocutory, procedural order

does not present a good opportunity for the Court to

address the nature of tise proofs necessary to establish

a claim under Section 206 of the Communications Act.

Class certification rulings are “inherently interlocutory,”

Coopers & Lybrand v. Livesay, 437 U.S. 463, 470 (1978),

and this Court has historically been reluctant to review

interlocutory orders. See Goldstein v. Cox, 396 U.S. 471,

478 (1970) (“[T]his Court above all others must limit its

review of interlocutory orders.”); Brotherhood of

Locomotive Firemen & Enginemen v. Bangor &

Aroostook A. R. Co., 389 U.S. 327, 328 (1967) (per curiam)

(“[Blecause the Court of Appeals remanded the case, it

is not yet ripe for review of an interlocutory order.”). As

the Court explained in Firestone Tire & Rubber Co. v.

10

Risjord, 449 U.S. 368 (1981), the “final judgment rule”

serves several salutary purposes:

It emphasizes the deference that appellate

courts owe to the trial judge as the individual

initially called upon to decide the many

questions of law and fact that occur in the

course of a trial. Permitting piecemeal appeals

would undermine the independence of the

district judge, as well as the special role that

individual plays in our judicial system. In

addition, the rule is in accordance with the

sensible policy of avoid[ing] the obstruction

to just claims that would come from

permitting the harassment and cost of a

succession of separate appeals from the

various rulings to which a litigation may give

rise, from its initiation to entry of judgment.

The rule also serves the important purpose

of promoting efficient judicial administration.

Id., at 374 (citations and internal quotation marks

omitted).*

3. See also Johnson v. Jones, 515 U.S. 304, 309 (1995)

(An interlocutory appeal threatens “delay, adding costs and

diminishing coherence. It also risks additional, and unnecessary,

appellate court work either when it presents appellate courts

with less developed records or when it brings them appeals

that, had the trial simply proceeded, would have turned out to

be unnecessary.”) (citations omitted); 19 James Wm. Moore,

Moore’s Federal Practice § 201.10[1] (3d ed. 2008) (“The

(Cont'd)

11

In 1998, the Court promulgated Fed. R. Civ. P 23(f)

as a narrow exception to the general rule against

piecemeal appeals. See In ve Delta Air Lines, 310 F.3d

953, 959 (6th Cir. 2002) (“[T]he Rule 23(f) appeal is never

to be routine.”); Chamberlan v. Ford Motor Co., 402 F.3d

952, 955 (9th Cir. 2005) (“We begin with the premise that

Rule 23(f) review should be a rare occurrence.”).

In particular, there is a short time limit—10 days—

within which the aggrieved party can ask the court of

appeals to exercise its discretion. See Fed. R. Civ. P 23

advisory committee’s note, 1998 Amendments,

Subdivision (f) (“The 10-day period for seeking

permission to appeal is designed to reduce the risk that

attempted appeals will disrupt continuing

proceedings.”); In re Lorazepam & Clorazepate

Antitrust Litig., 289 F.3d 98, 105 (D.D.C. 2002) (“Delay

caused by interlocutory appeals under Rule 23(f) may

be less of a concern because filing a petition does not

automatically stay the litigation”) (citation omitted). In

exercising their discretion, courts of appeals have

remained cognizant of the fact that “[t]hese appeals add

to the heavy workload of appellate courts, require

consideration of issues that may become moot, and

undermine the district court’s ability to manage the class

action.” Chamberlan, 402 F.3d at 959.

(Cont’d)

purposes of the final judgment rule are to avoid piecemeal

litigation, to promote judicial efficiency, and to defer to the

decisions of the trial court. Unfettered interlocutory appeals

would disrupt both the trial and appellate processes.”).

12

Despite an avalanche of Rule 23(f) applications over

the past decade, petitioner has not cited — and

respondents have not located — a single instance where

the Court has accepted review of such an appeal.’ The

petition also fails to raise a serious question concerning

generally applicable Rule 23 standards that might

warrant review by this Court. Compare Amchem

Products, Inc. v. Windsor, 521 U.S. 591, 619 (1997) (the

Court “granted review to decide the role settlement may

play, under existing Rule 23, in determining the

propriety of class certification.”).®

Instead, petitioner asks this Court to address the

injury and causation requirements of Section 206, but a

Rule 23(f) appeal is not a good vehicle for the Court to

consider the substantive scope and parameters of

underlying claims that are not yet the subject of a final

judgment. Petitioner notes that the district court

“determined that CenturyTel’s billing description for

WireWatch as Non-Regulated Services violated

47 U.S.C. § 201(b). App. 67a. CenturyTel does not here

challenge that ruling.” Pet. 7-8. Petitioner does not

challenge that ruling because it cannot challenge that

ruling; it is not the subject of a final judgment, nor has

4. See, e.g., Regents of University of California v. Credit

Suisse First Boston (USA), Inc., 482 F.3d 372 (5th Cin 2007),

cert. denied, U.S.__,1288S. Ct. 1120 (2008); Olden v. LaF arge

Corp., 383 F.3d 495 (6th Cir. 2004), cert. denied, 545 U.S. 1152

(2005); Klay v. Humana, Inc., 382 F.3d 1241 (11th Cir. 2004),

cert. denied, 543 U.S. 1081 (2005); Carnegie v. Household Intern.,

Inc., 376 F.3d 656 (7th Cir. 2004), cert. denied, 543 U.S. 1051 (2005).

5. Amchem arose prior to promulgation of Rule 23(f) and

involved an appeal from a final judgment.

13

it been certified for interlocutory appeal pursuant to

28 U.S.C. § 1292(b).

The Court should not expend its limited resources

interpreting the nature and scope of a statutory claim

in circumstances where the Court is not required to

reach the merits of the claim. See Delta Airlines, 310

F.3d at 960 (“The Rule 23(f) appeal should not become a

vehicle for early review of a legal theory that underlies

the merits of a class action’). As this is also one of the

rare cases where review of an interlocutory class

certification order has been allowed, four federal judges

(7.e., the district judge and a unanimous panel of the

Sixth Circuit) have now weighed in on the propriety of

class certification. That is sufficient interlocutory review

at this time. Further appellate review, if any, should

follow a final judgment in the ordinary course.

Il. THE UNDERLYING FACTUAL EVENTS ARE

UNLIKELY TO REOCCUR.

In addition to the interlocutory nature of this

appeal, this case is not a good vehicle for further

addressing, or offering advance guidance on,

telecommunication industry billing practices.

In adopting the truth-in-billing regulation (47 C.E.R.

§ 64.2401), the FCC has already explained:

We contemplate that sufficient descriptions

will convey enough information to enable a

customer reasonably to identify and to

understand the service for which the

customer is being charged. Conversely,

descriptions that convey ambiguous or vague

14

information, such as, for example, charges

identified as “miscellaneous,” would not

conform to our guideline. Similarly, in our

view, a charge described by what it is not,

such as, for example “service not regulated

by the Public Service Commission” is

inherently ambiguous and does not disclose

sufficient information. There is no way for

a consumer to discern from this description

that the charge refers to, for example, inside

wiring maintenance insurance.

In the Matter of Truth-in-Billing and Billing Format,

First Report and Order and Further Notice of Proposed

Rulemaking, In the Matter of Truth-In-Billing and

Billing Format, 14 F.C.C.R. 7492, at 7517-18 (F.C.C. Apr.

15, 1999) (emphasis added).

Petitioner’s practice of billing for WireWatch as

“Non-Regulated Services” utilized billing language

remarkably similar to FCC’s example of an inadequate

billing description. See App. 43—44a (district court noted

the “uncanny overlay of the example given by the agency

and the facts of this case”). Petitioner itself maintains

that it ceased the challenged practice in January 2002,

and it is unlikely that telecommunication companies

today would employ billing descriptions that are in open

defiance of the FCC’s admonition. Therefore, a decision

by this Court addressing the underlying facts likely

would not have a material impact on current or future

telecommunication industry billing practices.

ee:

15

Ill. THE SIXTH CIRCUIT RULING IS NOT IN

CONFLICT WITH THE RULINGS OF

ANOTHER CIRCUIT.

As the Court of last resort, certiorari may be

especially appropriate when “a United States court of

appeals has entered a decision in conflict with the

decision of another United States court of appeals on

the same important matter.” Sup. Ct. R. 10(a). In a

specious effort to invoke this consideration, petitioner

asserts that the Sixth Circuit’s decision conflicts with

the decision in Conboy v. AT&T Corp., 241 F.3d 242 (2d

Cir. 2001). Pet. 25-29.

Petitioner mischaracterizes Conboy as holding that

“liability could not be proven on a class-wide basis.”

Pet. 25. While Conboy was filed as a class action, the

issue of class certification was never reached. Instead,

the district court dismissed the case pursuant to

Fed. R. Civ. P. 12(b)(6), and the Second Circuit affirmed.

Thus, Conboy was an appeal from a final judgment that

~ was subjected to de novo review. 241 F\3d at 246. Even

if petitioner’s contentions concerning Conboy’s

interpretation of the Communications Act were

substantively correct, such a holding on the merits could

not be “in conflict” with a decision upholding a district

court’s exercise of discretion in certifying a class. See

App. 8a-9a (“The district court maintains substantial

discretion in determining whether to certify a class, as

it possesses the inherent power to manage and control

its own pending litigation.”) (citation omitted). Indeed,

the Sixth Circuit did not find it necessary to even

mention Conboy (which is not surprising since Conboy

16

has nothing to do with class certification).® Class

certification is a procedural matter and Rule 23 does

not give “a court any authority to conduct a preliminary

inquiry into the merits of a suit in order to determine

whether it may be maintained as a class action.” Hisen

v. Carlisle & Jacquelin, 417 U.S. 156, 177-78 (1974).’

In any event, nothing in the Sixth Circuit’s opinion

suggests a conflict with Conboy. There, consumers

alieged that AT&T, their long-distance telephone carrier,

unlawfully disseminated proprietary customer

information in violation of Section 222 of the

Communication Act, 47 U.S.C. § 222. In order to

establish a claim for damages, plaintiffs first argued that

“they have paid AT&T a monthly fee to keep their

names, address, and telephone number unlisted.”

Conboy v. AT&T Corp., 84 F. Supp. 2d 492, 498-99

(S.D.N.Y. 2000). Second, plaintiffs argued that “they

have paid AT&T for telephone services which include

the privacy protections of the Telecommunications Act.”

Id. at 499. According to plaintiffs, the actions of AT&T

deprived them of the value of both of these payments.

The first argument failed because, “as AT&T

correctly points out, the fee for non-published service

to which plaintiffs refer, is paid to Bell Atlantic, and not

6. Tellingly, petititoner’s opening brief to the Sixth Circuit

relegated its discussion of Conboy to single footnote.

7. For example, if the district court in Conboy had

addressed and granted class certification (which it did not)

before AT&T prevailed on the merits, procedurally AT&T

would have prevailed against a class, rather than just the named

plaintiffs.

17

AT&T.” 84 F. Supp. 2d at 499. Bell Atlantic was not a

defendant. “[PJlaintiffs cannot use their payment to Bell

Atlantic for ‘non-published service’ as the basis for their

claim for damages against AT&T, because these

payments represent the value of Bell Atlantic’s

compliance—not AT&T’s compliance—with the terms

of the ‘non-published service’ agreement.” 241 F.3d at

249. The second argument failed because “plaintiffs did

not make monthly payments to AT&T for compliance

with the Telecommunications Act; rather, they paid

AT&T for long-distance telephone service, which they

received.” 241 F.3d at 250. In AT&T’s bill, “every penny

paid to AT&T is accounted for, either in the form of

itemized charges, surcharges, or taxes.” Jd. Finally, the

Second Circuit upheld the district court’s rejection of

the alternative argument that damages for “emotional

distress and mental anguish” could simply be presumed.

241 F'3d at 250-51; 84 F. Supp. 2d at 499 n. 3.

As the discussion above demonstrates, the key

problem for the Conboy plaintiffs was that they could

not point to a separate line item in their telephone bills

reflecting a charge from AT&T for its compliance with

privacy requirements. The plaintiffs therefore had to

either (1) characterize payments to Bell Atlantic as

payment for something that they were deprived of by

AT&T, or (2) characterize payments to AT&T as

consideration for a Telecommunications Act compliance

component, notwithstanding the lawful description of

the charges. Respondents here need not engage in such

machinations because there is (1) a separate line item

charge for “Non-Regulated Services” in their bills,

(2) that caused them to pay a specific amount of money,

(3) to petitioner. The allegation of specific economic

18

damages suffered as a consequence of petitioner’s

violation of the Communications Act is also

distinguishable from the “‘presumed damages’ for

emotional distress and mental anguish” (241 F.3d at 249)

alleged and rejected in Conboy. All class members here

incurred economic injury when they paid CenturyTel

for the WireWatch unlawfully billed as “Non-Regulated

Services.”

Accordingly, there is no evident conflict among

circuits necessitating immediate resolution by this

Court. Petitioner’s argument merely stretches some of

the reasoning in Conboy in an attempt to support its

already twice-rejected contentions, which is insufficient

grounds to warrant further review.

IV. THE SIXTH CIRCUIT CORRECTLY HELD

THAT THE DISTRICT COURT ACTED WITHIN

ITS DISCRETION.

Finally, to the extent it may be relevant to this

Court’s consideration of the petition, respondents

respectfully submit that the Sixth Circuit’s inquiry into

Section 206 requirements is entirely correct. See App.

23a-24a. Even if the Sixth Circuit had misapplied the

statute in these circumstances, however, “[a] petition

for a writ of certiorari is rarely granted when the

asserted error consists of erroneous factual findings or

the misapplication of a properly stated rule of law.”

Sup. Ct. R. 10.

There is clearly a causal link between the Section

201(b) violation and consumers’ payments to CenturyTel

of the amounts so billed for “Non-Regulated Services.”

19

As the Sixth Circuit correctly recognized, the FCC

enacted a regulation intended to confirm the meaning

of Section 201(b) “so that customers can accurately

assess that the services for which they are billed

correspond to those that they have requested and

received, and that the costs assessed for those services

conform to their understanding of the price charged.”

App. 2la (quoting 47 C.F.R. § 64.2401(b)). When

petitioner failed to provide a proper description of its

WireWatch charge in its bills, consumers were, at a

minimum, unlawfully deprived of the opportunity to:

(1) object to the charge as unauthorized and/or withhold

payment; (2) cancel the service; or (3) take advantage

of the service by making a claim. Payments by

consumers of the amounts unlawfully billed for

“Non-Regulated Services” are the natural consequences

of the billing violation, rendering such payments an

injury under Section 206. Cf Edwards Industries v. Bell

Telephone Company of Nevada, 74 F-C.C. 2d 322, 328

117 (FCC 1979) (“We believe that the damages claimed

by Complainants could be expenses that would flow

under these circumstances as natural consequences

from the violations which have been alleged and, as such,

are recoverable under Section 206 of the Act.”).

Petitioner’s reliance on the Court’s interpretation

of causation under RICO, sheds little, if any, light on

the proper causation analysis of the Communications

Act. Pet. 17-18.2 The Court has recognized that the

8. Petitioner asserts that “Section 206, and the Court’s

decision in Holmes [v. Sec. Investor Protect Corp., 503 U.S. 258

(1992)], clearly require proof of causation, which the Sixth

Circuit wholly ignored in its assessment of the class certification

(Cont'd)

20

federal statute most analogous to the Communications

Act is the Interstate Commerce Act (“ICA”). Global

Crossing Telecommunications, Inc. v. Metrophones

Telecommunications, Inc., 550 U.S. 45, 127 S.Ct. 1513,

1517 (2007).° Courts have therefore held that decisions

construing the ICA are persuasive in establishing the

meaning of the Communications Act. Conboy, 241 F.3d

at 250 (“Sections 206 [and] 207 [of the Communications

Act]... are the present law in sections 8 [and] 9... of

the Interstate Commerce Act... .”) (quoting H.R. Rep.

No. 73-1850, at 6 (1934)).

In Interstate Commerce Commission v. Transcon

Lines, 513 U.S. 138 (1995), for example, the Court

upheld the ICC’s authority to enjoin the collection of

liquidated damages for, among other things, failure to

include in billing documents the notice language

required by regulation. See 513 U.S. at 145 (“To the

extent the ICC seeks to enjoin collection of liquidated

damages as a remedy for Transcon’s lack of notification

in the original bills, see 49 C.F.R. § 1320.3(c) (1992), and

nonissuance of revised bills within 90 days, see

(Cont'd)

criteria.” Pet. 18. The Sixth Circuit was not alone in ignoring

Holmes; petitioner never referred to the decision in either of

its briefs on appeal! or at oral argument. In any event, the Sixth

Circuit did expressly consider causation. See App. 23a-24a.

9. See Global Crossing, 127 S. Ct. at 1517 (“The relevant

sections (in both statutes) .. . authorize an injured person to

recover ‘damages’ for an ‘unlawful’ charge or practice .. .”)

(citations omitted).

21

§ 1320.2(g)(2)(vi), this remedy too is appropriate.”).

First, its remedy appears to the ICC, and to

us, necessary to the effective enforcement of

its regulations. Were we to disallow the

injunction, respondents and other trustees of

bankrupt carriers would be immune, in effect,

from enforcement of the credit regulations

Second, . . . the requirements for notice of

liquidated damages are to protect shippers

from the imposition of penalties without

warning. When a carrier fails to provide

notice, it is an appropriate remedy for the

ICC to bar collection of the liquidated

damages, for the remedy serves the

regulations’ intended beneficiaries.

513 U.S. at 146-47 (citations omitted; emphasis added).

The only charge there that could not be collected was

the undisclosed charge for liquidated damages, the filed

rate for shipping remained enforceable. Jd. at 148.

Here, because the truth-in-billing requirements are

intended to protect consumers (just like the

requirement of notice of liquidated damages in Transcon

was to protect the shippers), the telecommunications

provider — not the consumer — bears the burdens of

the violation. If petitioner is permitted to shift the

burden of its billing violation onto its customers —

22

e.g., by requiring each customer to individually prove

he or she did not understand the unlawfully described

charge — the truth-in-billing requirements would be

meaningless and unenforceable. Cf Interstate Commerce

Commission v. United States ex rel. Campbell, 289 U.S.

385, 390 (1933) (“The carrier ought not to be allowed to

retain his illegal profit, and the only one who can take it

from him is the one that alone was in relation with him,

and from whom the carrier took the sum.”) (citation

omitted) (cited in Conboy, 241 F.3d at 250).

Petitioner may, indeed, be entitled to seek a credit

or a set-off for various considerations. For example, the

district court’s order indicated that questions of

damages in this case “can be addressed later in the

proceedings by means of a special master, representative

trials, or other means.” App. 56a; cf Barnes v. Illinois

Bell Tel. Co., 1 F-C.C. 2d 1247 91 42 (FCC 1965) (“Although

the amount of damages need not be established with

precise mathematical accuracy, it must be shown with

reasonable certainty and by the best means possible

under the circumstances.”).

These are important issues that the district judge

will have to address as the case progresses toward

conclusion. In an appeal following a final judgment,

appellate courts will know exactly how the district court

handied these issues. Considerations of judicial

efficiency, therefore, weigh heavily in favor of allowing

this case to progress to a final judgment before

expending any further appellate resources.

23

CONCLUSION

For the reasons set forth above, the petition for a

writ of certiorari should be denied.

Respectfully submitted,

ELwoop S. SIMON

Counsel of Record

JOHN P ZUCCARINI

Ecwoop S. Simon & Assoc. PC.

355 S. Old Woodward Ave.

Suite 250

Birmingham, MI 48009

(248) 646-9730

PaTRICK E. CAFFERTY

CaFFERTY FAUCHER LLP

101 N. Main Street

Suite 450.

Ann Arbor, MI 48104

(734) 769-2144

Counsel for Respondents