Disclosure of Cellular Provider Billing Practices
In In re Comcast Cellular Telecom. Litigation (E.D.Pa. 1996), the plaintiffs alleged that a cellular provider's practice of charging in one-minute billing increments (rounding up) and charging for the noncommunication period from the time a call is initiated until the call is answered violated the Pennsylvania Unfair Trade Practices and Consumer Protection Law as well as the implied covenant of good faith and fair dealing, and unjustly enriched the cellular provider, Comcast. (Comcast Cellular, supra, 949 F. Supp. at p. 1196.)
The plaintiffs in Comcast also alleged that Comcast inadequately disclosed these billing practices to its customers. (Ibid.)
The Comcast Cellular court concluded that the plaintiffs' claims of inadequate disclosure of these billing practices were subject to state law. (Comcast Cellular, supra, 949 F. Supp. at pp. 1199-1200.)
But the plaintiffs' state law claims challenging the charges for noncommunication time, including the rounding-up charge, were preempted by section 332(c)(3)(A), said the Comcast Cellular court, because they posed "clear challenges to the reasonableness of the rates charged by Comcast for cellular phone services." (949 F. Supp. at p. 1200.)
The Comcast Cellular court reasoned as follows. the plaintiffs alleged that the noncommunication charges violated the covenant of good faith and fair dealing and unjustly enriched Comcast.
Thus, said the court, these allegations "directly" and "clearly" challenge "the reasonableness of the rates charged by Comcast . . . ." ( Comcast Cellular, supra, 949 F. Supp. at p. 1200.)
The remedies the Comcast Cellular plaintiffs sought also showed they were challenging Comcast's rates and not just the failure to disclose those rates.
The court noted in this regard: "Recovery of the amounts collected by Comcast through its alleged unlawful practices can be justified on the basis of nondisclosure.
The injunctions demanded by the Plaintiffs do not, however, mandate disclosure or simply seek to enjoin Comcast's practice pending full disclosure.
Rather, the Plaintiffs are seeking to permanently prevent Comcast from charging for the non-communication period. the request for such an injunction is nothing less than a request that the court regulate the manner in which Comcast calculates its rate schedules." (Comcast Cellular, supra, 949 F. Supp. at p. 1201.)
The Comcast Cellular court concluded:
"The Plaintiffs' claims attack the reasonableness of the method by which Comcast calculates the length and, consequently, the cost of a cellular telephone call. As such, the Plaintiffs' claims present a direct challenge to the calculation of the rates charged by Comcast for cellular telephone service. the remedies they seek would require a state court to engage in regulation of the rates charged by a cellular provider, something a state is explicitly prohibited from doing under section 332(c)(3)(A)." (Comcast Cellular, supra, 949 F. Supp. at p. 1201; see Chicago & N. W. Tr. Co. v. Kalo Brick & Tile Co. (1981) 450 U.S. 311, 326 101 S. Ct. 1124, 1134-1135, 67 L. Ed. 2d 258, 270-271 state court adjudication is a form of state regulation.)