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Utility Consumers' Action Network v. Sprint Solutions

July 10, 2008

UTILITY CONSUMERS' ACTION NETWORK AND ERIC TAYLOR, ON BEHALF OF THEMSELVES, THEIR MEMBERS AND/OR ALL OTHERS SIMILARLY SITUATED, AS APPLICABLE, PLAINTIFFS,
v.
SPRINT SOLUTIONS, INC.; SPRINT SPECTRUM, L.P.; SPRINT-NEXTEL CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Robert J. Bryan United States District Judge

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS PLAINTIFFS' FIFTH CAUSE OF ACTION

This matter comes before the Court on Defendants' Motion to Strike Plaintiffs' Second Amended Complaint (Dkt. 31-2) and Defendants' Motion to Dismiss Plaintiffs' Second Amended Complaint (Dkt. 32-2). The Court has considered the pleadings filed in support of and in opposition to the motions and the remainder of the file herein.

I. PROCEDURAL BACKGROUND

On November 21, 2007, Plaintiffs Utility Consumers' Action Network ("UCAN") and Eric Taylor filed a civil action against Defendants Sprint Solutions, Inc., Sprint Spectrum L.P., and Sprint-Nextel Corporation (Sprint). Dkt. 1. On January 2, 2008, Plaintiffs filed an amended complaint, alleging that Sprint improperly included taxes, fees and other charges on monthly invoices to customers who obtained data service or data card plans from Sprint, and improperly charged these customers for text messages. Dkt. 9. The amended complaint asserts class action claims for (1) violation of California Business and Professions Code § 17200; (2) breach of contract; (3) violation of the Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750 et seq.; (4) declaratory relief; (5) violation of the Federal Communications Act ("FCA"), 47 U.S.C. § 201(b); (6) money had and received, money paid and unjust enrichment; (7) conversion; and (8) cramming, pursuant to California Public Utilities Code § 2890. Id. The amended complaint requests certification of this case as a class action; declaratory, equitable, injunctive and/or monetary relief; actual, direct, incidental, consequential, statutory and exemplary damages; pre- and post-judgment interest; attorneys' fees; and other relief as the court may deem just and proper. Dkt. 9 at 26.

On January 23, 2007, Defendants filed a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) and to strike pursuant to Fed. R. Civ. P. 12(f). Dkt. 12. On April 25, 2008, the Court issued an order granting in part and denying in part Defendants' motion. Dkt. 27. The Court ordered Plaintiffs to provide a more definite statement on their Fifth Claim for Relief under the Federal Communications Act, 47 U.S.C. § 201(b). Id. at 12.

On May 9, 2008, Plaintiffs responded to the order for a more definite statement by filing a Second Amended Complaint. Dkt. 30. The Court has not granted authority for the filing of a Second Amended Complaint under Fed. R. Civ. P. 15(a). On May 23, 2008, Defendants filed this Motion to Strike Plaintiffs' Second Amended Complaint (Dkt. 31-2) and this Motion to Dismiss Plaintiffs' Second Amended Complaint (Dkt. 32-2). Although Defendants title their motion as a request for complete dismissal of the Second Amended Complaint, they only argue for the dismissal of Plaintiffs' Fifth Cause of Action. See id. On June 13, 2008, Plaintiffs responded to both motions. Dkt. 33, 34. On June 20, 2008, Defendants replied to both motions. Dkt. 35, 36.

II. DISCUSSION

Motion to Dismiss

Motions to dismiss may be based on either the lack of a cognizable legal theory or the absence of sufficient facts alleged under such a theory. Balistreri v. Pacifica Police Department, 901 F.2d 696, 699 (9th Cir. 1990). Material allegations are taken as admitted and the complaint is construed in the plaintiff's favor. Keniston v. Roberts, 717 F.2d 1295, 1301 (9th Cir. 1983). To survive a motion to dismiss, the complaint does not require detailed factual allegations but must provide the grounds for entitlement to relief and not merely a "formulaic recitation" of the elements of a cause of action. Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1965 (2007). Plaintiffs must allege "enough facts to state a claim to relief that is plausible on its face." Id. at 1974. When deciding a motion to dismiss, the Court's consideration is limited to the pleadings. Fed. R. Civ. P. 12(d).

In the Motion to Dismiss Plaintiffs' Second Amended Complaint (Dkt. 32-2), Defendants have moved to dismiss Plaintiffs' Fifth Cause of Action, Violation of the Federal Communication Act 47 U.S.C. § 201(b). Dkt. 32-2 at 6. The Court denied Defendants' previous motion to dismiss this cause of action and ordered Plaintiffs to provide a more definite statement connecting facts with violations of the specific section of the Act. Dkt. 27 at 13. Plaintiffs' Second Amended Complaint responds to that order, and states:

FIFTH CAUSE OF ACTION (Violation of the Federal Communications Act 47 U.S.C. § 201(b)) ******

74. Section 201(b) of the Federal Communications Act ("FCA") requires: "All charges, practices, classifications, and regulations for and in connection with interstate communications by radio shall be just and reasonable, and any such charge, practice, classification, or regulation that is unjust or unreasonable is declared to be unlawful."*fn1

75. Title II of the FCA is intended to regulate "common carriers" such as Sprint Nextel that provides telecommunications services.*fn2 Though the [Federal Communications Commission ("FCC")] may specify that some provisions of Title II are inapplicable to common carriers, 47 U.S.C. §332(c)(1)(A) explicitly prohibits the FCC from specifying that any provisions of 47 U.S.C. §§201,202, and 208 are inapplicable to providers such as Sprint Nextel.

76. Under the FCA, a service is subject to a different regulatory framework depending on whether it constitutes an "information service"*fn3 or a "telecommunications service", the latter of which includes a "commercial mobile service".*fn4 The FCC concluded in its decision in In re Appropriate Regulatory Treatment for Broadband Access to the Internet Over Wireless Networks (22 FCCR 5901, dated March 22, 2007 ("Declaratory Ruling")) that "'mobile wireless broadband Internet access service'*fn5 is not a 'commercial mobile service'". The impact of the Declaratory Ruling is that Class members cannot be billed for taxes, ...


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