Wash. SC rules AT&T class action shouldn't cross state borders

John O'Brien Apr. 19, 2011, 10:51am


OLYMPIA, Wash. (Legal Newsline) - The Washington Supreme Court elected last week not to certify a class of plaintiffs suing AT&T over extra charges because it would place too big a burden on the company.

The court, in an opinion released Thursday, said the difference in laws between states made certifying a nationwide class of plaintiffs imprudent. However, it seemed to suggest that plaintiffs could file statewide class actions in their respective states, much like a class in California has already done.

The lawsuit was brought over charges the plaintiffs said were not specified and increased without their approvals. AT&T was making the charge to recover Universal Service Fund contributions from its customers but listed the charge as either "Other Charges & Credits" or "Taxes, Surcharges & Regulatory Fees." The USF subsidizes phone and Internet service to low-income and rural areas.

The court said customers decided which venue in which they would bring their claims when they chose their area codes.

"The customer's area code is left to the discretion of the customer, and this area code often corresponds with the customer's place of residence," says the opinion, authored by Chief Justice Barbara Madsen.

"In effect, the customer selected which forum's law would apply when he requested phone service from AT&T. AT&T should not now be forced to face the enormous cost and complexity presented by a nationwide class action when it conscionably included choice of law provisions in its customers' contracts and the choice of forum is dictated by the consumer."

King County Superior Court Judge Douglass North denied the motion for class certification, but the state Court of Appeals overturned that decision. Madsen wrote that the Court of Appeals' decision "flies in the face" of federal law regarding nationwide class actions.

"The choice of law provisions in this case will do more than cause variations in damages," she added. "The availability of the voluntary payment doctrine in some states could abrogate AT&T's liability to customers in those states who voluntarily paid the UCC after receiving the informational flyer detailing their responsibility for its payment."

Justices Charles Johnson, Mary Fairhurst, Gerry Alexander and James Johnson joined in Madsen's opinion. Justice Richard Sanders dissented, and was joined by justices Susan Owens and Debra Stephens.

Sanders' opinion notes that the Court of Appeals wrote that differing state law issues in the nationwide class could be resolved through the creation of subclasses.

"The claims in every state involve the nature of the UCC, an apparent nationwide approach to charging fees in relation to the UCC, omissions or the same or similar misrepresentations to further that approach, and the same defendant corporation," Sanders wrote.

"A nationwide suit avoids a 50-fold redundancy of litigation, which will substantially increase the costs of the litigation to both parties, particularly attorney fees; result in redundant relitigation of the same issues; and saddle the judiciary of all 50 states with significant costs to redundantly try statewide class actions based on the actions of a single Washington corporation."

Justice Tom Chambers agreed that state law differences could be managed, but concurred with the majority that "the proximate cause standard... is the proper analytical device to determine whether the defendant's wrongful conduct caused the plaintiffs' injury."

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

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