323 F.3d 32 (1st Cir. 2003), 02-1760, Smilow v. SouthWestern Bell Mobile Systems, Inc.

Docket Nº:02-1760
Citation:323 F.3d 32
Party Name:JILL ANN SMILOW, on her own behalf and on behalf of all others similarly situated, Plaintiff, Appellant, v. SOUTHWESTERN BELL MOBILE SYSTEMS, INC., d/b/a CELLULAR ONE, Defendant, Appellee.
Case Date:March 07, 2003
Court:United States Courts of Appeals, Court of Appeals for the First Circuit

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323 F.3d 32 (1st Cir. 2003)

JILL ANN SMILOW, on her own behalf and on behalf of all others similarly situated, Plaintiff, Appellant,



No. 02-1760

United States Court of Appeals, First Circuit

March 7, 2003

Heard: December 2, 2002.

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[Copyrighted Material Omitted]

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Edward F. Haber with whom Todd S. Heyman and Shapiro Haber & Urmy LLP were on brief for appellant.

Marcus E. Cohn with whom Jonathan Sablone, John Pagliaro, and Nixon Peabody LLP were on brief for appellee.

Before Lynch, Lipez, and Howard, Circuit Judges.

LYNCH, Circuit Judge.

This is an appeal from a decision decertifying a class action brought by and on behalf of wireless phone customers of Cellular One, the doing-business name of Southwestern Bell Mobile Systems, Inc. The putative class members are Massachusetts and New Hampshire residents who were charged for incoming calls despite having signed a standard form contract, used mainly between August 1994 and February 1996, purportedly guaranteeing free incoming call service.

Class representative Jill Ann Smilow brought suit in 1997 for breach of contract and violations of Massachusetts General Laws chapter 93A, §§ 2(a), 9, 11 (West 1997), and the Telecommunications Act (TCA) of 1996, 47 U.S.C. § 201(b) (2000). The district court first certified and then decertified the contract, ch. 93A, and TCA classes. This court vacated the decertification order and remanded; the district court subsequently reinstated its decertification order, Smilow v. S.W. Bell Mobile Sys., Inc., No. 97-10307-REK (D. Mass. Apr. 10, 2002) (memorandum and order). We reverse.

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Smilow and proposed class representative Margaret L. Bibeau each signed a standard form contract for cellular telephone services with Cellular One in 1995. The form contract says, "Chargeable time for calls originated by a Mobile Subscriber Unit starts when the Mobile Subscriber Unit signals call initiation to C1's facilities and ends when the Mobile Subscriber Unit signals call disconnect to C1's facilities and the call disconnect signal has been confirmed." The parties contest the meaning of "originated." Smilow alleges that this language precludes Cellular One from charging for incoming calls. It is undisputed that a large group of Cellular One customers signed the same contract and were subject to charges for incoming calls. The contract contains an integration clause providing that changes must be in writing and signed by both parties.

Smilow and Bibeau purport to represent a class of Massachusetts and New Hampshire residents who subscribed for Cellular One services under this contract. The potential class members all signed the standard form contract, which was in broad use from August 1994 to February 1996. They did have a variety of rate plans and usage patterns. Some Cellular One customers paid a flat fee for a fixed number of minutes each month and an additional per-minute charge if they exceeded this fixed amount of air time (for example, $40/month for the first 300 minutes/month and 10 cents/minute thereafter). Many Cellular One customers paid different rates for day-and night-time calls.

Cellular One charged Smilow, Bibeau and the potential class members for incoming as well as outgoing calls. Smilow received just one incoming call; Bibeau received many incoming calls. Cellular One invoices clearly indicate that customers are charged for incoming calls. The user guide mailed to new Cellular One customers also states that the company charges for both incoming and outgoing calls. Bibeau paid her invoices knowing she was being charged for incoming calls.


On February 11, 1997, Smilow, as a purported class representative, filed suit in federal district court against Cellular One for breach of contract and violations of ch. 93A and the TCA. The district court had jurisdiction over the federal claims under 28 U.S.C. § 1331 (2000) and over the state law claims under 28 U.S.C. § 1367. The district court originally certified the ch. 93A, breach of contract, and TCA classes on October 9, 1998. 1 The district court rejected an initial attempt to decertify the classes for Smilow's incoming-calls claims. The court, with the approval of both parties, then filed a scheduling order on November 23, 1999 bifurcating the liability and damages issues on the incoming calls claims and providing that liability would be litigated to conclusion before further discovery or other activities concerning damages took place.

On September 15, 2000, the district court held an "evidentiary hearing" on plaintiffs' motion to substitute Bibeau as a new class representative. Cellular One had opposed this motion partly on the grounds that, because common issues of fact did not predominate among the class members, neither Bibeau nor any other individual could properly represent the class. Both parties stated that they regarded the evidentiary record as adequate Page 36

to allow the court to rule on plaintiffs' motion and did not wish to make additional submissions on this issue. Nonetheless, the district court issued a memorandum and order on December 1, 2000 extending the time period to submit evidence on the designation of Bibeau as a new class representative. On March 22, 2001, the district court granted defendants' pending motion to decertify the "incoming call" class, on the grounds that common issues of fact do not predominate.2 Smilow v. S.W. Bell Mobile Sys., Inc., 200 F.R.D. 5, 9 (D.Mass.2001). The court explained its conclusion that individual issues predominated as follows:

Proof that many persons (even if not as many as 275,000) were billed for and paid charges for incoming calls in many months is not enough to show that any specific amount of damages could properly be found by a finder of facts at trial, or that any aggregate amount could properly be found. Proof of charges and payments is not evidence of harm or an amount of harm on the basis of which damages could be awarded in the face of (i) a strong likelihood that services were received in return for the billed payments and (ii) lack of admissible evidence to rebut that strong likelihood.

Plaintiffs' assertions that causation will turn out to be "a common issue," and that the amount of damages calculable from defendant's records will "not be reasonably disputable," are not likely to be consistent with the record in this case after further discovery, regardless of how much longer the court allows for further discovery. To be a "common issue" in the relevant sense, the issue must be one that does not require separate dispute resolution processes for different individuals who are said to have claims in "common."

Id. at 8. The court held that additional discovery would not enable plaintiffs to show that common issues predominate for causation and damages. The court opined that separate damages hearings would be required for individual plaintiffs because (1) "services were received in return for the billed payments" and (2) particular class members had different plans and usage patterns. Although the opinion and order purported to decertify all incoming-call class claims, it contained no reasoning about the ch. 93A or TCA claims. In its March 22 opinion, the court also denied Bibeau's motion to become a designated class representative. Id. at 6. The district court provided little explanation of its decision to deny the motion to designate Bibeau as a class representative. It merely observed that the motion was "inadequately supported on the record before the court and thus also not effective to defeat the defense motion to decertify." Id.

Plaintiffs sought discretionary appellate review of the decertification order, pursuant to Fed.R.Civ.P. 23(f). On July 12, 2001, this court vacated the entire March 22, 2001 decertification order, noting that the district court had not addressed the ch. 93A claim. Smilow v. S.W. Bell Mobile

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Sys., Inc., No. 01-8001, slip op. at 1-2 (1st Cir. July 12, 2001). After remand and additional written submissions and oral argument on the issue, the district court decertified the class for the contract, ch. 93A, and TCA claims. Smilow, No. 97-10307-REK, slip op. at 9 (D. Mass. Apr. 10, 2002).3 The district court reinstated its March 22, 2001 decertification order, quoting the order at length and stating that its earlier reasoning was correct. The court then dismissed the ch. 93A claim class action on two grounds. First, the court held that the class members would fall into two groups: those who waived actual damages in favor of statutory damages of $25 and those who claimed actual damages. The court fell back on its original reasoning as to why the fact that actual damages could be easily calculated by computer was irrelevant. Second, the court held that individual issues predominated on causation. Here, it relied on its earlier rationale that, whatever the common contractual language, "services were received in return for the billed payments." Although the district court purported to be addressing issues of causation, it again referred to supposed individual differences in the damages calculations to show why causation had no common issues.

The district judge also denied plaintiffs' renewed motion to designate Bibeau as a class representative on the grounds that she had not "suffered the same injury as the class." Id. at 9.

Plaintiffs again appealed. This court granted plaintiffs permission to appeal pursuant to Fed. R. Civ. P. 23(f).4


A. Standard of...

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