Brittan Communications v. Southwestern Bell Tel.
| Citation | 313 F.3d 899 |
| Decision Date | 16 December 2002 |
| Docket Number | No. 01-41450.,01-41450. |
| Parties | BRITTAN COMMUNICATIONS INTERNATIONAL CORPORATION, Plaintiff-Appellant, v. SOUTHWESTERN BELL TELEPHONE COMPANY, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Eggleston, III, Tracy Lynn Jackson (argued), Eggleston & Briscoe, Houston, TX, for Plaintiff-Appellant.
Philip J. John, Shira R. Yoshor (argued), Baker Botts, Houston, TX, Madeleine E. Dabney, SBC Communications, San Antonio, TX, for Defendant-Appellee.
Appeal from the United States District Court for the Southern District of Texas.
Before DeMOSS, STEWART and DENNIS, Circuit Judges.
Brittan Communications International Corporation ("Brittan") filed suit against Southwestern Bell Telephone Company ("SWBT") in Texas state court alleging, inter alia, violations of the Communications Act of 1933 ("the Act"), common law fraud, and violations of the Texas Deceptive Trade Practices Act ("DTPA"). SWBT removed the case to federal court and filed motions for judgment on the pleadings and summary judgment. On November 9, 2001, the district court granted, inter alia, SWBT's motion for judgment on the pleadings with respect to Brittan's claim under the Communications Act and motion for summary judgment with respect to Brittan's fraud claim and its claims under the DTPA. The district court issued a final judgment and Brittan appealed. For the following reasons, we affirm.
Brittan began operating as a switchless reseller of long-distance telephone services in 1995. Brittan did not have its own telecommunications facilities, but rather leased long-distance access from two existing long-distance carriers ("Lessors"). It then resold the leased long-distance services to its customers in forty-two states.
As is common in the telecommunications industry, Brittan billed its customers through local exchange carriers ("LECs"), like SWBT. In order to do so, Brittan submitted its charges to a third-party billing aggregator with whom Brittan had a contract, namely Billing Concepts or its subsidiaries (collectively "Billing Concepts"). Billing Concepts performed billing aggregation services for multiple long-distance providers, including Brittan. Billing Concepts aggregated Brittan's charges with those of other long-distance providers and submitted them to SWBT.1 SWBT would then place Brittan's charges on the bills of its local telephone service customers, collect the payments due, and forward the monies received to Billing Concepts. Billing Concepts would then transfer the funds to Brittan.
On November 9, 1998, SWBT notified Billing Concepts that it would no longer accept billing records from Brittan, effective the following day. Brittan allowed its customers to continue to make long-distance calls, for which Brittan had to pay its Lessors, but Brittan was unable to bill those customers through SWBT. According to SWBT, it suspended billing services for Brittan in response to a large number of "slamming" and "cramming" complaints by SWBT's customers.2 In September 1998, SWBT received approximately 2400 customer complaints associated with charges that Billing Concepts had tendered to SWBT for billing. In late October 1998, SWBT conducted a random sampling of 100 of these 2400 customer complaints from September. The results of the survey indicated that more complaints had been filed against Brittan than against any other long-distance provider billing through Billing Concepts.
On November 2, 1998, SWBT wrote to Billing Concepts explaining that it intended to suspend billing of charges generated by Brittan unless Billing Concepts could inform SWBT, by November 7, 1998, of any reasons why it should not do so. Under the terms of its billing contract with Billing Concepts, SWBT was not obligated to process "[c]harges for services which, in SWBT's sole opinion, may result in nuisance calls to SWBT." On November 6, 1998, Brittan wrote Billing Concepts placing blame for the complaints in the sample on Brittan's Lessors. On November 9, 1998, SWBT notified Billing Concepts that SWBT would no longer accept billing records from Brittan, effective November 10, 1998, because it had not received adequate assurances from Billing Concepts that the number of complaints would be reduced in the future. In its letter to Billing Concepts, SWBT indicated that Brittan must provide SWBT with a specific action plan designed to reduce complaints in order to regain privileges. "These action plans must be specific, and need to address future actions, not reasons for past failures."
According to Brittan, SWBT's survey of complaints was skewed in favor of Billing Concept's largest customer, Worldcom, and against Brittan. Brittan contends that it never engaged in cramming and that all of the so-called cramming complaints in the survey were merely calls from customers who were unfamiliar with new fees imposed on long-distance providers in 1998 by the Federal Communications Commission ("FCC"). The FCC allowed long-distance providers to pass these fees on to customers.3 Brittan simultaneously contends that the complaints in the survey were due to errors in electronic transmission codes allegedly caused by SWBT.
On November 16, 1998, representatives of SWBT, Billing Concepts, and Brittan participated in a conference call. During this call, SWBT and Billing Concepts agreed that Billing Concepts would decide whether or not Brittan's billing would be reinstated. Brittan claims that SWBT's representative stated that billing services would promptly be restored as soon as Billing Concepts made the decision to forward Brittan's billing records to SWBT.
On or about November 24, 1998, Billing Concepts informed SWBT that Brittan should be reinstated on SWBT's billing tables. On December 15, 1998, SWBT resumed billing Brittan-generated charges for Billing Concepts. The money collected from those bills was paid to Billing Concepts in the normal course of business.
In June 2000, Brittan brought suit against SWBT in state court seeking damages stemming from the suspension of its billing and collection services. SWBT removed the case to federal court and filed motions for judgment on the pleadings and for summary judgment. On November 9, 2001, the district court granted SWBT's motions and entered final judgment. Brittan appeals.
Brittan presents the following issues on appeal: (1) whether the district court erred in granting SWBT's motion for judgment on the pleadings on Brittan's claim under Title II of the Communications Act of 1933, 47 U.S.C. § 202(a); (2) whether the district court erred in granting summary judgment for SWBT on Brittan's common law fraud claim; and (3) whether the district court erred in granting summary judgment for SWBT on Brittan's claims under the DTPA, TEX. BUS. & COM. CODE ANN. §§ 17.45(5) and 17.46(b)(5) & (7).
We review the grant of judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) de novo. St. Paul Fire & Marine Ins. Co. v. Convalescent Serv., Inc., 193 F.3d 340, 342 (5th Cir. 1999). In doing so, we must look only to the pleadings and accept all allegations contained therein as true. Id. Pleadings should be construed liberally, and judgment on the pleadings is appropriate only if there are no disputed issues of material fact and only questions of law remain. Voest-Alpine Trading USA Corp. v. Bank of China, 142 F.3d 887, 891 (5th Cir.1998). "[T]he central issue is whether, in the light most favorable to the plaintiff, the complaint states a valid claim for relief." Hughes v. The Tobacco Inst., Inc., 278 F.3d 417, 420 (5th Cir.2001) (quoting St. Paul Mercury Ins. Co. v. Williamson, 224 F.3d 425, 440 n. 8 (5th Cir.2000)).
Title II of the Communications Act outlines the duties of common carriers in the provision of interstate or foreign communication services and establishes procedures for enforcement of those duties. 47 U.S.C. §§ 201-224. Brittan claims that SWBT's temporary suspension of billing and collection services violates § 202(a) of the Act. Section 202(a) states as follows:
It shall be unlawful for any common carrier to make any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services for or in connection with like communication service, directly or indirectly, by any means or device, or to make or give any undue or unreasonable preference or advantage to any particular person, class of persons, or locality, or to subject any particular person, class of persons, or locality to any undue or unreasonable prejudice or disadvantage.
47 U.S.C. § 202(a) (2001).
The district court aptly looked for guidance from the FCC — the agency charged with administration of the Communications Act — in determining whether Brittan's claim fell within the scope of § 202(a). After reviewing the pertinent FCC decisions, the district court determined that "the relevant principle that can be extracted from these FCC decisions is that billing and collection services that do not utilize communications over the common carrier's wire or radio facilities are not `communications services' regulated by Title II of the Communications Act." Thus, the district court concluded that Brittan had not alleged a cognizable § 202(a) claim. We agree that the FCC has stated a clear position on this issue. In light of the FCC's position, we agree with the district court's conclusion. See generally Verizon Communications Inc. v. FCC, 535 U.S. 467, 122 S.Ct. 1646, 1687, 152 L.Ed.2d 701 (2002) ().
To discern the FCC's position, we look to the history and purpose of the agency's decisions. In 1986, the FCC issued a decision which resulted in...
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