Doty v. Frontier Communications, Inc.

Decision Date14 December 2001
Docket NumberNo. 86,769.,86,769.
PartiesJULES V. DOTY, Appellee, v. FRONTIER COMMUNICATIONS INCORPORATED, Appellant.
CourtKansas Supreme Court

Steve R. Fabert, of Fisher, Patterson, Sayler & Smith, L.L.P., of Topeka, argued the cause and was on the briefs for appellant.

Mark Doty, of Gleason & Doty, Chartered, of Ottawa, argued the cause, and Thomas E. Gleason, Jr., of the same firm, was with him on the brief for appellee.

The opinion of the court was delivered by

LARSON, J.:

This first impression case raises issues of claimed preemption by the 1996 Federal Telecommunications Act, 47 U.S.C. § 151 et seq. (1994 ed., Supp. V. 2000), and the application of K.S.A. 2000 Supp. 50-6,103 (Kansas Act) of the Kansas Consumer Protection Act (KCPA), K.S.A. 50-623 et seq., to an unauthorized change of an interstate long-distance telephone services carrier (a practice commonly known as "slamming").

Both parties substantially agree as to the factual and procedural background of the case, but have strikingly divergent views of the applicable law.

In October 1999, the plaintiff, Jules V. Doty, experienced the change of his long-distance telephone service provider (Southwestern Bell Telephone Company) without his consent, knowledge, or authorization. The change order was apparently falsely implemented by a company called International Exchange Communications, Inc., (IEC) through Frontier Communications, Inc., (Frontier) to Southwestern Bell. Frontier did not verify the authority for the change (and contends it is not authorized to do so). Southwestern Bell made the requested change.

When Frontier billed Doty, he learned he had been "slammed" and filed suit in January 2000, alleging Frontier had "submitted or caused to be submitted" an unconsented order for change of services. He requested relief under K.S.A. 2000 Supp. 50-6,103 for statutory penalties and attorney fees.

Frontier's answer denied it had "submitted" the request for change in service and identified the company which may have been the source of the false and unauthorized request. Frontier claimed it had no liability under K.S.A. 2000 Supp. 50-6,103 and further contended that there was federal preemption of any state law inconsistent with federal communications statutes and regulations issued thereunder. After cross-motions for summary judgment were filed, the trial court found that no essential facts were in dispute and ruled, as a matter of law, that Frontier had submitted the change order of Doty's long-distance carrier without his express authorization in violation of K.S.A. 2000 Supp. 50-6,103. The court awarded Doty a statutory penalty of $12,500 and attorney fees. After a motion for reconsideration was denied, Frontier has appealed.

The appeal was transferred to our court pursuant to K.S.A. 20-3018(c).

While we normally first answer jurisdictional arguments, Frontier's contention of no liability under K.S.A. 2000 Supp. 50-6,103 is intertwined with its claim of preemption, and we will discuss the two questions as submitted to us by the parties. We begin with some basic background information concerning the workings of the present-day telecommunications process.

When a consumer places a long-distance telephone call, the call is forwarded by his or her local exchange carrier that has facilities to receive, route, and transmit local telephone calls to the consumer's personal interexchange carrier, which is referred to as "a facilities based carrier." The telephone call is routed over separate long-distance facilities until it reaches the local exchange carrier of the recipient of the call, which then makes it available to the recipient.

The company which has the necessary facilities and equipment to transmit the long-distance calls is referred to as "a facilities based interexchange carrier." This facilities based interexchange carrier has its own carrier identification code which is utilized to transmit the telephone calls. A facilities based interexchange carrier can provide at retail its own long-distance service to consumers. But, after the AT&T breakup, competition was mandated and a new kind of carrier, "the switchless reseller," came into existence. The switchless reseller owns no equipment or facilities but purchases large blocks of long-distance time from a facilities based interexchange carrier at wholesale rates and resells that time at retail rates to consumers.

In the present case, a switchless reseller Interaction Exchange Communications, Inc. (IEC), apparently generated an unconsented change order and sent it to Frontier, a facilities based interexchange carrier. IEC had a contractual agreement with Frontier to buy access to its network and facilities. Frontier in turn sent this order to Doty's local exchange carrier, Southwestern Bell, for execution. This required Southwestern Bell to reprogram its switching equipment so that Doty's calls would be routed automatically to the long-distance interexchange facilities owned by Frontier. This resulted in Frontier's billing to Doty, the filing of the lawsuit, and the result that we have previously stated leading to this appeal.

We first consider Frontier's argument that even if K.S.A. 2000 Supp. 50-6,103 does apply (which Frontier alternatively contends does not apply because of federal preemption), Frontier has not violated its provisions.

K.S.A. 2000 Supp. 50-6,103 was enacted by the Kansas Legislature, effective June 4, 1998, as a part of the KCPA and reads as follows regarding a "change of telecommunications service provider":

"(a) As used in this section:
(1) `Express authorization' means an express, affirmative act by a consumer clearly agreeing to the change in the consumer's telecommunications carrier or local exchange carrier to another carrier.
....
"(b) No local exchange carrier or telecommunications carrier shall submit to a local exchange carrier an order to change a consumer's telecommunications carrier or local exchange carrier to another carrier without having obtained the express authorization of the consumer authorized to make the change. The local exchange carrier or telecommunications carrier requesting the change shall have the burden of proving the express authorization by a preponderance of the evidence.
"(c) No local exchange carrier, telecommunications carrier or third party utilized to verify an order to change a consumer's telecommunications carrier or local exchange carrier to another carrier shall:
(1) Engage in any activity, conduct or representation while soliciting or verifying a change in a consumer's telecommunications carrier or local exchange carrier to another carrier that has the capacity to mislead, deceive or confuse the consumer:
....
(3) use any methods not approved by the federal communications commission statutes, rules and regulations (as in effect on the effective date of this act) or state corporation commission rules and regulations to change a consumer's telecommunications carrier or local exchange carrier to another carrier.
"(d) Any local exchange carrier or telecommunications carrier that violates subsection (b) or (c) shall be subject to a civil penalty of not less than $5,000 nor more than $20,000 for each such violation instead of the penalty provided for in subsection (a) of K.S.A. 50-636, and amendments thereto.
"(e) Any violation of this section is a deceptive and unconscionable act or practice under the provisions of the Kansas consumer protection act and shall be subject to any and all of the enforcement provisions of the Kansas consumer protection act. Nothing in this section shall preclude the state corporation commission from exerting its authority as it pertains to intrastate services nor the attorney general from pursuing violations of any other provisions of the Kansas consumer protection act by a local exchange carrier or telecommunications carrier.
....
"(g) This section shall be part of and supplemental to the Kansas consumer protection act."

Frontier's initial argument is that it is not the party which "submitted" the order to change Doty's personal interexchange carrier.

Frontier first contends the word "submit" in K.S.A. 2000 Supp. 50-6,103(b) should be defined by the Federal Communications Commission (FCC) regulations, 47 C.F.R. § 64.1100 et seq. (1999) because it is not defined by the Kansas Act. Second, because K.S.A. 2000 Supp. 50-6,103 expressly incorporates FCC regulations, any conflict would be contrary to legislative intent. This argument is part and parcel of Frontier's federal preemption argument. Finally, Frontier argues that the 2001 amendments to K.S.A. 2000 Supp. 50-6,103(b) show that the legislature did not intend, prior to the amendments, to penalize the innocent submission by a personal interexchange carrier of a change request. See L. 2001, ch. 115, § 1.

Both parties agree our standard of review over issues of statutory construction is plenary. Babe Houser Motor Co. v. Tetreault, 270 Kan. 502, 506, 14 P.3d 1149 (2000). We have pronounced several maxims for the interpretation of statutes:

"It is a fundamental rule of statutory construction, to which all other rules are subordinate, that the intent of the legislature governs if that intent can be ascertained. [Citation omitted.] The legislature is presumed to have expressed its intent through the language of the statutory scheme it enacted.... when a statute is plain and unambiguous, the appellate courts will not speculate as to the legislative intent behind it and will not read such a statute so as to add something not readily found in the statute. [Citation omitted.]" In re Marriage of Killman, 264 Kan. 33, 42-43, 955 P.2d 1228 (1998).
Also, under our rules of construction, "ordinary words are to be given their ordinary meaning." Matjasich v. Kansas Dept. of Human Resources, 271 Kan. 246, 246, 21 P.3d 985 (2001).

K.S.A. 2000 Supp. 50-6,103(b) states no "telecommunications carrier shall submit ... an order to...

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