Gilmore v. Southwestern Bell Mobile Systems, Inc.

• Decision Date: 10 August 2001
• Docket Number: No. 01 C 2900.,01 C 2900.
• Citation: 156 F.Supp.2d 916
• Parties: Bruce GILMORE, individually and on behalf of all other people similarly situated, Plaintiff, v. SOUTHWESTERN BELL MOBILE SYSTEMS, INC., d/b/a Cellular One of Illinois, Defendant.
• Court: U.S. District Court — Northern District of Illinois

156 F.Supp.2d 916

Bruce GILMORE, individually and on behalf of all other people similarly situated, Plaintiff, v. SOUTHWESTERN BELL MOBILE SYSTEMS, INC., d/b/a Cellular One of Illinois, Defendant.

No. 01 C 2900.

United States District Court, N.D. Illinois, Eastern Division.

August 10, 2001.

COPYRIGHT MATERIAL OMITTED

P. Terrence Buehler, Susman & Watkins, Chicago, IL, George N. Vurdelja, Jr., John M. Heaphy, Griswold L Ware, Vurdelja & Heaphy, Chicago, IL, Janet Lynn Reed, Buehler & Reed, Chicago, IL, for Bruce Gilmore.

Kenneth Emanuel Kraus, Veronica Gomez, Lisa Beth Swedenborg, Schopf & Weiss, Chicago, IL, for Southwestern Bell Mobile Systems, Inc.

MEMORANDUM OPINION AND ORDER

HART, District Judge.

Named plaintiff Bruce Gilmore filed this putative class action in the Circuit Court of Cook County, Illinois. Defendant Southwestern Bell Mobile Systems, Inc.¹ d/b/a as Cellular One of Illinois removed the case to federal court contending that plaintiff's claims were completely preempted by federal law and therefore necessarily stated a basis for federal jurisdiction. Plaintiff has moved to remand the case to state court and defendant has moved to dismiss plaintiff's cause of action.

According to the allegations of the complaint, plaintiff is a resident of Illinois and defendant is a Delaware corporation. There is no allegation as to defendant's principal place of business, but defendant does not dispute plaintiff's statement that the requirements for diversity jurisdiction are not satisfied. Named plaintiff's individual claim apparently would be less than the jurisdictional amount for diversity and it may be that defendant's principal place of business is located in Illinois. Therefore, removal would only be appropriate if one or more of plaintiff's claims involve a federal question.

Plaintiff alleges that he has been a cellular telephone customer of defendant since before 1995. He further alleges that he has a contract under which he agrees to pay certain rates for his cellular telephone service. "Nowhere in the Contract or elsewhere did Plaintiff agree to pay higher rates for cellular service or to pay additional fees for which no significant additional goods or services were rendered." Plaintiff alleges that applicable taxes are the only appropriate additional charges. In 1995, defendant began charging a monthly "Corporate Account Administration Fee" (hereinafter the "Fee").² No significant administrative or other services are provided for the Fee and the monthly bills do not explain what services, if any, are provided for the Fee nor has it been specifically identified as a rate increase. Plaintiff alleges that the Fee was imposed "for the sole purpose of enabling [defendant] to generate more revenue without appearing to raise its rates for cellular service." It is further alleged that plaintiff and the class "have been deceived into paying a fee for which they receive no significant goods or services. Plaintiff and the Class also have been deceived, in effect, into paying for cellular service at rates higher than the rates for which they contracted."

The putative class identified in the complaint is "all persons with Illinois billing addresses who have subscribed to cellular telephone services provided by Defendant since 1995 ... and from whom Defendant has collected a Corporate Account Administrative Fee." The complaint contains four counts, all of which are denominated as state law claims. Count I is a claim for breach of contract in which it is contended that the Fee is not permitted under the parties' alleged contract. Count II is a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2, in which it is claimed that defendant used deception in charging the Fee by misrepresenting its true nature. Count III charges the same alleged misrepresentations as common law fraud. Count IV charges the alleged practice as unjust enrichment.

Defendant contends that plaintiff is challenging the rates it charges and therefore all of plaintiff's claims are preempted by the Federal Communications Act ("FCA"), specifically 47 U.S.C. § 332(c)(3). Defendant further contends that the FCA has so completely preempted the field that any challenge to rates is necessarily a federal claim. Plaintiff contends he is not challenging rates. Alternatively, he contends that his particular rate challenges are not preempted or that the field is not so completely preempted that any challenge to rates is necessarily a federal claim. Assuming there is federal jurisdiction, defendant moves to dismiss all the claims because they are preempted or, alternatively, because the FCC has primary jurisdiction. Alternatively, defendant contends Counts II and III do not satisfy the pleading requirements of Fed.R.Civ.P. 9(b) and Count IV should be dismissed because unjust enrichment does not apply when there is a contract.

Preemption is a defense. That a claim is preempted by federal law is not a sufficient basis for invoking federal question jurisdiction. Caterpillar Inc. v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). Preemption can only be a basis for federal question jurisdiction if there is complete preemption, i.e. "the pre-emptive force of a statute is so `extraordinary' that it `converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.'" Id. (quoting Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58, 65, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987)). A plaintiff is the master of his complaint; he may choose to bring state law claims only even if a federal claim is available. See Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, 809 n. 6, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986).

As to cellular telephone services,³ the FCA provides:

Notwithstanding sections 152(b) and 221(b) of this title, no State or local government shall have any authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service, except that this paragraph shall not prohibit a State from regulating the other terms and conditions of commercial mobile services. Nothing in this sub-paragraph shall exempt providers of commercial mobile services (where such services are a substitute for land line telephone exchange service for a substantial portion of the communications within such State) from requirements imposed by a State commission on all providers of telecommunications services necessary to ensure the universal availability of telecommunications service at affordable rates. Notwithstanding the first sentence of this subparagraph, a State may petition the Commission for authority to regulate the rates for any commercial mobile service ....

47 U.S.C. § 332(c)(3)(A).

The FCA also contains a savings clause:

Nothing in this chapter contained shall in any way abridge or alter the remedies now existing at common law or by statute, but the provisions of this chapter are in addition to such remedies.

Id. § 414.

The Seventh Circuit has considered the interplay between these two statutory provisions and the complete preemption doctrine.

At first blush, the savings clause appears to encompass most actions, but it is well established that such cannot be true. To read the clause expansively would abrogate the very federal regulation of mobile telephone providers that the act intended to create. See AT & T Co. v. Central Office Telephone, Inc., 524 U.S. 214, 228, 118 S.Ct. 1956, 141 L.Ed.2d 222 (1998) ("[T]he act cannot be held to destroy itself.") (citation omitted); Cahnmann v. Sprint Corp., 133 F.3d 484, 488 (7th Cir.1998). Therefore, we have read the savings clause narrowly to avoid swallowing the rule, but not so narrowly as to render it a dead letter. Although most complaints will involve rates or other issues specially reserved to federal control, we have recognized before that some claims do not and may be addressed in state court. See Cahnmann, 133 F.3d at 488 (citing In re Long Distance Telecommunications Litig., 831 F.2d 627, 633-34 (6th Cir.1987)).

The two clauses read together create separate spheres of responsibility, one exclusively federal and the other allowing concurrent state and federal regulation. Cases that involve "the entry of or the rates charged by any commercial mobile service or any private mobile service" are the province of federal regulators and courts. 47 U.S.C. § 332(c)(3)(A). The states remain free to regulate "other terms and conditions" of mobile telephone service. Id. The district court aptly characterized the phrase "other terms and conditions" as "somewhat enigmatic," and we agree, but the court's review of the legislative history regarding the meaning of this phrase was unnecessary and not particularly authoritative since it reflected only the views of one chamber of Congress. See Board of Trade v. SEC, 187 F.3d 713, 720 (7th Cir.1999) ("Legislative history is problematic under the best circumstances, and even so reliable a source as the Conference Committee Report may be used only when there is a genuine ambiguity in the statute.").

Furthermore, this case does not demand so nuanced a study of the phrase "other terms and conditions" because the meaning of "entry of or the rates charged by any commercial mobile service" adequately resolves the issue here. In practice, most consumer complaints will involve the rates charged by telephone companies or their quality of service. See Central Office Telephone, 524 U.S. at 223, 118 S.Ct. 1956 ("Any claim for excessive rates can be couched as a claim for inadequate services and vice versa."). As the Supreme Court recognized in Central Office Telephone, a complaint that service quality is poor is really an attack on the rates charged for the service and may be treated as a federal case regardless of whether the issue was framed in terms of state law. Id. In addition to rates and service, federal...