In re Long Distance Telecommunications Litigation, MDL No. 598

• Decision Date: 06 December 1984
• Docket Number: Civ. No. 84CV4801DT.,MDL No. 598
• Citation: 598 F. Supp. 951
• Parties: In re LONG DISTANCE TELECOMMUNICATIONS LITIGATION. Seymour LAZAR, an Individual on behalf of himself and all others similarly situated, Plaintiff, v. MCI COMMUNICATIONS CORPORATION, MCI Telecommunications Corporation, and Does I through X, inclusive, Defendants.
• Court: U.S. District Court — Western District of Michigan

598 F. Supp. 951

In re LONG DISTANCE TELECOMMUNICATIONS LITIGATION Seymour LAZAR, an Individual on behalf of himself and all others similarly situated, Plaintiff, v. MCI COMMUNICATIONS CORPORATION, MCI Telecommunications Corporation, and Does I through X, inclusive, Defendants.

MDL No. 598, Civ. No. 84CV4801DT.

United States District Court, E.D. Michigan, S.D.

December 6, 1984.

James A. Mangione, Law Offices of James A. Mangione, San Diego, Cal., for Seymour Lazar.

Fay Clayton, Sachnoff, Weaver & Rubenstein, Ltd., Chicago, Ill., for Certified Collateral Corp., Earl E. Olive and David H. Locks.

Michael J. Freed, Chicago, Ill., for Euromarket Designs, Inc. d/b/a Crate & Barrel.

Karl L. Cambronne, Chestnut & Brooks, P.A., Minneapolis, Minn., for McIntosh Embossing, Inc.

Gerald D. Miller, Miller, Hochman & Myerson, Jersey City, N.J., for Mark Hochman, et al.

Grant S. Lewis, LeBouef, Lamb, Leiby & MacRae, New York City, for United States Transmission Systems, Inc.

Mitchell S. Goldgehn, Greenberg Keele Lunn & Aronberg, Chicago, Ill., for Allnet Communication Services, Inc.

Richard J. Gray, Jenner & Block, Chicago, Ill., for MCI Telecommunications Corp.

Howard G. Kristol, Reboul, MacMurray, Hewitt, Maynard & Kristol, New York City, for GTE Corp., GTE Spring Communications Corp., GTE Automatic Elec. Corp., Southern Pacific Co., Southern Pacific Communication Co. and Southern Pacific Satellite Co.

John Havas, Foulkrod, Reynolds & Havas, Harrisburg, Pa., for Lilly M. Feitler, etc.

Nicholas Chimicles, Greenfield, Chimicles & Lewis, Haverford, Pa., for A. Linda Leventhal, etc.

Robert P. Hurlbert, Dickinson, Wright, Moon, Van Dusen & Freeman, Bloomfield Hills, Mich., for Western Union Telegraph Co.

Michael W. Ward, O'Keefe, Ashenden, Lyons & Ward, Chicago, Ill., for U.S. Telephone of the Midwest, Inc.

MEMORANDUM OPINION AND ORDER

ANNA DIGGS TAYLOR, District Judge.

This cause comes before the court on plaintiff's motion for remand to the California state court. For the reasons outlined below, plaintiff's motion is denied, and this cause is consolidated with the other federal actions transferred to this district court for pre-trial management by the Multidistrict Litigation Panel on August 27, 1984.

On May 16, 1984, plaintiff filed this class action for injunctive relief and damages in the Superior Court for the County of San Diego, California, alleging three causes of action: Count I for fraud and deceit; Count II for negligent misrepresentation, and Count III for unlawful, unfair or fraudulent business practices. Plaintiff claims that defendants, common carriers in competition with AT & T for the provision of long distance phone services to consumers, promised substantial savings on each long distance call made. Plaintiff charges that instead, defendants herein have in fact improperly charged, and continue to charge plaintiff and the class he proposes to represent for long distance calls which were never completed, and failed to notify plaintiff of that practice. The allegations of the complaint are characterized by plaintiff as violations of California statutory and common law, exclusive of any federal basis.

Defendants petitioned for removal in the United States District Court for the Southern District of California, alleging that plaintiff's claims arise under and are governed exclusively by the Federal Communications Act of 1934, 47 U.S.C. § 151 et seq. (1962). On June 22, 1984 counsel for the defendants wrote to the Judicial Panel on Multidistrict Litigation and designated this action as a potential "tag-along" action in connection with other cases then pending before the panel. On this same date, plaintiff petitioned the Southern District of California federal district court to remand to California state court. Hearing of that motion was deferred, pending the decision of the Multidistrict Panel.

On August 27, 1984, the Multidistrict Panel transferred nine long distance telecommunications actions pending in district courts to this forum. As a "tag-along" action, this case was subsequently transferred by order of the Panel dated September 28, 1984.

Pursuant to 28 U.S.C. § 1447(c) (1973), plaintiff now renews his motion for remand to the California state court on the ground that the matter was improvidently removed, no federal claims having been stated.

This action is but the most recent of fourteen class actions pending in the federal courts challenging the same alleged billing and disclosure practices of the defendants which are assailed by plaintiff herein. This court dismissed the first of these cases under the principles of primary jurisdiction, in deference to the Federal Communications Commission. Control Electronics v. Southern Pacific Communications Co., 83CV1010DT (E.D.Mich.1984). The second case was dismissed by the District Judge on primary jurisdiction grounds as well. Retail Recruiters of New York, Inc. v. MCI Telecommunications Corp., 83CV8048 (S.D.N.Y.1984). Of the remaining cases, nine have been transferred to this court by order of the Judicial Panel. The Panel's decision regarding transfer of a tenth case was deferred pending resolution of an appeal. The other two cases are no longer pending in federal courts. Although plaintiff's complaint does not expressly refer to the Federal Communications Act of 1934, the factual allegations of his complaint are materially indistinguishable from those presented in the cases which comprise the consolidated multidistrict matter now before this court, all of which are grounded in the Federal Communications Act.

In Ivy Broadcasting v. American Tel. and Tel. Co., 391 F.2d 486 (2d Cir.1968), the Second Circuit Court of Appeals determined that "questions concerning the duties, charges and liabilities of telegraph or telephone companies with respect to interstate communications service are to be governed solely by federal law and that the states are precluded from acting in this area." 391 F.2d at 491. The court there held that a radio broadcasting company did not have a state law cause of action to redress the AT & T Company's allegedly negligent operation of its lines and discriminatory billing practices.

Defendants here cite Ivy in support of the argument that the state common law and statutory claims which plaintiff presents are preempted by the Communications Act. In response, plaintiff contends that under Nader v. Allegheny Airlines, 426 U.S. 290, 96 S.Ct. 1978, 48 L.Ed.2d 643 (1976), his California state law claims are not preempted by the Communications Act as he had made no allegations which "arise under" that act. Further, plaintiff argues that the savings clause contained in the ...