Mcguire v. Ameritech Services Inc., No. C-3-99-661.

Decision Date15 January 2003
Docket NumberNo. C-3-99-661.
Citation253 F.Supp.2d 988
PartiesRaymond McGUIRE, et al., Plaintiffs, v. AMERITECH SERVICES, INC., et al., Defendants.
CourtU.S. District Court — Southern District of Ohio

Jon Paul Rion, John ¶ Rion and Associates, David Michael Deutsch, David M Deutsch Co., LPA, Dayton, OH, for Plaintiffs.

Marc Gregory Pera, Porter Wright Morris & Arthur, Jonathan Hollingsworth, Washington & Hollingsworth, Thomas Allen Knoth, Thompson Hine, Victor Terrell Whisman, Montgomery County Prosecutor's Office, Jeffrey Charles Turner, Jenks Surdyk Oxly Turner & Dowd Co LPA, Dayton, OH, Leslie M Smith, Julie B Ruder, Kirkland & Ellis, Chicago, IL, James B Niehaus, Frantz Ward LLP, Cleveland, OH, Jay M Vogelson, Stutzman & Bromberg, Dallas, TX, Daniel L Clark, Jr., Philomena M Dane, Squire Sanders & Dempsey, Joseph Matthew Mancini, Charissa Diane Payer, Ohio Attorney General, Gregory Paul Dunsky, United States Attorney's Office, Steven Gerard LaForge, Mark David Landes, Isaac Brant Ledman & Teetor, Columbus, OH, for Defendants.

EXPANDED OPINION; DECISION AND ENTRY SUSTAINING IN PART AND OVERRULING IN PART STATE DEFENDANTS' MTION TO DISMISS (DOC. #41); SUSTAINING IN PART AND OVERRULING IN PART TELPHONE DEFENDANTS' MOTION TO DISMISS (DOC. #42); SUSTAINING IN PART AND OVERULING IN PART COUNTY DFENDANTS' MOTION TO DISMISS (DOC. #43); THIS ACTION IS STAYED PENDING THE RESLOUTION OF BANKRUPTCY PROCEEDINGS INITIATED BY DEFENDANT MCI WORLDCOM NETWORK, INC., NOW KNOWN AS WORLDCOM, INC., OR UNTIL SAID DEFENDANT IS VOLUNTARILY DISMISSED; PLAINTIFFS DIRECTED TO NOTIFY THE COURT, WITHIN 20 DAYS OF DATE, OF WHETHER THEY DESIRE TO DISMISS SAID DEFEDANT FROM THIS LITIGATION

RICE, Chief Judge.

Plaintiffs, representing a proposed class of family members, friends, attorneys, and bailbondsmen of inmates at state and county correctional institutions throughout Ohio, have filed an Amended Complaint (Doc. # 21), in which they claim that certain telecommunication companies have conspired with the State of Ohio and certain counties of Ohio to create exclusive contracts for inmate telephone service, that such contracts restrict inmates' telephone privileges to collect calls, and that, as a result, they (Plaintiffs), who bear the cost of the collect calls, are charged excessive rates and surcharges. In so acting, Plaintiffs claim, Defendants have violated the Sherman Antitrust Act, 15 U.S.C. § 1, et seq., the Telecommunications Act, 47 U.S.C. § 151, et seq.,1 and certain of their constitutional rights, violations of which are actionable under 42 U.S.C. § 1983. Plaintiffs also state a related claim under the antitrust laws of Ohio, Ohio Rev.Code § 1331.01, et seq. ("Valentine Act"), over which the Court has jurisdiction pursuant to 28 U.S.C. § 1367(a).

Plaintiffs named in the Amended Complaint are: Raymond McGuire, Kim Rayford, Paul Null, Sandra Null, Thomas Short, Algie Harris, Rebia Harris, Cindy Partida, Dennis E. Gump, George Cleere, Amanda Cleere, Mildred Lawson, and Emmit Lawson (collectively, "Plaintiffs").

Defendants are: Ameritech Services, Inc., GTE Telecommunication Services, Inc., Ameritel, Evercom Systems, Inc., and MCI Worldcom Network, Inc. (collectively, "Telephone Defendants"); State of Ohio, Ohio Department of Rehabilitation and Corrections ("ODRC"), and Reginald A. Wilkinson, in his individual capacity, and in his official capacity as Director of the ODRC (collectively, "State Defendants"); the Ohio Counties of Miami, Greene, Madison, and Butler, along with their Commissioners and Sheriffs, and the County Commissioners of Montgomery County (collectively, "County Defendants").2 Plaintiffs also named as Defendants other Unknown Counties of Ohio, and John and Jane Doe Commissioners, Sheriffs, Telephone Companies, and Rehabilitation and Correction Institutions.

Plaintiffs have set forth eleven counts. In Count I, they allege that State Defendants and Telephone Defendants have conspired to set excessive calling rates for prison inmates in violation of the Equal Protection Clause of the Fourteenth Amendment. Count II alleges that a similar conspiracy exists between County Defendants and the Telephone Defendants, also in violation of the Equal Protection Clause. Counts III and IV allege that Defendants, by their actions of setting high calling rates, have placed an undue burden on their (Plaintiffs') rights of association and freedom of speech, in violation of the First Amendment. Counts V and VI allege that the actions of Defendants have deprived Plaintiffs of their procedural and substantive due process protections, in violation of the Due Process Clause of the Fourteenth Amendment. Counts VII and VIII allege that Defendants' actions impair certain contracts, in violation of Article I, § 10, of the Constitution ("Contracts Clause"). Count IX alleges that Defendants, through their conspiratorial actions, have violated § 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. Count X alleges that Telephone Defendants have violated the Telecommunications Act, 47 U.S.C. §§ 201(b) & 202(a). Finally, in Count XI, Plaintiffs allege that Defendants conspired in violation of Ohio's Valentine Act, Ohio Rev.Code § 1331.01, et seq.

Currently before the Court are the Motions of the State Defendants (Doc. # 41), Telephone Defendants (Doc. #42), and County Defendants (Doc. # 43) to Dismiss the Amended Complaint, pursuant to Rule 12(b)(1) & (6) of the Federal Rules of Civil Procedure. After noting the proper standard for review of motions to dismiss and setting forth the underlying facts, the Court will consider the individual Motions. With the exception of Count X, which concerns only the Telephone Defendants, to the extent the Amended Complaint concerns agreements between Telephone and State Defendants, the Court will consider their Motions together; likewise, to the extent the Amended Complaint concerns agreements between Telephone and County Defendants, the Court will consider their Motions together.

For the reasons expressed herein, the several Motions shall be SUSTAINED in part and OVERRULED in part.

I. Standards Governing Rule 12(b)(1) & (6) Motions to Dismiss

Pursuant to Rule 12(b)(6), the Court may only consider the facts as pled in the Complaint in deciding whether the Plaintiffs have stated a valid claim. See Nelson v. Miller, 170 F.3d 641, 649 (6th Cir.1999). "A court should not dismiss a plaintiffs complaint under Rule 12(b)(6) unless, after construing the complaint in the light most favorable to the plaintiff and accepting all factual allegations as true, the court determines that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief." Id. (citation omitted); Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984).

Regarding motions brought under Rule 12(b)(1), in Ohio Nat'l Life Ins. Co. v. United States, 922 F.2d 320 (6th Cir.1990), the Sixth Circuit, at 325, laid out the procedural framework for such:

Rule 12(b)(1) motions to dismiss based upon subject matter jurisdiction generally come in two varieties. A facial attack on the subject matter jurisdiction alleged by the complaint merely questions the sufficiency of the pleading. In reviewing such a facial attack, a trial court takes the allegations in the complaint as true, which is a similar safeguard employed under 12(b)(6) motions to dismiss. On the other hand, when a court reviews a complaint under a factual attack, as here, no presumptive truthfulness applies to the factual allegations. Such a factual attack on subject matter jurisdiction commonly has been referred to as a "speaking motion." See generally Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1364, at 662-64 (West 1969). When facts presented to the district court give rise to a factual controversy, the district court must therefore weigh the conflicting evidence to arrive at the factual predicate that subject matter jurisdiction exists or does not exist. In reviewing these speaking motions, a trial court has wide discretion to allow affidavits, documents and even a limited evidentiary hearing to resolve disputed jurisdictional facts. (Citations omitted.)

Importantly, in considering facts that bear on its subject matter jurisdiction, the Court does not convert a Rule 12(b)(1) motion into a motion for summary judgment, as facts which bear on jurisdiction are not the same as fact which bear on the merits.3 Herein, to the extent they rely upon Rule 12(b)(1), Defendants have presented only facial attacks on the Court's subject matter jurisdiction. As such, be it under Rule 12(b)(1) or (6), the Court shall presume the truth of the facts as alleged.

II. Factual Background

As just noted, for purposes of ruling on Defendants' Motions, the Court shall draw all of its underlying facts from the allegations set forth in Plaintiffs' Amended Complaint, accept them as true for the moment, and construe them in a light most favorable to Plaintiffs.4

Inmates housed at correctional institutions operated and managed by the State of Ohio or the counties of Ohio have a single means of calling out to their friends, family, and attorneys and the like: by collect call. Typically, each institution will contract on an exclusive basis with a single telephone company for the provision of a collect calling service. In consideration for the exclusive contract, the telephone company agrees to remit up to 50% of its revenues therefrom to the institution with which it is contracted. The commissions realized by the State and various counties amount to millions of dollars a year.

The impact of these exclusive contracts on those who most frequently communicate with inmates, to wit, family, friends, attorneys, and so forth, as represented herein by Plaintiffs, is obvious. Collect calling rates are higher than regular person-to-person calling rates, the result of which is that it costs...

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