Kathleen Lowden v. T-Mobile USA Inc. ( 2010 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT MAY 10 2010
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
KATHLEEN LOWDEN and JOHN No. 09-35201
MAHOWALD, individually and on behalf
of all the members of the class of persons D.C. No. 2:05-cv-01482-MJP
similarly situated,
Plaintiffs - Appellants, MEMORANDUM*
v.
T-MOBILE USA INC., a foreign
corporation,
Defendant - Appellee.
Appeal from the United States District Court
for the Western District of Washington
Marsha J. Pechman, District Judge, Presiding
Submitted May 5, 2010**
Seattle, Washington
Before: HALL, WARDLAW, and GOULD, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Plaintiffs Kathleen Lowden and John Mahowald filed this class action
lawsuit to challenge T-Mobile’s practice of charging its customers a Universal
Service Fund (“USF”) fee and a Regulatory Programs Fee (“RPF”) in addition to a
monthly wireless service rate. They initially filed their complaint in King County
Superior Court, and T-Mobile removed to the U.S. District Court for the Western
District of Washington, which had jurisdiction pursuant to 28 U.S.C. § 1332(d).
Plaintiffs moved for class certification, and T-Mobile moved for judgment on the
pleadings. The district court granted T-Mobile’s motion and dismissed the case
with prejudice. We have jurisdiction pursuant to 28 U.S.C. § 1291. We affirm.
Plaintiffs’ First Amended Complaint alleges that T-Mobile breached its
service contracts with plaintiffs and violated Washington’s Consumer Protection
Act (“CPA”). To survive a Federal Rule of Civil Procedure 12(c) motion, a
plaintiff must allege “enough facts to state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
Plaintiffs do not plausibly allege a breach of contract claim. When plaintiffs
opened their accounts with T-Mobile, they agreed to be bound by the Terms &
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Conditions (“T&Cs”) listed on the back of their Service Agreements. Lowden’s1
Service Agreement disclosed that “[a]ny applicable . . . taxes, fees or charges
imposed on Company as a result of providing the Service or your Unit to you will
be added to your charges when imposed or required by law.” Mahowald’s Service
Agreement similarly disclosed that “[a]ny applicable . . . fees or regulatory costs . .
. or charges imposed on you or Us as a result of providing the Service on your Unit
(“Taxes”) will be added to your charges as permitted or required by law.”
The USF, created by the Telecommunications Act of 1996, subsidizes
continued telecommunications service for low-income consumers, as well as for
consumers in rural and other high cost areas. 47 U.S.C. § 254(b)(3). The Federal
Communications Commission (“FCC”) funds the USF by charging all long
distance carriers (wireless and land-line) a small percentage of their interstate
revenues. 47 U.S.C. § 254(d); 47 C.F.R. § 54.709(a). The FCC expressly permits
carriers to recover their USF contributions from consumers through line-item
charges. 47 C.F.R. § 54.712(a). Because T-Mobile is required to contribute to the
USF as a result of providing long distance wireless services to plaintiffs, and
because USF contributions may be passed along to consumers, plaintiffs’ Service
1
Although the district court dismissed Lowden’s claims on standing grounds,
we need not address this issue. Instead, we hold on the merits that Lowden has
failed to state a claim either for breach of contract or for a CPA violation.
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Agreements authorized T-Mobile to charge plaintiffs a USF fee. Similarly, the
Service Agreements authorized T-Mobile to charge plaintiffs the RPF, which is
used to recover costs related to government mandates and programs such as
wireless number pooling, local number portability and enhanced 911. T-Mobile
was not required to list by name in its Service Agreements every regulatory charge
it would pass on to its customers.
Plaintiffs also fail to plausibly allege a CPA violation. A private action
under the CPA requires a plaintiff to plead an “unfair or deceptive act or practice,”
which is a practice having “the capacity to deceive a substantial portion of the
public.” Indoor Billboard/Wash., Inc. v. Integra Telecom of Wash., Inc., 170 P.3d
10, 18 (Wash. 2007). As explained above, T-Mobile’s contracts adequately
disclosed that it would pass along regulatory fees such as the USF fee and the RPF
to its customers. Moreover, until 2005 the FCC expressly excluded wireless
providers from the requirement that “charges contained on telephone bills must be
accompanied by a brief, clear, non-misleading, plain language description of the
service or services rendered.” 47 C.F.R. § 64.2401(b); In the Matter of
Truth-in-Billing and Billing Format, 20 F.C.C.R. 6448, 6456 ¶ 16 (2005). We
have previously held that these “Truth-in-Billing” rules do not have retroactive
effect. In re NOS Commc’ns, 495 F.3d 1052, 1062 (9th Cir. 2007).
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At no point does the complaint explain how any particular pre-sale
advertising might have “induce[d] contact through deception,” Robinson v. Avis
Rent A Car Sys., Inc, 22 P.3d 818, 825 (Wash. Ct. App. 2001), or allege with
specificity that T-Mobile materially misrepresented the nature or amount of its
fees, Gordon v. Virtumondo, Inc., 575 F.3d 1040, 1065-66 (9th Cir. 2009).
Although disclosure of the USF fee and the RPF in the “Taxes” sections of the
T&Cs and monthly invoices might give the impression that the government is
imposing the USF fee and the RPF directly on consumers, plaintiffs do not point to
any description of these charges that would materially deceive a substantial
number of potential customers. The T&Cs state that plaintiffs would be billed for
all taxes and regulatory fees imposed on the customer or on T-Mobile as permitted
or required by law, and this definition accurately encompasses the USF fee and the
RPF.
The district court did not abuse its discretion in denying plaintiffs further
leave to amend their complaint. Chodos v. West Publ’g Co., 292 F.3d 992, 1003
(9th Cir. 2002) (“[W]hen a district court has already granted a plaintiff leave to
amend, its discretion in deciding subsequent motions to amend is particularly
broad.” (internal quotation marks omitted)). The district court previously granted
leave to file the First Amended Complaint after all briefing on T-Mobile’s
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judgment on the pleadings was complete, yet the First Amended Complaint did not
address the deficiencies raised in T-Mobile’s briefs. The proposed Second
Amended Complaint also does not appear to meaningfully address those
deficiencies.
AFFIRMED.
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