GR8 News for Mobile Carriers: District Court Lets Them Off the Hook In Text Messaging Case

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FWIW, AT&T, Sprint, T-Mobile, Verizon Wireless, and CITA—a wireless trade association—can def breathe a sigh of relief. On May 19, 2014, a federal judge from the Northern District of Illinois granted summary judgment in favor of the defendants, finding that plaintiffs had failed to put forth credible direct or circumstantial evidence of collusive action to increase prices on individual text messages. (BTW, if any of you are still paying text-by-text, I’ve got a great bridge you can buy).

This case, as you may recall, has been going on for, like, ever.  It has weathered two motions to dismiss and two trips up to the Seventh Circuit. Back in 2008, after some typically-probing Congressional hearings into text message pricing, plaintiffs brought suit, alleging that the defendants had entered into and implemented a continuing plot to fix, raise, maintain, and stabilize prices for text messaging service sold in the United States. OMG!

After the extensive Rule 12 (b)(6) practice and some apparently entertaining discovery, the carriers moved for summary judgment. The plaintiffs countered with a motion for an adverse inference and a spoliation motion. The plaintiffs had what they considered a “smoking gun,” an email from a T-Mobile employee “admitting” that the price increases were “collusive.” Ouch! But, as we all know, there are SMOKING GUNS and then there are, well, smoking guns, and this was, uh, the latter. The court determined that the person who wrote the e-missive was (no offense, if you’re reading this) too junior and removed from the guts of the alleged conspiracy to have any direct knowledge of the alleged collusive behavior. And the plaintiffs had utterly failed to tie the author to the alleged conspiracy. The court also found that the plaintiffs’ complaints about spoliation (thank you spell-check) were insufficient under Seventh Circuit law.

The court concluded that although plaintiffs had presented evidence indicating that executives from each company had met and conferred in meetings, there was simply no direct or circumstantial evidence that anything other than parallel action occurred. And, although each carrier increased its rates from (two to ten cents) up to exactly twenty cents during the same three year period, these carriers did not do so as part a coordinated, “lockstep” operation.

BRB? It remains to be seen whether the plaintiffs will get any traction this time from the Seventh Circuit, but we will certainly be watching.

 

Topics:  Federal Rule 12(b)(6), Popular, Price-Fixing, Text Messages, Texting, Wireless Industry

Published In: Antitrust & Trade Regulation Updates, Civil Procedure Updates, General Business Updates, Communications & Media Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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