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BROWN v. WASHINGTON/BALTIMORE CELLULAR
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United States District Court, District of Maryland, Southern Division
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Docket Number available at www.versuslaw.com
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Citation Number available at www.versuslaw.com
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July 20, 2000
MELISSA SHIPE BROWN
V.
WASHINGTON/BALTIMORE CELLULAR, INC., ET AL. MAJID MATINRAZM, ET AL. V. WASHINGTON/BALTIMORE CELLULAR LIMITED PARTNERSHIP, ET AL.
John Joseph Beins, Gaviett & Datt, Rockville, Seth D. Goldberg,
Seth D. Goldberg, PC, Washington, Dc, for Majid Matinrazm, Mojgan
Thelen, Individually and on behalf of all others similarly
situated, plaintiffs.
George D. Ruttinger, Crowell and Moring, Kent A. Gardiner,
Crowell & Moring, Llp, Washington, Dc, for Washington/Baltimore
Cellular Limited Partnership dba Cellular One
Washington/Baltimore,, aka The Cellular One Group ta Cellular
One, Washington/Baltimore Cellular, Inc., defendants.
The opinion of the court was delivered by: Chasanow, District Judge.
MEMORANDUM OPINION
Plaintiffs, wireless telephone subscribers, bring these two
class actions against Defendants Washington/Baltimore Cellular,
Inc., Washington/Baltimore Cellular Limited Partnership, and
Southwestern Bell Mobile Systems, Inc. (collectively known as
"Cellular One") to recover allegedly unlawful late fee charges.
Plaintiffs seek damages pursuant to United Cable Television v.
Burch, 354 Md. 658, 732 A.2d 887 (1999), in which the Maryland
Court of Appeals held that the legal rate of interest is six
percent unless otherwise provided by the General Assembly. Id.
at 683, 732 A.2d 887. But see MD. CODE ANN., COM. LAW II §
14-1315(f) (enacted April 25, 2000) (allowing late fees of either
(1) 1.5% per month of the amount due; or (2) $5 or 10% per month
of the amount due, whichever is greater, for a maximum of three
months). Plaintiffs originally filed these suits in Circuit Court
for Charles County (Brown) and Circuit Court for Montgomery
County (Matinrazm). Defendants removed the cases to this court
pursuant to 28 U.S.C. § 1331, and Plaintiffs now move to remand
to state court pursuant to 28 U.S.C. § 1447(c) for lack of
subject matter jurisdiction. Because the two cases present
identical issues of law, the court will address both in this
memorandum opinion. The issues are fully briefed, and the court
now rules pursuant to Local Rule 105.6. For the reasons stated
more fully below, the court will GRANT the motions to remand.
According to Defendants' notices of removal, this court has
jurisdiction over these cases pursuant to 28 U.S.C. § 1331, which
provides original jurisdiction in federal courts for all civil
actions arising under federal law. Although Plaintiffs'
complaints
set forth causes of action under state consumer protection laws,
state common law, and the state constitution, Defendants argue
that the Federal Communications Act of 1934 completely preempts
their claims.
Federal question jurisdiction is ordinarily determined by the
well-pleaded complaint rule, which provides that the federal
question must be "presented on the face of the plaintiff's
properly pleaded complaint" to establish jurisdiction.
Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct.
2425, 96 L.Ed.2d 318 (1987). One narrow exception to this rule is
the doctrine of complete preemption. The preemptive effect of a
federal statute may be 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."
Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65, 107
S.Ct. 1542, 95 L.Ed.2d 55 (1987); see Caterpillar, 482 U.S. at
393, 107 S.Ct. 2425 (the complete preemption corollary "is
applied primarily in cases raising claims preempted by § 301 of
the LMRA").
Section 332 of the Telecommunications Act provides that "No
State or local Government shall have 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." 47 U.S.C. § 332(c)(3)(A). In
these two cases, Plaintiffs challenge the validity of certain
late fee charges assessed on their cellular phone accounts.
Therefore, the question facing the court is whether late fees
constitute "rates charged" or "other terms and conditions" of
wireless telephone service. While Congress may have completely
preempted claims relating to rates, it has left regulation of
other terms and conditions to the states. This distinction has
guided other federal courts in deciding whether to remand
telecommunications cases to the state courts. Compare Sanderson,
Thompson, Ratledge & Zimny v. AWACS, Inc., 958 F. Supp. 947
(D.Del. 1997) (remanding claim of failure to disclose practice of
charging from initiation of call); Esquivel v. Southwestern Bell
Mobile Sys., Inc., 920 F. Supp. 713 (S.D.Tex. 1996) (remanding
claim of unlawful liquidated damages provision); American Inmate
Phone Sys., Inc. v. U.S. Sprint Communications Co., 787 F. Supp. 852
(N.D.Ill. 1992) (remanding claim for failing to waive phone
card surcharges as verbally promised) with In re Comcast
Cellular Telecomm. Litig., 949 F. Supp. 1193 (E.D.Pa. 1996)
(denying motion to remand claims of "rounding up" minutes
charged); Mellman v. Sprint Communications Co., 975 F. Supp. 1458
(N.D.Fla. 1996) (denying motion to remand claims that
telephone company discontinued special international rate after
inducing customer to choose company as carrier).
The court finds that late fees are not included in "rates" of
service, but rather are part of the "other terms and conditions"
of service. While rates of service reflect a charge for the use
of cellular phones, late fees are a penalty for failing to submit
timely payment.*fn1 Defendants argue that late fee charges are
completely preempted because a reduction in late fee charges will
result in an increase in rates. However, any legal claim that
results in an increased obligation for Defendants could
theoretically increase rates. For example, a claim of false
advertising could lead to an increased obligation to notify
customers of charges, which could in turn lead to an increase in
rates. Congress did not preempt all claims that would influence
rates, but only those that involve the reasonableness or
lawfulness of the rates themselves.
For the foregoing reasons, the court will grant the motions to
remand to Circuit Court.*fn2 A separate Order will be entered
for each case.
Opinion Footnotes
*fn1 According to the Burch court, late fees are a form of
liquidated damages for failure to pay bills on time. 354 Md. at
674, 732 A.2d 887.
*fn2 Plaintiffs in the Matinrazm case also request that the
court award costs and attorneys fees. Given the unsettled nature
of the law relating to this Order and the lack of evidence of bad
faith on the part of Defendants, the court will DENY this aspect
of the motion. See In re Lowe, 102 F.3d 731, 733 n. 2 (4th Cir.
1996); 28 U.S.C. § 1447(c) ("An order remanding the case may
require payment of just costs and actual expenses, including
attorney fees, incurred as a result of the removal.") (emphasis
added).
20000720
© 1992-2003 VersusLaw Inc.
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