Crain v. Lucent Technologies, Inc.

739 N.E.2d 639, 250 Ill. Dec. 876, 317 Ill. App. 3d 486, 2000 Ill. App. LEXIS 909
CourtAppellate Court of Illinois
DecidedNovember 14, 2000
Docket5-99-0514
StatusPublished
Cited by17 cases

This text of 739 N.E.2d 639 (Crain v. Lucent Technologies, Inc.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Crain v. Lucent Technologies, Inc., 739 N.E.2d 639, 250 Ill. Dec. 876, 317 Ill. App. 3d 486, 2000 Ill. App. LEXIS 909 (Ill. Ct. App. 2000).

Opinion

JUSTICE MAAG

delivered the opinion of the court:

Lucent Technologies, Inc., and AT&T Corporation (AT&T) (defendants) appeal from an order of the Madison County circuit court denying their motions to dismiss or stay the pending class action suit. On appeal, defendants claim that the circuit court erred in denying their motion to dismiss and alternative motion to stay the proceedings because (1) the plaintiffs action is preempted by federal law, (2) each claim is barred by the voluntary-payment doctrine, and (3) the claims should be referred to the Federal Communications Commission (FCC) pursuant to the doctrine of primary jurisdiction. Defendants also contend that the circuit court abused its discretion in denying their motion to dismiss brought pursuant to section 2 — 619(a)(3) of the Code of Civil Procedure (735 ILCS 5/2 — 619(a)(3) (West 1994)) because there was another action pending between the same parties for the same cause.

A brief summary of the historical background and the facts pertinent to the appeal are set forth as follows. The case comes on the tail end of numerous changes in the telecommunications industry. Advances in computer technology, a conclusion by the FCC that some aspects of the telecommunications industry would thrive on deregulation and free market competition, and the divestiture of the Bell Telephone system contributed significantly to the deregulation in the industry during the 1980s. Prior to the deregulation, telephone companies leased customer-premises equipment to customers who used its telephone services. Customer-premises equipment (CPE) includes telephones, modems, and terminal equipment located inside the customers’ homes. Lease charges for CPE were “bundled with” charges for telephone service into one flat fee. According to FCC regulations, the flat fee, referenced in the industry as a “tariff,” had to be approved by the state utility commission, the FCC, or both. Once approved, that rate was billed to all customers of that service. Telephone companies could not alter the rate without submitting a proposed new rate to and receiving approval from the authorizing commission.

In the past few decades, a number of vendors, other than telephone companies, began to produce and market telephone equipment with different options and features for sale to the public. Recognizing the increase in competition in the CPE market, the FCC concluded that telephone companies should also lease or sell CPE in a deregulated market. The FCC determined that CPE charges would be separated from the other charges for telephone service and removed from the tariff regulations. In order to accomplish a uniform deregulation of CPE, the FCC directed each state to unbundle and detariff CPE. The goal was to remove the leasing and sales of CPE from the control of the federal and state utility commissions and to allow the competitive market to regulate this product.

In furtherance of this goal, the FCC issued an implementation order that imposed some restrictions and established some requirements on the telephone companies for a period of two years. The FCC determined that a transitional period was necessary in order to ensure that AT&T would not take advantage of its dominant position in the CPE market to arrest the development of competition in that market. AT&T had acquired all of the residential CPE from the Bell Telephone system as part of the divestiture. The FCC required AT&T to notify customers of their option to continue leasing CPE equipment and required AT&T to offer CPE for sale or lease at set prices in order to ensure price stability during the transition period. The FCC retained jurisdiction over the CPE deregulation and monitored the telephone companies to ensure compliance with its program during this period. The FCC’s implementation plan provided that telephone companies would be free from its requirements and restrictions upon the expiration of the two-year transition period. This transition period began with the divestiture of the Bell Telephone system in 1984 and ended in 1986.

In September 1996, Donna Crain (plaintiff) filed a class action suit against defendants, alleging that defendants breached contracts with its customers, violated the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/2 (West 1994)) and the Uniform Deceptive Trade Practices Act (815 ILCS 510/2 (West 1994)), and owed restitution for money paid on voidable contracts. The gravamen of plaintiff’s complaint is that defendants engaged in deceptive, misleading, and contract-breaching practices with respect to the leasing and servicing of CPE.

Defendants filed a motion for judgment on the pleadings in which they argued that the action should be dismissed because it was preempted by federal law and was barred by the voluntary-payment doctrine. Alternatively, defendants argued that the allegations should be referred to the FCC pursuant to the primary-jurisdiction doctrine and the pending case dismissed or stayed. In a separate motion to dismiss brought pursuant to section 2 — 619(a)(3) of the Code of Civil Procedure, defendants argued that the circuit court should dismiss this case because there were other actions pending that involved the same parties and claims in a federal district court.

On March 10, 1999, the circuit court granted the motion for judgment on the pleadings, finding that the claims were preempted by federal law. Based upon its decision, the court found the remaining issues raised in the motions to be moot and denied them on that basis. Plaintiff filed a motion for reconsideration. Prior to the hearing, the FCC filed an amicus memorandum in which it stated that the court erred in inferring that the FCC intended to preempt state consumer-protection and contract laws.

Following a hearing on the motion for reconsideration, the circuit court vacated its prior order and denied defendants’ motion for judgment on the pleadings. In its July 2, 1999, order, the court found that plaintiffs claims could be pursued without posing an obstacle to the FCC’s goal of a competitive CPE market and held that the claims were not barred by preemption. Addressing those issues previously denied as moot, the court held that plaintiffs action was not barred by the voluntary-payment doctrine and that the action should not be stayed under the doctrine of primary jurisdiction. The court also denied defendants’ section 2 — 619(a)(3) motion to dismiss.

Before addressing the issues raised by defendants, we will take up plaintiffs motion challenging our jurisdiction to consider those issues in this interlocutory appeal. Plaintiff alleges that this court lacks jurisdiction over the issues raised in point II and point III of defendants’ brief because defendants failed to preserve those issues for review and because those issues are not proper subjects for review under Supreme Court Rule 307 (166 Ill. 2d R. 307). In point II, defendants contend that the circuit court erred in vacating its original order granting the motion for judgment on the pleadings on the ground of preemption. In point III, defendants argue that the court erred in vacating its original order granting the motion for judgment on the pleadings on the ground that plaintiffs claims were barred by the voluntary-payment doctrine.

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Bluebook (online)
739 N.E.2d 639, 250 Ill. Dec. 876, 317 Ill. App. 3d 486, 2000 Ill. App. LEXIS 909, Counsel Stack Legal Research, https://law.counselstack.com/opinion/crain-v-lucent-technologies-inc-illappct-2000.