Minnesota Ex Rel. Hatch v. Worldcom, Inc.

125 F. Supp. 2d 365, 2000 U.S. Dist. LEXIS 20218, 2000 WL 1886618
CourtDistrict Court, D. Minnesota
DecidedDecember 27, 2000
DocketCiv. 00-2065RHKJMM
StatusPublished
Cited by9 cases

This text of 125 F. Supp. 2d 365 (Minnesota Ex Rel. Hatch v. Worldcom, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Minnesota Ex Rel. Hatch v. Worldcom, Inc., 125 F. Supp. 2d 365, 2000 U.S. Dist. LEXIS 20218, 2000 WL 1886618 (mnd 2000).

Opinion

MEMORANDUM OPINION AND ORDER

KYLE, District Judge.

Introduction

This lawsuit arises out of Defendant Worldcom, Inc.’s (“WorldCom”) “Five Cents Everyday” advertising campaign for long distance telecommunication services, which included television spots featuring Michael Jordan and the Looney Tunes® cartoon characters. On July 20, 2000, the State of Minnesota, through its Attorney General (hereinafter “the State”), filed suit in Ramsey County District Court alleging that the “Five Cents Everyday” advertisements were false and deceptive, in violation of several state trade practice and consumer protection statutes. World-Com removed the State’s lawsuit to this Court on the grounds that the State’s Complaint is completely preempted to the extent that it challenges Worldcom’s federally filed tariffs for interstate long distance telecommunications services and the billing practices associated with those rates. 1 Presently before the Court is the State’s motion to remand this matter to state district court. For the reasons set forth below, the Court will grant the motion.

Background

I. Factual History

An individual can make long distance telephone calls in a variety of ways. (Compl. ¶ 9; Answer ¶ 9.) A consumer may, for example, subscribe to a long distance calling plan offered by a long dis *367 tance carrier such as WorldCom; that carrier is said to be the consumer’s “pre-subscribed” long distance carrier. (Id.) The consumer may further choose to have the presubscribed long distance carrier handle either interLATA long distance service, intraLATA long distance service, or both. 2 (Id.) When a consumer chooses to have the presubscribed carrier handle “interLATA” calls, that carrier will provide long distance for all of the consumer’s interstate long distance calls and all of the consumer’s intrastate long distance calls that cross LATA boundaries. 3 (Id.)

Beginning in August of 1999, WorldCom offered “Five Cents Everyday” interLATA calling plans. (Compl. ¶ 11; Answer ¶ 11.) Under the “Five Cents Everyday” calling plans, consumers pay five cents per minute on evening and weekend interstate calls. (Compl. ¶ 12; Answer ¶ 12.) WorldCom also charged consumers additional fees in connection with the “Five Cents Everyday” calling plans, including

* service charges of between $1.95 and $4.95 per month;
* “Carrier Access Charges” of $1.46 per month (discontinued by WorldCom on August 1, 2000);
* “Federal Universal Service Fees” calculated as a percentage of the consumer’s monthly interstate long distance charges; and
* under certain of the “Five Cent Everyday” calling plans, monthly minimum call charges.

(Compl. ¶ 13; Answer ¶ 13.) In addition, WorldCom charged Minnesota consumers between ten and twenty cents per minute for intrastate, interLATA long distance telephone calls, depending on the “Five Cents Everyday” calling plan to which the consumer had subscribed. (Answer ¶ 14; see also Compl. ¶ 14.)

WorldCom advertised its “Five Cents Everyday” presubscribed long distance calling plans by sending direct mail solicitations to Minnesota consumers and by frequent television advertisements broadcast in Minnesota. (Compl. ¶ 15; Answer ¶ 15.) WorldCom has sent direct mail advertisements to Minnesota consumers since at least March 2000. (Compl. ¶ 16; Answer ¶ 16.) WorldCom also broadcast several television advertisements in Minnesota promoting its “Five Cents Everyday” calling plans beginning in at least August 1999. (Compl. ¶ 18; Answer ¶ 18.)

II. Procedural History

In December of 1999, a group of officials from state Attorneys General offices met with WorldCom to discuss a resolution of the states’ concerns that Worldcom’s advertisements for its “Five Cents Everyday” calling programs were deceptive. (Cox Aff. ¶ 4.) When those negotiations fell through, the Attorneys General of Minnesota, California, Missouri, New Jersey, and Maine filed consumer protection lawsuits on July 20, 2000, against WorldCom. (Id.)

In its Complaint, the State alleges that Worldcom’s “Five Cents Everyday” advertisements have the capacity and tendency to deceive consumers or mislead them into believing that WorldCom will only charge a five-cent-per-minute rate for their long distance calls. (ComplA 15.) The State complains that WorldCom either fails to disclose or inadequately discloses the ma *368 terial terms of the “Five Cents Everyday” calling plans. (ComplJf 30-46.) The State further contends that, due to additional costs and limitations imposed by Worldcom, it is impossible for any consumer to realize the advertised per-minute rate on long distance telephone calls. (Comply 15.) The State claims that Worldcom’s advertising violates Minn.Stat. § 325F.67 (False Statement in Advertising Act); Minn.Stat. § 325D.44 (Deceptive Trade Practices Act); Minn.Stat. § 325F.69, subd. 1 (Prevention of Consumer Fraud Act); and Minn.Stat. § 237.662 (Notice and Disclosure Requirements of Long Distance Providers). (CompLIffl 47-61.) The State seeks declaratory and injunctive relief against World-Com, and an award of civil penalties, costs and fees. (CompLITO I-VT, VIII.) The State also seeks “restitution under the parens patriae doctrine, the general equitable powers of this Court, and any other authority for all persons subjected to Defendant’s acts described herein.” (CompLUVII.)

Worldcom denies that its advertising violates state law and asserts that the State’s claims are preempted by federal law and barred by the “filed rate” or “filed tariff” doctrine. (Answer at 8.) Worldcom timely removed the State’s lawsuit to this Court pursuant to 28 U.S.C. § 1441. 4 (Notice of Removal of Action (Doc. No. 1).) Worldcom asserts that this Court has original jurisdiction over the State’s Complaint pursuant to 28 U.S.C. §§ 1331, 1337 and 1368. 5 (Id.)

Analysis

I. Standard of Decision

Where a case has been removed from state court to federal court, “if at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). In applying § 1447(c), the federal courts have established a presumption in favor of state court jurisdiction.

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Bluebook (online)
125 F. Supp. 2d 365, 2000 U.S. Dist. LEXIS 20218, 2000 WL 1886618, Counsel Stack Legal Research, https://law.counselstack.com/opinion/minnesota-ex-rel-hatch-v-worldcom-inc-mnd-2000.