Steven Robertson v. Nextel West Corp.

396 F.3d 922
CourtCourt of Appeals for the Eighth Circuit
DecidedFebruary 1, 2005
Docket04-2276, 04-2285, 04-2295, 04-2298, 04-2303, 04-2313
StatusPublished
Cited by1 cases

This text of 396 F.3d 922 (Steven Robertson v. Nextel West Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Steven Robertson v. Nextel West Corp., 396 F.3d 922 (8th Cir. 2005).

Opinion

SMITH, Circuit Judge.

Steven Robertson et al. (the Robertson objectors) and other objectors appeal the district court’s settlement approval in this multidistrict litigation (MDL) conducted in the United States District Court. 2 The litigation arose out of billing disputes between wireless telephone service providers and their customers. Defendant Nextel Communications, Inc., et al. (Nextel), and named class plaintiffs Joseph A. Blando et al. (the Blando plaintiffs) eventually agreed to a nationwide class settlement and submitted the terms of the settlement to the district court for approval. Several parties to the MDL action filed objections to the nationwide settlement and the settlement procedure. The district court approved the settlement agreement and several objectors appealed. 3 We now affirm the district court’s approval of the nationwide class action settlement.

I. Background

Nextel, Cingular Wireless LLC (Cingu-lar), and Sprint Spectrum, L.P. (Sprint), as wireless service providers, charged their customers a “Federal Programs Cost Recovery” (FPCR) fee in order to maintain services mandated by federal law. The providers used the fee to pay for enhanced 911 capabilities (E911), wireless local telephone number portability (LNP), and telephone number pooling capabilities. *927 Federal regulation permits the wireless companies to recoup those costs associated with the services by charging customers a line-item fee. Nextel charged its customers these fees under a line item listed as “Tax, Fees, and Assessments.”

Several classes of plaintiffs in various states filed actions challenging Nextel’s re-coupment of the FPCR costs by this means. The plaintiffs essentially alleged that Nextel impermissibly disguised a rate hike as a tax, fee, or assessment. The Blando plaintiffs, who filed their action in Missouri state court, were on the forefront of this litigation. The Blando plaintiffs’ complaint included state law claims for unfair merchandising practices, unjust enrichment, and breach of contract. Nextel vigorously fought to remove these actions to federal court.

Nextel succeeded in removing the Blan-do action to the United States District Court for the Western District of Missouri. The Blando plaintiffs argued that the district court lacked subject matter jurisdiction, and filed a motion in the district court seeking a remand of the case to' state court. The district court did not rale on the Blando plaintiffs’ removal motion. While the case was pending, the Blando plaintiffs entered into settlement negotiations with Nextel. In the meantime, several other cases filed in various state courts were removed to federal court. Nextel motioned for consolidation pursuant to 28 U.S.C. § 1407. The Judicial Panel on Multidistrict Litigation ■ (JPML) created MDL-1559 finding that:

All MDL-1559 actions present common, complex legal and factual questions concerning the disclosure and/or propriety of line-item fees charged by wireless telephone service providers to customers for recovering the costs of complying with one or more federally mandated telecommunications programs. Plaintiffs challenge essentially the same billing conduct and seek relief on behalf of frequently commonly defined (if sometimes geographically separate) plaintiff classes.

At the time MDL-1559 was created, Blando v. Nextel had proceeded further than any of the other cases. Thus, the Western District of Missouri was called on to preside over MDL-1559. In Blando, a proposed settlement had been filed and Nex-tel moved for an injunction to stay all related federal and state actions pending approval of the settlement. 4

After MDL-1559 was formed, the Blan-do plaintiffs and Nextel settled all claims arising out of the FPCR fee on a nationwide class basis. To ensure the validity of the settlement, Blando filed an amended *928 complaint alleging a federal cause of action so as to make certain federal jurisdiction. The Blando plaintiffs and Nextel then submitted expert reports on the value the proposed settlement would provide to the class members. The district court conducted a fairness hearing and considered objections. After the fairness hearing, Nextel submitted additional evidence in camera upon the court’s request. Despite several objections, the district court approved the settlement.

The approved settlement creates two classes. Class A is defined as “current” Nextel subscribers who paid the FPCR fee during defined periods. Class A receives free Nextel services, including minutes, text messaging, and phone internet access. Class B is described as former Nextel subscribers who paid the FPCR fee during defined periods but terminated Nextel service prior to September 30, 2003. Because Class B members are no longer Nextel subscribers, they may receive cash reimbursement, a phone card, or a credit if they resubscribe to Nextel. The settlement also requires Nextel to disclose on its bills that the FPCR fee is not a tax but a fee that “Nextel elects to collect to recover its cost of funding and complying with Government mandates and initiatives.”

Following the settlement approval, several parties and objectors brought the instant appeal. For sake of clarity, the various parties to this appeal will be referred to by the name of the lead party or objector in the underlying suit.

II. Discussion

A. Jurisdiction

Daniels and Daniels, PA, et al. (the Daniels plaintiffs) now challenges the district court’s jurisdiction. The Daniels plaintiffs assert that the district court improperly assumed jurisdiction when the Blando plaintiffs essentially conceded jurisdiction in order to get the settlement approved. The district court below maintained jurisdiction in this case pursuant to 28 U.S.C. § 1331 as the plaintiffs filed suit under a federal statute, 47 U.S.C. §§ 201(b), 206, 207, challenging the rates charged by various wireless telephone carriers. Lack of subject matter jurisdiction cannot be waived by the parties or ignored by the court. Hunter v. Underwood, 362 F.3d 468, 476 (8th Cir.2004).

We hold jurisdiction was proper in the district court. The Blando plaintiffs initially filed their cause of action in Missouri state court relying solely on state law. Nextel succeeded in removing the case to federal district court based upon federal preemption. Initially, the Blando plaintiffs opposed the removal and sought to have the ease remanded to Missouri state court. Then, on the same day that the Blando plaintiffs filed a Motion for Preliminary Settlement Approval, they filed an amended complaint alleging violations of the Federal Communications Act (FCA) under 47 U.S.C.

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Bluebook (online)
396 F.3d 922, Counsel Stack Legal Research, https://law.counselstack.com/opinion/steven-robertson-v-nextel-west-corp-ca8-2005.