Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—11th Cir.: Remand of cellphone buyer’s claims against MetroPCS upheld, (Nov 17, 2014)

By Linda O’Brien, J.D., LL.M.

A federal district court properly granted a complaining consumer’s motion to remand to state court a Florida Deceptive and Unfair Trade Practices Act claim filed against a mobile telecommunications provider in relation to the amount of tax charged on cellphone purchase, the U.S. Court of Appeals in Atlanta has held (Porter v. MetroPCS Communications Inc., November 14, 2014, Per Curiam).

MetroPCS is a provider of prepaid wireless service and operates a mobile telecommunications network in the United States. Jorge Porter filed a putative class action suit in state court alleging that CAI International, an authorized MetroPCS retailer, overcharged customers in Florida who purchased Samsung Galaxy Indulge cellular telephones by charging tax on a pre-rebate purchase price. Porter asserted claims for false advertising and a violation of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA).

MetroPCS removed the action to the federal district court, asserting jurisdiction under the Class Action Fairness Act (CAFA). After the district court granted Porter’s motion to remand, MetroPCS appealed.

The district court did not err in granting Porter’s motion to remand because MetroPCS failed to establish the minimum amount in controversy. The CAFA created federal jurisdiction where the defendant shows that (1) any member of the plaintiff class is a citizen of a state different from the state of citizenship of any defendant, (2) the aggregate amount in controversy exceeds $5 million, and (3) the proposed plaintiff class contains at least 100 members. In estimating the amount placed in controversy, MetroPCS had asserted it total revenue in Florida during the class period and justifying that method as the grounds that rescission of contract was a form of relief available to the plaintiffs.

According to the court, in its notice of removal, MetroPCS’ revenue included the amount from service agreements that may be rescinded as a result of the litigation but also revenue received from the sale of cellular phones, other devices and accessories without any corresponding commitment to MetroPCS. Since there was no reason to suggest that any of the other revenue would be returned to customers if the class action succeeded on the merits, any assessment of what amount would be subject to rescission would be speculative absent any breakdown of MetroPCS’s revenue.

Similarly, MetroPCS’ inclusion of punitive damages, attorney fees, and compliance costs without any concrete amount would require the court to engage in speculation in order to calculate the amount in controversy. Any remaining amounts MetroPCS cited in its notice of removal were insufficient to establish the amount in controversy requirement contained in the CAFA.

The case is No. 14-14239.

Attorneys: Gonzalo Ramon Dorta (Dorta Law) for Jorge Porter. Michael Patrick Daly (Drinker Biddle & Reath, LLP), and Aaron Stenzler Weiss (Carlton Fields Jorden Burt, PA) for MetroPCS Communications Inc., and MetroPCS Florida, LLC. Manuel F. Fente (Law Offices of Manuel F. Fente, PA) for CAI International, Inc.

Companies: MetroPCS Communications Inc.; MetroPCS Florida, LLC; CAI International, Inc.

Cases: StateUnfairTradePractices Advertising AlabamaNews FloridaNews GeorgiaNews