Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—M.D. Fla.: Excavation contractors’ unfair and deceptive trade practices claims against AT&T and BellSouth fail, (Mar 21, 2014)

By Linda O’Brien, J.D., LL.M.

In a class action suit by a group of excavation contractors against two telecommunication companies in relation to their billing and collection of certain charges when their telecommunications facilities were damaged, the contractors’ allegations of improper billing practices were insufficient to establish unfair or deceptive trade practices under state law, the federal district court in Jacksonville has decided. Thus, the contractors’ complaint was dismissed (James D. Hinson Electrical Contracting Co., Inc. v. AT&T Services, Inc., March 20, 2014, Corrigan, T.).

James D. Hinson Electrical Contracting, Blythe Development, and Callaway Grading are excavation contractors that have damaged underground and above ground telecommunications cables and equipment maintained by AT&T and BellSouth Telecommunications. When a telecommunications facility is damaged, the person or company responsible is sent a bill for the damage. The bill has a title “Claim for Damages” and includes charges for (1) claims processing; (2) loss of use; and (3) installation of markers to locate the facility in the future. If the bill is not paid, a demand letter is sent to the party responsible for the damages, which includes a statement authorizing a lawsuit to recover the bill.

The contractors filed a proposed class action suit against AT&T and BellSouth for violations of the North Carolina Unfair and Deceptive Trade Practices Act (NCUDTPA) and Florida Deceptive and Unfair Trade Practices Act (FDUTPA). Acknowledging that the telecommunications companies are entitled to recover their actual loss in repairing the damages to their facilities, the contractors challenged the companies’ charges for claims processing, loss of use, installation of markers, and other charges. The complaint claimed that their practice of billing and collecting charges that were not owed was unfair, misleading, and deceptive. AT&T and BellSouth moved for dismissal.

The court found that the contractors’ allegations of improper billing practices were insufficient to establish unfair or deceptive trade practices claims under either the NCUDTPA or FDUTPA. The Noerr-Pennington doctrine provides immunity from antitrust liability under the First Amendment for activities relating to the petitioning of public officials. The telecommunications companies argued that the bills were legitimate demands to resolve tort claims and, as such, are protected pre-litigation conduct immune from liability under the First Amendment. As pleaded, the contractors’ NCUDTPA and FDUTPA claims were based solely on the telecommunication companies’ bills, according to the court. The complaint provides details of the companies’ bills and billing practices, and alleges that the bills include improper charges. There were no other allegations beside the claimed improper billing practices that would constitute unfair or deceptive trade practices in violation of either the NCUDTPA and FDUTPA.

Additionally, the parties cited no authority in which a court considered similar documents under the Noerr-Pennington doctrine or First Amendment immunity. Citing the lack of direct legal guidance, the court granted the defendants’ motion to dismiss and allowed the contractors’ leave to amend their complaint.

The case is No. 3:13-cv-29-J-32 JRK.

Attorneys: Charles W. Surasky (Smith, Currie & Hancock, LLP), David Hagy (Law Office of David S. Hagy) and E. Lanny Russell (Smith, Hulsey & Busey) for James D. Hinson Electrical Contracting Co., Inc. Charles W. Surasky for Blythe Development Co., Callaway Grading, Inc. and Natl. Utility Contractors Assoc. Albert L. Frevola, Jr. (Conrad & Scherer, LLP) and Cindy D. Hanson (Kilpatrick Townsend & Stockton, LLP) for AT&T Services, Inc. and BellSouth Telecommunications, LLC.

Companies: James D. Hinson Electrical Contracting Co, Inc.; Blythe Development Company; Callaway Grading, Inc.; AT&T Services, Inc.; BellSouth Telecommunications, LLC

Cases: StateUnfairTradePractices FloridaNews