Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—MDLa: Louisiana Unfair Trade Practices Act Does Not Exempt Claim Against Public Utility for Failure to Pay Utility Pole Rental Fees, (Jan 16, 2013)

By Tobias J. Gillett, J.D., LLM.

An owner of utility poles can proceed with a Louisiana Unfair Trade Practices Act (LUPTA) claim against BellSouth Telecommunications LLC because LUPTA does not exempt a public utility like BellSouth in a dispute over an alleged failure to pay appropriate rental fees for the poles, the federal district court in Baton Rouge has ruled (Dixie Electric Membership Corp. v. AT&T, January 14, 2013, Trimble, J.).

The owner of the utility poles, Dixie Electric Membership Corporation (DEMCO), filed suit against BellSouth Telecommunications, LLC, alleging that BellSouth had failed to accurately report the number of DEMCO’s poles to which BellSouth had attached cables, resulting in inadequate payment of DEMCO’s annual rental fees. DEMCO asserted a claim under LUPTA, among other claims.

BellSouth argued that LUPTA expressly exempted claims against public utilities subject to the jurisdiction of the Louisiana Public Service Commission (LPSC) from its coverage. The court explained that the LUPTA stated that its provisions did not apply to “actions or transactions subject to the jurisdiction of the Louisiana Public Service Commission or other public utility body.”

Although it admitted that the LPSC had authority to regulate the terms and conditions of a pole attachment contract, DEMCO contended that the case involved unfair trade practices in violation of LUPTA, not a rate or term subject to regulation by the LPSC, and hence the particular claim in its lawsuit would not be exempted.

The court agreed with DEMCO. Because the case “involve[d] a contract wherein BellSouth allegedly failed to pay appropriate rental fees” rather than “an action to regulate the rates, terms and conditions of a pole attachment contract,” LUPTA did not exempt DEMCO’s claim. The court cited the Third Circuit’s 1988 opinion in Gulf States Utilities Co. v. Delcambre Telephone Co., 527 So.2d 45, which had held that the LPSC did not have jurisdiction over a claim for money damages arising out of unpaid use of a utility company’s poles.

Since the LUPTA did not exempt DEMCO’s claim, the court declined to dismiss it. The court also refused to dismiss a fraud claim under Louisiana law.

The case is Docket No. 12-078.

Attorneys: James Leeper Ellis (Taylor, Porter, Brooks & Phillips) for Dixie Electric Membership Corp. James F. Perot, Jr. for BellSouth Telecommunications, LLC.

Companies: Dixie Electric Membership Corp.; BellSouth Telecommunications, LLC.

Cases: StateUnfairTradePractices LouisianaNews