A non-Katrina-caused problem in New Orleans

Chiarella v. Sprint Spectrum LP, 2005 WL 3704505 (La.App. 4 Cir.)

Class certification in this consumer fraud case was reversed because, among other things, the representative plaintiffs had suffered too much harm to be truly representative – not something you see every day.

Plaintiffs alleged that Sprint had made false representations about the consistency and quality of service available in the New Orleans area – essentially, Sprint expanded into the area before it had the necessary switches and towers to provide the advertised service, so calls were constantly being dropped or failing to go through. Sprint’s statistics suggested that about 7% of calls were dropped or blocked in the relevant period. Plaintiffs, however, testified that 20-60% of their calls didn’t go through.

Many of the plaintiffs’ claims were preempted by federal law; when the FCC allowed Sprint to enter the New Orleans area, it necessarily determined that Sprint’s capacity was sufficient to justify the entry, and the Federal Communications Act bars state or local government from regulating entry or rates charged by any commercial mobile service. Granting relief on most of plaintiffs’ claims would necessarily be ruling that Sprint should have done more than was required by the FCC: providing more towers, clearer signals or lower rates. Breach of contract and false advertising claims, however, could be founded on the difference between what Sprint promised and what it delivered, which would not necessarily interfere with the FCC’s jurisdiction.

Class certification on those remaining claims, however, was improperly granted for a variety of reasons. The court first held that it could not assume that all of the Sprint subscribers in the area during the relevant period – the class as certified – were unhappy with their service, since some consumers would have experienced fewer than average lost calls. (This is a misdescription of the relevant standard; unhappy and defrauded are separate issues, and deception used to sell a product is deception even if the consumer does not complain.)

More in line with other cases denying class certification, the court also reasoned that common issues did not predominate, as the nature of the representations made to each plaintiff, and that plaintiff’s reliance, would have to be individually determined. Relatedly, appropriate damages would be difficult to determine, since each consumer suffered different blocked and dropped calls, and they would only have been charged extra if they’d been over their monthly minute plan and the system didn’t recognize a call as a dropped call for which no charge should be made. (Some of Sprint’s claims about difficulty of measuring harm seem disingenuous, including the idea that you’d have to add up the time of a dropped and a reconnected call to see if there was an extra minute charged – the conversation about the dropped call itself takes time and causes inconvenience – but apparently Sprint has no automated way of measuring who exceeds their monthly minute bundles, which seems a bit odd.)

Finally, as noted above, the court found that the class plaintiffs weren’t typical because, during the relevant time period, the system overall was experiencing 2%-3% dropped calls and 5%-9% blocked calls, whereas the five proposed representative parties who testified at the certification hearing reported dropped and blocked calls an order of magnitude greater. Three of the class representatives admitted that their experience was not “typical,” and all five had jobs that required a lot of travel around New Orleans.