Wisconsin court construes consumer protection acts broadly

MBS-Certified Public Accountants, LLC v. Wisconsin Bell Inc., --- N.W.2d ----, 2013 WL 238550 (Wis.App.), 2013 WI App 14

MBS initially lost its argument that the voluntary payment doctrine precluded its phone cramming claims against defendants. The state supreme court reversed and remanded because application of the voluntary payment doctrine would undermine the core purposes of the anti-cramming statute and remanded.  On remand, the court of appeals reinstated MBS’s various claims, including its general consumer protection law claim.

MBS alleged that defendants violated Wisconsin law by billing MBS in a false, misleading, or deceptive manner; by omitting information necessary to ensure that statements in the phone bills were not false, deceptive or misleading; and by billing MBS for services that it did not affirmatively order, and that were not required by law.  One of the relevant sections of the law, titled “Advertising and sales representations” bars any false, misleading or deceptive statement with regard to telecommunications services.  MBS stated a claim under this section because stating on a phone bill that a customer owes money for services the customer did not authorize is false. The law wasn’t limited to telecom providers who deal directly with customers, so if one defendant’s statements to Wisconsin Bell were false and that ended up harming MBS, there was a cause of action.  Defendants argued that bills weren’t “advertisements” or “sales representations,” but the title of a statutory section only matters if there’s ambiguity and the language actually used covered everything.  Similarly, the claim for violation of Wisconsin’s law against negative option billing or negative enrollment in telecom services survived. 

The trial court also dismissed the general state-law false advertising claim on the grounds that misleading bills weren’t advertisements or sales promotions. However, the court of appeals pointed out that the language of the statute is “extremely broad”:

No person . . . shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in this state, in a newspaper, magazine or other publication, or in the form of a book, notice, handbill, poster, bill, circular, pamphlet, letter, sign, placard, card, label, or over any radio or television station, or in any other way similar or dissimilar to the foregoing, an advertisement, announcement, statement or representation of any kind to the public . . . , which advertisement, announcement, statement or representation contains any assertion, representation or statement of fact which is untrue, deceptive or misleading.

The plain language of the law showed that statements could be actionable even in bills or other documents not traditionally considered ads.  Indeed, the statute lists “bill” as an example. (NB: I suspect this was another traditional/obsolete meaning of "bill." From the OED, “A written or printed advertisement to be passed from hand to hand (hence also called hand-bill), or posted up or displayed in some prominent place; a poster, a placard.” This doesn’t mean I disagree with the outcome.)  The law included documents “similar or dissimilar ” to the enumerated items, so long as they contain misrepresentations. Thus, phone bills that induced MBS to pay for services it did not authorize were among the prohibited misleading representations.

Defendants argued that MBS wasn’t the “public” because of its contractual relationship with Wisconsin Bell, but the crux of the lawsuit was that there was no contract in place with the defendants for the billed services at issue.  “[C]harges were billed to a party who had never agreed to pay for them in the hope of tricking that party into assuming a payment obligation.”  That was within the intended ambit of the law.  Nor did the voluntary payment doctrine bar the claims, since the doctrine was “at odds with the manifest purpose of the statute,” which was to bar a broad range of false statements and misrepresentations without requiring proof of common-law fraud.

The state-law little RICO claim also survived.