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A purported class action over a cellphone company’s service plan spent nearly five years in the courts before the U.S. Court of Appeals for the 9th Circuit asked the Supreme Court of Washington to advise on a legal question in the case. The case’s journey highlights a debate about the Class Action Fairness Act of 2005, which gives federal courts jurisdiction over controversies worth more than $5 million, or when any member of the proposed class is from a different state than any defendant. “When you have a case like mine being decided by the 9th Circuit that concerns nobody outside Washington, you’ve got a disconnect between the court making the decision and the court that should be making the decision,” said plaintiffs’ attorney Daniel Johnson. The 9th Circuit’s unanimous Jan. 24 panel order in Peck v. AT&T Mobility asked Washington state’s highest court to weigh in on a state law issue because there was no relevant state Supreme Court precedent. Circuit Judge Pamela Ann Rymer asked the state court whether Washington law allows a seller to recoup business and occupation taxes when it discloses to a buyer before it sells a monthly service contract that the company collects a surcharge to cover taxes. Circuit Judge N. Randy Smith and Senior District Judge Donald Walter from the Western District of Louisiana, who sat on the panel by designation, joined Rymer’s order. “Considering the substantial factual differences between the present case and Washington case law, it is not clear how the Washington Supreme Court would rule on this issue,” Rymer wrote. Senior U.S. District Judge Thomas Zilly ruled that defendant Cingular Wireless, now AT&T Mobility, did not violate Washington law by collecting its business and occupation taxes by applying a surcharge to customers’ bills. The length of time the case has been pending illustrates problems with the Class Action Fairness Act, said Johnson of Seattle’s Breskin, Johnson & Townsend, the plaintiffs’ lawyer in the case. “The problem that has resulted is that a lot of consumer cases that are state-specific are being decided in federal court,” Johnson said. “It’s an awkward situation for the development of the law and lawyers.” The plaintiffs’ lawyer filed the motion asking the 9th Circuit to certify the legal question to the Washington Supreme Court, so “it’s ironic that he would feel that the court granting his motion illustrates a problem with the CAFA,” said AT&T’s lawyer, Leonard Feldman, a Seattle Stoel Rives partner. “Regardless, CAFA is the law,” Feldman said. “It reflects the judgment of Congress that certain class actions should be in federal court and not state court. To the extent that any of those cases involve state law, supreme courts of just about every state in the country have these certification procedures.” The process of certifying questions hasn’t changed, Feldman added. “It has existed since diversity jurisdiction was created,” he said. “When state law is unclear, there’s a remedy for a federal court.” As for the 9th Circuit’s ruling, Feldman and his client were “pleased with the way the court has formulated the issue,” he said. “It shows that he court understands what is left to decide.” The complaint originally was filed in Washington state court in February 2006. Cingular removed it to federal court. A series of telecommunications company mergers changed the defendant’s name. The 9th Circuit issued its first ruling in the case in August 2008 — vacating the lower court’s dismissal, remanding and ruling that the Federal Communications Act did not pre-empt the appellant’s state law claims. The plaintiffs claim the cellphone company never disclosed to customers that they would be charged a “State B and O Surcharge” and was attempting to pass along a portion of its state tax to customers. The complaint alleges breach of contract, violation of the Washington Consumer Protection Act and unjust enrichment. It asks the court to declare that the company’s billing and collection of money for the business and occupation tax surcharge violates state law. They want the court to award the money class members have lost, expenses and attorneys fees and “treble, exemplary or punitive damages.” Sheri Qualters can be contacted at [email protected].

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