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Class plaintiffs’ claim that AT&T Wireless and Panasonic should have told purchasers their cell phones work only on AT&T’s network is not pre-empted by the federal regulation of the wireless industry because the government doesn’t regulate the technical “aspect” of cellular phones’ access to different networks, a Philadelphia judge has ruled. Rejecting defendants’ preliminary objections in Beckermeyer v. AT&T Wireless, Common Pleas Judge C. Darnell Jones II said they failed an “attempt to recast plaintiff’s claims into ones within the scope of federal responsibility.” AT&T and Panasonic contended that state-by-state regulation of wireless phones’ technological requirements would destroy the goals of federal regulation — uniformity and technological flexibility. “The basis of defendants’ implied preemption arguments is that the plaintiff seeks to modify the technical standards set forth by Congress and the [Federal Communications Commission],” Jones wrote. “This premise is faulty. Such technical aspects of the phone are not challenged by plaintiff.” No evidence proves the FCC has considered whether a cell phone’s “system operator code,” which is programmed to work on a particular carrier’s network, should be permanent or alterable, Jones observed. The judge overruled the defendants’ preliminary objections on the issue of implied and express federal preemption, but sustained objections to several other claims. Jones permitted only the breach of implied warranty claim brought under state law and the anti-tying and warranty-form claims brought under the federal Magnuson-Moss Warranty Act to go forward. Brandon Beckermeyer of King of Prussia, Pa., filed the lawsuit as a proposed class action in August 2002 after buying a Panasonic cell phone and discovering its programming was locked on AT&T’s network, preventing him from using another wireless service, according to the opinion. Beforehand, Beckermeyer told Nationwide Wireless — which sold him the phone — he didn’t intend to purchase wireless service from AT&T. But he was not told the phone would only work on AT&T’s network, according to the opinion. Beckermeyer contacted both AT&T and Panasonic, asking how he could unlock the phone’s programming code, and was told the phone couldn’t be reprogrammed to work on another carrier’s network. They refused to give his money back, according to the opinion. Beckermeyer’s claim revolves around his argument that no one told him his phone would be locked on one network. He argues that the system lock isn’t necessary to the functioning of the phone, noting that the system operator code on a Nokia phone used on the Cingular network is reprogrammable, according to the opinion. Generally, a phone sold to work on one wireless-signal network using “time division multiple access” technology can be programmed to work on the network of other time-division-multiple-access-based carriers, Jones explained. Thus, a Nokia cell phone using the technology could be programmed to work on Cingular’s network or on AT&T’s network by changing the phone’s system operator code, Jones said. Beckermeyer seeks damages and the companies’ disclosure of the phone’s locked system code, according to the opinion. “As no technological change is implicated by either the factual allegations or the desired relief, defendants’ implied preemption arguments fail,” Jones concluded. Jones also pushed aside the defendants’ express federal pre-emption arguments. The federal Communications Act says states cannot regulate the “entry of or the rates charged” by wireless service providers, but does not prohibit states from regulating “the other terms and conditions of commercial mobile services.” Although an award in Beckermeyer’s favor could have an impact on service rates, his challenge is not a direct assault on rates or market entry as described by the Communications Act, Jones reasoned. “To hold otherwise would exempt companies involved in wireless communications from every state law, regulation or court order that impacted their bottom line, which contravenes the plain language” of the Communications Act, Jones wrote. The FCC has recognized that wireless companies may be subject to damages for a non-disclosure under state law if they fail to inform consumers of material terms or limitations on the services they provide, Jones said. Mary Catherine Roper of Drinker Biddle & Reath represented AT&T, and Walter H. Swayze of Segal McCambridge Singer & Mahoney represented Panasonic. Plaintiff’s counsel was Neal A. Jacobs of the Jacobs Law Group and Mark R. Cuker of Williams & Cuker. The case is part of the Common Pleas Court’s commerce case management program.

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