Vianu v. AT&T Mobility LLC

Background

Ian Vianu and Irina Bukchin had wireless-service contracts with AT&T Mobility LLC. They alleged that AT&T advertised flat-rate monthly wireless plans without disclosing the Administrative Fee before customers signed up, then added the fee to monthly bills. They alleged that AT&T’s billing descriptions misleadingly placed the fee with government-type surcharges even though AT&T described it as helping cover certain company expenses. The plaintiffs said they relied on the advertised prices, paid the fees, and continued to have AT&T plans.

The complaint asserted five California state-law claims: violations of California’s Unfair Competition Law, violations of the False Advertising Law, violations of the Consumers Legal Remedies Act, a claim for public-injunctive relief, and breach of the implied covenant of good faith and fair dealing. The first three claims and the fifth claim were class claims; the public-injunction claim was individual. The case was brought on behalf of the plaintiffs and a proposed class of similarly situated California consumers.

AT&T’s motion

AT&T moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint plausibly states a claim, and in part under Rule 12(b)(1), which concerns subject-matter jurisdiction. AT&T argued that:

Contractual 100-day deadline

The court held that the contract’s 100-day provision did not bar the claims. The court explained that the provision appeared in a contract of adhesion and was procedurally unconscionable. It also found that the plaintiffs plausibly alleged substantive unconscionability because they claimed AT&T charged a service-related fee under a flat-rate plan and presented it as a pass-through cost. The court contrasted this situation with an ordinary, readily apparent billing dispute. It noted that the 100-day provision did not prevent claims based on fees charged within 100 days of the lawsuit and did not bar the older claims either.

Statutes of limitations

The court held that the applicable three- or four-year statutes of limitations did not bar the claims because each monthly bill could trigger a new limitations period under California’s continuous-accrual doctrine. The court also held that whether customers were sufficiently alerted to the alleged deception was a factual question not suitable for resolution on a motion to dismiss.

The court rejected the plaintiffs’ separate argument that the discovery rule applied. That rule can postpone the start of a limitations period until a plaintiff discovers, or has reason to discover, the claim. The court held that the plaintiffs had received notice of the fee before it was imposed, received monthly notice afterward, and had access to AT&T’s website disclosure. They therefore had not adequately shown why they could not have discovered the alleged wrongdoing earlier.

The court also rejected the plaintiffs’ continuing-violation theory. It held that AT&T’s conduct was not a continuing violation, explaining that the alleged harms were discrete, independently actionable events rather than a wrongful course of conduct that became apparent only through accumulating harms.

Voluntary-payment doctrine

AT&T argued that the voluntary-payment doctrine barred monetary recovery under the Unfair Competition Law, False Advertising Law, and implied-covenant claims. The court treated the doctrine as a defense and declined to reach it at the pleading stage because the plaintiffs had plausibly alleged unfair and deceptive practices.

Reliance

The court held that the plaintiffs plausibly alleged reliance. It said reliance was not required for the “unfair” and “unlawful” portions of their Unfair Competition Law claims because those theories were not based on fraud. The court further held that the plaintiffs could plausibly allege reliance even though they knew about the fee when they renewed service, because they alleged that AT&T deceptively described the fee as a pass-through cost. The court treated that issue as a factual question inappropriate for resolution on a motion to dismiss.

Standing for injunctive relief

AT&T argued that the plaintiffs lacked standing to seek an injunction because they knew about the fee and therefore faced no future harm. The court rejected that argument at the pleading stage. The plaintiffs were current AT&T customers who allegedly were subject to long-term plans and penalties for ending service early. The court held that their allegations were sufficiently analogous to cases recognizing standing for previously deceived customers who might buy or renew in the future.

Disposition

The court denied the motion to dismiss except that it held the discovery rule did not apply and AT&T’s conduct was not a continuing violation. The order disposed of ECF No. 67 but did not dismiss the case on the remaining theories.