Cottrell v. AT&T Inc.

Background

David Cottrell alleged that AT&T billed him for DirecTV Now after he expressly declined to purchase the service during a telephone call with AT&T customer service. He brought consumer-protection claims on behalf of a proposed class of similarly situated consumers.

Cottrell asked for permission to amend his complaint to add AT&T Services, Inc. and AT&T Mobility Services, LLC as defendants. AT&T did not oppose adding AT&T Services, which operated the call center involved in Cottrell’s interaction. AT&T opposed adding AT&T Mobility, arguing that Cottrell’s allegations did not plausibly connect that company to the alleged fraudulent charges or sales-incentive programs.

Leave to Amend

Federal Rule of Civil Procedure 15 generally requires courts to freely allow amendments when justice requires. One recognized reason to deny amendment is futility, meaning the proposed amendment could not support a viable claim even if accepted.

The court rejected AT&T’s futility argument at this stage. It treated Cottrell’s allegation that AT&T Mobility participated in creating sales-incentive programs as a factual allegation that had to be accepted for purposes of assessing the proposed amendment. The court stated that whether the alleged participation would ultimately support liability was a separate question that AT&T had not substantially addressed. It also stated that any pleading deficiency could, at most, support dismissal with leave to amend, and that the factual accuracy of Cottrell’s allegations was more suitable for summary judgment than for a challenge to the pleadings.

The court granted Cottrell’s motion for leave to amend, without prejudice to arguments AT&T might raise in a later motion to dismiss or at a later stage of the case. The court allowed Cottrell to file a new amended complaint addressing the defendants covered by his motion, but he could not add other claims or parties without further permission.

California Customer Records Act Claim

The proposed amended complaint would have included Cottrell’s claim under the California Customer Records Act, which the court had previously dismissed. The court noted that the earlier deadline for amending that claim had passed and that Cottrell’s proposed amendment added no new allegations concerning it.

The court therefore dismissed the California Customer Records Act claim with prejudice and denied Cottrell’s motion to the extent it sought permission to amend that claim. The court ordered that any further amended complaint could not include that claim.

Motion to File Under Seal

Cottrell also sought to file documents under seal solely because AT&T had designated them confidential. AT&T did not submit the required declaration establishing that all of the designated material was sealable.

The court denied Cottrell’s administrative motion to file under seal. It ordered Cottrell to file the documents publicly between March 22 and March 29, 2021, and reminded the parties of the requirements for any future sealing motions.

Disposition

The court’s order granted in part Cottrell’s motion for leave to amend, except as to the California Customer Records Act claim, which it dismissed with prejudice. The court denied Cottrell’s administrative motion to file under seal and ordered an amended complaint by March 31, 2021.