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Carroll v. Cellco Partnership

June 02, 1998

LARRY CARROLL, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF-RESPONDENT,
v.
CELLCO PARTNERSHIP, DEFENDANT-APPELLANT. CHRISTOPHER G. KUHN AND ROSALIND *FN1 TYMAN, ON BEHALF OF THEMSELVES AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS-RESPONDENTS,
v.
CELLCO PARTNERSHIP, DEFENDANT-APPELLANT.



Before Judges Dreier, Keefe and Wecker.

The opinion of the court was delivered by: Dreier, P.j.a.d.

[9]    Argued: April 21, 1998

Defendant Cellco Partnership appeals by leave granted from an interlocutory order granting plaintiffs' class certification. Plaintiff Larry Carroll and plaintiffs Christopher G. Kuhn and Rosalind Tyman filed two separate complaints against defendant. The actions were consolidated, and the court deemed Carroll's to be the operative complaint in which the other claims were subsumed. Plaintiffs moved for class certification, naming plaintiffs Carroll, Kuhn, and Tyman as class representatives. Defendant opposed the motion and itself unsuccessfully moved to stay discovery until resolution of the class issue. After a hearing based upon documents and oral arguments, the court granted the class certification in an order dated November 14, 1997. On defendant's motion, we granted leave to appeal.

After purchasing a cellular telephone in 1989, plaintiff Carroll subscribed to Bell Atlantic Mobile ("BAM") for cellular telephone services. Carroll questioned several charges after receiving the first monthly bills. Whenever he placed a call outside BAM's wireless telephone network, BAM charged a "landline" fee. Allegedly unbeknownst to Carroll, BAM also "rounded-up" calls in full minutes, a practice whereby customers were charged for calling time to the next full minute, and BAM measured the duration of each call from the time the "send" button was pressed until the last hang-up. In addition to these charges, Carroll opposed BAM's imposition of security pin codes which negated useful features of his telephone such as automatic redialing. But more frequently, Carroll complained about "dropped calls." As he moved around, Carroll often experienced an interruption of signals, thereby requiring him to redial and reconnect. Carroll called BAM at least once per billing period to receive credit for prematurely disconnected calls. Although BAM reimbursed Carroll for some of the dropped calls, he did not receive full credit.

Based upon these complaints, Carroll sued defendant, a Delaware partnership doing business as Bell Atlantic Mobile, formerly Bell Atlantic NYNEX Mobile, individually and on behalf of similarly situated customers. Carroll alleged three causes of action sounding in (1) unfair or deceptive practices in violation of the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq.; (2) common law fraud; and (3) common law negligent misrepresentation.

Carroll asserted that at the time he and other members of the class purchased cellular telephone services from defendant, they were not informed of potential problems. Instead, Carroll claimed he was led through defendant's advertising, marketing and promotional materials to believe that defendant offered quality and uninterrupted services. Carroll also maintained that through its sales literature, defendant intentionally misrepresented facts relating to its cellular telephone services and hidden billing practices, making it appear that defendant's services were more economical than the services of its competitors. In addition to class certification, Carroll sought a declaration that defendant's conduct was unlawful, damages, punitive damages, an order enjoining defendant from engaging in similar unlawful practices in the future, injunctive relief providing improvements in the delivery of cellular services and the right to terminate services without penalties, and attorney fees. Plaintiffs Kuhn and Tyman filed a nearly identical complaint. After receiving their first bills from Bell Atlantic NYNEX Mobile (BAN Mobile), Kuhn and Tyman discovered charges which they claim had not been disclosed to them when they signed up for cellular telephone services. Like Carroll, Kuhn and Tyman objected to the landline fees, "send to end" charges, BAN Mobile's practice of rounding-up fractions of calling time to the next full minute, and frequent "drop-offs." They claimed that in subscribing to BAN Mobile's cellular telephone services, they and other class members reasonably relied upon the misrepresentations and omissions of material facts by defendant.

In his deposition, Kuhn individually complained about BAN Mobile's promise of thirty free minutes of calling time per month. Based on promotional materials, Kuhn believed that he would receive thirty free minutes with his cellular phone service and that a feature on the telephone allowed customers to calculate how many free calling minutes remained. However, because BAN Mobile charged customers from the time they pressed the send button to the time the call disconnected, the thirty free minutes were severely reduced. At the time of his deposition, Kuhn did not have any individual claims related to pin codes or detection of cellular fraud for which he was seeking damages.

In opposing class certification, defendant argued there were no common questions of law or fact shared by the many putative plaintiffs, and that class certification prevented defendant from exploring the individual claims of such finite plaintiffs as may assert they were defrauded. Despite these claims, the court found that the proposed class of "all persons who purchased BAN Mobile and/or BAM cellular telephone service since February 1, 1990 other than defendant and members of the defendant's dealer network as well as its partners, their respective directors and officers, and members of the immediate families of those directors and officers," with the exception of a sub-class whose agreements adequately disclosed the practice of "rounding up," satisfied the requirements of R. 4:32-1. The court therefore granted certification, noting that adjustments to the class and sub-class may be required following discovery.

In its oral opinion, the court reasoned that class certification was warranted because the class was so numerous that joinder of all members was inappropriate and impractical. The court went on to hold that there were questions of law and fact common to the class, the claims of the representative parties were typical, and that the representative parties would fairly and adequately protect the interests of the class. Finally, the court stated that a class action would be "far superior to any individual actions by persons allegedly aggrieved by the defendant's conduct."

I.

Defendant first challenges the court's Conclusion that the requirements of R. 4:32-1(b)(3) were satisfied. Defendant points to the lack of in-depth analysis explaining why questions of law or fact common to the class members predominated over questions affecting individual members. As an example of the trial Judge's inadequate findings, defendant notes the court's conclusory statements that the existence of different choice of law provisions would not preclude class certification in New Jersey and that any conflicts in state laws could be addressed later. To bolster its claim, defendant stresses several issues of law and fact that the court overlooked, such as the varying clauses in the different customer contracts used in each region, the inclusion of arbitration requirements in many forms of cellular agreements, the selective application of landline fees in different regions, the individual sales conversations that led to the purchase of defendant's cellular telephone services, the varying advertising to which each of the millions of potential plaintiffs were exposed, the imposition of tariffs in some states barring class members' claims as a matter of law, and finally, the differences in state laws on the issues of fraud and negligent misrepresentation.

The pivotal question here is the nature of the inquiry that a court must undertake in determining predominance. Rule 4:32-1 provides the answer. Rule 4:32-1 states:

(a) General Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

(b) Class Actions Maintainable. An action may be maintained as a class action if the prerequisites of paragraph (a) are satisfied, and in addition:

....

(3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The factors pertinent to the findings include: first, the interest of members of the class in individually controlling the prosecution or defense of separate actions; second, the extent and nature of any litigation concerning the controversy ...


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