Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Weinberg v. Sprint Corporation

July 22, 2002

MARTIN WEINBERG, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF-APPELLANT,
v.
SPRINT CORPORATION, DEFENDANT-RESPONDENT.



On certification to the Superior Court, Appellate Division.

SYLLABUS BY THE COURT

The issue before the Court is whether a private party must plead a claim of ascertainable loss that is capable of surviving a summary judgment motion in order to have standing to sue for injunctive relief under the Consumer Fraud Act (the Act).

Sprint Corporation is a national long-distance provider that advertises and provides services to New Jersey residents. Martin Weinberg is a residential telephone consumer of Sprint. In 1995, Weinberg filed a national class action lawsuit against Sprint on behalf of residential users of Sprint's long-distance telephone services, claiming that Sprint's national television commercials induced residential customers to use its long-distance services by employing deceptive, fraudulent, misleading, and /or false advertising and promotional practices. According to Weinberg, Sprint's advertisements were designed to misrepresent and conceal its practice of charging a full minute of telephone usage even if the caller was only connected for a few seconds. Weinberg alleges that the practice of "rounding-up" to the next highest minute is unconscionable, resulting in millions of dollars in excess billing. It is undisputed that Sprint's advertisements do not explain its practice of "rounding-up" when stating the per-minute charge.

Sprint's federally filed tariffs for its long-distance service during the relevant period stated that it charged "per-minute" rates. The record does not demonstrate that Sprint's practice was inconsistent with its filed tariff.

Weinberg's complaint alleges three causes of action: 1) common-law fraud by knowingly engaging in deceptive practices, misrepresentations, and material omissions in order to induce residents to unknowingly pay for call time they did not use; 2) consumer fraud in violation of the Act; and 3) negligent misrepresentation by negligently failing to inform consumers of its billing practices. Weinberg sought, among other things, injunctive relief, statutory damages under the Act, and compensatory and punitive damages.

In January 1996, Sprint removed the matter to the United States District Court for the District of New Jersey on preemption grounds. Weinberg then successfully removed the matter to State court. Following the remand, Weinberg moved for class certification and Sprint moved to dismiss the matter. The trial court dismissed the case in part, finding that the filed-rate doctrine precluded Weinberg's claim for monetary relief. The court did allow Weinberg's claim for injunctive relief to proceed. The court also granted class certification limited to residential long-distance customers in New Jersey.

At the conclusion of discovery, the parties filed cross-motions for summary judgment. The trial court granted Sprint's motion and dismissed the complaint. The court reasoned that Weinberg's claim for injunctive relief under the Act must fail because: 1) Sprint complied with FCC disclosure requirements, and 2) Weinberg could not demonstrate any genuine issue of material fact to support his claim of ascertainable loss as a result of Sprint's conduct. The trial court also dismissed Weinberg's claims for common-law fraud and negligent misrepresentation. On appeal, the Appellate Division affirmed substantially for the reasons expressed by the trial court, noting that Weinberg failed to demonstrate any ascertainable loss.

The Supreme Court granted certification.

HELD: To have standing under the Consumer Fraud Act, a private party must plead a claim of ascertainable loss that is capable of surviving a summary judgment motion. In such a case, even if the factfinder ultimately determines that the loss has not been proven, a private party may obtain injunctive relief under the Act, along with attorneys' fees, when unconscionable conduct is found to exist.

1. The filed-rate doctrine forbids a regulated entity to charge rates for its service other than those properly filed with the appropriate federal regulatory authority. Customers are conclusively presumed to have constructive knowledge of the filed tariff. Thus, even if the carrier intentionally misrepresents its rate and a customer relies on the misrepresentation, the carrier cannot be held to the promised rate if it conflicts with the published tariff. As such, the filed-rate doctrine bars money damages from telecommunications carriers where the damage claims are premised on state contract principles, consumer fraud, or other bases on which plaintiffs seek to enforce a rate other than a filed rate. (Pp. 7-13)

2. Before 1996, Sprint's FCC tariff revealed that it billed in "per-minute" increments. Therefore, Weinberg is precluded under the filed-rate doctrine from recovering money damages since he paid a rate that was consistent with the approved filed tariff. Weinberg's fraud claim also is barred because the filed-rate doctrine requires the conclusive presumption that Weinberg knew the filed rate. In addition, a reasonable consumer would not have been deceived into believing that he or she was being billed by the second, especially in view of the monthly billing statements. (Pp. 13-17)

3. Although the filed-rate doctrine may bar monetary relief, it does not by its terms bar injunctive relief. As originally enacted, the Act vested the Attorney General (AG) with exclusive authority to fight the increasingly widespread practice of consumer fraud. The Act was later amended to enable individual consumers to bring private actions to recover refunds and treble damages for violations of the Act. The addition of a private cause of action promoted several purposes, including victim compensation, punishment of the wrongdoer, and the attraction of competent counsel to fight consumer fraud. (Pp. 17-21)

4. The plain language of the Act unmistakably makes a claim of ascertainable loss a prerequisite for a private cause of action for victims of consumer fraud. However, that does not mean that only a plaintiff who successfully proves ascertainable loss may have access to the Act's remedies of equitable relief and attorney's fees. A plaintiff who reaches the factfinder on a claim of ascertainable loss and succeeds in proving an unlawful practice but does not succeed in proving damages should be eligible to recover attorneys' fees for bringing the action. Here, the courts below correctly dismissed Weinberg's monetary claims under the preclusion of the filed-rate doctrine. Weinberg failed to present a claim of ascertainable loss because operation of the filed-rate doctrine precluded him from any monetary damages. He had no lawful claim to have been charged any other rate and could present no genuine issue of fact on his assertion of loss. His claims for compensatory damages were also properly dismissed. Weinberg may not proceed solely on his claims for injunctive relief and attorneys' fees; accordingly, those remaining claims were properly dismissed. (Pp. 21-28)

Judgment of the Appellate Division is AFFIRMED.

JUSTICE VERNIERO, dissenting, in which JUSTICES STEIN and ZAZZALI join, would not rely on the filed-rate doctrine to dismiss Weinberg's consumer protection claims. In his view, the public policy behind the Consumer Fraud Act argues in favor of allowing those claims to proceed to trial. According to Justice Verniero, Sprint should not be permitted to benefit from the protections of the filed-rate doctrine given the content of its filed tariffs, which did not explicitly disclose its "round-up" practice. In addition, Justice Verniero would not apply a legal fiction whose future is dim, at best. Absent the doctrine, Weinberg likely has an ascertainable loss or at least is entitled to prove such a loss at trial. Furthermore, allowing the claim to proceed would be consistent with the Act's history of expanding consumer protection in these circumstances.

CHIEF JUSTICE PORITZ and JUSTICES COLEMAN and LONG join in JUSTICE LaVECCHIA'S majority opinion. JUSTICE VERNIERO filed a separate dissenting opinion in which JUSTICES STEIN and ZAZZALI join.

The opinion of the court was delivered by: LaVECCHIA, J.

Argued February 11, 2002

In Meshinsky v. Nichols Yacht Sales, Inc., 110 N.J. 464 (1988), the Court addressed the requirement that a private plaintiff sustain an ascertainable loss in order to bring a cause of action under the Consumer Fraud Act, N.J.S.A. 56:8-1 to -20 (Act). Meshinsky noted that the positions of a private plaintiff and the Attorney General are sharply different in that respect. "While the Attorney General does not have to prove that the victim was damaged by the unlawful conduct, N.J.S.A. 56:8-2, a private plaintiff must show that he or she suffered an 'ascertainable loss . . . as a result of' the unlawful conduct." Meshinsky, supra, 110 N.J. at 473 (citation omitted).

In this appeal plaintiff invites us to eliminate the statutory distinction between the standing of the Attorney General and a private plaintiff, and to allow a private injunctive action for consumer fraud irrespective of the plaintiff's ability to claim ascertainable loss. We reject the invitation to vitiate the distinction between the powers of the Attorney General and private plaintiffs under the Act. The distinction was drawn by the Legislature in unmistakable terms and we are not free to ignore the requirement of ascertainable loss as a predicate to a private cause of action for consumer fraud. Instead, we must construe that requirement reasonably and sensibly. We conclude that to have standing under the Act a private party must plead a claim of ascertainable loss that is capable of surviving a motion for summary judgment. In such a case, even if the factfinder ultimately determines that the loss has not been proven, a private plaintiff may obtain injunctive relief under the Act, along with attorneys' fees when unconscionable conduct is found to exist.

I.

Defendant Sprint Corporation is a national long-distance provider that advertises and provides services to New Jersey residents. Plaintiff Martin Weinberg is a residential telephone customer of defendant, and has been since 1983. In December 1995, plaintiff filed a national class action lawsuit against defendant on behalf of residential users of defendant's long- distance telephone services. Plaintiff claims that defendant's national television commercials induced residential customers to use its long-distance services by employing deceptive, fraudulent, misleading, and/or false advertising and promotional practices. Plaintiff contends that defendant's practices were designed to misrepresent and conceal its practice of charging a full minute of telephone usage even if the caller was connected for a few seconds. That practice of "rounding up" to the next highest minute is alleged to be an ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.