Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-04785/USCOURTS-cand-3_14-cv-04785-4/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:53(b) - Prelim &amp; Perm Inj Relief &amp; other Equitable Relief

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United States District Court

For the Northern District of California

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 As indicated below, AT&T provides both mobile voice services and mobile data services. 

The FTC’s complaint concerns only the provision of mobile data services.

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

FEDERAL TRADE COMMISSION,

Plaintiff,

v.

AT&T MOBILITY LLC,

Defendant.

___________________________________/

No. C-14-4785 EMC

ORDER DENYING DEFENDANT’S

MOTION TO DISMISS

(Docket No. 29)

The Federal Trade Commission (“FTC”) has filed suit against Defendant AT&T Mobility

LLC (“AT&T”), asserting that AT&T has engaged in acts or practices, in connection with the

marketing of mobile data services,1

 that violate 15 U.S.C. § 45(a). Section 45(a), which is part of

the Federal Trade Commission Act of 1914 (“FTC Act”), provides in relevant part: “The

Commission is hereby empowered and directed to prevent persons, partnerships, or corporations,

except . . . common carriers subject to the Acts to regulate commerce . . . , from using . . . unfair or

deceptive acts or practices in or affecting commerce.” 15 U.S.C. § 45(a)(2).

Currently pending before the Court is AT&T’s motion to dismiss. AT&T argues that it

cannot be held liable for a violation of § 45(a) because it enjoys an exemption under the statute as a

“common carrier[] subject to the Acts to regulate commerce.” Id. Having considered the parties’

briefs and accompanying submissions, the Court hereby DENIES AT&T’s motion.

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I. FACTUAL & PROCEDURAL BACKGROUND

In its complaint, the FTC alleges as follows.

“[AT&T] is a major retailer of smartphones and provider of wireless broadband internet

access service for smartphones (‘mobile data’).” Compl. ¶ 9. In 2007, AT&T was the exclusive

mobile data provider for the Apple iPhone. Initially, AT&T offered iPhone customers an

“unlimited” mobile data plan. See Compl. ¶ 10.

In 2010, AT&T stopped offering the unlimited mobile data plan to new smartphone

customers and instead has required such customers to purchase one of its “tiered” mobile data plans

(where customers who exceed the stated data allowance are charged for the additional data at the

rate set forth in the tiered mobile data plan). See Compl. ¶ 11. Old customers, however, were

grandfathered – in essence, to ensure that they would not switch mobile data providers. See Compl.

¶¶ 12-13.

In July 2011, AT&T 

decided to begin reducing the data speed for unlimited mobile data

plan customers, a practice commonly known as “data throttling.” 

Under [the] throttling program, if an unlimited mobile data plan

customer exceeds the limit set by [AT&T] during a billing cycle,

[AT&T] substantially reduces the speed at which the customer’s

device receives data for the rest of that customer’s billing cycle.

Compl. ¶ 15.

The speed reductions and service restrictions in effect under [the]

throttling program are not determined by real-time network congestion

at a particular cell tower. Throttled customers are subject to this

reduced speed even if they use their smartphone at a time when

[AT&T’s] network has ample capacity to carry the customers’ data, or

the use occurs in an area where the network is not congested. 

Compl. ¶ 26. Moreover, “[AT&T] does not throttle its tiered mobile data plan customers, regardless

of the amount of data that a tiered mobile data plan customer uses.” Compl. ¶ 29.

According to the FTC,

[AT&T] has numerous alternative ways to reduce data usage on its

network that does not involve violating its promise to customers. One

alternative would involve [AT&T] requiring existing unlimited data

customers to switch to a tiered data plan at renewal. . . . Another

alternative would involve [AT&T] introducing its throttling program

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at renewal, with disclosures at point of sale. . . . Yet other alternatives

might include limited, narrowly tailored throttling programs that are

consistent with Defendants’ contracts, advertising, and other public

disclosures.

Compl. ¶ 28.

But “[AT&T’s] wireless customer agreements do not state that an unlimited mobile data plan

customer’s use of more than a specified amount of data is prohibited activity.” Compl. ¶ 32. Also,

at the time of renewal, AT&T does not tell its unlimited mobile data plan customers about the

throttling program. See Compl. ¶ 34. Disclosures about the throttling program have been limited –

e.g., in a monthly bill sent prior to renewal, in a text message, and/or in an e-mail. See Compl. ¶¶

33-37 (noting that only a minority of customers were sent a text message and/or e-mail). These

disclosures, however, were not adequate. For example, the monthly

statement failed to disclose the degree to which the customers’ data

speed would be reduced, and the impact that the reduced speed would

have on customers’ ability to use their device. It also failed to

adequately disclose that the speed reduction was due to a limit

intentionally imposed by [AT&T], as opposed to general network

congestion.

Compl. ¶ 35.

Based on, inter alia, the above allegations, the FTC has brought two claims pursuant to 15

U.S.C. § 45(a) which prohibits, inter alia, “unfair or deceptive acts or practices in or affecting

commerce.” 15 U.S.C. § 45(a)(2). In Count I, the FTC asserts that AT&T’s throttling program is

unfair because AT&T “entered into numerous mobile data contracts that were advertised as

providing access to unlimited mobile data, and that do not provide that [AT&T] may modify,

diminish, or impair the service of customers who use more than a specified amount of data for

permissible activities.” Compl. ¶ 45. In Count II, the FTC maintains that AT&T has engaged in

deceptive conduct because it does not disclose or fails to adequately disclose that “it imposes

significant and material data speed restrictions on unlimited mobile data plan customers who use

more than a fixed amount of data in a given billing cycle.” Compl. ¶ 49. In short, the gravamen of

the FTC’s complaint is not AT&T’s practice of throttling per se, but AT&T’s deceptive conduct in

failing to disclose its throttling to certain customers. 

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II. DISCUSSION

A. Legal Standard

AT&T has moved to dismiss on the basis that it is exempt from § 45(a) as a “common

carrier[] subject to the Acts to regulate commerce.” 15 U.S.C. § 45(a)(2). In its opening brief,

AT&T styled its motion as one made pursuant to Federal Rule of Civil Procedure 12(b)(1), i.e., for

lack of subject matter jurisdiction. In its opposition, the FTC counters that the motion is

appropriately brought under Rule 12(b)(6), not 12(b)(1), because AT&T is challenging only “the

scope of the FTC’s statutory authority.” Opp’n at 2 n.1.

Whether the pending motion to dismiss is technically predicated on Rule 12(b)(1) or on

12(b)(6) is not material in this instance. Neither party has asserted that the choice of rule affects the

disposition of the motion. Nor can the Court divine a difference in result here. Even assuming that

Rule 12(b)(1) were to govern, AT&T is making a facial challenge to jurisdiction, and not a factual

one. See Lacano Invs., LLC v. Balash, 765 F.3d 1068, 1071 (9th Cir. 2014) (indicating that a

jurisdictional attack can be facial or factual; in the former circumstance, all of the factual allegations

in the complaint are taken as true and extrinsic evidence such as documents attached to a complaint

may be considered). Given such a challenge, the standard is governed essentially by a Rule

12(b)(6)-type inquiry.

While the exact procedural posture is not dispositive, the Court acknowledges that recent

action taken by another administrative agency, namely, the Federal Communications Commission,

may impact this case. More specifically, the Federal Communications Commission recently made

the decision to reclassify mobile data service from a non-common carriage service to a common

carriage service. Because this “Reclassification Order” has not yet taken effect, the Court addresses

first the merits of the issues raised in the parties’ initial briefs. Only after assessing the merits of

these issues does the Court turn to the effect of the Reclassification Order on this action. 

B. Statutory Construction

As stated above, AT&T argues that it cannot be held liable for a violation of § 45(a) because

of an exception in the statute for “common carriers subject to the Acts to regulate commerce.” 15

U.S.C. § 45(a)(2). The full text of § 45(a) is as follows: 

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The Commission is hereby empowered and directed to prevent

persons, partnerships, or corporations, except banks, savings and loan

institutions described in section 18(f)(3) [15 U.S.C. § 57a(f)(3)],

Federal credit unions described in section 18(f)(4) [15 U.S.C. §

57a(f)(4)], common carriers subject to the Acts to regulate commerce, air carriers and foreign air carriers subject to the Federal Aviation Act

of 1958 [49 U.S.C. § 40101 et seq.], and persons, partnerships, or

corporations insofar as they are subject to the Packers and Stockyards

Act, 1921, as amended [7 U.S.C. § 181 et seq.], except as provided in

section 406(b) of said Act [7 U.S.C. § 227(b)], from using unfair

methods of competition in or affecting commerce and unfair or

deceptive acts or practices in or affecting commerce.

15 U.S.C. § 45(a)(2) (emphasis added). The term “Acts to regulate commerce” is defined as the

Interstate Commerce Act of 1887 and the Communications Act of 1934, as well as all amendments

and supplements thereto. See id. § 44. When § 45(a) was first enacted as part of the FTC Act in

1914, “Acts to regulate commerce” meant only the Interstate Commerce Act because the

Communications Act had not yet been passed. 

The Interstate Commerce Act was “[t]he first federal regulation to impose duties on common

carriers” and “applied to ‘any common carrier or carriers’ engaged in the railroad transportation of

people or property interstate.” FTC v. Verity Int’l, Ltd., 443 F.3d 48, 57 (2d Cir. 2006). “In 1910,

Congress passed the Mann-Elkins Act, which amended the [Interstate Commerce Act] to apply to

interstate telephone companies and to deem such companies common carriers.” Id. “Regulation of

telephone common carriers continued to rest with the [Interstate Commerce Commission] until

1934, when Congress passed the Communications Act of 1934.” Id.; see also Verizon Comms., Inc.

v. FCC, 535 U.S. 467, 478 n.3 (2002) (noting that “[f]ederal regulation in the area had previously

been undertaken incidentally to general interstate carrier regulation under the Interstate Commerce

Act”). When § 45(a) was amended in 1938, one of the amendments made was to re-define “Acts to

regulate commerce” to include the Communications Act.

The basic dispute between the parties is over the scope of the common carrier exception. 

According to AT&T, it falls within the scope of the exception because the exception applies so long

as an entity has the “status” of a common carrier. In other words, under AT&T’s position, if an

entity has the status of a common carrier, it cannot be regulated under § 45(a) at all, even when it is

providing services other than common carriage services. The FTC disagrees with this interpretation

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of § 45(a). According to the FTC, it is not just status that matters, but also the “activity” in question. 

That is, the common carrier exception applies only if an entity has the status of a common carrier

and is actually engaging in common carriage services. Thus, under the FTC’s view, an entity can be

regulated under § 45(a) even if the entity is a common carrier so long as it is the entity’s noncommon carriage services that are being regulated.

The basic issue for the Court is one of statutory construction. Statutory construction begins,

of course, with the language of the statute. See, e.g., Caraco Pharm. Labs., Ltd. v. Novo Nordisk

A/S, 132 S. Ct. 1670, 1680 (2012) (noting that statutory construction begins “‘with the language of

the statute itself’”); United States v. Byun, 539 F.3d 982, 991 (9th Cir. 2008) (indicating that

ordinary tools of statutory construction include the language of the statute, the statute’s legislative

history, and the “practical effects to the extent necessary to illuminate the meaning of the plain

language”). Here, § 45(a) carves out an exception for “common carriers subject to the Acts to

regulate commerce,” which includes the Communications Act. 15 U.S.C. § 45(a)(2). AT&T argues

that this language, on its face, weighs in its favor because: (1) AT&T is a common carrier – i.e., for

mobile voice services – even if it does also provide non-common carriage services such as mobile

data; and (2) AT&T is subject to the Communications Act, being regulated in fact not just for its

common carriage services (mobile voice) under Title II of the act but also for its non-common

carriage services (mobile data) under Title III of the act.

The problem with AT&T’s argument is it glosses over what is meant by “common carrier” in

the first place. Nowhere in the FTC Act is the term “common carrier” defined. Given that fact, the

Court deems it appropriate to consider what the term “common carrier” meant at the time the FTC

Act was enacted in 1914. Notably, that is the approach that the Second Circuit took in a decision

addressing the common carrier exception in § 45(a). See Verity, 443 F.3d at 57-58 (“decid[ing] to

give meaning to ‘common carrier’ in the FTC Act according to the ordinary sense of the word when

Congress used it to create the exemption”). 

As the FTC points out, prior to the enactment of the FTC Act, an entity was deemed a

common carrier and regulated as such under the common law only where it was actually engaged in

common carriage services. For example, in Santa Fe, Prescott & Phoenix Railway Co. v. Grant

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2

 At the hearing, AT&T argued that, when the FTC Act was enacted, times were “simpler” in

that common carriers (such as railroads) were single purpose entities that engaged in common

carriage activity only. But the cases cited above show that that was not the case. For instance, a

common carrier could engage in private transportation. See R.R. Co., 84 U.S. at 377 (“For example,

if a carrier of produce, running a truck boat between New York City and Norfolk, should be

requested to carry a keg of specie, or a load of expensive furniture, which he could justly refuse to

take, such agreement might be made in reference to this taking and carrying the same as the parties

chose to make . . . .”). Also, a common carrier might be involved in a completely different line of

business. See, e.g., Interstate Commerce Commission v. Goodrich Transit Co., 224 U.S. 194, 205

(1912) (noting that a common carrier also operated two amusement parks “and in connection

therewith owns, operates and derives revenue from lunch stands, merry-go-rounds, bowling alleys,

bath houses, etc., and collects admission fees from people entering the parks”).

3

 It is appropriate to consider the Interstate Commerce Act here for at least two reasons. 

First, the Interstate Commerce Act was “[t]he first federal regulation to impose duties on common

carriers.” Verity, 443 F.3d at 57. Second, the Interstate Commerce Act was expressly referenced in

§ 45(a) at the time it was enacted.

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Brothers Construction Co., 228 U.S. 177 (1913), the Supreme Court noted that “[t]he great object of

the law governing common carriers was to secure the utmost care in the rendering of a service of the

highest importance to the community” and, therefore, a “common carrier in the prosecution of its

business as such is not permitted to drop its character and transmute itself by contract into a mere

bailee with right to stipulate against the consequences of its negligence.” Id. at 184-85 (emphasis

added). The Supreme Court added that “this rule has no application when a railroad company is

acting outside the performance of its duty as a common carrier.” Id. at 184-85 (emphasis added); see

also R.R. Co. v. Lockwood, 84 U.S. 357, 377 (1873) (stating that “[a] common carrier may,

undoubtedly, become a private carrier, or a bailee for hire, when, as a matter of accommodation or

special engagement, he undertakes to carry something which it is not his business to carry”).2

 

Prior to the enactment of the FTC Act, common carriers were viewed in a similar way for

purposes of the Interstate Commerce Act.3

 For instance, in Interstate Commerce Commission v.

Goodrich Transit Co., the Supreme Court concluded that the Interstate Commerce Commission had

authority to require a system of accounting for a common carrier, even though “the accounts

required to be kept are general in their nature and embrace business other than such as is necessary

to the discharge of the duties in carrying passengers in freight in interstate commerce [e.g.,

amusement parks]”; but the Supreme Court also indicated that those non-common carriage “affairs

[were otherwise] not within [the Commission’s] jurisdiction.” Goodrich Transit, 224 U.S. at 211-12

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 Because of its analysis above, the Court need not entertain the FTC’s additional argument

that “common carriers subject to the Acts to regulate commerce” necessarily incorporates by

reference the totality of the Communications Act, which defines common carriers as turning on

whether the entity is actually engaging in common carriage services. See 47 U.S.C. § 332(c)(1)-(2)

(providing that “[a] person engaged in the provision of a service that is a commercial mobile service

shall, insofar as such person is so engaged, be treated as a common carrier for purposes of this Act”

and further that “[a] person engaged in the provision of a service that is a private mobile service

shall not, insofar as such person is so engaged, be treated as a common carrier for any purpose under

this Act”); see also 47 U.S.C. § 153(51) (defining the term “telecommunications carrier” as “any

provider of telecommunication services” and further providing that “[a] telecommunications carrier

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(emphasis added); see also Kansas City S. R. Co. v. United States, 282 U.S. 760, 764 (1931) (citing

Santa Fe in support of the statement that “[t]here is no doubt that common carriers subject to the

Interstate Commerce Act may have activities which lie outside the performance of their duties as

common carriers and are not subject to the provisions of the Act”).

Thus, as the FTC argues, at the time the FTC Act was enacted, the term “common carrier”

encompassed not only a “status” but also an “activity” component: An entity was deemed a common

carrier when it had the status of common carrier and was actually engaging in common carriage

services. 

Moreover, even if there were some doubt that “common carrier” was to be so understood, the

broader phrase used in § 45(a) for the common carrier exception must be taken into account. 

Section 45(a) refers to an exemption for “common carriers subject to the Acts to regulate

commerce.” 15 U.S.C. § 45(a)(2) (emphasis added). This language can fairly be read to mean that

the exemption applies only when the common carrier is subject to regulation as such. Cf. Verity,

443 F.3d at 57 (stating that Congress created the common carrier exemption because it “did not

intend the FTC to enforce unfair-competition law against common carriers because the ICC already

regulated common carriers under the Interstate Commere Act”). As indicated by the case law

discussed above, an entity was subject to regulation as a common carrier only when it was actually

engaging in common carriage activity. AT&T’s interpretation to the contrary is not convincing

because in essence, AT&T asks that § 45(a) be broken into two separate inquiries: (1) Is an entity a

common carrier (for any purpose)? and (2) if so, is the entity subject to the Acts to regulate

commerce? See Reply at 4. AT&T does not explain why the Court should apply this two-part

disjunctive construction rather than evaluate the exemption holistically.4

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shall be treated as a common carrier under this Act only to the extent that it is engaged in providing

telecommunications services, except that the [Federal Communications] Commission shall

determine whether the provision of fixed and mobile satellite service shall be treated as common

carriage”).

Prior to March 12, 2015, the Federal Communications Commission deemed mobile data

service a private mobile service, i.e., non-common carriage. See Verizon v. FCC, 740 F.3d 623, 650

(D.C. Cir. 2014) (noting that the Federal Communications “Commission has classified mobile

broadband service as a ‘private’ mobile service” and therefore mobile broadband providers are not

common carriers). On March 12, 2015, the Federal Communications Commission issued its

Reclassification Order in which it essentially reclassified mobile data service as common carriage in

nature. The Court addresses the impact of the Reclassification Order infra.

9

Furthermore, a holistic interpretation of the common carrier exception is more consistent

with the legislative history for the FTC Act. As the FTC notes, during the 1914 congressional

debate over the bill that would later become the FTC Act, Representative Stevens, a manager of the

House bill, discussed what entities would be covered by the proposed act. Mr. Stevens stated, inter

alia, that every corporation engaged in commerce would come within the scope of the act: 

They ought to be under the jurisdiction of this commission in order to

protect the public, in order that all of their public operations should be

supervised, just the same as where a railroad company engages in

work outside of that of a public carrier. In that case such work ought

to come within the scope of this commission for investigation.

. . . .

[E]very corporation engaged in commerce except common carriers,

and even as to them I do not know but that we include their operations

outside of public carriage regulated by the interstate-commerce acts.

51 Cong. Rec. 8996 (1914) (emphasis added).

Although AT&T argues the purpose of the common carrier exception is to ensure that there

is no agency overlap in terms of regulation, it appears that the more precise purpose was to prevent

overlap between common carrier regulations. As the Second Circuit observed in Verity, Congress

created the common carrier exemption because it “did not intend the FTC to enforce unfaircompetition law against common carriers because the ICC already regulated common carriers under

the Interstate Commere Act.” Verity, 443 F.3d at 57 (emphasis added). AT&T points to nothing in

the legislative history suggesting that Congress intended to prevent any and all regulatory overlap

(as opposed to focusing on the Interstate Commerce Commission’s regulation of common carriers as

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such). Indeed, it is not uncommon for any particular activity of a business to be subject to multiple

sets of regulations. 

That the common carrier exception in § 45(a) requires consideration of both status and

activity, and not just status alone, is also supported by the tool of statutory construction which

counsels a court to consider a statute’s “practical effects to the extent necessary to illuminate the

meaning of the plain language.” Byun, 539 F.3d at 991. AT&T’s interpretation of the common

carrier exception would result in significant regulatory gaps. For example, as the FTC points out in

its brief,

AT&T’s reading of the common carrier exemption would open a giant

loophole that would threaten to swallow the FTC Act. Companies

engaging in de minimus common carrier activity could immunize all of

their operations from FTC scrutiny. For example, internet giants that

introduce a small measure of common carrier business would be

shielded from the FTC’s active privacy and data security enforcement

because of their “status” as a common carrier. Indeed, such a move

into common carrier activities is not merely hypothetical; Google

recently announced its intention to become a virtual wireless carrier.

Opp’n at 16; cf. Crosse & Blackwell Co. v. Fed. Trade Comm’n, 262 F.2d 600, 604-05 (4th Cir.

1959) (in discussing the scope of entities exempt from § 45(a) because they are subject to the

Packers and Stockyards Act, noting that “Congress did not anticipate that a giant steel company

might attempt to escape the restraint of the antitrust laws by operating a small packing plant” and

thus be subject to the exemption). 

In response, AT&T contends that any such gap has not caused an adverse effect: “If the

FTC’s inability to regulate in these gaps were such a problem, one would imagine that Congress

would have stepped in at some point in the past century to address this.” Reply at 6. But this

argument misses the point. Congress would not need to step in if the common carrier exemption

were always understood to apply only when an entity is a common carrier and is engaging in

common carrier activity. As discussed above, that indeed appears to have been Congress’s

understanding at the time of the FTC Act’s enactment. In fact, that seems to have been the general

understanding of the common carrier exemption even years later, as noted by AT&T’s predecessor

during a 1937 congressional hearing. See To Amend the Federal Trade Comm’n Act, House

Committee on Interstate and Foreign Commerce Hearing, 75th Cong., 1st Sess. on H.R. 3143 (Feb.

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 AT&T has argued that Congress’s decision not to adopt its predecessor’s proposed

amendment weighs in its favor. The Court does not agree. Admittedly, the Supreme Court has

stated that, “[w]here Congress includes limiting language in an earlier version of a bill but deletes it

prior to enactment, it may be presumed that the limitation was not intended.” Russello v. United

States, 464 U.S. 16, 23-24 (1983). But that is hardly the situation here. Here, there was a proposed

amendment that was never adopted into any version of the bill. Moreover, “[a]s a general rule,

Congress’[s] rejection of a proposed amendment is not a significant aid in interpreting a statute

passed years earlier.” United States v. Capital Blue Cross, 992 F.2d 1270, 1277 (3d Cir. 1993)

(citing 21 N. Singer, Sutherland on Statutory Construction § 48.18 (5th ed. 1992)); see also Tahoe

Regional Planning Agency v. McKay, 769 F.2d 534, 538 (9th Cir. 1985) (stating that “caution must

be exercised in using the rejection by a legislature of proposed amendments as an aid in interpreting

measures actually adopted”). There are numerous reasons why legislation may not be enacted; in

addition to the realities of the political process wherein legislation may not be enacted for a

multitude of disparate reasons, Congress could have made a coherent choice to not enact new

legislation because it believed it was already covered by law and thus not needed. 

11

18-19, 1937) (AT&T’s predecessor company proposing to Congress that § 45(a) be amended to

include the following proviso: “provided that common carriers under the latter act are excepted as

common carriers under this act only in respect of their common-carrier operations”; stating that

“[a]ll this does is to make clear that so far as the fair trade practice provisions of the Federal Trade

Commission Act are concerned, the exception which has always been in the act shall be preserved,

and by my amendment, . . . it will make clear one thing, . . . namely, that where common carriers

engage in activities that are not in the common carrier field, beyond the field that the Government is

regulating, then and in that case, they are subject to the jurisdiction of the Federal Trade

Commission . . . .”).5

To the extent AT&T points out that there is no actual regulatory gap here because the

Federal Communications Commission happens to regulate mobile data services under the

Communications Act – albeit as non-common carriage activity (for conduct prior to the effective

date of the Reclassification Order) – that is not dispositive. The point is that, under AT&T’s broad

interpretation of the statute, there would be regulatory gaps in many instances; AT&T has not made

any showing that most or even many gaps would be filled. Moreover, that there may be some

overlap between agency regulation is not damning in and of itself, particularly in the absence of any

apparent conflict with respect to agency regulation. 

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AT&T contends that there would be a conflict if both the FTC and the Federal

Communications Commission were to assert jurisdiction over mobile data service (as a non-common

carriage service) because, in Count I,

the FTC believes that slowing throughput speeds to customers on

unlimited plans is an “unfair” practice that has “caused substantial

injury” to consumers. By contrast, as long ago as 2008, the FCC

affirmatively endorsed the use of such reduced speeds where, as here,

a provider offering unlimited plans (Comcast) needed to manage

traffic network: “Comcast has several available options it would use to

manage network traffic without discriminating as it does. . . . Comcast

could throttle back the connection speeds of high-capacity users

(rather than any user who relies on peer-to-peer technology, no matter

how infrequently).” The 2010 Open Internet Order likewise approved

of practices involving the provision of “more bandwidth to subscribers

that have used the network less over some preceding period of time

than to heavier users” to reduce congestion. That order was not

vacated in any respect until January 2014 (and, even then, it was

vacated in part on other grounds). AT&T thus had every reason to

believe during the period at issue here that conduct that the FCC

preemptively approved would not later be the subject of an FTC

enforcement action.

Reply at 14-15.

The problem with AT&T’s position is that, even though the FTC has characterized Count I

as implicating an unfair practice, the gravamen of the FTC’s complaint is based on AT&T’s failure

to disclose its throttling practice to certain customers. More specifically, in Count I, the FTC asserts

that AT&T’s throttling program is unfair because AT&T “entered into numerous mobile data

contracts that were advertised as providing access to unlimited mobile data, and that do not provide

that [AT&T] may modify, diminish, or impair the service of customers who use more than a

specified amount of data for permissible activities.” Compl. ¶ 45 (emphasis added). Thus, the FTC

is not arguing in the case at bar that the throttling program is unfair per se; instead it challenges

AT&T’s failure to disclose the practice to certain customers and afford them alternative options. 

To the extent AT&T suggests that there could also be a conflict (either with respect to Court

I or even Count II, which is the claim that characterizes AT&T’s conduct as deceptive, not just as

unfair) because the Federal Communications Commission has also passed its own “transparency

rule, 47 C.F.R. § 8.3, which itself requires an ‘accurate’ disclosure,” Reply at 15, the Court sees no

obvious conflict between 47 U.S.C. § 8.3 and § 45(a). AT&T has pointed to no instance where a

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Federal Communications Commission regulation requires conduct which would violate a FTC

regulation or vice-versa. See, e.g., Federal Communications Commission, In re Preserving the Open

Internet, 25 FCC Rcd 17905, at ¶¶ 56, 57 (stating that “[w]e believe that at this time the best

approach is to allow flexibility in implementation of the transparency rule” and “[w]e agree that

broadband providers must, at a minimum, prominently display or provide links to disclosures on a

publicly available, easily accessible website that is available to current and prospective end users

and edge providers as well as to the Commission, and must disclose relevant information at the point

of sale”).

AT&T protests still that “common carrier” must be viewed solely in terms of status because:

(1) § 45(a) repeatedly uses status-based terms, such as “persons,” “partnerships,” “corporations,”

“banks,” “savings and loan institutions,” “credit unions,” “air carriers,” and “common carrier” (as

opposed to common carriage) in its text; (2) § 45(a) does contain one activity-based exemption

which uses markedly different language, thus demonstrating that the lack of activity-based language

with respect to the common carrier exemption is telling; and (3) there is case law to support its

position. But ultimately, none of these arguments is availing. 

AT&T’s first argument has facial appeal but is problematic based on the understanding of

the term “common carrier” at the time of the FTC Act’s enactment in 1914 and Congress’s intent to

encompass that understanding. 

AT&T’s second argument is based on the 1958 amendment to § 45(a). Prior to the 1958

amendment, § 45(a) included an exemption related to the Packers and Stockyards Act. More

specifically, that exemption existed for “persons, partnerships, or corporations subject to the Packers

and Stockyards Act, 1921.” 52 Stat. 111 (1938). In 1958, that exemption was amended to read

“persons, partnerships, or corporations insofar as they are subject to the Packers and Stockyards

Act, 1921.” 27 Stat. 1749 (1958) (emphasis added). AT&T argues that this is evidence that the

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 AT&T asserts that the legislative history for the Packers and Stockyards Act shows that,

before the 1958 amendment, § 45(a)’s Packers/Stockyards exemption was status based. While the

legislative history for the act does use the terms “status” and “activity,” that terminology must be

viewed in context. The critical point in the legislative history was that the Packers and Stockyards

Act was being amended to limit application to certain kinds of packers. See H.R. Rep. No. 85-1048,

at 6 (1957) (noting that the amendment to § 45(a) of the FTC Act was to reflect the amendment

made in the Packers and Stockyards Act; for the amendment to the latter, “jurisdiction is predicated

not upon the mere fact that a person may fall within the definition of a packer but upon the type of

activity carried on by such person[;] [t]he bill limits the jurisdiction of the act and, therefore, of the

Secretary of Agriculture to those commodities specifically listed in paragraph (1): ‘livestock, meats,

meat food products, livestock products in unmanufactured form, poultry, or poultry products’” and

“[a]ctivities of packers with respect to all other products will fall under the jurisdiction of the

Federal Trade Commission”).

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Packers/Stockyards exemption used to be a status-based exemption but then, in 1958, was changed

into an activity-based exemption.6 

The Fourth Circuit, however, has explained that this change to the Packers/Stockyards

exemption was not consequential. More specifically, in Crosse & Blackwell, the Fourth Circuit

noted that, pre-amendment, it was 

clear that the substance of what was intended to be withdrawn from

the controls of the Federal Trade Commission and subjected to

regulation by the Secretary of Agriculture were the businesses of the

stockyards and packers as those industries were known and

understood at the time. Doubtless the Congress did not anticipate that

a great steel company might attempt to escape the restraints of the

antitrust laws by operating a small packing plant, taking the position

that it was engaged in the business of a packer and was thus subject, in

its steel business, to regulation only by the Secretary of Agriculture

under the Packers and Stockyards Act, or that a canner of

miscellaneous food items might avoid compliance with the general

antitrust laws solely by reason of the fact that it used a relatively small

quantity of meat as an ingredient in some of its products, for it did not

expressly provide in 1921 that one engaged in parallel business, or in

peripheral activity, would be subject to regulation as a packer under

the Packers and Stockyards Act to the extent that he was engaged in

that business and subject to regulation under the general antitrust laws

to the extent he was engaged in other businesses. Whatever doubt

there may have been on that scope has been removed by the [1958

amendment]. But if we look to the language of the Act prior to the

1958 amendment, in the light of the purposes the Congress in 1921

clearly intended to serve, there seems no doubt that it was never

intended that relatively inconsequential activity which might be

classified as meat packing should insulate all of the other activities of

a corporation from the reach of the Federal Trade Commission.

The language of the Act is susceptible to the construction that

one engaged in the business of processing meats for sale is subject to

regulation in that business as a packer under the Packers and

Stockyards Act, while any other business in which he may be engaged

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 To the extent AT&T cites other cases, those cases do not, as Miller did, address the exact

issue of whether the term “common carrier” should be understood to include both a status and

activities component. See, e.g., Nat’l Fed’n of the Blind v. Fed. Trade Comm’n, 303 F. Supp. 2d

707, 710-11, 714-15(D. Md. 2004) (noting that the FTCA applies only to corporations, not nonprofit

organizations, such that there is effectively a nonprofit exemption under the act; concluding that a

for-profit professional telemarketer that solicits charitable contributions for a nonprofit could be held

liable under the FTCA because “an entity’s exemption from FTC jurisdiction is based on that

entity’s status, not its activity”) (emphasis omitted; citing Miller).

8

 Section 46 is another provision in the FTC Act. It gives the FTC authority to investigate

but, like § 45(a), also includes an exemption for common carriers.

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is subject to the general restraints of that antitrust laws, and that

jurisdiction to enforce the antitrust laws was left in the Federal Trade

Commission, except insofar as the businesses of the stockyard and

packing industry, as such, were removed from the jurisdiction of the

Federal Trade Commission.

Crosse & Blackwell, 262 F.2d at 604-05 (emphasis added). “A literal interpretation of the

exemption . . . must be laid aside for it is ‘plainly at variance with the policy of the legislation as a

whole,’ and if held to grant a more extensive exemption than the [Agriculture] Secretary’s

regulatory power would produce an absurd result.” Id. at 606; see also Foxgord v. Hischemoeller,

820 F.2d 1030, 1034 (9th Cir. 1987) (noting that “‘departure from the literal construction of a statute

is justified when such a construction . . . would clearly be inconsistent with the purposes and policies

of the act in question’”). Hence, if anything, the legislative history of the Packers and Stockyards

exemption as explained in Crosse & Blackwell supports the FTC’s argument. According to the

Fourth Circuit, the pre-amendment language – which like the common carrier exemption contained

no activity-based language (merely covering businesses “subject to” the 1921 Packers and

Stockyards Act) – nonetheless encompassed activity, not just status. 

As for the third argument that case law supports its status argument, AT&T relies primarily

on Federal Trade Commission v. Miller, 549 F.2d 452 (7th Cir. 1977).7

 Miller, however, is not

binding authority on this Court, and the basic reasoning of Miller is not persuasive. The Seventh

Circuit stated in Miller that it 

need not decide whether the FTC is correct in its statement that the

non-carrier activities of a common carrier do not fall within the scope

of the § [46] exemption.[8

] Assuming that to be correct, it does not

follow that a corporation engaged solely in carrier activities steps

outside the exemption whenever those activities are not of a type

ordinarily regulated by the [Interstate Commerce Commission]. The

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 The Miller court also questioned the FTC’s contention that “Congress contemplated and

intended a perfect correlation between the end sought (avoidance of inter-agency conflict) and the

means adopted (the exemption) so that there would be no gap in the regulatory framework.” Miller, 549 F.2d at 458. According to the court, “[s]ubsequent legislative history [in particular, on banks]

tends to refute that assumption.” Id. But even if Congress did not intend a perfect correlation, it is

unlikely that Congress intended for there to be significant gaps.

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regulatory approach articulated by [the FTC], while it may be a

desirable one, is not the one Congress appears to have adopted. 

Before the Wheeler-Lea Amendment [in 1938], [§ 45(a)(1)] of the Act

had declared unlawful and [§ 45(a)(6)] of the Act had empowered the

Commission to prohibit, only “unfair methods of competition in

commerce.” The Amendment inserted in both those subsections the

additional words “and unfair or deceptive acts or practices in

commerce.” It did not, however, alter in any way the exemption

provisions of the latter subsection or of [§ 46]. Thus, as amended [§

45] declares unlawful both anticompetitive practices and unfair or

deceptive acts or practices and, further, empowers the Commission to

prevent persons, except regulated common carriers (and certain

others), from engaging in the conduct declared unlawful. There is no

conceivable basis for holding that the exception applies to one type of

forbidden conduct but not the other. The Commission’s argument

must therefore fail, and, having failed with respect to [§ 45(a)(6)], it

necessarily fails with respect to [§ 46(a)] as well.

Id. at 458 (emphasis added).9

Instead, the Court finds more persuasive the reasoning of the district court in Federal Trade

Commission v. Verity International, 194 F. Supp. 2d 270 (S.D.N.Y. 2002), and the Second Circuit’s

observation on appeal. There, the FTC sued the defendant with regard to its billing practices. The

defendant argued that it was a common carrier – indeed, had a license from the Federal

Communications Commission to be a facilities- or retail-based international common carrier – and

therefore exempt from the reach of § 45(a). The court rejected the defendant’s contention,

explaining that

its argument presupposes that once the FCC licenses an entity as a

common carrier, it is a common carrier for all purposes and thus

entirely beyond the reach of the FTC. But that premise is

fundamentally erroneous. An entity that is a common carrier may

engage in a broad range of activities, some integral to its functions as a

common carrier and some entirely extraneous to them. Even where

Congress commits regulation of common carrier activities to a

particular agency, it would make little sense to exempt a carrier’s

extraneous activities from laws of general application affecting the

broad sweep of American business. 

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Id. at 274; see also Computer & Comms. Industry Ass’n v. FCC, 693 F.2d 198, 210 n.59 (D.C. Cir.

1982) (stating that “[i]t is clear that an entity can be a common carrier with respect to only some of

its activities[;] [i]n this opinion the term ‘common carrier’ will be used to indicate not an entity but

rather an activity as to which an entity is a common carrier”). The Verity district court

acknowledged Miller but found it to be “inconsistent with [the] common sense proposition that the

carrier exemption to the FTC Act should be construed no more broadly than its purpose – to avoid

interfering with the regulation of carriers by agencies to which their regulation is committed.” Id. at

275. 

On appeal, the Second Circuit disagreed with the district court’s analysis in part, concluding

that “common carrier” as used in the FTCA had to be “defined by reference to the common law of

carriers and not to the Communications Act, even though the common law definition does not

meaningfully differ from the Communications Act definition for purposes of this appeal.” Verity,

443 F.3d at 57. However, the Second Circuit went on to indicate that it agreed with the district court

that “common carrier” was predicated on both an entity’s status and its activity, and not just status

alone. More specifically, the court noted that

[t]he notion of some indelible common carrier “status” under the

Communications Act is highly questionable. See Southwestern Bell

Tel. Co. v. FCC, 19 F.3d 1475, 1481 (D.C. Cir. 1994) (explaining that

“whether an entity in a given case is to be considered a common

carrier or a private carrier turns on the particular practice under

surveillance” and that the FCC “is not at liberty to subject [an] entity

to regulation as a common carrier” if the entity is acting as a private

carrier for a particular service”); see also NARUC II, 533 F.2d at 608

(“It is at least logical to conclude that one can be a common carrier

with regard to some activities but not others.”); In re Audio

Commc’ns, Inc., 8 F.C.C.R. 8697, 8698-99, P12 (1993) (“[A] single

firm that is a common carrier in some roles need not be a common

carrier in other roles.”). 

Id. at 60 n.4; cf. Crosse & Blackwell, 262 F.2d at 604-05 (interpreting pre-1958 version of Packers

and Stockyards Act exemption as activity based). 

As a final point, the Court notes that two other considerations counsel in favor of the FTC’s

interpretation over AT&T’s. First, because the FTC Act is a remedial statute, it should be read

broadly and its exemptions narrowly. See, e.g., United States v. An Article, 409 F.2d 734, 741 n.8

(2d Cir. 1969) (stating that the FTCA has a remedial purpose – i.e., to protect the public, “‘that vast

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multitude which includes the ignorant, the unthinking and the credulous’”); In re Smith, 866 F.2d

576, 581 (3d Cir. 1989) (noting that “[s]tatutes prohibiting unfair trade practices and acts have

routinely been interpreted to be flexible and adaptable to respond to human inventiveness[;] [i]n

construing section 5 of the Federal Trade Commission Act relating to unfair trade practices, for

example, the Supreme Court determined that the Act was to be both broad in sweep and flexible in

application”); cf. City of Edmonds v. Wash. St. Bldg. Code Council, 18 F.3d 802, 804 (9th Cir. 1994)

(stating that “[c]ourts generously construe the Fair Housing Act” and, “[a]s a broad remedial statute,

its exemptions must be read narrowly”). 

Second, the FTC’s interpretation – although not necessarily entitled to Chevron deference

(which the FTC disavowed at the hearing) – should still be afforded some deference pursuant to

Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944) (holding that a non-controlling agency opinion

may carry persuasive weight, depending on “the thoroughness evident in its consideration, the

validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors

which give it power to persuade, if lacking power to control”); see also United States v. Mead Corp.,

533 U.S. 218, 234 (2001) (stating that “an agency’s interpretation may merit some deference

whatever its form”). In this regard, the Court notes that, contrary to what AT&T argues, the FTC

has seemed to consistently take the position that the common carrier exemption should be viewed

both in terms of status and activity, and not just status alone. See, e.g., FTC Reauthorization,

Hearing Before the Subcommittee on Consumer Affairs, Foreign Commerce and Tourism, S. Hrg.

107-1147, at 28 (July 17, 2002) (statement of Hon. Sheila F. Anthony, FTC) (noting that

“Defendants often argue that the exemption protects every action of a company that enjoys common

carrier status” and that “[t]he Commission firmly believes that only the common carrier activities of

such companies are exempted, but litigating this issue, as the Commission has been repeatedly

forced to do, raises the cost of pursuing enforcement actions”), available at

http://www.gpo.gov/fdsys/pkg/CHRG-107shrg91729/pdf/CHRG-107shrg91729.pdf; Prepared

Statement of the Fed. Trade Comm’n, 2003 WL 21353573, at *19 (June 11, 2003) (statement before

the Subcommittee on Commerce, Trade and Consumer Protection to support the FTC’s

reauthorization request for fiscal years 2004 to 2006) (stating that, “[w]hile common carriage has

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been outside the FTC’s authority, the agency believes that the FTC Act applies to non-commoncarrier services of telecommunications firms, even if the firms also provide common carrier

services”); see also FTC Amendments of 1977 and Oversight, Hearings before the Subcommittee on

Consumer Protection and Finance, 95th Cong., 1st Session on H.R. 3816, 1767, and 2483 (1977)

(letter from FTC to Rep. Eckhardt) (asking for an amendment to the FTC Act, not “to extend the

Commission’s jurisdiction into those areas that are subject to regulation by other federal agencies,

but rather, as we explained in our formal statement, . . . intend[ing] to close a ‘regulatory gap’ under

exceptions in Sections 5 and 6 of the FTC Act as interpreted in a recent court decision [i.e.,

Miller]”) (emphasis added). To the extent AT&T argues that the FTC has taken a different position

in other lawsuits, see Mot. at 13, the Court does not agree. In those cases, the FTC argued that an

entity did not meet the status requirement of common carrier but it did not disavow that there was an

activity component as well.

Accordingly, for all of the reasons stated above, the Court rejects AT&T’s contention that

the common carrier exemption in § 45(a) is predicated on status alone, and rather agrees with the

FTC that § 45(a) can be applied to an entity that has the status of a common carrier so long as what

is being regulated is the entity’s non-common carriage services.

C. Reclassification Order

After initial briefing was completed in this case, the parties notified the Court that the

Federal Communications Commission had made the decision to reclassify mobile data service from

a non-common carriage service to a common carriage service. The Reclassification Order was

released on March 12, 2015, but apparently will not go into effect until it is published in the Federal

Register. See Docket No. 45, at 1 n.2 (FTC’s sur-reply). The Reclassification Order expressly states

that reclassification will “apply only on a prospective basis.” Reclassification Order at 134 n.792.

The FTC argues that the Reclassification Order will have minimal impact on this case

because it will apply only prospectively. In other words, the FTC focuses on the fact that, through

this case, the Court can still address AT&T’s past misconduct which allegedly violates § 45(a). In

response, AT&T contends that the FTC is missing the point – i.e., once the Reclassification Order

goes into effect, then the FTC will no longer have jurisdiction to pursue this case, even if limited to

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past conduct by AT&T. See, e.g., Docket No. 46, at 1 (AT&T sur-reply) (stating that “[t]he issue is

whether a change to an agency’s jurisdiction takes effect immediately and divests the agency of

authority to prosecute past conduct that is the subject of pending litigation”) (emphasis in original).

The FTC disputes that § 45(a) is a jurisdictional statute. But, even assuming that it is, the

Court is not persuaded by AT&T’s argument. Hughes Aircraft Co. v. United States, 520 U.S. 939

(1997), provides guidance as to how this issue should be resolved. 

In Hughes, the plaintiff-whistleblower brought a qui tam action against a company for

violation of the False Claims Act (“FCA”). Before 1986, qui tam suits were barred if the

information on which they were based was already within the government’s possession. In 1986,

there was an amendment to the FCA which partially removed that bar. The question for the

Supreme Court was whether that amendment applied retroactively to the plaintiff’s suit. The

Supreme Court held that the 1986 amendment was not retroactive and therefore the plaintiff’s action

was barred. See id. at 941-42.

One of the arguments made by the plaintiff in favor of retroactivity was that the 1986

amendment was “jurisdictional, and hence . . . an exception to the general Landgraf presumption

against retroactivity.” Id. at 950. The Supreme Court noted first that “[t]he fact . . . courts often

apply newly enacted jurisdiction-allocating statutes to pending cases merely evidences certain

limited circumstances failing to meet the conditions for our generally applicable presumption against

retroactivity, not an exception to the rule itself.” Id. at 951. The Court then went on to note that 

[a]pplication of a new jurisdictional rule usually ‘takes away no

substantive right but simply changes the tribunal that is to hear the

case.’ Present law normally governs in such situations because

jurisdictional statutes ‘speak to the power of the court rather than to

the rights or obligations of the parties.’” 

Statutes merely addressing which court shall have jurisdiction

to entertain a particular cause of action can fairly be said merely to

regulate the secondary conduct of litigation and not the underlying

primary conduct of the parties. Such statutes affect only where a suit

may be brought, not whether it may be brought at all.

The 1986 amendment, however, does not merely allocate

jurisdiction among fora. Rather, it creates jurisdiction where none

previously existed; it thus speaks not just to the power of a particular

court but to the substantive rights of the parties as well. Such a

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statute, even though phrased in “jurisdictional” terms, is as much

subject to our presumption against retroactivity as any other.

Id. (emphasis in original).

Here, even if the change to the common carrier exception, resulting from the Reclassification

Order, could be deemed a change in tribunal (i.e., because enforcement with respect to mobile data

would be delegated to the Federal Communications Commission instead of the FTC and this Court

would have jurisdiction only in the former instance), the fact remains that substantive rights are

affected by that change as well. As the FTC explains out in its sur-reply:

According to AT&T, the FCC is poised to sanction AT&T for its

throttling program. FCC action is not, however, a substitute for the

relief sought by the FTC. The FCC is not authorized to seek refunds

for injured consumers, and its enforcement authority is limited to

conduct going back one year. 47 U.S.C. § 503(b)(6). AT&T’s

throttling program has been in effect for more than three years, and

has, over the course of that time, inflicted economic harm on millions

of customers.

FTC Sur-Reply at 5 n.5 (emphasis added). This impairment of substantive rights (and AT&T’s

liability) is comparable to that in cases such as Matthews v. Kidder, Peabody & Co., 161 F.3d 156,

157, 166 & n.17 (3d Cir. 1998) (holding that amendment to Private Securities Litigation Reform

Act, which eliminated securities fraud-based RICO claims, was not retroactive; also indicating that

there be no retroactivity for, e.g., an amendment that reduced the statute of limitations under RICO

or that eliminated treble damages under RICO), and Mabary v. Home Town Bank, N.A., 771 F.3d

820, 826 (5th Cir. 2014) (stating, that before the amendment to the Electronic Funds Transfer Act,

the plaintiff “had a cause of action based upon [the defendant’s] alleged actions, but afterward she

would not” and “the amendment thus ‘may be seen as destroying a cause of action and impairing a

party’s rights’”). As in Matthews, the applicable limitation period would effectively be shortened

given the Communications Act’s one-year limitations period. Moreover, as in Mabary, the remedy

of refunds to injured consumers sought by the FTC (but not available to the Federal

Communications Commission) would be impaired. 

The authority that AT&T cited in its papers and at the hearing is unavailing. For example, in

Duldulao v. INS, 90 F.3d 396 (9th Cir. 1996), the Ninth Circuit simply indicated that deprivation of

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judicial review in the immigration context (more specifically, judicial review of deportation orders

involving aliens convicted of firearms offenses) merely affected the power of the court and not the

rights or obligations of the parties. See id. at 398-99 (noting that, “[a]s a general rule, we presume

that statutes affecting substantive rights or obligations apply prospectively only” and that “[t]his

presumption applies when a new statute impairs rights a party possessed when he acted, increases a

party’s liability for past conduct, or imposes new duties with respect to transactions already

completed”; adding that “[a] jurisdictional statute usually takes away no substantive right but simply

changes the tribunal that is to hear the case” – such statutes “speak to the power of the court rather

than to the rights or obligations of the parties”) (emphasis added; internal quotation marks omitted). 

As for Southwest Center for Biological Diversity v. United States Department of Agriculture,

314 F.3d 1060 (9th Cir. 2002), there, the plaintiff brought suit after failing to get a response to a

request for information pursuant to the Freedom of Information Act (“FOIA”). While the action was

pending, Congress enacted the 1998 Parks Act, which included a provision allowing for a

withholding of information in response to a FOIA request. The district court applied that provision,

which led the plaintiff to argue on appeal that the district court had given impermissible retroactive

effect to the Parks Act provision. The Ninth Circuit disagreed, rejecting the plaintiff’s contention

that the Parks Act provision impaired a right it possessed when it acted because it had a right to the

information when it filed its suit and then lost that right by application of the exemption. See id. at

1062. The court explained: “[T]he ‘action’ of the [plaintiff] was merely to request or sue for

information; it was not to take a position in reliance upon existing law that would prejudice the

[plaintiff] when that law was changed.” Id. The Ninth Circuit also noted that “application of the

exemption furthers Congress’s intent to protect information regarding threatened or rare resources of

the National Parks” and thus “[t]his case . . . presents one of the many situations in which courts

appropriately apply the law in existence at the time of their decision.” Id. Here, the action taken by

the FTC is not comparable to a mere FOIA request; what is at stake is not simply a request for

information, but substantive rights directly affecting financial interest. In this case, the FTC took a

substantive position in reliance upon existing law that would prejudice it, as well as the public on

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whose behalf it acted, when that law was changed – and notably, not by Congress directly but rather

by a sister agency.

III. CONCLUSION

For the foregoing reasons, the Court denies AT&T’s motion to dismiss. Contrary to what

AT&T argues, the common carrier exception applies only where the entity has the status of common

carrier and is actually engaging in common carrier activity. When this suit was filed, AT&T’s

mobile data service was not regulated as common carrier activity by the Federal Communications

Commission. Once the Reclassification Order of the Federal Communications Commission (which

now treats mobile data serve as common carrier activity) goes into effect, that will not deprive the

FTC of any jurisdiction over past alleged misconduct as asserted in this pending action. 

This order disposes of Docket No. 29.

IT IS SO ORDERED.

Dated: March 31, 2015

_________________________

EDWARD M. CHEN

United States District Judge

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