about quality of service generally constitute complaints about
the rates charged for the services.

The FCC does not specifically regulate rates for cellular
telephone services. Rates are instead left to be determined by
market forces, but with 47 U.S.C. § 201(b) prohibiting charges
that are unjust or unreasonable. See Bryceland, 122 F. Supp. 2d
at 708; In re Comcast, 949 F. Supp. at 1198. The specific
contract allegations are as follows:

16. According to the terms of its contract
with Plaintiff, Defendant agreed to provide
cellular telephone service to Plaintiff at the
rates set forth in the "Service Charges" section
of its monthly bills. Nowhere in the Contract or
elsewhere did Plaintiff agree to pay higher rates
for cellular service or to pay additional fees
for which no significant additional goods or
services were rendered. Thus, by imposing and
collecting such fees, Defendant has breached its
contract.

17. Defendant provides no significant
additional goods or services in exchange for the
Corporate Account Administrative Fees it charges,
and thus those Fees are also void and
unenforceable for lack of consideration.

18. The Fee is also void and unenforceable
as a violation of the duty of good faith implicit
in every contract.

19. The Fee is also unconscionable and, as
such, is void and unenforceable on that
additional basis.

Plaintiff's contract allegations explicitly raise the
issue of whether it received sufficient services in return for
the Fee. That is a rate issue. See Central Office Telephone,

524 U.S. at 223; Bastien, 205 F.3d at 988; Bryceland, 122

-13-


challenging rates. Alternatively, he contends that his
particular rate challenges are not preempted or that the field is
not so completely preempted that any challenge to rates is
necessarily a federal claim. Assuming there is federal
jurisdiction, defendant moves to dismiss all the claims because
they are preempted or, alternatively, because the FCC has primary
jurisdiction. Alternatively, defendant contends Counts II and
III do not satisfy the pleading requirements of Fed. R. Civ.

P. 9(b) and Count IV should be dismissed because unjust
enrichment does not apply when there is a contract.

Preemption is a defense. That a claim is preempted by
federal law is not a sufficient basis for invoking federal
question jurisdiction. Caterpillar Inc. v. Williams, 482 U.S.
386, 393 (1987). Preemption can only be a basis for federal

question jurisdiction if there is complete preemption, i.e. "the

pre-emptive force of a statute is so 'extraordinary' that it
‘converts an ordinary state common-law complaint into one stating
a federal claim for purposes of the well-pleaded complaint
rule.'" Id. (quoting Metropolitan Life Insurance Co. yv. Taylor,
481 U.S. 58, 65 (1987)). A plaintiff is the master of his
complaint; he may choose to bring state law claims only even if a
federal claim is available. See Merrell Dow Pharmaceuticals

Inc. v. Thompson, 478 U.S. 804, 809 n.6 (1986).


SS 1441(c), 1367; In re Comcast, 949 F. Supp. at 1206. Although
certain of the claims are preempted as state law claims, they are
still before the court as federal claims; to hold otherwise would
be inconsistent with applying complete preemption. Defendant can
still raise the issues of whether the allegations state a basis
for granting relief pursuant to § 207 of the FCA and whether the
no-services fraud claims satisfy the pleading requirements of
Fed. R. Civ. P. 9(b). Before addressing those questions,
however, plaintiff should amend his complaint to expressly state
all but the nondisclosure fraud claims as FCA claims. Also,
plaintiff remains the master of his complaint. He may choose to
drop the federal claims and pursue only the nondisclosure fraud
claims. If that is plaintiff's desire, he should so inform the
court by written motion and plaintiff's individual federal cause
of action would be dismissed with prejudice and the case would be
remanded to state court for further proceedings.

Thus far, it has been determined that the court has
jurisdiction over the case. The merits of plaintiff's claims
have not yet been considered, other than to hold, consistent with
the jurisdictional determination, that certain claims are
preempted as state law claims. Where possible, before
considering the merits of defendant's Rule 12(b) (6) motion, it
should first be determined whether this case is appropriate for

class certification. Chavez v. Illinois State Police, 251 F.3d

612, 629-30 (7th Cir. 2001); Mira v. Nuclear Measurements Corp.,

107 F.3d 466, 474-75 (7th Cir. 1997); Anderson v. Cornejo, 199

-17-


Cir. 2001); United States v. Crawley, 837 F.2d 291, 292-93 (7th

Cir. 1988).

Plaintiff argues that, even if state law based rate
challenges are preempted by the FCA, there is no complete
preemption supporting federal jurisdiction because the FCA does
not provide an adequate civil enforcement mechanism for raising

rate issues. See Sanderson, Thompson, Ratledge & Zimny v. AWACS,

Inc., 958 F. Supp. 947, 957-58 (D. Del. 1997). However, for
there to be complete preemption, the federal enforcement
provision need not provide as extensive a remedy as may be
available under state law. See Caterpillar, 482 U.S. at 391 n.47

Lister v. Stark, 890 F.2d 941, 946 (7th Cir. 1989), cert. denied,

498 U.S. 1011 (1990); McQuerry v. American Medical Systems, Inc.,

899 F. Supp. 366, 370 n.3 (N.D. Ill. 1995); Goidstein v. W.L.

Gore & Associates, Inc., 887 F. Supp. 168, 171 (N.D. Ill. 1995).

The FCA provides a remedy and also provides for proceedings
before the FCC or in federal court. See 47 U.S.C. S§ 201-08;
Bryceland v. AT&T Corp., 122 F. Supp. 2d 703, 707-09 (N.D. Tex.

2000); In re Comcast Cellular Telecommunications Litigation, 949

F. Supp. 1193, 1203-04 (B.D. Pa. 1996). In any event, this court
is bound to follow decisions of the Seventh Circuit. Although
some other courts have disagreed, see, €.g., Bryceland, 122

F. Supp. 2d at 710 (collecting cases),* Bastien holds that rate

“Bryceland, 122 F. Supp. 2d at 709-10, held complete
preemption did not exist because there was not sufficient indicia
of a congressional intent to create removal jurisdiction.


established that such cannot be true. To read

the clause expansively would abrogate the very

federal regulation of mobile telephone providers

that the act intended to create. See AT&T Co. v.

Central Office Telephone, Inc., 524 U.S. 214, 228

(1998) ("[T]he act cannot be held to destroy

itself.") (citation omitted); Cahnmann v. Sprint

Corp., 133 F.3d 484, 488 (7th Cir. 1998).

Therefore, we have read the savings clause

narrowly to avoid swallowing the rule, but not so

narrowly as to render it a dead letter. Although
most complaints will involve rates or other
issues specially reserved to federal control, we
have recognized before that some claims do not
and may be addressed in state court. See

Cahnmann, 133 F.3d at 488 (citing In_re Long

Distance Telecommunications Litig., 831 F.2d 627,

633-34 (6th Cir. 1987)).

The two clauses read together create separate
spheres of responsibility, one exclusively federal and
the other allowing concurrent state and federal
regulation. Cases that involve "the entry of or the
rates charged by any commercial mobile service or any
private mobile service” are the province of federal
regulators and courts. 47 U.S.C. § 332(c) (3) (A). The
states remain free to regulate "other terms and
conditions" of mobile telephone service. Id. The
district court aptly characterized the phrase "other
terms and conditions" as "somewhat enigmatic," and we
agree, but the court's review of the legislative history
regarding the meaning of this phrase was unnecessary and
not particularly authoritative since it reflected only
the views of one chamber of Congress. See Board of Trade
v. SEC, 187 F.3d 713, 720 (7th Cir. 1999) ("Legislative
history is problematic under the best circumstances, and
even so reliable a source as the Conference Committee
Report may be used only when there is a genuine ambiguity
in the statute.").

Furthermore, this case does not demand so nuanced
a study of the phrase "other terms and conditions"
because the meaning of "entry of or the rates charged by
any commercial mobile service" adequately resolves the
issue here. In practice, most consumer complaints will
involve the rates charged by telephone companies or their
quality of service. See Central Office Telephone, 524
U.S. at 223 ("Any claim for excessive rates can be
couched as a claim for inadequate services and vice
versa."). As the Supreme Court recognized in Central
Office Telephone, a complaint that service quality is
poor is really an attack on the rates charged for the
service and may be treated as a federal case regardless



As to cellular telephone services,? the FCA provides:

Notwithstanding sections 152(b) and 221(b)
of this title, no State or local government shall
have any authority to regulate the entry of or
the rates charged by any commercial mobile
service or any private mobile service, except
that this paragraph shall not prohibit a State
from regulating the other terms and conditions of
commercial mobile services. Nothing in this
subparagraph shall exempt providers of commercial
mobile services (where such services are a
substitute for land line telephone exchange
service for a substantial portion of the
communications within such State) from
requirements imposed by a State commission on all
providers of telecommunications services
necessary to ensure the universal availability of
telecommunications service at affordable rates.
Notwithstanding the first sentence of this
subparagraph, a State may petition the Commission
for authority to regulate the rates for any
commercial mobile service .

47 U.S.C. § 332(c) (3) (A).

The FCA also contains a savings clause:

Nothing in this chapter contained shall in

any way abridge or alter the remedies now

existing at common law or by statute, but the

provisions of this chapter are in addition to

such remedies.
Id. § 414.

The Seventh Circuit has considered the interplay between
these two statutory provisions and the complete preemption

doctrine.

At first blush, the savings clause appears
to encompass most actions, but it is well

Cellular telephone services fall within the FCA's
definition of "mobile service." See 47 U.S.C. § 153(27); GTE
Mobilnet of Ohio v. Johnson, 111 F.3d 469, 472 (6th Cir. 1997).


F.R.D. 228, 237 (N.D. Ill. 2000). Unless this case is remanded
to state court because plaintiff drops his federal claims,
plaintiff shall promptly move for class certification as set
forth in today's order.

IT IS THEREFORE ORDERED that plaintiff's motion for
remand [4-1] is denied. Defendant's motion to dismiss [3-1] is
denied without prejudice. By August 27, 2001, plaintiff shall
file his amended complaint. By September 12, 2001, defendant
shall answer or otherwise plead to the amended complaint. By
September 5, 2001, plaintiff shall move for class certification.

Status hearing set for September 19, 2001 at 11:00 a.m.

ENTER:

Wego Tolovt-

UNITED STATES DISTRICT JUDGE

DATED: AUGUST q , 2001

- 18 -


FCC decisions from state court review." Id. at 989 (emphasis
added). It did not matter that Bastien attempted to cast his
claims as state law contract and fraud claims; they were still
challenges to the FCC approved plan. Id. The Seventh Circuit
concluded: "Bastien's complaint, although fashioned in terms of

state law actions, actually challenges the rates and level of

service offered by AT&T Wireless, an area specifically reserved
to federal regulation." Id. at 990 (emphasis added).

It is true that a challenge to either rates or market
entry would have been a sufficient basis for finding federal
jurisdiction over Bastien's claims. See id. at 987 ("The issue
is whether Bastien's complaint, however denominated, actually
challenges AT&T Wireless's rates or market entry."). The Seventh
Circuit, though, did not hold that jurisdiction was based on a
challenge to market entry and alternatively hold, without
discussion or consideration of the facts, that it could also be
based on a challenge to rates. The rate issue did not receive
significantly less discussion and consideration than the market
entry issue; the Seventh Circuit discussed and considered that
jurisdiction existed on both grounds. The Seventh Circuit's
statement that § 332(c)(3) "completely preempted the regulation
of rates and market entry, although the savings clause continues
to allow claims that do not touch on the areas of rates or market
entry," id. (emphasis added), is a holding, not dictum. See

Whetsel v. Network Property Services, LLC, 246 F.3d 897, 903 (7th



Minute, Order Form (06/97)

United States District Court, Northern District of Mlinois

Name of Assigned Judge Sitting Judge if Oth
or Magistrate Judge WILLIAM T. HART than Assigned Judge
CASE NUMBER 01 C 2900 DATE AUG. Q , 2001
CASE BRUCE GILMORE, ete. v. SOUTHWESTERN BELL MOBILE SYSTEMS, INC.,, ete.
TITLE
{In the following box (a) indicate the party filing the motion, .g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented]
DOCKET ENTRY:
ql) Qa Filed motion of [ use listing in “Motion” box above.]
(2) im Brief in support of motion due
(3) o Answer brief to motion due. . Reply to answer brief due. :
(4) Oo Ruling/Hearing on set for at
(5) a Status hearing set for SEPTEMBER 19, 2001 at 11:00 a.m.
(6) a Pretrial conference[held/continued to] {set for/re-set for] on set for at
(7) Oo Trial[set for/re-set for] on at
(8) o {Bench/Jury trial] [Hearing] held/continued to at
(9) im This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
DOFRCP4(m) (General Rule21 COFRCP41(a\(1) 1 FRCP41(a)(2).
ao ff [Other docket entry] Plaintiff's motion for remand [4-1] is denied. Defendant's motion
to dismiss [3-1] is denied without prejudice. By August 27, 2001, plaintiff shall file his
amended complaint. By September 12, 2001, defendant shall answer or otherwise plead to
the amended complaint. By September 5, 2001, plaintiff shall move for class certification.
(11) [For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required.

V | Notices mailed by judge's staff.

Notified counsel by telephone.

Docketing to mail notices.

Mail AO 450 form.

Copy to judge/magistrate judge.

AUGUST 9, 200

es

courtroom . Sn aa eee date railed odie
cw deputy’s OL AUG -S FA SRS stom
initials
Date/time received in sine it
central Clerk's Office Pralling iniials



considered in order to resolve the claim. See 47 U.S.C.
§ 201(b); Sanderson, 958 F. Supp. at 954-55; In re Comcast, 949
F. Supp. at 1198.

In Sanderson, 958 F. Supp. at 955, it was held that
statutory fraud and contract® claims based on failing to disclose
that the defendant, unlike customary industry practice, charged
for noncommunication time® did not raise a rate issue that would

be preempted. Cases involving similar claims against the same

defendant reached the same conclusion. See In re Comcast, 949

F. Supp. at 1199-1200; DeCastro v. AWACS, Inc., 935 F. Supp. 541,

550, appeal dismissed, 940 F. Supp. 692 (D.N.J. 1996). As to
claims that the nondisclosure also constituted unjust enrichment
and breach of the implied duty of good faith and fair dealing,
Sanderson, 958 F. Supp. at 956, found it unclear as to whether
the charges themselves were being challenged as unreasonable,
unfair, or unjust, but resolved the doubts against finding

removal jurisdiction satisfied. In re Comcast, 949 F. Supp. at

1200-01, and DeCastro, 935 F. Supp. at 550-51, however, found

that similar claims involved direct challenges to the billing

5Sanderson does not detail the nature of the contract
claim.

®pefendant Comcast charged from the moment the send
button was pushed instead of when the call was answered, charged
for the time spent inputting a personal identification code, and
rounded up each call to the next minute. See Sanderson, 958
F. Supp. at 952.

-1l1-


regulation of cellular telephone services is completely preempted
by the FCA. Bastien will be followed.

As to complete preemption, the issue still remains as to
whether plaintiff's claims are properly characterized as
challenges to defendant's rates. If so, then such claims are
federal claims and this court has removal jurisdiction. In
Bastien, 205 F.3d at 987, and Cahnmann, 133 F.3d at 488, the
Seventh Circuit approvingly cited the holding in Long Distance
Litigation, 831 F.2d at 633-34, that certain claims in that case
did not involve rate issues preempted by FCA provisions
concerning land line telephone services. Cahnmann described the

non-preempted claims of Long Distance Litigation as follows: "A

carrier was accused of having represented that its rates were
lower than a competitor's without revealing that, unlike the
competitor, it charged its customers for their uncompleted calls.
This was a claim of simple fraud, and its adjudication did not
require determining the validity of a tariff." Cahnmann, 133
F.3d at 488. The key focus, therefore, appears to be on whether
the validity of the tariff had to be determined to resolve the
claim. Unlike land line telephone services, cellular telephone
services are not governed by tariffs. Connecticut Department of

Public Utility Control v. FCC, 78 F.3d 842, 846 n.1 (2d Cir.

1996); Digital Communications Network, Inc. v. AT&T Wireless
Services, 63 F. Supp. 2d 1194, 1199 (C.D. Cal. 1999). Therefore,

the focus would instead be on whether the amount charged being

unreasonable, unjust, or otherwise inappropriate needs to be

-10-


of whether the issue was framed in terms of state law.
Id. In addition to rates and service, federal
regulations expressly dictate the terms under which a
provider may enter a new market. The act makes the FCC
responsible for determining the number, placement and
operation of the cellular towers and other
infrastructure. .. . Congress has expressed its
decision that these areas be reserved exclusively for
federal adjudication ....

Bastien v. AT&T Wireless Services, Inc., 205 F.3d 983, 987-88

(7th Cir. 2000).

Plaintiff contends that the statements in Bastien
regarding rates are all dictum because that case only involved
market entry issues. That, however, is a misreading of Bastien.
Bastien's complaint centered on there being an allegedly high
rate of dropped calls, that is cellular calls that could not be
connected or that were cut off in the middle of the call. He
complained that AT&T Wireless obtained customers by
misrepresenting that it had an adequate infrastructure and that
the inadequate infrastructure was a breach of his contract with
AT&T Wireless. He also complained that AT&T Wireless failed to
adequately credit customers for dropped calls. See id. at 985.
The Seventh Circuit found that "Bastien's complaint would
directly alter the federal regulation of tower construction,

location and coverage, quality of service and hence rates for

service. . . . Should the state court vindicate Bastien's claim,
the relief granted would necessarily force AT&T Wireless to do
more than required by the FCC: to provide more towers, clearer

signals or lower rates. The statute specifically insulates these


revenue without appearing to raise its rates for cellular
service." It is further alleged that plaintiff and the class
"have been deceived into paying a fee for which they receive no
significant goods or services. Plaintiff and the Class also have
been deceived, in effect, into paying for cellular service at
rates higher than the rates for which they contracted."

The putative class identified in the complaint is "all
persons with Illinois billing addresses who have subscribed to
cellular telephone services provided by Defendant since 1995
+ . . and from whom Defendant has collected a Corporate Account
Administrative Fee." The complaint contains four counts, all of
which are denominated as state law claims. Count I is a claim
for breach of contract in which it is contended that the Fee is
not permitted under the parties' alleged contract. Count II is a
claim under the Illinois Consumer Fraud and Deceptive Business
Practices Act, 815 ILCS 505/2, in which it is claimed that
defendant used deception in charging the Fee by misrepresenting
its true nature. Count III charges the same alleged
misrepresentations as common law fraud. Count IV charges the
alleged practice as unjust enrichment.

Defendant contends that plaintiff is challenging the
rates it charges and therefore all of plaintiff's claims are
preempted by the Federal Communications Act ("FCA"), specifically
47 U.S.C. § 332(c) (3). Defendant further contends that the FCA
has so completely preempted the field that any challenge to rates

is necessarily a federal claim. Plaintiff contends he is not


F. Supp. 2d at 709.® Also, alleging that the Fee is
unconscionable and that defendant did not act in good faith are
allegations that the Fee is unjust and/or unreasonable. See In
re Comcast, 949 F. Supp. at 1200 (duty of good faith claim);
DeCastro, 935 F. Supp. at 550 (same). Compare Sanderson, 958
F. Supp. at 956 (same). But even if these express allegations
were not in Count I, the claim that plaintiff should not have
been required to pay the Fee because he did not agree to pay it
is a challenge to the appropriateness of the Fee and therefore a
rate challenge that falls within the purview of § 201(b). The
focus is on the agreement, not defendant's failure to disclose.
Plaintiff is claiming that the Fee defendant charged was not a
fee that had been established in the market as the FCA (as
interpreted by the FCC) provides. Plaintiff wants instead to pay
the amount that had been agreed upon through market mechanisms.
As a state law claim, Count I is preempted by the FCA and must be
construed as a claim under the FCA that falls within federal
jurisdiction and may be litigated in court under 47 U.S.C. § 207.
Although not expressly denominated and distinguished by
plaintiff, the statutory and common law fraud allegations
contained in Counts II and III each contain two different types

of fraud claims, one of which falls within the purview of the FCA

°‘The explicit allegations in plaintiff's complaint
apparently distinguish Count I from the contract claims
considered in Sanderson, 958 F. Supp. at 955; In re Comcast, 949
F. Supp. at 1199-1200; and DeCastro, 935 F. Supp. at 550.
Instead, the allegations are closer to those in Bryceland. See
Bryceland, 122 F. Supp. 2d at 708-09.

- 14 -


discussed, that is a rate challenge that falls within the purview

of the FCA. See Central Office Telephone, 524 U.S. at 223;

Bastien, 205 F.3d at 988; Bryceland, 122 F. Supp. 2d at 709. The
no-services fraud claims of Counts II and III fall within this
court's federal jurisdiction and, as state law claims, are
preempted.

The specific allegations of the Count IV unjust
enrichment claims include:

34. Defendant has no contractual or other

legal justification for imposing the Fee on

Plaintiff and the Class. Defendant provides no

significant additional administrative or other

goods or services in exchange for the Fee, and

Plaintiff and the Class thus receive no benefit

in return for the payment of such fee.

Count IV necessarily raises the issue of whether
plaintiff received adequate services in return for the Fee. It
also raises the question of whether the Fee was unjust. That is
a rate claim that falls within the purview of the FCA and which,
as a state law claim, is preempted. See Central Office
Telephone, 524 U.S. at 223; Bastien, 205 F.3d at 988; In re
Comcast, 949 F. Supp. at 1200-01; DeCastro, 935 F. Supp. at
550-51. Compare Sanderson, 958 F. Supp. at 956.

Since the contract, unjust enrichment, and no-services
fraud claims fall within the purview of the FCA's complete
preemption, they involved federal questions and removal was

proper. The state law nondisclosure fraud claims are properly

before the court on supplemental jurisdiction. ee 28 U.S.C.

-16-


corporation. There is no allegation as to defendant's principal
place of business, but defendant does not dispute plaintiff's
statement that the requirements for diversity jurisdiction are
not satisfied. Named plaintiff's individual claim apparently
would be less than the jurisdictional amount for diversity and it
may be that defendant's principal place of business is located in
Illinois. Therefore, removal would only be appropriate if one or
more of plaintiff's claims involve a federal question.

Plaintiff alleges that he has been a cellular telephone
customer of defendant since before 1995. He further alleges that
he has a contract under which he agrees to pay certain rates for
his cellular telephone service. "Nowhere in the Contract or
elsewhere did Plaintiff agree to pay higher rates for cellular
service or to pay additional fees for which no significant
additional goods or services were rendered." Plaintiff alleges
that applicable taxes are the only appropriate additional
charges. In 1995, defendant began charging a monthly "Corporate
Account Administration Fee" (hereinafter the "Fee").? No
significant administrative or other services are provided for the
Fee and the monthly bills do not explain what services, if any,
are provided for the Fee nor has it been specifically identified
as a rate increase. Plaintiff alleges that the Fee was imposed

“for the sole purpose of enabling [defendant] to generate more

?In response to the motion to dismiss, plaintiff
represents that the Fee started at $1.50 per month and was later
raised to $2.95 per month.


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

BRUCE GILMORE, individually and
on behalf of all other people
similarly situated,

Plaintiff,
v. No. 01 € 2900
SOUTHWESTERN BELL MOBILE

SYSTEMS, INC., d/b/a
Cellular One of Illinois,

Defendant.

AUG y "Dey
° eon,
MEMORANDUM OPINION AND ORDER

Named plaintiff Bruce Gilmore filed this putative class
action in the Circuit Court of Cook County, Illinois. Defendant
Southwestern Bell Mobile Systems, Inc.’ d/b/a as Cellular One of
Illinois removed the case to federal court contending that
plaintiff's claims were completely preempted by federal law and
therefore necessarily stated a basis for federal jurisdiction.
Plaintiff has moved to remand the case to state court and
defendant has moved to dismiss plaintiff's cause of action.

According to the allegations of the complaint, plaintiff

is a resident of Illinois and defendant is a Delaware

1Defendant represents that its correct corporate name is
Southwestern Bell Mobile Systems, L.L.C. Absent an amendment of
the complaint or a motion to substitute the party, this court
will use the name alleged in the complaint.


practices and therefore would be preempted by the FCA.” In
Bryceland, the plaintiffs brought claims of breach of contract,
fraud, breach of warranty, and negligent misrepresentation based
on AT&T Wireless allegedly providing a lower quality of service
than had been represented it would provide. Because the quality
of the service was implicated, the court found that the claims
were all challenges to the rates charged. 122 F. Supp. 2d at

709. %In Brown v. Washington/Baltimore Cellular, Inc., 109

F. Supp. 2d 421, 423 (D. Md. 2000), the court held that a
challenge to the late fees charged by a cellular telephone
service provider was not a challenge to rates subject to
preemption because, "[w]hile rates of service reflect a charge
for the use of cellular phones, late fees are a penalty for
failing to submit timely payment."® The claims contained in
plaintiff's complaint must be considered in light of this case
law and, more importantly, the Seventh Circuit's focus on whether
the appropriateness of the amount charged is necessary to

resolving the claim, as well as the recognition that complaints

"In re Comcast, 949 F. Supp. at 1204-05, held that the
FCA completely preempted the field and therefore held that the
claims were within federal jurisdiction. DeCastro, 935 F. Supp.
at 551-55, held Congress did not sufficiently express its intent
to support complete preemption and therefore held that the claims
were not removable, just subject to a preemption defense.

®It need not be decided if Brown correctly construes the
meaning of "rates" as used in § 332(c) (3) (A). Plaintiff does not
allege that the Fee was a charge for something other than
provision of cellular telephone services.

-12-


and one which does not. To the extent plaintiff simply claims
that defendant added the Fee while attempting to hide the
increase in charges (hereinafter the "nondisclosure fraud
claim"),?° that is a claim like the one in Long Distance
Litigation. Success on the nondisclosure fraud claim would not
require proof that the Fee was unreasonably high or unjustified
in light of any new services provided in return. Instead,
plaintiff would have to show that deceit or a misrepresentation
was used in charging the Fee and that the deceit or
misrepresentation was material to plaintiff's decision to
continue to subscribe to defendant's services. The Counts II and
III nondisclosure fraud claims are not preempted by § 332(c) (3)
and are not FCA claims within this court's federal question
jurisdiction. See Cahnmann, 133 F.3d at 488; Long Distance
Litigation, 831 F.2d at 633-34; Sanderson, 958 F. Supp. at 955;
In re Comcast, 949 F. Supp. at 1199-1200; DeCastro, 935 F. Supp.
at 550. But see Bryceland, 122 F. Supp. 2d at 709.

Counts II and III also include the allegation that the
Fee involved deception or a misrepresentation in that no
additional goods or services were received in return for the new
Fee (hereinafter the "no-services fraud claim"). The no-services
fraud claim would require proof that any services provided in

return were not worth the amount of the Fee. As previously

Tt is implied in the complaint that the Fee was made to
look like a tax or administrative charge that any cellular
service provider would charge in addition to the advertised rate
charged for the cellular service.

-15-