Opinion ID: 76790
Heading Depth: 2
Heading Rank: 1

Heading: AT&T's Motion for Judgment as a Matter of Law

Text: 7 A motion for judgment as a matter of law should be granted only if a court finds that there can be but one reasonable conclusion as to the proper judgment. See Bryan v. James E. Holmes Reg'l Med. Ctr., 33 F.3d 1318, 1333 (11th Cir.1994) (internal quotation marks omitted). AT&T argues that it was entitled to judgment as a matter of law because the jury's findings were unreasonable given the evidence presented at trial. Specifically, AT&T claims that Kemp failed to offer sufficient evidence for the jury to reasonably conclude that (1) AT&T's actions violated the mail or wire fraud statutes and Georgia's theft by deception statute; (2) AT&T's billing practices amounted to the collection of unlawful debts in violation of state and federal RICO; and (3) Kemp's payments were made involuntarily within the meaning of state law. We address each contention in turn. 8 1. RICO Violations For Racketeering Activity Involving Mail and Wire Fraud and Theft by Deception 9 In reviewing AT&T's motion for judgment as a matter of law on this issue, we consider whether there was a reasonable evidentiary basis for the jury to conclude that AT&T's actions constituted federal mail or wire fraud, under 18 U.S.C. §§ 1341 and 1343, respectively, and theft by deception under state law, Ga.Code Ann. § 16-8-3, which were the predicate crimes triggering RICO liability. See Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq., and the Georgia RICO Act, Ga.Code Ann. § 16-14-1 et seq. Given the materially equivalent elements for establishing a claim of mail or wire fraud and theft by deception, the district court only required that Kemp prove that AT&T committed mail and wire fraud. Since neither party challenges the correctness of this decision on appeal, we consider only whether Kemp established sufficient facts in order to prove mail or wire fraud. And because the elements of the mail and wire fraud statutes are the same, we consider these claims together. See Pelletier v. Zweifel, 921 F.2d 1465, 1498 (11th Cir.1991). 10 In order to bring a RICO claim where mail or wire fraud serves as the predicate activity, it is necessary to show that (1) the defendant intentionally participated in a scheme to defraud another of money or property, (2) the defendant used the mails or wires in furtherance of that scheme, and (3) the plaintiff relied to his detriment on the defendant's misrepresentations. Id. at 1498-99. Only intent and reliance are at issue in this appeal, since AT&T obviously used the mails when it sent Kemp his phone bill. 11 AT&T argues that Kemp failed to provide sufficient evidence that it intended to deceive him because none of the statements in its long distance phone bill were false. As this court has explained, however, it is not necessary for a plaintiff to point to affirmative misstatements in order to establish the requisite fraudulent intent of a defendant under the mail and wire fraud statutes. Langford v. Rite Aid of Ala., Inc., 231 F.3d 1308, 1312 (11th Cir.2000) (Intent to defraud need not be shown through active misrepresentation — material omissions can be fraudulent if they are intended to create a false impression.). The nondisclosure of material information, even in the absence of any patently false statements, can also constitute a violation of the mail and wire fraud statutes where a defendant has a duty to disclose. See Ayres v. Gen. Motors Corp., 234 F.3d 514, 521 (11th Cir.2000). Such a duty can be judicially created where there is a special relationship of trust between the parties, or may be based on other circumstances. See Langford, 231 F.3d at 1312-13 (Determinations as to whether a duty to disclose information exists must be made on a case by case basis, with appropriate attention given to the nature of the transaction and the relationship between the parties.). 12 In this case, once AT&T included the LMAD charges in the section of its bill for long distance calls, it had the duty to correct the mistaken impression it had fostered that the LMAD debts were for long distance charges. See United States v. Autuori, 212 F.3d 105, 119 (2nd Cir.2000) (A duty to disclose can also arise in a situation where a defendant makes partial or ambiguous statements that require further disclosure in order to avoid being misleading.); United States v. Townley, 665 F.2d 579, 585 (5th Cir.1982) (noting that under the mail fraud statute, it is just as unlawful to speak `half truths' or to omit to state facts necessary to make the statements made, in light of the circumstances under which they were made, not misleading). The LMAD gambling charges appeared under the heading direct dialed calls in Kemp's phone bill and were interspersed among charges for regular long distance calls. AT&T's name and logo were displayed on all the pages containing the LMAD charges. It was clearly foreseeable that this formatting would cause some customers to think that the LMAD charges were for a long distance phone call owed to AT&T and that the charges had to be paid in order to maintain phone service. 4 In fact, however, the LMAD charges were not long distance charges but were gambling debts owed only to Teleline, and as AT&T acknowledged at trial, individuals could not lose phone service for failing to pay these debts. Moreover, as we explain below, the LMAD fees constituted illegal gambling debts that could not be collected lawfully under Georgia law. 13 In light of the circumstances here, and most specifically the way the charges were placed on the bill, we are satisfied that sufficient evidence supports the jury's conclusion that AT&T intended to mislead customers into believing that they had to pay the LMAD debts in order to maintain uninterrupted phone service. As a result, AT&T had a duty to place adequate information on its bill that would have disclosed the true nature of the LMAD charges and corrected the misconception it had intentionally created. 5 See Autuori, 212 F.3d at 119. 14 Because AT&T was under a duty to make this disclosure, the company cannot argue that Kemp failed to rely on AT&T's omissions. Although it was a BellSouth representative who erroneously stated that Kemp's service would be terminated if he did not pay for the LMAD charges, had AT&T's long distance bill contained the necessary disclosures, Kemp need not have called BellSouth for an explanation. AT&T's material omissions were thus an essential part of Kemp's decision to pay these gambling debts. The district court did not err in denying AT&T's motion for judgment as a matter of law with respect to the jury's finding of fraud. See U.S. EEOC v. W&O, Inc., 213 F.3d 600, 610 (11th Cir.2000) (judgment as a matter of law should be denied unless the evidence is so one-sided that one party must prevail as a matter of law). 15 2. Illegal Gambling and Collection of an Unlawful Debt 16 AT&T argues that the district court erred when it concluded that the LMAD game violated Georgia's prohibition on illegal gambling. As a result, the company maintains that the jury's finding that it collected unlawful debts in violation of the federal and Georgia RICO statutes should be reversed, since both RICO claims are founded on a violation of Georgia's ban on gambling. See 18 U.S.C. § 1961(6) (unlawful debt under federal RICO statute includes debts incurred in activities that violate state gambling laws) and Ga.Code Ann. § 16-14-3(9)(A)(xvii) (racketeering activity under Georgia RICO includes violations of state prohibition on commercial gambling). 17 Under state law, the LMAD game was an illegal lottery if it was a scheme or procedure whereby one or more prizes are distributed by chance among persons who have paid or promised consideration for a chance to win such prize. Ga.Code Ann. § 16-12-20(4). This definition incorporates three key elements: consideration, prize and chance. See Tierce v. State, 122 Ga.App. 845, 846, 178 S.E.2d 913 (1970). Kemp maintains that all three elements were satisfied by showing that his grandson called a number that offered a chance to win a prize in exchange for a fee. AT&T responds that because non-callers could also participate in the game through the mail, the element of consideration was negated. 18 As the Georgia Court of Appeals has explained, in order for a game to amount to illegal gambling, it is only necessary that among those persons who receive a chance to win a prize there must be some who have paid a consideration. Id. at 847, 178 S.E.2d 913; see also Barker v. State, 56 Ga.App. 705, 193 S.E. 605, 607 (1937) (The test is not whether it was possible to win without paying.... The test is whether that group who did pay ... were paying in part for the chance of a prize.) (internal quotation marks omitted). Clearly, the element of consideration was present for those callers who called the line, since they were charged $3.88 per minute to play and have the chance of winning a prize. Therefore, LMAD was an illegal lottery under Georgia law and the district court did not err in rejecting AT&T's motion for judgment as a matter of law. 6 19 3. Whether Georgia's Voluntary Payment Statute Bars Kemp's Recovery 20 Georgia's voluntary payment statute, which AT&T claims bars Kemp's recovery, provides that: 21 Payments of claims made through ignorance of the law or where all the facts are known and there is no misplaced confidence and no artifice, deception, or fraudulent practice used by the other party are deemed voluntary and cannot be recovered unless made under an urgent and immediate necessity therefor or to release person or property from detention or to prevent an immediate seizure of person or property. Filing a protest at the time of payment does not change the rule prescribed in this Code section. 22 Ga.Code Ann. § 13-1-13 (emphasis added). 23 Under section 13-1-13, a payment will not be deemed voluntary if it was the product of fraud. See Decatur Fed. Sav. & Loan v. Gibson, 268 Ga. 362, 363, 489 S.E.2d 820 (Ga.1997). Therefore, in light of the jury's finding of fraud, we conclude that Kemp's payment was not made voluntarily under Georgia law. 24