Opinion ID: 2530632
Heading Depth: 1
Heading Rank: 7

Heading: Business Customers' Breach of Contract Claims

Text: This court reviews the district court's order granting AT & T summary judgment on the business customers' breach of contract claims de novo applying the same legal standard as the district court. Union Standard Ins. Co. v. Hobbs Rental Corp., 566 F.3d 950, 952 (10th Cir. 2009). The business customer plaintiffs alleged AT & T breached its contracts by charging them for administrative expenses that were not associated with the collection of the UCC. In granting AT & T's motion, the district court correctly decided the plaintiffs failed to raise a genuine issue of material fact. The relevant provision in AT & T's Business Service Guide allowed AT & T to collect the amounts it paid into the USF plus associated administrative costs. The Business Service Guide also listed the UCC rate applicable to the business customers' interstate and international charges. The business customers argue AT & T calculated the amount of administrative costs it billed on costs other than those associated with the collection and payment of USF expenses. Specifically, the plaintiffs point to AT & T's Undisputed Fact No. 44, which described its method of calculating administrative expenses: The ABS administrative expense estimates (sometimes referred to as overheads) were calculated by taking actual administrative expenses for all business services, dividing it by the underlying revenues to obtain an administrative expense percentage of total revenues, and multiplying that administrative-expense percentage by the total billed USF revenues. These rates ranged from 9.97% to 10.97% of the UCC, which in turn amounted to approximately 1.0% of a customer's total interstate and international phone charges. On April 1, 2003, after the close of the class period, AT & T's method of billing for the administrative expenses associated with the UCC changed. This change came shortly after an FCC order required the carriers separately disclose to their customers any administrative expenses associated with the UCC charge. In re Federal-State Joint Board on Universal Service, CC Docket Nos. 96-45, 98-171, 92-237, 99-200, 95-116, 98-170, Report & Order & Second Further Notice of Proposed Rulemaking, 17 FCC Rcd. 24,952, ¶ 48 (2002). This new, separately listed Administrative Expense Fee was 0.74% of a customer's total interstate and international phone charges during its first year in existence, and 0.88% during its second. The plaintiffs argue AT & T's method of calculating UCC administrative expenses was flawed because it made no attempt to quantify and assess the actual costs associated with administering the USF. Plaintiffs contend this fact alone precluded summary judgment because AT & T's expenses for all business services were not associated with the collection and payment of the USF. The undisputed fact cited by the plaintiffs does not establish a triable issue on whether AT & T recovered administrative expenses not associated with the USF. It stated only that the total administrative expenses recovered through the UCC were calculated by determining the administrative expenses associated with each dollar of revenue from all business services and then multiplying that percentage figure by the billed USF revenues. There is no evidence this method could have resulted in an over-recovery of administrative expenses associated with the USF. In particular, there is no evidence the administrative tasks and expenses associated with billing and collecting the UCC were less cost sensitive than those associated with billing and collecting other revenues for business services. The business customer plaintiffs next contend the undisputed fact that the percentage rate AT & T charged was lower after the FCC's April 1, 2003 rule change created a triable issue as to whether AT & T overcharged its business customers during the class period. This argument also fails. Plaintiffs fail to point to any evidence indicating AT & T's method of calculating the UCC administrative charge changed when the FCC's listing requirement was imposed. Nor do they point to evidence indicating the fluctuations in the administrative charges associated with the UCC trended differently from those associated with other aspects of AT & T's operations. Evidence of a reduction in the administrative charge from 1.0% to 0.74%, and subsequent increase to 0.88%, standing alone, does not create a genuine issue of material fact as to whether AT & T charged its business customers for administrative costs not associated with the USF prior to the FCC's order. Accordingly, the district court's dismissal of the business customers' breach of contract claim was proper.