Court Opinion

ID: 9697747
Source: CourtListenerOpinion
Date Created: 2023-08-25 19:28:21.357464+00
Date Added: 2024-06-11T18:20:35.046215
License: Public Domain

BASTIAN, Circuit Judge
(dissenting).
[¶ 19.] I respectfully dissent. . I agree that Firstel is not immunized from Mobile’s allegations that Firstel acted intentionally and recklessly but I would enforce Firstel’s tariff and hold that it applies to Mobile’s damage claims for breach of contract and ordinary negligence.
[¶ 20.] This Court’s decision in Rozeboom was based on Allen v. Michigan Bell Telephone Co., 18 Mich.App. 632, 171 N.W.2d 689 (1969). In Allen, plaintiff, an insurance agent, signed a contract with defendant, Michigan Bell Telephone Company, to place advertisements in defendant’s telephone directory. At the time, defendant was the sole provider of telephone directories in the area. When defendant failed to print the advertisements and plaintiff subsequently sued, defendant argued that a limitation of liability clause in the contract protected it from having to pay damages. Defendant moved for and was granted summary disposition.
[¶ 21.] On appeal, the Michigan Court of Appeals found that the limitation of liability clause was unconscionable because of plaintiffs lack of options and bargaining power as compared to the defendant. Id. at 692. See also Michigan Ass’n of Psychotherapy Clinics v. Blue Cross & Blue Shield of Michigan, 101 Mich.App. 559, 574, 301 N.W.2d 33, 40 (1980). The Court’s primary concern was that plaintiff was contracting with a’public utility which had a monopoly on the type .of advertising sought. Michigan Ass’n of Psychotherapy Clinics, 301 N.W.2d at 40.
[¶ 22.] At the time Rozeboom was decided and thereafter, the vast majority of jurisdictions have upheld provisions that limit the liability of telephone companies in omitting or erroneously listing numbers or advertisements in a directory.3 Rozeboom and Allen and virtually all other cases with *608similar holdings were decided before the deregulation of the telecommunication industry.
[¶ 23.] Many of the courts that have upheld limitation of liability clauses have recognized that in providing its service, a telephone company is significantly different from a private business because it must operate under the rules of a state regulatory commission.
*609[¶ 24.] A telephone company’s duty to provide adequate service is inextricably connected to its rates and expenses, including its potential liability for errors and omissions. See e.g. Prior v. GTE North Incorporated, 681 N.E.2d at 773. It is the responsibility of the state regulatory commission to find a balance among these factors. Prior v. GTE North Incorporated, 681 N.E.2d at 773-774. A tariff merely represents a trade-off between providing customers with a relatively low-cost service and ensuring that the utility will provide reasonably adequate service. Prior v. GTE North Incorporated, 681 N.E.2d at 774.
[¶ 25.] The majority essentially holds that Firstel’s tariff is unconscionable and unenforceable per se. The facts of this case, however, differ from those presented in Rozeboom and Allen. In both cases plaintiffs were private individuals bringing a lawsuit against the Bell Telephone monopoly. Here, both litigants are corporations and the Bell Telephone monopoly no longer exists.
[¶ 26.] In Rozeboom the limitation of liability clause completely immunized the telephone company from all legal actions including breach of contract, ordinary negligence, willful and wanton misconduct, and deliberate and intentional conduct. Here, as noted by the majority, Firstel’s tariff does not protect it from Mobile’s allegations of intentional and reckless acts. In Rozeboom and Allen, the defendant was the party that omitted the listing or advertising from its own directory. Here, the defendant telephone company . allegedly failed to properly classify a telephone number which prevented it from being listed in another company’s directory.
[¶ 27.] Moreover, Mobile has failed to plead the very facts upon which the holdings in Rozeboom and Allen are essentially based. Mobile does not allege, for example, that it had no choice but to contract with Firstel. Mobile does not allege that Firstel holds a monopoly on providing telephone service in the area. It does not allege that its bargaining power was unequal.
[¶ 28.] Therefore, based on the abundance of legal precedent and the dearth of factual underpinnings I would hold that Mobile’s claim for damages for breach of contract and ordinary negligence is subject to and limited by Firstel’s tariff.
[¶ 29.] AMUNDSON, Justice, joins this dissent.

. In addition to Rozeboom and Allen, cases that reject exculpatory clauses include Discount Fabric House of Racine, Inc. v. Wisconsin Telephone Co., 117 Wis.2d 587, 345 N.W.2d 417 (1984); Morgan v. South Central Bell Telephone Co., 466 So.2d 107 (1985); and Reuben H. Donnelley Corp. v. McKinnon, 688 S.W.2d 612 (Tex.App.1985); Pigman v. *608Ameritech Publishing, Inc., 641 N.E.2d 1026 (Ind.App.1994) (overruled) 700 N.E.2d 1128 (Ind.1998). A majority of tribunals in other states that have addressed this issue have upheld the validity of such clauses: Mendel v. Mountain States Tel. & Tel. Co., 117 Ariz. 491, 573 P.2d 891 (1977); Robinson Ins. & Real Estate, Inc. v. Southwestern Bell Tel. Co., 366 F.Supp. 307 (W.D.Ark.1973); Davidian v. Pacific Tel. & Tel. Co., 16 Cal.App.3d 750, 94 Cal.Rptr. 337 (1971); University Hills Beauty Acad., Inc. v. Mountain States Tel. & Tel. Co., 38 Colo.App. 194, 554 P.2d 723 (1976); Ed Fine Oldsmobile, Inc. v. Diamond State Tel. Co., 494 A.2d 636 (Del.1985); Neering v. Southern Bell Tel. Co., 169 F.Supp. 133 (S.D.Fla.1958); Advance Service, Inc. v. General Tel. Co. of Fla., 187 So.2d 660 (Fla.App.1966); Southworth & McGill, P.A., v. Southern Bell Telephone and Telegraph Co., 580 So.2d 628 (Fla.App. 1 Dist. 1991); Southern Bell Tel. & Tel. Co. v. C & S Realty Co., 141 Ga.App. 216, 233 S.E.2d 9 (1977) (overruled in part on other grounds); Georgia-Carolina Brick and Tile Co. v. Brown, 153 Ga.App. 747, 266 S.E.2d 531 (1980); McClure Engineering Assocs., Inc. v. Reuben Donnelley Corp. 101 Ill.App.3d 1109, 57 Ill.Dec. 471, 428 N.E.2d 1151 (Ill.App.1981) aff'd., 95 Ill.2d 68, 69 Ill.Dec. 183, 447 N.E.2d 400; Pinnacle Computer Services, Inc., v. Ameritech Publishing, Inc., 642 N.E.2d 1011 (Ind.App.1994); Prior v. GTE North Incorporated, 681 N.E.2d 768 (Ind.App.1997); Trimble v. Ameritech Publishing, Inc., 700 N.E.2d 1128 (Ind.1998); Woodburn v. Northwestern Bell Tel. Co., 275 N.W.2d 403 (Iowa 1979); Holman v. Southwestern Bell Tel. Co., 358 F.Supp. 727 (D.Kan.1973); Louisville Bear Safety Serv., Inc. v. South Cent. Bell Tel. Co., 571 S.W.2d 438 (Ky.App.1978); Wilson v. Southern Bell Tel. & Tel. Co., 194 So.2d 739 (La.App.1967); Baird v. Chesapeake and Potomac Tel. Co., 208 Md. 245, 117 A.2d 873 (1955); Alpha One v. NYNEX Information Resources, 2 Mass.L.Rptr. 568 (Mass.Super.1994); St. Paul Fire & Marine Ins. Co. v. Guardian Alarm, 115 Mich.App. 278, 283-284, 320 N.W.2d 244 (1982); All Makes S-V, Inc. v. Ameritech Publishing, Inc., 2001 WL 951381 (Mich.App.); Ezell v. Bellsouth Telecommunications, Inc., 961 F.Supp. 149 (S.D.Miss.1997); Warner v. Southwestern Bell Tel. Co., 428 S.W.2d 596 (Mo.1968); Tobler’s Flowers, Inc., v. Southwestern Bell Telephone Co., 632 S.W.2d 15 (Mo.App.1982); Montana ex rel. Mountain States Tel. & Tel. Co., 160 Mont. 443, 503 P.2d 526 (1972); Bernstein v. G.T.E. Directories Corp., 631 F.Supp. 1551 (D.Nev.1986); Bulb-man v. Nevada Bell, 108 Nev. 105, 825 P.2d 588 (1992); PK’s Landscaping v. New England Tel. & Tel. Co., 128 N.H. 753, 519 A.2d 285 (1986); Federal Building Serv. v. Mountain States Tel. & Tel. Co., 76 N.M. 524, 417 P.2d 24 (1966); Hamilton Employment Serv. v. New York Tel. Co., 253 N.Y. 468, 171 N.E. 710 (1930); Gas House v. Southern Bell Tel. & Tel. Co., 289 N.C. 175, 221 S.E.2d 499 (1976); North Carolina ex rel Utilities Comm. v. Southern Bell Tel. & Tel. Co., 307 N.C. 541, 299 S.E.2d 763 (1983); Cunha v. Ohio Bell Tel. Co., 26 Ohio Misc. 267, 271 N.E.2d 321 (1970); Wheeler Stuckey, Inc. v. Southwestern Bell Tel. Co., 279 F.Supp. 712 (W.D.Okla.1967); Vails v. Southwestern Bell Tel. Co., 504 F.Supp. 740 (W.D.Okl.1980); Georges v. Pacific Tel. & Tel. Co., 184 F.Supp. 571 (D.Or.1960); Behrend v. Bell Tel. Co. of Pa., 257 Pa.Super. 35, 390 A.2d 233 (1978); Pride v. Southern Bell Tel. & Tel. Co., 244 S.C. 615, 138 S.E.2d 155 (1964); Pilot Indus, v. Southern Bell Tel. and Tel. Co., 495 F.Supp. 356 (D.C.S.C.1979); Smith v. Southern Bell Tel. & Tel. Co., 51 Tenn.App. 146, 364 S.W.2d 952 (1962); Atkin Wright & Miles v. Mountain States Tel. & Tel. Co., 709 P.2d 330 (Utah 1985); McTighe v. New England Tel. & Tel. Co., 216 F.2d 26 (2dCir.1954); Allen v. General Tel. Co. of the Northwest, 20 Wash.App. 144, 578 P.2d 1333 (1978).