• On June 29, 2011, a California appeals court affirmed the dismissal of a putative class action against various AT&T entities for the wireless carrier’s practice of charging its California customers sales tax on the full, undiscounted price of their phones, instead of the price for which AT&T actually sells the phone. The relevant California tax law requires carriers to pay sales tax on the full price of the device when bundled with wireless service, but gives discretion to the carrier as to whether it collects the full tax from the consumer. The putative class representative alleged that she relied on AT&T’s representations that it only collects “mandatory” taxes; she then, in an amended complaint, alleged that an AT&T representative told her that it is “required by law” to collect the full tax. The appeals court agreed that the case was properly dismissed because the plaintiff did not allege that “she could have obtained a bundled transaction for a new cellular telephone – the telephone that she selected – at a lower price from another source,” which could have supplied the necessary injury-in-fact element of her claims. The court concluded that the plaintiff did not “allege a ‘tangible increased cost or burden’ as a result of AT&T’s purported misrepresentation.” The court did not explain how that could allegation could be made in light of AT&T’s practice of securing exclusive rights to sell particular mobile devices. Bower v. AT&T Mobility, LLC, Cal. Ct. App. 2d Dist. No. B223364.

The California Public Utilities Commission has opened an investigation into AT&T’s proposed acquisition of T-Mobile, including how it will affect consumer choice and prices. CPUC Investigation 11-06-09.

  • On June 28, 2011, the United States Court of Appeals for the Eighth Circuit reversed a Missouri district court’s denial of a challenge from a homeowners’ group to a consent judgment entered into between Franklin County, Missouri and St. Charles Tower that would have allowed St. Charles Tower to build a cellular tower. The County Planning and Zoning Commission originally denied the tower application, but, upon being sued in federal court, it entered into a consent judgment with the tower company, granting it the necessary permits to build the proposed facility. The Eighth Circuit “agree[d] with Intervenors that the consent judgment’s remedy – compelling the issuance of the conditional use permit without regard to the procedures specified in the [County’s] Land Use Regulations – violated state law.” The consent decree, for example, was not achieved through a concurring four-fifths vote, or accompanied by written findings and conclusions. The court concluded that “State actors cannot enter into an agreement allowing them to act outside their legal authority, even if that agreement is styled as a ‘consent judgment’ and approved by a court.” The case is remanded to the district court to vacate the consent judgment. St. Charles Tower, Inc. v. Kurtz, No. 10-2412 (8th Cir.).