[Federal Register Volume 65, Number 162 (Monday, August 21, 2000)]
[Rules and Regulations]
[Pages 50652-50653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-21135]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Chapter I

[WT Docket No. 99-263; FCC 00-292]


Availability of Monetary Damages for State Law Claims Against 
CMRS Providers

AGENCY: Federal Communications Commission.

ACTION: Interpretation.

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SUMMARY: In this document, the Commission responds to a Petition for 
Declaratory Ruling, and finds that certain portions of the 
Communications Act do not generally preempt the award of monetary 
damages against Commercial Mobile Radio Service Providers by state 
courts based on state consumer protection, tort, or contract claims. 
The action is taken to respond to the Petition and to clarify this 
issue.

FOR FURTHER INFORMATION CONTACT: Mary Woytek or Susan Kimmel, 202-418-
1310.

SUPPLEMENTARY INFORMATION: This is a summary of the Memorandum Opinion 
and Order (MO&O) in WT Docket No. 99-263, FCC 00-292, adopted August 3, 
2000, and released August 14, 2000. The complete text of this MO&O is 
available for inspection and copying during normal business hours at 
the FCC Reference Information Center, Courtyard Level, 445 12th Street, 
SW., Washington, DC, and also may be purchased from the Commission's 
copy contractor, International Transcription Services (ITS, Inc.), CY-
B400, 445 12th Street, SW., Washington, DC.

Synopsis of the Memorandum Opinion and Order

    1. In this Memorandum Opinion and Order (MO&O), the Commission 
responds to a Petition for Declaratory Ruling, filed on July 16, 1999, 
by Wireless Consumers Alliance, Inc. (WCA Petition). The WCA Petition 
concerns whether the provisions of the Communications Act of 1934, as 
amended, serve to preempt state courts from awarding monetary relief 
against Commercial Mobile Radio Service (CMRS) providers: (a) for 
violating state consumer protection laws prohibiting false advertising 
and other fraudulent business practices, or (b) in the context of 
contractual disputes and tort actions adjudicated under state contract 
and tort laws. In addition, the issue regarding damage awards raised in 
a Petition for Declaratory Ruling filed by Southwest Bell Mobile 
Systems is incorporated into the Commission's response to the WCA 
Petition. (FCC 99-365, 14 FCC Rcd 19898, 1999.)
    2. The Commission finds that section 332(c)(3)(A) does not 
generally preempt the award of monetary damages by state courts based 
on state consumer protection, tort, or contract claims. The Commission 
notes, however, that whether a specific damage calculation is 
prohibited by section 332 will depend on the specific details of the 
award and the facts and circumstances of a particular case.
    3. Specifically, the Commission concludes that award of damages to 
customers damaged by a CMRS provider's breach of contract or fraud 
violation would not normally require a state court to prescribe, set or 
fix wireless rates. A consideration of the price originally charged, 
for the purposes of determining the extent of harm or injury involved, 
is not necessarily an inquiry into the reasonableness of the original 
price and therefore is permissible.

[[Page 50653]]

    4. A court will have overstepped its authority under section 332 
if, in determining damages, it does enter into a regulatory type of 
analysis that purports to determine the reasonableness of a prior rate 
or it sets a prospective charge for services. Thus, while the 
Commission concludes that section 332 does not generally preempt damage 
awards based on state contract or consumer protection laws, this is not 
to say that such awards can never amount to rate or entry regulation. 
Nor does the Commission conclude that a damage award in the WCA 
litigation or any other specific case would or would not be consistent 
with section 332(c)(3). The Commission believes that the question of 
whether a specific damage award or a specific grant of injunctive 
relief constitutes rate or entry regulation prohibited by section 332 
(c)(3) would depend on all facts and circumstances of the case.

Ordering Clauses

    5. Pursuant to sections 4(i) and 4(j) of the Communications Act of 
1934, as amended, 47 U.S.C. 154 (i) and 154 (j), section 5(d) of the 
Administrative Procedure Act, 5 U.S.C. 554(e), and Sec. 1.2 of the 
Commission's Rules, 47 CFR 1.2, the Petition for Declaratory Ruling 
filed by Wireless Consumer Alliance, Inc. is granted in part, as 
indicated in the full text of this MO&O, and otherwise is denied.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 00-21135 Filed 8-18-00; 8:45 am]
BILLING CODE 6712-01-P