FTC’s Throttling Case Against AT&T to be Heard by Ninth Circuit
A federal judge in the Northern District of California recently certified his denial of AT&T’s Motion to Dismiss the Federal Trade Commission’s (FTC’s) complaint alleging that AT&T misled consumers by limiting its “unlimited” data plan for mobile customers. This means that AT&T will now be able to appeal that decision to the Ninth Circuit.
In October 2014 the FTC filed a complaint alleging that AT&T engaged in unfair and deceptive conduct in violation of Section 5 of the FTC Act when it “throttled” mobile broadband subscribers who were “grandfathered” into the company’s unlimited mobile data plan. AT&T filed a Motion to Dismiss arguing that it is a common carrier subject to the Communications Act and thus exempt from Section 5 of the FTC Act. On March 31, Judge Edward Chen denied AT&T’s Motion, holding that the common carrier exception applies only when the entity has the status of a common carrier and is engaging in common carriage activity. The Order also held that the Federal Communications Commission’s (“FCC’s”) recent “Reclassification Order” that prospectively reclassified mobile data service from a non-common carriage to a common carriage service does not wrest from the FTC jurisdiction over AT&T’s past alleged misconduct.
On May 15, Judge Chen certified his order denying dismissal of the FTC’s complaint, which means that AT&T can now appeal it to the Ninth Circuit. Judge Chen held that AT&T’s Motion to Dismiss involves two issues that raise “novel and difficult questions of first impression” for which there is “a substantial ground for difference of opinion” — (1) whether the common carrier exception in Section 5 of the FTC Act applied to AT&T and (2) whether the FCC’s Reclassification Order stripped the FTC of urisdiction to pursue the case, even if limited to AT&T’s past misconduct. In addition, Judge Chen found that “there is no real dispute that the two issues identified by AT&T are controlling questions of law and that an immediate appeal may materially advance the ultimate termination of the litigation.”