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Tuesday, August 16, 2011

Ind. Decisions - 7th Circuit issues one Indiana opinion today

This is an opinion about phone "cramming" and Indiana law, and affirms the district court decision. See particularly discussion of cramming and Indiana statutory authority at pp. 8-12.

In Lady Di's Inc. v. Enhanced Services Billing (SD Ind., Barker), a 23-page opinion, Judge Hamilton writes:

Plaintiff Lady Di’s, Inc. alleged in this proposed class action that defendants Enhanced Services Billing, Inc. (“ESBI”) and ILD Telecommunications, Inc. are billing aggregators engaged in “cramming” by placing unauthorized charges on customers’ telephone bills. The plaintiff alleged that the defendants arranged to have unauthorized charges placed on its telephone bill and, in the six years before this suit was filed, have been responsible for unauthorized charges being placed on the telephone bills of more than one million Indiana telephone numbers. The complaint alleged that plaintiff “never requested, authorized, or even knew about” the services for which defendants charged it. The evidence, however, turned out differently. Both defendants produced evidence proving that the plaintiff actually ordered the services in question.

Despite that evidence, plaintiff has pursued the case, arguing that although it actually ordered the services, the charges were never properly authorized. The plaintiff’s case now hinges on its theory that, even if a customer has actually ordered and benefitted from a service, the service was not legally authorized if the defendants did not possess all the customer authorization documentation required by the Indiana anti-cramming regulation, 170 IAC § 7-1.1-19(p). Indiana’s anti-cramming regulation does not provide a private right of action, but the plaintiff argues that the defendants’ failure to comply proves, without more, common law unjust enrichment, so that potential class members are entitled to a refund for all services for which defendants charged them. The plaintiff also argues that the defendants’ failure to comply with the regulation proves a claim for damages under Indiana’s Deceptive Commercial Solicitation Act, Ind. Code § 24-5-19-9.

The district court denied the plaintiff’s request for class certification and granted the defendants’ motions for summary judgment on the unjust enrichment and statutory deception claims. Lady Di’s, Inc. v. Enhanced Services Billing, Inc., 2010 WL 4751659 (S.D. Ind. Nov. 16, 2010). We affirm the district court’s judgment, though we follow a somewhat different path to that end. Turning first to the merits, we conclude that the Indiana anticramming regulation does not apply to these defendants because they are not telephone companies and did not act in this case as billing agents for telephone companies. Second, we find that there was no unjust enrichment where the plaintiff ordered and received the services in question. Third, we find that the Deceptive Commercial Solicitation Act does not apply because the plaintiff had actually ordered the services for which it was charged. Finally, because we reject plaintiff’s theory of the case, premised solely on the defendants’ common violation of the Indiana anti-cramming regulation, we affirm the district court’s denial of class certification because common issues do not predominate over individual issues, as required for a class under Federal Rule of Civil Procedure 23(b)(3).

Posted by Marcia Oddi on August 16, 2011 12:46 PM
Posted to Ind. (7th Cir.) Decisions