Federal Trade Commission v. AT & T Mobility LLC
87 F. Supp. 3d 1087
N.D. Cal.2015Background
- FTC sues AT&T Mobility LLC for unfair or deceptive acts or practices in marketing mobile data under 15 U.S.C. § 45(a)(2).
- AT&T argues it is exempt from § 45(a) as a common carrier subject to regulation of commerce.
- Court denies AT&T’s motion to dismiss, addressing both statutory text and historical understanding of common carrier exemption.
- Key issue is whether common carrier exemption requires only status or also activity (i.e., actual common carriage).
- FCC’s Reclassification Order reclassifying mobile data as common carriage is discussed for prospective effect and its impact on jurisdiction.
- Court emphasizes remedial nature of FTC Act and considers historical common law understanding of common carriers.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does § 45(a)(2) exemption apply when a common carrier provides non-carrier services? | FTC: exemption requires status and activity; non-carrier services can be regulated. | AT&T: exemption applies so long as entity has common carrier status, regardless of activity. | Exemption requires both status and activity; FTC interpretation favored |
| Should the common carrier exemption be read holistically or as two separate inquiries (status and regulation)? | FTC: interpret holistically to avoid gaps and overbreadth. | AT&T: use a two-step disjunctive approach (status or regulation). | Court adopts holistic interpretation: exemption applies when status and regulated activity align |
| What is the impact of the FCC’s Reclassification Order on FTC jurisdiction over past conduct? | FTC: past conduct remains actionable; retroactivity issues do not bar action for past behavior. | AT&T: retroactive jurisdictional change divests FTC of authority over pending actions. | Reclassification affects future regulation; past conduct remains within FTC's jurisdiction |
| Should the FTC Act be construed broadly or narrowly in light of its remedial purpose? | FTC: remedial act should be read broadly to protect the public and prevent gaps. | AT&T: Congress may have intended limited overlap with agency regulation. | Court favors broad, remedial construction of the FTC Act |
Key Cases Cited
- Interstate Commerce Comm'n v. Goodrich Transit Co., 224 U.S. 194 (U.S. 1912) (common carriers may have activities outside carriage; jurisdiction remains)
- Verity Int'l Ltd. v. FTC, 443 F.3d 48 (2d Cir. 2006) (common carrier exemption tied to status and activity; framework guide)
- Crosse & Blackwell Co. v. Fed. Trade Comm'n, 262 F.2d 600 (4th Cir. 1959) (pre-1958 Packers exemption interpreted to include activity)
- Miller v. FTC, 549 F.2d 452 (7th Cir. 1977) (debated scope of common carrier exemption; not binding here)
- Interstate Commerce Commission v. Goodrich Transit Co., 224 U.S. 194 (U.S. 1912) (illustrates activity versus status under regulation principles)