FTC v. At&t Mobility LLC, 883 F.3d 848

From 2011–2014 AT&T throttled data speeds for customers on grandfathered “unlimited” mobile data plans without disclosing the degree or intent of slowdowns; FTC sued under Section 5 of the FTC Act for unfair/deceptive practices.
AT&T moved to dismiss, arguing Section 5’s exemption for “common carriers subject to the Acts to regulate commerce” bars FTC jurisdiction over the company’s conduct (status-based exemption covering the entity entirely).
FTC argued the exemption is activity-based: common carriers are exempt only for their common-carrier activities; non-common-carrier activities remain subject to FTC enforcement.
While litigation was pending, the FCC issued a 2015 Reclassification Order treating mobile broadband as a common-carriage service prospectively; AT&T argued this eliminated FTC jurisdiction over the case retroactively.
The district court denied dismissal; a Ninth Circuit panel reversed on status-based grounds; the en banc Ninth Circuit affirmed the district court, holding the exemption is activity-based and the FCC reclassification was prospective only.

Issue	Plaintiff's Argument (FTC)	Defendant's Argument (AT&T)	Held
Scope of FTC Act common-carrier exemption: activity- vs. status-based	Exemption is activity-based; FTC can regulate non-common-carrier activities of an entity that also provides common-carrier services	Exemption is status-based; an entity that qualifies as a common carrier is wholly exempt from Section 5	Activity-based: exemption bars FTC only as to common-carrier activities; FTC retains authority over non-common-carrier activities
Effect of FCC s 2015 reclassification of mobile broadband	Reclassification is prospective; does not strip FTC authority over pre-order conduct or retroactively moot claims	Reclassification removes FTC jurisdiction over AT&T's claims, including past conduct	Reclassification is prospective; does not retroactively deprive FTC of authority to pursue past violations or monetary relief

N.Y. Cent. R.R. Co. v. Lockwood, 84 U.S. 357 (establishes that a common carrier may act in non-common-carrier capacities)
ICC v. Goodrich Transit Co., 224 U.S. 194 (recognizes regulator authority limited to matters within its jurisdiction and distinguishes carrier vs non-carrier business)
Kan. City S. Ry. Co. v. United States, 282 U.S. 760 (confirming common carriers may have activities outside common-carriage duties)
FTC v. Sperry & Hutchinson Co., 405 U.S. 233 (discusses breadth of FTC Act remedial purpose)
FCC v. Midwest Video Corp., 440 U.S. 689 (noting an entity may be common carrier with respect to some services but not others)
FTC v. Verity Int'l, Ltd., 443 F.3d 48 (2d Cir.) (historical analysis concluding courts must examine actual conduct to determine common-carrier status)
United States v. Mead Corp., 533 U.S. 218 (describes deference principles relevant to agency interpretations)