Lady Di's, Inc. v. Enhanced Services Billing, Inc.
654 F.3d 728
7th Cir.2011Background
- Lady Di's, Inc. sues ESBI and ILD, billing aggregators, for cramming on Indiana customers' bills over six years.
- Plaintiff alleges unauthorized charges were placed on its bill, targeting over a million Indiana numbers.
- Defendants produced evidence showing Lady Di's actually ordered the disputed services.
- Indiana anti-cramming regulation 170 IAC § 7-1.1-19 lists required documentation for billing—regulation has no private right of action.
- Plaintiff seeks unjust enrichment and Deceptive Commercial Solicitation Act remedies based on regulation noncompliance, while district court granted summary judgment and denied class certification.
- Court ultimately determines regulation does not apply, unjust enrichment not shown where services were ordered, and Deceptive Commercial Solicitation Act not triggered; class certification denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Indiana anti-cramming regulation apply to billing aggregators? | Lady Di's asserts regulation binds aggregators as billing agents. | Defendants are not PICs/LECs nor billing agents for PICs/LECs. | Regulation does not apply to aggregators. |
| Is there unjust enrichment when plaintiff ordered and received services? | Regulation violation allows unjust enrichment recovery. | No unjust enrichment where services were ordered and benefit conferred. | Unjust enrichment claim fails. |
| Does Deceptive Commercial Solicitation Act apply where services were ordered? | Failure to comply with regulation renders orders void, enabling statutory claim. | Statute applies only to not-yet-ordered services; here, services were ordered. | Act does not apply. |
| Should the case be certified as a class action under Rule 23(b)(3)? | Common issues predominate based on regulation violations. | Individual transactional details predominate; no common injury. | District court's denial of class certification affirmed. |
Key Cases Cited
- Michener v. Watts, 176 Ind. 376, 96 N.E. 127 (1911) (Ind. 1911) (statutory violation does not automatically void contracts for unjust recovery)
- Lawson v. First Union Mortgage Co., 786 N.E.2d 279 (Ind.App.2003) (Ind. App. 2003) (equitable relief not available where there is legitimate reason for charges)
- Continental Basketball Ass'n, Inc. v. Ellenstein Enter., Inc., 669 N.E.2d 134 (Ind.1996) (Ind. 1996) (voidness discussions in statutory context; contract remedies tied to protection statutes)
- Bayh v. Sonnenburg, 573 N.E.2d 398 (Ind.1991) (Ind. 1991) (unjust enrichment doctrine in Indiana law)