Schnall v. AT&T Wireless Services, Inc.
171 Wash. 2d 260
Wash.2011Background
- Plaintiffs allege AT&T Wireless charged a Universal Connectivity Charge (UCC) not disclosed as part of advertised rates, violating the Washington CPA and contract terms.
- AT&T recovered USF contributions from customers via the UCC, categorized in contracts as ‘Other Charges & Credits’ or ‘Taxes, Surcharges & Regulatory Fees.’
- Plaintiff Schnall seeks nationwide class certification of all AT&T customers improperly billed for the UCC; trial court denied; Court of Appeals reversed.
- The trial court held that choice-of-law provisions and 50-state contract law differences would cause predominance and manageability problems for a nationwide contract-class.
- The Court of Appeals found predominance despite limited analysis, suggesting subclasses/master’s hearings could address state-law variations, and held CPA claims could be nationwide.
- The Supreme Court affirms in part, reverses in part, and remands for further proceedings, holding a nationwide class cannot be maintained; warrants consideration of manageable subclasses and remand on CPA issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether choice-of-law clauses bar a nationwide contract class | Schnall: home-state laws apply; conflicts moot for predomi-nance. | AT&T: enforceability of clauses requires applying home-state law to contract claims. | Choice-of-law clauses enforceable; nationwide contract class not certified. |
| Whether CPA claims can be certified on a nationwide basis | CPA claims can be nationwide; common issues predominate and causation can be shown broadly. | Causation and deception vary; nationwide class unmanageable. | Nationwide CPA class cannot be maintained; remand for reconsideration. |
| Whether state-law differences in contract claims can be managed by subclasses | Subclasses/master’s hearings can address material differences among states. | Differences preclude predominance; no workable subclass plan. | Remand to determine whether manageable subclasses can address differences. |
| Whether Washington CPA applies extraterritorially to a nationwide class | Washington CPA applies to conduct outside the state due to its broad reach and Washington interests. | Extraterritorial reach is limited; nationwide enforcement questionable. | CPA applies to nationwide conduct; remand for reconsideration consistent with Indoor Billboard. |
Key Cases Cited
- Indoor Billboard/Wash., Inc. v. Integra Telecom of Wash., Inc., 162 Wn.2d 59 (2007) (proximity of causation standard in CPA and reliance discussion; per se rules rejected)
- Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778 (1986) (causation standard for CPA elements; capacity to deceive)
- Patterson v. Bixby, 58 Wn.2d 454 (1961) (enforcement of contract choice-of-law provisions)
- McKee v. AT&T Corp., 164 Wn.2d 372 (2008) (enforceability of choice-of-law provisions; Restatement § 187 framework)
- Erwin v. Cotter Health Ctrs., Inc., 161 Wn.2d 676 (2007) (Restatement § 187 and significant-relationship approach to choice of law)
- Schwendeman v. USAA Cas. Ins. Co., 116 Wn.App. 9 (2003) (CR 23 guidance; federal analogy on class certification)