Plaintiff Rex Elder, individually and on behalf of a class of similarly situated individuals, filed this lawsuit seeking relief against defendants Pacific Bell Telephone Company (hereafter Pacific Bell) and ACI Billing Services, Inc., doing business as OAN (hereafter OAN)
FACTUAL AND PROCEDURAL BACKGROUND
A. Law Relating to Cramming
In 1998, the Legislature added sections 2889.9 and 2890 to the Public Utilities Code
B. Current Lawsuit
In October 2009, plaintiff, on behalf of himself and others similarly situated, sued defendants Pacific Bell and OAN seeking relief for cramming.
Defendants generally demurred to the entire complaint based on the ground that the Public Utilities Commission (hereafter PUC) had exclusive or primary jurisdiction to resolve the lawsuit (Code Civ. Proc., § 430.10, subd. (a)), and generally demurred to each count based on the failure to allege facts sufficient to state a cause of action (Code Civ. Proc., § 430.10, subd. (e)). OAN specifically demurred on the ground that each cause of action against it was uncertain. (Code Civ. Proc., § 430.10, subd. (f).) Plaintiff opposed the demurrers.
The superior court granted defendants’ general demurrers without leave to amend on the ground that the PUC had exclusive jurisdiction over this lawsuit. Because of its ruling that it lacked jurisdiction, the court did not address defendants’ alternate argument that this lawsuit should be stayed under the doctrine of primary jurisdiction and the PUC should be given the opportunity to rule on plaintiff’s claims in the first instance. The court also found that a cause of action for tortious interference with a contract against OAN failed because the complaint did not allege facts to support a necessary inference that OAN knew the third party charges were unauthorized but nonetheless it forwarded them to Pacific Bell for inclusion in a subscriber’s telephone bill. Having sustained the demurrers without leave to amend, the court issued a judgment dismissing the lawsuit in its entirety. Plaintiff timely appeals.
DISCUSSION
I. Standard of Review
In reviewing the ruling on defendants’ demurrers, “we do not review the validity of [the superior court’s] reasoning but only the propriety of the ruling itself. [Citations.]” (Wilner v. Sunset Life Ins. Co. (2000)
II. Application of Exclusive Jurisdiction Doctrine Is Not Warranted in This Case
Section 1759, subdivision (a) (hereafter section 1759(a)), provides that no court, except the Supreme Court or a Court of Appeal, has jurisdiction to interfere with the PUC’s performance of its official duties.
Here, there is no question that the PUC has both the constitutional and statutory authority to make rules regarding cramming. (Cal. Const., art. XII, §§ 1-6; see Pub. Util. Com., §§ 2889.9, subds. (c), (d), (e), (f), (i), 2890.1.) And, there is no question that the PUC has adopted rules governing cramming pursuant to sections 2889.9 and 2890.1. At issue here is the third factor—whether plaintiff’s superior court action against defendants for allegedly engaging in cramming would hinder, frustrate, interfere with, or obstruct the PUC’s performance of its official duties. For the reasons we now discuss, we conclude that plaintiff’s lawsuit would not hinder, frustrate, interfere with, or obstmct the PUC’s regulatory authority or rule-making on cramming as enunciated in its decisions.
Contrary to defendants’ contention, the PUC has not undertaken to oversee and regulate “all aspects of third-party billing” to prevent cramming by entities governed by the PUC. In its 2004 decision, the PUC explicitly stated its adoption of cramming rules, “which are based upon the Commission’s
Two years later, in its 2006 revised decision, the PUC specifically refrained from adopting any preventive measures to be taken by telephone companies or billing agents, such as OAN, to prevent cramming. (Cal.P.U.C. Decision General Order No. 168, Market Rules To Empower Telecommunications Consumers and to Prevent Fraud (Mar. 2, 2006) Dec. No. 06-03-013 [2006 Cal.P.U.C. Lexis 86 at pp. *152-*154].) The PUC believed it made “little sense to micromanage” the entities regarding security measures, “given that there are a number of security measures a carrier could adopt in order to minimize the risk of cramming.” (Id., 2006 Cal.P.U.C. Lexis 86 at p. *152.) Instead, the PUC determined it did not need to impose security measures to prevent cramming because telephone companies and billing agents, such as OAN, had “strong financial incentives to adopt [their own] significant security measures [to prevent cramming],” and consumers would “continue to benefit from significant statutory protections” in sections 2889.9 and 2890, which “forbid placement of unauthorized charges on a telephone bill.” (Cal.P.U.C. Dec. No. 06-03-013, supra, 2006 Cal.P.U.C. Lexis 86 at pp. *153-*154.) In promulgating rules governing cramming complaints at that time, the PUC explained that its intent was to “establish, first and
On December 14, 2006, the PUC modified Decision 06-03-013, to “clarify ... the applicability of the [General Order No.] 168 rules,” by noting that its “intent in limiting the applicability of the rules was not to foreclose the ability of private individuals from filing claims under section 2106 or limit any existing rights. Rather, it was to indicate that we believe that all alleged violations of the G.O. 168 rules should be brought to the Commission for resolution as, we have primary jurisdiction over these matters. [Citation.] . . . [W]e shall be implementing a variety of consumer education programs and developing several initiatives to enhance enforcement of existing statutes and regulations as part of our consumer protection initiative. It is important that the interpretation and application of the rules are consistent with these programs and initiatives. Therefore, the Commission, and not the courts, should interpret the application of the G.O. 168 rules.” (Cal.P.U.C. Order Modifying Decision No. 06-03-013 and Denying Rehearing of the Decision as Modified (Dec. 14, 2006) Dec. No. 06-12-042
In its “Final Decision Adopting California Telephone Corporation Billing Rules,” dated October 28, 2010, the PUC adopted “modifications” to General Order No. 168 “to ensure that Part 4 of GO 168 clearly specifies the rules required to ensure that only authorized charges are placed on a subscriber’s bill,” and “as reflected in the rules attached to today’s decision to clarify that, as unambiguously required by the Public Utilities Code, the subscriber must authorize all charges that appear on a California telephone bill.” (Cal.P.U.C. Decision Issuing General Order No. 168, Final Decision Adopting California Telephone Corporation Billing Rules (Oct. 28, 2010) Dec. No. 10-10-034 [2010 Cal.P.U.C. Lexis 424 at pp. *41, *44], rehearing denied by Decision No. 11-03-031, dated Mar. 10, 2011 [2011 Cal.P.U.C. Lexis 164].) In the decision’s Attachment A, “Revised General Order [No.] 168, Part 4, California Telephone Corporation Billing Rules,” the PUC rewrote the rules “to address and report cramming-related issues.” (Cal.P.U.C. Dec. No. 10-10-034, supra, Attachment A, 2010 Cal.P.U.C. Lexis 424 at pp. *78-*79.) However, the PUC repeated that: “Compliance with these rules does not relieve Billing Telephone Corporations of other obligations they may have under their tariffs, other Commission General Orders and decisions, FCC orders, and state and federal statutes,” and these rules “shall not be interpreted ... to abridge or alter a right of action under any other state or federal law.” (Id. at p. *79.) In pertinent part, the rules now read that: (1) “Billing Telephone Corporations shall only place charges that have been authorized by the Subscriber on the Subscriber’s telephone bill. All charges billed without Subscriber authorization are unlawful”;
By its General Order No. 168 and decisions, the PUC has not effectively occupied the field such that all superior court actions raising cramming issues are subject to PUC’s exclusive jurisdiction, as defendants suggest. More specifically, and as pertinent to our discussion, the PUC has not approved “a general policy of limiting the liability” of telephone companies and billing agents for cramming. (Waters v. Pacific Tel. Co. (1974)
We therefore conclude defendants have not established plaintiff’s lawsuit would result in a decision that would be “contrary to a policy adopted by the PUC” or “interfere with” the PUC’s regulation of entities subject to the statutory prohibition against cramming. (Hartwell, supra,
III. Application of Primary Jurisdiction Doctrine Is Not Warranted in This Case
We also conclude that this lawsuit should not be stayed or dismissed under the primary jurisdiction doctrine. “ ‘ “Primary jurisdiction” . . . comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special
In this case, the critical issue to be resolved is whether defendants should be held liable for their allegedly unlawful practice of cramming. To resolve that issue, the superior court will be required to construe section 2890, “an inherently judicial function. ‘[Cjourts are the ultimate arbiters of the construction of a statute. [Citation.] An administrative agency cannot alter or enlarge the legislation, and an erroneous administrative construction does not govern the court’s interpretation of the statute. [Citation.]’ [Citation.] This case turns on ‘a question of statutory interpretation, a matter with which courts have considerable experience and which does not necessitate deferral to another agency. [Citation.]’ [Citation.] In this case, neither efficiency nor uniformity would be enhanced by ‘administrative expertise.’ [Citations.]” {People ex rel. Kennedy v. Beaumont Investment, Ltd. (2003)
IV. First Amended Complaint Is Sufficient and Certain to Withstand Demurrers
We also see no basis to dismiss this lawsuit on the ground that the allegations in the first amended complaint are insufficient or uncertain. Regardless of the titles of the causes of actions, the gravamen of plaintiff’s complaint is defendants’ alleged conduct of causing, directly or indirectly, the inclusion of unauthorized charges on a subscriber’s telephone bill. In evaluating a demurrer, “ ‘the complaint will be held good, although the facts may not be clearly stated, or may be intermingled with a statement of other facts irrelevant
Under the title of causes of actions based on violations of section 2890 and the UCL, plaintiff alleges his telephone bill included a charge that he did not authorize and for which he has not received a full refund. We conclude those facts are sufficient to demonstrate substantive causes of action for violations of section 2890 and the UCL. “ ‘Because Business and Professions Code section 17200 is written in the disjunctive, it establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent. “In other words, a practice is prohibited as ‘unfair’ or ‘deceptive’ even if not ‘unlawful’ and vice versa.” ’ [Citation.]” (Cel-Tech Communications, supra,
Defendants’ challenges to the causes of the action for violations of section 2890 and the UCL appear to equate the inclusion of an unauthorized charge on a subscriber’s telephone bill with a finding of liability. However, whether the inclusion of an unauthorized charge on a subscriber’s telephone bill will render defendants liable for monetary relief will require consideration of legal and factual issues to be resolved at a later stage in the litigation. “ ‘It is an elementary rule that the sole function of a demurrer is to test the sufficiency of the challenged pleading. . . .’ ‘Matters of defense not apparent in the pleading are not available upon demurrer. [Citation.]’ ” (Childs v. State of California (1983)
For similar reasons, we reject Pacific Bell’s challenge to the cause of action for breach of contract. Plaintiff alleges, in pertinent part, that “Plaintiff and the Class entered into substantially identical Service Agreements with . . .
OAN’s challenge to the cause of action for “restitution/unjust enrichment” is not persuasive. Billing agent OAN, the company submitting the charges to Pacific Bell for inclusion on plaintiff’s telephone bill, is the means by which the unauthorized charges were included on plaintiff’s telephone bill. Under the title of the third cause of action, labeled “restitution/unjust enrichment,” it is alleged that OAN received and retained money belonging to plaintiff resulting from the billing and collecting of significant amounts of money in unauthorized premium content charges. This allegation satisfies “the elements for a claim of unjust enrichment: receipt of a benefit and unjust retention of the benefit at the expense of another. [Citation.]” (Lectrodryer v. SeoulBank (2000)
V. Conclusion
In sum, we reverse the judgment of dismissal on the ground defendants’ demurrers should have been overruled because the PUC has neither exclusive nor primary jurisdiction over this action, and, at this pleading stage, the causes of action are alleged with sufficient specificity and certainty to permit defendants to answer. Our decision is not to be read as expressing an opinion on the merits of any cause of action or the propriety of the lawsuit proceeding as a class action. Those matters are not before this court and will be resolved in further proceedings. (Shernoff v. Superior Court (1975)
The judgment of dismissal is reversed. The matter is remanded to the superior court with directions to vacate its order sustaining the demurrers to the first amended complaint, and issue a new order overruling the demurrers. Plaintiff is awarded costs on this appeal.
McGuiness, P. J., and Siggins, J., concurred.
A petition for a rehearing was denied May 18, 2012, and respondents’ petition for review by the Supreme Court was denied July 18, 2012, S203194. Werdegar, J., did not participate therein.
Notes
Plaintiff also named as a defendant AT&T, which entity was dismissed without prejudice and is not a party to this appeal. Defendant ACI Billing Services, Inc., doing business as OAN, was erroneously sued as “OAN Services, Inc.”
All further unspecified statutory references are to the Public Utilities Code.
Because plaintiff’s lawsuit was resolved by demurrer, we set forth the relevant facts as alleged in the first amended complaint, the operative pleading. (Shvarts v. Budget Group, Inc. (2000)
As to the “facts relating to the named plaintiff,” it was alleged that plaintiff was a subscriber of landline telephone service for his personal use from Pacific Bell. In or about 2009, his telephone bill included charges for certain premium content services, which he had not ordered and did not want to receive. He had not authorized defendants or anyone else to bill him for these charges and at no time did defendants verify his purported authorization of these charges. It was further alleged that “defendants had yet to provide a full refund of the unauthorized charges, consisting of the premium content charges, taxes, data charges, back interest, lost time, [or to] implement adequate procedures to ensure that such unauthorized charges would not appear in future billing periods and/or an assurance that such unauthorized charges would not appear in future billing periods.”
Because the Legislature has not given Business and Professions Code section 17200 et seq. an official name, our Supreme Court refers to these sections as the “ ‘unfair competition law.’ ” (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999)
In their demurrers, defendants do not dispute that they are entities subject to sections 2889.9 and 2890. (See § 216, subds. (a), (b), (c) [defining “public utility” to include every “telephone corporation . . . where the service is performed for . . . the public ...[;]... HI] .. . [w]henever any . . . telephone corporation . . . performs a service for . . . the public or any portion thereof for which any compensation or payment whatsoever is received, that . . . telephone corporation ... is a public utility subject to the jurisdiction, control and regulation of the commission . . .”; and “[w]hen any person or corporation performs any service for . . . any person, . . . that in turn either directly or indirectly, mediately or immediately, performs that service for . . . the public or any portion thereof, that person or corporation is a public utility subject to the jurisdiction, control, and regulation of the commission . . . .”].)
Consequently, we do not separately address the superior court’s reasons for sustaining the demurrers without leave to amend. (McKell v. Washington Mutual, Inc. (2006)
Section 1759(a) reads: “No court of this state, except the Supreme Court and the court of appeal, to the extent specified in this article, shall have jurisdiction to review, reverse, correct, or annul any order or decision of the commission or to suspend or delay the execution or operation thereof, or to enjoin, restrain, or interfere with the commission in the performance of its official duties, as provided by law and the rules of [the] court.”
Section 2106 reads, in pertinent part: “Any public utility which does, causes to be done, or permits any act, matter or thing prohibited or declared unlawful, or which omits to do any act, matter, or thing required to be done, either by the Constitution, any law of this State, or any order or decision of the commission, shall be liable to the persons or corporations affected thereby for all loss, damages, or injury caused thereby or resulting therefrom. ... An action to recover for such loss, damage, or injury may be brought in any court of competent jurisdiction by any corporation or person.”
The superior court granted Pacific Bell’s request for judicial notice of certain PUC decisions. At the request of plaintiff, we take judicial notice of the PUC decisions, including its final decision in 2010. (See Hartwell, supra,
Pacific Bell argues that the obligation to obtain customer authorization for appropriate charges remains on the provider of the service or product because the rules make clear that as a billing telephone corporation, it can defend itself against alleged unauthorized charges by “providing a record of affirmative authorization from the Service Provider.” (Cal.P.U.C. Dec. No. 10-10-034, supra, Attachment A, 2010 Cal.P.U.C. Lexis 424 at p. *81.) However, Pacific Bell ignores that the rules also provide that a subscriber may rebut any evidence of authorization by evidence that the subscriber did not authorize the charges, and that the billing telephone corporation bears the ultimate responsibility for all items presented in a subscriber’s bill. (Id., 2010 Cal.P.U.C. Lexis 424 at pp. *81—*82.)
The PUC has directed, in pertinent part: “Prior to approving a Service Provider or Billing Agent for the provision of billing services, the Billing Telephone Corporation shall directly or through another entity conduct a reasonable inquiry of the Service Provider’s or Billing Agent’s history of violations of state or federal law or rules relating to consumer protection and current ability to operate lawfully. [][] At service initiation, all Billing Telephone Corporations shall disclose to Subscribers that the Billing Telephone Corporation has opted to provide billing and collection services to Third Parties and that such charges may be placed on the Subscriber’s bill, absent action by the Subscriber, [f] Wireless Billing Telephone Corporations shall explain at service initiation in clear and concise written terms that the Subscriber’s line is open to charges from third-party Service Providers and that the Subscriber has the option to block these charges.” (Cal.P.U.C. Dec. No. 10-10-034, supra, Attachment A, 2010 Cal.P.U.C. Lexis 424 at p. *83.)
Because we conclude plaintiff’s civil action for monetary damages is not barred by section 1759(a), we need not address whether section 1759(a) would preclude plaintiff’s request for injunctive relief. Ordinarily on demurrer we are not concerned with the type of relief demanded by the plaintiff. (Gruenberg v. Aetna Ins. Co. (1973)
“Ordinarily, a general demurrer does not lie as to a portion of a cause of action, and if any part of a cause of action is properly pleaded, the demurrer will be overruled.” {Fire Ins. Exchange v. Superior Court (2004)