Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Emilio v. Sprint Spectrum L.P.

United States District Court, S.D. New York

July 27, 2017

VINCENT EMILIO, individually and on behalf of all others similarly situated, Plaintiff,
v.
SPRINT SPECTRUM L.P., d/b/a SPRINT PCS, Defendant.

          OPINION AND ORDER

          J. PAUL OETKEN, DISTRICT JUDGE:

         Plaintiff Vincent Emilio initiated this action on May 4, 2011. (Dkt. No. 1.) In the operative amended class action complaint, Emilio alleges that Defendant Sprint Spectrum L.P. (“Sprint”) violated the Kansas Unfair Trade and Consumer Protection Act (“KCPA”), Kan. Stat. Ann. § 50-623 et seq., primarily by misrepresenting a discretionary charge as a mandatory tax imposed on customers by New York state. (Dkt. No. 141.) Specifically, Emilio cites provisions of the KCPA that bar companies from misrepresenting or willfully omitting material facts from consumers, Kan. State. Ann. § 50-626(b)(2)-(3), or engaging in unconscionable acts, id. § 50-627(a), as the basis for his class claims, id. § 50-634(d). (Dkt. No. 141 ¶¶ 33-45.)

         Currently pending before the Court are Sprint's motion for summary judgment (Dkt. No. 253), Emilio's motion for class certification (Dkt. No. 264), and certain other related motions. For the reasons that follow, the motions for summary judgment and for class certification are denied.

         I. Factual Background

         The Court assumes familiarity with the complex background and procedural history of this case.[1] The following facts are, unless otherwise noted, undisputed and taken from the parties' Rule 56.1 statements and responses. (Dkt. No. 283.)

         This case focuses on Sprint's billing for a New York state excise tax that, during the relevant period, imposed a 2.5% tax on gross receipts, including ancillary charges, from the sale of mobile telecommunications services to a customer who primarily used those services in New York. N.Y. Tax §§ 186-e, 1111(1)(1). It is undisputed that, since 1997, Sprint has passed the excise tax through to its customers by including a surcharge on their regular invoices. (Dkt. No. 283 ¶¶ 78-79.)

         The claims at the heart of this action focus not on the fact of Sprint's passing through the excise tax (a claim which arose during the initial arbitration but was effectively dropped (see Dkt. No. 306-4 at 2-3)), but instead take issue with the way the company represented the excise tax on customer invoices. Specifically, during the putative class period, Sprint included the excise tax on customer bills under the “Surcharges and Fees” section (or the “Other Surcharges and Fees” section) (Dkt. No. 283 ¶¶ 50, 80), rather than the “Taxes and Regulatory Related Charges” part of the bill (id. ¶¶ 45-46). It is undisputed that, in April and July 2003, Sprint listed the excise tax under two separate sections, including the part of the bill enumerating the “taxes.” (Id. ¶¶ 53-54.)

         With the invoices, Sprint included disclosures explaining various charges. From January 2002 to January 2003, the relevant disclosure read:

Taxes, Surcharges and Other Regulatory Related Charges - These include applicable federal, state, city and county taxes. Other fees and charges are also invoiced here, including the Regulatory Obligations & Fees surcharge . . . .

(Id. ¶¶ 46-47.) From February 2003 to November 2004, the disclosure separated out “Surcharges and Fees” from its explanation of taxes. That disclosure read:

Surcharges and Fees - The surcharges in this section generally recover the costs incurred by Sprint in complying with various federal and state mandates. Charges that appear in this section of your invoice . . . are neither taxes nor government-imposed assessments. Neither federal nor state law requires a carrier to impose these charges but carriers are permitted to recover their costs of complying with these federal and state mandates.

(Id. ¶¶ 48-49.) From December 2004 to June 2007, Sprint referred to the tax as a “New York State Excise Tax Surcharge”; the charge remained in the “Surcharges and Fees, ” subsection of the bill, and the relevant disclosure read:

Surcharges and Fees - The surcharges in this section include certain charges assessed on Sprint that we pass through to our customers, as well as those that recover the costs by Sprint complying with various federal and state mandates. Charges that appear in this section of your invoice . . . are neither taxes nor government-mandated assessments. . . .

(Id. ¶¶ 50-52.)

         Sprint represents that its invoices placed the excise tax in the section of the bill reserved for surcharges and other fees, rather than the section designated for taxes, but Emilio disputes whether these sections of the bill were truly “distinct, ” whether Sprint's disclosures as to the nature of the tax were actually readable or were “uninvitingly small, ” and whether some of the disclosures sufficiently explained the nature of the excise tax. (Id. ¶¶ 45-49, 52.)

         Sprint's present motion for summary judgment and its opposition to Emilio's motion for class certification depend largely on answers given by Emilio during a 2009 deposition. Sprint argues that Emilio's statements doom his claims regarding his knowledge of, degree of care with regard to, and injury as a result of Sprint's billing practices and fundamentally compromise his efforts to certify a class.

         In his deposition, Emilio testified that, at bottom, he does not take issue with how Sprint described the New York State excise tax-whether it was listed as a “tax” or a “surcharge.” Instead, he was bothered by the fact that Sprint passed through the tax to individual customers. (Dkt. No. 256-4 (“Emilio Tr.”) at 88:4-89:17.) To that end, he testified that he would have paid the New York State excise tax regardless of how it was described or where it appeared on the bill. (Id. at 98:19-99:20) (Emilio contends, however, that this is evidence of unequal bargaining power vis-à-vis his wireless bill. (Dkt. No. 283 ¶¶ 42-43.))

         Even though Emilio maintains that he did not understand the nature of the excise tax (except that it was some sort of tax) (id. ¶ 29), he did not contact Sprint for clarification, except in connection with this action (id. ¶¶ 30-31), and he does not have knowledge of other wireless providers' billing practices with respect to the excise tax (id. ¶ 33). Sprint also cites excerpts from the deposition suggesting that Emilio was not concerned by the excise tax-specifically, that it is possible that Emilio did not suffer any “loss” because of the labeling of the charge. (Emilio Tr. at 94:15-95:22.) While Sprint points to the fact that Emilio represented that he found “nothing” about Sprint's description of the excise tax on the bill to be misleading, Emilio counters that he meant that he found no description whatsoever on the bill. (Dkt. No. 283 ¶ 37.)

         Emilio also indicated that he continued to pay his bills and renew his service with Sprint despite the issues he had identified with the company's billing practices. Specifically, Sprint points out that Emilio set up his payments to Sprint to be made automatically through his credit card. (Id. ¶ 21.) Emilio, however, points to records indicating that bank account debits were occasionally used. (Id.) Sprint cites testimony that Emilio had seen, or at least “look[ed] casually across” the items on his bill since he became a Sprint customer, including the excise tax in question, and nevertheless continued to pay his bills. (Id. ¶ 25 (alteration in original).) Emilio further gave testimony that he did not review the back of the first page of any Sprint invoice, which provided a description and explanation of the taxes and surcharges on the bill (as detailed above), before paying. (Id. ¶ 23.) But Emilio contends that his failure to review that information was in part because the typeface was small and inconspicuous. (Id. ¶¶ 23, 34, 38.)

         II. Motion for Summary Judgment

         A. Legal Standard

         Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56. A fact is “material” if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is “genuine” if, considering the record as a whole, a rational jury could find in favor of the non-moving party. Ricci v. DeStefano, 557 U.S. 557, 586 (2009) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)).

         A movant bears the initial burden of providing evidence on each material element of its claim or defense. Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 244 (2d Cir. 2004). The non-moving party must then respond with specific facts demonstrating that there are remaining issues for trial. Ricci, 557 U.S. at 586 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)). The non-moving party gets the benefit of having all “inferences to be drawn from the underlying facts contained in such materials . . . viewed in the light most favorable” to it. U.S. v. Diebold, Inc., 369 U.S. 654, 655 (1962).

         B. Discussion

         Sprint argues that it is entitled to summary judgment on the grounds that Emilio did not suffer a loss as a result of any violation of the KCPA, that his damages claim fails under the statute (both because Sprint did not mislead consumers about the nature of the excise tax and because any misrepresentation was not "material, " at least to Emilio), and that he is not entitled to other relief he seeks-declaratory or injunctive-as a matter of law. (Dkt. No. 255 at 12-24.) Each argument is addressed in turn.

         1. Emilio's Loss

         Sprint's principal argument is that Emilio has not demonstrated any loss caused by Sprint's billing practices and disclosures.

         Specifically, Sprint argues that, on the basis of statements elicited during Emilio's deposition, his claim falters and he cannot marshal sufficient evidence to raise a genuine dispute of material fact. Emilio testified during his deposition that he does not take issue with how Sprint described the New York State excise tax-whether it was listed as a "tax" or a "surcharge"; instead, he was bothered by the fact that Sprint passed through the tax to individual customers. (Emilio Tr. at 88:4-89:13.) As noted above, however, the operative complaint is not based on alleged wrongdoing in the fact of passing through the tax; that claim that has been abandoned. (See Dkt. No. 306-4 at 3.) Emilio also testified that he would have paid the New York State excise tax regardless of how it was described or where it appeared on the bill (Emilio Tr. at 98:19-99:20), and although he "look[ed] casually across" the items on his bill-including the excise tax-he nevertheless continued to pay and to renew his contract (Dkt. No. 283 ΒΆ 25 (alteration in original)). These ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.