Cooper v. Charter Communications Entertainments I, LLC
2014 WL 3623594, 760 F.3d 103, 2014 U.S. App. LEXIS 14003 (2014)
Rule of Law:
A cable provider's statutory and contractual obligation under Massachusetts law to grant pro rata credits for service interruptions may create an enforceable right for consumers under Chapter 93A (the unfair and deceptive trade practices statute), even if direct contractual enforcement as a third-party beneficiary is precluded by the contract's specific enforcement mechanisms.
Facts:
- Bruce Cooper, John Romito, Roy Baker, and Whitney Taylor Thompson are Massachusetts residents who purchase cable television, internet, or telephone services from Charter Communications.
- Beginning on October 29, 2011, Massachusetts experienced a severe snowstorm that damaged trees, made travel impossible, and took down power and cable lines.
- During the storm, the plaintiffs did not receive services from Charter, either due to loss of electrical power, Charter's equipment failure, or a combination thereof.
- On November 22, 2011, Cooper, Romito, and Baker filed a complaint in Massachusetts state court.
- Two weeks later, the plaintiffs' attorneys sent Charter a demand letter seeking relief for the three original plaintiffs and others similarly situated, specifying the dates and times their services were interrupted (e.g., Cooper and Baker lost service Oct. 29, 2011, 6:00 pm, until Nov. 7, 2011, 3:00 pm).
- A month after receiving the demand, Charter sent a letter to the plaintiffs' attorneys, stating it had issued credits to Cooper, Baker, and Romito, claiming full compensation for the time they were without service.
- Whitney Taylor Thompson was added as the fourth plaintiff, alleging her service interruption lasted more than twenty-four consecutive hours.
Procedural Posture:
- Bruce Cooper, John Romito, and Roy Baker filed a class action complaint against Charter Communications Entertainments I, LLC and Charter Communications, Inc. in Massachusetts state court.
- After the first amended complaint was served on Charter, the company removed the case to federal district court, invoking the Class Action Fairness Act (CAFA).
- Charter then filed a motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction (mootness) and 12(b)(6) for failure to state a claim.
- The district court ruled that removal was proper and granted Charter's motion to dismiss, finding the claims of Cooper, Baker, and Romito moot because they had received credits, and that the claim of the fourth plaintiff, Whitney Taylor Thompson, failed to state a claim.
- Plaintiffs appealed the district court's decision to the United States Court of Appeals for the First Circuit.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a cable provider's failure to automatically provide pro rata credits for service interruptions, as required by Massachusetts law and incorporated into its licensing agreements, provide a basis for customers to assert claims under a third-party beneficiary theory, the Massachusetts unfair and deceptive trade practices statute (Chapter 93A), or quasi-contract theories of unjust enrichment and money had and received?
Opinions:
Majority - Kayatta, Circuit Judge
Yes, the district court properly exercised jurisdiction under the Class Action Fairness Act (CAFA). The amount in controversy requirement was satisfied because with a putative class of at least 95,000 customers seeking at least $75 per member, the total amount exceeded $7,125,000, well over the $5 million threshold. CAFA applies to class actions before or after class certification. No, the claims were not moot despite some plaintiffs receiving credits. While the individual monetary damages claims of Cooper, Baker, and Romito were satisfied by Charter's credits, the plaintiffs also sought declaratory relief regarding Charter's ongoing duty to provide credits without customers having to request them. Charter explicitly stated its credits were voluntary and exceeded legal requirements, thus rejecting the plaintiffs' interpretation of its duties. This ongoing, live dispute regarding the extent of Charter's obligations prevents the declaratory relief claim from being moot. Additionally, plaintiff Thompson had an unsatisfied damages claim. No, the plaintiffs cannot sue as third-party beneficiaries to enforce the licensing agreements. Although the contract provision requiring pro rata credits for service interruptions seems intended to benefit cable customers and directs payment to them, the contract as a whole provides specific and elaborate procedures for the municipality to enforce it (e.g., notice, cure period, public hearing). Allowing individual customers to circumvent these procedures would be inconsistent with the contracting parties' intent, especially considering the presumption against finding third-party liability in government contracts. Furthermore, claims for breach of implied contracts and breach of the duty of good faith and fair dealing fail because the plaintiffs made only a perfunctory effort to defend the implied contract claim, and no underlying contractual relationship enforceable by the plaintiffs was established for the good faith claim. Yes, the plaintiffs can plausibly state a claim under Chapter 93A, the Massachusetts unfair and deceptive trade practices statute. Massachusetts law requires cable providers to include a provision in licensing agreements promising pro rata credits for service interruptions of twenty-four or more hours. The court interprets 'any subscriber' to mean all subscribers who qualify, not just those who request a credit, finding Charter's contrary argument illogical. Charter's alleged failure to automatically provide these credits falls 'within at least the penumbra of some common-law, statutory, or other established concept of unfairness.' The legislature's requirement for Charter to promise to pay implies an intent for Charter to actually pay. A breach of such a promise, causing injury to consumers, plausibly makes out a Chapter 93A claim, providing a separate, consumer-centric cause of action distinct from common law contract principles. Yes, the plaintiffs can plausibly state claims for unjust enrichment and money had and received at the pleading stage. These quasi-contract claims rest on Charter unfairly benefiting by collecting money for unrendered services. While express contracts typically preclude quasi-contract claims, the court cannot determine at this stage whether an express contract between the individual plaintiffs and Charter exists that would foreclose these alternative theories, as no such contract was incorporated into the complaint.
Analysis:
This case significantly clarifies the distinction between contractual enforcement by third-party beneficiaries and consumer protection under state statutes like Massachusetts' Chapter 93A. It establishes that even when specific contractual enforcement mechanisms in a government contract preclude individual lawsuits for breach, consumers may still find recourse under broader unfair trade practices laws. The ruling provides a pathway for consumers to challenge a company's alleged failure to adhere to statutorily-mandated promises, especially where those promises address a clear consumer injury and are critical to the legislative intent. It highlights Chapter 93A's role as a separate, consumer-centric cause of action, allowing consumers to directly challenge conduct that is deemed unfair, even if not a direct breach of contract enforceable by them.
