Consumer Finance Insights
April 9, 2015

T-Mobile Invokes California Public Utilities Law to Defeat TCPA Motion to Compel

An Illinois federal district court held on March 20, 2015 that California law protects T-Mobile from having to turn over the names and addresses of thousands of its California customers without their consent in response to a third-party subpoena in a nationwide class action.

The case, Birchmeier v. Caribbean Cruise Line, Inc., Case No. 1:12-cv-04069 (N.D. Ill.), alleges a violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227, and is being litigated on behalf of two certified classes that could include nearly a million class members.  The plaintiffs allege that they received unsolicited automated telephone calls offering a free cruise on Caribbean Cruise Line in exchange for their participation in a political opinion survey – a ploy, according to the plaintiffs, to sell vacation packages and time shares.

As part of the class notification process, the plaintiffs issued third-party subpoenas to several wireless telephone carriers, including Cricket, MetroPCS, AT&T, Sprint PCS, U.S. Cellular, Verizon, and T-Mobile, requesting the names and addresses of the individuals whose phone numbers were called as part of the alleged “robo-calling campaign” at issue.  According to a joint status report filed at the end of last year (available at Dkt. No. 265 (Dec. 31, 2014)), most of the subpoenaed carriers cooperated with the plaintiffs: Cricket and MetroPCS are prepaid carriers and did not have the information sought, and Sprint, U.S. Cellular, AT&T, and Verizon agreed to produce the information, though AT&T and Verizon conditioned production on being able to notify their customers, and Sprint only produced its California customer data following the court’s grant of plaintiff’s unopposed motion to compel that information.  T-Mobile, however, initially refused to provide information for any of the approximately 42,000 numbers identified by plaintiffs.  While it ultimately agreed to produce the majority of the information sought, it continued to assert that California’s Public Utilities Code prohibits it from disclosing information about the 4,600 California customers identified in the subpoena without their consent.

In T-Mobile’s opposition to the ensuing motion to compel production of its California subscriber information, T-Mobile pointed to Cal. Pub. Util. Code § 2891(a)(4), which provides that:

“(a) No telephone or telegraph corporation shall make available to any other person or corporation, without first obtaining the residential subscriber’s consent, in writing, any of the following information:

(4) Demographic information about individual residential subscribers, or aggregate information from which individual identities and characteristics have not been removed.”

T-Mobile countered the plaintiffs’ arguments that Section 2891(a) does not apply to the T-Mobile subpoena: it cited extensive case law supporting its arguments that wireless carriers are “telephone or telegraph corporations” under the statute and that the statute applies to cellular phone records as well as residential phone records.  It also argued that the statute’s exception allowing disclosure of protected customer information for law enforcement purposes does not apply to civil subpoenas, because if it did it would render superfluous California’s Code of Civil Procedure § 1985.3(f), which expressly governs civil subpoenas duces tecum for personal records directed at telephone companies and requires written consent of the affected customer.  And it argued that the California statutes apply even though the subpoena was issued in federal court, because to hold otherwise would be “tantamount to asserting that Rule 45, providing for federal subpoenas, preempts the California laws governing the disclosure of the type of information sought in the subpoena.”

At a hearing on March 20, 2015, U.S. District Judge Matthew Kennelly agreed with T-Mobile’s arguments and issued an oral order denying the plaintiffs’ motion to compel production of T-Mobile’s California customer information absent written consent of the affected customers.

The decision reflects an uneasy balance between wireless carriers’ efforts to protect their customers’ privacy and plaintiffs’ efforts to include as many consumers in their class actions as possible.  To date, there have not been any further filings in the case in response to Judge Kennelly’s order.  But the order raises a number of interesting questions, like what effect, if any, the court’s ruling will have for the other subpoenaed carriers, who released their customers’ information (including, presumably, the information of California customers) before the order was issued, whether T-Mobile will obtain written consent from its California customers to release their information to the plaintiffs, and whether the plaintiffs in this case will be willing to pay the costs of obtaining that consent.  In any event, the order represents a important limitation on the reach of TCPA class action subpoenas, the significance of which may be informed by whether we see an increase in this type of privacy objection to future subpoenas in nationwide class actions.