Paging resellers Your Phone Company Inc. of Portland, Ore., and Page Club USA of Seattle last week won a lawsuit against the Oregon branch of Paging Network Inc. and were awarded $66,000 and $78,000 in damages, respectively.
The lawsuit by the two former PageNet resellers claimed PageNet of Oregon Inc. conspired to steal their customer bases by first overcharging the resellers and then terminating their airtime after they refused to pay the “excessive and unjustified” bills.
The jury voted 11-1 in favor of the plaintiff’s charges that PageNet intentionally interfered with the contract relations between the resellers and their customers.
“We are disappointed in the decision of the jury. The decision was contrary to the law and the evidence presented in the case. We plan to appeal,” said Scott Baradell, director of corporate communications at PageNet.
Jim Keeling, owner of Your Phone Company-now operating a business called AAA Paging Center-initiated the lawsuit after PageNet terminated its reseller agreement in September 1995. The company said it regularly paid all reseller charges until PageNet began overcharging the company by continuing to charge for numbers that it had deactivated months prior.
When Keeling complained and refused to pay the bills, PageNet cut off service.
The main contention of the lawsuit was over what happened next. PageNet then assumed control of both resellers’ customers bases and lists, which it sold to two different competing resellers of both companies. These new resellers then paged the plaintiffs’ customers, informing them they were their new paging providers.
Your Phone Company and Page Club USA also sued for misappropriation of trade secrets under Oregon’s Uniform Trade Secrets Act, which the judge ruled against in a summary judgment. The lawyer for the resellers, Mark Griffin, said he has not ruled out appealing that summary judgment.
“We have a meritous appeal issue, and we can appeal and will decide whether or not to do so at such a time as we have to,” he said.
This is not the first time resellers have made over-billing claims against PageNet. Resellers in Washington, California, Texas and New York have made similar complaints about the company’s local branches in their respective locations. Keeling said he is considering filing a class-action lawsuit against PageNet’s corporate office, charging it systematically overcharges resellers with the intent to take their customers.
PageNet, however, defended the integrity of its billing system.
“We feel like our billing system and its accuracy is certainly on par with the rest of the industry,” Baradell said. “We believe they will be improved significantly through the Centers of Excellence program … But previous to the COE system, there is no question our billing system was on par, at minimum, with other paging systems.”
PageNet just last month announced it had completed converting its Portland offices to the COE infrastructure.
