WASHINGTON—Minnesota Attorney General Mike Hatch (D) asked the U.S. Supreme Court to review a federal appeals court decision striking down a state law requiring cell phone carriers to notify subscribers of—and sometimes get permission for—changes to wireless contracts.
In December, the 8th U.S. Circuit Court of Appeals in St. Louis overturned a lower court ruling upholding Minnesota’s wireless consumer protection law. The 8th Circuit sided with the mobile phone industry in ruling the state statute amounted to rate regulation and therefore was pre-empted by federal law.
“The 8th Circuit’s decision leaves citizens at the mercy of cell phone companies, which are now allowed to change the terms of a customer’s contract, including the rates they charge, without the customer’s knowledge or consent,” said Hatch, who is running for governor of Minnesota. “By requiring notification and permission from cell phone customers, our law provides basic fairness that is currently missing in the relationship between cell phone companies and their customers.”
The wireless industry is expected to file a response to the Hatch petition with the Supreme Court early next month.
The Minnesota legislature passed the wireless consumer protection law in May 2004 after lawmakers, according to Hatch, heard from cell phone customers that companies routinely changed the terms of their contracts—including the price—without their knowledge or consent. Customers testified that when they learned of the changes, they tried to terminate their contracts and were forced to decide whether to pay a termination fee of $150 or more.
The state measure at issue requires cell phone carriers to provide customers with a copy of their contracts; to give customers advance notice of contract changes, which could increase the cost or extend the length of the contract; and to get customer consent before making such changes. In addition, if a customer proposes a change in their service, such as adding night and weekend minutes, the cell phone company is required to notify the customer if the change will increase the cost or extend the length of the contract.
Hatch said the attorney general’s office in 2004 received more complaints about cell phone companies than against all local telephone companies and energy utilities combined.
