CELLPHONE FEE TERMINATION CASES







Filed 3/3/11








CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

CELLPHONE FEE TERMINATION CASES.	A124077 A124095 A125311 (Alameda County Super. Ct. No. RG03121510, JCCP No. 4332)

These consolidated appeals are from a judgment after trial in a consumer class action against wireless telephone carrier Sprint Spectrum, L.P. (Sprint), challenging its policy of charging early termination fees (ETF's) to customers terminating service prior to expiration of defined contract periods.[1] The trial court found the ETF's to be unlawful penalties under Civil Code section 1671, subdivision (d),[2] enjoined enforcement, and granted restitution/damages to the plaintiff class in the amount of ETF's collected by Sprint during the class period, $73,775,975. A jury found that class members who had been charged ETF's had violated the terms of their contracts with Sprint, and that Sprint's actual damages exceeded the ETF charges Sprint had collected. The resulting setoff negated any monetary recovery to the class. The trial court, reasoning that the jury had failed to follow its instructions on Sprint's actual damages, granted the plaintiffs'[3] motion for a partial new trial new on that issue.
Sprint appeals the decision invalidating the ETF's and enjoining their enforcement, and the court's grant of the motion for partial new trial on damages. Plaintiffs cross-appeal, alleging that the trial court erred in permitting Sprint to assert damage claims as setoffs to class claims for recovery of ETF's paid. In the published portions of this opinion we address the issues of federal preemption and the application of section 1671, subdivision (d). We affirm in all respects.
I. Background
Procedural History
Sprint is a national cellular service carrier, providing cellular telephone service in California. In 2003, lawsuits were filed in Alameda County and in Orange County against Sprint and other cellular service providers[4] alleging that the ETF's violated California consumer protection laws and constituted unauthorized penalties under section 1671.[5] This action and others were coordinated under Judicial Council order (Code Civ. Proc., § 404.3; Cal. Rules of Court, rule 3.524) before Judge Ronald Sabraw in the Alameda County Superior Court as the Cellphone Termination Fee Cases (JCCP No. 4332).) (See Gatton, supra, 152 Cal.App.4th at p. 575, fn. 1.)
On June 9, 2006, Judge Ronald Sabraw, the then designated coordination judge, certified a class in the related cases defined as: â€