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Court Decides AT&T Can Avoid Suits by Resellers

Telecom: 'Filed-rate doctrine' bars customers from claiming they were promised a lower rate.

June 16, 1998|From Bloomberg News

WASHINGTON — AT&T Corp. and other major telephone companies on Monday won a U.S. Supreme Court fight to avoid breach-of-contract lawsuits by resellers and other customers who say they were offered special terms by the carrier.

The 7-1 decision killed a $1.1-million damage award against AT&T in its dispute with Oregon-based Central Office Telephone Inc., one of many firms that buy AT&T-discounted long-distance services and resell them to their own customers.

Central Office Telephone had charged that AT&T tried to drive the company out of business by delaying service and sending inaccurate bills to its customers. The company filed suit in Oregon, citing state laws against breach of contract and wrongful interference with commercial relationships.

An Oregon jury had awarded Central Office Telephone $13 million in actual damages.

Justice Antonin Scalia, writing for the Supreme Court in a decision overturning a lower court ruling, barred Central Office Telephone's claims, saying they involved regulated rates and services covered by Federal Communications Commission tariffs.

AT&T is protected by the "filed-rate doctrine," which prevents AT&T and other common carriers from deviating from the tariffs and bars customers from claiming they were promised a lower rate, Scalia held. The policy is designed to prevent carriers from discriminating against certain customers.

In other cases, the high court:

* Handed US Airways Group Inc. a victory in its fight with 86 former employees who sued the company's East Coast shuttle after they were laid off in 1992 and 1993. The justices left intact a lower court decision throwing out a series of claims by former fleet service workers at the company's Shuttle Inc. subsidiary. The workers tried to force the company to reinstate them or compensate them for losing their jobs in the staff cutback.

* Rejected a bid by NationsMart and its top executives to kill a class-action lawsuit by investors who say they were duped into buying shares of the failed company. NationsMart shares have tumbled from their initial $7 offering price in 1993 to only pennies today. The St. Louis-based company was designed to operate laundry, dry-cleaning and shoe-repair centers in stores owned by Wal-Mart Stores Inc. and Kmart Corp.

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