STATEOFMICHIGAN BEFORE the MICHIGAN PUBLIC SERVICE COMMISSION * * * * * in the Matter of the Complaint Of

Home , Ameritech

S T A T E O F M I C H I G A N

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

* * * * *

In the matter of the complaint of ) RAYMOND COCHRAN against ) Case No. U-11834 AMERITECH MICHIGAN. ) )

At the March 22, 1999 meeting of the Michigan Public Service Commission in Lansing,

Michigan.

PRESENT: Hon. John G. Strand, Chairman Hon. David A. Svanda, Commissioner

OPINION AND ORDER

HISTORY OF PROCEEDINGS

On November 9, 1998, Raymond Cochran filed a complaint against Ameritech Michigan pursuant to the Michigan Telecommunications Act, 1991 PA 179, as amended, MCL 484.2101 et seq.; MSA 22.1469(101) et seq., (MTA). The complaint alleged that Ameritech Michigan had improperly included Mr. Cochran’s name, address, and telephone number in the October 31, 1998 edition of a Detroit metropolitan area telephone directory. On December 2, 1998, Ameritech

Michigan filed an answer and affirmative defenses.

Pursuant to due notice, a prehearing conference was conducted by Administrative Law Judge

Robert E. Hollenshead (ALJ) on December 4, 1998. Mr. Cochran, Ameritech Michigan, and the

Commission Staff (Staff) participated in the proceedings. On December 11, 1998, Ameritech Michigan filed a motion to dismiss Mr. Cochran’s complaint. On December 16, 1998, answers to the motion to dismiss were filed by Mr. Cochran and the

Staff.

On January 5, 1999, the ALJ conducted a hearing on the motion to dismiss. After considering the positions of the parties, the ALJ issued an oral Proposal for Decision (PFD) that recommended dismissal of Mr. Cochran’s complaint in its entirety.

On January 29, 1999, exceptions to the PFD were filed by Mr. Cochran and Ameritech Michi- gan. On February 9, 1999, replies to exceptions were filed by Ameritech Michigan and the Staff.

II.

NATURE OF THE COMPLAINT

Background Information

From 1971 through August 28, 1997, Mr. Cochran was a customer of Ameritech Michigan for basic local exchange service. During this entire period of time, Mr. Cochran paid for his name, address, and telephone number not to be listed in Ameritech Michigan’s telephone directories.

In August 1997, after discovering that Ameritech Michigan had included his name, address, and telephone number in several Detroit metropolitan area telephone directories, Mr. Cochran filed a civil lawsuit against Ameritech Michigan in Oakland County Circuit Court alleging breach of con- tract, gross negligence, invasion of privacy, and fraud. Ameritech Michigan obtained dismissal of the Oakland County Circuit Court lawsuit by arguing, among other things, that the Commission had primary jurisdiction over claims like those asserted by Mr. Cochran. Ameritech Michigan also contended that its Tariff M.P.S.C. No. 20-R controlled the outcome of the proceeding by limiting

Page 2 U-11834 damages to a credit or a refund for the fee paid for nonpublished service during the period in which the customer’s listing appeared in local directories.

On February 24, 1998, Mr. Cochran filed a complaint against Ameritech Michigan that was docketed as Case No. U-11639. On August 20, 1998, the Commission issued an order in Case

No. U-11639 finding that Ameritech Michigan had violated Section 502 of the MTA,

MCL 484.2502; MSA 22.1469(502), by obtaining dismissal of Mr. Cochran’s civil action by wrongly asserting that the dispute involved a regulated service and was controlled by a Commis- sion-approved tariff. Ameritech Michigan was ordered to cease and desist from further such violations of the MTA and was also ordered to pay a $2,000 fine. However, the Commission determined that Mr. Cochran’s other assertions regarding the publication of his name, address, and telephone number by Ameritech Michigan were beyond the province of the Commission. In so doing, the

Commission specifically declined to make a determination regarding whether Ameritech Michigan’s actions would give rise to an actionable claim based on negligence, fraud, or invasion of privacy.

Rather, the Commission noted that such claims were “beyond the purview of the Commission and must be pursued before the courts.” Order, Case No. U-11639, p. 18.

Current Controversy

Subsequent to issuance of the August 20, 1998 order in Case No. U-11639, Mr. Cochran became aware that his name, address, and telephone number had been published in the October 31,

1998 edition of another of Ameritech Michigan’s metropolitan Detroit telephone directories. On

November 9, 1998, Mr. Cochran filed the instant complaint, which stated that at all times subsequent to August 27, 1997 he was a customer of AT&T Communications of Michigan, Inc.,

(AT&T). He also alleged that his service arrangement with AT&T included his payment for

Page 3 U-11834 unpublished telephone service. Accordingly, he maintained that Ameritech Michigan violated

Sections 502 and 503 of the MTA, MCL 484.2502 and 484.2503; MSA 22.1469(502) and (503), as well as several sections of the Consumer Protection Act, 1976 PA 331, as amended, MCL 445.901 et seq.; MSA 19.418(1) et seq. (CPA). Further, Mr. Cochran alleged that he sustained compensable economic losses of $52,000. Finally, he requested an award of $866,000 for punitive damages and recoupment of his reasonable legal costs.

III.

MOTION TO DISMISS

In its motion to dismiss, Ameritech Michigan contended that the Commission’s August 20,

1998 order in Case No. U-11639 clearly indicated that the Commission lacked jurisdiction to enter- tain Mr. Cochran’s request for recovery of his alleged economic losses and his claim for punitive damages. Moreover, Ameritech Michigan insisted that Mr. Cochran’s November 9, 1998 complaint failed to allege any violation of the MTA. Further, because Ameritech Michigan ceased providing

Mr. Cochran with basic local exchange service on August 28, 1997, Ameritech Michigan also insisted that it could no longer be held accountable for the publication of Mr. Cochran’s name, address, and telephone number, which occurred on October 31, 1998.

Ameritech Michigan also quoted Mr. Cochran’s testimony from Case No. U-11639 in an apparent attempt to demonstrate that Mr. Cochran had not requested unlisted service from AT&T at the time that he switched providers in August 1997. Indeed, Ameritech Michigan asserted that

Mr. Cochran’s November 9, 1998 complaint lacks merit because it is contradicted by his former testimony in Case No. U-11639. Ameritech Michigan also maintained that Mr. Cochran’s general allegations regarding violations of the CPA were simply too vague to justify invocation of the

Page 4 U-11834 Commission’s limited investigative powers under that act. According to Ameritech Michigan, the

Commission’s authority pursuant to MCL 445.918; MSA 19.418(18) is limited to investigating matters concerning public utilities and then providing the results of such investigations to the

Department of the Attorney General. Additionally, Ameritech Michigan stressed that the issue of the appropriateness of the Commission’s intervention pursuant to the CPA was considered and rejected in Case No. U-11639.

Finally, citing Section 209 of the MTA, MCL 484.2209; MSA 22.1469(209), Ameritech

Michigan argued that Mr. Cochran’s claims were frivolous and he should be required to pay all attorney fees and costs incurred by Ameritech Michigan in defending this complaint.

IV.

PROPOSAL FOR DECISION

In his PFD, the ALJ recommended that Mr. Cochran’s complaint be dismissed for failing to state a claim for relief that could be granted by the Commission. In so doing, the ALJ placed emphasis on the Commission’s August 20, 1998 order in Case No. U-11639. Indeed, he noted that the Commission found only one violation of the MTA, which was related to the misrepresentation by Ameritech Michigan regarding whether nonpublished service is regulated by the Commission.

Further, the ALJ noted that the Commission specifically declined to addressed the merits of

Mr. Cochran’s claims for damages, which the Commission clearly indicated should be adjudicated in a court of law. Even assuming all of Mr. Cochran’s well pled allegations to be true, the ALJ nevertheless concluded that the remedies sought by Mr. Cochran’s complaint did not come within the Commission’s jurisdiction. The ALJ also found that Mr. Cochran’s allegation that Ameritech

Michigan unlawfully misappropriated and published his name, address, and telephone number for

Page 5 U-11834 commercial gain or to solicit business was entirely unfounded. Likewise, the ALJ concluded that

Mr. Cochran’s allegations regarding gross negligence, fraudulent misrepresentation, gross invasion of privacy, unwarranted endangerment, intentional infliction of emotional distress, and interference with contractual relations were also beyond the scope of the Commission’s jurisdiction. Finally, the

ALJ concluded that Mr. Cochran’s complaint failed to plead a violation of the CPA with sufficient specificity to allow the Commission to go forward with an investigation.

DISCUSSION

In his exceptions, Mr. Cochran argues that the claims asserted in his November 9, 1998 complaint are quite different from the claims that were contested in Case No. U-11639. According to

Mr. Cochran, his current complaint clearly and concisely alleges three separate violations of

Section 502(a) of the MTA, MCL 484.2502(a); MSA 22.1469(502)(a). The common thread link- ing each of these alleged violations is that they all involve Mr. Cochran’s assertions that Ameritech

Michigan made false, misleading, and deceptive statements regarding the conditions of providing telecommunications service. According to Mr. Cochran, Ameritech Michigan has falsely claimed that (1) AT&T requested publication of his name, address, and telephone number in Ameritech

Michigan’s directories, (2) misrepresented Mr. Cochran’s prior testimony from Case No. U-11639, and (3) falsely implied that Mr. Cochran did not request unpublished service from AT&T.

The problem with Mr. Cochran’s exceptions regarding such alleged violations of Section 502(a) of the MTA by Ameritech Michigan is that all of them involve representations made by Ameritech

Michigan subsequent to the filing of Mr. Cochran’s complaint. As pointed out in Ameritech

Michigan’s reply to exceptions, actions that take place during the adjudication of a complaint cannot

Page 6 U-11834 serve as the basis for that complaint. Moreover, the Commission is persuaded that none of the alleged misrepresentations cited by Mr. Cochran would constitute a violation of Section 502(a) of the MTA. These misrepresentations are distinguishable from the misrepresentation that occurred in

Case No. U-11639. The allegations cited in Mr. Cochran’s exceptions do not involve representations concerning a telecommunications service or a tariff provision, but rather involve factual allegations regarding actions that could explain how Mr. Cochran’s name, address, and telephone number came to be published in Ameritech Michigan’s October 31, 1998 directory. The Commission finds that these types of allegations, even if misleading or inaccurate, are not covered by Section 502(a) of the MTA.

Mr. Cochran also maintains that Ameritech Michigan violated administrative rules promulgated by the Commission to protect the disclosure of certain customer information and customer privacy intrusions. According to Mr. Cochran, such conduct by Ameritech Michigan constitutes a violation of Section 503(2) of the MTA, MCL 484.2503(2); MSA 22.1469(503)(2). Additionally, Mr. Coch- ran asserts that Ameritech Michigan violated the cease and desist directive contained in the

August 20, 1998 order in Case No. U-11639 by failing to take any mitigating actions to ensure that his name, address, and telephone number were not subsequently published in Ameritech Michigan’s directories.

The Commission finds that Mr. Cochran’s exception regarding alleged violations of

Section 503(2) of the MTA and the August 20, 1998 order in Case No. U-11639 are not well taken because they are based on an erroneous interpretation of that order. An examination of the

August 20, 1998 order reveals that the violation of the MTA that gave rise to the cease and desist directive relates only to the violation of Section 502(a) of the MTA that was associated with Ameri- tech Michigan’s false representations regarding the Commission’s authority to adjudicate complaints

Page 7 U-11834 related to nonpublished service. Moreover, in the August 20, 1998 order in Case No. U-11639, the

Commission specifically found that the undesired publication of Mr. Cochran’s name, address, and telephone number did not constitute a violation of Section 503(2) of the MTA and did not violate any of the administrative rules promulgated under the authority of Section 503(2). Indeed, the

Commission specifically noted in its order in Case No. U-11639 that any claim stemming from the publication of Mr. Cochran’s name, address, and telephone number would be beyond the purview of the Commission and would have to be pursued before the courts. Accordingly, the Commission agrees with Ameritech Michigan and the Staff that Mr. Cochran’s exceptions regarding alleged violations of Section 503(2) of the MTA and the cease and desist directive contained in the

August 20, 1998 order in Case No. U-11639 should be rejected.

Mr. Cochran also contends that Ameritech Michigan and its affiliate, Ameritech Publishing, Inc.

(API), violated Section 503(3) of the MTA, MCL 484.2503(3); MSA 22.1469(503)(3), by disclosing his name, address, and telephone number for commercial gain, using his unpublished telephone number to solicit business, and intentionally disclosing his unpublished number to a computer data base.

The Commission finds that Mr. Cochran’s allegations regarding violations of Section 503(3) of the MTA have no merit. Although Ameritech Michigan and API are both wholly-owned subsidiar- ies of a common parent, Ameritech Corporation, the Commission is persuaded that Mr. Cochran’s complaint fails to allege why Ameritech Michigan should be held responsible for the allegedly wrongful actions of API, which is not a party to this proceeding. Moreover, Mr. Cochran’s complaint fails to allege any legal theory by which the Commission could assert jurisdiction over API.

Finally, the Commission notes that Mr. Cochran raised the same issues in Case No. U-11639 and the Commission explicitly found that such allegations did not constitute violations of Section 503(3)

Page 8 U-11834 of the MTA. Accordingly, the Commission finds that Mr. Cochran’s allegations regarding Section

503(3) of the MTA were properly rejected by the ALJ.

In its exceptions, Ameritech Michigan complains that the ALJ erred by failing to address its request for an order directing Mr. Cochran to pay the attorney fees and costs incurred by Ameritech

Michigan in defense of his complaint. Citing Section 209 of the MTA, MCL 484.2209;

MSA 22.1469(209), Ameritech Michigan maintains that the Commission has authority to award reasonable attorney fees and costs if Mr. Cochran’s complaint was frivolous. Ameritech Michigan asserts that Mr. Cochran ignored the Commission’s previous ruling in Case No. U-11639, which involved nearly the same issues and facts. Indeed, Ameritech Michigan insists that the facts presented by Mr. Cochran’s November 9, 1998 complaint are even more favorable to Ameritech

Michigan than were the facts presented in Case No. U -11639. According to Ameritech Michigan,

Mr. Cochran was aware at the time he filed this complaint that his positions were devoid of any merit. Further, Ameritech Michigan insists that ordering Mr. Cochran to compensate Ameritech

Michigan for its attorney fees and costs will discourage him from filing another frivolous complaint.

Section 209(2)(a) of the MTA, MCL 484.2209(2)(a); MSA 22.1469(209)(2)(a), defines a party’s position as frivolous if it meets at least one of the following conditions:

1. The party’s primary purpose in initiating the proceeding or asserting the defense was to harass, embarrass, or injure the prevailing party.

2. The party had no reasonable basis to believe that the facts underlying its legal position were true.

3. The party’s legal position was devoid of arguable legal merit.

MCL 484.2209(2); MSA 22.1469(209)(2)(a).

Ameritech Michigan has not alleged and the Commission is not persuaded that Mr. Cochran’s primary purpose in initiating his complaint was to harass, embarrass, or injure Ameritech Michigan.

Page 9 U-11834 Additionally, the Commission finds that Mr. Cochran had a reasonable basis to believe that the facts underlying his legal position were true. Accordingly, the focus in determining whether Ameritech

Michigan’s request for an award for attorney fees and cost should be granted turns on whether

Mr. Cochran’s legal position was devoid of arguable legal merit within the meaning of

Section 209(2)(a)(iii) of the MTA, MCL 484.2209(2)(a)(iii); MSA 22.1469(209)(a)(iii). In considering this issue, the Commission notes that the Staff did not support Ameritech Michigan’s claim for an award of attorney fees and costs. In opposing this request, counsel for the Staff stated:

[Mr. Cochran’s] legal position, while it may be - - while we’ve indicated it may be appropriate to grant a motion to dismiss in this case, I think any legal deficiencies that might be in Mr. Cochran’s complaint are likely due to the difficulty of under- standing the complexity of the relationships between all the local exchange carriers and who publishes the directory, and not an attempt to prosecute a legally unforce- able claim. So Staff wouldn’t be supportive of any kind of an award of cost[s] and attorney fees.

2 Tr. 24.

The Commission finds that Ameritech Michigan’s request for an award of attorney fees and costs should be denied. In so doing, the Commission agrees with the Staff that the intricacies of

AT&T’s interconnection agreement with Ameritech Corporation, combined with the branding of

Ameritech Michigan’s telephone directories and the less than obvious nature of Ameritech Corpora- tion’s corporate structure, lend to the confusion regarding the identity of the party responsible for publication of Mr. Cochran’s name, address, and telephone number in Ameritech Michigan’s telephone directory. Because all of these complicating factors were not present in Case No. U-11639, the Commission is persuaded that Ameritech Michigan’s request for an award of attorney fees and costs should be denied.

Page 10 U-11834 The Commission FINDS that:

a. Jurisdiction is pursuant to 1991 PA 179, as amended, MCL 484.2101 et seq.;

MSA 22.1469(101) et seq.; 1969 PA 306, as amended, MCL 24.201 et seq.; MSA 3.560(101) et seq.; and the Commission's Rules of Practice and Procedure, as amended, 1992 AACS,

R 460.17101 et seq.

b. Mr. Cochran’s complaint should be dismissed with prejudice.

c. Ameritech Michigan’s request for an award of attorney fees and costs should be denied.

THEREFORE, IT IS ORDERED that:

A. The November 9, 1998 complaint filed by Raymond Cochran against Ameritech Michigan is dismissed with prejudice.

B. Ameritech Michigan’s request for an award of attorney fees and costs is denied.

The Commission reserves jurisdiction and may issue further orders as necessary.

Page 11 U-11834 Any party desiring to appeal this order must do so in the appropriate court within 30 days after

issuance and notice of this order, pursuant to MCL 462.26; MSA 22.45.

MICHIGAN PUBLIC SERVICE COMMISSION

/s/ John G. Strand Chairman ( S E A L )

/s/ David A. Svanda Commissioner

By its action of March 22, 1999.

/s/ Dorothy Wideman Its Executive Secretary

Page 12 U-11834 Any party desiring to appeal this order must do so in the appropriate court within 30 days after issuance and notice of this order, pursuant to MCL 462.26; MSA 22.45.

MICHIGAN PUBLIC SERVICE COMMISSION

Chairman

Commissioner

By its action of March 22, 1999.

Its Executive Secretary

Page 13 U-11834 In the matter of the complaint of ) RAYMOND COCHRAN against ) Case No. U-11834 AMERITECH MICHIGAN. ) )

Suggested Minute:

“Adopt and issue order dated March 22, 1999 dismissing the complaint filed by Raymond Cochran against Ameritech Michigan, as set forth in the order.”