DISTRICT COURT, OTERO COUNTY, COLORADO Sixteenth Judicial District Court Otero County Courthouse 13 W. 3RD Street, Room 207 La Junta, CO 81050-1536 Tele: 719-384-4981 Fax: 719-384-4991 COURT USE ONLY Plaintiff: Wesley Colvin Case Number: v. Div.: Ctrm.: Defendant: Qwest Communications International, Inc. (Attorney for Plaintiff) Curtis L. Kennedy 8405 E. Princeton Ave. Denver, CO 80237-1741 Phone: (303) 770-0440 Fax: (303) 843-0360 Email: [email protected] Atty. Reg. #: 12351 CLASS ACTION COMPLAINT (with Demand for Jury) PLAINTIFF WESLEY COLVIN, by and through his counsel, Curtis L. Kennedy, files this Class Action Complaint: PRELIMINARY STATEMENT 1. For many decades, Qwest Communications International, Inc. (and predecessor Bell Telephone companies) contracted to provide retirees with a “Telephone Concession Reimbursement” payable throughout retirement and for two months after death. Qwest and its predecessors have a long history of treating the “Telephone Concession Reimbursement” as a lifetime contract payable from operating revenues. However, most recently Defendant Qwest terminated its long standing contract with more than 4,500 retirees. Accordingly, efforts were made by countless retirees to have the “Telephone Concession Reimbursement” reinstated, but Qwest gave written confirmation that it was sticking by its decision to terminate the contract. Therefore, this is a class action complaint for breach of contract and promissory estoppel. JURISDICTION AND VENUE 2. The Otero County District Court has subject matter jurisdiction of the claims for relief based upon breach of contract and promissory estoppel. 3. Venue of this action lies in this district court since the acts complained of herein occurred within this County where the subject matter contract – “Telephone Concession Reimbursement” – was to be performed by Qwest and paid to Plaintiff residing in this County. THE PARTIES 4. Named Plaintiff WESLEY COLVIN is a United States citizen and resident in a rural area outside of Swink, Otero County, within the Sixteenth Judicial District of Colorado. He was formerly employed as a manager within the Network Switching Department at U S WEST Communications, Inc., a wholly owned subsidiary of U S WEST, Inc. He retired from U S WEST, Inc. in February 1990 after 30 years of employment service. From February 1990 - 2 - until December 2003, he received the “Telephone Concession Reimbursement”, a “Retiree Telephone Discount” on his local telephone service. 5. In July 2000, U S WEST, Inc. merged with QWEST COMMUNICATIONS INTERNATIONAL, Inc., the surviving corporation. 6. Defendant QWEST COMMUNICATIONS INTERNATIONAL, Inc. (“QWEST”) is a Delaware corporation qualified to do business within the State of Colorado. QWEST’s principle executive office and place of business is within Colorado. QWEST is a telecommunications company that provides communication services, data, multimedia and Internet-based services on a national and global basis, and wireless services, local telecommunications and related services in a 14-state local service area, including Colorado. QWEST is the successor employer and provider of the “Telephone Concession Reimbursement” to Named Plaintiff and the proposed class of QWEST Retirees. 7. The “Telephone Concession Reimbursement” is also known as a “Retiree Telephone Discount” on local residential exchange telephone service and some toll (“long distance”) charges. 8. The “Telephone Concession Reimbursement” has been an established contractual commitment in existence at QWEST and predecessor companies for more than forty (40) years. 9. The “Telephone Concession Reimbursement” is not governed by the Employee Retirement Income Security Act of 1974 (ERISA) and is not a welfare benefit plan. The “Telephone Concession Reimbursement” specifically fits within the exemption outlined by the - 3 - Department of Labor’s regulation, 29 C.F.R. 2510.3-1(e), because it is a discount on a commodity of the kind which QWEST’s offers for sale in the regular course of business. 1 10. During the period February 1990 though most of 1994, Named Plaintiff received the “Telephone Concession Reimbursement” when his local telephone exchange provider was U S WEST Communications, Inc. In 1994, U S WEST, Inc. sold its rights to the local telephone exchange to an “Independent Telephone Company” named Pacific Telecom. A few years later, Pacific Telecom sold the local telephone exchange to another “Independent Telephone Company” named Century Telephone, the current “Independent Telephone Company”. From 1994 through 2003, Named Plaintiff received the “Telephone Concession Reimbursement” for local telephone service provided by the Independent Telephone Company during which time he was considered by U S WEST and, then, QWEST, as “grandfathered” having a protected right to receive the “Telephone Concession Reimbursement.” During year 2003, Named Plaintiff’s “Retiree Telephone Discount” or “Telephone Concession Reimbursement” amounted to about $100 monthly. 1 29 C.F.R. 2510.3-1 lists practices which the Department of Labor has determined are not subject to ERISA’s provisions. 29 C.F.R. 2510.3-1(e) states: “Sales to employees. For purposes of title I of the Act and this chapter, the terms “employee welfare benefit plan” and “welfare plan” shall not include the sale by an employer to employees of an employer, whether or not at prevailing market prices, of articles or commodities of the kind which the employer offers for sale in the regular course of business.” Therefore, Defendant’s counsel are put on notice that the claims made herein are not preempted by ERISA, there is no federal court subject matter jurisdiction, and any attempted removal to federal court would be wrongful. - 4 - FACTS 11. Since post-World War II, AT&T’s wholly owned companies, to-wit: “Mountain Bell,” “Northwestern Bell,” “Pacific Northwest Bell,” committed to provide a “Telephone Concession Reimbursement” payable out of operating revenues during the lifetime of every retiree. 12. Prior to the January 1, 1984 effective divestiture of AT&T and creation of U S WEST, Inc. as a new holding company, Mountain Bell, Northwestern Bell and Pacific Northwest Bell committed to provide the “Telephone Concession Reimbursement” payable from operating revenues during the lifetime of every retiree. 13. During the several years before the divestiture of AT&T, the “Baby Bell” companies – Mountain Bell, Northwestern Bell and Pacific Northwest Bell – issued to their employees (including Named Plaintiff and members of the proposed class) a brochure with the following or substantially similar language: “TELEPHONE SERVICE AFTER RETIREMENT — Effective with your retirement, charges for your residence telephone service will be paid by this Company. This means that, except for a few special types of service, you will receive free local service and be allowed a reasonable amount of toll service over Bell System or connecting lines within the continental United States and Canada during your lifetime. After retirement, if you take up residence in an area not served by [the Company] this concession still applies.” 14. Effective January 1, 1984, there was a federal court approved divestiture of AT&T and Baby Bell companies were transferred to new holding companies, including U S WEST, Inc. 15. As part of the federal court approved terms of the divestiture of AT&T, the newly - 5 - created holding companies, including U S WEST, were required to continue providing retirees the “Telephone Concession Reimbursement,” as previously committed by AT&T’s wholly owned companies. 16. Since the January 1, 1984 effective divestiture of AT&T and creation of U S WEST, Inc. as the new holding company for Mountain Bell, Northwestern Bell and Pacific Northwest Bell, U S WEST, Inc. has committed to provide the “Telephone Concession Reimbursement” payable out of operating revenues during the lifetime of every eligible retiree plus two months after the death of the retiree. 17. Soon after the divestiture of AT&T, Mountain Bell, Northwestern Bell and Pacific Northwest Bell sent written confirmation to its retirees, stating: “Dear Retired Employee: I know that you have been anxious to learn the effect that divestiture will have on your telephone concession. employees who were retired as of December 31, 1983 will continue to enjoy essentially the same telephone concession.. You will receive a 100% discount on local service charges. .If you currently live in an area served by a company other than PNB, Mountain Bell or Northwestern Bell, you will also receive the same concession privileges.” 18. The aforesaid commitment is now binding upon QWEST, the successor in interest to U S WEST. 19. In addition, upon information and belief, since 1984 U S WEST represented to state public utilities commissions that a rate base for U S WEST had to include the cost of providing the “Telephone Concession Reimbursement” to its retirees. Accordingly, the state utilities commissions in fourteen different states set charges for ratepayers that included U S - 6 - WEST’s costs of providing the “Telephone Concession Reimbursement” to its retirees. 20. Prior to and when the Named Plaintiff commenced his retirement, U S WEST habitually made official written representations stating that the “Telephone Concession Reimbursement” would be payable out of operating revenues during the lifetime of the retiree and for two months following the death of the retiree. 21. In numerous official publications given to employees and retirees, U S WEST memorialized its