2005 | Cited 0 times | N.D. Illinois | June 3, 2005


Before the court are several motions: (1) defendants' motionfor "partial" summary judgment; (2) defendants' motion to dismissthe amended complaint; (3) the carrier defendants'1motion to dismiss the amended complaint; (4) defendant Nokia,Inc.'s motion to dismiss the amended complaint; and (5) defendantNokia Corp.'s motion to dismiss the amended complaint forinsufficiency of service of process. For the reasons statedbelow, defendants' motion for partial summary judgment is grantedin part and denied in part; defendants' motion to dismiss isgranted in part and denied in part; the carrier defendants' motion to dismiss isgranted in part and denied in part; defendant Nokia, Inc.'smotion to dismiss is granted; and defendant Nokia Corp.'s motionto dismiss the amended complaint is denied.


In this multidistrict litigation, plaintiffs contend that thewireless telephones manufactured and sold by defendants fail tocomply with the Second Report and Order of the FederalCommunications Commission ("FCC") concerning the revision of theFCC's rules to ensure compatibility with Enhanced 911 emergencycalling systems.2 In the Second Report and Order, the FCCapproved three "call completion" methods for processing wirelesscalls (in analog mode) to 911. One of those methods is called"Automatic A/B Roaming-Intelligent Retry," also known as"A/B-IR." The FCC required that a handset using the A/B-IR methodmeet two conditions in order to address the problem of delays inconnecting to 911: (1) "provide effective feedback to inform theuser when 911 call processing is underway and has not finished";and (2) "seek to complete the call with the non-preferredcellular carrier if the preferred cellular carrier has notsuccessfully delivered the call to the landline carrier within 17seconds after the call is placed." (Second Report and Order, ¶¶39-41.) The primary contention of plaintiffs' initial class action complaint was thatdefendants' phones did not comply with the second requirement —the "17-Second Rule."3

Defendants moved for a stay of this action pursuant to thedoctrine of primary jurisdiction, arguing that we should applythe doctrine because the Second Report and Order is ambiguous asto what "call completion" means and therefore ambiguous as toexactly what act must be performed by the handset in 17 seconds.Defendants argued that "call completion" occurs when a handsetreceives a voice channel assignment. Plaintiffs, however,contended that the Second Report and Order clearly andunequivocally indicates that a call is "complete" when it is delivered to the landline phone system. The relevant language ofthe Second Report and Order is as follows: • "In general terms, the handset should seek to complete the call with the non-preferred cellular carrier if the preferred cellular carrier has not successfully delivered the call to the landline carrier within 17 seconds after the call is placed." • "The 17-second period is also generally consistent with the combined time periods for two basic call processing tasks that must be performed and completed if a call attempt is to be successful after the call is sent: in the first task, a handset waits up to 12 seconds to receive a voice channel assignment from a base station; in the second task, the base station waits up to 5 seconds to receive a voice channel transmission from the handset." • "After a handset receives a voice channel assignment and begins transmission to a base station on that channel, Conversation State is reached. As noted, however, at this stage, the handset's voice channel transmission has not necessarily been received at the base station, and thus the handset may not necessarily be able to use the voice channel to communicate with the base station (and thence to the landline network). In establishing a time limit for delivering the call to the landline carrier, we are seeking to ensure that communication between the handset and base station on the voice channel goes beyond Conversation State and reaches the point where the handset's voice channel transmission is indeed received at the base station."(Second Report and Order, ¶ 41 & n. 52.)

We disagreed with plaintiffs and found that it is not clearfrom the Second Report and Order exactly what act must beperformed by the handset in 17 seconds. The intricacies ofcellular call technology led us to conclude that resolving the ambiguities ofthe Second Report and Order is not within our conventionalexpertise, but is within the FCC's field of expertise. The FCCwas, after all, the author of the very report whose meaning wasin dispute. Mindful of the possibility of inconsistent rulings,we reasoned that a consistent and uniform rule is necessary andthat judicial economy would be served by having the FCC resolvethe issue. Therefore, we granted defendants' motion to stay theaction pursuant to the doctrine of primary jurisdiction andreferred the issues of what is meant by "call completion" and"delivery of the call to the landline carrier" and exactly whataction must be performed by the handset in 17 seconds to the FCCfor its consideration and decision.4

In an order dated July 22, 2004 (the "Clarification Order"),the FCC issued its answers to our questions.5 Thereafter,we asked the parties for statements of their positions regardingthe impact of the FCC's order on the further conduct of thislitigation. According to defendants, the Clarification Orderconfirmed their interpretation of the Second Report and Order andwarranted dismissal of plaintiffs' cases. Plaintiffs filed amotion for leave to file a consolidated amended complaint, whichwe granted. In the amended complaint, plaintiffs now allege that defendants'phones fail to satisfy at least one of the following requirementsof the Second Report and Order and the Clarification Order: (1)if a cell phone attempting to place a 911 call does not detect asignal from the preferred carrier, it must switch to thenonpreferred carrier and attempt to complete the call; (2) if thecell phone detects a signal from the preferred carrier but is notassigned a voice channel within 17 seconds, it must switch to thenon-preferred carrier and attempt to complete the call; and (3)if a wireless 911 call is completed but dropped, the cell phonemust automatically retry the call. (Consolidated Amended ClassAction Complaint, ¶ 40.)

We held a status hearing on October 5, 2004 to discuss theimpact of the FCC's ruling. We indicated to the parties that eventhough plaintiffs were filing an amended complaint containing newallegations that were not encompassed by the FCC's ClarificationOrder, we were inclined to enter some type of order recognizingthe FCC's decision as the law of the case and of all thetransferred cases in this multidistrict litigation. We suggestedthat defendants file a motion for partial summary judgment basedon the FCC's decision, using the phrase "partial summaryjudgment" as shorthand for a pretrial order to the effect thatthe FCC's decision regarding the 17-Second Rule would be the law of thecase.6

Defendants then filed a motion for summary judgment (actually amotion for "partial" summary judgment), which is now pendingbefore us as well as four motions to dismiss the amendedcomplaint.


A. Defendants' Motion for Partial Summary Judgment

In response to our referral of the aforementioned issues to theFCC for its consideration and decision, the FCC issued athoroughly reasoned and detailed order, the Clarification Order.The FCC answered our questions as follows: 1. What is meant by "call completion?" Within the context of the A/B-IR call processing mode, "call completion" occurs when the handset receives a valid voice or traffic channel assignment and tunes to the assigned channel. If the handset has not received a voice channel assignment within 17 seconds on the preferred carrier's system, the handset must attempt to set up the call on the non-preferred carrier's system. 2. What is meant by "delivery of the call to the landline carrier?" This refers to the further stage of call processing, after the call is delivered to the wireless carrier's base station, when the call is routed by the wireless carrier through its switch and onto trunks linking that switch to facilities of the local wireline carrier. In the case of 911 calls, the call will typically be routed by the wireline carrier to a switch called a selective router, which identifies the PSAP [Public Safety Answering Point] designated to handle calls from the area where the call was received and delivers the call to that PSAP. The references to "delivery of the call to the landline carrier" in the [Second Report and Order] expressed the Commission's expectation that the A/B-IR mode would improve overall 911 call completion, including improving the likelihood that 911 calls will be received by the PSAP. However, the "delivery of the call to the landline carrier" stage of call processing is not relevant to the operation of A/B-IR mode or to compliance with the 17 second condition. 3. What action must be performed by the handset in 17 seconds? During the 17 second period, a handset using the A/B-IR method must override any features which prevent scanning of either the A side or B side carrier control channels, and scan the control channels of the handset's preferred carrier setting, either A or B. If the handset does not detect a signal from the preferred carrier, the handset must then retry the call with the non-preferred carrier. If the handset does detect a signal (i.e., forward control channel) from the preferred carrier, the handset must attempt to complete the call with the preferred carrier by requesting assignment of a voice channel. If the handset receives a voice or traffic channel assignment and tunes to the assigned voice channel, the call is deemed completed. If the initial call set-up attempts with the preferred carrier fail, because a voice channel is not assigned within 17 seconds, the handset must terminate its call set-up attempts with the preferred carrier and retry to set up the call with the non-preferred carrier. The handset may meet the 17 second condition in any of several ways, including limiting the number of initial call attempts or setting an overall time limit for initial call attempts to the preferred carrier.(Clarification Order, ¶¶ 31-33.)

Defendants argue that the FCC's ruling, which confirms theirinterpretation of the 17-Second Rule, is binding on this court pursuant to the doctrine of primary jurisdiction, warrantingpartial summary judgment.7 Plaintiffs, on the other hand,contend that we are not bound by the FCC's ruling, but ratherthat the ruling is subject to review for reasonableness. Inplaintiffs' view, the FCC's answers in the Clarification Orderare unreasonable because they contradict the "clear language" ofthe Second Report and Order. (Memorandum in Opposition to Motionfor Summary Judgment at 8.)

It is not necessary to decide the question of whether we arebound by the Clarification Order;8 assuming we are notbound, and thus required to review the Clarification Order forreasonableness, the Order passes muster. We reject plaintiffs'argument that the Clarification Order is inconsistent with the"unequivocal" Second Report and Order and represents a "change"in FCC rulemaking. In fact, in our previous memorandum opinionthat referred these matters to the FCC, we already rejectedplaintiffs' argument that the Second Report and Order is "clear."The language of the Second Report and Order is ambiguousregarding what a handset must do in 17 seconds (and we explainedthe ambiguity in our memorandum opinion); that was the wholepoint of the referral. To determine what the FCC meant, there wasno better resource than the FCC itself.

In the Clarification Order, the FCC undertook a diligent,reasoned, and comprehensive examination of its own language. Itsanswers to our questions, quoted supra, make sense to us, especially in light of the FCC's sound analysis of its ownlanguage and intent: [W]e clarify that the 17 second condition requires that the handset retry an initial 911 call attempt with the non-preferred carrier if the handset is not assigned a voice channel by the preferred carrier within 17 seconds. . . . [I]n general, under the analog standard . . ., as well as under the A/B-IR algorithm, when the handset receives a valid voice or traffic channel assignment and tunes to the assigned voice channel, call set-up is considered "completed." In other words, the call completion has occurred. In the [Second Report and Order], the Commission did not change this common understanding of when the completion of call set-up occurs, but rather took notice of it as a concern. . . . [I]t is reasonable to conclude that the Commission did not mandate that the handset, after completing the call set-up, monitor the channel and ensure that the call indeed transmitted to the landline. Such a requirement would necessitate technical changes to analog operations and existing standards as well as changes to wireline or wireless network control procedures and functions which the Commission clearly did not intend. . . . The Commission concluded . . . that "a time limit should be placed on the initial attempt to set-up the call with the preferred carrier," and that 17 seconds would be "a reasonable and achievable maximum time period." . . . The Commission explained that in general, a call would take a maximum of 17 seconds to process, (i.e., 12 seconds to receive a voice channel assignment from the base station and 5 seconds for the base station to receive a voice channel assignment transmission from the handset). Because of that, the 17 seconds is also a sufficient amount of time to adequately determine whether a call could have been delivered to the landline carrier, by the preferred carrier. . . . Accordingly, the Commission found that waiting a maximum of 17 seconds before triggering the obligation to retry the call with the non-preferred carrier is a reasonable and achievable maximum time period. . . . The 17 second time limit applies to the initial "call set-up" attempts between the handset and the preferred carrier's base station, not to the further stages of call processing (i.e., delivery of the call to the landline from the base station). . . . Although the court found that the Second Report and Order is ambiguous, it is reasonable to conclude that the Commission did not mandate that the call must be delivered to the landline carrier within 17 seconds nor require that the handset verify that its voice channel transmission is indeed received at the preferred carrier's base station. The Commission did mention delivery of the call to the landline carrier in two places in the discussion of the A/B-IR method, but in context, those represent general statements describing 911 call completion objectives and the expected effect of the A/B-IR method. At no point, however, do these statements clearly indicate that the Commission was conditioning the approval of A/B-IR method on the successful development and incorporation into the A/B-IR method of all the technical changes necessary for a handset to monitor the call until it is successfully "delivered to the landline carrier." . . . In paragraph 41 [of the Second Report and Order], the Commission said that "[i]n general terms, the handset should seek to complete the call with the non-preferred carrier if the preferred cellular carrier has not successfully delivered the call to the landline carrier within 17 seconds after the call is placed." But using the phrase "[i]n general terms" as a preamble indicates that this language is descriptive of what the Commission expected that the A/B-IR call-processing mode would achieve in most circumstances, not a technical prescription of how the 17-second condition must operate. The use of the word "should" in this sentence, rather than "must" or "is required to," further establishes that this sentence was not intended to set a technical requirement for how the 17-second condition was to be met. Footnote 52 in the [Second Report and Order] also refers to a time limit for delivering the call to the landline network, but this language similarly does not indicate that the Commission was prescribing a specific method by which the 17 second condition is to be achieved. The footnote says that "we are seeking to ensure that communication between the handset and base station on the voice channel goes beyond Conversation State and reaches the point where the handset's voice channel transmission is indeed received at the base station." As discussed before, this language intended to explain the reasonableness of the 17 seconds as a maximum time sufficient to achieve a call set-up, in general, not to set a required technical procedure or method to determine that the call has been delivered to the landline carrier. Furthermore, the Commission expected that A/B-IR, as approved, could be implemented through limited changes in handset programming and operations. In evaluating A/B-IR, the Commission concluded that the method "requires only relatively modest changes in handset software that should not be unduly expensive and should not take long to incorporate into mobile units." In setting an implementation schedule, the Commission similarly understood that it would be relatively easy to begin to manufacture handsets incorporating such minor programming changes. . . . [R]equiring handsets to monitor whether a call has been transmitted and received by the wireline carrier would require substantial revamping of network equipment and practices as well as of wireless handsets. Such changes were neither contemplated nor required by the Commission in its approval of the A/B-IR method. Although the language in paragraph 41 of the [Second Report and Order] might be considered ambiguous, it is reasonable to conclude that the Commission did not mandate that the call must be delivered to the landline carrier within 17 seconds, or the handset must have capability to verify that its voice channel transmission is indeed received at the base station. Such a requirement might have further improved 911 call completion rate, but the successful implementation of such a method would necessitate changes to wireless and wireline networks. We believe that the controlling language for the 17-second requirement is found in paragraph 38 [of the Second Report and Order] stating that the time limit may be met in several ways including a limit on the number of call attempts, and in paragraph 40 and elsewhere that the Commission sets a time limit (i.e., 17 seconds) "on the initial attempt to set-up the call with the preferred carrier."(Clarification Order, ¶¶ 9, 15, 17, 19-22, 22 n. 64, 23-24(citations omitted).) After carefully reviewing both the Second Report and Order and the Clarification Order, we find the FCC'sanswers to the questions we referred to it to be eminentlyreasonable.

Plaintiffs also assert that defendants' motion for summaryjudgment should be denied pursuant to Federal Rule of CivilProcedure 56(f) because they have not been given the opportunityto take appropriate discovery. Plaintiffs contend that they are"entitled to discovery regarding Defendants' compliance with the17 Second Requirement" and "wish to examine materials" "to assistin determining if the FCC's Answers to the Court's questions arereasonable." (Memorandum in Opposition to Motion for SummaryJudgment at 14.) Plaintiffs are entitled to discovery regardingcompliance with the 17-Second Rule, but only in relation to whatthey allege in the amended complaint about the Rule as it hasbeen clarified in the Clarification Order, and the summaryjudgment motion does not go to the allegations of the amendedcomplaint. No amount of additional discovery, though, would beappropriate or necessary in relation to our determination ofwhether the FCC's interpretation of its own language isreasonable. The type of discovery proposed by plaintiffs —documents tending to show defendants' or the FCC's prior"understanding" of the 17-Second Rule — is not material to theissue of the reasonableness of the Clarification Order and wouldnot assist the court. We will adopt the FCC's Clarification Order as the law of thecase. Defendants' motion for partial summary judgment thus willbe granted to the extent that it relates to the FCC'sclarification of the 17-Second Rule, but it will be denied to theextent that it seeks judgment on the abandoned allegationsregarding the feedback requirement, see supra n. 2.

B. Defendants' Motion to Dismiss

We move on to defendants' motion to dismiss the complaint thatis presently pending, the Consolidated Amended Class ActionComplaint. The amended complaint contains eleven counts:violation of the Communications Act of 1934 (the "CommunicationsAct"), seeking injunctive relief under 47 U.S.C. § 401(b) (CountI); violation of the Communications Act, seeking damages under47 U.S.C. §§ 206 and 207 (Count II); violation of California'sunfair competition law (Counts III and XI); breach of the impliedwarranty of merchantability (Count IV); breach of the impliedwarranty of fitness for a particular purpose (Count V); breach ofcontract (Count VI); breach of the implied covenant of good faithand fair dealing (Count VII); violation of state consumer fraudstatutes nationwide (Count VIII); seeking restitution for unjustenrichment (Count IX); and seeking "injunctive and equitablerelief" (Count X).9 1. Injury

Defendants' first contention is that all of plaintiffs' claimsmust be dismissed because plaintiffs have failed to allege alegally cognizable injury. Defendants assert that "no plaintiffhere alleges that he or she ever even attempted to make a 911call with a phone manufactured or sold by defendants, let alonesuffered an injury as a result of a 911 call that was notprocessed in the manner required by FCC regulations." (Memorandumin Support of Motion to Dismiss at 8.) In defendants' view, "theAmended Complaint amounts to a request for protection from, andcompensation for, possible future harm — the possibility that,one day, a wireless telephone user might attempt to connect to a911 operator and be unable to complete a call within a particulartime frame." (Id. at 3.) Because none of the plaintiffs havealleged that they tried to make a 911 call and failed to getthrough, the argument goes, plaintiffs have failed to allege thatdefendants' phones "exhibit" or "manifest" any defect.

Plaintiffs argue that they have suffered injury under bothfederal and state law because they "purchased phones that do notfunction the way they are supposed to function, and anFCC-compliant phone is worth more than an FCC-noncompliant phone. . . . In thiscase the defect has `manifested' in each and every phone whichdoes not contain the mandated software. The fact that this defecthas not resulted in a plaintiff's failure to reach 911 does notmean there is no damage." (Memorandum in Opposition to Motion toDismiss at 10-11.)

We agree with plaintiffs. It is plain that they have adequatelyalleged that they have been injured by purchasing cell phonesthat do not operate in accord with FCC requirements forprocessing 911 calls and are therefore worth less than compliantphones. We certainly could not hold as a matter of law that anoncompliant phone has as much value as a compliant one.Plaintiffs are entitled to the opportunity of proving thisallegation of diminished value. The cases cited by defendants aredistinguishable because they involved products that are notanalogous to cell phones, such as automobiles, and/or productsthat were alleged to be "prone" to defects but had not yetmanifested a defect. Here, plaintiffs have alleged that thephones at issue do not process 911 calls in the required ways andthus are defective. Any diminished value of such phones would notbe "speculative," as defendants claim. We reject defendants'contentions that plaintiffs must actually have tried to dial 911on their cell phones and failed to get through in order to statea cognizable injury. 2. Enforceable FCC Order

Defendants also argue that plaintiffs' Communications Actclaims fail because the Second Report and Order "is prospectiveand more akin to a general rulemaking than to a rule thatrequires specific action by specific parties." (Reply at 11.)Moreover, defendants contend, plaintiffs do not have standing toassert a Communications Act claim because they were not "parties"to the proceedings that resulted in the Second Report and Order.Section 401(b) of the Communications provides: If any person fails or neglects to obey any order of the Commission other than for the payment of money, while the same is in effect, the Commission or any party injured thereby, . . . may apply to the appropriate district court of the United States for the enforcement of such order. If, after hearing, that court determines that the order was regularly made and duly served, and that the person is in disobedience of the same, the court shall enforce obedience to such order by a writ of injunction or other proper process, mandatory or otherwise, to restrain such person or the officers, agents, or representatives of such person, from further disobedience of such order, or to enjoin upon it or them obedience to the same.47 U.S.C. § 401(b).

Defendants' first argument, that the Second Report and Ordersimply sets out rules of "general applicability" and does not"contain any specific directive, explicit, or implicit, to any ofthe defendants in this case," (Memorandum in Support of Motion toDismiss at 10-11), thereby rendering it unenforceable, is simplyincorrect and in fact borders on the absurd. The Second Reportand Order (read in conjunction with the Clarification Order) requiresthat cell phones operating in analog mode process 911 calls inspecific ways. Whom does the Second Report and Order contemplateis responsible for ensuring that the phones do so? Manufacturersand, to some extent, carriers — those involved in the productionand design of the phones and their software.10 That theSecond Report and Order does not expressly refer to thoseentities by name does not demonstrate that the Second Reportand Order was not a directive to certain parties to take specificactions, nor does it render the Second Report and Order "poorlysuited for enforcement," as defendants assert.

Defendants' second argument, that the plaintiffs do not qualifyunder § 401(b) as "part[ies] injured thereby" because plaintiffswere not parties to the FCC proceedings that produced SecondReport and Order, is really just a version of the first argument.The thrust of both of defendants' contentions is a position thatthey claim to disavow (because it is the minority view andcontrary to Seventh Circuit precedent)11 — that orders produced by FCC "rulemaking" proceedings, as opposed to"adjudicatory" proceedings, cannot be enforced pursuant to §401(b). Defendants rely on New England Telephone & Telegraph Co.v. Public Utilities Commission, 742 F.2d 1 (1st Cir. 1984), inwhich the court held that the word "order" in § 401(b) does notinclude FCC rulemaking decisions, for the proposition thatplaintiffs must have been parties to the FCC proceedings in orderto bring suit to enforce the Second Report and Order. At the sametime, though, defendants concede that "[t]his is not to say thatFCC rulemakings are never enforceable under Section 401(b). Mostenforceable rulemakings are cases involving rate-making orsimilar activities, where the FCC has historically availed itselfof rulemaking processes." (Memorandum in Support of Motion toDismiss at 9-10.) The Second Report and Order is different fromthose "enforceable rulemakings," say defendants, because it doesnot require specific action of specific parties. We have rejectedthat contention.

3. Fraud

Defendants contend that plaintiffs' state-law consumer fraudclaims in Counts III, VIII, and XI must be dismissed because theyare not pled with the particularity required by Federal Rule ofCivil Procedure 9(b). Rule 9(b) provides that "[i]n all avermentsof fraud . . ., the circumstances constituting fraud . . . shallbe stated with particularity." Plaintiffs respond that their claims are "not necessarily subject to the strictures of Rule9(b)" because "plaintiffs must plead with particularity onlythose claims which are grounded in fraud." (Memorandum inOpposition to Motion to Dismiss at 14-15.) Because the consumerfraud statutes encompass a broad range of conduct, plaintiffsassert, fraud is not a necessary element of recovery, and theclaims need not be pled with particularity.

Counts III and XI of the amended complaint allege thatdefendants engaged in "fraudulent business practices," and CountVIII alleges that defendants engaged in a "deceptive" practice.Therefore, those claims are at least in part grounded in fraud,and plaintiffs must plead them with particularity — the who,what, when, where, and how of the alleged fraud, see Katz v.Household International, Inc., 91 F.3d 1036, 1040 (7th Cir.1996). Given that "[a]ccusations of fraud can do serious damageto the goodwill of a business firm," the Seventh Circuit hascommented that the "true rationale" of Rule 9(b) is to discouragelitigants "from tossing such accusations into complaints in orderto induce advantageous settlements or for other ulteriorpurposes." Bankers Trust Co. v. Old Republic Ins. Co.,959 F.2d 677, 683 (7th Cir. 1992). This rationale applies equally to bothcommon-law and statutory fraud claims. See Petri v. Gatlin,997 F. Supp. 956, 973 (N.D. Ill. 1997) (Grady, J.). Accordingly, Counts III, VIII, and XI of the amended complaintwill be dismissed without prejudice because they do not complywith Rule 9(b). Plaintiffs will be given leave to amend thecomplaint to allege fraud with specificity.

4. Implied Warranty of Merchantability/Fitness for aParticular Purpose

Defendants maintain that plaintiffs' claims for breach of theimplied warranty of merchantability and breach of the impliedwarranty of fitness for a particular purpose should be dismissedfor lack of privity. According to defendants, the "general rule"is that privity of contract is required in an action for breachof implied warranty. Defendants cite case law and statutes fromseveral states supporting this proposition. Plaintiffs concedethat ten states require privity of contract between consumer andmanufacturer, but they argue that the majority of states eitherhave abolished the privity requirement or recognize exceptions tothe requirement that would apply here.12

It is clear to us that the laws of the states on the privityrequirement differ and that because of the exceptions to therequirement in some states, it would be impossible for us tostate a general rule that would be useful. We see no need, then,for us, the transferee court in this MDL, to address the issue ona stateby-state basis. It is a case-specific question that shouldawait the attention of the transferor courts on remand. We will,however, address the issue as it arises in our own case that ispart of the MDL, Aggarwal v. Nokia, 02 C 8808.

The Aggarwal case involves the application of Illinois law.Defendants cite Seventh Circuit case law stating that privity isa prerequisite to recover economic damages for breach of impliedwarranty, Voelker v. Porsche Cars N. Am., Inc., 353 F.3d 516,525 (7th Cir. 2003). Plaintiffs argue that the Illinois SupremeCourt, in Rothe v. Maloney Cadillac, Inc., 518 N.E.2d 1028(Ill. 1988) (relying on Szajna v. General Motors Corp.,503 N.E.2d 760 (Ill. 1986)), has interpreted federal law — theMagnuson-Moss Act — to allow suits for implied warranties byplaintiffs who, as here, have been issued express warranties bythe manufacturer.

The weight of authority in this district has rejected theIllinois courts' interpretation of federal law. We adopt theanalysis of our colleague, Judge Bucklo, who recently confrontedthis issue: [W]hile I must follow the Illinois Supreme Court's interpretation of Illinois law, Highsmith v. Chrysler Credit Corp., 18 F.3d 434, 442 (7th Cir. 1994), I need not be bound by its interpretation of federal law. RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997). The Seventh Circuit in Voelker held that privity was required. 353 F.3d at 525. While plaintiffs argue that Voelker did not explicitly address the issue raised by Szajna, I must follow Seventh Circuit pronouncements. In addition, several district courts have rejected the Szajna Court's interpretation of Magnuson-Moss. E.g., Kutzler v. Thor Indus., Inc., No. 03-C2389, 2003 WL 21654260, at *6 (N.D. Ill. July 14, 2003) (Schenkier, J.); Soldinger v. Aston Martin LaGonda of N.A., Inc., No. 97-C7792, 1999 WL 756174, at *6-10 (N.D. Ill. Sept. 13, 1999) (Pallmeyer, J.). I agree with their conclusion.Finch v. Ford Motor Co., 327 F. Supp. 2d 942, 945-46 (N.D. Ill.2004) (holding that plaintiffs lacked the necessary privity ofcontract with the manufacturer for a breach of implied warrantyclaim); see also Soldinger, 1999 WL 756174 at *6-10(explaining why the privity requirement is not eliminated underthe Magnuson-Moss Act if it is required for a breach of impliedwarranty claim under Illinois law). The breach of impliedwarranty claims in the Aggarwal case, therefore, will bedismissed with prejudice for lack of privity.

In addition to the privity issue, defendants present relatedarguments for dismissal of the implied warranty claims, none ofwhich is persuasive. Defendants first imply that plaintiffs failto allege that defendants' phones are not fit for the ordinarypurposes for which they are used because making 911 calls is notan "ordinary purpose."13 As plaintiffs point out, it is astretch to argue that making 911 calls is not an ordinary purposefor which cell phones are used. The amended complaint allegesthat defendants' phones do not comply with FCC regulations andare therefore not fit for making 911 calls. (Consolidated AmendedClass Action Complaint, ¶ 70.) That is sufficient. We also rejectdefendants' contention that plaintiffs' claims fail because thereis no express allegation that the cell phones in question do notmake 911 calls; a reasonable inference from the allegation thatthe phones do not comply with FCC regulations is that the phonesdo not properly make 911 calls. We also reject defendants'argument that plaintiffs have not adequately alleged that theyrelied on the defendants' knowledge for purposes of the warrantyof fitness for a particular purpose. That the plaintiffs reliedupon defendants' skills or judgment to provide suitable phones isa reasonable inference from the language of the complaint, whichalleges that defendants were obligated to use their skill andknowledge and that plaintiffs were entitled to rely on it.(Consolidated Amended Class Action Complaint, ¶ 68.)

Defendants' motion to dismiss the implied warranty claims willbe denied without prejudice to renewal of the motions in thetransferor districts after remand, except as to the impliedwarranty claims in the Aggarwal case, which will be dismissedwith prejudice.

C. Carrier Defendants' Motion to Dismiss

In addition to the arguments set forth in defendants' generalmotion to dismiss, the "carrier defendants," Cellco Partnershipd/b/a Verizon Wireless, AT & T Wireless Services, Inc., andSprint Spectrum L.P. d/b/a Sprint PCS, argue that the FCC has "made itclear" that the Second Report and Order applies only to themanufacturer defendants and not to them. The carriers seize uponthe text of the regulation that was amended by the Second Reportand Order: Mobile telephones manufactured after February 13, 2000 that are capable of operating in ? analog mode . . . must incorporate a special procedure for processing 911 calls. Such procedure must recognize when a 911 call is made and, at such time, must override any programming in the mobile unit that determines the handling of a non-911 call and permit the call to be transmitted through the analog systems of other carriers. This special procedure must incorporate one or more of the 911 call system selection processes endorsed or approved by the FCC.47 C.F.R. § 22.921 (emphasis added). In the carriers' view, thislanguage unambigously imposes duties only "at the handsetmanufacturing stage and not on the sale of the handsets or theprovision of wireless cellular services." (Memorandum in Supportof Carrier Defendants' Motion to Dismiss at 3-4.) The carrierscontend that there is no provision in the Second Report and Orderassigning them responsibility for "implementation or roll out ofthe new 911 call-processing technologies," and they quote frompassages in the Second Report and Order and related orders thatrefer to imposing 911 call-processing requirements on "handsetmanufacturers" and allowing reasonable time for "handsetmanufacturers" to comply with the requirements. (Id. at 4-7.)Another indication that the Second Report and Order applies onlyto manufacturers, say the carriers, is the fact that the FCC has issued orders subsequent to the Second Report and Order grantingmanufacturers' requests for alternative call-processingtechnologies, but no such orders with respect to carriers.

We find the carriers' arguments unpersuasive. The language ofthe pertinent FCC regulation, 47 C.F.R. § 22.921, refers tophones "manufactured after" a certain date; this is simply alimitation on the phones to which the regulation applies. It doesnot give us much insight on whether the Second Report and Orderimposes any duties on carriers, and it certainly does not"clearly" indicate that the FCC intended the Second Report andOrder to apply to manufacturers only.

Similarly, we believe that the FCC's subsequent orderspertaining to manufacturers' alternative call-processing requestsare of little relevance. That no carriers have filed requests forapproval does not tend to show that FCC intended the SecondReport and Order not to apply to carriers at all. And in fact,the carriers' argument is undercut by the FCC's invitation toboth manufacturers and carriers to submit such requests:"Manufacturers or carriers wishing to incorporate new or modified911 call processing modes may submit such requests to theWireless Telecommunications Bureau, and we delegate authority tothe Bureau to act on such requests." (Second Report and Order, ¶88.)

The best way to tackle this issue is to look at the SecondReport and Order itself and the realities of 911 call processingit contemplates. The excerpts quoted by the carriers do not indicatethat only manufacturers are bound by the order. Moreover,several portions of the Second Report and Order refute thecarriers' argument that they are not subject to the order.Appendix C to the Second Report and Order, the "Final RegulatoryFlexibility Analysis," states under the heading "Description andEstimate of Small Entities Subject to the Rules"14(emphasis added): Cellular Equipment Manufacturers. The actions taken in the [Second Report and Order] will chiefly apply to manufacturers of cellular equipment offering analog services or digital equipment also offering analog services. . . . Cellular Carriers. Cellular carriers are also impacted by the Commission's decision in this proceeding.The section does not include any other categories of entities"[s]ubject to the Rules." Thus, it appears that although the FCCcontemplated that manufacturers would be primarily responsiblefor implementing the call-processing modes, carriers would alsohave implementation duties. Other language of the Second Reportand Order that refers to carriers supports this conclusion: • [W]e . . . anticipate that other methods [of complying with these rules] could be developed in the future. Thus, no manufacturer or carrier is required to employ any specific patented technology. • A nine month deadline should allow manufacturers to make the programming changes in handsets, test the updated handsets, and revise the handset manuals. . . . We also believe the nine month period will allow carriers and PSAPs sufficient time to plan for changes in 911 calling patterns and make any other needed adjustments. • We encourage carriers and manufacturers to act voluntarily, based upon the objectives we have stated in this Order, to extend 911 performance improvements.(Second Report and Order, ¶¶ 66, 87, 90 (emphasis added).)

The Second Report and Order also describes the realities of thecomplex wireless phone industry, in which manufacturers andcarriers work in conjunction to provide phones that comply withFCC regulations: One reason access to emergency 911 systems is not always available for wireless handsets is that there are gaps in the signal coverage provided by wireless carriers. . . . Two cellular carriers usually provide service in each market, referred to as the A carrier and the B carrier. Each A carrier uses one set of assigned frequencies and each B carrier another, but both use compatible technology and air interface standards for analog service. Cellular handsets are manufactured to be used for both A and B carrier systems, and software programs in these handsets permit them to operate in several modes. . . . [C]arriers are major distributors of handsets. . . . [D]irect sales from carriers account for about 24 percent of cellular sales. . . .(Second Report and Order, ¶¶ 14, 20, 83.) As plaintiffs pointout, the language of the Second Report and Order shows thatcarriers play a role in bringing cell phones to market (theextent of that role, however, is a factual question). Given thetext of the Second Report and Order, especially the provisions quoted supra,we must reject the carriers' contention that the Second Reportand Order does not apply to carriers.

Regarding plaintiffs' state-law claims, the carriers assertwhat appears to be a preemption argument: "[P]laintiffs' attemptto invoke state law would contravene the FCC'smanufacturer-focused 911 call-processing regime." (Memorandum inSupport of Carrier Defendants' Motion to Dismiss at 9.) Theproblem is that the carriers cite no case law supporting theirargument, and they fail to explain why the following "savingclause" provision of the Communications Act does not apply:"Nothing in this chapter contained shall in any way abridge oralter the remedies now existing at common law or by statute, butthe provisions of this chapter are in addition to such remedies."47 U.S.C. § 414. The preemption argument is therefore rejected.

The carriers also contend that three of the state-law claims —breach of contract, breach of the implied covenant of good faithand fair dealing, and unjust enrichment — must be dismissed asimproperly pled. The carriers cite case law from several states.As with defendants' general motion to dismiss, these arecasespecific questions that will best be handled by thetransferor courts on remand. We will deny the motion on theseissues, without prejudice to renewal. We will address theseclaims only as to our own case, Aggarwal, which involvesIllinois law. As for breach of contract, the carriers cite only Californiaand Texas law for their contention that to assert a claim ofbreach of contract, a plaintiff must allege a breach of someobligation arising out of the contract. Plaintiffs respond thattheir claim is proper because their contracts with the carriersincorporate, by implication, the FCC's cellular phoneregulations. Plaintiffs cite Illinois law for the propositionthat law existing at the time and place of the making of acontract "necessarily enters into and forms part of everycontract as if specifically incorporated therein." Schiro v.W.E. Gould & Co., 165 N.E.2d 286, 290 (Ill. 1960). The carriersattempt to avoid this rule by arguing that the FCC's regulationsshould not be incorporated into the contracts because they do notapply to carriers, but we have already considered and rejectedthat argument.

The carriers also maintain that Illinois does not recognize anindependent cause of action for breach of the implied covenant ofgood faith and fair dealing. It is true that Illinois does notrecognize such an independent cause of action in tort, but acontractually-based claim for breach of the implied covenant doesexist. See, e.g., Puthusserill v. Shell Oil Co., No. 02 C2289, 2003 WL 22494790, at *2-3 (N.D. Ill. Nov. 4, 2003). Theclaim, however, boils down to breach of contract: "[T]heobligation to deal in good faith is implied by Illinois law intoevery contract and breach of that duty is simply a breach of theunderlying contract." Batteast Constr. Co. v. Public Bldg. Comm'n,195 F. Supp. 2d 1045, 1051 (N.D. Ill. 2001). Plaintiffs have alreadyasserted a separate breach of contract claim in Count VI. Theirclaim for breach of the implied covenant of good faith and fairdealing, then, is superfluous, see id., and will be dismissedfrom the Aggarwal case.

The carriers' final argument regarding the state-law claims isthat an unjust enrichment claim does not lie where there is acontract between the parties. Plaintiffs contend that they mayplead unjust enrichment in the alternative. In the amendedcomplaint, however, unjust enrichment is not pled in thealternative, nor is it pled in the alternative in the Aggarwalcase. Plaintiffs' unjust enrichment claim will be dismissedwithout prejudice, and plaintiffs will be given leave to repleadunjust enrichment in the alternative.

We decline to address the carriers' argument that plaintiffs'failure to identify a specific violation of the CommunicationsAct dooms their §§ 206 and 207 claims, because it is raised forthe first time in their reply brief and is therefore waived.See APS Sports Collectibles, Inc. v. Sports Time, Inc.,299 F.3d 624, 631 (7th Cir. 2002); Petri, 997 F. Supp. at 981 n.18.

Accordingly, the carrier defendants' motion to dismiss will begranted in part, to the extent that plaintiffs' unjust enrichmentclaim will be dismissed without prejudice and that the claim in Aggarwal for breach of the implied covenant of good faith andfair dealing will be dismissed with prejudice. The remainder ofthe motion is denied.

D. Nokia, Inc.'s Motion to Dismiss

There are two Nokia entities involved in this litigation:Nokia, Inc., a U.S. corporation ("Nokia, Inc."), and NokiaCorporation, a Finnish corporation ("Nokia Corp."). Nokia, Inc.moves to dismiss the amended complaint on the basis that it isnot subject to the Second Report and Order. (The motion of NokiaCorp., which is discussed infra section E, is premised oninsufficiency of service of process.)

In the Second Report and Order, as quoted supra section C,the FCC invited manufacturers and carriers wishing to incorporatenew or modified 911 call-processing modes to submit such requeststo the Wireless Telecommunications Bureau (the "Bureau"), and theFCC delegated authority to the Bureau to act on such requests.Nokia, Inc. filed such a request, which was approved by theBureau in a January 28, 2000 order that we will call the "NokiaOrder." Nokia, Inc. contends that all claims against it must bedismissed because its handsets are governed solely by the NokiaOrder and the amended complaint alleges that defendants violatedonly the Second Report and Order with no mention of the NokiaOrder.

Plaintiffs, on the other hand, contend that the Second Reportand Order does apply to Nokia even though the alternativecall-processing mode was approved in the Nokia Order. Plaintiffs argue that"[w]hile Nokia is correct in stating that its 911 callingobligations are governed by the Nokia Order, Nokia's corollarycontention — that it is not subject to any of the requirementsset forth in the Second Report and Order — is erroneous."(Memorandum in Opposition to Nokia, Inc.'s Motion to Dismiss at2.) In plaintiffs' view, the Nokia Order incorporated the threetasks required of cellular phones by the Second and Report andOrder, as set forth in the amended complaint. Paragraphs 40 and41 of the amended complaint allege: 40. Under the Second Report and Order and the [Clarification Order], when an emergency call is placed: a) If a cell phone attempting to place a 911 call does not detect a signal from the preferred carrier, it must switch to the non-preferred carrier and attempt to complete the call; b) If the cell phone detects a signal from the preferred carrier but is not assigned a voice channel within 17 seconds, it must switch to the non-preferred carrier and attempt to complete the call; and c) If a wireless 911 call is completed but dropped, the cell phone must automatically retry the call. 41. Many of the cell phone models manufactured after February 13, 2000 and marketed to the U.S. public by defendants have failed, and continue to fail, to satisfy at least one of the requirements set forth above. At all times relevant hereto, defendants have concealed from purchasers of the cell phone models in question, and have not disclosed to them or any of them, that the said cell phone models were non-compliant.(Consolidated Amended Class Action Complaint, ¶¶ 40-41.) To determine whether Nokia, Inc. is subject to the SecondReport and Order, we turn to the relevant language of the NokiaOrder: In its Second Report and Order in the Wireless E911 Rulemaking, . . . the Commission adopted Section 22.921 of its rules, 47 C.F.R. § 22.921. To help improve 911 call completion, this rule requires new analog wireless handsets, and multimode handsets when operating in analog mode, to be able to complete 911 calls to either analog carrier in an area, regardless of the programming of the handset for non-911 calls. . . . Further, the Commission approved three proposed 911 call processing modes, while stating general principles for other acceptable modes and encouraging the development of further improvements in 911 call completion. . . . . . . On October 27, 1999, Nokia, Inc. filed a letter with the Bureau requesting approval for an alternate 911 call completion method for Nokia's multi-mode products. . . . Nokia describes its method as based on the Automatic A/B Roaming-Intelligent Retry (A/B-IR) method approved in the Second Report and Order, but going further to attempt call completion on all systems on which a handset is capable of operating, including both analog and digital modes. . . . In a Public Notice in this docket, the Bureau sought comment on this proposal, in particular on whether the proposed method is consistent with the Commission's rules and the principles set out by the Commission for 911 call processing modes. . . . Based on our review of the Nokia request and the record, we approve Nokia's proposed 911 call completion method, subject to the same two conditions that the Commission imposed in the Second Report and Order to address lock-in concerns associated with the A/B-IR call completion method. First, the handset must provide effective feedback. . . . Second, the Commission required that handsets employing A/B-IR seek to complete the call with the non-preferred cellular carrier if the preferred cellular carrier has not successfully delivered the call to the landline carrier within 17 seconds after the call is placed. . . . Nokia's original proposal did not specifically provide that the call be delivered to the landline carrier within 17 seconds. . . . Subsequently, Nokia clarified that its multi-mode handsets will comply with the time limits for access attempts approved by the Commission for the A/B-IR method, specifically the 17-second limit. . . . Applying the same 17-second limit to Nokia's proposal as that applied by the Commission to the substantially similar A/B-IR method should similarly address lock-in concerns. . . . [W]ith Nokia's proposed method, if attempts to complete the 911 call via the [Preferred Roaming List] fail, the handset would then attempt to complete the call with nonpreferred carriers, including the local non-preferred analog carrier. . . . Subject to the two conditions, we find that Nokia's proposed method will satisfy both the Commission's general principles for 911 call processing modes and the specific conditions the Commission imposed upon the Automatic A/B Roaming-IR mode on which the Nokia proposal is based. . . . Accordingly, we approve the proposed Nokia 911 call completion method for multimode handsets, subject to the conditions imposed by the Commission for feedback and time limits for the Automatic A/B Roaming-IR mode.(Nokia Order, ¶¶ 1-5, 10-12 (emphasis added).)15

Thus, the language of the Nokia Order refutes Nokia, Inc.'scontentions that the Second Report and Order does not apply toNokia handsets. The Nokia Order explicitly incorporates theSecond Report and Order and the 17-Second Rule, which is one ofthe three requirements for call processing cited by plaintiffs in paragraph40 of the amended complaint. The argument that this lawsuit is"groundless" as against Nokia, Inc. because the Second Report andOrder does not apply to it (and the corollary argument thatattorneys' fees and costs are warranted) is without merit.

We do believe, however, that the amended complaint requiressome clarification with respect to Nokia, Inc. We view the NokiaOrder as an extension or amplification of the Second Report andOrder. Because the Nokia Order approves an alternativecallprocessing method for Nokia, Inc., it changes the parlance ofcall processing with regard to Nokia, Inc.'s method. (Forexample, Nokia, Inc.'s call-processing method encompassesdifferent concepts, such as the "presently acquired system" andthe "preferred roaming list.") Because the amended complaint doesnot allege that Nokia, Inc. violated the Nokia Order and does noteven refer to the Nokia Order, it is unclear from the allegationsexactly what requirements plaintiffs believe are applicable toNokia handsets and what violations of those requirements arealleged. Nokia, Inc. is entitled to adequate notice of the claimsagainst it in light of the applicability of the Nokia Order.Therefore, Nokia, Inc.'s motion to dismiss will be granted, andplaintiffs' claims will be dismissed without prejudice as againstNokia, Inc. Plaintiffs will be given leave to amend the complaintto re-allege their claims as against Nokia, Inc., taking into account the existence and language of the Nokia Order andconforming the allegations accordingly.

Nokia, Inc. also raises essentially the same preemptionargument that was asserted by the carriers and that we rejectedsupra section C. We reject it again.

E. Nokia Corp.'s Renewed Motion to Dismiss for Insufficiencyof Service of Process

Nokia Corp. contends that its has not been properly served as aforeign corporation. Prior to the consolidation of these mattersby the Judicial Panel on Multidistrict Litigation, Nokia Corp.was named as a defendant in two of the underlying lawsuits: theAggarwal case, which we have already mentioned, is pendingbefore this court, and McMurry v. Nokia Corp., a case from theWestern District of Washington. On December 16, 2002, plaintiffsattempted to serve Nokia Corp. in the Aggarwal case by servinga copy of the complaint on National Registered Agents, Inc.("National"). National, however, is the registered agent forservice of process in Illinois for Nokia, Inc., not Nokia Corp.Plaintiffs concede that the Aggarwal complaint was"inadvertently served on" Nokia, Inc. rather than on Nokia Corp.(Opposition to Nokia Corp.'s Renewed Motion to Dismiss at 1.) OnJanuary 21, 2003, Nokia Corp. filed a motion to dismiss theAggarwal case for insufficient service of process. In February2003, plaintiffs requested Nokia Corp. to waive service ofprocess, but Nokia Corp. did not agree. On March 19, 2003, weordered plaintiffs to obtain service on Nokia Corp. by May 30, 2003. Plaintiffs did not do so. Thereafter, wedecided defendants' primary jurisdiction motion, and in light ofour referral of issues to the FCC, we denied Nokia Corp.'s motionto dismiss without prejudice to filing a renewed motion at alater time.

After the FCC issued the Clarification Order, plaintiffs filedthe Consolidated Amended Class Action Complaint. Nokia Corp. thenfiled a renewed motion to dismiss for insufficient service ofprocess. Plaintiffs contend that Nokia Corp. has waived anyjurisdictional objections due to its "active? participat[ion] inthese proceedings for purposes other than objecting tojurisdiction." (Opposition to Nokia Corp.'s Renewed Motion toDismiss at 3.) Plaintiffs cite five instances of such"participation": (1) seeking and agreeing to a June 26, 2003protective order; (2) defendants' November 2004 general motion todismiss the amended complaint (the motion that is discussedsupra section B); (3) defendants' liaison counsel's July andAugust 2004 letters to the court; (4) defendants' October 2004discovery requests to plaintiffs; and (5) defendants' January 31,2003 motion to transfer and consolidate the cases into this MDLproceeding.

Federal Rule of Civil Procedure 12(h)(1) provides that "[a]defense of . . . insufficiency of service of process is waived . . .if it is neither made by motion under this rule nor includedin a responsive pleading." Plaintiffs do not dispute that NokiaCorp. raised the defense timely by asserting it with its first filing.The defense, nonetheless, may be waived "by submission throughconduct." Continental Bank, N.A. v. Meyer, 10 F.3d 1293, 1297(7th Cir. 1993). All of the conduct purportedly constitutingwaiver occurred after Nokia Corp.'s filing of the motion todismiss for insufficiency of process. The question is whetherNokia Corp.'s conduct led plaintiffs to believe that service wasadequate and that no such defense was being interposed or thatthe defense was being abandoned. See Trustees of Cent.Laborers' Welfare Fund v. Lowery, 924 F.2d 731, 732-33 (7th Cir.1991). We do not think that any of the conduct cited byplaintiffs would lead anyone to believe that Nokia Corp. wasabandoning its insufficiency-of-service defense.

The January 2003 motion to consolidate the cases into an MDLproceeding was not brought by Nokia Corp. or signed by anyone onbehalf of Nokia Corp. And we do not believe that the fact thatthe other defendants' motion sought transfer of the Aggarwalcase (which was brought against Nokia Corp. and not Nokia, Inc.)could have been reasonably construed by plaintiffs as NokiaCorp.'s abandonment of its insufficient-service defense. (Infact, it was not construed by plaintiffs as such an abandonmentbecause plaintiffs later requested that Nokia Corp. agree towaive service.) Defendants' general motion to dismiss was brought only "[o]nbehalf of all defendants who have been properly served and haveappeared in this litigation." (Motion to Dismiss at 4.)Plaintiffs argue that because the motion seeks to dismiss thecomplaint in its entirety, we should find waiver because"[a]ffirmative relief has . . . been sought on behalf of Nokia[Corp.]." (Opposition to Nokia Corp.'s Renewed Motion to Dismissat 4.) We are unpersuaded. There is no indication in the motionto dismiss that Nokia Corp. was abandoning its defense, and thesignature by liaison counsel only "[o]n behalf of all defendantswho have been properly served" is a clear signal that Nokia Corp.was not joining in the motion or abandoning its defense. Indeed,Nokia Corp. filed its renewed motion to dismiss for insufficientservice of process on the very same day that the general motionto dismiss was filed.

Liaison counsel's use of the generic term "defendants" incorrespondence with the court and in discovery requests similarlydoes not constitute waiver. Nor does the fact that the discoveryrequests sought information from, among other plaintiffs,plaintiffs who purchased Nokia phones. Neither of these actionsby liaison counsel, who has never purported to represent NokiaCorp., can reasonably be imputed to Nokia Corp.

As for the protective order, page 6 of the signature pages tothe order does list counsel "for Nokia Corp., Nokia, Inc." This signature to the protective order is the only "conduct" that canfairly be attributed to Nokia Corp. for purposes of the waiverinquiry. However, it is not conduct that rises to the level ofwaiver. The protective order in question is narrowly focused: itstates that it is "for the sole purpose of facilitating thelimited discovery" we had permitted of the parties'correspondence with the FCC that was relevant to the primaryjurisdiction issue. Nokia Corp.'s participation in the case byvirtue of signing the protective order was for a very limitedpurpose that in our view could not reasonably be viewed as anabandonment of its defense. Moreover, as Nokia Corp. points out,while plaintiffs cite one Illinois state court case supportingtheir argument, plaintiffs cite no federal case law. This is anissue of federal, not state, civil procedure. We find that NokiaCorp. did not waive its insufficiency-of-servicedefense.16

Plaintiffs contend that even if Nokia did not waive itsdefense, service was sufficient because Nokia Corp. was properlyserved with the complaint in the McMurry case and becauseliaison counsel was served with the Consolidated Amended ClassAction Complaint. We disagree. The McMurry complaint was servedon National, which was not authorized to accept service on behalfof Nokia Corp. in the state of Washington. Nokia Corp. submitsthe affidavit of Dennis E. Howarth, President of National, who statesthat National is not and has never been authorized to acceptservice on behalf of Nokia Corp. in the state of Washington (justas it does not have that authorization in Illinois) and that allservice accepted by National in the McMurry case was as agentfor Nokia, Inc. and not for Nokia Corp. Plaintiffs do not offerany evidence to the contrary. And as for service of the amendedcomplaint on defendants' liaison counsel, liaison counsel is notcounsel of record for Nokia Corp. and has never been authorizedto accept service on Nokia Corp.'s behalf.

Accordingly, we find that Nokia Corp. has not been properlyserved with the summons and complaint in this matter. We decline,however, to grant the motion to dismiss. Instead, pursuant toFederal Rule of Civil Procedure 4(m), plaintiffs will be givenuntil September 6, 2005 to effect service of process on NokiaCorp.


Defendants' motion for partial summary judgment is grantedinsofar as it relates to the FCC's clarification of the 17-SecondRule. The decision of the FCC in the Clarification Order isadopted as the law of the case. The motion for partial summaryjudgment is denied insofar as it seeks judgment on the abandonedallegations regarding the feedback requirement.

Defendants' motion to dismiss the Consolidated Amended ClassAction Complaint is granted in part and denied in part. Counts III, VIII, and XI are dismissed without prejudice. In addition,the breach of implied warranty claims asserted in the Aggarwalv. Nokia case, 02 C 8808, are dismissed with prejudice. Theremainder of defendants' motion to dismiss is denied.

The carrier defendants' motion to dismiss is granted in partand denied in part. Plaintiffs' unjust enrichment claim isdismissed without prejudice. The claim for breach of the impliedcovenant of good faith and fair dealing asserted in theAggarwal case is dismissed with prejudice. The remainder of thecarrier defendants' motion to dismiss is denied.

Nokia, Inc.'s motion to dismiss is granted. Plaintiffs' claimsare dismissed without prejudice as against Nokia, Inc.

Nokia Corp.'s motion to dismiss for insufficiency of service ofprocess is denied. Plaintiffs are given leave to serve NokiaCorp. with process by September 6, 2005.

Plaintiffs are given leave to file an amended complaint by July5, 2005, to allege the fraud claims with specificity; to pleadunjust enrichment in the alternative; and to properly re-allegetheir claims against Nokia, Inc. to account for the Nokia Order.

1. The "carrier defendants" are Cellco Partnership d/b/aVerizon Wireless, AT & T Wireless Services, Inc., and SprintSpectrum L.P. d/b/a Sprint PCS.

2. In re Revision of the Commission's Rules to EnsureCompatibility with Enhanced 911 Emergency Calling Systems, 14F.C.C.R. 10954 (1999) ("Second Report and Order").

3. Our statement in the Memorandum Opinion of September 3,2003 that "[p]laintiffs contend that defendants' phones do notcomply with . . . the `17-Second Rule'" could be read to implythat plaintiffs did not contend that the phones failed to provideeffective feedback. Plaintiffs' initial class action complaintdid allege, however briefly, that the phones "failed to providean audio notification that the 911 call was in progress." (ClassAction Complaint, Aggarwal v. Nokia, 02 C 8808, ¶ 13.) Thefocus of the proceedings in this case has been the 17-Second Ruleand very little, if any, mention has been made of the feedbackrequirement. Our referral of issues to the FCC concerned only the17-Second Rule, and therefore, the instant motion for partialsummary judgment has nothing to do with the feedback requirement.It is puzzling (but not exactly surprising), then, that inaddition to seeking "partial" summary judgment in relation to the17-Second Rule, defendants also contend that summary judgment is"appropriate on all of Plaintiffs' claims premised on theallegation that wireless phones must provide visual and audiofeedback that they are operating in 911 mode." (Motion forSummary Judgment at 7.) Defendants are incorrect; we did notrefer the feedback requirement issue to the FCC, we did notinvite a summary judgment motion on the issue, and it is notproperly before the court as a subject for summary judgment. Intheir consolidated amended class action complaint, plaintiffshave abandoned any claim that the phones fail to provideeffective feedback. Plaintiffs confirm in their response to thesummary judgment motion that they "do not claim Defendantsviolated the `effective feedback' rule." (Memorandum inOpposition to Motion for Summary Judgment at 1-2 n. 2.) It iswell settled that an amended complaint supersedes the priorcomplaint, rendering the latter a nullity. See Kelley v.Crosfield Catalysts, 135 F.3d 1202, 1204-05 (7th Cir. 1998);Lubin v. Chicago Title & Trust Co., 260 F.2d 411, 413 (7th Cir.1958). Accordingly, defendants' motion for summary judgment willbe denied to the extent that it seeks judgment on the feedbackrequirement issue.

4. We also denied plaintiffs' motion for class certificationwithout prejudice to refiling once the stay was lifted.

5. We set forth relevant portions of the Clarification Orderin our Discussion, infra section A.

6. After denying a motion for summary judgment, a districtcourt may, pursuant to Rule 56(d), issue an order "specifying thefacts that appear without substantial controversy, including theextent to which the amount of damages or other relief is not incontroversy." Fed.R.Civ.P. 56(d); see also OccidentalFire & Cas. Co. v. Continental Bank, 918 F.2d 1312, 1320 (7thCir. 1990) (noting that under Rule 56(d) the trial court mayenter a binding order "listing the facts that are not indispute").

7. In their Reply, defendants also maintain that "by adoptingthe FCC's explanation of the 17 Second Condition in the AmendedComplaint, Plaintiffs have conceded that the FCC's rationale inthe Clarification Order is reasonable" and that this is a"judicial admission" by plaintiffs. (Reply at 4.) The argument isspecious. It is too much of a leap to transform the amendedcomplaint's simple description of what the FCC purported to do inthe Second Report and Order and the Clarification Order into a"concession" or "judicial admission" that the FCC's rationale wasreasonable.

8. Plaintiffs are correct that we referred issues to the FCCunder the "second" form of primary jurisdiction described inArsberry v. Illinois, 244 F.3d 558, 563 (7th Cir. 2001). TheSeventh Circuit distinguished the "central and original form" ofprimary jurisdiction, "exclusive agency jurisdiction," from thesecond form of primary jurisdiction as follows: The doctrine of primary jurisdiction is sometimes defined quite differently, as a doctrine that allows a court to refer an issue to an agency that knows more about the issue, even if the agency hasn't been given exclusive jurisdiction to resolve it. So, for example, we read . . . that "the doctrine of primary jurisdiction allows a federal court to refer a matter extending beyond the `conventional experiences of judges' or `falling within the realm of administrative discretion' to an administrative agency with more specialized experience, expertise, and insight.". . . In such cases, either court and agency have concurrent jurisdiction to decide an issue, or only the court has the power to decide it, and seeks merely the agency's advice.244 F.3d at 563-64 (emphasis added). We are unsure about whetherthe FCC's answers to our questions are subject to our review orif so, what is the appropriate standard of review. In the case of In re Starnet, Inc., 355 F.3d 634, 639 (7thCir. 2004), the Seventh Circuit itself referred a matter to theFCC under the primary jurisdiction doctrine to "resolve theambiguity created by the word `location'" in theTelecommunications Act and a Report and Order implementing thestatutory provision. The Court noted: "Only the FCC candisambiguate the word `location'; all we could do would be tomake an educated guess. And although the FCC's position would besubject to review by the judiciary for reasonableness, theagency's views are the logical place for the judiciary to start."355 F.3d at 639. Plaintiffs cite Starnet for the propositionthat this court should review the Clarification Order forreasonableness. Defendants point out that Courts of Appeals haveexclusive jurisdiction to enjoin, set aside, suspend, ordetermine the validity of all final FCC orders made reviewable by47 U.S.C. § 402(a). See 28 U.S.C. § 2342(1). 47 U.S.C. § 402(a)provides that "[a]ny proceeding to enjoin, set aside, annul, orsuspend any order of the [FCC] under this chapter . . . shall bebrought as provided by and in the manner prescribed inchapter 158 of Title 28." We question whether the exclusive jurisdictionprovision would even apply here, though, because the referral tothe FCC and these subsequent proceedings to determine the effectof the FCC's answers do not appear to qualify as a "proceeding toenjoin, set aside, annul, or suspend" an FCC order.47 U.S.C. § 402(a) does not seem to contemplate or apply to the type of FCC"order" we have in this case that was generated by a referral tothe agency pursuant to the doctrine of primary jurisdiction. Inany case, we need not decide the issue, as explained infra.

9. Counts I, IV, V, IX, and X are asserted by all plaintiffs,individually and on behalf of the classes, against alldefendants. Counts II, VI, and VII are asserted by allplaintiffs, individually and on behalf of the classes, againstthe carrier defendants. Count III is asserted by plaintiffsAdvanced Systems Integration, Inc. ("ASI"), Hubbard, Viengvilay,Lee, Nguyen, McAneny, and Freeland, individually and on behalf ofthe subclasses (except the Kyocera subclass) and the generalpublic of the state of California and affected members thereof,against all defendants except Kyocera Corporation ("Kyocera").Count VIII is asserted by all plaintiffs (except for ASI),individually and on behalf of the classes, against alldefendants. Count XI is asserted by plaintiff Clarke,individually and on behalf of the Kyocera class and the generalpublic of the state of California and affected members thereof,against Kyocera.

10. For a more detailed discussion regarding the carrierdefendants, see infra section C.

11. In Illinois Bell Telephone Co. v. Illinois CommerceCommission, 740 F.2d 566 (7th Cir. 1984), the Seventh Circuitdid not discuss the rulemaking/adjudicatory distinctionspecifically, but it affirmed the entry of an injunction under §401(b) to enforce an order that was the product of rulemaking.Other Courts of Appeals, such as the Sixth and Ninth Circuits,have expressly held that a decision resulting from a rulemakingproceeding constitutes an "order" within the meaning of § 401(b).See Alltel Tennessee, Inc. v. Tennessee Pub. Serv. Comm'n,913 F.2d 305, 308 (6th Cir. 1990); Hawaiian Tel. Co. v. PublicUtils. Comm'n, 827 F.2d 1264, 1271 (9th Cir. 1987).

12. Attached to plaintiffs' memorandum in opposition to themotion to dismiss is a survey of the law of fifty states and theDistrict of Columbia regarding the privity requirement.

13. "To prove a breach of an implied warranty of fitness forparticular purpose, a plaintiff must show (1) a sale of goods,(2) that the seller had reason to know of any particular purposefor which the goods are required, (3) that plaintiff, as buyer ofthe goods, was relying upon seller's skills or judgment to selectsuitable goods, and (4) that the goods were not fit for theparticular purpose for which they were used." Maldonado v.Creative Woodworking Concepts, Inc., 796 N.E.2d 662, 666(Ill.App. Ct. 2003).

14. Page 36 of the Second Report and Order states: "Asrequired by Section 603 of the Regulatory Flexibility Act, theCommission has prepared a Final Regulatory Flexibility Analysisof the expected impact on small entities of the changes in ourrules adopted herein. The Final Regulatory Flexibility Analysisis set forth in Appendix C."

15. Nokia, Inc. requests that we take judicial notice ofseveral documents — those relating to past FCC proceedings, thedocket and file in some of the pending MDL cases, and a patentissued for a particular calling technology. Plaintiffs requestthat we take judicial notice of the Request for Approval that ledto the Nokia Order. We recognize that we can take judicial noticeof matters of public record, but we do not find these documentsrelevant to the question of whether the Second Report and Orderapplies to Nokia, Inc. The question is not very complex and isanswered by a simple review of the Nokia Order. In fact, Nokia,Inc., has inundated the court with numerous exhibits in relationto this motion that are of marginal relevance.

16. An equitable consideration weighing against waiver is thatwe denied Nokia Corp.'s original motion without prejudice torenewal at a later time. We had not addressed the merits of themotion and signalled our willingness to do so at Nokia Corp.'s request.

Back to top