NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT MAY 10 2010
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
KEVIN JANDA and MANJIT SINGH, on No. 09-15770
behalf of themselves and all others
similarly situated and as private attorneys D.C. No. 3:05-cv-03729-JSW
general on behalf of the members of the
general public residing within the State of
California, MEMORANDUM*
Plaintiffs - Appellants,
v.
T-MOBILE USA, INC., a foreign
corporation,
Defendant - Appellee.
Appeal from the United States District Court
for the Northern District of California
Jeffrey S. White, District Judge, Presiding
Submitted May 5, 2010**
Seattle, Washington
Before: HALL, WARDLAW, and GOULD, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Plaintiffs Kevin Janda and Manjit Singh filed this class action lawsuit to
challenge T-Mobile’s practice of charging its customers a Universal Service Fund
(“USF”) fee and a Regulatory Programs Fee (“RPF”) in addition to a monthly
wireless service rate. They initially filed their complaint in Alameda County
Superior Court, and T-Mobile removed to the U.S. District Court for the Northern
District of California, which had jurisdiction pursuant to 28 U.S.C. § 1332(d).
T-Mobile moved to dismiss plaintiffs’ Second Amended Complaint. The district
court granted T-Mobile’s motion and dismissed the case with prejudice. We have
jurisdiction pursuant to 28 U.S.C. § 1291. We affirm.
I.
Plaintiffs’ Second Amended Complaint alleges that T-Mobile violated
California’s Unfair Competition Law (“UCL”), False Advertising Law (“FAL”),
and Consumer Legal Remedies Act (“CLRA”), and that it breached its contracts
with plaintiffs. To survive a Rule 12 motion, a plaintiff must allege “enough facts
to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007).
In addition to the complaint itself, on a motion to dismiss, the district court
may consider documents that are referenced by the complaint, are central to the
plaintiff’s claims, and the authenticity of which is undisputed. Marder v. Lopez,
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450 F.3d 445, 448 (9th Cir. 2006). The district court properly considered T-
Mobile’s 2005 Terms & Conditions (“T&Cs”), which were part of Janda’s contract
with T-Mobile and therefore central to Janda’s claims. Although the T&Cs
applicable to Janda’s Service Agreement were in a separate document from the
contract he signed, Janda’s Service Agreement clearly and unequivocally
incorporated the T&Cs and informed him that the T&Cs were contained in the
Welcome Guide. Janda acknowledged that the T&Cs were in the Welcome Guide
or otherwise provided to him, and that he had read them.
II.
The UCL prohibits any “unlawful, unfair or fraudulent business act or
practice.” Cal. Bus. & Prof. Code § 17200. The FAL prohibits advertising “which
is untrue or misleading, and which is known, or which by the exercise of
reasonable care should be known, to be untrue or misleading.” Cal. Bus. & Prof.
Code § 17500.
Because plaintiffs have not demonstrated above a speculative level that any
of T-Mobile’s “advertising” is likely to deceive members of the public, they have
not stated a claim for a fraudulent business practice under the UCL or FAL. Kasky
v. Nike, Inc., 45 P.3d 243, 250 (Cal. 2002). Janda’s Service Agreement and T&Cs
explicitly disclosed the USF fee and RPF, and Singh’s Service Agreement and
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T&Cs disclosed that “Any applicable . . . regulatory costs . . . imposed on . . . Us
[T-Mobile] as a result of providing the Service . . . will be added to your charges as
permitted . . . by law.” Federal law requires T-Mobile to contribute to universal
service and regulatory programs as a result of providing telecommunications
services, and the FCC explicitly permits providers to pass these contributions along
to customers. 47 U.S.C. § 254(d); 47 C.F.R. § 54.712(a).
Plaintiffs have not plausibly alleged that T-Mobile drafted its Service
Agreements so as to (1) confuse customers into agreeing to a substantial, avoidable
charge, Schnall v. Hertz Corp., 93 Cal. Rptr. 2d 439, 454-55 (Cal. Ct. App. 2000),
(2) bill customers in excess of their relative contribution to universal service or
regulatory programs, McKell v. Wash. Mut., Inc., 49 Cal. Rptr. 3d 227, 239-40
(Cal. Ct. App. 2006), or (3) mischaracterize the nature of the USF fee or the RPF,
Williams v. Gerber Prods. Co., 552 F.3d 934, 939 (9th Cir. 2008). Plaintiffs do not
identify any particular promotional brochures or in-store advertising that is
allegedly deceptive, and the Second Amended Complaint makes only broad,
generalized references to T-Mobile’s pre-sale advertising. Nor do plaintiffs allege
above a speculative level that there was a “centrally-orchestrated scheme” in which
T-Mobile employees were encouraged to hide the USF fee and RPF when selling
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service plans to customers. In re First Alliance Mortgage Co., 471 F.3d 977, 985,
992 (9th Cir. 2006).
Plaintiffs allege that T-Mobile’s billing practices violated Section 201(b) of
the Federal Communications Act (“FCA”)—as well as an FCC/FTC Joint Policy
Statement “informing” the Section 201(b) analysis—and therefore were “unlawful”
under the UCL. Farmers Ins. Exch. v. Superior Court, 826 P.2d 730, 734 (Cal.
1992) (“Unlawful business activity . . . includes anything that can properly be
called a business practice and that at the same time is forbidden by law.” (internal
citations and quotation marks omitted)). Section 201(b) forbids any “charge,
practice, classification, or regulation that is unjust or unreasonable.” In the Joint
Policy Statement, 15 F.C.C.R. 8654 (2000), the FCC and FTC purportedly object
to the practice of recovering extra revenue through undisclosed discretionary line-
item charges. This policy statement, however, does not address USF fees at all and
deals only with long-distance dial-around services, not wireless providers. Instead,
the FCC explicitly exempted wireless providers from relevant provisions of its
Truth-in-Billing rules until March 2005—approximately three months prior to the
filing of this lawsuit. In the Matter of Truth-in-Billing and Billing Format, 20
F.C.C.R. 6448, 6456 ¶ 16 (2005). Plaintiffs therefore have failed to state a claim
for an unlawful practice.
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Plaintiffs have also failed to state a claim for an “unfair” practice under the
UCL. In the context of a UCL consumer claim it is unclear whether a plaintiff
must (1) show that the harm to the consumer of a particular practice outweighs its
utility to defendant, S. Bay Chevrolet v. Gen. Motors Acceptance Corp., 85 Cal.
Rptr. 2d 301, 316 (Cal. Ct. App. 1999); or (2) allege unfairness that is “tethered to
some legislatively declared policy,” Cel-Tech Commc’ns, Inc. v. Los Angeles
Cellular Tel. Co., 973 P.2d 527, 544 (Cal. 1999). Plaintiffs’ claims, however, fail
both standards. Under the Cel-Tech test, plaintiffs again rely upon the FCC/FTC
Joint Policy Statement, but, as explained above, T-Mobile’s practices were not
prohibited by that policy. Under the balancing test, plaintiffs have not plausibly
alleged a harm to them because they have not shown an actionable
misrepresentation by T-Mobile. Samura v. Kaiser Found. Health Plan, Inc., 22
Cal. Rptr. 2d 20, 29 n. 6 (Cal. Ct. App. 1993) (observing that the “unfairness”
prong of the UCL “does not give courts a general license to review the fairness of
contracts”).
The district court therefore properly dismissed plaintiffs’ UCL and FAL
claims.
III.
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The district court properly dismissed plaintiffs’ CLRA claims. The CLRA
prohibits “unfair methods of competition and unfair or deceptive acts or practices.”
Cal. Civ. Code § 1770. The CLRA requires plaintiffs who seek damages to
provide notice of their claims to the allegedly offending parties at least thirty days
before filing suit. Cal. Civ. Code § 1782(a). Plaintiffs do not dispute that they
have failed to provide such notice, but they argue that the district court should have
provided an opportunity to cure this deficiency. Although there is a split in
authority on whether the CLRA requires strict compliance with its notice
provision, we do not weigh in on this issue because plaintiffs have not alleged a
representation “likely to deceive a reasonable consumer.” Colgan v. Leatherman
Tool Group., Inc., 38 Cal. Rptr. 3d 36, 46 (Cal. Ct. App. 2006) (citation omitted).
IV.
Plaintiffs claim that T-Mobile breached its contracts by (1) charging the USF
fee and RPF without authorization; and (2) increasing Singh’s USF fee without
notice.
When Singh and Janda opened their accounts with T-Mobile, they agreed to
be bound by their Service Agreements and the corresponding T&Cs. As explained
more fully above, the Service Agreements and T&Cs authorized T-Mobile to bill
plaintiffs the USF fee and the RPF, and T-Mobile did not mischaracterize either
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charge. The district court properly dismissed Singh’s and Janda’s breach of
contract claims.
Singh’s breach of contract claims are also barred by a one-year contractual
limitations period. His Service Agreement states that “any controversy, claim, or
dispute” between the parties “must be brought within one (1) year of the date you
are entitled to assert any such claim.” T-Mobile first billed Singh the USF fee in
2002 and the RPF in March 2004. He did not sue until July 2005. Even if a
contract is one of adhesion, a provision shortening the applicable statute of
limitations is enforceable so long as the limitations period is substantively
reasonable. Soltani v. W. & S. Life Ins. Co., 258 F.3d 1038, 1044-45 (9th Cir.
2001). The one-year limitations period provided by Singh’s Service Agreement is
substantively reasonable. Id. (holding that six-month period was reasonable); Han
v. Mobil Oil Corp., 73 F.3d 872, 877 (9th Cir. 1995) (“A contractual limitation
period requiring a plaintiff to commence an action within 12 months following the
event giving rise to a claim is a reasonable limitation which generally manifests no
undue advantage and no unfairness.”).
V.
The district court did not abuse its discretion in denying plaintiffs further
leave to amend their complaint. The district court previously granted plaintiffs
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leave to file the Second Amended Complaint in response to T-Mobile’s initial
motion for judgment on the pleadings in June 2008. After giving plaintiffs the
opportunity to address the deficiencies in the complaint, and after determining that
plaintiffs had failed to do so, the district court acted within its discretion by
determining that further leave to amend would be futile.
AFFIRMED.
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