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CenturyLink Fights Billing-Fraud Lawsuit By Claiming That It Has No Customers (arstechnica.com)
An anonymous reader quotes a report from Ars Technica: CenturyLink is trying to force customers into arbitration in order to avoid a class-action lawsuit from subscribers who say they've been charged for services they didn't order. To do so, CenturyLink has come up with a surprising argument -- the company says it doesn't have any customers. While the customers sued CenturyLink itself, the company says the customers weren't actually customers of CenturyLink. Instead, CenturyLink says they were customers of 10 subsidiaries spread through the country. CenturyLink basically doesn't exist as a service provider -- according to a brief CenturyLink filed Monday.
"That sole defendant, CenturyLink, Inc., is a parent holding company that has no customers, provides no services, and engaged in none of the acts or transactions about which Plaintiffs complain," CenturyLink wrote. "There is no valid basis for Defendant to be a party in this Proceeding: Plaintiffs contracted with the Operating Companies to purchase, use, and pay for the services at issue, not with CenturyLink, Inc." CenturyLink says those operating companies should be able to intervene in the case and "enforce class-action waivers," which would force the customers to pursue their claims via arbitration instead of in a class-action lawsuit. By suing CenturyLink instead of the subsidiaries, "it may be that Plaintiffs are hoping to avoid the arbitration and class-action waiver provisions," CenturyLink wrote.
"That sole defendant, CenturyLink, Inc., is a parent holding company that has no customers, provides no services, and engaged in none of the acts or transactions about which Plaintiffs complain," CenturyLink wrote. "There is no valid basis for Defendant to be a party in this Proceeding: Plaintiffs contracted with the Operating Companies to purchase, use, and pay for the services at issue, not with CenturyLink, Inc." CenturyLink says those operating companies should be able to intervene in the case and "enforce class-action waivers," which would force the customers to pursue their claims via arbitration instead of in a class-action lawsuit. By suing CenturyLink instead of the subsidiaries, "it may be that Plaintiffs are hoping to avoid the arbitration and class-action waiver provisions," CenturyLink wrote.
All these superhuman powers, combined with immortality, makes corporations our new Gods in the USA. Eventually we will all be kneeling to our new overlords. I do not mean that figuratively.
The argument that they don't have customers is not nearly as clear as they suggest -- what matters is what is in the contract, not how they actually provide services through affiliates.
Read through, for example, the digial phone subscriber terms of service that contains the dispute resolution clause involved in those products.
Does it identify the corporate entity that is on the other side of the transaction? (hint: "In this agreement, we use the terms 'we,' 'us' or 'our' to mean CenturyLink.")
Does it mention any local or operating company? (hint: run a word search)
Does the notice section clarify any of this?
Does the agreement contain an "integration clause" that says that all other information or representations are to be disregarded? (hint: section 8. H.)
So who is to say that the CenturyLink holding company is not a party to the subscriber agreement? Who might have drafted the agreements (which apparently are identical no matter which operating company serves the customer)?
If you look at the basic agreements, only the High-Speed Internet and Internet Access Services Residential Terms and Conditions (updated in fall 2017l) actually specifies that the agreement for that product is with a particular affiliate providing services. Both the digital phone and TV service agreements do not. Earlier versions of the internet agreements may not have as well...
This isn't going to get them a quick dismissal without judicial findings of fact...
Only if CenturyLink actively manages their subsidiaries day-to-day operation do they pierce the veil (or whatever the term is) of the subsidiary arrangement. We have CenturyLink, nee Level 3, nee TW Telecom for our office fiber. The only communication I have that says CenturyLink is the announcement of the merger.
That said, the announcement says:
It will be interesting to see where this goes.
Operations in multiple states is an easy one, but there are regulatory barriers in many industries that require a firewall between groups which are difficult to achieve without separate corporate structures. It can also make it hard to spin off or acquire another line of business.
One could argue that limiting the size and scope of how big and individual entity can get would be a good thing though.
Also consider then...
Centurylink's name and branding was on the bills...
As per centurylink's arguments in court, the people who received the bills were NOT their customers.
Thus fraud has clearly occurred, because people who are not customers of centurylink were billed for centurylink services.
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