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.

Comments

Limited Liability Corporations can do this.

[140Mandak262Jamuna]

This is the insidious things of "corporations are people" crowd. Back in 1820s when Limited Liability Corporation idea was proposed it met with severe resistance because, the question of "who will be criminally responsible for the criminal acts of a corporation?" was not answered. Remember, those days they had debtors prisons and the defaulters went to jail! They wanted owners of corporations to go to jail if they fail to repay their debts.

Now nearly 200 years later, the "corporations are people" crowd has steadily usurped the rights and liberties meant for real people in flesh and blood to these corporations. No criminal liability. Assets flow one way, Liabilities flow the other way, so no civil liability either. Perverse arguments like "spending money = speeach" and "corporations can have religious belief" has made mockery of our society.

We can't clone ourselves, and transfer liabilities to the clone and keep assets with us. We can not clone ourselves, transfer the salary earned by the clone to us, call it "carried interest" and pay lower taxes. But corporations can do all these and more.

Unless we limits the rights of the corporations commensurate with the liabilities they carry, we are doomed.

Re:Corporations are people too!

[mysidia]

No, that's not true. Limited liability. You can sue for anything you like, but the owners of a limited liability corporation are not going to lose a lawsuit.

That all depends. Limited liability is not zero liability: the shareholders of a company that is sued might be required to pay back dividends or other payment they received of the company's profits to cover liability: particularly if it becomes deemed transfer in conjunction with fraudulent actions or a crime.

There are situations where the courts can pierce the corporate veil and hold the parent company or investors responsible in excess of their investment; for example, especially, if the parent company was intermingling assets of their multiple subsidiaries, or if the parent or operating companies were significantly undercapitalized with major assets being transferred to the parent or vice-versa (eg a corporate structure that is an alter-ego of one or more of its owners organized only to act
  as a 'shield').

Re: Corporations are people too!

[ArmoredDragon]

IANAL but this is corporate law 101: The company responsible is always the company whose name and branding is on the materials that the company's customers interact with. There are many examples of case law confirming this, including a SCOTUS ruling.

CenturyLink's name and branding was plastered all over the materials used to purchase the service. CenturyLink's branding was plastered all over the billing statements. This applies regardless of whether the materials are physical or online. Either CenturyLink's legal team is as stupid and lazy as CenturyLink's employees, or the c level executives didn't bother consulting with a lawyer at all. This isn't even a crapshoot, it's more like driving your car into a wall and expecting that it won't get damaged.

Ambiguity is usually resolved against the drafter

[DRJlaw]

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?

If you want to provide notice to us either because this agreement requires it or
because you have a matter you want to bring to our attention, you should notify us at the customer
service telephone number on your bill or write us at 1801 California Street, Suite 900, Denver,
Colorado 80202, Attn: Legal Department.

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...

A simple improvement.

[Kaenneth]

Corporations should not be allowed to own other corporations.

One layer of obfuscation and liability protection is sufficient for legitimate businesses.

Re:Time for a Judge with a Daedric Gavel

[jwhyche]

While I agree that it is asinine, prison time is a bit over the top.

No it isn't. Time and time again asshats like this use the "corporate card" to shield themselves from shit like this. They get away with all kinds of shit and laugh while hiding behind corporate laws and lawyers. It's more than time we stripped them of assets and send their ass to prison.

We are more than happy to lock up some kid that robs a liquor store for $50 bucks for 20 years. But IF we send one of these fuckers to prison its for 6 months even though they stole millions. Bull fuckign shit. lock them up and let them rot.

Re: Corporations are people too!

[Bert64]

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.