Attorneys Present Possible Arguments in 'FTC v. AT&T Mobility' at FCBA Event
Experts debated the FTC's case against AT&T Mobility, scheduled for oral argument at the 9th U.S. Circuit Court of Appeals Tuesday, by citing arguments each side may make. Morrison & Foerster attorney Joseph Palmore and Davis Wright Tremaine Peter Karanjia squared off Thursday during an FCBA event in a mock court-type argument overseen by Harris Wiltshire's Christopher Wright.
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​In May, the 9th Circuit granted the FTC an en banc rehearing in the case that alleged AT&T Mobility inadequately informed customers about its data throttling program (see 1705090068). A three-judge panel last year threw out the case, siding with AT&T in a decision that said the FTC didn't have jurisdiction. The FTC successfully argued allowing the decision to stand would create an enforcement gap (see 1610140038), an argument supported by the FCC.
Palmore said entities like common carriers are exempt from the FTC Act. He said the trade Commission has "not once" successfully pursued an enforcement action against a common carrier. Some common carriers do engage in non-common carrier activities similar to banks or airlines that might engage in activities that aren't related to their sector, but they're still considered status-based and not subject to FTC jurisdiction, he said. Palmore added this also applies to common carriers even when they’re not acting as common carriers. Karanjia agreed with the banks as a status-based activity but not common carriers.
Karanjia argued the decision "profoundly undermines" consumer protection. He said if the ruling were allowed to stand, a company like Google could claim its fiber business is exempt from FTC oversight since it's a common carrier. He said that would take away from that agency expertise and history in regulating privacy of such companies. Just because Congress included a number of different exemptions in the statute, it doesn't mean they all have to be activities based, he said. He said common carrier has "centuries of history" that it's an activity-based concept.
Taking off their advocate hats, Karanjia said AT&T has a difficult case especially with multiple amici backing up the FTC. Palmore said there are “troubling hypotheticals” that give judges pause, and they may be swayed toward the trade agency’s argument supported by the FCC.