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The Courts Network The Internet United States Technology

CenturyLink Fights Billing-Fraud Lawsuit By Claiming That It Has No Customers (arstechnica.com) 198

Posted by BeauHD from the not-expected dept.
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.
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CenturyLink Fights Billing-Fraud Lawsuit By Claiming That It Has No Customers More

CenturyLink Fights Billing-Fraud Lawsuit By Claiming That It Has No Customers

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  • Corporations are people too! (Score:2, Insightful)

    by Anonymous Coward
    In this case, all these corporations are the same person using different alibis. With human-like rights come human-like responsibilities.

    • 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. They very well might need to go after the individual subsidiaries.

      • Re:Corporations are people too! (Score:5, Informative)

        by mysidia ( 191772 ) on Wednesday April 04, 2018 @04:37PM (#56383399)

        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! (Score:4, Interesting)

          by aaarrrgggh ( 9205 ) on Wednesday April 04, 2018 @05:35PM (#56383739)

          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:

          I am very excited to share with you that CenturyLink and Level 3 are now one combined company. This means that you now have access to one of the largest global networks with more than approximately 450,000 fiber route miles and approximately 360,000 international transport miles. Paired with our SDN solutions and IT services, CenturyLink now provides one of the most comprehensive digital service portfolios available today.

          It will be interesting to see where this goes.

      • Limited liability doesn't mean unlimited liability, and courts most certainly can peal away at subsidiaries to get to the actual entity (person or corporation) who controls those subsidiaries. There's the whole concept of legal control of a company, and just because a corporation sets up a bunch of subsidiary companies, particularly where that corporation controls a majority stake, or as it sounds like in this case, holds all the ownership, the courts are almost certain to dispose of any notion that these s

        • Well, I did hedge in my comment with "they very well might". If there is some criminal or nefarious intent proved, then yes a court might pierce the shield. But that might be a harder fight than suing the subsidiaries and getting the arbitration clause thrown out.

        • Re: (Score:2)

          by sphealey ( 2855 )

          = = = This is hardly the first time someone has tried a shell game, and I have no idea why their attorneys would even imagine the court would long entertain such an argument. = = =

          John Roberts

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        This, exactly this, is why Move to Amend is so important.

        If we were at war, who in the corporation gets drafted?
        If someone is killed by a corporate product, who goes to jail for murder?
        If everyone's retirement funds go up in smoke, who pays them back?

        You cannot have the rights of being a person WITHOUT the responsibilities of being a person.
        I've incorporated myself as an LLC, and look forward to my spending spree before filing for reorg under chapter 11 multiple times.

    • Re: Corporations are people too! (Score:5, Informative)

      by ArmoredDragon ( 3450605 ) on Wednesday April 04, 2018 @04:40PM (#56383443)

      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.

  • Limited Liability Corporations can do this. (Score:5, Insightful)

    by 140Mandak262Jamuna ( 970587 ) on Wednesday April 04, 2018 @04:23PM (#56383289) Journal
    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: (Score:3, Interesting)

      by Anonymous Coward
      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.

    • Spot on. At the very least, people active in the running of the business should not have limited liability - it completely defeats the whole libertarian ideal of individual responsibility. I can understand the desire to encourage passive investment, but I don't see any upside in limiting the liability of active investors.

    • All the decisions that proclaim that "corporations are people" are based on lies. A lie that Congress intended this and then a lie that the Supreme Court had already decided this.

    • Re: (Score:2)

      by es330td ( 964170 )

      who will be criminally responsible for the criminal acts of a corporation

      Corporations do not commit criminal acts, only people do. Behind every "this product from Acme corp caused x deaths" was a decision made by a PERSON. The way one holds a corporation responsible is by opening the employees to criminal liability. Every corporate criminal conviction should see at least one actual person do prison time because a person or group of people consciously made a decision to act a certain way.

    • I guess that's my question. The only anti-corporate people I know in America can barely hold onto a few senate seats (Bernie Sanders & Liz Warren). Whenever anyone gets serious about reigning this shit in a wedge issue divides the working class or people get scared somebody's gonna take all their money and gives it to the poors and they vote more pro corporate right wing party members in. Sometimes with D's next to their name, sometimes R's, but it's the same thing.

      Unless you and everyone else readi
      • It is tough. But I see some small encouraging signs. The senate seat in Jan, the house seat in southwest PA in march, the state supreme court seat in Wisconsin... All off year elections, special elections, normally Democrats would not turn up in any numbers for these elections. All places that went to Trump by 20 points are breaking even and turned slightly palest of pale blue.

        If the trend continues till Nov 2020, there is some chance. All the standard groups of the Republicans, the deficit hawks, the free

    • Re: (Score:2, Informative)

      by fatwilbur ( 1098563 )
      I think a common misunderstanding of the phrase "corporations are people" is that corporations have the same rights as people, when it's actually acknowledging that there is ultimately no separate intelligent entity known as a "corporation", it is essentially run by people and all the decision are made by real people. Thus things like free speech must extend to what a corporation says. A key but important distinction even if the misconception is a side effect of the decision.

      And "liability" in the sens

      • Can a corporation marry a woman? I have that legal right and your reasoning seems to apply.

        You have put forth the same flawed answer that others have used before. Just because people have a right does not mean that right extends to a group of them. That is a NEW idea proposed by conservatives only in the most recent time. [b]Most importantly, that right is not given to ALL organizations you join. The fact that I am a member of the PTA does not grant the head of the PTA the right to speak for me. Individ

  • They'll get away with it too (Score:3, Insightful)

    by bazmail ( 764941 ) on Wednesday April 04, 2018 @04:28PM (#56383319)
    Its weird how Americans really get fucked when it comes to internet service or mobile data/cell service. Whats going on?

    • I voted Democratic, it got worse. I voted Republican, it got worse.

      • I voted third party - things got worse, but I had nothing to do with it, so I sleep better at night.

        • You threw your vote away by not playing by the rules of our 2-party society. Maybe you are rebelling against a flawed system, but by your choice to vote 3rd party the system effectively excluded you from participating in democracy.

          P.S. I was registered as LP [lp.org] for many years. So I'm not really judging you quite as harshly as I sounded.

          • You threw your vote away by not playing by the rules of our 2-party society.

            You want to see what the "playing by the rules of our 2-party society" looks like? Take a look at the 2 major-party candidates last presidential election.

            Voting for somebody that you don't want to be elected -- that's what sounds like a wasted vote to me.

            • Voting for somebody that you don't want to be elected -- that's what sounds like a wasted vote to me.

              That's what everyone says. But they still slavishly vote against the opposing side rather than voting for a particular candidate. Much of this can be resolved by voting reform. Improving the candidates can be solved by reversing Citizens United. People could become more educated on issues and expect real debates instead of a series of pandering-to-their-base soundbites.

              But I'm not going to hold my breath. Or rather maybe it will get better when my generation breathes their last breath.

      • Re:They'll get away with it too (Score:4, Insightful)

        by Cajun Hell ( 725246 ) on Wednesday April 04, 2018 @06:27PM (#56384003) Homepage Journal
        Looks like voting wasn't enough. Are you running yet?

        • touche' but I'm too honest to be a successful politician, seriously. I wish people would take the time to better understand a topic at a deeper level then what can be explained in the 30 second sound bite. But most people don't.

        • Looks like voting wasn't enough. Are you running yet?

          Are you talking about running away from America? Because god knows there's no point in running for public office there. Unless your goal is to work up the republican or democratic hierarchy conforming to their norms on the way. For all the democracy you guys love the USA has one of the worst and most dysfunctional forms of a somewhat non-corrupt democratic government.

      • So you reacted to the Democrats being insufficiently left wing by voting for the right-wing party?

        That, right there is why this country is fucked, over the long term.

      • I voted independent.

        Of course, other people mocked me for "throwing away my vote", and then voted Democratic and Republican. It still got worse.

  • No customers? (Score:3)

    by 93 Escort Wagon ( 326346 ) on Wednesday April 04, 2018 @04:31PM (#56383339)

    That would explain a lot regarding what they refer to as "customer service"...

  • They do improper tax collection, too. They list X% tax = $Y value, however absolutely no line item or combination of line items with X% would equal $Y value. Even worse, is that they list multiple percentages for various taxes, and each would have a completely different and arbitrary base value if you calculated it out, none of which actually exist on the bill. I have countless other billing issues with them too. They wouldn't do shit over the phone, even after several months. I even went directly into one

  • Stand up in court, show the monthly bill. If it says CenturyLink on it, then it is CenturyLink. Pretty simple way to disprove this arguement.

  • Ambiguity is usually resolved against the drafter (Score:5, Interesting)

    by DRJlaw ( 946416 ) on Wednesday April 04, 2018 @04:51PM (#56383491)

    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 [centurylink.com] 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...

    • Re: (Score:2)

      by H3lldr0p ( 40304 )

      Which is likely part of their plan. To keep dragging this out until it doesn't matter or the people behind it give up. And considering that a lot of their customers are the elderly, the second might happen a lot quicker than the former.

      • If it is a class-action, there is a lead plaintiff and attorneys who stand to become very rich. They won't give up.

  • A simple improvement. (Score:5, Insightful)

    by Kaenneth ( 82978 ) on Wednesday April 04, 2018 @05:01PM (#56383573) Journal

    Corporations should not be allowed to own other corporations.

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

    • That can be really hard to make work, even for smaller organizations. There are real reasons why you have a holding company beyond liability protection that are quite difficult to avoid. 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.

      • Re:A simple improvement. (Score:4, Interesting)

        by Target Drone ( 546651 ) on Wednesday April 04, 2018 @06:18PM (#56383953)

        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.

    • Agreed 100%!

      Originally, corporations could NOT own other corporations but I'm not sure what year that got hijacked.

      This whole "I want to reap the benefits of a company but not have _any_ responsibility for when they are liable" has gotten WAY out of hand.

      The fact that corporations are treated like people in the eyes of the Law just makes things worse.

      Some interesting reading:

      https://www.npr.org/2014/07/28... [npr.org]
      http://reclaimdemocracy.org/co... [reclaimdemocracy.org]
      https://consumerist.com/2014/0... [consumerist.com]

    • Re: (Score:2)

      by hAckz0r ( 989977 )

      I would agree with that statement.

      If implied in their argument, LLC Corporations are to be treated like people...then logically...

      cat << EOD

      Corporations should not be allowed to own other corporations.

      EOD \
      | sed -e 's/corporations/people/g'

      "People should not be allowed to own other people"

      I would throw away that key for a lesser offense.


  • >That sole defendant, CenturyLink, Inc., is a parent holding company that has no customers, provides no service...

    Got that right.... as a former customer.

  • Lawyer joke? (Score:3)

    by manu0601 ( 2221348 ) on Wednesday April 04, 2018 @08:07PM (#56384387)

    Nonexistent customers vs nonexistent service billed? Is that a lawyer joke?

  • Fraud (Score:3)

    by Bert64 ( 520050 ) <bert@[ ]shdot.fi ... m ['sla' in gap]> on Wednesday April 04, 2018 @10:45PM (#56384849) Homepage

    If you didn't order a service but were still charged for it then its true, you aren't a customer..

    However as you aren't a customer, you also can't have agreed to any arbitration clauses since there was never any agreement or contract in place between you and the provider for the service they charged you for.

    If a company charged you for a service and you were not a customer of that service and did not have an agreement in place to purchase that service, then that company committed fraud.

  • Comment removed based on user account deletion
  • "CenturyLink basically doesn't exist as a service provider "

    No kidding. I've been trying for years to get the bastards to provide me with the internet speed they advertise to me on a daily basis.

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