Voluntary payment doctrine is not a
viable defense to deceptive telecommunications
A person who voluntarily pays unauthorized charges on phone or other
telecommunication bills can still assert claims for monetary relief for
deceptive billing practices.
By org jforward wisbar Joe Forward, Legal Writer,
State Bar of Wisconsin
2012 – Voluntarily paying a bill will not bar claims of
“cramming,” the practice of slipping small but unauthorized
charges into customers’ bills, under the state’s
telecommunications statute, the Wisconsin Supreme Court ruled today.
More specifically, the “voluntary payment doctrine” cannot
be used as a viable defense when sued under Wis. Stat. section 100.207,
which regulates telecommunication services.
Plaintiff Thomas Schmitt and his accounting firm sued Wisconsin Bell
Inc. and other telecommunication companies, claiming the defendants
violated state laws, including section 100.207, when they billed for
small, unauthorized charges ranging from $2 to $40 per month.
Schmitt said he paid the disputed telephone bills without noticing the
charges. Under the common law voluntary payment doctrine, a party
can’t sue to recover payments made knowingly and voluntarily,
absent fraud or duress.
The circuit court dismissed, concluding that Wisconsin Bell could use
the voluntary payment doctrine as a defense even if it were proved that
Wisconsin Bell violated section 100.27 by including charges on the bill
that were not authorized. The appeals court affirmed.
Supreme court reverses
In MBS-Certified Public Accountants LLC v.
Wisconsin Bell Inc., 2008AP1830 (Feb.
24, 2012), the supreme court unanimously reversed (6-0, Abrahamson, C.J., did not participate). A
majority (Justices Bradley, Crooks, Roggensack, and
Ziegler) ruled that the voluntary payment doctrine is never applicable
to claims under section 100.207.
“Application of the common law voluntary payment doctrine would
undermine the manifest purposes of Wis. Stat. §
100.207,” wrote Justice Ann Walsh Bradley for the
Allowing the doctrine to apply, the majority explained, would give
customers a remedy only if they protested before paying, or proved the
elements of common law fraud.
“The statute is meant to deter the practice of cramming by
holding crammers responsible for the illegal practice
in court,” Justice Bradley wrote.
Allowing the common law defense, the majority explained, might
encourage telecommunications companies “to produce more
unauthorized charges, knowing that customers who do not initially notice
deceptive charges will face high hurdles to recovering those payments in
a court action.” The majority also rejected the
argument that the voluntary payment doctrine applies to all
legislatively created causes of action unless expressly barred.
In a concurring opinion, Justice David Prosser (joined by Gableman, J.) agreed that the voluntary payment
doctrine did not require dismissal in this “billing” case,
but suggested that it could still apply under other provisions of the
statute, like advertising and sales.
The supreme court remanded the case to determine if the voluntary
payment doctrine applies to claims under Wis. Stat. section 100.18(1),
which generally prohibits fraudulent representations, and the Wisconsin
Organized Crime Control Act.
The plaintiffs had also sued under those provisions. But the supreme
court deferred, noting that those alternative arguments were not yet
properly before the supreme court.
“[N]othing set forth in this opinion should be
construed to restrict the court of appeals from taking up these
arguments on remand,” Justice Bradley wrote.
Dissenting on this point, Justice Prosser (joined by Gableman, J.) argued that the voluntary payment
doctrine already applies to claims under section 100.18 under prior case
“The majority opinion casts a cloud of uncertainty over
commercial transactions in this state,” Justice Prosser wrote.
“[The majority’s] assurance that ‘the voluntary
payment doctrine remains alive and well in Wisconsin’ will prove
hollow if its discussion of the doctrine in relation to Wis. Stat § 100.18 is maintained.”
Douglas Dehler of O’Neil, Cannon, Hollman, DeJong & Laing S.C., Milwaukee, represented the
plaintiffs Thomas Schmitt and MBS-Certified
Public Accountants LLC. Paul Linn and Ted Wisnefski of
Michael, Best & Friedrich LLP, Milwaukee, represented Wisconsin
Bell. The State of Wisconsin filed an amicus curiae