## Facts

- AT&T Wireless Services, Inc. was required to contribute to the federal Universal Service Fund and was permitted to recoup those contributions from customers.
- AT&T imposed a monthly “Universal Connectivity Charge” (UCC) that was not included in advertised monthly rates and was not clearly itemized on customer bills, appearing under general headings such as “Other Charges & Credits” or “Taxes, Surcharges & Regulatory Fees.”
- Martin Schnall and other customers alleged AT&T misled consumers by concealing or mislabeling the UCC.
- Plaintiffs asserted claims for violation of the Washington Consumer Protection Act (CPA) and for breach of contract based on nondisclosure of the UCC at contracting and later increases without notice.
- Plaintiffs sought certification of a nationwide class of AT&T wireless customers who allegedly paid an improper UCC.
- The trial court denied certification, finding individualized issues predominated and that contractual choice-of-law provisions would require applying many states’ laws.
- The Court of Appeals reversed and certified a nationwide class.
- The Washington Supreme Court granted review.

## Issues

1. Whether the trial court abused its discretion in denying certification of a nationwide class asserting contract and Washington CPA claims.
2. Whether Washington’s CPA may be applied to nonresident class members for transactions occurring outside Washington, and how choice-of-law provisions affect nationwide class treatment.

## Decision

- The Washington Supreme Court held the trial court did not abuse its discretion in denying certification of a nationwide class.
- The court held Washington’s CPA does not apply to nonresidents for conduct and transactions occurring outside Washington.
- The court reversed the Court of Appeals’ nationwide class certification in part and remanded for further proceedings, including consideration of a Washington-only class.

## Legal Principles

- Class certification decisions are reviewed deferentially; denial will be upheld absent an abuse of discretion.
- Predominance and manageability can be defeated where individualized legal questions require applying multiple states’ laws, including through contractual choice-of-law clauses tied to customers’ home states.
- Washington’s CPA is generally limited to protecting Washington residents and in-state commerce; absent clear legislative intent, it does not extend to out-of-state transactions involving nonresidents.
- Limiting a proposed class to Washington-centered claims may reduce choice-of-law and extraterritoriality barriers and permit renewed consideration of class treatment.

## Conclusion

The court rejected nationwide class treatment because individualized, multi-state choice-of-law issues predominated and because the Washington CPA could not be used to regulate out-of-state transactions by nonresidents, while leaving open the possibility of a narrower Washington-only class on remand.


Schnall v. AT&T Wireless Servs., Inc., 168 Wash. 2d 125, 225 P.3d 929 (Wash. 2010)