At&t v Washington State Utilities Wa Response to Tnetix Petition for Apa Review 2011

Type: Phone Litigation • Topics: Telephones

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o EXPEDITE
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(if filing within 5 court days of hearing)

o Hearing is set:
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IN THE SUPERIOR COURT OF WASHINGTON
FOR THURSTON COUNTY

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AT&T COMMUNICATIONS OF THE
PACIFIC NORTHWEST, INC.,
Petitioner,

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v.
WASHINGTON STATE UTILITIES AND
TRANSPORTATION COMMISSION,

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and
SANDY JUDD and TARA HERIVEL
Intervenors,
and
T-NETIX, INC.,
Interested Party.

T-NETIX, INC., a Delaware corporation,
Petitioner,

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INTERVENORS' RESPONSE TO
T-NETIX'S PETITION FORAPA
REVIEW

Respondent,

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NO. 11-2-00992-8
and
NO. 11-2-00998-7

v.
WASHINGTON STATE UTILITIES AND
TRANSPORTATION COMMISSION,

Respondent.
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11-------------------'

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

Table of Contents

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Introduction

II.

Factual Background

A. Background of the Claims

The AT&T/DOC Contract

The Underlying Litigation

D. The First WUTC Proceedings and Appeal to Division 1

III.

The Second WUTC Proceeding

T-Netix Received Due Process Because It Responded To Complainants'
Argument That At&T Violated The Regulations

IV.

The Commission's Decision Is Supported By Substantial Evidence

The Commission Did Not Err In Considering Telephone Bills From
Consumers Other Than The Complainants

Conclusion

VI.
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SIRIANNI YOUTZ SPOONEMORE

COMPLAINANTS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - i

999 THIRD AVENUE, SUITE 3650
SEATILE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

INTRODUCTION

T-Netix appeals the Commission's finding that AT&T violated the rate
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disclosure regulations for collect telephone calls from Washington State Department of
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Correction (DOC) facilities to Washington residents. T-Netix argues that: (1) T-Netix had no
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opportunity to argue that intrastate rate quoting was actually provided prior to 2001, thus
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denying it due process; and (2) the decision was not supported by substantial evidence. In fact,
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T-Netix was provided an opportunity to address this issue. T-Netix submitted a memorandum
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responding to the complainants' argument that AT&T violated disclosure regulations. T-Netix
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had ample opportunity to dispute AT&T's admission that it was not quoting rates for intrastate
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collect calls and the other evidence showing AT&T's failure to comply with the rate disclosure
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regulation. Instead, T-Netix used its opportunity to try to exonerate itself, not AT&T. T-Netix
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argued that it had no duty, under its agreements with AT&T, "to provide or enable any rate
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disclosures prior to [January 1, 2001], and thus was not expected to comply with WAC
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480-120-141."
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The Commission's decision was supported by substantial evidence.

The

evidence included admissions by AT&T that it was not providing rate quotes for collect calls
. 1.7

fromDOCfadHiies,evldence-thattiiiate··206<f-Venzon-anrlGTE-were-UiiiibIe-toprovlaeiife

quotes from the equipment because the technology was not ready, and declarations of recipients
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of these calls who testified that rate quotes were not provided.
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T-Netix also argues that the Commission improperly considered evidence
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provided by complainants in response to the Commission's bench request. This information
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included records of collect telephone calls made from DOC facilities to Columbia Legal
Services ("CLS"). Those records reflected charges billed and collected by AT&T. Calls to CLS

were similar to collect calls received by intervenor Tara Herivel from Airway Heights and by
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intervenor Sandy Judd from Clallam Bay, both of which were billed by AT&T. This evidence

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - 1

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

was properly considered along with other portions of the record showing collect calls billed by
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AT&T.

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T-Netix's arguments provide no basis for modifying or reversIng the
Commission's decision, and Final Order 25 should be affirmed in full.

II. FACTUAL BACKGROUND1
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Background of the Claims

In 1988, in response to the telecommunication industries' practice of failing to
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disclose toll rates, the legislature mandated transparency. It directed the WUTC to promulgate
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rules to ensure full disclosure of rates. RCW 80.36.510-.520.
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The WUTC issued detailed regulations in 1991.

Under those regulations,

"alternate operator services" companies were required to disclose rates for a particular call
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"immediately, upon request, and at no charge to the consumer." WAC 480-120-141(5)(a)(iv)
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(1991). The operator was required to provide "a quote of the rates or charges for the call,
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including any surcharge." Id. In 1999, the WUTC amended the regulation to require automatic
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verbal rate disclosures triggered by a call recipient pressing the keys on the telephone keypad.
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WAC 480-120-141(2)(b) (1999).
The legislature made noncompliance with the WUTC regulations a per se
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violation of the Washington Consumer Protection Act. RCW 80.36.530.
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The AT&T/DOC Contract

In 1991, when the rate disclosure regulations were being introduced, AT&T
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proposed to provide telephone services to the facilities managed by the DOC. AT&T was
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awarded the contract, which is dated March 16, 1992. See R000029, et. seq. In that contract,
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AT&T agreed to be responsible for the entire project and to enter into subcontracts with three
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1 T-Netix devotes much of the factual section of its brief to arguing (for the most part without any citation to
the record) that complainants Judd and Herivel have no standing because they did not receive collect telephone.
T-Netix won that issue in the Superior Court, but lost it in Division I. See below, pp. 5-6. Standing is not an issue
in this appeal.

SIRIANNI YOUTZ SPOONEMORE

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FORAPA REVIEW - 2

999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

other telephone companies that would serve as local exchange carriers for DOC facilities in
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their service areas.

T-Netix was a subcontractor for AT&T. It provided and programmed the specific
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equipment used to provide automated operator services for collect calls from DOC institutions.
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As the Commission determined in Order 25, the platform installed by T-Netix at AT&T's
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direction did not provide consumers with either a rate quote or the means to obtain a rate quote
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for inmate-initiated calls as required by the WUTC regulations. Complainants filed the King
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County litigation in 2000 to redress those violations.

The Underlying Litigation

The King County action was originally brought against all toll providers. All
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defendants brought motions to dismiss. GTE and U.S. West were dismissed because they were
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expressly excluded from the regulations. The Court declined to dismiss AT&T and T-Netix.
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In 2000, AT&T then asked the King County court to refer two key liability issues
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to the WUTC under the doctrine of primary jurisdiction.

See Tenore v. AT&T Wireless

Services, 136 Wn.2d 322, 345, 962 P.2d 104, 115 (1998) (" 'Primary jurisdiction' is a doctrine
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which requires that issues within an agency's special expertise be decided by the appropriate
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agency.").

See R000072.

The King County trial court agreed.

It referred the following

questions to the WUTC:
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(1)

whether T-Netix or AT&T were operator service providers (OSPs); and

(2)

if so, whether they violated WUTC regulations requiring OSPs to disclose

rates to consumers. Id.
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All further activity before the King County court was stayed. Id.

The First WUTC Proceedings and Appeal to Division I

Ms. Judd and Ms. Herivel filed a formal complaint with the WUTC against
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T-Netix and AT&T pursuant to the King County court's primary jurisdiction referral. Experts
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were retained, and extensive discovery and motions practice ensued. After five months of
SIRIANNI YOUTZ SPOONEMORE

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - 3

999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

litigation, T-Netix filed a motion with the WUTC arguing that plaintiffs lacked standing. The
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administrative law judge ("ALJ") denied the motion. Her decision was affirmed by the full
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Commission.

In response, T-Netix obtained an order from the King County Superior Court
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lifting the stay. That allowed T-Netix to argue the same standing issue in Superior Court that it
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had lost before the WUTC. On September 7,2005, Judge Ramsdell granted T-Netix's motion
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and revoked its referral to the WUTC. He then entered a second order applying that ruling to
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AT&T. This prompted the WUTC to dismiss the action pending before it. Plaintiffs appealed
the King County court's orders of dismissal.

On December 18, 2006, Division I of the Court of Appeals reversed, instructing
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the King County Superior Court to refer the same two questions back to the WUTC. T-Netix's
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petition for review was denied. Judd v. Am. Tel. & Tel. Co., 162 Wn.2d 1002, 175 P.3d 1092
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(2007). Accordingly, the King County Superior Court reinstated the referral to the WUTC on
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March 21,2008. R001919.

The Second WUTC Proceeding

The WUTC reopened the referral. There was extensive discovery and motion
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practice, including depositions in New Jersey, Vermont, Colorado, Texas, and Oregon. Finally,
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on April 21, 2010, the ALJ issued an initial order (Order 23) concluding that AT&T was legally
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required to disclose rates during the relevant time period. AT&T petitioned for review by the
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full Commission. The parties submitted briefs, and the Commission reopened the record, issuing

bench requests for additional information. R005297-98.
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On March 31, 2011, the Commission issued Order 25, a final order answering
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both questions referred by the King County court.

The order concluded that: (1) AT&T was

an operator services provider ("aSP"); and (2) AT&T violated WUTC regulations by failing to
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provide required rate disclosures. Id,

~~84-85.

T-Netix and AT&T appeal that decision under

the judicial review provisions of the APA.
SIRIANNI YOUTZ SPOONEMORE

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - 4

999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

III. T-NETIX RECEIVED DUE PROCESS BECAUSE IT RESPONDED TO
COMPLAINANTS' ARGUMENT THAT AT&T VIOLATED THE REGULATIONS
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T-Netix contends that the Commission violated T-Netix's right to due process,
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claiming "no party had the opportunity to present evidence or argument" on the issue of whether
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AT&T violated the rate quote regulation. T-Netix is wrong.
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Shortly after this matter was first filed with the Commission, AT&T filed a
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motion for summary determination to resolve both of the referred questions. AT&T' s motion
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requested that the Commission hold that: (1) it was not the OSP; and (2) it did not violate the
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Commission's regulations regarding rate disclosure. T-Netix later filed its own motion arguing
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that it was not the OSP. As described above, the underlying case was dismissed by the Superior
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Court for lack of standing. After the Court of Appeals reversed that decision, the referral was
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reinstated and discovery proceeded regarding the two referred questions. Contrary to T-Netix's
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argument, discovery was taken on both issues: whether T-Netix or AT&T was the OSP and
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whether required rate disclosures were provided.

See, e.g., R008138-141 (deposition

examination regarding AT&T's failure to provide rate quoting in Washington).
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After discovery was completed, both T-Netix and AT&T obtained permission to
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amend their motions for summary determination.

They were permitted to update their

submissions to include evidence acquired during discovery. R003170-74. AT&T's amended
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motion sought the same relief as its original motion: (1) a declaration that it was not the OSP
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for the collect calls from the DOC facilities, and (2) a declaration that it did not violate any "of
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the Commission's regulations applicable to an OSP or AOS company at those prisons and
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correctional facilities since June 20, 1996." ROOOI2I.
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Complainants filed a single memorandum in opposition to both AT&T's and
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T-Netix's motions. R008082-8I09. The memorandum addressed both issues, including the
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second issue raised by AT&T. Complainants presented evidence showing that rate quotes for
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intrastate calls were not being provided as required by the regulations. That evidence included
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testimony from AT&T admitting that it was not providing the required rate quoting for intrastate
SIRIANNI YOUTZ SPOONEMORE

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - 5

999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

calls. See R008089-96; R008139-141. Complainants also submitted an August 2000 letter from
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AT&T to T-Netix. In it, AT&T complained that T-Netix would not implement intrastate rate
quoting in Washington for AT&T without being paid to make changes to the P-III platform.
R008123.

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In addition, the complainants submitted declarations from Ken Wilson, a former
AT&T employee and telecommunications expert, who had examined the P-III configuration
maintained by T-Netix under contract with AT&T. He concluded that T-Netix needed to modify
its platform at the Washington DOC facilities to provide intrastate rate quoting, but that did not
occur until early 2001. R008119. That is, intrastate rate quoting was not possible during the
loss period-1996-2000.

In their response to AT&T's and T-Netix's motions, complainants noted that this
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evidence was provided because

AT&T' s motion also asked for a declaration that it did not violate
the regulations. As shown above, AT&T is liable for the failure to
ensure that rate quotes were given as required by the regulations.
As shown by Youtz Exhibit B, also discussed above, AT&T was
aware that rate quotes were not being provided on intrastate calls
from DOC facilities in Washington as required by the
Commission's regulations.

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R008095.
Both AT&T and T-Netix submitted replies to the complainants' response.
AT&T chose not to respond to complainants' argument that rate quoting was not being provided
in accordance with the regulations. AT&T chose not to address the evidence in support of the
argument. 2 T-Netix, however, responded to the argument beginning in a section entitled
"Complainants Improperly Argue And Describe T-Netix's Purported Violations Of WUTC

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2" By doing so, AT&T waived its right to contest the resulting decision. Failure to submit argument on an issue
that is raised does not give a party the right to delay resolution of that issue. If a party chooses to neither provide
argument on the issue nor respond to others who do, then it waives its right to protest the result of its tactical
decision. See Satterfieldv. Edenton-Chowan Bd. oIEd., 530 F.2d 567,572 (4th Cir. 1975).

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - 6

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

Regulations." R003266. In this response, T-Netix observed that "Complainants contend that
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T-Netix did not provide rate quotes during the relevant time period and that 'it was clear that

T-Netix was unwilling to do the work needed to add intrastate rate quoting unless it was paid
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additional money.'" R003267. Rather than produce any evidence that rate quoting was actually
being provided, however, T-Netix claimed that complainants were simply trying to "tarnish"
T-Netix in front of the Commission by claiming that "T-Netix refused to comply with
regulatory requirements in order to extort money from a prime contractor." R003268. T-Netix
then complained that as a vendor it was entitled to be paid for additional work needed to provide
rate quoting. It chastised AT&T for its "attempt to shift blame for regulatory deficiencies, if
any, to its subcontractor where that subcontractor merely refused to provide additional
equipment or service without pay." R003269.
T-Netix could have put any evidence it wanted to in response to complainants'
evidence. If the T-Netix equipment had been providing rate quoting for intrastate calls in
Washington, T-Netix certainly could have obtained a declaration from its own employees or
evidence from its own files to show so. Instead, it simply argued that it was not liable if rate
quotes were not being provided in 1996-2000 because it was "not expected to provide or enable
any rate disclosures" until January 1,2001. ROOI367-368.
Despite its claim that it was denied the opportunity to present evidence regarding
rate quoting, T-Netix argues that "many more' documents in record support a finding of no
violations than do the two documents on which the final order relies to find a violation."
T-Netix brief at 15. T-Netix then points to portions of the record that it claims support an
argument that rate quotes for intrastate calls were in fact being made during 1996 to 2000. (As
shown in the next section, those efforts fail.)
T-Netix does not indicate what other evidence it may have that would have
changed the Commission's decision. In fact, T-Netix claimed in 2008, that because of the
passage of time it would be unable to shed any more light on what quoting was actually done at
SIRIANNI YOUTZ SPOONEMORE

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - 7

999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

the Washington DOC sites. When asked by AT&T to identify all the services provided by T2

Netix at the Washington DOC facilities, T-Netix responded:

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T-Netix responds that [it] lacks sufficient information at this time,
years after the events at issue and after a number of intervening
corporate and personnel changes, to determine with precision which
services were provided by T-Netix to AT&T at which Washington
State institution(s) at any particular period of time. T-Netix refers
AT&T to TNXWAOOOOl-599 for a list of products that would have
been available for AT&T's use at any covered Washington State
facility. Various Washington facilities mayor may not have
activated some or all of these products that were available on the TNetix system.
R002100 (T-Netix response to AT&T Second Data Requests, Nov. 17, 2008).
Even though T-Netix does not mention what additional evidence it would submit,
it claims that it is denied due process unless the Commission conducts a second proceeding to
consider whether AT&T had violated the rate disclosure regulations. T-Netix does not claim
that the Commission failed to follow any of its rules or procedures, but rather that it failed to
provide a "fair opportunity to be heard on the merits." The Commission was not required to
conduct a second proceeding when T-Netix and AT&T had the opportunity to make their
arguments within the hundreds of pages of briefing and exhibits they submitted on the issues
referred to the Commission. Tobin v. Dep't of Labor & Indus., 145 Wn. App. 607,619, 187
P.3d 780, 785-86 (2008) af!'d, 169 Wn.2d 396, 239 P.3d 544 (2010).
Due process is a flexible concept, requiring "such procedural
protections as the particular situation demands." Mathews v.
Eldridge, 424 U.S. 319, 334, 96 S.Ct. 893, 896, 47 L.Ed.2d 18
(1976) (quoting Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct.
2593, 2600, 33 L.Ed.2d 484 (1972)); accord Morris v. Blaker, 118
Wash.2d 133, 144, 821 P.2d 482 (1992). The fundamental
requirement of due process is notice and the opportunity to be
heard. Mathews, 424 U.S. at 333, 96 S.Ct. at 902; Soundgarden v.
Eikenberry, 123 Wash.2d 750, 768, 871 P.2d 1050, cert. denied,
513 U.S. 1056, 115 S.Ct. 663, 130 L.Ed.2d 598 (1994). So long as
the party is given adequate notice and an opportunity to be heard
and any alleged procedural irregularities do not undermine the
SIRIANNI YOUTZ SPOONEMORE

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - 8

999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

fundamental fairness of the proceedings, this court will not disturb
the administrative decision.
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Sherman v. State, 128 Wn.2d 164, 184, 905 P.2d 355, 367-68 (1995) amended, 61645-1, 1996
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WL 137107 (Wash. Jan. 31,1996).
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The plaintiffs citations of authority regarding the right to
procedural due process in administrative hearings establish the
principle that a person may not be deprived of a protected right
unless he is first given notice and an opportunity to be heard. But
none of them supports the proposition that a party is entitled to a
hearing at every stage of the proceedings.

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***
While she contends that she might have been able to sway the
board, had she been given an opportunity to argue before it a
second time, she does not point to any argument that could have
been made that was not available to her or that was not, in fact,
made at the hearing which was held.
Bowing v. Bd. ofTrustees ofGreen River Cmty. Coli., Dist. No. X 85 Wn.2d 300, 313, 534 P.2d

1365, 1373 (1975).3
From the outset in this referral, there have been two issues:

(1) Is AT&T,

T Netix, or both the aSP?; and (2) Did AT&T or T-Netix violate the rate disclosure regulations?
Early in these proceedings, AT&T filed a motion to determine both issues. After discovery on
both issues, AT&T amended its motion to add additional arguments and evidence, and retained
its request that the Commission rule that it was not the asp and to declare that it did not violate
the rate disclosure regulations.

As described above, the complainants' joint response to

AT&T's and T-Netix's motions showed, through AT&T's own admissions, submissions by
experts, and other evidence, that AT&T had violated the regulations.

AT&T had the

opportunity to respond to complainants' arguments and evidence, but chose not to. T-Netix also

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3 T-Netix cites Seattle Area Plumbers v. Washington State Apprenticeship and Training Council, 131 Wn.
App. 862 (2006). In that case a party challenging agency action had been denied discovery and was not permitted
to cross-examine a witness regarding certain areas. That is far from our case. There were no restrictions placed on
the briefs, and T-Netix has not suggested any area in which it was denied discovery.

SIRIANNI YOUTZ SPOONEMORE

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - 9

999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

had the opportunity to respond to the argument in its reply memorandum, and did. However, it
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did not produce any countervailing evidence.

After the briefing was completed, the ALJ directed a bench request to T-Netix
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regarding the capability of the P-III system to provide rate quoting. R003483. Neither AT&T
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nor T-Netix objected to that request on the grounds that it was outside the scope of the
proceeding. T-Netix responded to the request without objection. R007030-31.

Thus, both AT&T and T-Netix had:
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(1) notice that the Commission would

consider whether the regulations were violated (and, AT&T, expressly asked it to do so),
(2) notice of the complainants' arguments and evidence that the regulations were violated, and

(3) an opportunity to respond with discovery, arguments and evidence. T-Netix received due
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process and is not entitled to an additional hearing. T-Netix does not seek due process. Instead,
it seeks further delay of a case that has already been in the Superior Court, the Commission, the
Superior Court, the Court of Appeals, the Superior Court, the Commission, and now before two
Superior Courts, over the course of 11 years. 4

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IV. THE COMMISSION'S DECISION IS SUPPORTED
BY SUBSTANTIAL EVIDENCE

Although T-Netix complains that it did not have the opportunity to submit

evidence of compliance, it nonetheless argues that there is substantial evidence in the record

showing that the Commission's determination that there was no rate disclosure is wrong.

T-Netix misses the mark.

T-Netix creates confusion regarding rate quoting by including materials

regarding interstate rate quoting instead of intrastate rate quoting for the state of Washington.

The T-Netix engineers noted that the P-III platform was configured to provide a rate quoting

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4 T-Netix also argues that it was denied due process because it did not anticipate that the full Commission
would consider the rate quoting issue and, had T-Netix so known, it would have submitted additional evidence and
argument. T-Netix had no right, however, to submit any additional evidence or argument to the Commission. The
purpose of the Commission's review was to make a decision based on the evidence and arguments as they existed
before the ALI and any additional evidence that the Commission subsequently requested.

SIRIANNI YOUTZ SPOONEMORE

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - 10

999 THIRD AVENUE, SUITE 3650
SEATILE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

function (if turned on) for interstate telephone calls because of FCC requirements. In some
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states, that option was apparently being activated. 5 The presence of that option, however, did
not make the system capable of providing rate quotes for intrastate calls.

Former AT&T

employee Wilson notes that the P-III platform used by the Washington DOC facilities was not
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configured or enabled to provide intrastate rate quoting until early 2001. R008119. A T-Netix
witness noted only that in November 2000 the P-III platform was enabled for interstate calls in

order to meet FCC requirements. R007361. The brochure that the witness examined suggested
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that the platform "may also be enabled for other types of calls, including local and intraLATA
calls." Id. (emphasis added). Recipients of collect calls from DOC facilities during 1996-2000
confirmed that they did not receive rate quotes. See Decl. of Tara Herivel, R006196-97; Decl.
of CLS paralegal Maureen Janega, R000959-59; and Decl. of Suzanne Elliott, R000955-956.

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T-Netix points to the following evidence of alleged compliance with the
intrastate rate quote regulation:

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21

22
23
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Deposition of Robert Rae at 221:13-222:2; 240:24-241:1; 246:19-25. The

referenced testimony simply mentions that the P-III platform uses voice chips to make
announcements or prompts, such as a prompt for the prisoner to state his name. None of the
testimony relates to rate quoting. See R007240-251.

•

Deposition of Scott Passe at 174:3-175:13. The referenced testimony merely

states that voice chips, installed on program chips, need to be changed as new features are
added. See R007293. His testimony notes that voice chips are customized for a given site.
R007294. The testimony does not relate to rate quoting.

•

Deposition of Alice Clements at 231:23-232:8. The witness was asked about

language used in one particular interstate rate quote that T-Netix gave in some unidentified
location on June 14, 2000. The witness said it sounded like a general rate quote but concluded:

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5 In February 2002, T-Netix asked for additional time to comply with the FCC requirements for interstate rate
quoting. SeeR008117,~19.

SIRIANNI YOUTZ SPOONEMORE

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - 11

999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

"I don't know."
2

This has nothing to do with intrastate rate quotes for Washington. Ms.

Clements' testimony also indicates that she was not even sure whether the language was used on

the P-III platform or a different platform sold by T-Netix and not used at DOC facilities in
4

Washington. See lines 2 through 20 of page 231 of the transcript (R007360).

•
6
7
8
9

E-mail correspondence at R002207. By referencing this single page, T-Netix

risks misleading this Court into thinking that the cited page deals with Washington state rate
quotes. The full e-mail chain (R002205-R002211) makes it clear that this e-mail exchange
pertains to interstate rate quotes. AT&T was seeking to make sure that the phrase "for state to
state calls" was included in the rate quotation. See R002209. AT&T was concerned that

interstate rate quoting be implemented in Pennsylvania. See R00221 O. One of the e-mails notes
11

that the interstate rates were to be changed "at ALL adjunct locations and any premise locations
12

where we have turned on the FCC Rate Announcement Feature." This confirms that even the
13

interstate rate quoting features were not activated for all premise sites. R002206 (emphasis
added).

•
16

T-Netix response to Bench Request Number 4. After briefing on the motion

. for summary determination was completed, the ALJ issued a bench request to T-Netix:

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Please indicate whether, from June 1996 through
December 2000, the P-III premise platform was capable
of: 1) providing consumers with instructions on how to
receive rate quote and 2) providing consumers with rate
quotes.
T-Netix carefully answered that "the P-III premise platform was capable of: (1) providing

consumers with instructions on how to receive rate quote, and (2) providing consumers with rate

quotes" (emphasis added). R007030-31. The question did not distinguish between interstate

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and intrastate rate quoting. Nor did it ask whether quotes were actually being provided. By
parroting the exact phraseology of the question in its response, T-Netix avoided answering the
relevant question: whether the P-III platforms used by the Washington DOC facilities were
actually providing intrastate rate quoting.
SIRIANNI YOUTZ SPOONEMORE

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - 12

999 THIRD AVENUE, SUITE 3650
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None of this "evidence" contradicts the evidence that AT&T was not providing
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rate quoting for intrastate calls from Washington DOC facilities. Further, it lends no support to
the argument that the Commission's finding was not supported by substantial evidence.
T-Netix next complains that the Commission's decision is arbitrary and
capricious and is not supported by substantial evidence because the Commission only
referenced two documents in support of its conclusion (although the opinion actually refers to
more). The appropriate inquiry under the judicial review section of the APA, however, is
whether the factual finding is supported by the entire record, not just the evidence highlighted in
the Commission's opinion. RCW 34.05.570(e).
Two documents referred to by the Commission, and that T-Netix argues are
insufficient, are the declarations of T-Netix expert Allen Schott and complainants'
telecommunication expert Kenneth Wilson. T-Netix claims that Mr. Schott's declaration was
intended only to be used to identify the aSP. Yet, Mr. Schott was T-Netix's witness. Regardless
of T-Netix's intent, Mr. Schott provided a detailed description of the prompts received by the
call recipient, including the options that the call recipient had. He did not identify receiving rate
quotes as an option.
Mr. Wilson also examined the P-III system. His May 2008 declaration (as well as
his 2005 declaration) concluded that the call recipient did not have the option of a rate quote
under the system as configured. R008114, R008119. T-Netix claims that this declaration should
be stricken because it lacks foundation. However, T-Netix did not object to either of these
declarations when given the opportunity to do so. R003545. 6
T-Netix claims that the letter from AT&T to T-Netix regarding the need to
implement rate quoting does not "confirm" the absence of any rate quote but, rather, "regards
implementation of a particular rate quote content." T-Netix brief at 15. That is not even an

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6 The parties had until April 12, 2010, to object to a selected group of exhibits, which included Mr. Wilson's
2008 declaration. None of the parties objected to the exhibits. See R003518.

SIRIANNI YOUTZ SPOONEMORE

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - 13

999 THIRD AVENUE, SUITE 3650
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TEL. (206) 223-0303 FAX (206) 223-0246

arguable reading of the letter. The letter states that AT&T and T-Netix needed to "implement
2

rate quote for intrastate calls from correctional facilities in Washington State," not change

existing rate quote language. R008123 (emphasis added). Further, T-Netix does not even discuss
4

related deposition testimony from the author of AT&T's letter, who states that the letter was
5

sent because intrastate rate quoting in Washington was not being provided. R008138-141.

There was plenty of other evidence that defendants provided no intrastate
7

Washington rate quotes in 1996-2000. For example, the Commission also noted that as late as
8
9

September 2000 it granted temporary waivers to Verizon and GTE because the P-III platforms

at the DOC facilities were not configured to perform rate quoting. The required rate-quoting

technology was still in the process of being developed. Order 25,
11

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16

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R006835-36. T-Netix

fails to address this evidence.

12
13

~56,

The APA only requIres that factual findings be supported by substantial
evidence:
An agency's findings of fact are reviewed under a substantial
evidence standard. Hubbard v. Dep't of Ecology, 86 Wn. App.
119, 123, 936 P.2d 27 (1997). "'Substantial evidence is
"evidence in sufficient quantum to persuade a fair-minded person
of the truth of the declared premises." ,,, Heinmiller v. Dep't of
Health, 127 Wash.2d 595, 607, 903 P.2d 433, 909 P.2d 1294
(1995) (quoting Nghiem v. State, 73 Wn. App. 405, 412, 869 P.2d
1086 (1994)).

Motley-Motley, Inc. v. State, 127 Wn. App. 62, 77, 110 P.3d 812, 820 (2005). "This standard is

highly deferential to the administrative fact finder." Id., 127 Wn. App. at 72.

Clearly, if intrastate rate quoting was being provided as required, AT&T and

T-Netix would quickly have brought those facts to the forefront. If intrastate rate quoting was

the norm in 1996-2000, this case would be over. There would be no need to worry about

whether AT&T or T-Netix was the aSP. AT&T and T-Netix would have offered evidence of
rate quoting years ago.

SIRIANNI YOUTZ SPOONEMORE

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - 14

999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

T-Netix notes that the ALl failed, in her initial decision, to decide whether the
2
3

rate disclosure regulations were violated. However, the initial decision expressly notes that the
violation issue was raised by AT&T:

AT&T filed an answer to the formal complaint and a Motion for
Summary Determination (AT&T's Motion), requesting that the
Commission find that AT&T was not an OSP during the period in
question and that AT&T had not violated the Commission's
regulations applicable to OSPs.

5
6
7

Order 23,

~5,

R003540. The ALl also noted the complainants' reference to AT&T's letter of

August 25, 2000. She characterized that letter as "negotiations to implement rate disclosures for
9

intrastate inmate telephone calls in the state of Washington." Order 23, ~82, R003571.
10

The ALl's mistake was in concluding that there was insufficient evidence to
11

decide whether the regulations were violated. Order 23,

~82,

R003590. The full Commission

disagreed. It determined that the evidence showed that rate quotes were not being provided
13

during 1996 through 2000. It is the full Commission that has the final say:
14

[T]he Legislature has made the judgment that the final authority for
agency decision-making should rest with the agency head rather
than with his or her subordinates, and that such final authority
includes "all the decision-making power" of the hearing officer.
RCW 34.05.464(4).

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17

Tapper v. State Employment Sec. Dept., 122 Wn.2d 397, 405, 858 P.2d 494, 499 (1993). Thus,

the full Commission had the right to conduct a de novo review and issue its own decision and

fact findings from the record. T-Netix and AT&T do not dispute.

If an ALl's findings are changed or not accepted by the Commission, they have

no relevance for subsequent judicial review. Regan v. State Dept. of Licensing, 130 Wn. App.

39,49,121 P.3d 731,737 (2005); Valentine v. Dep't ofLicensing, 77 Wn. App. 838,844,894

P.2d 1352, review denied, 127 Wash.2d 1020, 904 P.2d 300 (1995)) ("To the extent that the

Director's findings modified or replaced the ALl's findings, we review only the Director's

findings.").

Thus, T-Netix's references to and reliance on the ALl's findings must be

disregarded.
SIRIANNI YOUTZ SPOONEMORE

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - 15

999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

The Commission correctly determined that there was enough evidence to
2

determine that AT&T violated regulations by failing to provide intrastate rate quoting. Its

finding that AT&T violated those regulations was supported by substantial evidence.
4

The

Commission's order should be affirmed.

THE COMMISSION DID NOT ERR IN CONSIDERING TELEPHONE BILLS
FROM CONSUMERS OTHER THAN THE COMPLAINANTS

T-Netix claims that the Commission erred in considering telephone bills to

Columbia Legal Services. Those bills showed charges for collect calls from Washington DOC

facilities, including Airway Heights. T-Netix claims that it was denied the opportunity to attack

these bills. T-Netix, however, responded to these bills by asking the Commission to strike them.

See T-Netix Motion to Strike and/or Exclude Exhibit A to Complainants' Response to Bench

Request No.7, R006173-178.

Both AT&T and T-Netix argued that the Commission's review of these bills was

outside the scope of the referral from the King County court. This argument was rejected by the

Commission:
Nor do we find that bills to consumers other than the Complainants
are irrelevant or beyond the scope of our jurisdiction pursuant to the
Superior Court's referral. The Court asked the Commission to
determine "whether AT&T or T-Netix were aSPs under the
contracts at issue," which is a broader question than whether either
company provided operator services to the Complainants. Indeed,
we make no findings on the latter issue, leaving that determination
to the Superior Court. Our charge is to determine whether AT&T
or T-Netix was an asp for collect calls placed during the relevant
time period from the Correctional Facilities. Bills to any consumers
who accepted those calls are relevant to that inquiry.

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Order 25, ~38, R006828-829.
Neither T-Netix nor AT&T objected to other evidence in the record showing that

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AT&T billed consumers other than the complainants for calls from Airway Heights (see
Complainants' Response to Responses by AT&T and T-Netix to Bench Requests 11,12,13, 14,
and 15,

~~6-9,

R006612-614 and referenced exhibits). See also Ms. Judd's bills showing that

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - 16

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

she was billed by AT&T for operator assisted (i.e., collect) calls from Clallam Bay (R005445).
2

Even if the Commission's review of these bills somehow violated due process, T-Netix has not
3

shown that it was prejudiced by inclusion of these bills in the record. Without showing that
4

prejudice, the Commission's order should not be modified or vacated in any part. Motley5

Motley, Inc., 127 Wn. App. at 81.

T-Netix also argues that the ALJ implicitly found bills to non-complainants
7

irrelevant when she placed certain limits on the complainants' discovery rights.
8
9

The

Commission, however, is not bound by the rulings made by an individual ALJ. See cases at
pp. 16-17, supra. In any event, the referral order from the Superior Court asked generally

whether AT&T and T-Netix were operator service providers; it did not limit that inquiry only to
11

calls received by the plaintiffs. T-Netix and AT&T were offered the opportunity to have this
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13

issue reviewed by the trial court that made the referral to see if the Commission was wrong, but
chose not to do so.7

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The Commission properly considered the evidence of collect telephone calls
received by consumers from Washington DOC facilities in identifying the

asp for those calls.

The Commission's decision should not be vacated or modified because it considered this
evidence.

VI. CONCLUSION
19

For the reasons stated above, and for reasons set forth in complainants' response
20

to AT&T's petition for administrative review, the Commission's Final Order No. 25 should be

affirmed in all respects.
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7 T-Netix and AT&T undoubtedly realized that this argument would fail since the King County Superior Court
rejected their objections and allowed the complaint to be amended to add Columbia Legal Services as a class
representative.

SIRIANNI YOUTZ SPOONEMORE

INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FOR APA REVIEW - 17

999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246

DATED: October 31,2011.
2

SI
3
4

Chris R. Youtz
S
#7786)
Richard E. Spoonemore (WSBA #21833)
Attorneys for Plaintiffs

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INTERVENORS' RESPONSE TO T-NETIX'S
PETITION FORAPA REVIEW -18

SIRIANNI YOUTZ SPOONEMORE
999 THIRD AVENUE, SUITE 3650
SEATTLE, WASHINGTON 98104
TEL. (206) 223-0303 FAX (206) 223-0246