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Puerto Rico Supreme Court sitting on $500M decision for island telecom consumers

The Puerto Rico Supreme Court has in its hands the final decision on whether a 12-year-old case against Claro de Puerto Rico will be resolved in favor of consumers or be reverted to a lower court for a trial by jury.

The class action lawsuit filed in February 2009 at the Bayamón Superior Court could represent a payment of some $500 million in back charges and other fees to benefit consumers who paid leasing fees for phone equipment — for both residential and commercial service — offered by the carrier, which at the time did business as Puerto Rico Telephone.

The timeline of the class-action case is long and winding, and involves several branches of the government, as well as the private carrier. The case was initially presented at the former Telecommunications Regulatory Board (now known as the NET), challenging the equipment rental fee that PRT was charging Puerto Rican consumers from 1999 to 2009 and “for which it illegally collected the amount of $168.3 million,” said Spokesman Ismael Torres.

During that time, the company charged a $1 monthly fee to residential consumers, $1.75 per unit to businesses with a single line, and $3/line to businesses with switchboards that often had multiple active lines.

That complaint was seen at the Telecom Board, by a judge that certified the class-action suit but it was stuck at the agency because several of its members at the time refused to sign off on it. Two of them, Sandra Torres and Gloria Escudero, were former PRT employees.

It eventually moved out of the agency and in May 2019, the Bayamón Superior Court issued a judgment against the PRTC, concluding that the equipment rental charge was illegal and fraudulent, and ordering the PRTC to return the sum of $168.3 to the consumers who were members of the plaintiff class, the spokesman said.

In December 2020, the Puerto Rico Court of Appeals “confirmed in its entirety the judgment in the Howard Ferrer class-action and again determined that the evidence demonstrated that the charge was illegal and that the PRTC should return the entire amount charged to consumers,” Ismael Torres said.

“The judgment in the Howard Ferrer case represented for the PRT, under the Consumer Class Action Act, double the amount illegally collected, that is, the amount of $336.7 million, plus another $200M in interest and attorney fees,” he said.

In March 2021, the PRT appealed to the Puerto Rico Supreme Court requesting the revocation of the decisions by the two lower courts. That set off three rounds of voting at the Supreme Court — in the first round, the PRT’s appeal was denied, prompting the company to ask for a reconsideration. That reconsideration was also denied in a second round of voting.

“In that third round, Justices Roberto Feliberti and Erick Kolthoff changed their votes and joined the other two Justices [Mildred Pabón and Edgardo Rivera] to vote in favor of accepting the PRT appeal, revoking the judgment in favor of consumers by the Superior Court and the Court of Appeals,” Ismael Torres said, adding that “politics and corruption made its way into the Supreme Court.”

“Justices Kolthoff, Feliberti, Pabón Charneco, and Rivera García were appointed by New Progressive Party administrations and belong to the majority group in the Supreme Court, which raises suspicions about the relationship of this fact with the surprising change in the votes of the judges Filiberti and Kolthoff,” he said.

“It’s time to create pressure so they vote in favor of consumers because there are external elements related to politics that are pressing for the case to be revoked, which would be fatal for consumers and a case that has taken more than a decade to address, to do justice to consumers,” he said, adding that the Supreme Court could potentially sit on its decision “for however long it wants, which could work against consumers who have already waited this long.”

Second case pending resolution
A second case is also pending resolution at the Bayamón Superior Court for a separate amount that defendants claim the telecom service provider illegally collected in touch-tone service fees, or charges related to the use of fixed telephones which at the time had push buttons that produced tones corresponding to numbers.

That case, known as “Fernando Márquez and others vs. PRTC,” requests that the carrier return to its consumers the amount charged for the fee over a seven-year period, which amounted to $75 million.

“So, according to the Consumer Class Actions Act, PRT was exposed to pay double said amount, ascending to $150 million, plus an extra 25% for attorney fees and process related expenses,” said the spokesman.

Author Details
Author Details
Business reporter with 29 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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