Las Vegas phone company NOS wins ruling over complaint

Wednesday, Feb. 25, 2004 | 10:56 a.m.

CARSON CITY -- The Nevada Supreme Court today rejected the state Bureau of Consumer Protection's request that it issue an order against a Las Vegas communications company accused of deceptive trade practices.

The court upheld a decision of District Judge Michael Griffin of Carson City, who held in favor of NOS Communications Inc. and Affinity Networks Inc., a related California corporation.

The state consumer agency said it had received numerous complaints from businesses about the charges of NOS on long distance telephone services. The company used a complex "call unit" method of assessing charges.

Consumers complained to the state bureau that they were misled into thinking "call units" equaled minutes as is the standard billing practice in the long distance industry. The customers learned the bills from NOS were higher using the unit system.

The consumer protection bureau filed suit seeking a declaratory judgment and a preliminary injunction to stop NOS from engaging in its billing procedure. It alleged this was a deceptive trade practice.

NOS denied the allegation.

The Supreme Court said it is upholding the ruling against the state bureau because its court documents were faulty.

"Because the Bureau of Consumer Protection did not assert a counterclaim or properly support its request, we conclude that the motion for preliminary injunction was procedurally defective and was properly denied."

It said the bureau failed to support affidavits in its motions.

In a footnote, the court said the bureau could refile its suit.

State Consumer Advocate Tim Hay said he would have to read the opinion before commenting. But he said the Legislature agreed to amend the law to require the telephone companies to charge in minutes.

But the decision by the Supreme Court said Judge Griffin adopted an incorrect standard in denying the motion for a preliminary injunction. Griffin ruled that the bureau could carry its case to the state Public Utilities Commission in a workshop to cure what it believed were deceptive practices.

The court said, however, Griffin could have issued a preliminary injunction. "It is well settled that a state or government agency seeking injunctive relief based on an enforcement action need not plead or prove irreparable injury or an inadequate remedy at law.

"Instead, the state or government agency must only show that the statute was violated and the statute relied upon specifically allows injunctive relief," said the court.

In arguments before the Supreme Court last December, Dan Reaser, a Reno attorney representing NOS, argued the case should be before the Public Utilities Commission that is uniquely qualified to set the standards for communications.

The PUC last year ordered a probe into the firm's practices in Nevada. The staff report was presented this morning.

It pointed out that while the company has paid fines in other states it has never been convicted or admitted to wrongdoing. The commission closed the case without taking action against company but advised its consumer complaint division to watch over the company.

The PUC said NOS has 823 Nevada customers and has received just two complaints.