Verizon Wireless, Content Provider, In Legal Stalemate

Last week Verizon Wireless said it filed a lawsuit against companies that it said were engaged in sending text spam that results in unwanted charges on consumers' bills.

This week one of the companies named by Verizon, JAWA, of Scottsdale, Ariz., issued a press release, saying the federal judge in the case denied a motion that would have prevented the company from doing business with Verizon customers.

Texas Attorney General Greg Abbott had also filed a similar complaint in Texas. JAWA says that complaint, too, was dismissed by a judge in Austin last week.

TRO granted in Texas

However, Lauri Saathoff, in the Texas Attorney General's Office, told ConsumerAffairs.com that the Texas judge signed a Temporary Restraining Order Against JAWA and other defendants Tuesday, once language issues were resolved.

"This was a big victory for our company" said JAWA Founder and CEO Jason Hope, referring to the Verizon case. "Verizon Wireless is trying to use its dominant position in the wireless market to put third party content providers like JAWA out of business and we are going to fight them every step of the way."

Verizon had sought a temporary restraining order to stop JAWA, Eye Level Holdings, and other interconnected companies, from doing business with Verzon Wireless customers. U.S. District Judge David G. Campbell denied the motion, even though he said Verizon had "submitted specific evidence that Defendants are doing business through shell corporations, using false business addresses, using websites that do not comply with industry standards and that trick consumers, and using diversionary software to prevent Plaintiff from discovering these activities."

Charges of ‘cramming’

Verizon claimed the Defendants baited consumers into providing their cell phone numbers, then charged them for monthly subscriptions to various content, a practice known as “cramming.”

But Campbell denied the motion for a TRO, saying the language in the proposed restraining order "is too general, and too focused on disputed factual matters, to give Defendants meaningful guidance as to precisely what actions would be enjoined."

At the same time, the judge denied JAWA's motion to enjoin Verizon from taking action against it, saying the Defendants had not shown their claims had a "fair chance of success on the merits." Even so, Hope sees the legal stalemate as a victory.

It’s on

"We're not going to take this lying down," Hope said. "Our 240 employees have mortgages to pay and families to feed. I am not about to stand by and allow this corporate giant to put people out of work so it can make a few more million."

Meanwhile, Verizon clearly believes it will prevail in court, once the language in the restraining order is resolved.

"This case is about the fraud committed against us and against our customers, as we outlined in the initial complaint," Debra Lewis, a spokeswoman for Verizon Wireless, told ConsumerAffairs.com. "There will be many hearings and decisions along the way."