An Arizona judge has denied Verizon Wireless’ attempt to get a temporary restraining order against a ring of companies that allegedly perpetrated widespread premium SMS fraud.
U.S. District Judge David Campbell said Verizon’s request for an injunction against Jawa, the company it says organized the scam, was not specific enough to warrant a preliminary injunction. Verizon had asked the judge to grant an order that would have prevented Jawa from doing business with its customers.
“The proposed TRO [temporary restraining order] language is too general, and too focused on disputed factual matters, to give defendants meaningful guidance as to precisely what actions would be enjoined,” Campbell wrote in his decision.
The judge also denied Jawa’s request to force Verizon to continue doing business with them because the company “failed to counter the very specific evidence of wrongdoing submitted by Plaintiff.”
“Plaintiff has 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,” Campbell wrote in his order. “Defendants have submitted a declaration in support of their TRO that generally denies these allegations, but that fails to present any specific evidence to support the denials or to refute the allegations of wrongdoing contained in Plaintiff’s evidence.”
Verizon will provide additional evidence in the case at an upcoming hearing on the injunction, expected to happen in a couple of weeks.
Jason Hope, founder and CEO of Jawa, called the ruling a “big victory for the company.” A motion similar to Verizon’s from the Texas Attorney General filed in Austin was also denied by the court.
“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,” he said in a statement.
Jawa has filed a countersuit against Verizon Wireless alleging deliberate business disparagement.
In a suit filed last week, Verizon claimed that a group of more than 20 companies and individuals used shell websites to hide deceptive premium SMS offerings from its auditors. The alleged scam lured customers into unwittingly agreeing to high-cost premium SMS services that violated industry standards and Verizon’s own company policies.
Jawa has denied the allegations and said it has not received any customer complaints in Texas to date.
Filed Under: Industry regulations