Discriminatory Pricing

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7^th Circuit Court of Appeals

Case Name: Todd Heath v. Wisconsin Bell, Inc.

Case No.: 22-1515

Officials: Easterbrook, Hamilton, and Lee, Circuit Judges.

Focus: Discriminatory Pricing

The 1996 E-Rate program, officially known as the Schools and Libraries Universal Service Support program under the Telecommunications Act (110 Stat. 56), aims to maintain affordable telecommunications services for schools and libraries situated in rural and economically disadvantaged areas. This program provides subsidies to such entities, mandating that service providers offer rates to these customers lower than or equal to the lowest rates extended to similarly situated customers. Heath initiated a qui tam action under the False Claims Act (31 U.S.C. 3729), alleging that Wisconsin Bell overcharged schools and libraries in violation of the program, leading the federal government to pay more than it should have. The district court granted Wisconsin Bell summary judgment.

The Seventh Circuit reversed the decision. Although Heath’s arguments and evidence primarily focused on the burden of proving violations, rather than pinpointing specific violations in his extensive exhibits and lengthy expert report, he presented enough specific evidence of discriminatory pricing. This evidence allowed a reasonable jury to conclude that Wisconsin Bell, with the necessary intent, charged certain schools and libraries more than similarly situated customers. The inference that government funds were implicated and that the government would disapprove claims if aware of actual overcharges is reasonable under the circumstances.

Reversed and remanded.

Decided 01/16/24

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