People using overseas pay phones are shelling out $54 and $55 for one-minute calls when using their credit cards, and they say that phone instructions give them no warning of such staggering charges. Understandably, the victims are screaming. That’s one reason there are lawsuits charging a San Diego company, BBG Communications, with business-code violations and exploitation of consumers.
The company’s headquarters is located at 1658 Gailes Boulevard in Otay Mesa, and it also has a San Ysidro office. BBG is 95 percent–owned by the families of Gregorio and Rafael Galicot, American citizens whose father is a prominent promoter of Tijuana’s good life. Gregorio is now president. The company has phones in hotels and airports all over the world, including Lindbergh Field, and processes 300 million minutes of calls each month, according to one suit.
Those who complain are routed to customer-service representatives in Tijuana who insist they must have the victim’s credit-card number before they can consider further action. That demand often aborts the complaint call, says attorney John Mattes, who filed the main suit along with Alan Mansfield. Mattes is a former Fox News investigator in San Diego who has also worked for ABC World News and many other organizations. The plaintiffs are Vlastimil Sajfr and David Keeports, who say they are victims of outrageous credit-card phone charges. There is a similar suit filed by Nicolas Wood in San Diego federal court.
Hundreds of others have complained about BBG Communications to Mattes’s website. His and Mansfield’s suit is intended to be a class action representing the aggrieved. BBG gets an F (the lowest) rating from the San Diego Better Business Bureau, which has handled no fewer than 510 complaints about the company in the past three years and 165 in the past 12 months.
I called BBG and asked to talk with Gregorio or Rafael Galicot. I was told I would have to talk with the company’s longtime law firm, Sheppard, Mullin, Richter & Hampton. But attorneys on the case would not respond to my questions.
The Mattes/Mansfield suit originally went to United States District Court Judge Marilyn Huff. She is often pro-business, but when BBG asked for a dismissal, she rebuffed the company on most counts. Sheppard Mullin argued that Switzerland-based BBG Global AG, not San Diego’s BBG Communications, was the company providing the service. But Huff rejected the argument, saying that some of the conduct may have occurred in California and the plaintiffs are California residents.
Huff also said that the plaintiffs had sufficiently shown that BBG’s practices were unlawful under California’s unfair competition law. Among other things, Huff said that the case should go forward on the plaintiffs’ claim that BBG’s collection personnel and customer service representatives recorded phone calls without the consent of those complaining about the huge charges. Huff did say that plaintiff Keeports didn’t have standing because his wife actually made the call, not he.
BBG petitioned the Ninth Circuit appeals court for emergency intervention in Huff’s decision. The appeals court thumbed down the request. Then, in an unrelated move, court officials decided that Huff’s caseload was too onerous, and the BBG case moved to U.S. District Judge Anthony Battaglia.
BBG is using similar arguments before Battaglia. It is attempting to get summary judgment (the case dropped before it goes to trial) later this year. The plaintiffs should be suing BBG Global, not BBG Communications, insists Sheppard Mullin. California law should not apply to conduct outside its borders.
Sheppard Mullin claims that “No unity of interest between BBG Communications and BBG Global exists…BBG Global and BBG Communications are separate entities and operations…BBG Global plays no role in BBG Communications’ daily operations or vice versa.”
Hmm...let’s look at that assertion. In the case filed by Nicolas Wood, one Irene Fedier, managing director of BBG Global, entered a declaration on behalf of BBG. She claimed that BBG Global “does not have any officers, offices or employees in California.” But in the next paragraph she declares that the BBG Global board includes “Gregorio Galicot [who resides in California].”
Officers are generally considered those who run day-to-day operations, but Money House, which posts corporate information about Swiss companies on the internet, has consistently listed Gregorio Galicot as president of BBG Global. Fedier testified that before each board meeting, she forwards financial documents to Galicot.
Further “the back office administrative duties have been outsourced to BBG Communications…BBG Communications provides certain billing-related, accounting, bookkeeping and database management services to BBG Global.” Even Sheppard Mullin admits that but claims that the companies “keep separate books and records.”
And each day, BBG Communications in San Diego receives phone-billing information from BBG Global and the companies with which it works.
In my own opinion, BBG Communications is going to have an extremely difficult time showing that it is separate from BBG Global.
Mansfield went to Switzerland to view the BBG Global office. The Mattes/Mansfield lawsuit states that BBG Global’s “address is in an apartment building with a BBG Global AG sign taped at the door.” Mattes says that it smacks of an offshore “brass plate” bank in a remote location with few employees and very little capital.
Fedier claimed in her declaration that “the offices are not located in an apartment complex, but rather in a multi-use building, whose first level is dedicated exclusively to commercial use, which is where BBG Global’s office is located.”
Maybe the judge and jury (if the case gets that far) will take a jaunt to Baar, Switzerland — during ski season, of course — to see for themselves.
Fedier stated that the BBG Global office is 460 square feet, with three offices, a conference room, and a supply room. But she asserted that BBG Global provides services in 50 different countries and has more than 300 agents, more than 100 technicians, and more than 50 administrative personnel in 50 international offices. Frankly, an office of 460 square feet sounds awfully small to manage a purported empire that large.
BBG Global “is a shell company used primarily for funneling money out of Europe,” says the Mattes/Mansfield suit. Sheppard Mullin denies the charge.
Sheppard Mullin expects Judge Battaglia to act on the request for summary judgment later this year. There are many more variables in this case for the court to consider.
Meanwhile, we all might ponder this: according to the Mattes/Mansfield suit, no state or regulatory agency has primary, exclusive, or any jurisdiction over BBG Communications’s actions. It’s a wonder more companies don’t enter the business and, without government oversight, charge credit-card customers $54 for a one-minute call. ■