[pyre]

That may be, but they are claiming that $193k+ is the cost of what she took, which I doubt very much is the case.

If someone steals a fake piece of art from my house worth $80, can I turn around and claim that it was the original and therefore worth millions that should be repaid to me?

[tptacek]

No, you cannot claim that.

However, when a utility gets a bill from an MNO for $193k for services they contractually agreed to, and that bill is a result of a criminal action or a tort, it becomes easy to establish $193k as basis for damages in court.

[thailandstartup]

That contract could have been written to make them contractually liable for $75 trillion dollars. Following your logic, it would then be easy to establish $75 trillion dollars as a basis for damages.

[tptacek]

(In US law, at least) Clauses that impose "penalties" which are not directly rooted in liquidated damages are unenforceable.

This is not a case about a penalty clause; the damages here emerge straightforwardly from the MNO's usage contract with the utility. The thief didn't stumble across a landmine clause that said "parties agree theft of SIM card incurs $100,000 of damage"; instead, the thief continuously used a metered service that resulted in a 6-figure charge.

One imagines it would be possible to dispute a six-figure liquidated damages claim by arguing that the metered charge was devised in such as way as to deliberately create a penalty clause. My point here being, these things aren't so black and white as to be trivially adjudicated by geeks on a message board. But I think we all in the back of our heads realize that the fee structure for smart meter mobile data isn't an elaborate scam to entrap SIM card thieves.

So, no, your example doesn't work. Companies cannot simply write "you owe me a zillionty squillion dollars if you steal my stuff" and have that hold up in court.

[Natsu]

I wonder, however, if the power company will itself actually suffer $183,000 in damages. Every time I've heard of someone accidentally racking up insane charges like this, they've been able to negotiate it to something reasonable.

So I do believe that knowing the true damages, and not just the dollar figure specified by the contract, is relevant here.

[hugh3]

The power company is presumably already forking over a huge amount of money to Telstra every month for data. This one event would have been a spike, but not a crazy dominant one.

If you or I accidentally ran up $200K in charges due to somebody stealing our SIM then yes, we could probably negotiate it down. In a big-business-to-big-business context, though, Telstra is as likely as not to say "Hey look, that's what the contract says, you signed it, so suck it".

Without any information to the contrary, I'm willing to believe that if the court decided that the actual damages to the power company were $183,000, then the actual damages were $183,000.

[thailandstartup]

The two companies can write whatever they like in the contract between themselves. You seem to agree that the contract should be held to some standard of reasonableness where it is used to establish damages caused by some third party. You think 200K is reasonable. I do not.

The position you're advocating is that a contract between two private companies should be used to calculate damages for a criminal act. That's a very bad idea - it makes those companies legislators.

[tptacek]

Steal a loaf of bread. Is the shopkeeper you stole it from, who says the loaf costs $2.50, a "legislator"?

[thailandstartup]

If the court considers the value of the item and agrees with the valuation of the shopkeeper then no.

If the shopkeeper says the loaf of bread was worth $200K and the the court doesn't question the amount because the shopkeeper has been billed $200K for replacement of said loaf according to a contract with the bakery, the shopkeeper and the bakery have legislated the punishment for the crime.

[thailandstartup]

If I had a contract with a company that charged $193K to replace said $80 artwork - should I then be able to claim $193K damages?

[tptacek]

No, because that scenario isn't any different from the original scenario proposed.

The utility is in this case contractually obligated to pay those fees. The basis for damages here is straightforward.

[hugh3]

Besides, "eighty bucks" is a silly estimate anyway. Nobody in Australia will sell you unlimited 3G data for twenty bucks a month. If you think that's unfair compared to other countries, remember that Australia has a population density of two people per square kilometre, and that Telstra actually has a pretty darn good coverage in their 3G network (Optus and Vodafone are cheaper but can't be expected to work reliably outside major cities).

Somebody mentioned $22 a gig... well, the highest-data plan on http://www.telstra.com.au/mobile/browsing_packs.html is $69 for twelve gigs a month, with excess data charged at five cents a meg, or fifty dollars a gig. That sounds like a lot, but as we've said, the 3G network really isn't designed for individual customers doing terabytes of data per day... they clearly don't want you using 3G in that way.

[wglb]

But isn't it likely that the meter owner might strike a deal for thousands of devices which each send a very minor bit of data once or four times a month, and be able to structure that contract a little differently?

[hugh3]

Most certainly. I'm just pointing out that $200,000 is, in fact, consistent with the prevailing market rates if you choose to download terabytes worth of data on your 3G modem.