Class action plaintiffs lawyers worked quickly to undo the damage after a San Francisco federal judge ruled last year that iPhone customers must arbitrate antitrust claims against Apple and AT&T Mobility over their service agreements. But it’s looking increasingly unlikely that they’ll be able to salvage the five-year-old case.
After U.S. District Judge James Ware concluded in December that the arbitration clause in AT&T’s customer agreement covered claims against both defendants, the lawyers fired off a new complaint that targeted only Apple. And they asked Judge Ware to let them file an interlocutory appeal to the U.S. Court of Appeals for the Ninth Circuit, arguing that Apple shouldn’t be able to hide behind an arbitration agreement to which it wasn’t even a party.
Judge Ware allowed the plaintiffs lawyers at Wolf Haldenstein Adler Freeman & Herz to appeal, finding that there was “good cause to certify for immediate appeal the issue of whether Defendant Apple is able to assert the doctrine of equitable estoppel against Plaintiffs, eventhough it is a non-signatory defendant to the agreement providing for arbitration.” But the Ninth Circuit didn’t bite. On Friday the appellate court refused to hear the case, brushing aside the lawyers’ arguments that the law on equitable estoppel in the arbitration context was muddled and ought to be clarified (in plaintiffs’ favor, of course.)
For the time being, the Ninth Circuit’s order leaves Wolf Haldenstein with no other option but to press the Apple-only claims that it filed back in December. As in the original (now decertified) class action, the plaintiffs in the new case claim that Apple conspired with AT&T to prevent iPhone owners from signing with different cellular providers.
The new suit is also before Judge Ware, and as we’ve reported Apple’s lawyers at Latham & Watkins are pushing back hard, accusing the plaintiffs of attempting an end-run around the judge’s previous rulings. “The Court has already seen this case–and held that Plaintiffs’ claims are so intertwined with the AT&T Mobility LLC wireless service agreement that Plaintiffs must arbitrate their claims in accordance with the terms of that contract,” the defense lawyers wrote in their April 16 motion to dismiss. “Because the theory of the case remains the same, ATTM is a necessary party and arbitration is still required.”
We left a message with Wolf Haldenstein partner Rachele Rickert but didn’t hear back. Apple counsel Daniel Wall of Latham & Watkins also didn’t immediately return a call seeking comment. AT&T had Mayer Brown in the case before Judge Ware and at the Ninth Circuit.
