AT&T Class Action Over 'Unlimited Data' Escapes Arbitration
A federal judge agreed that false advertising claims against the telecom giant cannot be routed to arbitration under a recent California Supreme Court decision.
March 16, 2018 at 06:35 PM
2 minute read
U.S. District Judge Edward Chen of the Northern District of California.
SAN FRANCISCO — A federal judge has breathed new life into a class action lawsuit claiming that AT&T Mobility misled consumers by marketing certain data plans as “unlimited” while at the same time slowing the data speeds for consumers who crossed certain use thresholds.
U.S. District Judge Edward Chen of the Northern District of California, who had previously routed the suit to arbitration, on Wednesday granted the plaintiffs' motion for reconsideration, agreeing that AT&T's arbitration clause is now unenforceable under a California Supreme Court ruling that was handed down while his earlier ruling was pending on appeal.
AT&T's lawyers at Mayer Brown previously convinced Chen to route the lawsuit to arbitration in April 2016 based on language in the company's user agreement with customers. That ruling was upheld by the U.S. Court of Appeals for the Ninth Circuit in December 2017.
But while the case was pending at the Ninth Circuit, the California Supreme Court ruled in McGill v. Citibank, N.A. that an arbitration agreement that waves the right to seek public injunctive relief in any forum is contrary to California public policy and therefore unenforceable.
In Wednesday's ruling, Chen held that the McGill rule would apply to the California-based named plaintiffs in the AT&T case, and that plaintiffs counsel at Lieff Cabraser Heimann & Bernstein hadn't waited too long to raise new arguments.
Mayer Brown's Archis Parasharami passed a request for comment along to an AT&T spokesman, Marty Richter .
“We respectfully disagree with the decision and we plan to appeal,” said Richter in an email statement.
Michael Sobol of Lieff Cabraser didn't immediately respond to a message seeking comment.
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