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AT&T Defeats Class Action In Unlimited Data Throttling Case (arstechnica.com)

Posted by BeauHD on from the limited-by-restrictions dept.

An anonymous reader writes from an Ars Technica article: Customers who sued ATT over its practice of throttling unlimited data plans will not be able to pursue a class-action lawsuit against the company. ATT argued that the customers could not only have their complaints heard individually in arbitration, and Judge Edward Chen of US District Court in Northern California has sided with the cellular company. Chen accepted ATT's argument, noting that the Supreme Court previously upheld ATT's arbitration provision in a 2011 decision. In the 2011 case, ATT Mobility v. Concepcion, the Supreme Court found that the Federal Arbitration Act preempted a California state law that limited the power of companies to force customers into arbitration. [Chen's ruling granting ATT's motion to compel arbitration was issued on February 29 and highlighted in a MediaPost article Friday.] "Plaintiffs argue that the Concepcion Court never addressed the specific issues now raised -- i.e., that enforcement of the arbitration agreements would violate their rights as protected by the Petition Clause of the First Amendment," Chen wrote. "Because there is no state action in the instant case, Plaintiffs lack a viable First Amendment challenge to the arbitration agreements. As Plaintiffs have not challenged the arbitration agreements on any other bases, the Court grants ATT's motion to compel arbitration."
ATT is still being punished by the FCC and FTC. Ars Technica writes, "The FCC last year proposed a $100 million fine to punish ATT for throttling the wireless Internet connections of customers with unlimited data plans without adequately notifying the customers about the reduced speeds. Separately, the FTC sued ATT in an attempt to gain millions of dollars worth of refunds for customers who paid for unlimited data and had their speeds throttled."

11 of 63 comments (clear)

  1. America, land of one-stop shopping! by jeffb+(2.718) · · Score: 4, Insightful

    If you're looking to "invest capital in your company's future", you don't have to buy legislators in all 50 states; you can just buy the right ones at the federal level, and the courts will take care of the rest.

    1. Re:America, land of one-stop shopping! by Tablizer · · Score: 2

      Yet another example of the big guys screwing the little guys.

      --
      Table-ized A.I.
    2. Re:America, land of one-stop shopping! by Darinbob · · Score: 4, Interesting

      Class action is also used for cases where individually there's no point to really suing to recover the small amount of money. For instance, when computer monitor makers started labelling screen size to include the plastic borders. People who joined the lawsuit got a pittance, a coupon for a few tens of dollars I think, but on the other hand the monitor makers also started telling the truth in their advertisements.

      Was this a waste of time, or did it actually cause a change? AT&T case is similar, the product they advertised is not what was delivered. The difference is that AT&T has learned how to remove rights from their customers through arbitration agreements. Essentially any contract with AT&T can be broken by them with no recourse. Arbitration does not mean you get to resolve a dispute, it is not "small claims court, lite-version". Arbitration means that whoever has the most money will win.

    3. Re:America, land of one-stop shopping! by ShanghaiBill · · Score: 2

      It's not a free market when the government puts their thumb on the scale.

      In a free market, a contract is a contract. So if the government refuses to get involved (other than enforcing contracts), then AT&T wins. No thumb is needed.

    4. Re:America, land of one-stop shopping! by Trailer+Trash · · Score: 3, Informative

      I'll put to you this way, if you ever are dealing with customer service, and have decided, well, I am just going to have to sue them, you know it's over. If you tell them that, they'll say go ahead, and they are out. If you instead document your problem, send a dispute notice with intent to arbitrate, they have 45 days to deal with you (in most cases), or else they are $1,000 minimum. You will get a call, it will be someone who can settle and solve problems, and that's that.

      Not to discredit your great essay and experiences, but I've actually had resounding success multiple times by threatening to sue. However, I don't just yell "I'm going to sue you!" or something like that which they probably hear on a daily - if not hourly - basis.

      I start at the top: "You've breached your contract, and because of that I will now sue your company. I do not make threats of lawsuits, I am telling you what I will do. Our contract has an arbitration clause, however, I will argue in small claims that because you've breached the contract my obligations are null and void and I should be able to sue you directly. I live in a close community where the judge doesn't take kindly to people who don't keep their word. It will cost me about $150 to file, it will cost your company a thousand dollars in lawyer time just to deal with coming here and unsuccessfully defending yourselves before you lose and pay me what I want. But, here's the funny part - even if you win, you lose. You will still ultimately pay your lawyers more to defend your company than you would pay me in fulfillment of your contract. Your call."

      I've used a variation of that speech on three occasions - two to get a new refrigerator - and each time I was quickly transferred to someone who gave me exactly what I wanted without asking further questions.

      You can't say "I'm going to sue". Instead, you have to make it painfully clear that you at least have passing familiarity with the legal system and the process. That little speech wouldn't work as well against their actual lawyers, by the way, but I have another method for dealing with them and I've had great success in other areas where I've interacted directly with counsel.

      --
      Do you have ESP?
    5. Re:America, land of one-stop shopping! by SlaveToTheGrind · · Score: 2

      Excellent post -- arbitration is a far more useful tool (for all involved) than many people believe. Just wanted to clarify one minor point:

      You can't sue them in small claims court or state court because of jurisdiction. The first thing the company will do is petition for removal for diversity of jurisdiction - that means moving it from small claims or state court to Federal court.

      Even if there's complete diversity of the parties, the amount in dispute has to be above a threshold (currently $75,000) for a federal court to have jurisdiction.* 28 U.S.C. 1332. It's unlikely that would be true in most disputes like this, and if it were you wouldn't be filing in small claims court anyway.

      * This assumes your cause of action isn't under federal law, which it generally shouldn't be in this kind of situation.

    6. Re:America, land of one-stop shopping! by SlaveToTheGrind · · Score: 3, Informative

      But, here's the funny part - even if you win, you lose. You will still ultimately pay your lawyers more to defend your company than you would pay me in fulfillment of your contract. Your call.

      Otherwise known as a cost of litigation settlement demand -- exactly the same technique patent trolls use to try to skim from businesses large and small. But, like many of them, eventually you're likely to run into a Newegg that understands that if it just forks over money every time it's threatened like that, it'll experience death by a thousand cuts. Companies make judgment calls all the time that it's better in the long run to pay the lawyers more for a particular case to set an example that they're not an ATM to everyone who comes along with their hand out.

  2. Gross Perversion by rtb61 · · Score: 2

    Consider the hugely corrupt perversion of compulsory biased arbitration. One party has broken the contract but demand the contract they broke remains in force, well, at least the part that favours them, the parts that favour you, meh, sucker. A hugely corrupt application of law to allow a broken contract to remain in force in selected parts by one party to their advantage. Surely the law should have governed whether the contract was substantively broken and no longer in force and thus court action was the only fair resolution.

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    Chaos - everything, everywhere, everywhen
  3. You have all the power by koan · · Score: 2

    Stop using ATT, Verizon, Microsoft, Apple, Facebook, etc.............

    --
    "If any question why we died, Tell them because our fathers lied."
  4. Comment removed by account_deleted · · Score: 4, Informative

    Comment removed based on user account deletion

  5. they way they roll by Anonymous Coward · · Score: 3, Interesting

    I used to work for AT&T awhile ago.

    AT&T entered into agreements with customers (corporate and state customers in my case) knowing full well that what they were agreeing by contract was going to end up in legal action afterward either because they didn't intend to adhere to the contract or because they knew they were shafting the customer (an example is selling an entire MPLS network to the State of Texas knowing full well that they had only a single MPLS device in the entire state and they were just going to use existing circuits to back-haul all the sites to the one MPLS device).

    They do what they can get away with up front and let the lawyers handle it afterward...and they build the whole thing into their business model so that the legal costs and penalties are risk managed out for each project.

    I think this is a shitty way to treat your customers but I guess it's probably done by most companies today as a matter of course.

    Posting this as AC to avoid potential repercussions from AT&T.