9th Circuit Revives
T-Mobile Class Action
(CN) - The 9th Circuit reinstated a lawsuit against T-Mobile USA on the grounds that a class-action waiver in the company's arbitration agreement is unconscionable and unenforceable under Oregon law.
Consumers allegedly had trouble inserting their wireless LAN cards into their IBM ThinkPad laptops. They called T-Mobile, with whom they'd signed a service agreement, and T-Mobile sent them refurbished cards. But the refurbished cards didn't work, either, according to the buyers.
The users filed a class action against T-Mobile and card maker Sony, alleging violations of various state and federal consumer-protection laws.
The district court dismissed the lawsuit based on the class-action waiver in the arbitration clause.
On appeal, Judge Reinhardt said the arbitration clause is substantively unconscionable because it unreasonable favors T-Mobile, the party with greater bargaining power.