Apple and AT&T Reinforce Stance in IPhone Carrier Suit

(CN) - Apple and AT&T continued to defend arbitration as the best means to sort out whether they illegally restricted the carrier choices of iPhone customers, fighting a proposed class action.

Lead plaintiffs Paul Holman and Lucy Rivello filed a federal complaint against Apple and AT&T Mobility (ATTM) in October 2007, claiming the companies illegally controlled consumer choices by limiting iPhone users to AT&T plans. A San Jose federal judge certified their class action last year.

AT&T and Apple said last month that the lawsuit should be arbitrated and the class should be decertified because the "entire theory rests on a single, unified course of conduct."

"Plaintiffs have wrapped themselves for years in the service contract and in allegations of a single ATTM-Apple conspiracy to survive motions to dismiss and obtain class certification," according to Apple's motion to compel arbitration. "They cannot run from those theories now."

Attorneys for both companies filed new motions last week to compel arbitration, decertify the class and stay the proceedings.

Apple attorney Daniel Wall said the plaintiffs' case has always been built around their wireless service agreement, and they cannot use that agreement "to prop-up antitrust claims, then use it again to overcome obstacles to class certification, and yet deny they are bound by the arbitration clause found in the [agreement]."

Regardless of how the motions to compel arbitration are resolved, Wall said the class must be decertified because their entire theory was based on the wireless agreement. In their latest brief, the plaintiffs said that agreement was "merely background," Wall noted.

"That means that plaintiffs misled both defendants and the court about their theory of the case, the way that they intended to prove their claims on a class basis, and obtained certification based on false arguments and premises," the brief states. "Decertification is plainly appropriate in such circumstances."

Apple also said the iTunes Store's Terms of Service is "irrelevant" to the class claims because that agreement has nothing to do with the iPhone wireless agreement.

In another filing supporting the motion to compel arbitration, AT&T's attorney Donald Falk rejected the class's argument that the company waived its right to compel arbitration because it did not appeal to the court's denial of the original motion to compel.

"Class-wide procedures are incompatible with arbitration and therefore undermine core purposes of the Federal Arbitration Act," Falk wrote, citing the recent Supreme Court ruling in AT&T Mobility v. Concepcion. "There is no reason for swimming against this tide of authority here."

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