(CN) - A class action that claims AT&T Mobility systematically overbills iPhone or iPad users for data use must proceed to arbitration, a San Francisco federal judge ruled.
In a two-month study of AT&T's billing practices, lead plaintiff Patrick Hendricks claimed to have discovered that the company systematically overstates web server traffic by 7 percent to 14 percent. In some cases, AT&T overbilled by 300 percent, the study allegedly found. Hendricks also claimed that AT&T bills for "phantom data traffic" when there is no actual data usage initiated by the consumer.
But iPhone-use contracts bar lawsuits at this stage, U.S. District Judge Charles Breyer found. The contract "requires the use of arbitration on an individual basis to resolve disputes, rather than jury trials or class actions, and also limits the remedies available ... in the event of a suit."
In so ruling, the court rejected Hendricks' claims that AT&T "routinely" passes on the costs of arbitration to consumers by alleging that the customer has breached contract and that pursuing the case on an individual basis would be prohibitive.
Breyer issued a stay in the case while arbitration is underway.
The class action sought restitution and class damages for breach of contract, unjust enrichment, unfair and fraudulent business practices, unfair competition, and violations of the federal Communications Act.
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