AT&T Customers Must Arbitrate Complaints

SAN FRANCISCO (CN) - A class of customers who said AT&T aggressively markets "data hungry devices" despite "knowing their network infrastructure could not possibly accommodate the demands increased usage would cause" must arbitrate their claims, a federal judge ruled.

Four customers sued AT&T in February 2011 for problems with the company's smart phones, including "slow or nonfunctional Internet connectivity, innumerable dropped calls, and the inability to place or receive calls," according to the amended complaint.

They said the shoddy service "is largely due to AT&T's inability to meet the demands placed on their network because of oversubscription."

"In other words, AT&T's service was not fit for the purpose for which wireless phone service is generally used."

The plaintiffs also said they were "held hostage by the costs associated with changing providers."

But U.S. District Judge Charles Breyer agreed with AT&T that its customers are contractually obligated to arbitrate their claims.

Breyer granted AT&T's motion to compel arbitration because the plaintiffs could not prove that the arbitration agreement violated state or federal law.

"The first page of AT&T's terms of service advises consumers that their agreements require the use of individual arbitration to resolve disputes, 'rather than jury trials or class actions,'" Breyer wrote. "It explains clearly and in boldface type: 'arbitration under this Agreement will take place on an individual basis; class arbitrations and class actions are not permitted,'" the judge continued, quoting the company's service agreement.

Named plaintiffs Fredrick Blau, Jacob Stern and Anthony Tran were represented by Lenza McElrath, who also represented herself in the case.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit