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AT&T Dodges Consumer Suits Over T-Mobile Deal

(CN) - AT&T does not have to enter arbitration with customers who seek to block to company's takeover of T-Mobile, a California federal judge ruled.

Leslie Bernardi and Deborah Schroeder had filed suit separately in the San Francisco-based Northern District of California, hoping to block the merger and enforce arbitration agreements under the Clayton Act.

AT&T asked to court to enjoin the arbitrations, saying that the demands were outside the scope of the arbitration agreements that each customer signed because they aim to represent a class.

"Customers are four of over 1,000 people who, represented by the same firm, filed essentially identical arbitration demands, all seeking the same, non-individualized relief: injunction of the ATTM/T-Mobile merger," U.S. District Judge Charles Breyer wrote.

Though there is no explicit class allegation in the arbitration demand, the 9th Circuit has ruled that courts can make decisions based on whether litigation "resembles a class action in substance, if not in form."

Twenty-four such arbitration cases have come before federal judges in eight districts so far. Three courts already ruled on their cases, all in favor of AT&T.

AT&T's plan to acquire T-Mobile drew an antitrust lawsuit which claims that the $39 billion merger would weaken competition and raise prices for consumers. The deal would make AT&T the largest wireless carrier in the country, with around 132 million connections and $72 billion in revenues, according to the government's antitrust complaint.

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