Class Must Arbitrate iPad Claims

     SAN JOSE (CN) – A class that claims Apple and AT&T ran “a classic ‘bait and switch’ fraud scheme” in service plans for the 3G iPad must arbitrate their claims – except for a plaintiff who did not accept the agreement to arbitrate, a federal judge ruled. The ruling came a day after the same judge refused to dismiss the case.



     Apple launched the 3G-enabled iPad on April 30, 2010, with AT&T Mobility as exclusive provider of 3G data service. One month later, they refused to let customers switch in and out of an unlimited data plan, which they pushed in an advertising campaign. That led to a class action lawsuit on seven claims, including fraud, false advertising and consumer law violations.
     Lead plaintiff Adam Weisblatt claimed that if the class had known Apple and AT&T would not allow them to switch in and out of the unlimited plan, they would not have bought the 3G-enabled iPads, which cost $130 more than iPads without 3G.
     AT&T sought to compel arbitration, which U.S. District Judge Ronald Whyte partly granted for all but one plaintiff.
     “Unlike the other plaintiffs, plaintiff [Joe] Hanna never accepted the iPad Agreement,” Whyte ruled.
     Hanna agreed to AT&T’s arbitration agreement when he bought an iPhone, but not an iPad.
     “While the iPhone arbitration agreement does explicitly require arbitration of all disputes and all claims between the parties, it does not specifically provide for the arbitration of any differences in interpretation arising with respect to the scope of the arbitration clause itself,” Whyte wrote.
     The judge denied AT&T’s motion to compel arbitration for Hanna.
     “Certainly a reasonable consumer would not contemplate that an arbitration agreement regarding the iPhone would bind him to arbitrate a dispute with respect to a future, unreleased device,” Whyte wrote.
     Judge Whyte stayed the plaintiffs’ claims against AT&T pending arbitration.

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