Class Must Arbitrate|AT&T Throttling Case

     SAN FRANCISCO (CN) – A federal judge ordered private arbitration of class action claims that AT&T does not adequately disclose throttling of mobile customers with unlimited data plans.
     Lead plaintiff Marcus A. Roberts sued AT&T Mobility in 2015, accusing it of a “deceptive and unfair trade practice of marketing its wireless service plans as being ‘unlimited,’ when in fact those plans are subject to a number of limiting conditions [in particular, throttling] that either are not disclosed or inadequately disclosed to consumers.” (Brackets in ruling.)
     Throttling is the intentional slowing of customers’ speed data once they reach certain data use thresholds.
     AT&T sought to compel arbitration, and U.S. District Judge Edward Chen granted the motion on April 27, and stayed the case pending arbitration proceedings.
     Chen rejected Roberts’ argument that arbitration would violate the class’s First Amendment rights.
     “As a starting point, the court finds no merit to plaintiffs’ assertion that the mere fact of judicial enforcement automatically establishes state action,” Chen wrote, since “plaintiffs have pointed to no authority holding that judicial enforcement, particularly of an arbitration award, constitutes state action.”
     Chen rejected on similar grounds the argument that judicial interpretation of the Federal Arbitration Act (FAA) provided the requisite state action to prevent an arbitration order.
     He rejected the argument that court-ordered arbitration would interpret the FAA as applying to contracts of adhesion and would therefore violate the consumers’ constitutional rights.
     “But this asserted constitutional injury is predicated on the contract being one of adhesion i.e., where the consumer did not knowingly and/or voluntarily agree to arbitration and forfeits access to the courts,” Chen wrote.
     “Thus, the source of the alleged constitutional deprivation when a consumer is involved is not the judicial interpretation of the FAA; rather, the source is AT&T’s private conduct in purportedly forcing arbitration on an unwitting consumer.”
     However, “a court giving effect to a private contract does not constitutionalize the contract.”
     The plaintiffs “have not established the requisite degree of government coercion or encouragement sufficient under existing case law to establish state action,” the judge added.
     “Because under the current state of law, there is no state action in the instant case, plaintiffs lack a viable First Amendment challenge to the arbitration agreements,” Chen concluded.
     AT&T attorney Donald Falk, with Mayer Brown in Palo Alto, declined comment.
     Plaintiffs’ attorney Alexander Schmidt, with Wolf Haldenstein in New York City, did not immediately respond to an email requesting comment Monday afternoon.

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