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Court Restores New Cingular Class Action

(CN) - The 9th Circuit has revived a class action accusing New Cingular Wireless of breaching the contracts of AT&T customers who were forced to sign up for New Cingular cell phone service after Cingular merged with AT&T.

Lead plaintiff Kennith Shroyer claimed his cell-phone service was severely degraded after AT&T Wireless Services merged with Cingular Wireless in 2004 to form New Cingular Wireless.

He said New Cingular disregarded its obligations under customers' existing AT&T contracts by providing inadequate cell-phone service and by forcing him to sign up for a different contract in order to keep the former quality of service.

He sued for breach of contract, fraud and deceit, and unfair competition, and demanded a declaratory judgment.

Shroyer lost in the district court, but the Pasadena-based appellate panel said his contract claim could proceed.

"Shroyer sufficiently states a claim that New Cingular breached its contract with him," Judge William Canby wrote.

"He alleges that his service degraded after the merger, in violation of AT&T's promise in the contract. He also alleges that, by requiring Shroyer to sign up for a different contract with the merged company and pay additional expenses in order to maintain the former quality of service, New Cingular required additional consideration from Shroyer before it would perform its preexisting contractual duty. Finally, he alleges that this conduct was in violation of the implied covenant of good faith and fair dealing."

The court reinstated the contract claim, but upheld dismissal of the remaining claims.

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