WASHINGTON (CN) – The U.S. Supreme Court rejected T-Mobile USA’s appeal of a 9th Circuit decision allowing a California class action against the company to move forward, despite the arbitration clause in the telecommunication company’s cell-phone contracts.
Consumers originally filed suit in Washington state court, alleging that T-Mobile breached its contracts and violated the state Consumer Protection Act by failing to disclose the terms of the contracts, including taxes on the free phones offered under T-Mobile plans.
The district court denied T-Mobile’s motion to compel arbitration, and the 9th Circuit affirmed, finding the arbitration clause “unconscionable and unenforceable” under state law.
But T-Mobile’s appeal to the high court was not welcomed by all in the telecommunications industry. AT&T Corp. filed an amicus brief encouraging the justices to let carriers work out the kinks in cell-phone arbitration clauses.
T-Mobile maintained that federal arbitration law barred the class action.