Customers of AT&T Mobility who claim they were forced to pay additional fees following AT&T’s 2004 merger with Cingular will be allowed to proceed with a class action suit against the company as a result of a federal district court ruling that invalidated arbitration provisions written into the AT&T subscriber contract. The ruling, handed down by the U.S. District Court for the Western District of Washington, follows on the complaints of former Cingular customers who accused AT&T of deliberately degrading their wireless service upon completion of the merger to induce them to purchase new handsets that work on the AT&T network. Allegedly, subscribers who declined to buy new handsets and to pay an $18 transfer fee were forced to accept degraded service or pay $175 to terminate service before the end of their contract terms. Although a group of AT&T customers sought to have their grievances addressed through a class action lawsuit filed in July 2006, AT&T asked the district court in Seattle to compel individual arbitration in accordance with clauses in the AT&T wireless service contract that prohibit dissatisfied subscribers from seeking class action status. Opposing AT&T, the plaintiffs argued that the clauses at issue were “unlawful under state contract law because [they] would effectively prevent customers from obtaining justice.” In a decision released on Wednesday, Judge Ricardo Martinez agreed, concluding that the terms in question would “effectively exculpate” AT&T from “any potential liability for unfair or deceptive acts or practices in commerce.” Adding that the ruling “is . . . consistent with the modern trend” in which seven courts in five jurisdictions have refused to enforce class action waivers since the beginning of last year, Martinez said the plaintiffs could proceed with their class action claims.
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Judge invalidates AT&T arbitration clause, allows class action suit to proceed
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