Courts differ on billing litigation against AT&T Mobility, VZW: Texting class actions now total 16

Federal courts on opposite sides of the country came to different conclusions in billing litigation against Verizon Wireless and AT&T Mobility, while the number of antitrust class-action texting lawsuits against the nation’s top mobile-phone operators has skyrocketed to more than a dozen.
While the various cases involve different legal theories and circumstances, it is becoming increasingly apparent that the $144 billion mobile-phone industry is facing increased exposure as disgruntled consumers combine forces with plaintiffs’ lawyers throughout the country.
U.S. District Judge Freda L. Wolfson sided with Verizon Wireless in ruling that the Federal Arbitration Act preempts New Jersey law. Wolfson granted the No. 2 cellular carrier’s motion that the arbitration clause in its service contracts is enforceable.
But the legal question over arbitration clauses is far from settled.
The Wiley Rein law firm, which represented Verizon Wireless, noted other courts – including the 9th U.S. Circuit Court of Appeals – have favored consumers by holding that individual arbitration clauses do not necessary foreclose class-action complaints. The firm said the issue is apt to land in the lap of the U.S. Supreme Court in the future.
In May, the high court passed on a chance to grapple with the jurisdictional question regarding arbitration clauses in cellphone contracts, but declined to do so.
AT&T’s content charges
AT&T Mobility did not fare as well in a federal court in San Diego. U.S. District Judge Jeffrey Miller refused to dismiss a class-action lawsuit alleging wireless subscribers were charged for unauthorized mobile content on their monthly bills. In addition to AT&T Mobility, other defendants in the lawsuit include VeriSign Inc., Jamster International SARL and T-Mobile USA Inc. The defendants in litigation before the U.S. District Court for the Southern District of California had sought to get out from under the class-action lawsuit by arguing they had liability releases under a settlement in a separate billing suit in a Georgia court. Miller rejected defendant’s argument and temporarily blocked AT&T Mobility from settling the class action case in Georgia.
“The proposed settlement in Georgia was entirely unacceptable,” said Robert Thompson, lead counsel for the plaintiffs in the multidistrict litigation in San Diego. “It placed the entire burden on AT&T customers to prove that the charges were unauthorized and would have resulted in a very small payout. It was just a method for AT&T to try and get out of their wrongdoing cheaply.”
AT&T Mobility does not view Miller’s ruling as a defeat, however.
“Judge Miller’s order preserves the bulk of the settlement. We are still reviewing and considering our options,” said Marty Richter, an AT&T Mobility spokesman.
Meantime, the number of class-action antitrust lawsuits against AT&T Mobility, Verizon Wireless, Sprint Nextel Corp. and T-Mobile USA now total at least 16. All the lawsuits have followed Senate Judiciary antitrust subcommittee Chairman Herb Kohl’s (D-Wis.) announcement earlier this month that he has begun a probe of texting price hikes by major carriers over the past few years. Wireless CEOs are due to respond to Kohl’s written inquiries by Monday.