Sprint Nextel sued for $1 billion over early-termination fees

Sprint Nextel Corp. has been hit with a $1 billion federal class-action lawsuit over early-termination fees, the complaint filed by the same lawyers pursuing relief for consumers in a California state court and just days before the No. 3 wireless provider announced a date to implement pro-rated ETFs.
“After a full trial on the merits, we proved that Sprint Nextel’s termination fees violated California law,” said Scott Bursor, lead trial lawyer for the plaintiffs in the case before a California state court. “We proved that the fees bear no relation to any cost incurred by the company. And we proved that the fees were established as an arbitrary penalty to prevent dissatisfied customers from leaving. Now we will prove that the fees violate federal law as well.”
A California superior court in July ordered Sprint Nextel to refund $73 million to affected consumers, but that decision only applies to California subscribers assessed ETFs on or before March 17, 2007. Verizon Wireless settled an ETF class-action lawsuit for $21 million in the same court, a venue also entertaining pending class-action ETF litigation against AT&T Mobility and T-Mobile USA Inc.
The new, federal class-action lawsuit against Sprint Nextel seeks ETF refunds for a nationwide class of subscribers, with plaintiffs alleging that the No. 3 cellphone operator has charged about $1.2 billion in illegal ETFs since 1999.
Sprint Nextel was not immediately available for comment.
The cellular industry has been working with FCC Chairman Kevin Martin on crafting a national ETF policy, but controversy over federal pre-emption and other issues raised by consumer and state groups has prevented the agency plan from moving forward.