Sprint Nextel to pay $17.5M in nationwide ETF settlement but Calif. case excluded

Sprint Nextel Corp., struggling to get its wireless business back on track and put consumer litigation behind it, has secured preliminary court approval for a $17.5 million nationwide settlement of early-termination fee litigation that appears to put in jeopardy a separate $1 billion ETF lawsuit against the No. 3 wireless provider by a different team of plaintiffs’ lawyers.
The national settlement initially approved by U.S. District Judge Jose L. Linares in a New Jersey federal court does not include ETF litigation in California state court that has ensnarled Sprint Nextel, Verizon Wireless and other mobile-phone carriers. Verizon Wireless settled a class-action ETF lawsuit in California Superior Court for $21 million earlier this year.
In the California state litigation, Judge Bonnie Sabraw of the Alameda County Superior Court ruled Dec. 4 that early-termination fees charged by Sprint Nextel to subscribers in the state between 1999 and 2007 were illegal and could not be collected. Sprint Nextel previously said it would not pursue $225.6 million in unpaid ETFs even if Sabraw ruled in its favor.
Court findings in the California state litigation against Sprint Nextel formed the basis for a $1 billion class-action ETF lawsuit brought by lead plaintiffs’ attorney Scott Bursor against the cellular operator in San Francisco federal court.
But the national settlement initially approved by Judge Linares – which excludes the Alameda County case – does include Bursor’s $1 billion class-action suit against Sprint Nextel in California federal court.
Bursor said he plans to oppose the national ETF settlement Sprint Nextel reached with other plaintiffs’ lawyers that won preliminary approval by Linares in New Jersey federal court. Bursor asserted consumers are being shortchanged by the $17.5 million national ETF settlement ($14 million in cash, $3.5 million in credits, vouchers and other concessions).
“I think the settlement is in big trouble,” Bursor told RCR Wireless in a phone interview. “Sprint Nextel has basically fled the jurisdiction [California] where they’ve suffered loss after loss, and they are attempting to settle the claims in a court where they haven’t been litigated.”
Bursor said he likely will submit a filing with the New Jersey federal court in February to block the national ETF settlement from receiving final approval in March.
Sprint Nextel last month instituted a new policy to pro-rate ETFs, joining other national mobile-phone operators in easing charges that carriers claim are intended to subsidize phones and other wireless operations. Consumer outcry over ETFs – which can run $175 to $200 – have prompteda flood of class-action lawsuits around the country and heated policy debates in the nation’s capital. Some lawmakers have sought to mandate pro-rated ETFs, while Federal Communications Commission Chairman Kevin Martin has toiled to craft a national ETF regulatory plan. However, the initiative has failed to get off the ground to date because of opposition by consumer and state groups over a proposed inclusion of a federal pre-emption provision.