Key Victory for Cell Phone Users; Nationwide Lawsuit Against Cingular/AT&T for Overcharges...

Key Victory for Cell Phone Users; Nationwide Lawsuit Against Cingular/AT&T for
Overcharges and Poor Cell Phone Service May Proceed, Federal Court Rules

Court Rejects AT&T's Efforts to Bar Customers From Joining Together to Hold
the Company Accountable in Court

SANTA MONICA, Calif., May 27 /PRNewswire-USNewswire/ -- A class action lawsuit
charging that millions of cell phone users were misled and overcharged when
Cingular merged with AT&T Wireless in 2004 may go forward, a federal court
ruled on Tuesday.

In a victory for consumers nationwide, the U.S. District Court for the
District of Washington in Coneff v. AT&T struck down a clause in AT&T's
contract that the company argued allowed it to force its customers to bring
their claims individually in arbitration proceedings, rather than in a class
action in court. The District Court held that without a class action, the
vast majority of AT&T's customers would never obtain justice -- and for that
reason refused to enforce the contract provision.

Cingular bought AT&T's cell phone system in October 2004, after assuring
federal regulators that the merger would be "seamless." But, the lawsuit
contends, instead of providing the new and improved services it promised AT&T
customers, Cingular immediately began dismantling and degrading the AT&T
network, forcing AT&T customers to move to Cingular's network. That meant
buying new phone equipment, moving to higher cost plans, and, in some cases,
an $18 "transfer" or "upgrade fee." Some customers who tried to go to another
company were hit with "early termination fees" of $175. Others who didn't
want to pay or couldn't afford the termination fees were stuck with riding out
their contract with AT&T Wireless while suffering poor to no reception -- and
paying an extra monthly fee of $4.99. Cingular ultimately shut down the former
AT&T network. Cingular later changed its corporate name to AT&T.

AT&T: Fine Print Bars the Lawsuit

The case was filed in Seattle, Washington in July 2006 on behalf of all
original AT&T Wireless customers who were deceived or overcharged as a result
of the merger. AT&T responded by asking the court to dismiss the case on the
grounds that under a term buried in the fine print of its service contracts,
customers are barred from bringing class actions and instead must fight the
company one-on-one through arbitration. The customers argued that because
their claims are individually small but complex, the class action ban would
prevent them from holding the company accountable at all -- a result not
permitted in Washington, where AT&T was based at the time.

U.S. District Court Judge Ricardo Martinez agreed, striking down the
arbitration clause as "unconscionable" under Washington law. He explained that
the contract term would "effectively exculpate" the corporation from "any
potential liability for unfair or deceptive acts or practices in commerce."
"The Court will not condone such a broad and exculpatory practice," he added,
emphasizing that the central purpose of class actions is to curb fraudulent
business practices such as those alleged in this case.

The court also emphatically rejected AT&T's argument that the court should
apply the laws of other states chosen by AT&T in its contract, even if those
states' laws are less protective of consumers than Washington's and would
permit AT&T to bar their residents from participating in the class action.

Decision a Victory for Consumers

"It stands to reason that if a company chooses to do business from the state
of Washington, it can't use the fine print of its contract to give itself
carte blanche when it violates Washington's strong consumer protection laws,"
said Leslie Bailey, a staff attorney with the national public interest law
firm Public Justice. "Judge Martinez saw through AT&T's legal arguments to
the injustice of what the corporation was trying to do here. This is an
extremely well-reasoned decision, and is likely to be influential with other
courts around the nation." Bailey and Public Justice staff attorney Paul
Bland led the customers' fight to keep their case in court, and Bland argued
the case before Judge Martinez.

"This is a major victory for AT&T customers all over the nation," said Harvey
Rosenfield, a lawyer for the non-profit Consumer Watchdog, a California-based
crusader for consumer rights. "The company broke its promise to its customers,
making them pay millions of dollars more than they should have. Now we can
move forward to get people their money back."

"It's been a long battle and there is still much work to be done," said Kevin
Coluccio of the law firm of Stritmatter, Kessler, Whelan and Coluccio, based
in Seattle. "But today's decision confirms that AT&T does not have the
unlimited right to immunize itself from accountability under the law."

In addition to Rosenfield, Bland, Bailey and Coluccio, the plaintiffs are
represented by Bruce Simon and Esther Klisura of Pearson, Simon, Warshaw and
Penny; Paul Stritmatter of the Stritmatter firm, as well as several other
nationally-recognized consumer advocates and law firms.

Read the Federal District Court's decision:
http://www.consumerwatchdog.org/resources/ATT_OrderDenyArb_5-26-09.pdf

Read the brief filed on behalf of AT&T customers opposing AT&T's arbitration
motion: http://www.consumerwatchdog.org/resources/ATT_Oppo_Arb_Motion.pdf

Read the latest version of the complaint in the case:
http://www.consumerwatchdog.org/resources/ATT_ConsolidatedComplaint.pdf

Read a fact sheet about the case:
http://www.consumerwatchdog.org/courts/articles/?storyId=27527

Read the news release announcing the lawsuit:
http://www.consumerwatchdog.org/resources/CING-ATT_PR_7-6-06.pdf

SOURCE Consumer Watchdog

Harvey Rosenfield of Consumer Watchdog, +1-310-392-0522 x 303; or Leslie
Bailey of Public Justice, +1-510-622-8150 x 203