* Class action on Cingular/AT&T deal allowed to proceed
* Customers say being forced to pay fees, buy phones.
NEW YORK May 27 A U.S. District Court ruled on
Wednesday that consumers can go ahead with a class action
lawsuit against AT&T Inc (T.N) that stems from the 2004 merger
of Cingular Wireless and AT&T Wireless.
The case arose from complaints from customers after the
merger that they were being forced to pay fees and buy new
phones to transfer their service plan from the AT&T Wireless
network to Cingular, now operating under the AT&T brand.
AT&T argued customers should channel their complaints
through individual arbitration rather than class actions, but a
U.S. District Court for the Western District of Washington in
Seattle ruled against the company on Wednesday, allowing a
class action to go ahead.
AT&T representatives confirmed the ruling by Judge Ricardo
Martinez and said in an emailed statement the company was
studying the ruling and considering its options.
"We respectfully disagree with the court's conclusions,"
the company said. "Our arbitration clause is among the most
consumer-friendly in the nation and has been shown to be very
consumer friendly in other cases."
The lawsuit MaryGrace A. Coneff, et al versus AT&T said
Cingular "deliberately degraded" the AT&T network to induce
AT&T Wireless customers to transfer their service to Cingular.
But a transfer came with obligations including an $18
transfer fee to Cingular and the purchase of a new phone from
Cingular. Customers who did not accept the transfer fee had to
put up with a degraded service until the end of their service
contract or pay a $175 early termination fee.
Consumer advocacy group Consumer Watchdog described the
ruling as "a major victory for AT&T customers."
"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," said Harvey
Rosenfield, a lawyer for the non-profit the California-based
(Reporting by Sinead Carew; Editing by Andre Grenon)