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AT&T seeks to end arbitration in T-Mobile merger

Communications giant AT&T is engaged in talks to purchase rival provider T-Mobile to the outrage of some of its customers who have joined in a class action lawsuit to stop the merger. In an attempt to end arbitration claims made by the group of eight customers, AT&T has filed lawsuits seeking injunctions against the customers alleging abusive actions.

A group of customers, concerned about potential rate hikes, were allegedly solicited by a law firm with the promise of a $10,000 arbitration settlement for each if they won the lawsuit to stop the merger. The promise of cash was made based on the terms of AT&T’s arbitration agreement. The law firm claims that it has solicited more than 1,000 people to join the class action lawsuit to date.

AT&T, in filing the lawsuits, says that customers and the firm representing them are violating the arbitration agreement, which excludes class action proceedings. The arbitration agreement provides only for settlement of individual claims based on the merit of the claim. According to AT&T, the promise made of a $10,000 payment is not applicable in the case of customers that are involved in the class action.

AT&T insists that the claims against the merger made by the customer group in the class action lack merit and that an arbiter doesn’t have the authority to stop the merger or affect it in any way.

The American Arbitration Association, the arbiter in the case, has rejected AT&T’s claims and is proceeding ahead with arbitration. It is now up to the federal courts to determine if arbitration will go forward.

Source: PC Magazine, “AT&T Goes After Customers Over T-Mobile Merger Lawsuit,” Sara Yin, Aug. 15, 2011


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