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AT&T Defeats Class Action In Unlimited Data Throttling Case (arstechnica.com) 63

An anonymous reader writes from an Ars Technica article: Customers who sued ATT over its practice of throttling unlimited data plans will not be able to pursue a class-action lawsuit against the company. ATT argued that the customers could not only have their complaints heard individually in arbitration, and Judge Edward Chen of US District Court in Northern California has sided with the cellular company. Chen accepted ATT's argument, noting that the Supreme Court previously upheld ATT's arbitration provision in a 2011 decision. In the 2011 case, ATT Mobility v. Concepcion, the Supreme Court found that the Federal Arbitration Act preempted a California state law that limited the power of companies to force customers into arbitration. [Chen's ruling granting ATT's motion to compel arbitration was issued on February 29 and highlighted in a MediaPost article Friday.] "Plaintiffs argue that the Concepcion Court never addressed the specific issues now raised -- i.e., that enforcement of the arbitration agreements would violate their rights as protected by the Petition Clause of the First Amendment," Chen wrote. "Because there is no state action in the instant case, Plaintiffs lack a viable First Amendment challenge to the arbitration agreements. As Plaintiffs have not challenged the arbitration agreements on any other bases, the Court grants ATT's motion to compel arbitration."
ATT is still being punished by the FCC and FTC. Ars Technica writes, "The FCC last year proposed a $100 million fine to punish ATT for throttling the wireless Internet connections of customers with unlimited data plans without adequately notifying the customers about the reduced speeds. Separately, the FTC sued ATT in an attempt to gain millions of dollars worth of refunds for customers who paid for unlimited data and had their speeds throttled."
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AT&T Defeats Class Action In Unlimited Data Throttling Case

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  • by jeffb (2.718) ( 1189693 ) on Monday March 14, 2016 @08:02PM (#51696961)

    If you're looking to "invest capital in your company's future", you don't have to buy legislators in all 50 states; you can just buy the right ones at the federal level, and the courts will take care of the rest.

    • by Tablizer ( 95088 )

      Yet another example of the big guys screwing the little guys.

    • WTF were the actual losses here? i remember the days when class action lawsuits were about suing over crappy products that resulted in death, injury, lifetime health issues, etc. now people are suing a cell phone carrier who told them about throttling but their lives are so hopeless they are suing over being able to watch unlimited netflix and youtube everywhere they go. did they lose money? use of their bodies? they can still sue, they just have to do it one by one and present actual evidence of losses an
      • by Darinbob ( 1142669 ) on Monday March 14, 2016 @09:10PM (#51697365)

        Class action is also used for cases where individually there's no point to really suing to recover the small amount of money. For instance, when computer monitor makers started labelling screen size to include the plastic borders. People who joined the lawsuit got a pittance, a coupon for a few tens of dollars I think, but on the other hand the monitor makers also started telling the truth in their advertisements.

        Was this a waste of time, or did it actually cause a change? AT&T case is similar, the product they advertised is not what was delivered. The difference is that AT&T has learned how to remove rights from their customers through arbitration agreements. Essentially any contract with AT&T can be broken by them with no recourse. Arbitration does not mean you get to resolve a dispute, it is not "small claims court, lite-version". Arbitration means that whoever has the most money will win.

        • those were actual losses because they were advertising 17" monitors and selling 15" or so with the bezels. somewhat like all the 52x cdrom drives back in the day that never performed close to that speed. AT&T has been open about throttling for years, their sales people have told people to use wifi, and many of these people signed new contracts with the throttled plans.
          • by sims 2 ( 994794 )

            And now they sell 50" and you get 49.5"

          • Do note that these were CRTs, and the tube of the CRT was in fact 17" diagonal. The 15" space of the bezel was somewhat arbitrary, since the entire front of the tube was covered with phosphors. It could in fact display a 17" image (or close to it - there are/were controls for adjusting the picture height and width), but for aesthetics and to keep the tube from falling out the front of the plastic housing, the opening of the bezel was made smaller than the tube.

            In that respect, the practice was more aki
        • arbitration means you have to go in with evidence of real financial losses and how you were wronged. not sign up on a website for a bunch of lawyers to make a lot of money settling a case because it's cheaper.
        • "a few tens of dollars" sounds about like the price difference of 2" of TV, so I'm not sure the problem there.

        • by danheskett ( 178529 ) <danheskett @ g m ail.com> on Tuesday March 15, 2016 @01:53AM (#51698317)

          Arbitration does not mean you get to resolve a dispute, it is not "small claims court, lite-version". Arbitration means that whoever has the most money will win.

          I disagree strongly. I have gone to arbitration close to a dozen times against big companies. And I've won in every case but one. MOst of the time they settle before the process gets going.

          What arbitration does is remove the prospect of a big punitive award against the company. But in all my cases, I got exactly what I wanted to the extent that I had actual documentated losses or damages. Would it have been nice to win a punitive award for a million bucks here or there? Certainly.

          I found in all cases, that the arbitration method produced pressure on the company to assign a real person with authority to settle issues (usually a paralegal or in house counsel), and produced incentive for them to settle before owning fees to the arbitration company. In virtually all cases, the arbitration clause specified that the company would pay the initial filing fee, which usually runs like $700-$1000. That basically means that if your claim is for less than $1000, they'll just give it to you without much fuss.

          The basic method to follow is:

          1. Read your agreement. It will say how to file. Usually it's with the American Arb Association, which is the favorite. Or a competitor, but it's almost always the AAA.

          2. You almost always have the right to have the hearing near you or a place of your choosing. Or often your place of last billing. In one case, I used this to my benefit by changing my billing address to a mailer forwarded in remote Alaska.

          3. Almost every agreement, because of the patchwork of state laws and Federal Law like the FAA, have the company pay the initial filing fee. This is usually around $1,000. For example, here is Sprint:

          (4) We each are responsible for our respective costs, including our respective counsel, experts, and witnesses. Sprint will pay for any filing or case management fees associated with the arbitration and the professional fees for the arbitrator's services.

          4. Almost every agreement has constraints on the company as well, which means that they have to negogiate first. So:

          Before initiating an arbitration or a small claims matter, you and Sprint each agree to first provide to the other a written notice ("Notice of Dispute"), which shall contain: (a) a written description of the problem and relevant documents and supporting information; and (b) a statement of the specific relief sought. A Notice of Dispute to Sprint should be sent to: General Counsel; Arbitration Office; 12502 Sunrise Valley Drive, Mailstop VARESA0202-2C682; Reston, Virginia 20191. Sprint will provide a Notice of Dispute to you in accordance with the "Providing Notice To Each Other Under The Agreement" section of this Agreement. Sprint will assign a representative to work with you and try to resolve your Dispute to your satisfaction. You and Sprint agree to make attempts to resolve the Dispute prior to commencing an arbitration or small claims action. If an agreement cannot be reached within forty-five (45) days of receipt of the Notice of Dispute, you or Sprint may commence an arbitration proceeding or small claims action.

          This basically means they get a chance to make it right before you can cost them $1,000. This is an awesome incentive for them to settle, every time. If what you want costs less than the filing fee, and you seem determined to fight them, they will just cave. It's simply mathematics.

          5. Without arbitration, in most cases, companies have a huge advantage. You can't sue them in small claims court or state court because of jurisdiction. The first thing the company will do is petition for removal for diversity of jurisdiction - that means moving it from small claims or state court to Federal court. They'll win, you'll have to deal with a different court, with a lot of procedures and burden on you. 99% of the time this means that you aren't

          • by Trailer Trash ( 60756 ) on Tuesday March 15, 2016 @08:59AM (#51699437) Homepage

            I'll put to you this way, if you ever are dealing with customer service, and have decided, well, I am just going to have to sue them, you know it's over. If you tell them that, they'll say go ahead, and they are out. If you instead document your problem, send a dispute notice with intent to arbitrate, they have 45 days to deal with you (in most cases), or else they are $1,000 minimum. You will get a call, it will be someone who can settle and solve problems, and that's that.

            Not to discredit your great essay and experiences, but I've actually had resounding success multiple times by threatening to sue. However, I don't just yell "I'm going to sue you!" or something like that which they probably hear on a daily - if not hourly - basis.

            I start at the top: "You've breached your contract, and because of that I will now sue your company. I do not make threats of lawsuits, I am telling you what I will do. Our contract has an arbitration clause, however, I will argue in small claims that because you've breached the contract my obligations are null and void and I should be able to sue you directly. I live in a close community where the judge doesn't take kindly to people who don't keep their word. It will cost me about $150 to file, it will cost your company a thousand dollars in lawyer time just to deal with coming here and unsuccessfully defending yourselves before you lose and pay me what I want. But, here's the funny part - even if you win, you lose. You will still ultimately pay your lawyers more to defend your company than you would pay me in fulfillment of your contract. Your call."

            I've used a variation of that speech on three occasions - two to get a new refrigerator - and each time I was quickly transferred to someone who gave me exactly what I wanted without asking further questions.

            You can't say "I'm going to sue". Instead, you have to make it painfully clear that you at least have passing familiarity with the legal system and the process. That little speech wouldn't work as well against their actual lawyers, by the way, but I have another method for dealing with them and I've had great success in other areas where I've interacted directly with counsel.

            • by SlaveToTheGrind ( 546262 ) on Tuesday March 15, 2016 @11:08AM (#51700301)

              But, here's the funny part - even if you win, you lose. You will still ultimately pay your lawyers more to defend your company than you would pay me in fulfillment of your contract. Your call.

              Otherwise known as a cost of litigation settlement demand -- exactly the same technique patent trolls use to try to skim from businesses large and small. But, like many of them, eventually you're likely to run into a Newegg that understands that if it just forks over money every time it's threatened like that, it'll experience death by a thousand cuts. Companies make judgment calls all the time that it's better in the long run to pay the lawyers more for a particular case to set an example that they're not an ATM to everyone who comes along with their hand out.

              • But, here's the funny part - even if you win, you lose. You will still ultimately pay your lawyers more to defend your company than you would pay me in fulfillment of your contract. Your call.

                Otherwise known as a cost of litigation settlement demand -- exactly the same technique patent trolls use to try to skim from businesses large and small. But, like many of them, eventually you're likely to run into a Newegg that understands that if it just forks over money every time it's threatened like that, it'll experience death by a thousand cuts. Companies make judgment calls all the time that it's better in the long run to pay the lawyers more for a particular case to set an example that they're not an ATM to everyone who comes along with their hand out.

                I agree, but keep in mind that these were all cases where *they* demonstrably breached the contract and wouldn't have had a leg to stand on in court or arbitration. Their lawyers wouldn't have let it go to court or arbitration as they would have lost.

                Unlike a patent troll, I'm not a dick. I don't take what's not mine, but I will defend my own rights.

          • Excellent post -- arbitration is a far more useful tool (for all involved) than many people believe. Just wanted to clarify one minor point:

            You can't sue them in small claims court or state court because of jurisdiction. The first thing the company will do is petition for removal for diversity of jurisdiction - that means moving it from small claims or state court to Federal court.

            Even if there's complete diversity of the parties, the amount in dispute has to be above a threshold (currently $75,000) for a federal court to have jurisdiction.* 28 U.S.C. 1332. It's unlikely that would be true in most disputes like this, and if it were you wouldn't be filing in small claims court anyway.

            * This assumes your cause of action isn't under federal law,

      • by Anonymous Coward

        False advertising, aka fraud, is still illegal even if it didn't injure you. People might not have signed up for the services if they knew they were going to be throttled, so the damages is the cost of the service. Or do you prefer to allow liquid soap companies to sell colored water as soap and then be safe from being sued as no one would be able to prove they got sick because it wasn't real soap?

        "Unlimited" has a specific meaning. Why are you whining about consumers when the companies are trying to red

      • If they had losses they could just bring individual suits and this would be good for the people with the most losses. ;)0

        It is no surprise, it isn't really news. The SCOTUS has been very clear; arbitration clauses are enforceable, don't sign them unless you mean it.

    • http://www.cand.uscourts.gov/e... [uscourts.gov]

      District Judge Edward M. Chen

      Federal Judicial Service:
      Judge, U. S. District Court, Northern District of California

      Nominated by Barack Obama on August 6, 2009 and renominated on January 20, 2010, September 13, 2010, and January 5, 2011, to a seat vacated by Martin J. Jenkins; Confirmed by the Senate on May 10, 2011, and received commission on May 12, 2011

      U.S. Magistrate Judge, U.S. District Court, Northern District of California, 2001-2011

      Education:
      University of California, B

    • by dywolf ( 2673597 )

      though that didn't stop them (ALEC) from taking over most of the legislatures anyway with their cronies (many of whom are ON the ALEC board).
      and stupid Debbie Wasserman Schultz and the rest of the party leadership let them do it.

      and technology is helping drive it too; before it was difficult for even for people like the Koch's to go beyond influencing a few state elections.
      but now they can not only target every state, but individual cities and townships within states. They've been, through their groups like

  • by rtb61 ( 674572 ) on Monday March 14, 2016 @08:07PM (#51696999) Homepage

    Consider the hugely corrupt perversion of compulsory biased arbitration. One party has broken the contract but demand the contract they broke remains in force, well, at least the part that favours them, the parts that favour you, meh, sucker. A hugely corrupt application of law to allow a broken contract to remain in force in selected parts by one party to their advantage. Surely the law should have governed whether the contract was substantively broken and no longer in force and thus court action was the only fair resolution.

  • ATT is still being punished by the FCC and FTC. Ars Technica writes, "The FCC last year proposed a $100 million fine to punish ATT for throttling the wireless Internet connections of customers with unlimited data plans without adequately notifying the customers about the reduced speeds.

    I don't quite get that... the FCC proposed a $100 million fine versus imposed a $100 million fine, the way it would be presented to me as a citizen gone awry of the rule of law.

    Separately, the FTC sued ATT in an attempt to gain millions of dollars worth of refunds for customers who paid for unlimited data and had their speeds throttled."

    Millions of dollars for millions of customers typically translates into a small credit on my bill... but hey, the attorney's children need a college fund too.

    • Perhaps the suit is not about earning someone a lot of dollars, but instead to punish a company into changing their behavior. The only way the FTC and other government TLAs have to control corporations who break the law is to sue them; this is a civil matter so they can't arrest anyone. Would you prefer that they sued AT&T for $100 million and then pocketed it all instead of giving out refunds?

      • by penix1 ( 722987 )

        Would you prefer that they sued AT&T for $100 million and then pocketed it all instead of giving out refunds?

        No, I would prefer a suspension of their corporate charter when they break the law. Why should the law protect them from personal suits when they break the law? I say if they want to be treated as "people" then let's treat them as people with something real to lose.

        And if you think that AT&T hasn't already calculated fines into the price of their services, I have some prime land in Florida ca

        • It's a civil case, not criminal. So dissolving the company is pretty harsh over such a matter. And you can't do either anyway without a trial, and a trial in a civil case means lawsuit.

          • by penix1 ( 722987 )

            If you read what I was replying to you will see it was the FTC and FCC fines I was talking about. Those do go through a court.

  • This must be such a dilemma for Republicans... which ideology do I sacrifice to the other?!

  • Organizing plaintiffs for individual arbitration would cost ATT is the obvious answer. Boiler plait arbitration demands can be used by all and the simplified process can be managed my most without much trouble.

  • If you are "limiting" the amount of data that can be utilized, even indirectly, by just limiting data throughput, then as long as you take "limit" as a verb, by very definition, the amount of data is being limited. Now while obviously the quantity of data is still limited by things like the properties of the physical network layer and even the capacity of the physical network to handle a quantity of data, when any limits are being artificially imposed on a connection by limiting its throughput that wou

    • by Anonymous Coward

      The question isn't wither the class-action would go thru in favor of the customers, but rather an issue of having the right to file a class-action against AT&T. A previous ruling (2011) prevents the class-action from going forward.

      So, no class-action, because the anti-class-action clause in the contracts are firm, not because the lawsuit didn't have merit.

  • Stop using ATT, Verizon, Microsoft, Apple, Facebook, etc.............

    • by dywolf ( 2673597 )

      there reaches a point where that's not an option.

      at various points people also said you had the power and were free to stop using:
      cars, refrigerators, gasoline, microwaves, and other such items through history that we consider pretty much mandatory for modern life.

      cell phones are pretty much in that category now too, and soon smartphones as well.
      even if there are still a few holdouts such as myself who lack a pressing need for either.
      (I have one, but pretty much only so wife can get ahold of me; it's a 10$

    • Stop using the internet, stop driving, stop eating, stop needing medical care, stop living....

  • "ATT argued that the customers could not only have their complaints heard individually in arbitration, and Judge Edward Chen of US District Court in Northern California has sided with the cellular company."

    Sentence good-having the summary is not.

  • Class-action suits typically just end in big payouts to the class, that end up getting divided into a million or two parts, with a 1/3 going to the lawyers who represent the class. It's not all that useful really.

    I think what an enterprising person needs to do is set it up easy to have class members compel individual arbitration. This isn't cheap for AT&T. A good trial lawyer with a nice system could bring in clients, help them file an arbitration claim, and then wait for the system to implode. Most

  • they way they roll (Score:3, Interesting)

    by Anonymous Coward on Tuesday March 15, 2016 @06:46AM (#51698907)

    I used to work for AT&T awhile ago.

    AT&T entered into agreements with customers (corporate and state customers in my case) knowing full well that what they were agreeing by contract was going to end up in legal action afterward either because they didn't intend to adhere to the contract or because they knew they were shafting the customer (an example is selling an entire MPLS network to the State of Texas knowing full well that they had only a single MPLS device in the entire state and they were just going to use existing circuits to back-haul all the sites to the one MPLS device).

    They do what they can get away with up front and let the lawyers handle it afterward...and they build the whole thing into their business model so that the legal costs and penalties are risk managed out for each project.

    I think this is a shitty way to treat your customers but I guess it's probably done by most companies today as a matter of course.

    Posting this as AC to avoid potential repercussions from AT&T.

  • These arbitration clauses are a curse for consumers. Any ideas on how crowd sourcing could be used to help a group of individuals in these cases? Pulling together volunteers/advocates, gathering and sharing evidence, rules and process information... Needs to lower the cost and amplify the power of each individual to fight. While the corporations will easily overwhelm any individual, maybe making a fair fight possible for even a small percentage of those affected could overwhelm a corporation.
  • DO THE CRIME, PAY THE FINE!

    To corporations essentially,

    PAY THE FINE, DO THE CRIME

    When fines are equivalent to about $5 of an average American's paycheck. Why are corporations going to stop? Meanwhile, the average traffic ticket fine which ranges $150-$450 often given for driving the same damn speed as everyone else. Essentially equates to about 0.5%+/-0.2% of an average American income.

    Therefore a similar equivalent fine for AT&T should be around $500 million to $1 billion.

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