Cingular Tries to Get Class Action Lawsuit Thrown Out, Cites Arbitration Clause

Regular readers of this blog will be familiar with Cingular’s arbitration clause, a nasty piece of work that supposedly “forfeits your right to a lawsuit” just by signing a contract with Cingular. We’re about to see if works, because Cingular (now AT&T) is the target of a 9-state class action lawsuit stemming from (this gets a little confusing) Cingular’s purchase of AT&T wireless, and they’re playing the “arbitration clause” card to get it thrown out of court.

“Although the exact wording of these provisions has changed somewhat over time, each has required customers to pursue their disputes with Cingular or AT&T Wireless in either individual arbitration or small claims court,” the defendants allege in their motion.

“Cingular’s arbitration provisions do not contain a prohibitive cost structure or otherwise impose disincentives on customers’ ability to pursue their claims. . . . Accordingly, this court should issue an order compelling each plaintiff to pursue his or her claims in individual arbitration or in small claims court and dismissing this lawsuit.”

So if you wondered why that clause was in there, now you know just how they planned to use it. —MEGHANN MARCO

Lawsuit: Class Action: Cell users pursue claims [Tulsa Wold]
(Photo: Maulleigh)

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  1. jdthorpe says:

    I work for Cingular/ATT(I know, I know, I’m the enemy) and this post is a little off. First off when ATT was aquired, Cingular looked at the two networks and spent 2 years identifying weak spots and overlaps and made inprovements in coverage. Yes, coverage was spotty for a while, but that was manily due to the intergration of the two provider’s equipment into one network. Next, I don’t know what Shady retailers that these people went to, but the normal $18 upgrade fee doesn’t apply to former ATT wireless customers. AND anyone who is ever charged for a SIM card should take a close look at their receipt, because they are free…burn me alive if you want, but I just needed to clear this up.

  2. RegularGonzalez says:

    Generally a company cannot disclaim your right to a lawsuit. Its considered a factor that will materially alter a contract. But you never know…

  3. 44 in a Row says:

    Next, I don’t know what Shady retailers that these people went to, but the normal $18 upgrade fee doesn’t apply to former ATT wireless customers.

    My parents and brother were all hit for that charge at a Cingular store.

  4. jdthorpe says:

    Hence me saying SHADY retailers…

  5. SuperJdynamite says:

    Are they serious when they say they want people to pursue claims in small claims court? It’s pretty easy to file a claim. Are they really going to send an attorney to every hearing? Seems like a good way to nickel and dime themselves out of millions.

  6. John Stracke says:

    @44 in a Row: Not everything that looks like a Cingular store is owned by Cingular.

  7. royal72 says:

    ok i just figured it out, we need a list of reasons of what people can take cingular/att to small claims court and most likely win. also, a step-by-step instruction manual on how to do this (i don’t have a clue). we’ll pick a specific day to file the suit. does cingular have 500,000 or even a million lawyers throughout the nation for every suit?

    lol, i’d think the lawyers would happily (if secretly) endorse such a concept just for the paycheck!

  8. BillyShears says:

    All of their recent shenanigans are making me seriously consider dropping them on principle (I’m out of contract, so huzzah). I can get a cheap-ish, unlocked 1-year old phone and go straight to month-to-month on T-Mobile, go (back) to Verizon and get my corporate discount on, or, hell, Helio actually looks pretty interesting but MVNO’s kind of scare me; it’s so easy for them to just up and disintegrate and shove their users onto the network leasee.

  9. Fait Accompli says:

    The problem with arbitration clauses such as Cingular’s is that it prohibits class actions (note: many states refuse to recognize prohibitions on class cases). Companies know that most people will not go to individual arbitration or small claims court because it is simply too time consuming (how big is your claims versus how much work will you have to miss?).

    Also, for many suits, once you take the ability to file a class action out of the picture many attorneys are simply not interested. If there is not a fee shifting provision in the statute sued under (less common than you think), the lawyers are stuck with the 1/3 contingency. Even if you had damages of $3,000 (which in highly unlikely . . .) your lawyer would taking a pay cut after the first several hours on your case, and every minute spent thereafter would cut it even further.

    Obviously if there is fee shifting available (allowing a prevailing plaintiff the ability to petition the court for fees), lawyers are more likely to pursue the case, but even that is a crapshoot when damages are low (i.e., you get a consumer a couple hundred bucks back, but it took $20,000 in billable hours to do it because the Defendant put up a fight . . . the court may award you half your time if you are lucky, so again, the case represents a pay cut).

    Another issue here is that if the cases are individual, it is unlikely that the company will ever be forced to redress the wrong on a global scale. They can limit exposure AND continue bad practices.

    I guess my point is that arbitration is okay. It is the class prohibition that is murder on your ability to address malfeasance.

  10. mad_oak says:

    @jdthorpe: Given the fact that your Comment has absolutely nothing to do with this post, what the hell is your point?

  11. jdthorpe says:

    @mad_oak: If you actually took the time to read the article after the jump, you would know what I was talking about.

  12. mad_oak says:

    Shrinkwrapping your rights away. Love this website. Don’t let the boingboing scare you!!! http://www.boingboing.net/2007/01/25/reasonableagreemento….

  13. mad_oak says:

    @jdthorpe: What the hell are you doing… lurking for people to make fun of your weazely comment? Sheesh.. you jumped back within 4 minutes. I hadn’t even finished typing my actual comment, otherwise you little post script whine would have never been seen. And it doesn’t matter WHAT the people are suing for. (Nor that you have a good excuse.) Cingular isn’t arguing the validity of the suits, its arguing the right to sue. Hence I don’t care what PR B.S. you have to shovel, if they are trying to prevent someone there day in court, they are scum. Res ipsa loquitur. Duh.

  14. 44 in a Row says:

    @44 in a Row: Not everything that looks like a Cingular store is owned by Cingular.

    I’m aware. This was definitely a company-owned store, though.

  15. mad_oak says:

    I misspelled their… and i’m not too sure misspelled is spelled with one S or two. GREAT! NOW I’M LURKING. I’M OUTA HERE!

  16. mrwilson says:

    What Fait Accompli said, especially about lawyers’ motivations.

    The insidious part about class action waivers like this is that: (1) most people end up with no remedy at all, since few people are willing to take the time and effort to do the individual arbitration thing over a couple hundred bucks, at most; and (2) most people have no idea they are signing away their class action and litigation rights when they are included in the small print in consumer contracts like this.

  17. Charles Duffy says:

    What’s this about lawyers in small claims court? The only lawyer in a small claims court (in California, at least) is the magistrate judging the case (who is very frequently a lawyer serving in that capacity rather than a full judge). All parties represent themselves; companies send a non-lawyer representative (in theory, this is typically someone managerial).

    Quoting the rules from http://www.courtinfo.ca.gov/selfhelp/smallclaims/scbasics….

    * If you are the only owner of a business, you must go to court unless the claim can be proved by evidence of a business account in which case a regular employee with knowledge of that account may represent you.
    * If you have a partner, one of you must go.
    * If the business is a corporation, an employee, officer, or director must go to court. That person can’t be hired just to represent the corporation.

  18. FLConsumer says:

    What irked me most about the whole Cingular takeover was the total lack of support/help/deals for former AT&T customers. They weren’t willing to do SQUAT for the old AT&T customers… to top it off, waiting 30-90 minutes for a rep was totally unreasonable…esp. when the reps were rude and unhelpful.

    /dumped AT&T, refused to go Cingular. Glad I did.

  19. Logan26 says:

    jdthorpe, are you nuts? service is better? I’d like to know where because my service still sucks since the switch. Before the switch, I could be in my basement and never get a dropped call. Hell I almost never had a dropped call while driving either. Now, I have to be on my back porch to make calls otehr wise it will drop. Making a call causes the signal to drop 1-3 bars of service. Cingular sucks and should be sued for false advertising. More bars in more places my ass.

  20. sam-i-am says:

    I tried to get out of my contract using the previously mentioned article. I was told formally by Cingular that the part of the arbitration clause that I had claimed (the former article had claimed) had changed had in fact not changed, and they had only added instructions for arbitration.

    And they didn’t care about court rulings against their favor. They said I would have to take them to court again, for the same thing someone else had already done.

  21. bris says:

    I am not a Cingular customer, but I am studying madatory arbitration clauses. A friend gave me an arbitration pamphlet from Cingular. It is the largest I have seen to date. What I noticed is that not only are they trying to get out of any class action suits by it, but are seeking to set dollar limits on awards. I don’t know if this has been challenged, but it seems like companies are able to control more and more by these clauses trumping consumer rights and the legal system.

  22. xplnlife says:

    I am an old school att customer with tdma.

    I have a DIGITAL ADVTG 350 plan that includes 1050 MINUTES, mob 2 mob, unlim night and weekends for $39.99. I am now on a month to month contract.

    I have been battling with cingular/att to get a comparable plan that is also MONTH TO MONTH. I have been offered 450 mins w/ 200 bonus and a free new KRZR phone for 39.99. I was told month to month is not an option.

    This sucks lily white butt in my opinion.

    I am looking for advice on how to get what I want from this company!!! Does anyone have any experience with this situation.

    ARG. save me.

  23. filardo says:

    I bought an AT&T phone in March 2004 and a little over a year later (just after I received cards and letters from Cingular telling me how great the new service was going to be) the quality of my phone service plummeted. After having me jump through all kinds of hoops they said that it was my fault because my phone was too old (it was, at this point, about 15 months old). They did not offer me any help or advice on transferring my service without a new contract or offering me a new phone. Nor had they pre-emptively warned me that my existing phone would not work on their new network — quite the contrary, they had told me how much improved my service would be. Needless to say I left AT&T / Cingular and went to a different carrier. Fortunately for me I had only a one year contract so was able to do that.