Court Allows Lawsuit Against T-Mobile To Proceed

On Wednesday, the California Supreme Court refused to review two earlier findings, which killed T-Mobile’s final chance at blocking a lawsuit against its early-termination fees and practice of locking phones. This is the third time T-Mobile has tried to stop the case from proceeding, and both a state trial judge and a state appeals court have already rejected T-Mobile’s claims that its customers were required by the terms of their contracts to submit to binding arbitration.

In June, the state appeals court said T-Mobile’s contractual prohibition of class-action lawsuits was “unconscionable,” which “rendered the arbitration provision unenforceable.”

If the plaintiffs win, “the outcome could require cell phone carriers, at least in California, to unlock cell phones upon a customer’s request.” It could also have an impact on two class-action lawsuits that were filed last week in California against Apple and AT&T over their practice of locking the iPhone to a single network, and of possibly bricking rogue phones deliberately.

“Court Clears Way for Mobile-Phone-Unlocking Lawsuit Against T-Mobile” [Wired]
(Photo: Getty)

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  1. yg17 says:

    Why is T-Mobile being targeted here?

    1. Every carrier has ETFs.

    2. Every carrier locks phones. However, T-Mobile has the most lenient unlocking policy. Customers get a free unlock code every 90 days. Simple as that. I requested one for my BlackBerry Pearl and had one the next day. I don’t know what AT&T’s unlocking policy is. Sprint and Verizon? Forget about it, they won’t unlock it.

    We have a certain carrier locking phones to their network and refusing to unlock the phone and working with a certain manufacturer to make sure any attempts to unlock will result in a bricked phone when a software update is performed. We have Verizon who cripples Bluetooth and installs their crap UI and who won’t allow unlocked, non VZW phones on their network. Then there’s Sprint that does the same as VZW. And this is what the courts are worried about? I’m sorry, but I have to say, as a T-Mobile customer who likes the service A LOT and doesn’t want to see rates go up or quality go down, I see this lawsuit as a bunch of bullshit.

    • ShizaMinelli says:

      OK, I hate to sound stupid, but I only recently got my first cellphone (a Sidekick Slide) since 2002, so…what do they mean by “unlocking” a phone?

  2. 8abhive says:

    With luck this is only the beginning.

  3. yg17 says:

    @8abhive: I hope so too, I want to see and end to locking and outrageous ETFs. They’re just going after the wrong carrier here.

  4. ShadowArmor says:

    Only GSM phones can be unlocked in the manner the case seems to be describing. It is kind of a shame that the case singles out T-Mobile, and I agree that their unlock policy is reasonably lenient.

    However, the road to unlocked phones has to begin somewhere, and the outcome of this case could influence many more like it. Indeed it would be nice if the practice of locked phones was abolished.

  5. Bourque77 says:

    @yg17: I dont know why t-mobile was singled out but hey you have to start somewhere.

  6. Red_Eye says:

    Works for me. I can remember years ago when ‘bag’ phones were all the rage (before the flip phones) and in California you had to buy the phone because at the time it was illegal to advertise the phone free with a locked in contract. Unfortunately they changed that law, now it looks to possibly be headed the other direction at least in part.

    Its simple, sell me something and its MINE. Especially if its a physical item. You should not be able to control the item after that point. Can GM cut the horsepower of an onstar vehicle because I take it to Quickie Lube to get serviced instead of the GM dealer, heck no, its not legal. The cell carriers though cripple and lock down phone and then say you cant do anything about it. Sickening.

  7. ab3i says:

    @ShadowArmor: Unfortunately, ‘locked’ phones and ‘locked’ contracts is the American cellular industry’s way of justifying the (usually) small subsidy they give on the handsets.

    @yg17: AT&T is a (@#& when it comes to unlocking phones, and they make the weirdest excuses. Last time i tried when i was travelling overseas, I got excuses such as:
    You will receive the unlock code via e-mail in 48 hours. Then when no code shows up, You will receive it OTA (over the air) in 48 hours. Then when it doesn’t show up, we have the unlock code for you, but we can’t give it to you on the phone because there is a problem with the OTA and e-mail methods and we need to investigate it. Heck, i went on my trip and came back three weeks later, and the issue was ‘closed’ without any response from them.

  8. Trackback says:

    Following on this post, Wired reports that T-Mobile failed in its efforts to compel the plaintiff to participate in binding arbitration rather than litigate his claims as a class action in court.

  9. theninjasquad says:

    I don’t know why they can’t open things up to allow the consumer to buy whatever phone they want, then from there pick what network they want to be on. I mean why must we choose a network first, then pick a phone. They are equally as important.

  10. babaki says:

    @yg17: if verizon or sprint gave you the unlock what other network would you tranfser to? i dont know any other carriers that operate in the US on PCS or CDMA or iDEN@theninjasquad: not all phones are manufactured for all networks. this is why GSM is the best way to go right now.

  11. Anonymous says:

    @yg17: once this goes through my guess is the courts hope other carriers will follow suit or be subjected to similar class action suits.

  12. liquisoft says:

    I love it when things are ruled unconscionable.

  13. yg17 says:

    @babaki: True. That is a good point. With CDMA, the problem has 2 parts. One, the phones are locked. Two, Sprint and Verizon will ONLY allow their own phones on the network. So if we ever get to the point where locking is illegal, then Sprint should be forced to allow a Verizon phone on their network and vice versa.

    @INconsumer: Yes, but it just doesn’t make any sense to go after the carrier with the most lenient policies, hoping others follow suit. If you’re going to crack down on illegal drugs, do you go after the high school dropout who likes to get stoned in his own home, or go after the trafficers?

  14. CurbRunner says:

    I hope this action sets a precedent to help free customers from being locked into the arbitration/kangaroo court/anti-constitutional terms that are established by all kinds of organizations as a prerequisite to doing business with them.

  15. FLConsumer says:

    @yg17: No CDMA phone I’ve ever had is “locked” to any particular carrier, and I’ve been running CDMA for 10 years now. It’s just a matter of getting the carrier to let you do an ESN change, which Alltel has been very gracious about doing whenever I’ve asked.

  16. mikecolione says:

    I have a suggestion that should please all parties.

    1. If a customer signs up for service and agrees to the contract, sell the phone unlocked, or provide the unlock code after the trial period is over.

    2. If a customer buys the phone outright w/o service, let them get it unlocked for a fee of say.. 50 dollars. (price is just a suggestion).

    This way the money paid for exclusive models evens itself out in the end.

  17. ju-ju-eyeball says:

    WHAA! You must use binding arbitration! That way we will win! WHAA!

    Eat me T-Mobile

  18. yg17 says:

    @FLConsumer: My bad. But the policies of VZW and Sprint not activating others phones is just as bad as locking, if not worse

  19. humphrmi says:

    I suspect that, if some group of consumers or lawyers were considering who to target for this sort of lawsuit, going after the most lenient first sends a message to everyone who isn’t as lenient. T-Mobile has been cool about unlocking most (but not all) phones, the point isn’t “Unlock some phones”, it’s “I own the phone, dammit, unlock it, it’s mine.” Close only counts in hand-grenades; AT&T and VZW know damn well that T-Mobile unlocks most of their phones and will correctly read a legal hit against them as a shot over their own bows; unlock phones, make ETFs fairer, or end up in court like them. Oh, and now with this ruling add “and you will probably lose.”

  20. ascara says:

    For GSM phones you can already get a phone without a contract and already unlocked. Just buy it straight from the manufacturer. Motorola is more than willing to sell you a Motorola RAZR on their web site, not tied to a carrier or contract and fully unlocked for 169.99.

    You can activate that phone with a GSM carrier on a prepaid plan with no contract, buying only the minutes you care to use. No free nights or weekends, but since the cell phone company is not really giving you any perks, you still have that freedom to leave at any time and with no penalty.

    Of course you can get it from a carrier free with a new activation in many cases, saving you that 169.99. I wonder why a carrier would want a termination fee if you decide to end service shortly after getting your shiny new electronic toy? I am sure they get a discount on volume for buying them, but I can’t buy a calculator for as cheap as I can get a cellphone from a carrier. It’s about recouping the costs. You pay money to bring that customer in and since you are a business, you need to get that investment back at some point.

    I would love to see cell phone contracts go. I would love to know that if I leave carrier x that I could take my phone to carrier y and start service without strings and without an interruption in people being able to call me on the same number. I pay a lot for my service as it is and my main fear in stepping away from that model is that I will pay even more. If people really have to pay for their phones, less people will be able to buy them. Over time, less people will be on the networks meaning my cost is likely to go up as the carrier tries to figure out how to pay for all those towers.

    Government intervention rarely makes things better in real practice. Sounds good in theory, ends badly in practice.

  21. STrRedWolf says:

    Sprint, Verizon, and All-tel are CDMA, so not only are they technically locked, roaming internationally isn’t very easy.

    I’m with the French, but I’m also with T-Mobile. 90 days, ask for an unlock code. Otherwize sell an unlocked phone.

  22. joeonsunset says:

    AT&T states that they’ll just give you the unlock code if you ask for it.

    @AB31: One incident of getting the runaround doesn’t mean that’s the institutional norm. I’m not saying it isn’t, but, one experience doesn’t a good generalization make!